Sustainable Procurement Tools

Contract and Supplier Management

Ensure sufficient resources are allocated to ensure there is relevant and proportionate monitoring of intended outcomes. This is a vital stage, to be able to demonstrate whether intended outcomes have been delivered or not and to identify lessons for further development or other contracts.

Where energy efficiency is a relevant contract focus, relevant and proportionate performance indicators need to be developed and included as standing items in regular contract review meetings, to ensure delivery of intended outcomes.

The benefits of the contractual requirement must be quantifiable and measurable.

Establishing a baseline may be easier in some contracts than others so contract management requirements must be relevant and proportionate.

According to the subject matter of the contract these may include the use of metering to measure reductions of energy use or even the incentive of profit sharing of energy cost savings over the contract term.

Establishing a baseline against which to monitor progress

The above will depend in part on the availability of a baseline against which improvement can be measured.

  • A new service contract which requires carbon emissions to be minimised where practical from energy efficiency measures may not have a baseline as it is a new requirement.
  • It may be appropriate to seek to establish a baseline sometime after contract award, and improvements against this. This is dependent on whether robust and verifiable data is available to confirm the carbon emissions arising from the product, service or other procurement. In some cases it is not practical or reasonable to determine a quantified baseline against which improvements can be measured. If so, is it possible to identify qualitative improvements?

As an example, in Construction projects relevant baselines may include:

  • Industry averages/ benchmarks/ minimum requirements (e.g. such as set within CEEQUAL or carbon databases).
  • Current project norms – which may be based on client baselines or those which contractors have identified. Given the nature and scale of some Frameworks there may also be the opportunity to identify project baselines by monitoring outcomes from Framework call-offs, which become the new norms for forthcoming call-offs/ projects.

Where contract conditions include a specific energy reduction requirement it must be considered whether this requirement is core to the contract or a secondary issue, as any remedy for breach of performance may be difficult to quantify. In this case a pre-agreed service credit or maintenance rebate would enable recompense for non-performance where termination of the contract would not be an option.

Ongoing improvement and innovation can also be built into the management of the contract to further develop the products and services required.

At contract award/ mobilisation there is always the opportunity to reach a voluntary agreement with the supplier that they will work with you to deliver agreed energy efficiency outcomes that can be captured as a contract commitment.


Where offsets have been determined to be relevant (only after all possible measures to mitigate energy emissions by the supplier) reporting may include detail of payments into verified offset schemes.

Qualitative improvement

Where energy efficiency has been identified as an important issue for the contract but quantifying intended outcomes is problematic due to lack of reasonably available data (e.g. a service contract performed on your site with no discreet metering) it may be appropriate to seek qualitative detail of how the contractor is supporting energy efficiency ambitions.

In some cases, clear measures are available e.g. energy saved and reductions in carbon emissions. In others there will be a narrative element to reporting. For example, measures the supplier has undertaken, such as measures to reduce energy used in a cleaning service contract including energy efficient equipment, workforce training to comply with site energy policy.

Within the Annex are examples of KPIs that may be relevant within procurements.

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