At the procurement stage of the infrastructure lifecycle, the land, materials, services, and/or equipment required to deliver an infrastructure project are procured. Although in the lifecycle sequence of this work, this phase has been placed between the design and construction phases, in practice, procurement occurs at multiple points in the lifecycle. It may include, for example, the procurement of consultancies for planning and design services in advance of Phases 3 and 5 or contractors to operate a network in advance of Phase 8, in addition to construction-related procurement in Phase 7.
Much of the existing industry guidance on procurement and climate change focuses on green procurement, which is not the focus of this consolidated guidance. Integrating climate resilience into procurement requires broadening the typical scope of procurement to consider the wider system and the longer timescales in which climate change occurs. It also involves addressing climate risks through procurement including the use of procurement mechanisms that can help facilitate resilience goals and the inclusion of resilience considerations within procurement requirements and evaluation. Finally, it requires working with the market to improve the capabilities to deliver climate resilience outcomes.
Effective procurement for climate resilience requires good upstream strategic planning, scope definition and understanding of climate-related risks. The benefits of climate resilience-informed procurement can be realized in efficiencies in project cost and timeframes and in overall climate resilience enhancements of the resulting asset(s) or system.
Government sets the procurement requirements for buying organisations to follow and has an important part to play in developing the capabilities of the market. In many cases, where government bodies are acting as the owner or operator of infrastructure, they may also be the buying organization.
Infrastructure owners and/or operators are typically responsible for the procurement of services, equipment and materials, including the development of procurement documents such as Terms of Reference (TORs), Requests for Qualifications (RFQs), Requests for Proposals (RFPs), specifications and performance requirements, and contracts. They are typically the “buying organisation” in a procurement agreement.
Key Inputs from Other Phases
Phase 1Policies and Plans
Government policy surrounding procurement requirements will have a major influence on which mechanisms buying organizations are able to employ. Policy may allow for new approaches to infrastructure procurement that can address climate resilience.
Provided prioritization has been conducted effectively, prioritized projects should input into the procurement phase with clearly defined climate resilience objectives and benefits.
Prioritization should also provide the initial building blocks for supplier requirements and evaluation by defining the objectives of the project at a system scale.
Phase 3Feasibility and Preparation
This phase will provide further detail to inform the development of specifications by outlining the high-level nature and scope of the project, location, technologies to be used etc.
Whole lifecycle cost-benefit and affordability assessments can help provide a basis for later value-for-money evaluations that account for the complete resilience value of a project.
Phase 4Funding and Financing
Levels of funding will influence the complexity of the procurement process, with higher budget projects allowing more detailed procurement.
In the case of public-private financing initiatives, the initial decision, framework and business case is likely to be built during this phase. The extent to which climate resilience is incorporated into these agreements will therefore have a major impact on how it can be embedded through procurement.
Decisions made at the design phase will determine the specifications for construction procurement, and subsequently should be a major consideration in the tendering process, particularly where evaluating supplier qualifications to deliver the work.
Lessons learnt from construction should inform the future selection of suppliers and help improve the overall quality of the supplier pool.
Information on innovative and modern construction methods will be of particular importance when considering the risks and requirements they entail for future procurement.
Phase 8Operations and Maintenance
Continual learning and evaluation of past experiences during operations and maintenance can help inform resilience through the procurement of new operations or maintenance contracts.
Phase 9End of Life
Circular economy considerations can play a key role in the procurement of materials and construction. This should include a detailed understanding of the end-of-life consequences of decisions at the procurement stage.
The Basics and the Shift
Procurement helps ensure that concepts, plans and designs surrounding climate resilience are adequately communicated and converted into practical reality. The impacts of climate change on the procurement phase therefore center around changing approaches and considerations during procurement to best facilitate this conversion. Climate change and climate risks must be incorporated in procurement approaches, requirements, and evaluation processes if resilience measures devised at earlier phases are to become a reality. Furthermore, as a complex issue with often technically complicated solutions, climate change will necessitate greater capacity and skills surrounding climate issues and responses both among suppliers and procurement professionals.
Traditional Responsibilities and Decisions
Effects of Climate Change
New Tools and Approaches
Procurement is traditionally undertaken through a piecemeal, project-by-project approach. Typically, this is performed as required for the project and on relatively short timescales with a view to short-term cost savings. This can result in operators becoming “locked-in” to procurement that maintains the status quo, making long-term transformation and improvement highly challenging. Procurement is often regarded as a necessary step to enable the delivery and use of infrastructure projects rather than an integral tool to the delivery of long-term strategies and goals.
Climate change is, by its very nature, a long-term issue with impacts that are systemic rather than project-based in scope. Likewise, climate adaptation is, by its nature, an adaptive process which cannot be achieved through maintaining the status quo or being locked-in to existing processes. A short-term view to procurement would likely lead to a reactive only approach to climate change which does not appropriately prepare for, transform or adapt to the issues it presents. Similarly, procurement for individual projects in isolation will not allow for effective consideration of climate change’s systemic impacts and will risk simply passing issues on to other parts of the system.
Adopting a long-term, systemic approach to procurement of infrastructure projects can help create the right environment for the delivery of climate resilience objective. One of the primary goals of this is to shift focus from short-term capital expenditure savings to a view of holistic value and benefits over the project’s full life. Criticality assessments can aid in the prioritisation of projects within a network and inform the required procurement approach. The creation of a climate resilient procurement strategy to guide this process and set long-term procurement goals can be a useful tool to help facilitate this change in approach.
The buying organisation sets requirements for the supplier in terms of the service, materials, or equipment to be provided within the contracting documents. This includes specifications for what is to be supplied, technical requirements and qualifications in the case of services. In traditional procurement, requirements typically focus on prescriptive inputs, qualifications and past experience delivering similar projects, which rarely include climate resilience considerations. Supplier evaluation then typically reviews the extent to which each tender meets these requirements and their cost.
High levels of uncertainty around climate change mean that it is not always clear what exact inputs are required to ensure long-term continuity of service and delivery of value. Furthermore, incorporating climate resilience into infrastructure projects is a technically complicated, nascent field in which many contractors may have little or no prior experience even if they have extensive experience delivering traditional infrastructure. Additionally, supplier evaluation based on costs may fail to recognise the long-term value in the face of climate change.
Buying organisations should ensure that any project that incorporates climate resilience elements requires some minimum experience or qualifications from contractors responsible for delivering that component of the work. This may include involving climate risk experts in design teams where design needs to account for future climate, for example.
Where employed, climate resilience actions and qualifications required should be set out clearly in the contract documents. Outcomes based procurement approaches can allow greater flexibility to deal with uncertainty surrounding climate change. There are a number of rating systems and evaluation approaches that can help consider resilience value in addition to traditional costs.
The procured team to deliver an infrastructure project is frequently fragmented, formed of a number of different organisations each with separate, siloed responsibilities and motivations. This can result in difficulties communicating and coordinating the implementation of resilience, potentially leading to measures that are viewed as ‘inessential’ or poorly understood being neglected. Furthermore, a lack of incentives to deliver value beyond the minimum contract requirements, particularly long-term, can lead to this value also being dropped.
