International Journal of Construction Management

ISSN: 1562-3599 (Print) 2331-2327 (Online) Journal homepage: https://www.tandfonline.com/loi/tjcm20

Introducing sustainability principles into the

procurement of construction works – case of
Indonesian developers

R. Wirahadikusumah, M. Abduh, Y. Messah & M. Aulia

To cite this article: R. Wirahadikusumah, M. Abduh, Y. Messah & M. Aulia (2019):

Introducing sustainability principles into the procurement of construction works – case
of Indonesian developers, International Journal of Construction Management, DOI:
10.1080/15623599.2019.1599559

To link to this article: https://doi.org/10.1080/15623599.2019.1599559

Published online: 20 Apr 2019.

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INTERNATIONAL JOURNAL OF CONSTRUCTION MANAGEMENT
https://doi.org/10.1080/15623599.2019.1599559

Introducing sustainability principles into the procurement of construction

works – case of Indonesian developers
R. Wirahadikusumah, M. Abduh, Y. Messah and M. Aulia
Faculty of Civil and Environmental Engineering, Institut Teknologi Bandung, Bandung, Indonesia

ABSTRACT KEYWORDS
The construction sector plays an important role in sustainable development, for example, Construction work;
through sustainable procurement of construction works. However, procuring for construction developer; procurement;
works in such a way has been particularly challenging. The objective of this research was to sustainability; principles
identify the owners’ potential of applying sustainability principles into their construction works
procurement. Data were collected using questionnaires, in-depth interviews, and additional
review on the relevant documents, involving 6 public and 14 private developers of green build-
ings, located in major provinces. The scope of study focused on: (i) technical specifications, (ii)
evaluation criteria and (iii) procurement processes conducted by the organization. The assess-
ment of potential implementation was mainly based on the frequency of responses of
‘Awareness’, ‘Willingness’ and ‘Implementation’. Further analysis identified the so-called Degree
of Unwillingness and the Degree of Difficulty. Results show that the developers were more
ready to implement sustainability into the technical specifications. Meanwhile, among the two
other aspects of procurements, the most challenging issue was to introduce sustainable princi-
ples into the processes conducted within the procurement organization.

Introduction
The construction industry is a vital sector in the
Indonesian economy, particularly since Indonesia has
recently focused on building its infrastructure which
drives construction sector development. The Central
Bureau of Statistics (BPS) stated that the Indonesian
construction sector contributed 10.38% of GDP in
2016 and 10.25% in 2017.
Construction activities have a significant impact
not only on economic but also on other pillars of sus-
tainability, that is social and environmental. There
were over 8 million construction workers in 2016
according to BPS; however, only <10% were highly
skilled/certified. While local environmental-related
data are not readily available, the Global Status
Report 2017 indicated that CO2 emissions from build-
ings and construction have risen by nearly 1% annu-
ally between 2010 and 2016.
Procurement is an integral process of any construc-
tion project which includes all activities related to
providing goods, services and consultancy for building
national infrastructures. Government spending on
infrastructures has been dominant, thus, construction
public procurement has a significant potential to drive
the sustainability agenda of Indonesia because of its
volume. Moreover, as stated by Grob and Benn
(2014), the national government adoption to sustain-
able procurement will provide the impetus for local
government and private sectors to follow and spread
the implementation of sustainable procurement wider.
By influencing better procurement practices, it will
help improving the sustainability of Indonesia’s con-
struction. Traditional procurement processes, such as
the lowest bid method (with only little considerations
on environmental issues of construction), could cause
environmental degradation, eventually resulting in
impaired quality of life for supporting communities,
and can result in huge indirect costs for project own-
ers due to potential damage.
DEFRA (2006) defined ‘Sustainable Procurement’
as a process whereby organizations meet their needs
for goods, services, works and utilities in a way that
achieves value for money on a whole-life basis in
terms of generating benefits not only to the organiza-
tion but also to society and the economy, while mini-
mizing damage to the environment. This means that
the procurement should consider the environmental,

