Selection and evaluation of suppliers

Several systems for qualifying suppliers of works, goods and services are active and updated in Acea.

The unit responsible for Supplier Qualification, in respect of the principles of competitiveness and equal treatment, sets up Qualification systems of European significance88 and Suppliers’ Lists for so-called “below threshold” or private tenders, coordinating workgroups to identify the qualification requirements and drawing up the Qualification Regulations. The Unit is also responsible for processing individual qualification applications, checking the possession of the requirements and managing communications with the supplier concerning: admission measures and rejection or suspension from the Lists.

The product tree shared among the Group companies includes, as at 2018, 467 product groups and as at 31 December 2018 the responsible Unit had managed 117 qualification Lists/Systems.

[88] Pursuant to art. 134 of Legislative Decree no. 50/2016 as amended.

A supplier qualification portal is active in Acea, fully integrated with the supplier database. Companies intending to be qualified insert their qualification application online for the product groups of interest, accessing the Vendor Management portal directly from the Acea institutional website (www.gruppo.acea.it, Suppliers section).

In some cases, the specific requirements include holding certain Authorisations and/or certifications, for example:

  • possession of UNI EN ISO 9001 certification (binding requirement for all the “works” product groups and for almost all the “goods and services” qualification systems);
  • possession of UNI EN ISO 14001 certification (for example for registration in the Qualification System for special non-hazardous waste);
  • possession of Registration to the National Environmental Operators’ Register or authorisation to manage a plant for the recovery/disposal of waste (for example for registration in Waste Management Systems);
  • possession of OHSAS 18001 certification (for example for registration in the Qualification system for the electro-mechanical maintenance of industrial plants).

For admission to the qualification systems of Community-wide significance, lastly, companies wishing to qualify must declare their availability to undergo an audit at the administrative head office, aimed at assessing the truthfulness and adequacy of the documentation provided, and at the operating plants or product warehouses, in order to assess the implementation and application of the active management systems.
In 2018 a total of 646 applications for registration in the qualification lists/systems were processed, amounting to 513 successful applications.

Specifically:

  • 328 qualification applications processed for “works” Qualification systems;
  • 318 qualification applications processed for Qualification Systems/Suppliers’ Lists for “goods and services”.

The assessment of suppliers is carried out by means of different types of controls that are implemented depending on the List and the different statuses that the supplier acquires with respect to Acea (pending qualification, qualified or qualified with a tender in progress).

In order to be able to register for the Qualification systems relating to the Single Regulations for Goods and Services and Works – which for 2018 were 92 out of 117 total qualification systems – suppliers are required to complete a self-assessment questionnaire (differentiated according to whether they are offering goods and services or works) directly on the Vendor Management platform, which can be accessed from the institutional website (www.group.acea.it). The questionnaire asks about Quality, Environment, Safety, Energy management systems and other sustainability issues. In particular, during the year 261 suppliers completed the self-assessment questionnaire (144 for goods and services and 117 for works), representing 84% of the total number of qualified suppliers in the year (equal to 309). At the end of 2018 the Vendor Management platform was able to implement all the system requirements necessary to process the data collected through the questionnaires. Therefore, they will be available from next year.

Finally, with the aim of monitoring some data and raising awareness in the supply chain on sustainability, in synergy with the Sustainability Unit and in continuity with recent years, Purchasing and Logistics sent a questionnaire to a sample of suppliers – 114 in 2018 – focused on social and environmental issues (see the dedicated box).

The Acea questionnaire to monitor social and enviromental issues in the supply chain

For the fourth year in a row, in 2018 Acea asked a panel of 114 Group suppliers (104 in 2017) to complete a questionnaire on their commitment to environmental and social issues. 36 companies completed the questionnaire, 19 for goods and services and 17 for works (55 companies responded in 2017). With regard to social issues, an analysis of the questionnaires shows that, with regard to ethics and integrity, 58% of respondent companies adopt tools to promote virtuous conduct including a Code of Ethics and the Organisation, Management and Control Model pursuant to Legislative Decree no. 231/2001; with regard to job security, it was found that 84% of the personnel of supplier companies are employed on permanent contracts and that in 39% of cases the company has trade union representatives; with regard to health and safety at work, 64% of the suppliers who completed the questionnaire are equipped with safety management systems (e.g. OHSAS 18001), 83% have provided safety training to more than 50% of staff and 83% have not recorded any accidents. The results of the findings on environmental data, such as consistency of energy consumption, are described in the section Relations with the environment to which reference is made.

Once qualified, the supplier’s headquarters can be subjected to a second-party Audit on Quality Management Systems, Environment, Safety, Energy and Social Responsibility (QASER) regardless of the certifications in place, to verify both the effective application of certified Management Systems, where present, and the management methods of other areas relevant to sustainability.

