Forward Commitment Procurement

Forward Commitment Procurement (FCP) is a procurement model designed to be used to deliver cost-effective environmental products and services to the public sector and help to create the market conditions in which the environmental goods and services sector can thrive.

Forward Commitment Procurement (FCP) is a procurement model designed to be used to deliver cost-effective environmental products and services to the public sector and help to create the market conditions in which the environmental goods and services sector can thrive. ==Model== The model was conceived and developed by the UK Government's Environmental Innovation Advisory Group (EIAG) 2003–2008) to address a key market failure identified by EIAG, namely the lack of market pull for environmental innovations. The first report of EIAG identified the Government as a key player in the environmental market, with a special responsibility as custodian of the common good to provide intelligent and effective supply chain management that could help to unlock investment in new environmental products and services. As such, the public sector provides a lead market for environmental products and services, and this, coupled with the fact that the Government is a major purchaser of environmental goods and services, led EIAG to focus its activities on "how Government and its agencies can improve on the way they manage the supply chain in this sector" Jack Frost, Chairman of EIAG (2003–2008). In essence then, our analysis turns the problem of innovation on its head. It is the lack of credible articulated demand that is at the root of the relative failure of innovation in the UK environmental goods and services sector not any lack of research, invention or innovative aspirations. EIAG believes the solution lies in Government taking action to mobilise the supply chain to deliver environmental innovations. And this means moving from a focus on R&D and technology push to a focus on intelligent supply chain management. ==Examples== ===Demonstration project: the zero waste prison mattress=== HMPS were buying around 60,000 highly flame retardant, polyurethane foam mattresses and pillows per year and disposing of around 40,000, mainly to landfill, but with a significant number also being disposed of as clinical waste. The combined cost of supply and disposal was estimated to be well in excess of £3 million per year. In short, the way in which mattresses were disposed of was costly, environmentally unsustainable and out of step with HMPS sustainable development policy. There had been several attempts to find a solution none of which had delivered a meaningful result. HMPS had an 'unmet need' for a cost-effective and environmentally sustainable solution. Further consideration of the problem led HMPS to identify the following requirement: This requirement was then communicated to the market in a market sounding exercise in the form of a 'call for innovation and information', designed and managed by the EIAG FCP team. This exercise involved the publication of a Prior Information Notice in the Official Journal of the European Union and the engagement of intermediaries, such as the BERR funded Knowledge Transfer Networks, trade bodies and similar, to communicate notification of the call to the potential supply chain. Detailed information on the requirement, the context for the call and the scale of the market opportunity were provided in a market sounding prospectus, and HMPS offered to consider a 'forward commitment contract' to enable the take up of innovative solutions. Over 36 high quality responses were received, and from which a range of options were identified. A directory of companies and organisations that responded to the call was published on the HMPS procurement website to assist supply chain development and a "concept viability" workshop was held with a cross section of the supply chain members who submitted responses to discuss the options available and inform the HMPS mattress procurement strategy. The market engagement process led HMPS to adopt a completely different approach to the procurement of its mattresses and pillows. HMPS is at the concluding stages of a procurement exercise for a 'cradle to cradle' managed service to supply zero waste mattresses and pillows. The final stage of evaluation is underway and HMPS is confident that all of the shortlisted bids will be able to deliver the requirement (see above), and in addition estimates that it will save between £3-£5 million over the life of the contract. "Sustainable procurement has been talked about for years but the Prison Service launching a competition for zero waste mattresses was one of the few truly innovative examples CEMEP came across." ===Later projects=== , a number of FCP projects were getting underway. These projects involved NHS Trusts, the NHS Purchasing and Supply Agency (NHS PASA), South West Regional Development Agency (SWRDA), Swindon Borough Council, New Swindon Company, and are addressing a range of environmental unmet needs such as ultra efficient lighting systems, innovative CCHP, water efficiency, and sustainable waste management solutions. ==Notes== ==References== Unlocking change in prison procurement - Public Servant Daily, January 9, 2008

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