Contract performance clauses may address sustainable issues within supply chains on condition that they are linked to the performance of the contract, for example the pay and labour conditions for the workforce involved in the performance of the contract.
Where clauses in respect of supply chain conditions and worker exploitation have been built into the contract, performance monitoring methods must be developed to ensure delivery.
This may include a requirement to provide details of the supply chain and any changes to this, audits undertaken on supplier sites by the main supplier, and review of suppliers slavery and human trafficking statements published as a requirement (where applicable) of the Modern Slavery Act 2015.
Contractual requirements must be quantifiable and measureable; otherwise there is a risk that it may be unenforceable. The buyer must also consider whether this requirement is core to the contract or a secondary issue, as any remedy for breach of performance may be difficult to quantify.
At the point of potential award there is always scope to reach a voluntary agreement with the supplier that both parties will work together through the period of the contract with the aim of improving working conditions and labour standards, and to deliver identified (and agreed) sustainable outcomes that can be captured as contract commitments.
The approach taken to working with supply chains can make a difference. For example, upon discovering potential issues with child exploitation, rather than prohibit procurement (and thereby potentially increase poverty), it can be better to work with the supplier to improve conditions and introduce social benefit (such as education and health care) for current employees whilst seeking to eliminate the need for child labour.
Finally, on-going improvement and innovation can be built into the management of the contract to further develop the products and services required by the contracting organisation and key performance indicators can be developed in order to focus on areas where continuous improvement is sought.
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