Socially responsible spending vital

Public authorities use public funds when procuring goods, works and services. The European Union (EU) has created a well-regulated public procurement market founded on the core principles of transparency, equality and open competition to ensure that these funds are not misspent and that tenders are fair. Socially Responisble Public Procurement (SRPP) aims to go one step further and to address the impact on society of the purchases made by the public sector.

SRPP is about implementing social considerations in public contracts to achieve positive social outcomes. 

The European Commission has recently published the report Making socially responsible public procurement work: 71 good practice cases. The 71 cases included in the report make the potential of SRPP visible, showing how procurement can affect the broader market. By promoting employment opportunities, decent work, social inclusion, accessibility, design for all, ethical trade, and compliance with social and environmental standards, public buyers can increase demand for socially responsible goods, works and services. Public procurers can be especially impactful in sectors where they command a large share of the market, such as construction, healthcare and transport. As public procurers spend around 14% of the EU’s gross domestic product, their power does not stop there. The European Commission (EC) report also contains cases relating to cleaning and facility management, food/catering services, furniture, gardening services, social services, ICT and textiles.

The report is more than just a showcase for the progress made by SRPP. By demonstrating correct bidding procedures and effective policies, it is also a useful guide for procurers and operators in Europe’s social economy aiming to stimulate replication across the continent. Despite its increased momentum. SRPP still poses many challenges. Procurers sometimes lack high-level support for SRPP due to concerns about the resources required or about legal challenges (the 2014 EU Public Procurement Directives have made it clear that social aspects can be taken into account throughout the procurement cycle). Furthermore, when procurers introduce SRPP considerations, they need to have a good understanding of where the main social risks and opportunities are, and how these can best be targeted through their procurement. This demands strong knowledge of the market, suppliers’ business models and supply chains. The report shows that market consultations can be a useful tool to obtain that knowledge. 

Leading the way

The City of Helsingborg organised a market consultation to discuss how it could use its procurement of cleaning services to create job opportunities for unemployed people. It invited market players to hear their opinion on how employment criteria could best be implemented in the contract and on how requirements regarding employment and internship opportunities could be met in the public procurement. The approach of the City worked: four of the six companies that took part in the market dialogue, eventually became suppliers, while companies became more positive towards employment requirements and more willing to cooperate with the City’s Labour Market Administration for recruitment and matching. In the first year of the contract, five people got jobs or internships through these requirements. The Helsingborg case is also one of the many examples in the EC report, proving that cost-effective socially responsible public procurement is possible.

SRPP is not only a challenge for procurers. Suppliers familiar with writing bids for traditional tenders sometimes find it it hard to incorporate a social dimension in their bids. Moreover, social enterprises are still sometimes reluctant to sign up for a tender, believing they are at a disadvantage to large for-profit companies. However, there are several SRPP practices which can make it easier for social enterprises to win contracts. Procurers can, for example, use selection criteria/reserved tenders that benefit the work or organisational structure of social enterprises. This makes it easier and more attractive for these organisations to compete for tenders and gives them a higher likelihood of winning the tender. 

Salamanca has used such a reserved tender to award a contract for maintaining the green areas of the city to a Work Integration Social Enterprise (WISE). WISEs are not-for-profit operators, focusing on local development and care for the environment, whose main objective is the labour integration of people in a situation of social exclusion. As such, reserved tenders for WISEs are a valuable tool to protect vulnerable people and the environment. This is also an example of how SRPP could evolve. 

The European Commission has until recently seen Socially Responsible Public Procurement and Green Public Procurement (GPP) as two separate strands of sustainable procurement. In the future, it aims to encourage public authorities to integrate social and green aspects equally in their procurement. The EC report could help guide them in that direction.