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The sole responsibility for the content of this
presentation lies with the Clean Fleets project. It does
not necessarily reflect the opinion of the European
Union. Neither the EACI nor the European
Commission are responsible for any use that may be
made of the information contained therein.
MODULE 3:
APPROACHES TO CLEAN
VEHICLE PROCUREMENT
3.1: FLEET MANAGEMENT
FLEET MANAGEMENT
Each fleet manager will have a different level of control over the fleet
Organisation describes the vehicle and the fleet manager procures and
maintains
Fleet manager understands each interaction employees make and
describes to the organisation which tool they use
TOOLS AT YOUR DISPOSAL
 Web conferencing
 Public transport
 Lift sharing
 Pool car
 Grey mileage (not recommended)
 Company car
RELATIONSHIP WITH THE MARKET
 Engage the market
 Know the market
 Engage in trials and demonstrations
 Provide clear signals to the market
3.2: RETROFIT
RETROFIT
 Do you even need to purchase a new vehicle?
CASE STUDY: BARCELONA
 Fully owned and operate the fleet
 High degree of mechanical competency
 Political will to reduce all emissions
 Covenant of Mayors
 European legislation
 European directive 20/20/20
 Spanish air quality national plan
CASE STUDY: BARCELONA
 Barcelona Air Quality Plan 2011
 7 areas
 13 objectives
 34 measurement points
 Result
 425 buses SCR+CRT
 70 units to hybrids
3.3: LEASE
LEASE
 Higher costs but less responsibility
 Lower upfront costs can be manageable for smaller authorities
 Maintenance can be included, although maintenance contracts
can be brought in for purchased vehicles
3.4: TENDERING FOR CLEAN VEHICLES:
A
SUBJECT MATTER OF THE CONTRACT
TECHNICAL SPECIFICATIONS
AWARD CRITERIA
OTHER PROCUREMENT APPROACHES
PROCUREMENT APPROACHES
Stages of the procurement process
 Better together!
 Subject matter of the contract
 Technical specifications
 Selection criteria
 Award criteria
 Contract performance clauses
 Other procurement approaches to encourage innovation and
clean, energy efficient solutions.
PROCUREMENT EXAMPLE 1 - CARS
City of Ljubljana, Slovenia
 Type of vehicles - 6 hybrid cars out of a fleet of 60
 Background drivers - Target of 10% hybrid vehicles, involved in
CIVITAS
 CVD methodology used – Option 1, Maximum CO2 emissions of
100g/km
 Savings of between 30% - 50% fuel
PROCUREMENT EXAMPLE 2 - BUSES
The City of Vienna – Wiener Linien
 12 full electric microbuses were purchased
 Policy to reduce personal transport to >20% in 2025, zero
emission zone centre + wider low emission zone
 CVD methodology used = Option 1*
 Innovation needed – no planning permission for charging stations
& existing tram system infrastructure
 Double acquisition cost+ additional infrastructure cost, 1/3 less
maintenance cost, much lower running costs**
PROCUREMENT EXAMPLE 3 – WASTE TRUCKS
Bristol city council
 Procurement of low carbon waste collection services
 City target to reduce CO2e by 40% by 2020
 CVD methodology used – Option 2
 On the first page of the specifications, Bristol’s aims as relevant to
the contract were set out – important
 Competitive dialogue procedure used (as opposed to
conformance-based specs) to encourage innovation
 Emissions reductions of 720 tonnes annually
PROCUREMENT EXAMPLE 4 – WASTE TRUCKS
Wasteserv Malta limited
 Euro IV WEEE collection trucks
 GPP action plan 2011, greening 30% tenders by 2013
 CVD methodology used – Option 1
 Other useful procurement approaches = upgraded vehicles
accepted
 A strong signal was sent to future providers – Malta has one of the
oldest commercial vehicle fleets in Europe
What else would they need to consider now the CVD has been
transposed……?
PROCUREMENT EXAMPLE 5 - BUSES
Madrid
 142 CNG and 23 CNG hybrid buses purchased by the transport
operator
 CVD methodology used – Option 1 and 2
 Option 1 – only CNG, electric or hybrid allowed
 Option 2, 10 points fuel consumption and 10 points pollutants
 30-50% less NOx emissions
INTERACTIVE ACTIVITY
Which procurement approach is the most appropriate?
