Supplier assessment

Qualification Systems are active within Acea for the suppliers of work, goods and services; these are regularly up-dated. Since September 2011, the task of handling and co-ordinating the Supplier Qualification and Rating process for the AceaGroup has been assigned to the Safety and Protection Division. This organisational choice was based on the desire to identify a neutral and autonomous party with respect to the stakeholders who usually have dealings with the supplier, in other words the Purchasing Division, required to handle the adjudication procedures at the time of selecting the best bidder, and the operating companies, who are entrusted with the handling of the tender execution stage.

The Safety and Protection Division is also assigned the management of the company quality and safety processes. Within the sphere of the Division, steps have been take to establish the Supplier Qualification and Rating Unit, which, in observance of the principles of maximum competition and equal opportunities, sees to the establishment of qualification Systems of European importance - pursuant to Article  232 of Italian Legislative Decree No. 163/2006  and subsequent amendments and additions - and the Supplier Register for tenders under the EU threshold, co-ordinating the interdivisional groups for the drafting of the qualification requirements and drawing up the related Qualification regulations.

The Safety and Protection Division is also entrusted with guiding the activities of the Qualification Committee, as well as the handling of the communications to suppliers of the rules regarding admission, rejection or suspension from the Registers. In conclusion, the Division co-ordinates the Group Interdivisional activities for the definition of the rating model and has the task of handling and maintaining the rating disclosure system.

As of 31 December 2012, in accordance with the new qualification procedure - which envisages the activation of Qualification systems/Supplier registers for all the commodities groups existing - 228 commodities groups were active out of a total of 314, of which 82 by means of publication of Qualification systems of European importance and 146 due to tenders for amounts lower than the EU threshold, by means of publication of specific Supplier register regulations - tenders under the EU thresholds The percentage of commodities groups active therefore rose from 7.9% in 2011 - when there were 25 groups active - to 72%.

In detail, the Qualification systems of European importance have been established for almost all the commodity groups for works, as well as for strategic supplies and services, or those particularly critical due to expenditure volumes, repetitiveness over time or importance of the goods and/or services for the purposes of safety and/or protection of the environment.

The companies which intend to qualify, input their qualification application on-line, at any time during the period of applicability of the respective Regulations, for the commodity groups of interest, accessing the Vendor management portal directly from the Acea institutional website (www.acea.it, Suppliers section) .

In order to enrol in the Registers set up in accordance with the Regulations for amounts under the EU threshold, possession of requisites of good moral standing78 and requisites of commodity consistency with respect to the commodity group for which enrolment is requested in the related List, are required.

 In order to obtain enrolment in the Qualification system of European importance, the possession of standard requisites  - including the requisites of good moral standing envisaged by sector legislation - and specific requisites, studied for each individual commodity group, is required. The latter are defined by an Interdivisional Work Group, made up of representatives from the Safety and Protection, Purchasing and Logistics, Administration, Finance and Audit divisions and the appropriate operating Units, according to the type of commodities group and the characteristics of the procurement in question.

The classification of the requisites is structured on the basis of the following type of criteria:

  • technical, environmental and safety reliability;
  • commercial reliability:
  • financial and social security contribution reliability;
  • assessment of the counterpart risk (in accordance with the control principles envisaged by the Organisation, Management and Control Model pursuant to Italian Legislative Decree No.  231/01).

The requisites of technical, environmental and safety reliability - which are the most important in this venue - includes the following standard requisites:

  • Certification of the company Quality Management System issued in compliance with the ISO 9001:2008 standards (binding requisite for certain commodity groups), or QSA qualification Check lists (for uncertified suppliers);
  • possible presence of accreditations/qualifications care of third parties in the last 5 years;
  • inexistence of serious violations, duly ascertained, pertaining to the observance of the safety provisions and any other obligation deriving from the work relationships in the last 5 years;
  • the presence of a system for the assessment, selection and supervision of the sub-contractors/sub-suppliers, with particular reference to checking the technical-professional suitability of the same.

By way of example, for the “Printing” commodity group (supply of printed materials and forms) FSC "Forest Stewardship Council” certification has been identified among the specific requirements;  this is the international certification system which guarantees that the raw material used for creating a product in wood or paper originates from forests where environmental, social and economic standards are observed.

For the purposes of admission to the EU qualification Systems, the willingness to undergo a possible check at the administrative headquarters of the veracity and suitability of the documentation is also required; as well as checking at the operating premises or product warehouses (e.g. safety, quality, production processes, etc.).

