Integrating Environmental Sustainability into Airport Contracts (2013)

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14 To identify where opportunities exist for environmental sus- tainability in airport contracts it is important to first under- stand what a typical procurement process at an airport is and the environmental impacts and opportunities associated with the various types of airport contracts. This information will help airport operators take full advantage of driving environ- mental sustainability through airport contracts. Throughout the industry there are many different processes used by airport operators to draft a contract and eventually procure goods and services. In most cases, it is determined by the airport ownership or the process adopted by the local city or county that is applied to its aviation department. Some airport operators have a centralized procurement process that is responsible for managing all of the airports operator’s pro- curement on behalf of all technical disciplines. Other airport operator organizations have a decentralized procurement func- tion so the airport departments identify a need and manage the procurement themselves. Regardless of organization, Figure 2 depicts a generalized version of a typical airport procurement process and the environmental consideration for each stage. As soon as a product or service need is identified, the airport department responsible for procurement begins con- sidering the implications that this activity will have on the entire airport, including the environmental performance of the airport. It is at this first stage of procurement that con- sideration can be given to how best to move environmental improvements forward. Over the next two stages, the spe- cific service or product desired are identified by the airport operator. Because the goal of environmental sustainability for the desired product or service is determined early in the process, the development of the sustainability language must be adjusted at each successive procurement stage—in accor- dance with previous stages—to accomplish the environmen- tal sustainability goal of the airport operator. The more con- sideration given to integrating environmental sustainability into the process as early on as possible, the more successful the contract will be in delivering environmental sustainabil- ity improvements at the airport. The procurement phases and their associated opportunities for considering environmental sustainability at each stage are evaluated in the following section. NEED FOR A PRODUCT OR SERVICE IS IDENTIFIED In the first stage of procurement, the airport operator pro- vides full business justification for the need for purchasing the goods or services. If the procurement can be avoided or the need can be fulfilled without the purchase of a new good or additional service then in most cases this is the most sus- tainable option available. Reducing the need for purchasing reduces resource consumption. If there is good business jus- tification for the goods or services, the airport operator asks the following questions: 1. Does procuring this service or product impact the envi- ronmental sustainability footprint of the airport? 2. Can the environmental impact be reduced or managed within the contract requirements? 3. Does the contract requirement help the airport opera- tor achieve its environmental sustainability goals and targets? 4. If not directly, can the need and goals of the contract be adapted to align with the organization’s environmental sustainability goals? It is helpful for airport operators to state the intentions for the contract clearly in the subject of the proposal, ensuring transparency of the process. For example, the Massachusetts Port Authority (Massport) has re-invented its waste manage- ment contract for Boston Logan International Airport. The previous waste management RFP was titled: “Waste Hauling, Disposal and Recycling Services Agreement.” The new RFP is titled: “Performance Based Resource Management Agree- ment.” By renaming and refocusing the contract goal, Massport expects to attract waste management companies that specialize in waste minimization and recycling instead of waste disposal companies that offer neither expansive recycling capabilities or guidance. REQUEST FOR PROPOSAL TEMPLATE STANDARD LANGUAGE Contract templates or standard contract language are an ideal place to state the overarching environmental and sustainable goals of the airport operator. If the airport operator has a sus- tainability policy, environmental management system, ISO 14001 certification, and/or environmental goals or objectives, chapter four OPPORTUNITIES FOR INTEGRATING ENVIRONMENTAL SUSTAINABILITY CLAUSES AND CONDITIONS DURING THE AIRPORT PROCUREMENT PROCESS

15 these are often referenced as standard contract language and included in full as a contract document. Some airport opera- tors surveyed attach the detailed information to the contract, a quick way for them, even if there is limited opportunity to make specific requirements of suppliers and contractors, to set out the overarching sustainability goals of the orga- nization and set expectations early on in the relationship. Furthermore, it is very cost-effective for airport operators to leverage existing industry standards such as Leadership in Energy and Environmental Design (LEED) or ISO 14001. Mandating that contractors and suppliers follow these stan- dards, in addition to any federal, state, county, or city laws and environmental permits, leverages industry-wide best practices with relatively little additional administrative cost to the airport operator. For example, staff at Toronto Pearson International Airport includes the following standard lan- guage in all of their RFPs: The GTAA [Greater Toronto Airports Authority] endorses the use of environmentally friendly products or processes and encourages suppliers and contractors to become ISO 14001 registered. Ten- derers already ISO 14001 registered should state this clearly in their tenders. Tenderers are encouraged to suggest environmen- tally friendly products in their tenders, provided these products or processes meet GTAA specifications. ISO 14001 awareness will be taken into consideration in the evaluation of tenders. The Chicago Department of Aviation includes the follow- ing reference to their Sustainable Airport Manual (SAM) in all of their RFPs: The Chicago Department of Aviation is embracing the best pos- sible environmental, social, and fiscally responsible practices to enhance the quality of life and complement the overall mis- sion and goals of the City of Chicago. The Sustainable Air- port Manual (SAM) is an integral part of Chicago’s ongoing efforts toward implementing more environmentally sustain- able buildings and civil infrastructure, incorporating best prac- tice guidance for planning, operations and maintenance of all City airport facilities and functions, and those of its tenants. The purpose of the SAM is to integrate airport-specific sus- tainable planning and practices early in the design process, through planning, construction, operations, maintenance and all airport functions with minimal impact to schedule or budget. To achieve greater success, Consultant must consider the SAM in every aspect of its projects and daily activities. The SAM is available at www.airportsgoinggreen.org/SAM. Flughafen Zurich AG, operators of Zurich Airport (ZRH) has specifically developed general environmental terms and conditions for its contractors, which outline specific require- ments that all suppliers or contractors operating at the air- port must adhere to. The exact language is contained in the appendix. In some cases, the airports interviewed set out the detail within specifications and conditions in full within the main contract document to ensure it is legally enforceable. For these airports, information attached or in an appendix is not enforceable. It is important for airport operators to work with their legal advisors to understand the case at their spe- cific airport. FIGURE 2 Opportunities to incorporate environmental provisions during the procurement process (Source: Leighfisher 2012). • • • • •