The effective delivery of climate resilience requires a systemic, holistic approach involving numerous areas of expertise. Measures therefore need to be taken to ensure that the project team is able to collaborate effectively and that all parties are incentivised to deliver resilience.
Approaches to create more collaborative and better integrated project teams through procurement include the combining of multiple roles under one organisation, partnerships between private and public-sector bodies, alliance contracting, and the Project 13 ‘enterprise’ approach.
Performance-based procurement mechanisms tie the remuneration of contracting bodies to their performance. Incorporation of climate resilience objectives into the measurement of performance can help ensure parties are incentivised to deliver.
Buying organisations traditionally try to procure from a wide selection of competent suppliers to ensure equitable, balanced and competitive procurement. Some engagement and negotiation with the market may occur, but in well–established markets one would expect a sizable pool of suppliers to be available and willing to bid on traditional projects.
Climate resilience has not traditionally been a priority in most infrastructure sectors. As such, the market often has limited capacity to deliver climate resilience. This may lead to a limited pool of possible suppliers, reducing competition, or even an inability to find any suitable suppliers. This is particularly an issue in smaller or less developed economies. Furthermore, uncertainties around climate change may lead to climate resilience projects being perceived as higher risk, further limiting the number of willing suppliers.
A number of tools and approaches exist to help build the capacity of the market to deliver climate resilience projects, encourage cooperation and open communication between suppliers. These include supplier development plans and supplier diversity initiatives. Industry outreach might be conducted to build an understanding of the market.
Furthermore, the use of risk sharing strategies through procurement can help reassure involved parties that climate risks can be managed.
Integrated Guidance for Climate-Resilient Infrastructure
Based on the review of over 150 existing publications and tools on climate-resilient infrastructure, the following key actions have been identified to support practitioners in integrating climate resilience into infrastructure development in the Procurement phase of the infrastructure lifecycle. These actions are summarized in the table below and grouped by theme. Each action is further elaborated on in this section and references and links to key publication and tools are shared.
The following resources have been identified as the key resources for practitioners working in the Procurement phase of the infrastructure lifecycle.
BS ISO 20400:2017 Sustainable procurement – Guidance
While this resource is sustainability focused it contains guidance on a number of procurement actions with high applicability for climate resilience too.
Guidance London Climate Change Partnership
Adapting to Climate Change. The Role of Public Procurement
A useful resource for highlighting the importance of different aspects of procurement for climate change adaptation.
Guidance Global Centre on Adaptation
Climate Resilient Infrastructure Officer: Handbook. Knowledge Module on Public Private Partnerships and Climate Resilient Infrastructure
Provides useful guidance on many areas of climate resilience within procurement from a PPP perspective, with broader applicability too.
Guidance Inter-American Development Bank
Climate Resilient Public Private Partnerships: A Toolkit for Decision Makers
Contains easy to use tools and guidance for a number of procurement activities. This resource also focuses on PPPs but many of the tools could be used on other types of project.
Guidance Institute of Civil Engineering
Project 13. From Transactions to Enterprises: A new approach to delivering high performing infrastructure
Institute of Civil Engineers (UK) document that outlines the key aspects of the Project 13 approach to procurement.
Summary of Integrated Guidance
- Theme 1: Systems Thinking
- 6.1.1 Maintain awareness of the core principles for effective procurement for climate resilience
- 6.1.2 Recognise the resilience requirements and drivers relevant to different forms of procurement
- 6.1.3 Employ long-term approaches to procurement
- 6.1.4 Consider the criticality of procured assets and their role relative to the wider system
- Theme 2: Climate Risk and Uncertainty
- Theme 3: Procurement Approaches and Mechanisms
- Theme 4: Requirements and Evaluation
- Theme 5: Capacity Building
Theme 1: Systems Thinking
Central to embedding climate resilience within Procurement is adopting a new approach based on longer-term, systems-level thinking.
The field of climate-resilient procurement is very underdeveloped in existing literature. Although some high-quality published guidance on sustainable procurement exists, resilient procurement guidance was a gap identified by the LCCP  that remains mostly unfilled, and there is low awareness of the guidance that does exist. There is considerable overlap between the two concepts, so the guidance for this phase of the infrastructure lifecycle adapts existing sustainable procurement literature where applicable and appropriate.
6.1.1 Maintain awareness of the core principles for effective procurement for climate resilience
There are two primary areas through which the procurement phase can support climate resilience:
- By creating opportunities to enhance the resilience qualities of the project overall: This largely centres around the creation of a delivery team that can embody resilience qualities of integration, flexibility, and resourcefulness (see Resilience and Systems Thinking).
- By enabling climate resilience developed during earlier phases of the project to be carried forward properly throughout the remainder of the lifecycle: This involves ensuring that requirements for climate resilience are fully understood by suppliers, that they are embedded within the procurement requirements and contracts, and that selected suppliers are appropriately incentivised and have the necessary skills and resources to deliver climate resilience
The ASCE sets out the high-level qualities that should form part of a resilient project in their Sustainable Procurement for Infrastructure Standard. These qualities consist of robustness, recovery, adaptability, redundancy, mitigation, avoidance, and integration, outlined on page 18 of the standard . Many of these qualities will be fully realised through other phases of the lifecycle; however, it is important to retain a view of these qualities when developing requirements, reviewing and evaluating responses.
An alternative list of key principles is provided by ISO 20400, this list is concerned with sustainable procurement in general, rather than climate resilience. However, several of these principles are also beneficial for climate resilience. These include accountability, transparency, respect for stakeholder interests, integration, seeking innovative solutions, the analysis of costs, and continual improvement, outlined on page 7 of the standard . These principles underline much of the guidance provided in this phase of the infrastructure lifecycle.
6.1.2 Recognise the resilience requirements and drivers relevant to different forms of procurement
Procurement is considered its own phase within the project lifecycle. However, it is a phase that extends across the lifecycle as procurement activities are required to support every other phase in some capacity. Procurement might include works, supply and installation, goods, consulting and non-consulting services, and the lease or purchase of existing infrastructure assets. The procurement process, and subsequent climate-resilient considerations, will vary for each type of procurement.
Government and infrastructure owners and operators should push for climate resilience at the procurement phase. Several drivers encourage organisations to adopt climate resilience into their procurement practices. Again, these overlap considerably with sustainability drivers. Key drivers adapted from BSI Service Continuity and Reliability include customer expectations around safety and reliability of service, Capacity Buildingstimulating innovation from supply chains, stakeholder expectations, reducing risks to infrastructure, avoiding disruptions to the supply chain, and conforming with legislation, regulation and policy. There are few legislative requirements currently, but as legislators increasingly consider climate change and resilience, climate resilience may need to be demonstrated throughout the supply chain as part of the procurement process to comply with legal requirements. Policy commitments, goals and action plans, such as the UN SDGs are the top driver for sustainable public procurement implementation according to a UNEP (2017)  survey.