In conclusion, it is recalled that at the time of the individual adjudication procedures, the possibility of including additional requisites with respect to those envisaged by the Qualification system is provided for, on the basis of the amount and importance of the contract.

78 Pursuant to Article 38 of Italian Legislative Decree No. 163/2006 and subsequent amendments and additions. Two typical elements of the moral requirements established by legislation are particularly important for the purpose of protecting the workers, in other words the payment of duties, taxes and social security contributions for employees confirmed by the DURC – Documento Unico di Regolarità Contributiva – Insurance Contribution Payment Certificate) and compliance with laws on safety and any other obligation concerning employer-employee relations. Any irregularity regarding the requirements mentioned means automatic exclusion from the tender procedure.

As of 31 December 2012, 793 requests for enrolment in the Qualification systems and the Registers active within Acea had been approved, for a total of 448 economic operators.

In detail, the economic operators are broken down as follows79:

  • 156 operators enrolled in the Water works Qualification system;
  • 55 operators enrolled in the Energy works Qualification system;
  • 15 operators enrolled in the Qualification systems for Water and civil works;
  • 74 operators enrolled in the Qualification systems for Goods and Services;
  • 100 operators enrolled in the Registers of professionals;
  • 48 operators enrolled in the Suppliers Register Regulations - tenders under the EU threshold.

During 2012, the Safety and Protection Division launched the implementation of a Vendor Rating system which, according to an approach integrated with the Qualification systems set up, populates the input data of said systems via a feedback process. In this connection, a rating model has been put together to be applied to the commodity groups of particular interest, and in the first place to the Registers established for the types falling under water works and electrical works, which is based on the assignment of an “entry rating” score (so-called “E.R.”) and an in situ rating” score (so-called “I.R.”); as from June 2012, the QAS (Quality - Environment and Safety) inspections commenced, which, following a check based in 117 requisites and an assessment process, process a score which classified the supplier in one of the 5 entry rating brackets (see related box). The QAS inspections carried out as at 31 December 2012 numbered 30: 16 on suppliers enrolled in the water works register; 9 on suppliers enrolled in the electrical works register; 5 on the suppliers enrolled in both Registers). During 2013, the Safety and Protection Division proposes to continue with the inspection activities and start the collection of the performances on all the rating elements identified in the model.

Among the other projects followed, during the year the Supplier Qualification and Rating Unit - together with the Corporate social responsibility and sustainability unit - took part in the Sustainable Supply Chain Work Group, set up within the sphere of Global Compact Network Italia, which Acea has been a member of since 2007, for the purpose of sharing and implementing an instrument for monitoring the sustainability performances of the companies belonging to the supply chains of the Network members, encouraging the suppliers to adopt improved practices (see related box under Corporate identity, Strategy and sustainability, section Sharing of the corporate social responsibility themes)

Box – Safety and Protection:  launch of a vendor rating system  integrated with the Qualification systems and the Registers 

During 2012, the Safety and Protection Division put together a rating model based on an “entry rating” (E.R.) and anin situ rating” (I.R.) In detail, the E.R. score is assigned to all the suppliers enrolled in the Register and is made up of the score assigned to the supplier at the time of the QAS (Quality . Environment and Safety) inspection and the assessment of the economic/financial soundness of the operator. By contrast, the I.R. score concerns just the suppliers who have been awarded tenders and shall be essentially populated by the data collated within the sphere of the worksite inspections, already tried and tested successfully by Acea Distribuzione, with the Vendor Rating system applied to suppliers of work in the energy area since 2008, and, for the remaining part, by the assessment of the pre-contractual conduct of the supplier.

In June, supplier inspection activities were launched, carried out by a Safety and Protection Division Team made up of contacts from the Supplier Qualification and Rating, Quality and Health and Safety in the workplace Units The aim of the visit was to check, specifically: the organisational structure; the physical structure; the investment in training; the methods for handling contracts; the management of the vehicles and the equipment; the handling of the warehouse; the observance of safety legislation; the observance of environmental legislation.