In 2018 the checklists of compliance with the requirements assessed and the QASER brackets for categorising the scores achieved by the suppliers were confirmed (Excellent - Very Good - Good - Fair - Sufficient - Poor - Critical - Inadequate).
The audits were carried out exclusively by qualified internal auditors of Acea SpA belonging to the Integrated Certification Systems Unit of the Risk & Compliance Function. 40 audits were performed which produced the following overall appraisals: 2 Excellent, 4 Good, 21 Satisfactory, 8 Sufficient; 2 Poor; 3 Critical.
Each supplier was sent feedback detailing the assessment bracket resulting from the audit together with a summary report highlighting the strengths and areas requiring improvement. Where necessary, a report of the most significant findings was also sent, with a request to specify the causes of non-compliance and proposals for appropriate corrective actions.

The results of the audits carried out were satisfactory in the areas of Quality, Environment and Safety, with 70% of suppliers ranked between good and excellent, while only 10% of suppliers earned an equal assessment for the areas of Energy and Social Responsibility. These findings confirm the need and opportunity for Acea to use the assessment as an opportunity for discussion to engage suppliers on specific issues of sustainability.

In the second half of 2018, the Acea Top Management also decided to join the TenP working group within the Global Compact Network Italy in order to intensify its action to raise the awareness of the supply chain, also making use of the new services offered by the platform, desktop Audit and supplier training on sustainability issues.

Acea Elabori has a Safety Team that is responsible for managing the safety of the works and services contracted out by Group companies (mainly Acea Ato 2, Acea Ato 5 and Areti). Working with the companies, the Safety Team provides:

  • support and assistance to the Works Manager and general Safety Coordination;
  • coordination of safety in the design phase and during execution at specific sites;
  • safety inspections for works and services that do not require coordination during execution;
  • services ancillary to safety inspection activities.

Site safety inspections are primarily related to the main works that are the subject of maintenance contracts for networks and services in the water and electricity sectors, but also concern minor contracts (like civil, electrical or electromechanical maintenance work carried out on plants, meter changes, road repairs, video-inspections and gully emptiers, etc.), awarded from 2015 to 2018.

The Safety Team manages the activities listed above, with the aim of ensuring compliance with the highest standards of safety and current regulations89, also verifying compliance with the documents produced during the tender 90 and by the companies91. Activities are differentiated between works requiring Safety Coordination during the Executive phase (Coordinators nominated as needed by the Works Director) and works in which the safety standard adopted is assessed and verified through sample inspections.

The dedicated structure intervened through the use of:

  • 19 Safety coordinators in the Execution and Design phase, assigned to specific worksites from time to time;
  • 22 Safety inspectors, who assessed and verified the safety standard through random inspections;
  • 7 Planners, who followed the planning and dispatching of the safety inspections to the sites of the contractors;
  • 10 Technical Support resources, who managed the technical and professional audits of the companies engaged in the contracts.

The number of on-site inspections carried out has increased significantly in the last two years – from about 5,500 inspections carried out in 2016 to more than 11,200 in 2018 – and for some contracts the inspections have been managed with the help of computer systems that have facilitated the operations of the department, making it more agile and able to act as needed. The management model adopted has made it possible to provide timely support for the technical and
professional assessment of contractors, subcontractors and self-employed workers; to make on-site controls immediate and efficient, assigning safety inspectors to work orders to be inspected due to a rating higher than a certain threshold; to
engage a safety coordinator during execution or design, where required.

[89] Legislative Decree no. 81/08 “Consolidated Act on Safety”, as amended.
[90] Safety plan and coordination on site, DUVRI.
[91] Operational Safety Plan, Substitute Safety Plan.

During the year, the Safety Team provided support to the technical and professional audits of 226 companies (92 contractors and 134 subcontractors). It also carried out Safety Coordination in the Execution and Design phase for 315 work orders (296 in the execution phase and 19 in the design phase), in all performing 11,270 on-site safety inspections 92 (27% more than the 8,900 inspections of 2017), reporting compliance with current regulations on workplace health and safety or deviation therefrom (non-conformity). In all inspections carried out in 2018 1,601 non-conformities were found.

For the main contracts, as envisaged in the contract documentation, the results of audits are recorded according to four categories: compliant or non-applicable, minor (generally corrected on the spot), medium and major infractions. The non-conformities are associated with corrective actions and penalties applied by the contracting company on the basis of the provisions of the tender documentation, and, serious infractions may lead to the suspension of works.

Following the 10,111 inspections in 2018 of the main contracts, 893 non-conformities were found, of which 545 were “minor”, 252 were “medium” and only 96 were “major”.