6.1.3 Employ long-term approaches to procurement
Traditional procurement is frequently conducted with only a short-term view towards cost savings. This can frequently lead to projects which fail to meet their intended outcomes . Decision-makers can easily become “locked-in” to an approach of short-term, piecemeal procurement which favours the maintenance of the status quo and makes it difficult to invest in solutions that will see long-term benefits at larger initial expense. Future-Oriented PlanningShifting towards procurement processes intended to operate on longer timescales can lead to improved project outcomes . The key factor is altering an owner’s or investor’s focus from reducing the initial capital expenditure to a holistic vision of value that benefits a range of stakeholders and enabling “a shift away from procurement of new infrastructure as a series of individual projects each procured independently in the market”.
This approach is particularly essential for increasing climate resilience, as climate-resilient infrastructure often requires increased initial capital expenses in return for greater ability to cope with climate hazards and long-term climate change impacts.
Performance based contracting and financial incentives for highways maintenance
While not explicitly concerned with climate resilience in their initial conception, Argentina’s use of performance-based contracts (PBCs) and concession schemes demonstrates how they can be used as a powerful procurement tool to improve the quality of infrastructure services, particularly where funding is limited. The government of Argentina was struggling to maintain its road network following a financial crisis. In 1990 10,000 km of national roads were therefore awarded as concession schemes. This was followed up by the creation of PBCs in numerous phases, starting in 1996, until today the entire national network and part of the regional network is maintained by PBCs.
When the contracts began they focused 75-80% of the total contract amount on rehabilitation due to the poor road conditions. Contracts were mostly awarded to local contractors, initially in 100 to 300 km sections and were comparatively longer-term than the traditional contracts awarded in Argentia at 5-years. A number of key findings and successes were identified from this work):
- Comparison of the PBC contracts with conventional contracts in Argentina indicated that the long-term performance-based systems were more cost-efficient overall. The rehabilitation and maintenance funding yielded an economic rate of return of 60%, at a 12% cost of capital, and the contracts reduced the need for future capital investments by nearly 30%
- Competition was high during bidding and only 1 of 60 contracts had to be cancelled due to contractor financial difficulties, indicating that the contracts were appealing to the private sector.
- Delays in project implementation were minimised by requirements for detailed engineering designs before initiation of works.
- Government supervision costs were reduced due to requirements for contractors to perform their own quality control.
- Cost overruns were practically eliminated by the use of lump-sum contracts.
- The long-term payment obligations built into the contracts ensured that the treasury was legally committed to providing funding for road maintenance. Funding was found to be continually provided even in later periods of financial constraints.
- Performance levels were simple enough to be monitored by a small inspection team.
- The system was found to foster innovation in programming and execution of works.
- The risk of unsatisfactory rehabilitation and maintenance works was found to be reduced by the longer-term contracts.
a Asian Development Bank, 2018. Guide to Performance-based Road Maintenance Contracts. Available at: https://www.carecprogram.org/uploads/Guide-Performance-Based-Road-Maintenance-Contracts.pdf Last accessed: 18/10/2021
6.1.4 Consider the criticality of procured assets and their role relative to the wider system
Criticality is an indicator of how crucial an asset is to the wider system. Action 5.2.4 discusses how to assess this.
Systems ThinkingAssessing the criticality of procured assets and how these relate to the wider infrastructure system allows the procuring authority to better understand the role these assets play in maintaining a stable system or the importance of their contribution to the overall resilience of the system. This includes understanding what vulnerabilities they are exposed to within the system and the impacts that exposure to these vulnerabilities could have on the procured assets themselves as well as the wider system. This should allow the procuring authority to address the vulnerabilities at the asset and system-level, through design, construction, or O&M interventions, which are discussed in the preceding and subsequent lifecycle phases. At a minimum, considering the criticality will prevent diminishing the ability of the system to withstand climate shocks and stresses if the asset is altered in any way post-procurement.
Optimising the procurement approach in this way has downstream and systemic benefits. Placing the asset within the context of the system as a whole, rather than as a siloed entity, provides greater insight into the critical links and interactions with other assets and systems. Inclusive EngagementBeing able to account for these at the procurement phase will allow procuring authorities to more effectively exploit these synergies downstream, through cooperation with other relevant stakeholders, thereby building a more robust and interconnected system.
Theme 2: Climate Risk and Uncertainty
6.2.1 Incorporate climate risk assessments into procurement
The need to develop capacity in incorporating climate risk into procurement processes was identified in 2015 and thought to be critical in achieving the Paris targets. Since then, limited progress has been made in identifying opportunities, practices and techniques for accounting for climate risk in procurement.
One approach that offers a limited opportunity to incorporate climate risk, is proposed by the Stichting Klimaavriendelijk Aanbesteden en Ondernemen. Their procurement guide, which sets out a framework for a low-emissions procurement approach, advocates for a methodology that sees buying organisations account for and minimise their relevant ‘scope 3 emissions’ throughout all stages of procurement. The handbook’s definition of these is emissions that “can form a risk for the company”. This guide focuses on climate change mitigation, however similar principles apply to climate change resilience and adaptation.
Systems ThinkingClimate risks do not occur in isolation, those responsible for procurement should therefore look to identify climate risks holistically across the entire supply chain. Inclusive EngagementEngaging with relevant suppliers and service providers to understand the impact the climate has on their products and services and the steps they are taking to minimise and mitigate against those impacts is therefore key to managing and reducing climate risk.
As per the Inter-American Development Bank’s recommendations, climate resilience considerations should be included as early as possible in the procurement process. Section 3 of their Climate Resilient PPP Toolkit guides buying organisations on how to include climate resilience in the procurement process. These qualifications can be mandated by the relevant buying organisation, or, under appropriate circumstances, could be a requirement stipulated at a governmental level. See the Policies and Plans phase for further guidance on regulations supporting climate resilience. Assessing a supplier’s climate resilience credentials at the primary stage of procurement in this way can have several benefits. Firstly, it helps to streamline the procurement process, as unsuitable candidates will not be considered going forward. Secondly, as this practice becomes more widespread, considering climate resilience at this stage in the lifecycle process will ideally become part of business-as-usual procurement operations.
Tool 3.1 of the IDB toolkit offers guidance on including climate resilience considerations at the Request for Qualification (RFQ) stage of the procurement process, with approaches for this outlined in Tool 3.2. Tool 3.3 offers guidance on integrating climate resilience into output specifications.
While the toolkit targets Public Private Partnerships (PPPs) which are discussed further in Action 6.4.2, the guidance is high-level enough to be applicable in other instances and detailed enough to still provide useful insights.