For such purposes, a check list was drawn up for the assessment of the supplier which envisages a total of 177 requisites divided up into 32 categories, attributable to three inspection areas (quality, environment and safety). the assignment of a score is envisaged for each requisite and, on an average basis, for each of the 32 categories identified. In order to provide consistency in the valuation, “Methods notes” have been drawn up which for each requisite indicate the significance of the scores in detail and act as guidelines for the appraiser. The assessment is summarised with a score of between 0 and 100: 40 points: Quality, 40 points: Safety, 20 points: Environment. The outputs of the assessment are the check list compiled with the assignment of a specific and overall score which classifies the supplier in one of the 5 entry rating classes and the inspection report for internal use, similar to that used for the Quality System

79 It should be borne in mind that an operator can be enrolled in several qualification Systems/Registers and that the data provided does not take into account the imposition of any transitory suspension measures.

During the year, initiatives were undertaken, also by the operating companies, which had positive repercussions on the supply chain, in terms of additional controls on quality and safety. Within Acea Ato 2, together with Acea SpA, the Trade Unions and the Trade Associations, an important Protocol on the water tenders  was signed, with a view to on-going improvement of the work and services in the water sphere (see related box). In Acea Energia, more challenging procedures with regard to quality of the sales service provided by the agents were introduced in the Agency mandate which disciplines the relations between Acea Energia and the network of sales agents, with a view to protecting the customers; this also envisaged mandatory training for all the agents (see related box).

Box - Acea Ato 2: quality of work and safety in the worksites in the Protocol on the water tenders

In June 2012, Acea SpA, Acea Ato 2 and the Trade Union organisations CGIL, CISL and UIL, with the Trade Associations Filctem, Flaei, Uilcem, Fillea, Filca and Feneal approved and signed a Protocol on the water tenders, with a view to on-going improvement of the adjudication processes, aimed at encouraging a tenders market in which standards for the handling of the work with regard to quality and safety can stand out and preventing and fighting irregular work, contractual and welfare breaches and the lack of observance of legislation concerning the protection of workers’ safety.

All the trade union organisations emphasised with great appreciation the signing of the Protocol, which envisages monitoring and control initiatives and other action aimed at checking the due nature, quality and safety of the works and the services within the sphere of water tenders.

On the basis of the features and the nature of the activities subject to tender, the presence on the contractor’s workforce of professionals with proven experience and suitable training is envisaged with the aim of avoiding recourse to unsuitable profiles from a professional standpoint.

Furthermore, the control activities carried out by Acea Ato 2 have also been developed, in its capacity as contractor, sanctioning the commitment and frequency by means of which they will be checked on-site, including: the absence of irregular workers, the availability - in relation to the type of tender - of service premises (canteen, bathrooms, changing rooms) for the workers, certification of mandatory training regarding prevention and safety.

In order to highlight the importance of the steps taken, the establishment was agreed between the Trade Unions and Acea of a Joint commission, manifestation of the parties signing the Protocol, which will see to the monitoring of the trend of the tender contracts, with particular reference to aspects of prevention and protection of safety and observance of the contractual obligations undertaken.

Box – Acea Energia and the sales agents: training and monitoring of performances

Acea Energia, the Group company tasked with the management of electricity and gas sales service, avails itself of structured companies with experience in the sector (Agencies) for the door-to-door sale and/or teleselling of electricity and gas in the “household” and “micro business” segments of the eligible market. As from 2012, more challenging procedures with regard to quality of the sales service provided by the agents were introduced in the Agency mandate which disciplines the relations between Acea Energia and the network of sales agents, with a view to protecting the customers and preventing any incorrect commercial practices (i.e. mis-selling).

The Agency mandate in fact envisaged both the mandatory training of all the agents, which operate on behalf of and in the name of Acea, and monetary fines in the event of detection of incorrect commercial practices. The training activities have the aim of clearly transmitting the notions relating to the eligible market dynamics and the sales proposals of Acea Energia, placing the agents in a position to adequately transfer information to the customer contacted. During the year, Acea Energia provided 800 sales agents with a training programme focused on Gas and Electricity Authority legislation, the Code of Commercial Conduct and the products offered.

Furthermore, the company has activated strict internal procedures aimed at monitoring the performances of those appointed: in the event of door-to-door sales, in fact, the customers are re-contacted by telephone to check that the information has been transmitted by the sales agent correctly and, in the event of telephone sales, all the calls are recorded and played back (also see the sections Customers and the community, Customer care). In the event of incorrect commercial practices, identified further to the control activities, the Mandate envisages that monetary fines be imposed, with a unit value of Euro 1,000, which is joined by the non-payment, in the pertinent month, of the remuneration linked to the commercial quality of the contracts acquired: in 2012, in the presence of 140,000 new supply contract acquired (electricity and gas), 27 cases of incorrect conduct were fined (for a total of Euro 27,000), an extremely contained figure which bears witness to the adequate quality levels of the service carried out during the year.

