The government is poised to adopt a set of guidelines that will fundamentally change the way 40 percent of the annual budget is spent, focusing on the whole life cycle cost of goods and services rather than the lowest tender offer in public procurement.

"Whilst existing procurement framework and practices are pursued to choose the 'lowest-cost' contract with some 'quality' check, lowest-cost purchase does not necessarily ensure maximum benefit in the long run," said a policy paper.

The reason being there are additional expenditures involved during the lifetime of the product in maintenance and then for the disposal of the product once its functionality expires.

So in many cases, the lowest offer in a tender does not end up being the cheapest in the long run. Besides, the costs to the environment are also not factored in.

Subsequently, the planning ministry, the Central Procurement Technical Unit (CPTU) and the Implementation Monitoring and Evaluation Division (IMED) have prepared the Sustainable Public Procurement Policy paper.

The policy paper has been prepared to ensure that the $25 billion that Bangladesh spends annually on public procurement "achieves value for money on a whole life basis in terms of generating benefits not only to the organisation but also to society and the economy whilst minimising damage to the environment".

The International Monetary Fund has marked it down as a top reform priority and the government has committed to adopting the policy paper and an associated action plan by September as part of the conditions agreed upon for the $4.7 billion loan programme.

The policy would be piloted in the procurement of: paper and paper products; office supplies; computer and other electronic equipment and supplies; office and other furniture or related wooden appliances; vehicles and other transportation equipment; food services and catering; hotel materials like towels and bed covers; and official paper-made publications.

As part of the policy, the procurement agencies must go for competitive bidding and take a flexible approach if small and medium enterprises (SMEs), including women-owned enterprises (WOEs), are participating in the bidding.

To attract more SMEs and WOEs, the procurement agencies can minimise the complexity of tender documentation, divide contracts into smaller lots, limit the number of lots that will be awarded to one bidder and allow more time for submission of expression of interest and tenders.

The contract subject matter should clearly indicate that a sustainable product or service will be purchased, and the accepted price point can be 10 percent more than non-sustainable products.

The products and services must be certified by the BSTI or ISO that they are sustainable.

The procurement process must consider the whole-life costs covering: manufacture, delivery and installation; operating costs including energy, water usage and maintenance; end of life costs including decommissioning and disposal.

Bids that have met the minimum general criteria, financial criteria and qualification and expertise criteria should be evaluated against a specific set of award criteria for sustainability -- social criteria, economic criteria and environmental criteria -- using the rating system developed by the competent authority from time to time.

All sustainability criteria that will be used, including the rating system given to each criterion, should be clearly indicated in the call for tenders.

The contracts must ensure compliance with all relevant existing public procurement legislation along with the social and environmental legislation to be mentioned, to the extent possible, in the procurement documents.

There would be performance monitoring for the duration of the contract to ensure compliance of suppliers with the specifications and contract terms.

Review meetings and periodic audits of suppliers throughout the life of the contract would be carried out to verify that the sustainability practices meet the agreed requirements.

Sustainability results should be reported openly and transparently in the procurement entities' reports, such as the annual report.

To assist the implementation, the public organisations will work with the suppliers and determine sustainable products and services that have a less adverse impact on human health and the environment.

A high-level steering committee headed by the planning minister will annually select a sustainable procurement "champion" from amongst the procuring organisations

The committee will also review the policy every six months to adapt to the changing needs, circumstances and conditions.

The CPTU and IMED will provide secretariat services to the committee and lead the integration process, capacity development, amendment in the legal framework, and prepare procurement documents and make those readily available to the organisations.

By 2024, the Public Procurement Act 2006 and the Public Procurement Rules 2008 would be amended by incorporating the relevant sustainable public procurement provisions based on the lessons learned from the pilot.