16 TECHNICAL SPECIFICATIONS ARE PRODUCED With every RFP and contract there is an opportunity to specify sustainable options, whether through product speci- fications or a service process. Driving sustainability through specifications is an effective and straightforward mecha- nism for airport operators. This is done by the airport opera- tor by producing a set of technical specifications that detail an exact product or process that meets its sustainability crite- ria or by detailing the sustainability goals that the contractor is required to meet when delivering a service at the airport. Included are criteria relating to the environmental charac- teristics of the product or production method of the product, for example: • Tenants are required to specify lighting and mechanical equipment that is at least 14% better than ASHRAE/ IESNA standard 90.1-2004 (contract language found on page A14). • Tenants are required to specify materials with recycled content for a minimum of 10% of the total value of all materials in their build out (contract language found on page A13). • Contractor is required to purchase supplies, materials, equipment, and other products meeting or exceeding the minimum requirement of the Green Product List- ing (contract language found on page A22). Alternatively, instead of giving detailed technical descriptions in the RFP, airport operators can also provide performance-based or functional specifications in contracts; for example, “tenant must achieve a 50% recycling rate”; this states a performance level, but would not specify how a tenant can achieve it—that the details would be for them to determine. Performance-based contracting has many advan- tages in comparison with detailed technical descriptions for each desired performance metric. It gives an airport operator the opportunity to express requirements in terms of the per- formance or function required, leverages the market to inno- vate new solutions, and is often employed when the goal of cutting costs is imperative. Performance standards or goals can be phased into contracts gradually as renegotiations occur to improve performance over time. Performance-based con- tracting mechanisms and examples are discussed further in chapter five. SCORING CRITERIA CREATED The ability, capacity, and commitment to environmental sus- tainability of the contractor may be examined and scored for all types of contracts. For services or work contracts the airport operator asks about the specific environmental management measures that will be applied during the project or life of the contract. Vancouver International Airport (YVR) uses a standard contract scoring template that includes some weighting toward environmental sustainability criterion. This is shown in RFPs as: Compliant tenders shall be evaluated as follows: Please note the weight can be changed, however the criterion must be in all evaluations . . . 5%—Use of environmentally friendly products or processes; ISO 14001 registration of Tenderer. Vancouver Airport Authority uses a standard 5% weighting for the evaluation of all contracts for environmental issues at the airport. This is built on a case-by-case basis depending on the contract type. The Port of Portland allocated a 30% weighting to “Man- agement & Execution; customer service, sustainability prac- tices and quality control” within their RFP for a restaurant concessionaire at Portland International Airport. Including sustainability practices in this category ensures that bidders consider this as an important element of their proposal. CONTRACT MANAGEMENT Active contract management ensures that contractors are meeting the requirements set out in their contract. This can be done through scheduled inspections, spot checks, monthly reports, or requests for information. Airport interviewees confirmed that proactive contract management helps build good relationships with contractors. Communicating with contractors on the airport’s sustainabil- ity performance and ensuring they know what they are con- tributing to can engage and motivate contractors to contrib- ute to the airport’s goals. Furthermore, airport operators have encouraged tenants to participate in an airport sustainability committee or green team to help them engage in the overall environmental goals of the airport. Incentive and punitive measures within a contract moti- vates suppliers and contractors to fulfill the requirements set out in the contracts. One example is at Portland International Airport, where the Port of Portland has language in the con- cessionaire lease agreements that grease traps in the kitchens must be maintained to manufacturer’s standards. The Port has someone inspect the grease traps on a regular basis and if they are not up to standard the concessionaire is charged for the inspection and the maintenance costs of the Port’s contractors to fix it. There is more information on incentive and punitive mechanisms in chapter six.