6.2.2 Create systems to distribute climate risks
At the procurement phase, there are two primary areas of risk management related to climate change impacts: management of risks due to climate change impacts throughout the asset life and of risks related to a failure to deliver on the climate resilience objectives of the project. The risks from the former category are primarily assessed and addressed in other phases of the project lifecycle. However, a high-level review and prioritisation of climate change issues should be undertaken during procurement. Depending on the lifecycle point, this should be able to draw on various existing risk assessments. As an adaptation of a sustainable procurement approach presented on page 10 in ISO 20400, a review of each issue’s relevance to the organisation, Evidence-Based Decision Makinganalysis of the severity of adverse impacts to the organisation and supply chain, and the effort and capacity to influence the level of impact could inform this prioritisation. This review should inform how an organisation, through its procurement activities, exercises its influence through direct or indirect control to mitigate climate risks.
Climate risk and resilience requirements may at times be complex or less well understood, and there is therefore potential for contractors and suppliers to regard them as higher risk. This therefore places additional importance on the proportional allocation of risks between the different project parties). Mechanisms to allocate climate risks include:
- Payment mechanisms – defining how parties will be compensated, which can be made contingent on the mitigation of risks.
- Express contractual provisions – setting explicit guarantees and obligations to adjust the risk allocation implicit in the project structure.
- Provisions for financial re-equilibrium of contracts to deal with supervening events.
These above mechanisms are from a PPP-related source but have broader applicability. In the case of PPPs, the private partner, through the project specific ‘Special Purpose Vehicle’ (SPV), usually takes on most of the risk of non-performance and disaster risk. Under other models of procurement, the majority of the risk defaults to the owner and investor in the assets. A three-tiered approach to supervening events in climate-resilient PPPs is proposed by the IDB on page 142 of their toolkit, consisting of:
- Compensation events – The buying organisation pays compensation to the developer, in addition to any other contractual relief required, to leave them in the same position as before the event.
- Relief or delay events – The developer takes on financial risk for an event but is given relief from other consequences of non-performance resulting from the event. Typically used for insurable or short-duration events.
- Force majeure events – Events beyond the control of all parties that render performance impossible. Typically, these are uninsurable, uncontrollable, and catastrophic events. Parties usually each bear their own consequences for these events, although contracts which make allowances for force majeure events do exist.
Climate risks are traditionally treated as Force Majeure. Future-Oriented PlanningHowever, a more nuanced, hazard-specific approach can improve this classification and enable better allocation of climate risk for events which are potentially foreseeable and avoidable. The IDB Climate Resilient PPP Toolkit includes a simple tool (Tool 4.2) for redefining climate risks.
6.2.3 Prepare adjustment, dispute, and grievance mechanisms to help adapt to changing circumstances as the project progresses
Future-Oriented PlanningLong-term projects are likely to require contractual changes during their lifetimes, especially given the high uncertainty surrounding climate change. This may include unforeseen changes in climate, advances in technology or adaptation of assets and operations. The creation of adjustment mechanisms introduces flexibility within procurement contracts to allow projects to adapt to this uncertainty. Furthermore, putting mechanisms in place to deal with supplier issues can help ensure both smooth project delivery and that all stakeholders have equal opportunities to address problems.
Future-Oriented PlanningPreparing mechanisms to deal with change in procurement agreements from the outset allows them to deal with uncertainty, a particularly important factor given the high levels of uncertainty around climate change. For example, a project that intends to use adaptive design (discussed in Lifecycle Phase 5), should clearly state the trigger points within the contracts with the supplier responsible for their enactment. Long-term contracts will typically include mechanisms for contract renegotiation due to unforeseen risks or changes in the law. Learning and IterationContracts may also incorporate a regular review of their requirements, for example a 5-year updated masterplan for airport concessions to respond to changes in climate predictions and new technologies.
Future-Oriented PlanningThe creation of a dispute resolution process (DRP), that outlines steps for resolution of disagreements between the procuring body and supplier and assigns responsibility for its facilitation, is recommended on page 38 of ISO 20400. These are particularly important in the complex, ideally long-term, agreements likely to be required to deliver climate resilience. Disputes are also increasingly likely to be triggered by extreme climate events. A DRP should :
- Aim to facilitate high level negotiations between the two parties, perhaps including an impartial third party as a mediator.
- Include a dispute resolution board including two independent experts, one designated by each party and a 3rd selected by mutual agreement.
- Consist of a process where evidence is presented to the third party, who makes the final decision.
For climate-related disputes, the expert and mediator roles could be filled by climate experts.
Inclusive EngagementA transparent grievance mechanism should be established to allow any stakeholders who feel they have been negatively impacted by the project. This might include members of the community, and should be made open to everyone, particularly vulnerable groups. This mechanism should ensure grievances can be addressed in a mutually agreeable, safe and equitable manner. Equity and Social Co-BenefitsThis can play an important role in mitigating negative impacts across the supply chain and is an important part of ensuring equity through procurement.
Theme 3: Procurement Approaches and Mechanisms
Decisions can be made at the procurement phase around the selection of procurement approaches and mechanisms to leverage and facilitate resilience beyond the direct scope of procurement and throughout the project life. The earlier resilience can be embedded in a project, the greater impact small investments can have on the overall resilience of an infrastructure system. These opportunities include both creating systems that will encourage resilience to be carried forward and Learning and Iterationthat can be adapted, adjusted and improved as the project progresses.
The approaches available to procurement officials during public procurement activities will typically be limited by national regulations and requirements. Therefore, it may not always be within the power of decisionmakers at the procurement phase to freely select their approach. Furthermore, climate resilience is not the only consideration behind procurement approach selection. This guidance should therefore be regarded as recommendations from a climate resilience perspective only.
6.3.1 Select procurement processes that support climate resilience
Climate resilience is an emerging, and often technically complicated field. It therefore requires innovation and technical expertise to deliver. A procurement process that best enables suppliers to demonstrate their technical credentials, the integration of different areas of expertise, and flexibility for contractors to innovate where necessary will therefore be best suited to deliver resilience value.
The procurement procedures available to a public buying organisation will typically be restricted by national procurement requirements and regulations. Open, restricted and negotiated procurement procedures are all frequently employed, each with their own particular uses. Inclusive EngagementCompetitive dialogue processes have been recommended by some authorities for use in ‘complex’ projects as they offer the advantage of including participants in the tendering process. In competitive dialogue procurement, pre-qualified bidders participate in a dialogue to develop alternatives for later evaluation. This allows for innovative solutions to be developed, could increase contractor buy-in to climate resilience measures and could prevent later issues developing due to contractors being unable to deliver. However, there is usually limited room for changes to the proposal to be made later and suppliers are likely to be resistant to change due to the time and expense required, potentially resulting in inflexible project arrangements.
There are many different project delivery systems employed during the procurement phase. Of the five primary functions of procurement, Design (D), Build (B), Finance (F), Operate (O) and Maintain (M), traditional procurement focuses on D, B, D&B or O&M contracts (GCA, 2021). Each of these systems has its own benefits and disadvantages and there is no single system best suited to all conditions. However, systems which integrate several roles into a single contractor, or expand the responsibilities of the contractor, may be beneficial in areas where the market has greater expertise than the infrastructure owners, as they allow greater innovation among suppliers (UNEP, 2018). On the other hand, these arrangements may be inflexible and unable to deal with uncertainty, or adaptive approaches if handled improperly. For example, a contractor procured for design-build may be locked-in to a particular approach which will receive less scrutiny and be less open to change than if the two phases were procured separately. Future-Oriented PlanningOwners should ensure they are clear on their desired outcomes before entering an inflexible, multi-function agreement.
