Supply chain management (suppliers, contractors and partners)
Contractor management is Downer’s third-highest ranked material issue.
Each year, Downer spends over $8 billion with more than 30,000 suppliers and subcontractors. We rely on these suppliers and subcontractors to help deliver outstanding services for our customers and maintain our reputation as an industry leader. We want our suppliers and contractors to share our values and reflect our expectations when doing business with and for us. Downer undertakes a comprehensive prequalification process to ensure our suppliers and subcontractors meet our high standards of business conduct. This includes background checks on financial health, health and safety standards and policies, environmental policies, and adherence to Downer’s terms and conditions.
Downer’s Procurement team has developed a standardised framework supported by a range of best practice platforms to ensure we are engaging with the right suppliers and subcontractors to achieve our business, ethical, Zero Harm and social objectives.
The Procurement team’s key objectives align to Downer’s Pillars and are to:
- Ensure value for money is delivered across all Downer procurement activities
- Meet governance and probity requirements
- Streamline procurement processes
- Deliver on our social and sustainable procurement goals.
Value for money: Value for money is not necessarily the lowest price, nor the highest quality good or service. Value for money is derived from a fair and balanced assessment of a range of financial and non-financial factors.
Governance and probity requirements: Ensuring governance and probity across the procurement process builds trust in Downer’s practices and decisions, drives fair and ethical behaviour, and ensures healthy working relationships between Downer and its suppliers.
Procurement processes: Downer aims to ensure that procurement processes are streamlined for both internal stakeholders and suppliers, while still meeting Zero Harm and all relevant requirements and legislations. Making procurement simpler, easier and more efficient delivers time and cost efficiencies for both Downer and our suppliers.
Social and sustainable procurement goals: By helping to build a diverse supply chain, Downer’s procurement capability can support businesses of all types to grow and encourage economic and social development while ensuring a sustainable future. Downer uses procurement to support small and medium-sized businesses, Aboriginal-owned businesses, regional businesses, and disability employment organisations. Downer also proactively works with its supply chain to support social and sustainable outcomes, including reducing the risks of modern slavery impacting Downer’s supply chain. Downer ensures compliance with all legislations relevant to social and sustainable procurement is maintained. For Downer, sustainable procurement includes:
- Considering how procurement impacts society, the economy and the environment
- Providing suppliers with fair opportunities to compete
- Respecting stakeholders’ interests, the rule of law and human rights (including modern slavery)
- Seeking sustainable alternatives
- Analysing all procurement costs, including benefits for society, environment and the economy
- Integrating sustainability into procurement practices.
In FY20, Downer developed and launched a number of initiatives and platforms to help meet these objectives. This includes a new online sourcing tool that helps Downer employees ensure they are adhering to governance and probity requirements as well as social and sustainability goals. The tool provides important information on all 30,000 of Downer’s suppliers and subcontractors, including:
- Preferred suppliers and subcontractors
- Indigenous ownership, and other social and sustainable procurement metrics
- Prequalification status (utilising Avetta, Pegasus, CM3)
- Modern slavery compliance
- Size and capacity of companies
- Cost range
- Performance ratings.
The performance ratings draw information from a separate online evaluation tool, which was launched in June 2020. The evaluation tool helps to ensure Downer does not re-engage poor-performing suppliers and subcontractors and complies with requirements for International Organisation for Standardisation (ISO) certification.
These technological improvements have been complemented by a new online Procurement Induction and Training module to guide employees through Downer’s procurement framework and keep them informed of important changes in legislation such as modern slavery.