The Safety Team organises meetings with the contractors in order to raise their awareness of site safety both before the start of works – informing the contractors’ employers of the activities carried out by the Safety Team and the standards adopted, requesting the documents necessary for technical and professional inspection, etc. – and during the execution of the contract itself, for example by correcting conduct that infringes the regulations in force and by thoroughly investigating specific problems that emerge during the execution of the contract. Lastly, during the audits completed on the staff of contractor and subcontractor companies, the Safety Team ascertains that the employer has provided both basic training and, where applicable, specific training, as provided by the law in force on the matter of safety.

Despite the attention paid to this issue, 33 accidents occurred during the year while performing activities entrusted by Group companies to contractors. While the number of accident reports has increased (the figure was 22 in 2017), the “seriousness” of the accidents themselves has decreased (as seen by the 734 days of absence in 2017 compared to 439 in 2018). Furthermore, of the 33 accidents reported during the year, only one lasted longer than 40 days.

[92] The number includes visits for all types of contracts, both main ones and “minor ones”. Note that for smaller contracts, the Technical Specifications do not provide for the recording of non-conformities according to the types specified in the text, unlike the contractual documentation for tenders that have as their object the major works of network maintenance and services.

Pursuant to the Memorandum on Water Tender Contracts signed on 6 June 2012 by Acea SpA and Acea Ato 2, the Trade Unions and Industry Federations and still in force, a series of meetings were held as part of the Joint Committee set-up for the purpose.
In recent years there has been a general reduction in the number of critical issues relating to safety and the organisation of work done by personnel of the companies involved in Acea contracts, and there has been an improvement in the traceability and transparency of information. During 2018 the Parties met on two occasions (1 February and 27 September 2018) and Acea arranged for, during calls to tender for the award of services, the insertion of a specific clause to promote occupational stability for staff used in the contracts.

In 2018, Acea Energia continued to carefully monitor the quality of the sales service provided by its door-to-door and/or telemarketing agencies in the “domestic” and “micro-business” segments of the free market. The Agency Mandate provides for the compulsory training of persons who work in the name and on behalf of Acea, so that they can transmit adequate information to customers, and also provides for financial penalties (with a minimum value of € 1,000) in the event of unfair business practices (see in this respect the chapter on Customers).
During 2018, Acea Energia provided a training programme to 639 salespersons, for a total of 64 days corresponding to 392 hours of training.

During 2018 Areti provided training to contractors’ personnel on the topic: “Variations in the LV scheme - through the use of the corporate application GEOWEB aimed at surveying the LV network from the Substation to the POD”. 34 people participated in the meetings for a total of 136 hours of training carried out with the contribution of an internal instructor. The company also organised 8 coordination meetings with contractors to manage and reduce risks due to interference between workers, as required by the regulations 93.

Areti, inoltre, continua ad utilizzare un modello di vendor rating – sperimentato ormai dal 2008 – per i lavori in area energia, incentrato su 142 parametri di qualità, sicurezza e ambiente. Il sistema prevede ispezioni in cantiere, l’elaborazione di classifiche di merito basate sulla reputazione degli appaltatori e la possibilità di applicare penali e sospendere le attività dell’appaltatore: nel corso del 2018 sono stati sospesi per “non conformità” sulla sicurezza 29 cantieri, a fronte di un totale di 2.214 visite effettuate. L’indice reputazionale medio rilevato nell’anno, pari a 98,29, in costante incremento (era 97,02 nel 2017), conferma il buon livello di affidabilità degli operatori

[93] Art. 26, paragraph 3 of Legislative Decree no. 81/08 as amended.

Disputes with suppliers in 2018

The dispute between the company and suppliers primarily concerns litigations due to failure to pay invoices for goods, services and works and legal action concerning tender contracts.
With regard to non-payment of invoices, there has been an increase in the number of disputes that have arisen: 29 in 2018 (compared to 19 in 2017). In general, there are injunctions concerning invoices that were not paid for reasons of a formal nature and were quickly resolved by settlement proceedings; in fact 21 cases were settled during 2018.

With regard to the remaining litigation relating to procurement contracts, which mainly concerns the registering of reserves by contractors, contract terminations and compensation for damages, in 2018 13 legal actions were initiated, with an increase in the number of disputes compared to the previous year (6 in 2017), of which 2 were settled that same year.

We point out, moreover, that 6 disputes were lodged of an administrative nature on the matter of calls to tender, 3 of which are already settled. The disputes decreased compared to the 11 of the previous year.
As at 31 December 2018, the total number of disputes pending with suppliers (including disputes initiated in previous years) amounted to 86, practically the same as in 2017, where – on a like-for-like basis – there were 76 disputes. In detail, this concerns 10 appeals to the local court on the matter of awards and 63 proceedings brought at the ordinary magistrate’s court which mainly concerning registrations of reserves by the contracts, contract termination and compensation of damages – and 13 regarding unpaid invoices.