Last month, the government issued a procurement policy notice which will require tenderers for public contracts with a value above £5m to demonstrate how they will act to reduce their carbon emissions.
The policy note takes effect from 30 September 2021 and highlights that bidders will risk disqualification from tenders if they fail to produce a satisfactory carbon reduction plan as part of their tender response.
The policy will apply to contracts tendered by central government departments, their executive agencies and non-departmental public bodies. As well as government ministries, the policy note will also cover a number of bodies charged with delivering infrastructure projects such as Highways England, the Atomic Energy Authority and Network Rail.
It is envisaged that the policy will apply to contracts where environmental considerations and carbon reduction are relevant. This could include most, if not all, contracts and therefore it is expected that in the majority of cases, the policy note will have to be observed. That may include, but is not limited to the following contractual situations:
- Contracts whose performance will have a direct impact on the environment.
- Contracts which require the use of buildings by staff engaged in the delivery of the contract.
- Contracts which require the transportation of goods or people used in the delivery of the contract.
- Contracts which require the use of natural resources in the delivery of the contract.
Organisations active in government contracting will need to assess the policy note and its implications as a matter of urgency and take the necessary steps needed to comply with it.
To assist in this, Beale & Co partner Paul Henty has written some useful commentary discussing the new requirements and what it will mean for businesses.