CONTACT Reini Wirahadikusumah wirahadi@si.itb.ac.id

ß 2019 Informa UK Limited, trading as Taylor & Francis Group
2 R. WIRAHADIKUSUMAH ET AL.
social and economic consequences of design, non-
renewable material use, manufacture and production
methods, logistics, service delivery, use, operation,
maintenance, reuse, recycling options, disposal, and
suppliers’ capabilities to address these consequences
throughout the supply chain.
The ‘traditional’ procurement with emphasize on
profit maximization has been identified to not sup-
porting the sustainability principles (Ruparathna and
Hewage 2015a). However, the initiatives to implement
sustainable procurement as the ‘better’ alternative to
‘traditional’ procurement should be based on the
assessment of the current status of the use of the triple
bottom line of sustainability (i.e. social environmental
and economic factors) in a procurement process.
Walker et al. (2012) explain that procurement
choices should be geared towards maximizing value.
This involves not only considering which type of con-
tract to use but also how to engage stakeholders, how
to link business strategy to select the project initially,
how to define value both in its more tangible and eas-
ily explicated form, and the hidden tacit aspirations
of those who are meant to benefit from the project.
Procurement choices should be about balancing
demands and responsibilities; protecting reputations
of those involved in the project against using uneth-
ical practices; encouraging innovation, best practice
and knowledge transfer where it can reap value;
developing project governance and reporting criteria
that highlight, protect and generate value; and they
should aim to attract the level of talent that can
deliver stakeholder delight. Thus, this vision of pro-
curement is far from the traditional lowest-cost/bid
strategy. It requires a more intelligent treatment of
how best to facilitate the project to generate sustain-
able value.
Sustainable procurement for construction works
has been an important topic in recent studies.
Oyegoke et al. (2009), Koh et al. (2011), Sourani and
Sohail (2013), Paintsil (2015), Renukappa et al. (2016)
suggest that sustainable construction can be achieved
through procurement. Successful practice of sustain-
able procurement requires a framework as a guide for
stakeholders in the construction sector; such frame-
work was developed by Sourani and Sohail (2013) for
England, Ruparathna and Hewage (2013) for Canada,
Wahid et al. (2014) for Malaysia, Paintsil (2015) for
Ghana and Ewuga and Scott (2017) for Ireland. Other
research formulated sustainable procurement criteria
and identified specific barriers for implementation on
construction works (Ruparathna and Hewage 2015b;
Iles and Ryall 2016; Young et al. 2016; Dutra et al.
2017). Ding (2008) studied the issues of sustainability
in residential developments and developed a sustain-
ability index for mandatory assessments of all residen-
tial developments in NSW, Australia. Siew et al.
(2016) proposed a framework for sustainability assess-
ment and sustainability reporting tools for
infrastructure.
While the initiatives in the developed countries
have been the main reference of this study, other
studies to introduce sustainability issues in the pro-
curement of construction works, particularly in the
context of developing nations were identified, such as
Bamgbade et al. (2017), and Bohari and Xia (2015) in
Malaysia. Enshassi et al. (2013) discussed the point of
view from Palestinian construction professionals.
As the role and commitment from the owners are
considered as critical project delivery attributes influ-
encing the project’s sustainability goals (Swarup et al.
2011), the objective of this paper is to identify the
owners’ potential of applying sustainability principles
into their construction works procurement. For the
case of the private sector, data were collected from
property developers, which had been assumed to be
more advanced than the client/owners in the public
sector. The assessment included: (i) identifying the
awareness of sustainable procurement and (ii) identi-
fying the initiatives towards sustainable procurement.
Furthermore, this study analysed the specific chal-
lenges of current procurement practices to move for-
ward to include sustainability principles in the
procurement of construction works.
Overview of the Indonesian
construction industry
To achieve higher economic growth, Indonesia has
determined its infrastructure targets for the period of
2016–2019 which were stipulated in the National
Medium-Term Plan (RPJMN). Indonesian govern-
ment introduced 245 projects and 2 programmes as
National Strategic Projects (PSN) with the estimated
total investment of US$322.8 Billion, according to the
Ministry of National Development Planning
(Bappenas). Infrastructure provision in Indonesia
often faces obstacles due to the lack of coordination
between various stakeholders involved (ministries,
institutions, regional governments, etc.) and the pri-
vate sector. Such a large range of stakeholders, each
having its own objectives and responsibilities, causing
delays for execution. Therefore, the Committee for
Acceleration of Priority Infrastructure Delivery
(KPPIP) was established that can work across

