By Prof. Roberto Caranta
The contributions collected in this issue have for the most part been presented at the 5th European Conference on Sustainable and Innovative Public Procurement organized by APMEP – Associacao Portuguesa Dos Mercados Publicos (Portuguese Society of Public Markets) in Lisbon on 5-6 May 2022. The contributions hail from various disciplinary backgrounds, from economic and management sciences to social sciences, including law.
The 2019 European Green Deal refers to public procurement as one of the tools of choice to achieve its objectives. The Circular Economy Action Plan indicated that public authorities’ purchasing power is a powerful driver of the demand for sustainable products. These policy documents herald a paradigm change in EU public procurement law. EU rules have been traditionally focused on setting procedural rules to avoid purchasing choices favouring domestic or local companies, but for the most has steered clear form directing contracting authorities and entities on what products and services the should prefer. Today the Commission is precisely envisaging such type of mandatory rules on ‘what to buy’ (and to some extent on ‘whom not to buy from’). The Circular Economy Action Plan indicates that “[p]ublic authorities’ purchasing power represents 14% of EU GDP and can serve as a powerful driver of the demand for sustainable products. To tap into this potential, the Commission will propose minimum mandatory green public procurement (GPP) criteria and targets in sectoral legislation and phase in compulsory reporting to monitor the uptake of Green Public Procurement (GPP) without creating an unjustified administrative burden for the public buyers”.
In the meantime, several Member States have already developed various sustainable public procurement (SPP) mandatory criteria or product procurement guidelines for priority goods, services or works categories.
According to the European Commission, the value of public procurement, from over 250,000 public authorities in the EU, is 14% of Union GDP, or two trillion Euro a year. Given the importance of public procurement contracts in the economy, procurement standards have a significant influence on the practices of private contracting parties and their subcontractors, and thus a significant indirect influence on the private sector as a whole.
The articles in this issue of the European Journal of Public Procurement Markets analyse different aspects of SPP law and practice at both EU and national levels.
Roberto Caranta – the Coordinator of SAPIENS Network – focuses on the role SPP is to play with reference to buildings and more generally to works procurements, specifically in the light of the reform proposals following the European Green Deal and the Circular Economy Action Plan. The reform proposals for the Directive on Energy Performance of Buildings (EPBD) and the Renewable Energy Directive (RED) are mainly setting sustainability targets for the Member States to achieve. By cross-referring to the Energy Efficiency Directive (EED), the RED however also refers to the more general ‘exemplary role’ to be played by the public sector as a whole, including therefore contracting authorities. Here the problem will be to monitor if targets are met and to require the application of remedial actions if they are not. Monitoring whether an ‘exemplary role’ is indeed fulfilled will be even more difficult. The proposals for a recast of the Constrution Products Regulation (CPR) and the EED instead foresee a role for mandatory SPP criteria, to be required when not designed by the Commission. With no good reason, the approach in the two cases is however very different.
Luís Valadares Tavares, José Antunes Ferreira and Alexandre Ricardo present a new multicriteria model to evaluate tenders to award design or design and build contracts for public works pursuing sustainability objectives. This green award criterion for public works is compliant with EU rules and is based on a multicriteria model based on three major perspectives: the life cycle discounted cost (LCC), the expected benefits (EB), and the assessment of the estimated risks (RI). The methodology of Cost-Benefit Analysis is relevant to support EB and RI estimation, and the authors embraced an adapted version of Failure Mode and Effects Analysis (FMEA) to estimate RI. According to the authors, this model can be easily applied as it is confirmed by its application to the study of the procurement of a new public hospital in Portugal.
François Lichère sheds light on how the new and innovative award procedures introduced or retrofitted on the occasion of the 2014 public procurement and concession reform, such as the innovation partnership, the competitive procedure with negotiations and the competitive dialogue. Among different SPP objectives, low carbon public procurement, as it is sometime called, should be given priority because of the Paris Agreement that has put concrete legal duties on the shoulders of public authorities
Giulia Botta investigates the interplay between EU Public Procurement and Human Rights in global supply chains. According to the recently consolidated Business & Human Rights field of international law, this topic is a core challenge and opportunity in the current globalized economy. Global supply chains play a crucial role in enhancing socio-economic development, however evidence from NGOs and case law shows that human rights and labour standards abuses persist in many market sectors. Thus, goods, works, services procured by public entities may entail human rights risks, potentially occurring throughout their global supply chains. The EU regulatory framework has not adequately regulated such intersection, fostering ambiguity and uncertainties in the application which require legal clarification at multiple levels. The article investigates the interplay both at theoretical level and with specific reference to the recent Italian experience on mandatory SPP criteria. The case study presented by Arianna Sica too stems from the Italian experience of GPP as it is a case in which the environmental agency in Piedmont renovated its building having recourse to the Bilan Carbone and the Life Cycle Costing.
Steven Schooner and Désirée Klinger advocate driving SPP through economics-inspired soft tools, including nudging, moral suasion and persuasion. Rather than waiting for legislative or regulatory changes, the article advocates driving sustainable public procurement (SPP) through efficient and available behavioral-economics-inspired “green defaults,” nudging, persuading procurement officials, and, more broadly, rethinking the value proposition when confronted with price premiums. More in general, they highlight the need to think in terms of the actual cost, including externalities, rather than just in terms of price.
Two in-depth case studies link with the role that soft tools may play in SPP. They highlight the challenges contracting authorities face in managing SPP and the strategies they can develop to face those challenges successfully. Nikola Komšić from Serbia discusses the criteria for an optimal model for public procurement. Tying with the topic of the 3rd issue, such a model has to be able to face emergency situations but also foster sustainable growth. Jozef Kubinec presents a second case study from Slovakia, focusing on the potential contributions of adopting central purchasing bodies.
The different contributions collected in this issue show, from a multidisciplinary point of view, how SPP has taken centre stage in the sciences of public procurement as public purchasing activities have been enlisted to contribute to facing the enormous challenges our societies are facing.
With the circular economy underpinning the Green Deal, the public sector must take the lead. The legal public procurement framework is therefore a key aspect for review. The present framework comprises a set of EU directives that will be reviewed in this briefing.
The 6th European Conference on Sustainable and Innovative Public Procurement will focus on Construction Contracting and will be held in Torino, Italy, on the 6th of June 2023, being organized by the University of Torino and the Polytechnic of Torino and APMEP (Portuguese Society of Public Markets).
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