 In all cases - appropriate subject matter should always be used! It
helps avoid problems later when using environmental
requirements
 Under-developed market = joint procurement and award criteria
 Well developed market = technical specifications to set a
threshold in combination with award criteria to push the market
further
3.5: GETTING THE MESSAGE ACROSS TO
PROCURERS
GETTING THE MESSAGE ACROSS TO PROCURERS
A variety and combination of procurement approaches can be used to
procure clean vehicles:
 Look at examples of what other authorities have procured – learn
from others!
 Adjust technical specifications and award criteria according to
market availability of the technology type
 The CVD is very flexible – just remember to take into account
local pollutants AND energy use
3.6: BUYING TOGETHER
COLLABORATION THROUGH
JOINT PROCUREMENT
JOINT PROCUREMENT
Definition:
 Combining the procurement actions of two or more contracting
authorities into a single procurement.
 E.g. one large contracting authority (a city) or central
purchasing organisations buying on behalf of other
organisations as well as themselves
 E.g. a group of purchasing organisations liaising on the
procurement process to buy together
.European Commission GPP Toolkit: Module 1
COOPERATION WITH OTHER BUYING ORGANISATIONS
Principal advantages:
 Reducing high acquisition costs of vehicles
 Streamlined administration
 Bulk purchasing drives down costs
 Reducing risks associated with buying new fuel or technology
types
 Pooling expertise
 Expanding the uptake helps to develop the market e.g. Fuel/
spare parts more readily available
COOPERATION WITH OTHER BUYING ORGANISATIONS
Examples:
National Swedish
procurement
COOPERATION WITH OTHER BUYING ORGANISATIONS
Examples:
Oslo, Norway
DISCUSSION ON CONCLUSIONS
 What aspects have we already used in our own organisations
to try and encourage greener options for vehicles, or any
other product / service categories? (In terms of both
collaboration with stakeholders, tendering processes and joint
procurement)
 Which have been the most effective?
 Which would you consider using in your organisation in the
future?
 What steps would need to be taken to make this work?

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Module_3_-_Approaches_to_Clean_Vehicle_procurement.ppt

  • 1. The sole responsibility for the content of this presentation lies with the Clean Fleets project. It does not necessarily reflect the opinion of the European Union. Neither the EACI nor the European Commission are responsible for any use that may be made of the information contained therein. MODULE 3: APPROACHES TO CLEAN VEHICLE PROCUREMENT
  • 3. FLEET MANAGEMENT Each fleet manager will have a different level of control over the fleet Organisation describes the vehicle and the fleet manager procures and maintains Fleet manager understands each interaction employees make and describes to the organisation which tool they use
  • 4. TOOLS AT YOUR DISPOSAL  Web conferencing  Public transport  Lift sharing  Pool car  Grey mileage (not recommended)  Company car
  • 5. RELATIONSHIP WITH THE MARKET  Engage the market  Know the market  Engage in trials and demonstrations  Provide clear signals to the market
  • 7. RETROFIT  Do you even need to purchase a new vehicle?
  • 8. CASE STUDY: BARCELONA  Fully owned and operate the fleet  High degree of mechanical competency  Political will to reduce all emissions  Covenant of Mayors  European legislation  European directive 20/20/20  Spanish air quality national plan
  • 9. CASE STUDY: BARCELONA  Barcelona Air Quality Plan 2011  7 areas  13 objectives  34 measurement points  Result  425 buses SCR+CRT  70 units to hybrids
  • 11. LEASE  Higher costs but less responsibility  Lower upfront costs can be manageable for smaller authorities  Maintenance can be included, although maintenance contracts can be brought in for purchased vehicles
  • 12. 3.4: TENDERING FOR CLEAN VEHICLES: A SUBJECT MATTER OF THE CONTRACT TECHNICAL SPECIFICATIONS AWARD CRITERIA OTHER PROCUREMENT APPROACHES
  • 13. PROCUREMENT APPROACHES Stages of the procurement process  Better together!  Subject matter of the contract  Technical specifications  Selection criteria  Award criteria  Contract performance clauses  Other procurement approaches to encourage innovation and clean, energy efficient solutions.
