Green Public Procurement & Socially Responsible Public Procurement

Green Public Procurement:

Considering the broader impacts of public procurement and opting for products and services with environmental benefits, such as reduced greenhouse gas emissions, can also help public authorities to invest in the future of their cities and can actively encourage local innovation and entrepreneurship.

For this reason it makes sense to adopt GPP as a policy, rather than just as an ad-hoc practice, so that it can be supported, monitored and improved over time. A GPP policy can also help to establish communication between the users or commissioners of goods, works and services and procurers, to ensure needs are met in a sustainable manner.
GPP can be applied to all products and services purchased by a public authority, such as energy efficient computers, vehicles, and food and catering. Sometimes a small change in a very big contract can have a significant environmental impact, as in Barcelona where, with just a 15% increase in the proportion of electricity being purchased from renewable sources, one centralised contract for electricity saved the equivalent of more than 66,000 tonnes of CO2.

Smaller purchases are just as significant. When the German Public Purchasing Authority Bescha brought a new dishwasher for their onsite canteen, the new machine was twice as energy efficient as its predecessor and halved its water consumption.

The selection stage of a tendering process is important for signalling the use of GPP and encouraging innovation. The 2014 Directives allow contracting authorities to both:

• exclude companies from tendering for not meeting certain conditions (exclusion criteria); and
• select the most suitable companies to bid based on technical ability and previous experience in relation to the subject matter of the contract (selection criteria).

Both sets of criteria provide opportunities for pursuing sustainability goals.

You may allocate points during the award stage to recognise environmental performance beyond the minimum requirements set in the specifications. There is no set maximum on the weighting you can give to environmental criteria. Labels and other forms of third-party evidence can help you to assess how well a tender performs against your chosen award criteria, and to verify bidders’ claims.

In addition, adopting a life-cycle costing approach reveals the true costs of a contract. Considering energy and water consumption, maintenance and disposal costs in your evaluation may indicate that the greener option is also the cheaper option over the full life-cycle.

At the last meeting of the URBACT Procure network, we explored how a city can take the steps to embed GPP into its everyday procurement practices, from raising internal awareness and gathering support, creating a policy and strategy, using green criteria and engaging with suppliers. A presentation from Robert Kaukewitsch of the European Commission Environment Directorate-General provided an introduction to what is possible for GPP. John Watt of ICLEI – Local Governments for Sustainability then hosted a workshop to demonstrate to the cities how GPP can be applied, by providing practical steps, advice and examples.

John Watt
Officer, Sustainable Economy and Procurement

ICLEI

Socially Responsible Public Procurement: Enhancing social benefits through procurement

There has often been a misnomer that procurement processes cannot consider innovation in procurement and particularly criteria around economic, social, environmental benefits because it contravenes the European Procurement Directives and specifically requirements around competitiveness. This misnomer has meant that procurers across Europe have often not considered innovation in procurement and have instead focused purely upon the cost of the product or the service being procured. 

At the last meeting of the Procure Network in Albacete in December 2016, we explored how this misnomer could be overcome and particularly how social criteria could be built into the various stages of the procurement cycle. Indeed, the European Directives are now actively encouraging municipalities and others to utilise the process of procurement to achieve wider social and environmental goals and suggests three main ways of doing this.  

The first is that the Directives emphasise that the award criterion for all public contracts should be founded around the ‘Most Economically Advantageous Tender’ (MEAT) – this means that purchasers will be increasingly required to assess quality elements in their decisions and no longer purely focus on cost. The second is that the Directives actively encourage the development of innovation partnerships – these are tender procedures which allow procurers to develop solutions that are not yet available on the market. The third is the focus on life-cycle costing and enabling environmentally friendly and socially conscious production processes to be rewarded in the procurement decision. 

In Albacete, we discussed how the principles of the Directives could be practically translated into the four stages of the cycle of procurement. There are various means which can be undertaken at each stage: 

Design of the service (commissioning)

Mean 1 – innovate for outcomes
The first is to adopt a Public Procurement of Innovation (PPI) approach whereby suppliers are engaged to create a good or service which is not already on the market. 

Mean 2 – link design to wider issues
The second is for commissioners to actively consider in the design process what wider issues their product or service can potentially address; they can then embed this into the procurement process. 

Procurement strategy and tender processes

Mean 3 - Link procurement to wider priorities
The third is to frame procurement strategy in relation to the wider priorities facing a city such as addressing unemployment. 

Mean 4 - Set criteria around social factors
The fourth is to allocate criteria in procurement around social factors. So, procurers may have more of a balanced decision-making process where 45% is awarded on cost, 45% on quality, and 10% on social factors.  

Mean 5 – Ask questions around social factors
If cities are to include considerations around social factors in their decision-making processes, then they need to ask questions around social factors in their tender documentation. This will enable them to subsequently score bidders against these considerations. 

Mean 6 – Through including social clauses
Where appropriate and relevant to the subject of the good or service, cities can include specific obligations on potential suppliers to deliver social clauses. For example, they can ask construction companies to create one job or one apprenticeship per million euros spent with that organisation. 

Making the decision

Mean 7 – Score against social criteria
If Cities are involving means 3,4,5 and 6 (as described above) in their procurement strategies and tender processes, then they need to make sure that they score against these in making the decision as to who wins a particular contract. 

Monitoring

Mean 8 – contract manage and monitor
The final mean of practically embedding social considerations into procurement is to actively contract manage and monitor. This can be done through a dedicated contract manager or through issuing questionnaires to all suppliers on an annual basis. 

Each of the cities in the Procure Network will be thinking in the coming months how they can start to embed social value criteria into their procurement processes to enable the objectives of the European Procurement Directives to be realised.  

Matthew Jackson is the Lead Expert for the Procure network.

Matthew is the Deputy Chief Executive of the Centre for Local Economic Strategies (CLES)