Procurement specialists may consider procuring more integrated teams that encourage cooperation while remaining flexible. Alliance Contracting consists of procurement approaches that utilise joint contracts between parties. The integrated project delivery (IPD) approach incorporates elements of Alliance Contracting, emphasising openness, shared risks and rewards, and collaborative decision making. IPD is intended to utilise versatile expertise, in addition to nascent tools, techniques and procedures. All these aspects are potentially beneficial to a project attempting to be climate-resilient and could be taken into account when selecting a procurement system, alongside other project requirements.
ICE’s Project 13 attempts to present an alternative model of infrastructure delivery based around integrated ‘enterprises’ rather than transactional, independently procured projects. This approach aims to increase the integration of project teams as well as the governance and capabilities of the organisation. A key aspect of this is the creation of an ‘integrator’ role, an organisation responsible for integration between the different components of an enterprise. Under this model it is this integrator role that is responsible for establishing the procurement strategy and incentivised commercial agreements. Increasing the levels of the resilience quality of integration through a role like this could enable the more effective coordination of activities around climate resilience Systems Thinkingbetween different organisations and better facilitate systems thinking throughout the remainder of the project.
6.3.2 Consider partnering directly with the private sector
Public Private Partnerships (PPPs) are mechanisms for public procurement that involve a private sector organisation working closely with the public sector on an infrastructure project to provide investment and expertise. They are typically long-term contracts, in which the private sector bears significant risk and responsibility for project management, reward is linked to performance and most or all areas of the project are procured at once. Other procurement mechanisms which place greater emphasis on the role of the private sector include Mutual Investment Model (MIM) agreements and Direct Procurement for Customers (DPC). In addition to offering opportunities to mobilise additional private sector investment, PPPs and similar agreements may in some cases provide opportunities for enhanced climate resilience for several reasons outlined on page 24-25 in the GCA’s handbook:
- Incentivised performance – Service Continuity and ReliabilityPayment is often based on performance, therefore allowing the integration of climate-resilient principles into reward structures and incentivising outcomes. This is discussed further in Action 6.3.3.
- Output/results focus – An output focused approach that enables private sector innovation, Environmental Co-Benefitssuch as the integration of Nature-based solutions. This can also be combined with incentives to encourage innovation and maximisation of co-benefits.
- Long durations and whole-life costing – Future-Oriented PlanningAs PPPs and similar agreements operate on longer timescales than traditional public sector procurement, the private sector actors typically taking responsibility for operations and maintenance for a number of years, so they are more likely to effectively address long-term climate resilience issues.
- Widespread use – PPPs are relatively common in many markets and so organisations should be more capable of working within them comfortably than more novel procurement approaches, reducing the complexity of climate resilience integration.
- Risk transfer – As PPPs and similar agreements typically include risk-sharing among the participating organisations they are well suited for reviewing and tackling risks related to climate change effectively.
It should be noted that the status and popularity of PPPs and similar agreements is variable across the globe, with some national and regional governments favouring them while others do not support them. Likewise, their popularity with contractors is variable depending on attitudes within the market.
The GCA’s four phase PPP project lifecycle on page 13 of their handbook illustrates how different key concepts of climate resilience, decision-making under uncertainty, stakeholder engagement, characterising the future and nature-based solutions, can be embedded within the phases of a PPP.
The IDB toolkit for decision making in Climate-Resilient Public Private Partnerships includes many tools useful for the delivery of PPPs and some with applicability to other procurement mechanisms. The toolkit includes tools (Tool 2.4 – 2.9) to help decision-makers evaluate the value for money (VfM), business case and other factors to decide whether to pursue a PPP based project, with consideration of climate change.
Sendai International Airport risk sharing and supplier evaluation under concessions-based PPP
The Sendai Airport Operation was put in place after the tsunami induced by the 2011 Great East Japan Earthquake damaged the airport’s electrical and mechanical equipment, ventilation and sanitation systems in the terminal, and the airport rail line. The project to restore and operate the airport going forward was procured as a PPP with a concession scheme in place.a
As part of this scheme, three types of force majeure risks were defined with differing risk sharing policies. Under an ordinary force majeure occurrence, the full costs would be borne by the concessionaire. However, a second category of force majeure was added for circumstances in which all or most of the additional costs to the concessionaire are not covered by insurance, in which case “government interventions” would be taken to restore operations, in which case the costs would be split between the government and Miyagi Prefecture. The third category covers “critical emergency situations” which would significantly prevent the concessionaire from conducting operation safely, would jeopardize national security or the safety of the airport, or cause damage to human bodies, lives and properties within the airports. In this 3rd situation the government can decide to suspend the PPP and take control of the airport operations, compensating the operator for normal loses b. These three measures are intended to share risk between parties while ensuring that the airport continues to provide its essential services during unexpected events. By comparison, under the separate terminal building services agreement, all force majeure costs shall be borne by the private party, these functions are considered less critical and the government provides no business continuity measures.
The concessionaire selection process for the airport consisted of an initial screening of tenders, a competitive dialogue process, followed by a final screening including quantitative evaluation to select the final consortium. During the second screening positive evaluations were given for proactive and detailed measures to:
- Prevent security incidents and accidents
- Minimize damage from disaster
- Obtain insurance – conditions to obtain insurance included standards relating to tsunami and other disaster risk management.
Additional details concerning the procurement approach for this project and other PPPs in Japan can be found in Resilient Infrastructure Public-Private Partnerships (PPPs): Contracts and Procurement – The Case of Japan
a (The World Bank, 2021. Preparing, Procuring and Implementing Climate-Smart PPPs. Available at: https://ppp.worldbank.org/public-private-partnership/climate-smart/climate-smart-clean-technology-ppps/preparing-procuring-and-implementing-climate-smart-ppps# Appraisal Last accessed: 12 July 2021).
b (The World Bank, 2017. Resilient Infrastructure Public-Private Partnerships (PPPs): Contracts and Procurement – The Case of Japan).
6.3.3 Consider outcome-based procurement approaches
Outcome-based procurement approaches employ performance and functional requirements. The former defines performance standards to be met by the supplier and might be combined with a definition of how the supplier should deliver to optimise this performance. The latter define a function that is to be met by the goods or services delivered by the supplier without any requirements for how it is to be delivered. A combination of performance and functional requirements can enable suppliers to propose the most efficient technical solution for the required performance or function within sustainable procurement. This is likely to be beneficial provided the available suppliers have sufficient capabilities and expertise surrounding climate resilience. However, the creation of these performance and functional requirements for climate resilience may be more challenging than for climate mitigation, due to the inherent uncertainty around climate risks. Suppliers are likely to be hesitant to accept requirements that too broadly require ‘fitness for purpose’, as this is usually uninsurable.