A process aimed at implementing vendor rating has also been launched for the companies in the waste management area (waste-to-energy and environmental services) focused on the checking of observance of environmental and safety legislation: during the year, audits were carried out in the firms which work for SAO and which have carried out work care of the Orvieto plant engineering Hub and on firms which carry out the service for the collection, transportation and disposal of the leachate produced by said complex; with regard to A.R.I.A., a number of audits have been carried out on suppliers and a Register of qualified suppliers has been drawn up relating to the disposal activities.

Once again in 2012, activities also continued in Acea Distribuzione for the application of the Vendor rating system, within the sphere of the work in the energy area, a system for the assessment of the activities of the companies developed, for some years now, in collaboration with Tor Vergata University. The assessment system, centred on quality, safety and environment parameters, envisages site inspections and the creation of merit ratings based on the reputation of the contractors, which are taken into account, objectively and not predominantly, in the awarding of the tenders and for the qualification of the companies. The application of fines is possible along with suspension of the activities of the contracting company: in 2012, there were suspensions for non-compliance regarding safety at 23 sites, in the presence of a total of 935 inspections made. The application of the Vendor rating system continues to be a sharp incentive for the improvement of the levels of attention paid to quality, safety and the environment and during the year an additional increase was obtained in the average reputation index of 30 contracting companies (21 of which electromechanical and 9 involved in restoring road conditions) who worked for Acea Distribuzione, passing from an annual value of 91.47 in December 2011 to 91.65 in December 2012 (see related box for details).

Furthermore, on a consistent basis with the adoption by Acea Distribuzione of a Safety Management System pursuant to the OHSAS 18001:2007 standard, the companies supplying work are also obliged to comply with the Health and Safety in the workplace Policy. 

Box – Quality and safety: the Vendor rating system for work in the energy sector 

The system for assessing the performances of contractors operating in the energy sector, perfected in collaboration with the Center of Advanced Procurement at “Tor Vergata” University in Rome, processes the information gathered on 142 opinion parameters centred on quality, safety and environment, further to site inspections, and turns them into an “Indicator of Reputation” (IR).

This IR has been introduced as a possible additional parameter in the formula for awarding contracts, rewarding the companies with the best safety and quality standards.

The Acea Distribuzione “Inspection and Checks” Unit carried out around 2,750 inspections in the three-year period 2010-2012. The average annual indicator of reputation for companies increased from a value of around 79.9 in January 2010, to a result of more or less 91.6,  involving a particularly significant improvement trend. The system has demonstrated that it can increase the reliability of companies, thereby guaranteeing optimum performance levels and positively affecting the entire supply chain.

The reputation index, or rather the opinion which the same company has assigned over time to its supplier becomes - alongside the proposed demotion - a possible element for assessing the quote which affects the choice of the winner in a balanced manner.

The chart shows the time-related performance on an annual basis of the average assessment of all the companies between January 2010 and December 2012, recalling that at the start of the project, January 2008, the average monthly index was around 40.

Overall valuation of companies – rolling year January 2010 – December 2012

Overall valuation of companies – rolling year January 2010 – December 2012

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Box - Litigation with suppliers

Disputes between the company and the suppliers mainly concern two spheres: the disputes for lack of payments against supplies of goods, work and services and the sentences regarding tender contracts.

With regard to the former, these involve invoices which, in 90% of the cases, are not paid for formal reasons and as a rule are rapidly settled: in this connection, 12 positions were opened and closed in 2012 with another 13 positions pending.

With regard to the disputes on tender contracts, in relation to 69 total cases, recourse was made to the TAR (regional administrative court) in relation to adjudications (24 cases) and there were proceedings before the ordinary courts (45 cases) relating to the recording of reservations by contractors, contract terminations, etc..

In conclusion, 7 petitions were filed by employees of the contracting firm of Acea Distribuzione, who invoked the joint and several liability of the Acea company due to the failed observance by their direct employer of certain elements associated with the employment relationship. Acea Distribuzione, as soon as it became aware of the situation, took steps to suspend payments to the contractor in breach vis-à-vis its workers, launching settlement procedures with the directly injured parties for the economic compensation of the damage suffered and at the same time taking steps to deduct these sums from the remaining amount due to the contractor.