ministries and institutions to facilitate and assist pro-
ject owners in preparing and performing the develop-
ment of the project.
While coordination is a strategic issue, the capabil-
ity of the public procurement system for infrastruc-
ture projects is another huge challenge. The
procurement of public goods and services accounts
for approximately 30% of the national budget.
However, Bappenas acknowledged that the procure-
ment system needs to improve its efficiency, account-
ability and transparency in order to get a better
quality of infrastructure.
Procurement involves not only considering which
type of contract to use but how to engage stakehold-
ers, attracting qualified bidders/contractors.
Construction works for public infrastructure is mainly
procured by the Ministry of Public Works and
Housing. Data from 2017 suggest that 93% of pro-
curement packages were assigned for small- and
medium-sized contractors. These firms dominate the
Indonesian construction industry. According to the
Construction Service Development Board of
Indonesia (LPJK), there are over 140,000 small- and
medium-sized contractors. Another 1000þ firms are
classified as large contractors, which can only bid for
bigger value projects. In 2017, of all projects with
‘big’ contract value, 65% were completed by state-
owned companies and the rest by private contractors
(Kompas 2018).
While official data on contractors’ performance are
not readily available, except for a limited number of
reputable firms, these companies are struggling to
support the national infrastructure targets due to lack
of skilled workers, working capital and technology.
The industry is in dire needs of highly skilled trade
workers. Only 10% of the 8 million workers are certi-
fied. Recent numerous construction accidents are an
indicator of such moderate to poor performance par-
ticularly in the quality of the finished products.
Sustainability concept has gained recognition in the
industry. Large contractors are fully aware and will-
ing, while they have been only partly implementing
sustainability practices (Wirahadikusumah and Ario
2015). The initiatives for nation-wide implementation
of sustainable construction should be led by the
public sector, from the owner/client-side. But public-
sector clients first need to learn from the private
sector which has more flexibility in procurement reg-
ulations and presumably better choices of procure-
ment personnel.
Also, collaboration is a key in the procurement of
construction works. Even in the private sector,
INTERNATIONAL JOURNAL OF CONSTRUCTION MANAGEMENT 3
collaboration requires a level of procurement maturity
in order to succeed, a level that is not always present
in public sector organizations. That maturity means
people with the right skills, an effective system, and
lack of fear from making mistakes and harsh scrutiny
by auditors.
With the vision of procurement that is more
focused on generating sustainable value, the trad-
itional lowest-cost/bid strategy is not relevant in
many cases. The public organizations need to provide
more intelligent services on how best to facilitate the
procurement of infrastructure projects.
Because most of the big projects are concentrated
in several cities in Java Island, this study involved 6
public and 14 private developers. These cases repre-
sented construction project owners/clients; their pro-
curement practices were investigated to obtain the
general assessment of potentials in executing sustain-
able procurement.
Integrating sustainability into the technical
specifications, the evaluation criteria and the
organization
Naoum and Egbu (2015) compiled findings from
pieces of literature that the production of newly built
and refurbished buildings with sustainable models
requires several iterations at the design stage and
requires close collaboration between the various par-
ties involved. One of the main barriers to sustainable
procurement, particularly in the central government,
is the conflict between sustainable procurement and
reducing costs. It was also found that the progress in
the area of innovation has been hindered by many
barriers, that is, fragmented nature of the construc-
tion industry, lack of long-term perspective, unwill-
ingness of clients to share burden, lack of clear
concept definition of sustainable construction and its
benefits, regulatory constraints and inconsistent gov-
ernment policy and lack of fiscal incentives.
The concept of sustainability has been introduced
in the Presidential Decree 54/2010 (Republic of
Indonesia 2010) – ‘Procurement Guidelines for
Government Goods and Services’. Sustainable
Procurement is defined as the procurement of goods
and services with the objective to obtain the value
which will not only give economic benefit to the pub-
lic organizations but will also benefit the community
and at the same time minimizing the negative effects
to the environment during their useful life. The
numerous factors to be tackled in the efforts to intro-
duce sustainability concepts in the procurement of
4 R. WIRAHADIKUSUMAH ET AL.
construction works, this study focused on three issues:
(1) the technical specifications, (2) the evaluation cri-
teria, and (3) the activities within the procurement
organization. The three focuses were stated as the pri-
ority steps in the Presidential Decree 54/2010 for ini-
tiating sustainable public procurement, which was
later adopted by Herdianti (2015) to illustrate the
practice of green procurement.
Furthermore, the ‘Procurement Guidelines for
Government Goods and Services’ was very recently
been renewed into the Presidential Decree 16/2018
(Republic of Indonesia 2018). In the new guidelines,
sustainable procurement for public goods and services
is pushed forward nationally for concrete
implementation.
Sustainability in the technical specifications
The design documentation for a construction project
includes three interconnected parts: design drawings,
bill of quantities and technical specifications. The
complete documentation should be prepared to a level
that allows the works to be accurately constructed.
Design drawings are developed to a level of detail
necessary to prepare a clear, coordinated visual depic-
tion of all aspects of the works. The bill of quantities
is then prepared as the basis for cost estimation. The
third documentation, the technical specifications, is
prepared to provide consistency and to instruct con-
struction contractors on how the works are to be exe-
cuted, the quality of the workmanship and methods
of quality assurance for the construction. Technical
specifications comprehensively describe the project
design and construction practices, technical standards,
specifications and principles to be followed during
construction.
In general, the scope and the detail of technical
specifications will depend on the nature and complex-
ity of the project. This document is very important
since it is the foundation of the quality of the con-
tractor’s product. The level of compliance with the
design drawings and technical specifications ultim-
ately determines the quality of the project and influ-
ences the performance of the constructed works.
The development of sustainable/‘green’ design
drawings, bill of quantities and technical specifica-
tions, are the responsibility of the architects/engineers
during the planning/design phase of the project.
While the contribution of contractors to sustainability
is particularly the adherence to the technical specifica-
tions: the use of sustainable/‘green’ construction
materials and material testing, and sustainable/‘green’
construction/installation methods.
In the context of concrete works, for example, it
is generally accepted that project specification that
minimize prescriptions or that incorporate perform-
ance-based requirements allow knowledgeable con-
crete suppliers to optimize concrete mixtures for
performance required in its plastic and hardened
states. The general concepts are that specifications
should permit the use of regionally available materi-
als that minimize transportation, avoiding restric-
tions on material ingredients beyond those in
reference material specifications, permit the ability
to increase the recycled content in concrete mix-
tures and minimize waste incurring disposal man-
agement and cost, minimize the carbon footprint of
concrete mixtures, and incorporate aspects that
maximize the environmental (life cycle assessment)
and service life performance of concrete as a con-
struction material.
Sustainability in the evaluation criteria
The key feature of project delivery is a selected pro-
curement procedure, where suppliers are invited to
submit a bid proposal (in the form of qualification
information or a response to a request for informa-
tion). The owner is seeking the best value for money,
or the most economically advantageous offer, not
simply the lowest price, namely the optimum combin-
ation of whole-life costs and quality to meet require-
ments, having due regard to propriety and regularity.
Bidding is based on a bid package ready for adver-
tisement or distribution to selected contractors. Bid
documents must be comprehensive and of an appro-
priate technical quality and clearly defining scope and
quality of the work required. The owner receives and
evaluates bids, and selects and appoints a contractor
using a fair, competent and transparent system.
Boswell and Walker (2004) suggest that for public
procurement, the owner needs to first define one or
more options with higher sustainability performance
in addition to a basic option. At the award stage,
when considering bids, the procurement authority can
then decide which option best meets the needs,
according to criteria previously decided by the
authority and made clear in the bid documentation.
For example, a basic requirement for post-consumer
waste content could be set, along with variant specifi-
cations setting higher post-consumer waste require-
ments. The authority can then choose the variant
option that best meets its needs, selecting the best