It is essential that outcome-based procurement requirements are well considered to ensure that they are within the supplier’s power to influence, achievable, and clearly measurable. Climate resilience might be incorporated into outcomes-based requirements through:
Continuity of quality service – Requirements around the ability of infrastructure to consistently deliver quality service to end users. These might include maximum allowable periods of service losses. Reasonable levels for these criteria should consider the criticality of the service and services dependent on it, the value generated by the asset, the level of redundancy in the system, and the repair or recovery time of the asset.
- Design standards and safeguards – Clearly specifying standards to be met for the project can increase resilience. However, most standards currently published do not account for climate change. Procurement officials should therefore specify clear, climate informed, benchmarks that might go beyond the current standard requirements. This might include the use of rating systems.
Key performance indicators – Establishing key performance indicators that must be met. Service Continuity and ReliabilityExamples of these might include quality of service requirements, damage by disasters and extreme weather events, efficiencies of the asset over time, reductions in independently assessed hazard ratings across a network, the number of interventions against climate change impacts made, and any other indicators considered relevant to the specific requirements of the project. The Re:focus Toolkit for Procuring Resilience includes some high level guidance on performance metrics for inclusion in a procurement contract for resilience with consideration of environmental, social and economic benefits delivered.
Future-Oriented PlanningOutcome-based requirements for climate resilience may require long durations before they can be effectively measured, and may subsequently be ineffective unless long-term procurement agreements, such as PPPs, are utilised. Some requirements may be shorter term in nature if they are independent of whole-life performance, they are therefore easier to implement across shorter contract periods but likely to be less suitable for ensuring long-term climate resilience.
6.3.4 Incentivise the delivery of climate-resilient outcomes through payment mechanisms
Selecting incentive structures that incorporate climate resilience is a useful lever to support the delivery of resilience outcomes as a project progresses. Service Continuity and ReliabilityThese incentive structures are a common form of outcome-based procurement which explicitly tie contractor renumeration to the delivery of performance metrics or the provision of a reliable service.
Performance-based payment schemes legally bind suppliers to agreements which tie payments to measurable outputs according to a predefined performance standard. Service Continuity and ReliabilityThe creation of such mechanisms can provide a financial incentive to stimulate better risk mitigation and preparation, in addition to higher quality operational responses and repairs. Future-Oriented PlanningAdditionally, performance-based payments can encourage longer term thinking and integration of different contractors, for example by jointly incentivising multiple contractors to deliver on the same long-term performance objectives. Performance-based payment mechanisms are already well-established in some industries, sectors, and nations. For example, 100% of maintenance contracts on South Africa’s national roads were delivered through performance-based contracting.
The Project 13 Commercial Handbook, page 21, outlines a methodology for performance-based reward centred around the establishment of a performance baseline, the allocation of shares according to who is best placed to maximise value and mitigate risk, and payment based on each organisation’s respective shares and the level of performance above the baseline.
PPPs typically employ performance-based payment mechanisms. Additionally, PPPs often include payment through user charges, for example the right to charge for a toll road, and penalties or fines for failing to deliver outcomes, all of which must be fully defined in the contract. Service Continuity and ReliabilityThese further incentivise the private partner to ensure reliable service delivery. The IDB PPP toolkit includes a short tool (Tool 3.7) to help develop PPP payment mechanisms to incentivise and enforce climate resilience.
Integrated project delivery with the Anglian Water @One Alliance
The Anglian Water @One Alliance is an alliance team set up in 2005 in the east of England. It is composed of seven partners including Anglian Water and several infrastructure, engineering, construction and consultancy organisations. The alliance is responsible for delivering over half of Anglian Water’s capital investment programme, designing and building around 800 schemes. These include water and water recycling treatment centres, and maintaining and improving the regional water mains and sewage networka.
The alliance employs an aligned commercial arrangement which developed into a shared reward pool, thereby encouraging the “best for task” assignment of personnel from all the participating organisations. It should be noted that the alliance had some initial issues. To being with, incentives were created to chase turnover as this resulted in the greatest financial reward sometimes resulting in increased costs for no added value. The initial allocation of sub-programmes was uneven, with some programmes being more easily achievable than others without a fair division in fee. This was recognised as a problem by the alliance board and so measures were put in place to resolve the issues. Rewards were shared between partners and moderated to a fix level through agreement between the board. The alliance was further refined to remove the turnover incentive and eventually all fees were removed, payment being based solely on performance.
Financially, the alliance performed poorly during its first investment period. However, once the commercial arrangements were refined the programme was able to deliver sustainable profits for all the partnersb.
The alliance can take a long-term, systemic view of the Anglian Water network and work effectively with a large pool of different experts who are all jointly incentivised to deliver the best results they can. While climate resilience is not usually stated as the primary goal of the organisation, the resilience of the water network is one of the primary results, and sustainability is heavily emphasised by the alliance. The alliance has produced a number of innovative projects such as the Whitlingham Sewer rehabilitation, and the delivery of the Marston Water Recycling Centrec.
a (Anglian Water, 2021. Project partners. Available at: https://www.anglianwater.co.uk/about-us/who-we-are/our-suppliers/project-partners/. Last accessed: 18/10/2021).
b (ICE, 2021. Aligned commercial arrangements: Anglian Water’s @one Alliance 2015. Available at: https://www.ice.org.uk/knowledge-and-resources/case-studies/aligned-commercial-arrangements-anglian-water-@one Last accessed: 18/10/2021)
c (@One Alliance, 2021. Our Projects. Available at: https://www.onealliance.co.uk/pages/our-projects Last accessed: 2021).
Theme 4: Requirements and Evaluation
Supplier requirements for climate resilience, in terms of qualifications and deliverables, must be embedded into the tendering and selection process to effectively deliver climate-resilient projects.
Although the precise figures vary depending on hazard, asset type and location, the creation of resilient infrastructure typically requires a Future-Oriented Planninglarger capital cost in exchange for future cost savings and additional social, environmental, and economic benefits. Procurement practitioners are typically required to ensure that value for money (VFM) is achieved through their procurement. If the added value of climate resilience is not appropriately considered it may end up being deprioritised during the procurement process. Approaches should therefore be adopted where possible that help evaluate, stress, and enhance Systems Thinkingthe total resilience value of a project at the procurement phase.
6.4.1 Specify clear requirements for contractor and supplier capabilities and actions for climate resilience
Incorporating explicit climate change requirements into procurement documents such as the Request for Qualifications (RFQ)/ Selection Questionnaire (SQ), Request for Proposal (RFP)/ Invitation to Tender (ITT) and contracts can help guarantee a minimum level of climate resilience action from the selected partners, through ensuring suppliers have the necessary credentials to deliver and that the activities they will have to undertake are embedded early within the project. Including climate resilience within the RFQ/ SQ can help reduce the number of bids from under-qualified candidates. For example, procurement professionals might consider setting requirements for past experience of having undertaken a similar role on projects with similar climate change considerations, which might have a set minimum level or form part of an initial evaluation of candidates. The IDB Climate Resilient PPP Toolkit provides some additional guidance on this within Tool 3.1.
