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Many state and local governments are required to develop competitive specifications for the products they are acquiring. These specifications typically identify physical and performance features of the product. In developing these specifications, one can follow a structured approach to meeting both the needs of the end user and the needs of the environment. This approach consists of:
Needs Assessment
When developing specifications, the very first thing that should be assessed is the need for the product. This involves determining:
- Why do you need the product?
- How is the product going to be used?
- What is the product going to be used for?
- Who is going to use the product?
- What products are available on the market?
Answering these questions will help you determine the actual requirements of the product you are about to acquire.
Developing Green Specifications
In developing your specifications, you will be identifying and prioritizing these requirements into a biddable document. This list of requirements should include a description of the physical and performance characteristics of the product. You should also identify any or all of the environmental requirements of the product. Examples include:
- Lead free
- Mercury free
- 50% postconsumer recycled content
When developing your performance requirements, you must be specific in what you expect the product to adhere to. These requirements must be obtainable, measurable, and verifiable. Using general language like "Low VOC" is not a measurable or verifiable requirement. A specific attainable level of VOCs should be identified.
In developing these specific requirements, one additional criterion must be addressed, and that is the level of competition available to meet your requirements. Establishing a set of performance requirements that limit your competition among suppliers will undoubtedly raise the cost of such products. Maintaining an equitable number of suppliers while including environmentally friendly performance requirements will enable you to achieve the best results.
Using Existing Standards
The best method of specifying your performance requirements is to identify existing environmentally friendly standards and specify product compliance with these standards. Examples of existing environmentally friendly standards include:
These standards cover a large percentage of available products on the market today and insure that the products purchased will have the least impact on the environment during product development and throughout their useful lives. For example, Green Seal conducts a life-cycle evaluation of the product category that evaluates the major environmental impacts in each life-cycle stage including resource extraction, production, distribution, use, and eventual disposal or recycling. The evaluation considers energy, resource use, and emissions to air, water, and land, as well as other environmental and health impacts. The purpose of this evaluation is to identify significant life-cycle stages to be addressed in the standard. The evaluation also ensures that the environmental criteria selected will not lead to the transfer of impacts from one stage of the life cycle to another or from one medium (air, water, land) to another without a net gain in environmental benefit. [48]
When purchasing products which have yet to be assessed using these environmentally friendly standards, the specifier has a couple of options. They are:
- Life Cycle Cost Assessment
- Best Value Assessment
A word of caution: These two unique product assessment tools require extensive research and involve detailed evaluation methodology development for assessing value of both the products and the companies supplying the products. Individuals wishing to use either one of these product assessment tools should check with their internal Procurement Departments for authorization and assistance in developing such assessment methodologies.
Life Cycle Cost Assessment
A life cycle cost assessment of a product is a true quantitative evaluation of the product's overall cost rather than simply assessing the initial purchase price of the product. The life cycle cost assessment takes into consideration the purchase price, the operational costs, the maintenance costs, and finally the disposal cost of a product. These costs are assessed throughout the product's useful life. An example of developing a life cycle cost assessment on a typical fleet vehicle with an expected life of seven years is as follows:
- Purchase price: $14,000
- Operational costs (Fuel Usage): $800/year x 7 years = $5,600
- Maintenance Cost (Scheduled Service Intervals): $300/year x 7 years = $2,100
- Salvage Value (10% of purchase price): $1,400
Therefore, the total evaluated assessed cost would be: $14,000 + $5,600 + $2,100 - $1,400 = $20,300.
As you can imagine, the various cost factors affecting the initial price, operation and maintenance costs, and salvage value will vary from one product to the next and will even vary from brand to brand. It is imperative that the evaluation criteria used to determine a total life cycle cost of a product be consistently applied to all products being evaluated. Evaluating products based on the total cost over their useful lives will help ensure the purchase of the most economic and energy efficient products available on the market.
Best Value Assessment
Like life cycle cost, best value assessment looks at other parameters outside of the initial purchase price of the product. However, best value assessment is more of a qualitative assessment rather then a quantitative assessment. Determining the best value of a product requires identifying specific attributes a product offers and assigning a weighted point system to those attributes. Such attributes associated with typical commodities could include:
- Price
- Embodies one or more of these environmental attributes:
- Less Hazardous
- Conserves Energy
- Recycled Content
- Prevents Waste
- Improves Air Quality
- Low Volatile Organic Compounds (VOC)
- Conserves Water
- End-of-life Management
- Waste/Materials Management
- Material Availability
- Reduces Global Warming
- Responsible Manufacturers
Once all attributes have been identified that best embody the solicited product, a weighting system can be developed that assigns a specific amount of points for each attribute identified. When using percentages, make sure all percentages add up to 100%. Example:
Price -- 40%
Conserves energy -- 10%
Recycled content -- 10%
Improves air quality -- 10%
Conserves water -- 10%
Reduces global warming -- 10%
End-of-life management -- 10%
Total -- 100%
Now a point system can be applied to all potential suppliers and the supplier with the maximum amount of points will be the supplier providing the Best Value. See table below for a sample evaluation.
Weighting System Example
Each supplier will be given a rating based on how they compared with the industry as a whole or with other suppliers offering similar products. In this case, a maximum of 10 points was assigned to each attribute. It is imperative that the evaluation criteria used to determine the point ratings of each supplier be consistently applied to all suppliers being evaluated.
| Attribute |
Rating |
Weight |
Score |
| Price |
7 |
40% |
2.8 |
| Conserves Energy |
4 |
10% |
0.4 |
| Recycled Content |
9 |
10% |
0.9 |
| Improves Air Quality |
5 |
10% |
0.5 |
| Conserves Water |
6 |
10% |
0.6 |
| Reduces Global Warming |
8 |
10% |
0.8 |
| End-of-Life Management |
10 |
10% |
1.0 |
| Total |
|
|
7.0 |
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