value for money bid, within that option, according to
the award criteria it has set out in the tender
documentation.
Sustainability concept to be considered in the con-
tractor’s selection stages, mainly (a) in the qualifica-
tion criteria of the bidders and (b) in the award
criteria during the evaluation of contractors’ proposal.
Bidders can be excluded from tender lists. The pro-
curement authorities can request an exhaustive list of
the evidence as proof of technical capacity (i.e. the
qualification criteria). Several of these can relate to
sustainability matters. These should be relevant to the
subject of the contract; the owner can ask for
evidence of a track record specific knowledge or
experience, an environmental performance record,
description of technical facilities and measures for
ensuring quality, statement of tools, plant and tech-
nical equipment, and an indication of environmental
management measures relevant to the execution of
the contract including the requirement to use best-
practice environmental management practices during
construction.
Factors other than price to be used in the award
(or tender evaluation) criteria should be expressed.
Award criteria include cost, quality and performance,
schedule, innovation and environmental effects.
Boswell and Walker (2004) indicate that the scope for
taking social issues into account during procurement
is more limited than for environmental issues because
naturally, they are less likely to be directly related to
the subject of the contract. And, frequently, there will
be more efficient and effective means of achieving
social outcomes than through the procurement pro-
cess. The key social impacts from procurement can be
identified from risk assessments which can be the jus-
tification of suppliers’ compliance with social legisla-
tion that focuses on health, safety, and other
social issues.
Sustainability in the activities within the
procurement organization
Implementing sustainability issues starts at the plan-
ning and project programming stage where the tech-
nical and economic feasibility of alternatives will be
compared in order to select the best possible project
delivery. The belief that an organization can benefit
by balancing the concerns of economics, the environ-
ment and society in its procurement processes and
operations is not new. Sustainability decisions must
be made early. The decision for sustainable procure-
ment can only be successful if all stakeholders are
INTERNATIONAL JOURNAL OF CONSTRUCTION MANAGEMENT 5
fully committed. This should also be reflected in the
activities within the procurement organiza-
tion/authority.
The procurement organization also acts sustainably
in their business processes. The considerations of
energy savings, greener materials for office products
and more socially assured organizational settings, etc.,
are part of the organization’s efforts in internalizing
the concept of sustainability. However, the internal as
well as external drivers should be taken into consider-
ation (Grob and Benn 2014).
Research method
The study’s objective is to identify the owners’ poten-
tial of applying sustainability principles into their
construction works procurement. The owners should
consider the capabilities of available designers and
contractors to deliver their demands. Many owners
do not have the determination in implementing sus-
tainable principles because they are not fully aware of
the principles. Meanwhile, others are already aware,
but they do not have the determination. However,
there are a few of them are fully aware, willing and
have already implemented but only partially since
they stumbled upon numerous barriers.
The study was limited to property developers spe-
cializing in residential housings and office buildings
because these firms are commonly trying to brand
their products as ‘green’ or ‘sustainable’ for marketing
purposes. Data collection was performed by self-
administered questionnaires and follow-up interviews
with the developers located in three major provinces,
that is, DKI Jakarta, West Java and DI Yogyakarta.
The questionnaires were designed using close-
ended questions and divided into three sections: gen-
eral information, sustainable procurement concepts,
and the implementation of sustainable procurement
in construction projects. The general information sec-
tion included questions related to respondent’s pro-
files. The second section was aimed to collect
respondent’s opinions on sustainable procurement
concepts (the definition and the principles). The last
section was designed to identify the implementation
level and the factors that could contribute to the suc-
cess of sustainable procurement in construction proj-
ects. The assessment was focused on three important
areas of construction procurement, that is, (i) tech-
nical specifications, (ii) evaluation criteria and (iii)
procurement processes within the organization.
For supporting the second and third sections of
the questionnaire, the definition and the principles
6 R. WIRAHADIKUSUMAH ET AL.
were gathered from several works of literature, regula-
tions and guidelines. The references included: The
Governor of DKI Jakarta’s Decree on Green Buildings,
Abidin (2009), the Australian Government’s ongoing
procurement report (Department of Finance and
Deregulation 2013), the Sustainable Procurement
Integration Guidance in Procurement by the NSW
Government (Department of Housing and Public
Work 2014), and Sustainable Procurement An intro-
duction for practitioners to sustainable procurement in
World Bank IPF projects (The World Bank 2016).
The environmental aspect of sustainable procure-
ment was translated into environmental protection
and welfare. The social aspect related to social welfare
with the benefits for workers and future users, that is,
attributes such as security, satisfaction, comfort,
actualization, skills, health, knowledge and motivation.
Finally, the economic aspect is related to the benefits
of micro-economics (factors or activities that may
lead to monetary gain by the construction project)
and macro-economic (the benefits for society and
government derived from the project’s success).
Earlier studies by Kibert (1994), Abidin (2009) and
Wirahadikusumah and Ario (2015) were adapted to
summarize the concept of ‘Sustainable Procurement
for Construction Works’ to be used in this study, as
shown in Figure 1. The three elements of sustainable
principles, that is, environmental (Env), social (Soc)
and economic (Eco) were integrated into the three
aspects of procurement for construction works. The
Technical Specifications incorporate issues such as
energy saving, water saving, etc. The Evaluation
Criteria for selecting contractors during the
Qualification Stage should consider environmental
management, quality management, etc. During the
Bid Evaluation process, construction methods should
be environmentally friendly, while also considering
the labour wages and life cycle cost. Finally, within
the procurement organization, their activities need to
adopt sustainability principles such as energy saving,
paper footprint, etc. Two consultations with experts
and officers from the National Public Procurement
Agency (LKPP), that issued the public sustainable
procurement related regulations, and the Ministry of
Public Works and Housing, that issued technical
guidelines for sustainable construction implementa-
tion, were utilized to verify the framework of the sus-
tainable principles that were adopted in the study as
depicted in Figure 1.
The main questionnaire was developed based on
Figure 1 to identify the level of implementation of
sustainable procurement in construction projects by
the developers. However, another short questionnaire
was also developed to identify the understanding of
respondents on sustainable procurement concepts
including the definition and principles of sustainable
procurement. This questionnaire aimed to validate the
selection of respondents and their background.
The level of implementation of sustainable pro-
curement is defined as whether the respondent is
aware of the sustainable principles, willing to apply
the principles into the procurement system, or already
implementing them. The number of respondents that
are aware of each sustainable principle (i) is noted as
‘Awareness’ or Ai. The number of respondents that
are aware and planning to apply the principle (i) into
procurement processes is noted as ‘Willingness’ or
Wi. Finally, the number of respondents that have
already conducted the procurement plan and proc-
esses based on the sustainable principle (i) is noted as
‘Implementation’ or Ii.
Furthermore, quantitative as well as qualitative
analyses of the differences between Ai, Wi and Ii for
each sustainable principle were introduced in this
study. There are two quantitative measures that aimed
to identify whether the respondents that are already
aware of the principles have no willingness to imple-
ment them into procurement activities, further meas-
ured as degree of unwillingness, and to identify
whether the respondents that have the willingness to
implement the principles have difficulties in the
implementation, further measured as degree of diffi-
culty. The Degree of Unwillingness (Ui) represents
the difference between the number of respondents
that are aware (Ai) and the number of respondents
that are planning to implement the sustainable princi-
ples into procurement processes (Wi). The Degree of
Difficulty (Di) represents the difference between the
number of respondents that are planning to imple-
ment (Wi) and the number of respondents that had
implemented the sustainable principles into the pro-
curement (Ii). The formulations are as follow:
Ui ¼ Ai Wi (1)
Di ¼ Wi Ii (2)
A qualitative analysis was then used to interpret
the two equations, (1) and (2), for identifying the fac-
tors that should be considered in the future for devel-
opment. For this purpose, an arbitrary classification,
containing three categories, was used based on a rela-
tive percentage of difference for each equation. The
degree of unwillingness (Ui) is classified as ‘low’ or L
if the value of Ui is <33.4% of Ai, ‘moderate’ or M
degree of unwillingness is when the value of Ui is

