Formulate ambitions & call for proposal

High performance with regard to the circular economy starts with defining a clear ambition for your procurement project. Build on the ambitions and policies of your organisation and refine them for the product group you are procuring. For instance, are you aiming to reduce the use of raw materials, or do you want to maximise the value of residual flows?

CircularIQ has developed a model to support this process. This model – illustrated in the figure below – represents five possible circular objectives for procurement projects (A to E). A choice for one or more objectives leads to various possible strategies (for example A1 to A5). Find an objective and a strategy that fits the product group you want to procure. On the basis of these objectives you can measure the impact of your procurement once the contract has been awarded.

Five possible circular objectives, including possible related strategies, as defined by CircularIQ (Source: CircularIQ, 2018)

A lot of calls for proposal are mainly based on technical specifications, with the client dictating the required product specifications. With functional specifications you are asking the market to meet your needs, instead of providing a prescribed solution. A tender that is based on functional specifications can contribute to a more circular solution in various ways:

• Market parties are given more freedom to provide the best (qualitative) solution as long as it meets the functional needs.
• Market parties are better able to bring product innovations into play, which gives them more opportunity to distinguish themselves.
• Using functional specifications ensures that requirements will not be in conflict with the ambitions that have been set.

Two examples:

• If you are looking for a company caterer you can either use a technical specification (“a product range of X, Y and Z with minimum quantities”), or apply a more functional approach (“healthy and nutritious catering for xx employees”).
• If you need a cycle path you can either opt for a technical specification (“a cycle path that is 3 metres wide and meets the Dutch standards”), or use functional specifications (“a connection that links A and B for the benefit of cyclists and pedestrians”).

The extent to which functional specifications can be used is also dependent on the market’s level of maturity with regard to circularity, and the complexity of the product group.

• A more mature market is more open to functional specifications, while in a less mature market it might be wise to indicate the type of solution you have in mind.
• With a product that is more complex, such as a laptop, the knowledge gap between client and supplier is bigger, and functional specifications could help to make your sustainable ambitions become a reality. For simpler products, such as printing paper, functional specifications are less appropriate.

Many sectors are currently addressing the transition to a circular economy. More and more market parties have gathered first experience and are getting started. Dutch central government is increasingly producing future-oriented strategies, that provide guidelines for making specific categories more circular, e.g. the strategies Towards a circular category office furniture or Towards a circular category catering (both publications in Dutch).