  • 14. PROCUREMENT EXAMPLE 1 - CARS City of Ljubljana, Slovenia  Type of vehicles - 6 hybrid cars out of a fleet of 60  Background drivers - Target of 10% hybrid vehicles, involved in CIVITAS  CVD methodology used – Option 1, Maximum CO2 emissions of 100g/km  Savings of between 30% - 50% fuel
  • 15. PROCUREMENT EXAMPLE 2 - BUSES The City of Vienna – Wiener Linien  12 full electric microbuses were purchased  Policy to reduce personal transport to >20% in 2025, zero emission zone centre + wider low emission zone  CVD methodology used = Option 1*  Innovation needed – no planning permission for charging stations & existing tram system infrastructure  Double acquisition cost+ additional infrastructure cost, 1/3 less maintenance cost, much lower running costs**
  • 16. PROCUREMENT EXAMPLE 3 – WASTE TRUCKS Bristol city council  Procurement of low carbon waste collection services  City target to reduce CO2e by 40% by 2020  CVD methodology used – Option 2  On the first page of the specifications, Bristol’s aims as relevant to the contract were set out – important  Competitive dialogue procedure used (as opposed to conformance-based specs) to encourage innovation  Emissions reductions of 720 tonnes annually
  • 17. PROCUREMENT EXAMPLE 4 – WASTE TRUCKS Wasteserv Malta limited  Euro IV WEEE collection trucks  GPP action plan 2011, greening 30% tenders by 2013  CVD methodology used – Option 1  Other useful procurement approaches = upgraded vehicles accepted  A strong signal was sent to future providers – Malta has one of the oldest commercial vehicle fleets in Europe What else would they need to consider now the CVD has been transposed……?
  • 18. PROCUREMENT EXAMPLE 5 - BUSES Madrid  142 CNG and 23 CNG hybrid buses purchased by the transport operator  CVD methodology used – Option 1 and 2  Option 1 – only CNG, electric or hybrid allowed  Option 2, 10 points fuel consumption and 10 points pollutants  30-50% less NOx emissions
  • 19. INTERACTIVE ACTIVITY Which procurement approach is the most appropriate?  In all cases - appropriate subject matter should always be used! It helps avoid problems later when using environmental requirements  Under-developed market = joint procurement and award criteria  Well developed market = technical specifications to set a threshold in combination with award criteria to push the market further
  • 20. 3.5: GETTING THE MESSAGE ACROSS TO PROCURERS
  • 21. GETTING THE MESSAGE ACROSS TO PROCURERS A variety and combination of procurement approaches can be used to procure clean vehicles:  Look at examples of what other authorities have procured – learn from others!  Adjust technical specifications and award criteria according to market availability of the technology type  The CVD is very flexible – just remember to take into account local pollutants AND energy use
  • 22. 3.6: BUYING TOGETHER COLLABORATION THROUGH JOINT PROCUREMENT
  • 23. JOINT PROCUREMENT Definition:  Combining the procurement actions of two or more contracting authorities into a single procurement.  E.g. one large contracting authority (a city) or central purchasing organisations buying on behalf of other organisations as well as themselves  E.g. a group of purchasing organisations liaising on the procurement process to buy together .European Commission GPP Toolkit: Module 1
  • 24. COOPERATION WITH OTHER BUYING ORGANISATIONS Principal advantages:  Reducing high acquisition costs of vehicles  Streamlined administration  Bulk purchasing drives down costs  Reducing risks associated with buying new fuel or technology types  Pooling expertise  Expanding the uptake helps to develop the market e.g. Fuel/ spare parts more readily available
  • 25. COOPERATION WITH OTHER BUYING ORGANISATIONS Examples: National Swedish procurement
  • 26. COOPERATION WITH OTHER BUYING ORGANISATIONS Examples: Oslo, Norway
  • 27. DISCUSSION ON CONCLUSIONS  What aspects have we already used in our own organisations to try and encourage greener options for vehicles, or any other product / service categories? (In terms of both collaboration with stakeholders, tendering processes and joint procurement)  Which have been the most effective?  Which would you consider using in your organisation in the future?  What steps would need to be taken to make this work?