Figure 1. Sustainable principles implemented into construction procurement. Adapted from Kibert (1994), Abidin (2009) and
Wirahadikusumah and Ario (2015).
<66.8% of Ai, and ‘high’ or H degree of unwillingness
is when the value of Ui is larger than or equal to 66.8%
of Ai. For classifying the degree of difficulty (Di), the
same method was used, but it was based on the percent-
age of the difference value to the number of respondents
who have the willingness to implement (Wi).
An illustrative example of qualitative analysis is
as follows:
 If there are 20 respondents answering a question
related to a sustainable principle, and there are 20
respondents claimed to have awareness on the
principle, 15 respondents have the willingness to
implement it into procurement, but only 7 of
them have implemented the principle into the pro-
curement, then Ai ¼ 20, Wi ¼ 15, and Ii ¼ 7.
 Using equations (1) and (2), Ui ¼ 20  15 ¼ 5, and
Di ¼ 15  7 ¼ 8.
 It can be classified that the degree of unwillingness
is low since the division of Ui by Ai is 5/20 or
equal to 0.250 or 25%; which is <33.4%.
INTERNATIONAL JOURNAL OF CONSTRUCTION MANAGEMENT 7
 It can be classified that the degree of difficulty is
moderate since the division of Di by Wi is 8/15 or
equal to 0.533 or 53.3%; which is between 33.4%
and 66.7%.
Results
During April to December 2017, this study had man-
aged to contact and interview 20 developers located
in DKI Jakarta, West Java and DI Yogyakarta. These
firms included 6 state-owned companies and 14 pri-
vately owned companies specializing in building hous-
ings, apartments, offices and shopping centres. All
developers have been in business for more than
4 years, 8 of them for more than 10 years, and they
were promoting their products as sustainable/green as
marketing gimmicks. All respondents have enough
experiences and have innovative solutions to keep up
with current trends related to sustainability issues.
There were 20 respondents in this study who
were representatives of 20 developers; one person
8 R. WIRAHADIKUSUMAH ET AL.
represented one company. Based on the positions of
the respondents in the companies, there were 2 direc-
tors, 7 heads of division, and 11 managers or
deputy managers related to procurement. The
respondents held strategic and operational positions
related to construction procurement and sustainability
and therefore they were appropriately involved in
this study.
Sustainable procurement concepts: definition
and principles
The questionnaire related to sustainable procurement
concepts focused on the definition of sustainable pro-
curement and the principles used for sustainable pro-
curement. It can be concluded that all respondents
were very knowledgeable about the concepts and
therefore valid to answer the other questionnaire. All
respondents seemed to agree on the definition and
principles of sustainable procurement that have been
established and widely used:
1. Definition
All respondents agreed that sustainable procure-
ment can be defined as an effort of improvement to
the traditional procurement by adding sustainability
principles into consideration to procurement’s
important areas. The definition of sustainable pro-
curement and other related derivatives were suggested
to come out from the government as the major stake-
holder in a country for this matter with a caution
that the definition should be realistic to be imple-
mented in the Indonesian context. In fact, their sug-
gestions were just realized as a revision of Public
Procurement Guidelines issued in 2018 with an
objective to promote the implementation of sustain-
able procurement.
1. Principles
All respondents thought that general procurement
principles were still relevant to sustainable procure-
ment concept as they could reflect three important
aspects of sustainability; social, economic, and envir-
onmental aspects. Those principles included effi-
ciency, effectiveness, environmental-friendliness,
accountability, transparency, ethics, accessibility and
fairness, respecting others, innovative solutions, focus-
ing on needs, total cost of ownership, integration and
continuous improvement.
All respondents were aware of all principles and
eager to implement the principles into procurement
processes. However, it is interesting to find that there
were three procurement principles which were catego-
rized into moderate for implementation: accountabil-
ity, the total cost of ownership, and integration. It
seems that there are still issues related to those three
principles that will contribute to less effective imple-
mentation of sustainable procurement. Accountability
principle would be easier to implement if policies or
regulations were provided by government adequately.
The policies should include the vision and the road-
map of Indonesian in addressing sustainability issues
in all sector, as well as in procurement. The total cost
of ownership should be a practice that is promoted
by all parties involved in each phase of the life cycle,
therefore, the guidelines of such practices, for
example, life cycle cost analysis, should be available.
All respondents believed that the integration of
principles required more effort for implementation
since there are many parties involved and all of them
should have the same understandings and visions.
The dissemination activity in promoting sustainable
procurement principles and practices was deemed
essential to initiate the integration process between
parties involved.
Implementation of sustainable procurement by
Indonesian developers
Integrating sustainability principles into technical
specification
As per definition, technical specification is a descrip-
tion or provision, that is clearly and completely
formulated, of the products, the method of produc-
tion, or performance of products that have been
defined based on the end-customer’s goal. The tech-
nical specifications will become a document that
should be available during procurement processes and
used to determine the qualification of the prospective
contractors. Some commonly used technical require-
ments are related to the quality of materials, construc-
tion methods, laboratory and field tests, and
construction equipment. With sustainable procure-
ment in mind, all requirements are to meet the three
aspects of sustainability, that is, economic, social and
environmental.
Table 1 shows the degree of unwillingness (Ui) and
difficulties (Di) of integrating sustainable principles
into the technical specifications by the developers,
state-owned company (SOC) and privately owned
company (POC), in percentage (%) and respective
 INTERNATIONAL JOURNAL OF CONSTRUCTION MANAGEMENT 9