Requirements might be taken into further detail as part of the RFP/ ITT. As in the RFQ/SQ, these might take the form of minimum pass/fail requirements or evaluation criteria. Minimum requirements should only be considered where the procuring agency is clear on what it requires from the bidders, whereas evaluation criteria can be used to differentiate bidders where the procuring agency is not certain about what they want delivered. In addition to qualifications, minimum requirements might include proof of sufficient insurance coverage regarding potential climate risk and the submission of disaster prevention and risk response plans. Other requirements might include the use of a specific project system and capabilities with a particular tool or rating system.
Many requirements for climate resilience might be incorporated into the project specification. As with sustainability criteria, climate resilience criteria included in specifications should be objective, verifiable, clearly defined, transparent, and fair, with consideration of the capacity for contractors and consultants to respond. The Re:focus Toolkit for Procuring Resilience provides high-level guidance on the design of resilient procurement RFIs, Competitions and Performance contracts at different levels of complexity depending on the nature of the project.
The specific language used in specifications and procurement documents is key to delivering some of the above qualities, ensuring that it is concise and unambiguous. Tool 3.4. and 3.6 in the IDB toolkit includes example language for a requirement to produce an emergency preparedness and response plan and periodically updated climate risk mitigation plan respectively, indicating how the use of language might develop depending on the particular stage and circumstances of procurement. Chapter 4 of ASCE’s Sustainable Procurement for Infrastructure Standard includes numerous examples of requirements from RFQs, RFPs, and contract documents for sustainability which might be adapted to suit other projects. For example, the RFP for rehabilitation of a pumping station in Madison, USA, included the clause “…a project team having a successful track record of incorporating sustainable thinking into projects and programmes … [including] applied decision-making frameworks such as the Institute for Sustainable Infrastructure’s EnvisionTM” and several other sustainability frameworks. Professionals might also wish to incorporate requirements for the delivery of sustainability co-benefits, which often overlap with resilience outcomes at this stage, for which the ASCE standard has helpful guidance.
There is potential for prescriptive requirements in procurement documents to become excessively onerous, preventing suppliers from being able to enter the market or fairly compete. This might be particularly true of novel climate resilience requirements which only a limited number of suppliers may have the capabilities to deliver. Inclusive EngagementMarket engagement, discussed further in Theme 6.5, is key to preventing and identifying these issues.
6.4.2 Utilise resilience rating systems and standards in the supplier selection process
Evidence-Based Decision MakingRating systems and standards provide a useful, transparent, and standardised way to evaluate bids and suppliers. Qualification of bidders might require a minimum level of achievement under a specific rating system. They might be used to evaluate responses or be included as a delivery requirement. The incorporation of rating systems with a climate resilience element can help ensure resilience is appropriately valued during supplier selection. Many of these systems consider resilience alongside sustainability.
Tools such as the Envision rating system and SuRe Standard for Sustainable and Resilient Infrastructure are designed to evaluate infrastructure projects according to a series of sustainability criteria, which incorporate some climate resilience elements. They provide guidance for assigning levels of achievement to each of these criteria. However, these tools are mostly suitable for evaluation of projects themselves during delivery. The evaluation criteria set out in these guides may not all be suitable for procurement; however, they could provide a useful foundation for the development of evaluation criteria with minor adaptation. The criteria largely focus on inputs and actions to be taken by the team, making them useful for proposal evaluation.
The IS Rating System is similar to the above, with the same limitations for procurement. However, ISC have also developed the ISupply Directory, which allows suppliers offering products and services that meet the IS Rating System’s criteria, which includes resilience and climate adaptation considerations, to connect with potential clients. Evidence-Based Decision MakingThis is a good example of how rating systems can be directly incorporated into supplier selection.
6.4.3 Employ evaluation approaches that consider total resilience value
Criteria for the evaluation of received bids should be leveraged to incorporate climate resilience. This can include technical evaluation of climate resilience solutions and staff qualifications, in addition to how the infrastructure fits into broader climate-related goals. The IDB Climate Resilient PPP Toolkit includes high level guidance on the inclusion of climate resilience as evaluation criteria (Tool 3.6).
Evaluation criteria should be clearly set out in the RFP for transparency purposes, along with a description of the factors that will be considered when assessing sub-criteria. Independent evaluation and scoring of technical criteria before reviewing financial criteria, as is required by EU procurement regulations, can help prioritise these technical criteria over cost and subsequently total project value over initial CAPEX savings. It is also critical that the personnel responsible for reviewing the responses are technically competent. Capacity BuildingThis should be considered as part of the professionalisation of procurement discussed in Action 6.2.1.
Theme 5: Capacity Building
Central to the embedment of climate resilience within procurement are measures that can be taken to manage and enhance the industry’s capacity to deliver climate resilience goals and to get the most out of the private sector’s existing expertise. Capacity BuildingThis includes improving the capabilities of both procuring bodies and suppliers and strengthening the relationships and processes necessary for resilient procurement.
6.5.1 Build governmental capacity to deliver climate resilience through procurement
There are many ways that the organisation of the procurement process can be improved to better facilitate climate-resilient decision-making and implementation. Capacity BuildingCreating a supportive organisational culture, implementing performance management, providing education, training, and other forms of support, will all help to give all those involved in the procurement process a full understanding of the reasoning behind climate resilient procurement and their role in delivering it. There is a recognised need to increase the professionalisation of the procurement process and the level of expertise in sustainable procurement. This will be important for procurement that supports climate resilience due to its technically complex and underdeveloped nature, where a check-box approach to procurement will not be sufficient.
Establishing specific, clear, and accountable roles within the procurement team with climate resilience integrated into the team’s objectives and job descriptions can help the delivery of resilient outcomes and the overall transparency of the organisation). Transparency of procurement processes can be particularly important in the case of partnerships between public and private institutions, discussed further in Theme 6.1. The CoST Infrastructure Transparency Index is a tool intended to measure the transparency of infrastructure procurement to help improve the quality of associated processes.
Climate resilience, and resilience in general, is poorly acknowledged in most existing resources. The encouragement of resilience education for procurement could help to raise the profile of this issue and produce benefits for businesses. Government would have the primary responsibility for establishing requirements for resilience in procurement and supporting education programmes.
6.5.2 Engage with stakeholders to understand the market and build the capacity of consultants and contractors
It is important for procurement practitioners to understand what suppliers within a particular market can deliver, to develop trusting working relationships with suppliers and to build their skills in the field of climate resilience. Suppliers may perceive requirements outside of traditional infrastructure, such as those around climate resilience, as higher risk. This may lead to increased prices or a reluctance from some suppliers to bid for climate-resilient projects. Capacity BuildingMarket engagement and capacity building therefore plays a key role in familiarising suppliers with resilience concepts, building confidence in their delivery, and subsequently lowering the perceived risk. This is particularly key in developing markets where climate change expertise may be less widespread.
