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Environmental considerations may be included in the specification of a proposed purchase, or among the criteria against which a supplier is to be chosen. Specifying in environmentally friendly terms sends a clear indication to suppliers that you take environmental issues seriously. In drawing up specifications whole-life costs should be considered.

Environmental factors may include energy efficiency and waste reduction, which contribute to cost savings as well as environmental performance. Environmental standards increasingly help in choosing environmentally preferable products. These include the EU Eco labelling Scheme, ISO 14001, and the European Eco-Management and Audit Scheme (EMAS). The supplier's environmental credentials may also be assessed: whether it has a formal policy and a recognised environmental management system.

The EU Directives require however that specifications' must relate to the subject matter of the contract, not extraneous matters. Requirements about environmental management systems for example can be relevant to construction and service contracts but are irrelevant if goods are being purchased. Requirements must not discriminate against products or providers from other member states, or restrict competition (for example by requiring that green electricity is to be generated by wind-energy, to the exclusion of hydro or solar). The purpose of the award stage of the procurement process is to allow the contracting authority to assess which tender best meets its needs. Environmental award criteria must relate to the subject of the contract and test the relevant environmental qualities of each of the bids, not secondary issues, such as external costs or benefits.

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