PPN 04/23 (PCR 2015)
Procuring steel in government contracts
In: Define > Sourcing strategy
Overview
This PPN applies to all central government departments, executive agencies and non-departmental public bodies when conducting procurements covered by Part 2 of the Public Contracts Regulations 2015 (PCR 2015), the Utilities Contracts Regulations 2016 (UCRs), the Defence and Security Public Contracts Regulations 2011 (DSPCRs), and the Concession Contracts Regulations 2016 (CCRs), where steel is being procured directly or indirectly (collectively referred to as in-scope organisations’).
Other public sector contracting authorities are encouraged to consider applying the approach set out in this PPN, where it is relevant and proportionate to do so and in light of any relevant legal obligations which may apply.
The PPN sets out a number of existing policies, tools and methodologies that in-scope organisations should consider and apply (where appropriate) when designing relevant steel procurements. A relevant steel procurement is a regulated procurement where steel is being procured directly or indirectly.
The PPN also sets out the scope of reporting requirements on steel origin data.
Objective at this commercial stage
Developing clear, appropriate outcome-based technical specifications is key to facilitating innovative, cost-effective solutions.
As steel is typically not bought directly, it is necessary to ensure that the contractor cascades any important technical requirements, which define the characteristics required of the material, product or supply of the steel, both through the specification and contract conditions, where appropriate.
Key considerations at this commercial stage
In-scope organisations should:
- ensure that early market engagement involves all tiers of the supply chain including steel producers, fabricators and stockists to help buyers understand the range of solutions and options available from the market, inform and test the procurement approach and the deliverability of their requirements
- avoid competition based on price alone and be aware that, when considering outlay, the key factor is the whole life cost, not the lowest purchase price
- consider that, in regard to steel, the resources required by the production process, and costs connected with environmental impacts, including the cost of emissions at the production plant and during transport, are likely to be relevant in determining the whole life cost of an asset
- consider relevant criteria for projects / programmes requiring steel, which may cover:
- cost / benefits of specialised niche solutions (e.g. design, weight, durability, adaptability for subsequent use), speed of response, service and responsiveness to changes, at all points in the life cycle of the product
- supply chain management (e.g. requiring a good, secure supply chain and management performance)
- outcomes identified through the IPA’s Project / Programme Outcome Profile tool, and any relevant priorities set out in the National Procurement Policy Statement
- health and safety (requiring the same standards of health and safety throughout the supply chain, including steel production), and
- social value.
Legal framework
The PPN should be read alongside the relevant parts of the legal framework, including but not limited to, the following provisions of the Public Contracts Regulations 2015 (which may be particularly relevant to the consideration of this PPN):
- Regulation 18: Principles of procurement
- Regulation 40: Preliminary market consultations
- Regulation 42: Technical specifications
- Regulation 43: Labels
- Regulation 58: Selection criteria
- Regulation 60: Means of proof
- Regulation 62: Quality assurance standards and environmental management standards
- Regulation 63: Reliance on the capacities of other entities
- Regulation 67: Contract award criteria
- Regulation 68: Life-cycle costing
- Regulation 70: Conditions for performance of contracts
- Regulation 71: Subcontracting
- Regulation 107: Qualitative selection
Additional support and guidance
Make sure you:
- read the PPN and any supporting implementation guidance
- seek legal and commercial advice in the context of specific procurements