In the realm of public procurement, the LCCP (2009) (identified policymakers, contracting authorities, industry organisations, and contractors as the stakeholders with the greatest potential to “influence the extent to which climate change is embedded into public procurement” (p.67), and therefore targets for stakeholder engagement activities.
Systems ThinkingEngagement with suppliers, partners and subcontractors throughout the supply chain can help expand the scope of resilience activities, potentially allowing for longer-term initiatives and activities that reach beyond the first tier of suppliers, i.e. those that a buyer organisation typically interacts with directly. This may provide opportunities to increase the resilience of the entire supply chain and to use supply chain innovation to improve the resilience of the overall project. Example engagement techniques which could be adapted to a climate resilience context, set out on page 17 of ISO 20400, include:
- Supplier development plans – The organisation supports suppliers to develop their capabilities: these might include climate resilience, risk assessment and development.
- Supplier diversity initiatives – Aim to increase business opportunities for under-utilized groups of suppliers by including them in procurement decisions. Diversified supply chains typically have greater resilience to disruption.
Industry outreach might similarly be conducted to gauge private sector capabilities and interest in a particular project at early stages of the procurement process to ensure it is commercially viable. Additionally, early market engagement has been employed to encourage innovation through an open dialogue, encouraging the generation of research and development projects and furthering understanding of the field. Outreach might allow buying organisations to tailor their assessment criteria and requirements to mitigate damage to contractor’s willingness to deliver climate-resilient infrastructure, by identifying criteria that contractors find unreasonable.
National public procurement requirements typically mandate free and open competition, intended to deliver equal opportunity to all bidders. Principles of non-discrimination, equal treatment, and transparency are typical of international public procurement agreements and many national procurement requirements. Ensuring that public procurement is equitable is additionally challenging when complex climate change requirements are included, as this may make it difficult for local suppliers, and small and medium enterprises (SMEs) to compete. Equity and Social Co-BenefitsThis amplifies the importance of capacity building activities that will expand the range of potential qualified suppliers.
Community Involvement and Capacity Building for Climate Resilient Redevelopment
On Christmas Eve 2013 a tropical storm caused heavy rainfall and flooding across Saint Vincent and the Grenadines, causing significant damage to the islands. Cumberland Bridge on Saint Vincent, the only route connecting numerous communities in the north to the rest of the island, was severely damaged. UNOPS led a reconstruction project to design the bridge to withstand up to category 5 hurricanes. The project also included construction of river embankment defences, road repairs and institutional strengthening activities.a
As part of the project procurement, local workers from the community were employed to deliver the project, stimulating the local economy, increasing the local buy-in to the project and helping to ensure the project suited the end user’s needs. Furthermore, a capacity building phase was conducted including procurement workshops and workshops for engineers in the country’s Ministry of Transport. These activities hoped Saint Vincent and the Grenadine’s resilience capabilities at an institutional level.b
a (UNOPS, 2021. At the water’s edge: Adapting to climate change through resilient infrastructure. Available at: https://www.unops.org/news-and-stories/stories/at-the-waters-edge-adapting-to-climate-change-through-resilient-infrastructure Last accessed: 15/10/2021)
b (UNOPS, 2021. At the water’s edge: Adapting to climate change through resilient infrastructure. Available at: https://www.unops.org/news-and-stories/stories/at-the-waters-edge-adapting-to-climate-change-through-resilient-infrastructure Last accessed: 15/10/2021)
Climate Change Mitigation Considerations
Theme 1: Systems Thinking
There is considerable overlap between the systemic approach, principles, requirements, and drivers for resilience and those for sustainability and low carbon infrastructure. Many of the recommendations under this theme can directly contribute towards facilitating climate mitigation activities, particularly adopting a long-term, systemic view of the value delivered by infrastructure.
As part of the embedment of systems thinking into procurement, procurement professionals should also consider the societal value that can be delivered by the project. This may be informed by social drivers and should be considered as part of the criticality assessment. A general shift away from status quo procurement could provide many opportunities for incorporation of equity considerations.
Theme 2: Climate Risk and Uncertainty
Climate risks can be expanded to include risks that a project poses to the climate i.e. emissions. Approaches to risk management can therefore be employed to manage risk related to failures to meet emission targets, reputational damage and other carbon mitigation related risks.
Risk distribution, adjustment, dispute and grievance mechanisms could provide opportunities to ensure risks are managed fairly, without any one party bearing an unreasonable portion of climate risk.
Theme 3: Procurement Approaches and Mechanisms
The procurement approaches and mechanisms discussed here could also be employed to facilitate and incentivise climate change mitigation activities. Outcome and performance-based procurement and payment mechanisms can incorporate carbon emission targets.
Social value can also be incorporated into outcome and performance-based procurement and payment mechanisms to incentivise actions that provide greater value to the community.
Theme 4: Requirement and Evaluation
Procurement requirements and tender evaluation can also incorporate minimum requirements around climate change mitigation, carbon quantification and similar activities. There are also significant opportunities to reduce carbon emissions due to construction through requirements for construction materials and the supply chain. Most of the rating systems discussed under this theme incorporate sustainability and carbon mitigation criteria and could be used to evaluate suppliers in this regard.
Procurement requirements and tender evaluation can also incorporate minimum requirements for social value, equity, community engagement and diversity from suppliers. Likewise, the rating systems discussed under this theme incorporate human rights and social criteria that could be used to evaluate suppliers.
Theme 5: Capacity Building
Climate change mitigation is also a relatively emergent market. Market engagement and capacity building could therefore offer opportunities for similar benefits in this area to climate adaptation, allowing for an improved pool of suppliers and subsequently better delivery of projects.
By developing the capacity of the market and engaging with industry, owners and operators can help ensure there is equity in procurement and a diverse range of available suppliers. Engagement activities might include developing local expertise and the involvement of SMEs. The community might also be included within wider outreach activities to ensure that procured projects will meet the needs of the end user.
Downstream Benefits of a Resilience-based Approach in the Procurement Phase
Effective procurement will ensure that the climate resilience measures prepared during the planning and design phases are carried out as intended by the construction contractors. This involves ensuring that contracts are clear in what is required and that preparations have been made to ensure they are carried forward despite the potential for unexpected events.
Phase 8Operations and Maintenance
Effective procurement can ensure that contractors deliver on a project’s operations and maintenance resilience requirements. A long-term view of procurement will encourage contractors to consider the long-term value of their actions and therefore encourage climate adaptation, particularly if incentivized through performance and outcomes-based procurement mechanisms. Capacity building exercise will also enable supplier capabilities to grow to suit the project needs throughout its life.
Phase 9Decommissioning and Handover
Effective, systemic and whole-life based Procurement contracts should ensure that a contracted body has prepared for the end of the project life and is able to handover or decommission the assets with minimal disruption to the system performance, rather than simply abandoning the project as it ceases to be their responsibility.
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