Table 1. The degree of unwillingness and difficulties of inte- seemed to put requirements related to environmental
grating sustainable principles into the technical specifications. control and management on hold because they are
SOC POC waiting for more mature regulation related to envir-
Principle Ui Di Ui Di onmental impact assessment, and institution and per-
Environment sonnel capacities to help them in the implementation.
Energy saving 14.29 L 5.21 L 16.67 L 2.50 L
Water saving 18.09 L 15.58 L 28.57 L 16.67 L While the SOC’s difficulty in putting requirements
Resource utilization 9.52 L 13.16 L 5.56 L 17.65 L related to green materials was more due to the
Minimize pollution 26.83 L 23.33 L 11.11 L 37.50 M
Healthy and non-toxic 15.85 L 14.49 L 2.78 L 28.57 L unavailability of local green certification institution.
Waste management 23.64 L 21.43 L 29.17 L 23.53 L
Environmental impact
Spatial planning
17.86
2.38
L
L
17.39
17.07
L
L
41.67
22.22
M
L
28.57
7.14
L
L
Integrating sustainability principles into procure-
Supporting facilities 28.57 L 23.33 L 16.67 L 13.33 L ment evaluation criteria
Social In procurement, there are two steps of evaluations.
Working environment 0.00 L 14.29 L 0.00 L 16.67 L
OHS attributes 0.00 L 7.14 L 0.00 L 33.33 L The first one is selecting the right prospective com-
Toilet and worker barracks 0.00 L 7.14 L 0.00 L 16.67 L pany to submit the bid; known as the qualification
Economic process. The second one is the evaluation of the pro-
Environmental-friendly 7.14 L 38.46 M 0.00 L 16.67 L
materials posal submitted by the prospective contractors;
Average 12.63 L 16.77 L 13.42 L 19.91 L known as bid evaluation (BE) process. Therefore,
there are two sets of criteria. In the context of inte-
gration of sustainable principles into procurement
categories: L for ‘low’ and M for ‘moderate’. The sus- evaluation criteria, the evaluation criteria should also
tainable principles were grouped into environmental be specific for each purpose of evaluation, that is, to
aspect, social aspect and economic aspect, while the evaluate the company’s profile and to evaluate the
percentages and categories of differences (Ui) and (Di) project proposal.
are listed for each principle. As shown in Table 2, there is no moderate degree
Most respondents seemed confident to implement of unwillingness and difficulty for introducing sus-
sustainable principles into technical specifications tainable principle into the evaluation criteria (average
since they showed low Degree of Unwillingness (Ui) Ui ¼ 20.07% and average Di ¼ 18.15%), and it is also
and Difficulties (Di) with the average percentage of noticed that there is no principle that has a moderate
12.86 and 17.73, respectively. There were exceptions degree of unwillingness and difficulty from the POC’s
on three principles which indicated a moderate degree perspective. Meanwhile, there are seven principles
of unwillingness and difficulties. This finding, in gen- that are considered to have moderate unwillingness
eral, is obvious since all developers are promoting and two principles that have moderate difficulty from
products that could be categorized into sustainable the SOC’s perspective. With the average degree of
products, therefore the technical specification should unwillingness of 24.89% and the average degree of
contain requirements to fulfil sustainable products unwillingness for all seven principles of 47.62%, it can
effectively. be said that the SOCs were still hesitating to put those
Those three principles that have moderate degree requirements into qualification and bid evaluation cri-
of implementation are moderate in a degree of teria; however, only one bid evaluation criterion was
unwillingness for environmental impact by POC (Ui categorized into the moderate degree of
¼ 41.67%), and moderate in a degree of difficulty for unwillingness.
pollution control by POC (Di ¼ 37.50%) and environ- Even though it was found many sustainable princi-
mental-friendly material by SOC (Di ¼ 38.46%). ples were reluctantly and moderately difficult to be
POCs are rather unwilling to implement principles implemented into evaluation criteria by the SOCs, the
related to environmental impact into the specification, overall degree of unwillingness and difficulty are still
almost four times of the average degree of unwilling- considered low since the POC’s perspectives pulled
ness (13.42%), and they have minor difficulty to put them down. Thus, in this case, there is a contrast
requirement related to pollution minimization, only finding between SOC’s and POC’s perspectives on the
twice of average degree of difficulty (19.91%). On the evaluation criteria that can differentiate their procure-
other hand, SOCs have only minor difficulty in the ment practices. For SOC, the requirements to be cer-
setting requirement for green or environmental- tified by independent institutions, such as ISO or
friendly materials, about twice of the average degree OHSAS, are minimized. This may relate to the readi-
of difficulty (16.77%). Based on the interviews, POCs ness of SOC’s supply chains that could provide the
10 R. WIRAHADIKUSUMAH ET AL.

