Transurban has a procurement policy in place for sourcing and purchasing. We focus on ensuring our suppliers comply with best practice and adhere to our Supplier Sustainability Code of Practice.
This Code of Practice applies to all suppliers and sets a number of Governance, Community, Environmental Management, Social Responsibility and Supply Chain criteria as minimum requirements for supplier conduct, as well as ‘leading’ practices for preferred suppliers.
In all tender processes for corporate and project procurement, we outline our environment, sustainability and safety expectations including those within Transurban’s Sustainability Supplier Code of Practice and specific issues relevant to each supply contract.
In FY15, we upgraded our procurement systems to a company-wide platform, providing a central resource for the review, approval and payment of suppliers. This has increased our visibility over all purchasing decisions made across the business, and also provides a central point for our suppliers to manage their interactions with us.
In FY16, our Procurement Team continued to centralise procurement into a dedicated category sourcing model with specialisations for:
Examples of the significant benefits the specialised category management approach has provided include the sourcing and negotiation of Australian electricity supply contracts and upgrades to in-tunnel air quality monitoring systems in CityLink.
In FY16, about 60 per cent of the total annual spend on procurement was related to capital expenditure on major infrastructure projects. This includes the projects summarised in the Enhancing Our Networks section of this Report.
Transurban delivers large infrastructure projects such as road construction and upgrades by engaging major contractors, which typically takes on responsibility for day-to-day delivery of the works and sub-contracting subject to conditions set by Transurban.
Transurban establishes robust project scope and contractual conditions to work with contractors to develop effective and sustainable infrastructure. A major element of capital procurement is contractor management and establishing strong expectations for sustainability management within the project scope, contracts and operational plans.
Procurement requirements and expectations are established by Transurban and our client agencies in project tender and contract documents. The requirements imposed on contractors for major projects will vary, but may include:
Working to these standards is audited by Transurban and external assurers throughout the project to ensure compliance with agreed operating practices. These processes are a major part of contractor procurement and surveillance.
Transurban is a member of ISCA and uses the IS rating tool as an overall governance framework for our Australian development projects. The IS rating tool provides a robust and independently-verified means of assessing the overall sustainability performance of major infrastructure throughout the design, construction and operation phases.
The IS rating tool is used by Transurban to assess proposed sustainability initiatives on major capital projects in the tender phase, to monitor progress towards agreed sustainability rating levels during project delivery and to encourage holistic sustainability benefits.
Transurban has a target for major Australian projects to achieve at least ‘Excellent’ Design and As Built IS ratings, which require the achievement of measurable KPIs and sustainability rating ‘credits’ across a range of categories:
This target is part of a requirement for major contractors as part of the project tender process. The target needs to be achieved during delivery of the project and this is independently verified by an ISCA-appointed verifier.
Transurban also uses the Envision infrastructure rating system in the USA, with Transurban and its partners committing to achieving an Envision rating in the I-66 proposal to VDOT.
Envision is a rating system developed by the Institute for Sustainable Infrastructure which provides guidance and benchmarking on best practice in planning, designing, building, and operating civil infrastructure. The Envision assessment process operates with similar principles to the IS rating process and allows Transurban to assess the sustainability performance of major capital works projects.
Envision provides a framework for evaluating and rating the community, environmental, and economic benefits of infrastructure projects, including the opportunity to achieve rating credits in a range of sustainability categories:
Envision will allow infrastructure projects in the USA to be evaluated thoroughly using a transparent system of sustainability metrics.
In FY16, Transurban continued a number of long-term partnerships with social enterprises in an effort to support local employers, small businesses and people who may be at a disadvantage in seeking work.
In Australia, we partner with Ability Works Australia (AWA), an organisation that employs, trains and supports people with disabilities and provides meaningful employment.
In the USA, we continue to support the Small, Women-owned and Minority-owned Business (SWaM) Procurement Initiative and the Disadvantaged Business Enterprise (DBE) Program. In FY16, Transurban and its partners awarded over US$2.2 million in contracts to DBE and SWaM entities working on the 495 Express Lanes and over US$1.8 million to DBE and SWaM entities involved in the 95 Express Lanes – a total of over US$ 4 million in contracts. Over the lifetime of the assets to date through construction and operation, Transurban USA has awarded over US$60 million in contracts to DBE and SWaM entities.