Editor's Notes

  1. Fleet managers are on a wide spectrum between those who serve a simple, reactive function to those who have more of a strategic role. For those at the reactive end it will be a small part of their job in procurement and they will just find the cheapest car that the organisation says it needs. At the strategic end there will be those who work with the organisation to understand the tools the business needs to do the job. Point out that the trainees you have in the room will all have different places on this spectrum and different levels of control, but each will be able to influence the decision on what vehicle to procure in their own way.
  2. Like the hierarchy of modes of transport, these options can be used to consider alternatives, before procurers go ahead and buy everyone a company car; Web conferencing – do you need to make the journey at all? Public transport – Do you need to drive a vehicle at all? Lift sharing – can more than one employee share a car on the same journey? Or can you sign up to an online portal which facilitates this? Lift share or “Bla bla car” Pool car – how often do you use a car? Grey mileage – use of personal car (not preferable due to insurance liability, no idea of if the car is green or properly maintained etc) Business car – use of company owned car
  3. You cannot be a fleet manager unless you know the market, know what is coming (various fuel/technology types/ models) and know who the suppliers are etc. the whistle stop tour in module 1 was a start. Vehicle procurers will all have to go forth and keep track of the market now. This market will change significantly over the next few years as electric and plug in hybrid vehicles become more and more cost effective. Clear signals are very important to the market, for example if they know that that in the next few years you will only accept proposals from companies which contain some ultra low emission vehicles (ULEVs) in their fleets then they will start thinking about ULEVs. Alternatively, if your city is considering a low emission zone in an area of poor air quality, let potential transport providers know this well in advance so that they have the chance to incorporate low emission vehicles into their fleets. More broadly you can use your relationship with the supply chain to force them to use low emission vehicles. For example London’s bus stop cleaning contract was won by a company who said they would use 6 electric vehicles as part of the 42 vehicle fleet. The best way to engage with the market is to: Attend trade events Attend events with fellow authorities and procurers Read the trade papers Attend industry or government led innovation workshops Keep an eye on EU funding streams such as Horizon 2020 and try and get involved in one. A good way to do this is to see who is currently conducting Horizon 2020 or FP7 work and email them. Often consultancies will be the most responsive.
  4. The other consideration is to fit something to the vehicle which means it emits less. Retrofitting after treatment systems or hybrid systems can both be done in cost effective ways. This is particularly pertinent for larger vehicles which: Emit more Tend to stay in the fleet for longer Have more technology on the market to be retrofitted This shows that the emissions from older vehicles are huge compared to moderns standards. Spending limited resources on reducing emissions from all Euro I II and III vehicles currently in the fleet through retrofitting may be better than buying a few brand new buses (investing those resources in expensive technologies for just one or two vehicles). As an aside, I think we can sit back and remark at the rather staggering success of the Euro standards!
  5. Barcelona chose to retrofit many of their vehicles, there were a number of reasons which made this work. Some can be replicated easily – others are harder to replicate, but this should not be seen as a barrier. They have a high degree of mechanical competency, which means that they could do almost all of the work in-house – they also upskilled many of their employees. They have a good level of political support. This is in the form of their Barcelona air quality plan – this is driven by the four elements on the screen.
  6. This plan was put in place in 2011 and was fairly far reaching. They retrofitted about half of the vehicles in central Barcelona – the most polluting vehicles. This is the retrofit which makes the most sense as it is relatively cheep and has a big impact. They also made 70 units into hybrid buses – this was before hybrids were available on the market – they did this themselves, it just shows what a well funded and ambitious plan can achieve when its backed politically and financially. They retrofitted all of the worst polluting buses, very little more they can do on ICE buses. Now they are exploring full electric buses and plug in hybrids.
  7. Overall you will tend to pay slightly more to lease vehicles, unless you are a large authority and are leasing a huge number of vehicles – so able to better negotiate a deal. When leasing vehicles you will have far lower upfront costs which can be very appealing for electric vehicles. Some electric vehicles will never be sold with the battery (Renault) which you have to lease on a monthly lease based on the miles you travel. Remember – it is very important when looking at alternative fuelled vehicles to get a quote for purchasing the vehicles and leasing the vehicle. Even if you plan to do only one understand the costs of the other will allow you to negotiate better. For example, BMW provide a guaranteed buy back, but only for leasing companies, which means that they can write the car down to a higher value, and so provide a very competitive price. Residual value is the main issue for electric vehicles both when purchasing and leasing. Some research done recently shoes that a Nissan leaf holds its value as well (if not better) than an equivalent vehicle after 3 years. Insurance, TfL self insure which provides lower costs, but 1,000+ vehicles means it is possible.