Table 2. The degree of unwillingness and difficulties of inte- Table 3. The degree of unwillingness and difficulties of inte-
grating sustainable principles into procurement evalu- grating sustainable principles into processes within the pro-
ation criteria. curement organizations.
SOC POC SOC POC
Principle Ui Di Ui Di Principle Ui Di Ui Di
Environmental Environmental
ISO 14001 57.14 M 16.67 L 16.67 L 20.00 L Energy saving 12.50 L 22.45 L 8.33 L 18.18 L
Eco-friendly methods (BE) 30.36 L 41.03 M 16.67 L 30.00 L Renewable energy 21.43 L 18.18 L 16.67 L 40.00 M
ISO 9001 50.00 M 28.57 L 0.00 L 16.67 L Reduce paper trail 28.57 L 30.00 L 0.00 L 16.67 L
Quality management 8.93 L 17.65 L 0.00 L 20.83 L
Social
OHSAS 18001 57.14 M 16.67 L 16.67 L 20.00 L Social
Occupational Health 0.00 L 14.29 L 0.00 L 0.00 L Staff training 28.57 L 20.00 L 0.00 L 66.67 M
Insurance (BE) Development of career 28.57 L 30.00 L 16.67 L 60.00 M
Certification of skills 42.86 M 25.00 L 16.67 L 20.00 L Organizational 14.29 L 41.67 M 16.67 L 60.00 M
Standard remuneration 42.86 M 37.50 M 0.00 L 33.33 L
Using local labour 7.14 L 7.69 L 0.00 L 16.67 L Economic
Using labour wages 14.29 L 16.67 L 0.00 L 16.67 L Cost savings 0.00 L 28.57 L 16.67 L 40.00 M
Female workers 21.43 L 27.27 L 33.33 L 25.00 L Average 17.86 L 26.06 L 9.38 L 40.29 M
Disability workers 35.71 M 11.11 L 33.33 L 0.00 L
CSR activities 21.43 L 9.09 L 0.00 L 16.67 L
Permanent workers 0.00 L 7.14 L 16.67 L 20.00 L
Non-permanent workers 0.00 L 7.14 L 0.00 L 16.67 L
organization should do (average Ui ¼ 15.31% and
average Di ¼ 30.74%).
Economic
Bank support 0.00 L 0.00 L 0.00 L 0.00 L This is also a contrast finding that can differentiate
Using life cycle cost (BE) 35.71 M 22.22 L 0.00 L 50.00 L between SOC and POC in their organizations and
Ownership of equipment 7.14 L 7.69 L 0.00 L 33.33 L
Average 24.89 L 17.40 L 8.82 L 19.71 L business processes related to procurement. The strug-
gle is on the POC’s side, while on the SOC’s side,
there is only one principle related to organizational
requirements; not many of them have such certificates arrangements. It seems that POC tends ineffectively
yet since for them that kind of certificates is volun- implement the requirements into the procurement
tary. On the other hand, the POCs were confident organization and that could also imply that the POC
that their supply chains could provide the require- has not used a systematic approach in introducing
ments since for them that kind of certificates could be sustainable principles to the internal procurement
used as competitive advantages and therefore becom- organization.
ing mandatory for survival. Regarding two difficulties
in implementation based on the SOC’s perspective,
which is an eco-friendly method and standard remu-
Discussion
neration, the SOCs found those requirements will
demand them to level up their personnel capacities as Following discussions show how far the introduction
well as the monetary appreciation for them. of sustainability principles has been done by develop-
ers in their procurement activities. Also, the compari-
son between SOC and POC developers was conducted
Integrating sustainability principles into processes
to identify the potential specific development of each
within the procurement organization
type of companies. For that purpose, the findings of
From Table 3, it can be found that there are five prin- the study are summarized in Table 4.
ciples that are considered to have moderate difficulty In general, the developers (both SOC and POC)
by POCs: renewable energy, staff training, develop- are already familiar with the definition and sustain-
ment of career, organization arrangements, and cost able procurement principles, and they are willing to
savings; over and around the average degree of diffi- implement the principles into three areas of procure-
culty of 40.29%. While, from the SOC’s perspective, ment (average degree of unwillingness is low, 14.5%).
there is only one principle that has a moderate degree Furthermore, many of them have implemented the
of difficulty, that is organization arrangement, but it principles into the procurement processes and found
may be the most difficult requirement to be imple- a small number of issues for implementation (average
mented since it has the highest degree of difficulty by degree of difficulty is low, 23.36%). The findings are
SOCs. However, in general, there is no moderate of course encouraging to know the owners have
degree of unwillingness and difficulty for introducing already committed into the sustainable procurement,
sustainable principle into processes that procurement but this is also understandable since they are

