Jeff Taylor sets out the huge extent of procurement around the world, the importance of sustainable procurement, and what the Asian Development Bank is doing about it.
Speaking to a global audience, Asian Development Bank (ADB) head of procurement Jeff Taylor has highlighted the important role of procurement in securing sustainable outcomes.
“$13tn a year is spent through procurement – primarily from the largest nations in the world, though even mid-sized nations spend over $50bn per year,” he said, adding “In total, procurement makes up between 13% and 20% of GDP within countries.”
As a result of that scale, he stressed that making procurement sustainable will have a big impact on the world’s outcomes, but he also said people had to understand what procurement was about when they set about changing it.
Taylor explained to an international audience in Asia: “Much of what ADB does is process driven. So, the procurement process turns money into a tangible investment. Sustainable public procurement is the purchasing and investment process that considers the economic, environmental, social, and institutional impacts of the entity’s spending.”
“Sustainable public procurement allows governments to meet their needs for goods, services, works and utilities in a way that achieves value for money on a whole-life basis in terms of generating benefits not only to the organization, but also to society and the economy, while remaining within the carrying capacity of the environment”.
Then he set out what the ADB had done and how extensive the concept of sustainable procurement is.
“We developed our sustainable guidance notes which have strategic alignment with other key documents within the ADB. Now, ADB’s guidance notes are not static documents. We upgrade them and adapt them over time and we have benchmarked these across public sector procurement, MDBs and the UN.”
“This is all done to help strengthen country public procurement systems and capacity building, provide tools to support incorporating sustainable procurement into projects/contracts – through our individual country plans.
He said that when this is well developed, it will see sustainability become a corner stone of public procurement in each nation, and he outlined how extensive the that will be.
Taylor joked that “Procurement is always changing and is either getting more complicated than when I was younger, or I now know how much I didn’t know back then.” He then emphasised the importance of recognising that complication in making procurement sustainable by listing aspects to consider:
- needs assessment – risks, opportunities and priorities
- market analysis/supplier questionnaire
- specifications/terms of Reference – certification, standards, labels
- supplier code of conduct
- submission and Evaluation criteria
- monitoring and reporting in Contract Management Phase.
While Taylor made it clear that sustainability had to be a focus, he also reminded his international audience that it cannot be treated as the only one.
“Procurement is always a balance. It must balance price, quality, service and sustainability. Somewhere in the middle of those is ‘best value’. So it’s the art of balancing, not a science.”
Jeff Taylor was speaking at the FIDIC Asia Contract Users Conference on 19 May 2022.