  8. As you are going through the following points, consider asking your trainees whether or not they regularly/have ever used any of the suggested methods, in order to try and stimulate conversation about the most effective ways/ stages of the procurement cycle to target. You may also want to split the following aspects into separate slides depending on the depth you want to go into: Better together (slogan stolen from the campaign who want Scotland to stay part of the UK…) this refers to the importance of procurement departments liaising with all relevant stakeholders (as referred to earlier in Module 1) before the procurement process begins, in order to generate ideas and get feedback from transport/mobility departments, other internal user departments, passengers and others who you may need to gain buy-in from in order to make more significant steps towards purchasing alternative technologies/fuel types to ensure a cleaner fleet. Subject matter – as the most important old public procurement mantra goes “they can’t tell you what to buy, they can only tell you how to buy it.” – As your trainees will doubtless all know - according to EU principles promoting competition, public procurement should be carried out in a non-discriminatory, transparent manner i.e. what you ask of suppliers (especially when evaluating them on award criteria) must be PROPORTIONATE and RELEVANT to the subject matter of the contract. It is therefore imperative that you state in the subject matter (the stage at which you have the most freedom) that you want “clean/ low emission/ zero emission/ energy efficient vehicles”, rather than just “vehicles”. Another way to ensure that environmental requirements are still deemed to be relevant and proportionate is by referring, within the tender, to established commitments, policies and targets that your municipality has, which are related to minimising transport emissions/ fuel consumption. Mention the Swedish / Norwegian cases (which will be discussed in more detail shortly) where they specifically selected the technology type in the subject matter i.e. EVs and PHEVs Technical specifications – Can be used to select technology types and/ or to set environmental thresholds e.g. Euro 6 / Euro VI or 100g CO2/km (for small cars) *Also consider the use of variants – i.e. using a set of technical specifications including environmental requirements that you know the market will be able to respond to – and then alongside these, a set of more ambitious specifications. Ask suppliers to provide offers and prices for the first set and (if possible for them) the second, as a way of testing the market and getting an idea of price premiums for better environmental performance. This method is a way of encouraging suggestions and sending a message about your organisation’s commitment to high environmental performance without the risks associated with no bidders/ unfeasibly high prices. *Other environmental aspects that may be considered – Tyre pressure monitors, gear shift indicators, separate air conditioned/ heated drivers cabs. *Mention the Madrid example (which will also be discussed in more detail shortly) limiting their selection to only electric or hybrid vehicles, but still allowing a number of options to be proposed so that choice wasn’t too narrow (which would have increased the risk of higher prices and fewer bidders). Selection criteria – You can select the types of companies you want at this point (as long as its relevant and proportionate to the subject matter) i.e. how they do their business – you CANNOT do this later on in the procurement. At the supplier evaluation/award phase for example, the criteria must only be relevant to the specific contract / procurement in question. Award criteria – can be used to take the thresholds established by the technical specifications one step further by awarding points for environmental performance as well as other quality issues and price. Award criteria can be used to send a message to the market, without taking such a big risk as setting very high standards in the technical specifications. The higher the weighting given to environmental parameters the more effective. From an environmental standpoint, the use of award criteria is more effective when procuring vehicles of similar prices. Contract performance clauses – can be used to encourage continuous improvement of service providers/ transport operators over the lifetime of the contract e.g. Within a year from the start of the bus contract, green driver training should have been delivered to all drivers involved in delivering the contract and/ or driver monitoring systems should be installed and incentivisation schemes initiated. Warrantees for batteries in electric vehicles are very important as this is one of the biggest risks/ costs with this relatively new technology type.
  9. The following are a collection of examples from the Clean Fleets case study series and the EU GPP Helpdesk GPP Examples series. Unless there are particular aspects you think will be of interest to your group, you may wish to consider sourcing your own examples that are more relevant to the types of organisations you are training (i.e. size, resources available, market maturity of certain technology types) or the country you are delivering the training in. Please see attached case studies (as part of the training materials) for further details on each of the case studies presented here. Please note that some of the procurement examples presented took place before the CVD was transposed into their national legislation and therefore not all aspects now required under the CVD were covered. This actually makes for quite a nice exercise with trainees, asking them which aspects required under the CVD are missing and where they would suggest including them if the procurement were to be done again.