Table 4. Summary of degrees of unwillingness and difficulty.
Unwillingness Difficulty
Procurement area SOC POC SOC
Technical specification 12.63 13.42 16.77
Evaluation criteria 24.89 8.82 17.40
Process in procurement 17.86 9.38 26.06
organization
Average (SOC/POC) 18.46 10.54 20.08
Average (All) 14.50
promoting green concept or sustainability approach at
the first place.
Based on the three procurement areas for imple-
mentation, it was found that the technical specifica-
tion area is the easiest one; degrees of unwillingness
and difficulty are the lowest and less than the aver-
ages. The evaluation criteria area still has a minor
issue from SOC’s point of view; its degree of unwill-
ingness higher than the average (24.89%) with the
degree of difficulty less than the average. On the con-
trary, the last area of procurement, that is, processes
within procurement organization possess several
issues that make SOCs less eager in the implementa-
tion (the degree of unwillingness is slightly higher
than the average, i.e. 17.86%) and considered become
difficult to implement for SOCs and especially for
POCs (degrees of difficulties are 26.06% and 40.29%).
Based on the type of owner’s organization, SOC or
POC, it was also found some notes that should be
mentioned to improve the implementation of sustain-
able procurement. The SOCs faced most issues in the
area of evaluation criteria (degree of unwillingness
above the average, i.e. 24.89%) than the POCs. On
the other hand, the POCs faced most issues in the
area of processes within the procurement organization
(degree of difficulty above the average, i.e. 40.29%)
compared to the SOC.
Furthermore, based on more detail information
related to moderately rated principles for a degree of
difficulty, Table 5 is provided to show issues that are
still considered to be challenging for improving sus-
tainable procurement implementation.
The area of technical specification is not a big con-
cern for both SOCs and POCs, even though require-
ments for environmental-friendly material and
pollution minimization are still issues to be supported
here. The existence of an institution that could certify
the green material and assess the negative environ-
mental impact is important to support the issues in
this area. Moreover, in Indonesia, the eco-label system
is not working effectively, green materials are still
expensive, green supply chains are not available
adequately, and there are not many independent
INTERNATIONAL JOURNAL OF CONSTRUCTION MANAGEMENT 11
institutions that could effectively support the environ-
mental impact assessment yet.
POC In the area of evaluation criteria, the issues of eco-
19.91 friendly method and standard remuneration are still
19.71
40.29
considered difficult by the SOCs. An eco-friendly
method is still viewed as a costly proposal for con-
26.64 tractors in Indonesia, since the requirements for
23.36
necessary equipment and procedures may not be
available locally. Regarding standard remuneration for
workers, many employers, such as owners or contrac-
tors, still find it too high and could reduce margin
significantly.
Organization arrangement is considered difficult by
both SOCs and POCs, in the area of processes within
the procurement organization. Furthermore, POCs
find more issues in this area such as career develop-
ment, staff training, cost savings and renewable
energy. Since this area is internal matters of the pro-
curement organization, the requirements are for
building the developers’ capacity, especially in the
procurement organization. It means that the procure-
ment organization should become a strategic organ-
ization and implement sustainable principles in the
first place. It is necessary for the procurement organ-
ization to walk the talk in implementing sustainable
principles before asking other organization, such as
contractors or consultants, to comply via procurement
processes.
The findings of this study open some opportunities
for improvement in the area of sustainable procure-
ment that are not only directed to the owner since
the issues are related to procurement policy, proce-
dures, and tools, existence of sustainable supply
chains, certification institution, research and develop-
ment for local sustainable technologies, human
resource development, and strategic management. In
order to implement sustainable procurement effect-
ively, there is a need to have a holistic view of it, and
therefore developing a complete framework of sus-
tainable procurement implementation in Indonesia is
important. Further assessments to other parties in the
construction industry, such as contractors, consultants
and suppliers, and other supporting industries are
also necessary for the complete picture and for build-
ing a roadmap of sustainable procurement implemen-
tation for all parties involved in construction.
Conclusions
Based on 6 public and 14 private developers of green
buildings, it was identified the sustainable principles
that had a moderate degree of unwillingness and
12 R. WIRAHADIKUSUMAH ET AL.

Table 5. Moderate degree of difficulty in introducing sustainable principles to the devel-

opers’ procurement.
Technical specification
Evaluation criteria
Processes within procurement
organization
SOC POC
Environmental-friendly materials Pollution minimization
Eco-friendly methods
Standard remuneration
Organization arrangement Organization arrangement
Career development
Staff training
Renewable energy
Cost savings

difficulty for implementation on procurement.
Indonesian developers were readier to implement sus-
tainability into the technical specifications. The other
two areas of procurement (evaluation criteria and
procurement processes) were more challenging, and
the most challenging one is the process within the
procurement organization. Research findings showed
that private firms differed from public developers that
they have moderate difficulties for the issues related
to the process within the procurement organization.
On the other hand, public developers differ from pri-
vate firms that they were moderately unwilling to
implement sustainable principles into evaluation crite-
ria. Issues to be improved were related to not only
the internal capacity of the developers but also related
to the availability of other sub-systems that should
support the implementation of sustainable procure-
ment effective in Indonesia. These findings will be
useful to identify the most significant factors for the
future development of a framework for implementing
sustainable procurement in Indonesia.
Acknowledgments
This research was partially supported by the Institute for
Research and Community Services – Institut Teknologi
Bandung. We also thank our colleagues from the National
Public Procurement Agency (LKPP) who provided insight
and expertise that greatly assisted the research.
Disclosure statement
No potential conflict of interest was reported
the authors.
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