The new guidelines state that public sector construction projects must factor in the environmental impact of transporting steel when making purchasing decisions as well as the workplace safety regime observed during its production.
The edict is the government’s response to a growing crisis in the UK steel sector that has seen several firms go out of business in recent weeks due to falling prices and increased global competition.
The new Procurement Policy Note: Procuring steel in major projects is intended to support UK steel suppliers in competing for government contracts – as far as EU and WTO competition laws allow.
The instructions apply to all infrastructure, construction or any major procurement project with a significant steel component where the overall project requirement has a capital value of more than £10m.
The guidance encourages purchasers to assess the carbon footprint of bids and requires contractors to advertise their requirements for steel so that UK steel firms can compete. Environmental criteria could include the carbon footprint of sourcing and transporting construction materials.
Purchasers are also being advised to factor in ‘social criteria’ such as the health and safety policies of firms involved in the production process and how they integrate disadvantaged workers. The entire supply chain should comply with relevant health, safety and employment legislation, the guidelines state.
In addition, price or cost calculations should be based on an assessment of the whole-life cost and not lowest purchase price.
The government said that the new guidelines should help UK steel suppliers “compete on a level playing field with international suppliers for major government projects”.
Paymaster general Matthew Hancock, who chairs the government’s steel procurement working group, said: “By asking procurers on major UK projects to consider social and environmental impacts, we are building a Britain that is happier, healthier and better off. We will always strive to get the best value for money for taxpayers and we are going to do so in a way that strengthens our economy and bolsters the long-term prosperity of people across the country.
“I don’t want contracts going abroad if the best bid is a British bid with all the social and economic benefits that brings.”