  10. Other important aspects of this case include the use of market consultation and of renewable electricity to power the buses. *An interesting discussion point to ensure your trainees are keeping the CVD in the front of their mind, and to delve a bit deeper into practical CVD implementation issues: The question was asked to the Commission if asking for a certain clean technology type would mean automatic compliance with the Directive – The response was yes, but only if these covered all aspects required under the CVD i.e. energy efficiency as well as CO2 and local air pollutant emissions. In this Vienna case, the local air pollutant and CO2 emissions were covered through technology selection (well to wheel (WTW) emissions do not have to be considered under the CVD) but would energy use be covered by simply asking for BEVs? No – however, Wiener Linien did rule out 2 models in the pre-tender stage because of too much energy consumption. **Cost implications: 400.000 Euro per bus, 90.000 Euro for charging stations and 320.000 for end station, maintenance 8000 Euro annually (one third less) significantly lower electricity costs.
  11. This is a really interesting case and well worth a proper read through before presenting it. The most interesting aspect is how Bristol City Council translated its overarching carbon targets to a specific baseline CO2e reduction target for this waste contract and then used emissions reductions proposed by bidders to award points during the evaluation phase. Bidders were therefore encouraged to make strong commitments to reducing emissions compared to the old contract, but not such high ambitions as to be unachievable as any shortfall in reductions targets would result in financial penalties (it works rather like an energy performance contract used for buildings contracts).
  12. This may not seem like a particularly ambitious example, however trainees should bear in mind the national economic and market circumstances and age of the existing fleet in Malta. One notable aspect is that vehicles upgraded to Euro IV or better were also accepted, which meant that potential suppliers did not have to make significant outlays in terms of buying newer models.
  13. This example was referred to earlier as a good example of using technical specifications to limit the offers to vehicles powered by electricity or CNG fuel only, but leaving room for various options as these buses could either use purely electric, electric hybrid (series or parallel) or traditional mechanical propulsion. Although local air pollution emissions were monetised using the values stipulated by the Clean Vehicles Directive, the monetary values were then converted into points and therefore this is considered to be an example of using option 2 of the CVD rather than option 3 (reiterate here that under option 3 the monetary values are simply added to the other financial costs and the total value is used to compare offers).
  14. Subject matter (continued) - and it is far less likely that you will get challenged for not going far enough – the more likely risk of challenge is from suppliers who think that stringent environmental requirements are disproportional and irrelevant to the contract… but this will only happen if you forget to put “clean/ low emission/ energy efficient” in the subject matter!
  15. Summary
  16. A very useful publication from the EC to help give a good background into this slide can be found here: http://ec.europa.eu/environment/gpp/pdf/toolkit/module1_factsheet_joint_procurement.pdf
  17. Again, this can be built upon from the publication previously mentioned. Joint procurement can be a very useful exercise for smaller organisations and for those with fewer resources and/ or expertise on clean vehicle procurement. It is also useful for larger, more experienced organisations who are those that would be leading on the joint procurement in terms of aggregating demand, driving down prices and stimulating particular new markets – however the downside for those leading on the exercise is the amount of time and energy that needs to be put into a larger procurement, when the requirements of other organisations must be factored in.
  18. It is worth reading this case study before presenting on it – it is a really good example of a successful joint procurement exercise because not only does it involve a vast number of organisations (and had to reconcile many differences in terms of requirements for safety levels and other specifications) but it also involves participation from both the public and private sector in a dedicated effort to try and stimulate the market for electric vehicles on a national level. It may also be interesting to compare this newer case study with the older one written for the EU GPP Helpdesk when it first started – this illustrates that in the beginning the take up (purchasing of EVs/PHEVs from the contract) was low but then accelerated over time.
  19. Again it is worth reading this case thoroughly before presenting it. It is also worth pointing out that both municipalities in Sweden and Oslo have been involved in joint procurement exercises for other product and service groups – and that once these types of exercises have been established for one, it is easier for it to become comonplace to cooperate in this way and reap the benefits. Point out that the „zero-emission technology“ policy was a strong driver behind this procurement.
  20. Use this session as a way of reiterating messages and making conclusions