Buying Social – A guide to taking account of social considerations in public procurement – Second edition

(2021/C 237/01)

TABLE OF CONTENTS

Introduction 4

Chapter 1 Definition, purpose and benefits of socially responsible public procurement 4

1.1. Socially responsible public procurement and its definition 4

1.2. Identifying and applying social objectives in public procurement 6

1.3. Purpose and Benefits of SRPP 9

1.4. Links to EU and International Policies and Legislation 11

Chapter 2 An Organisational Strategy for Buying Social 16

2.1. Putting SRPP on the Agenda 16

2.2. Defining Objectives 17

2.3. Stakeholder Consultation 17

2.4. Assessing Risks, Prioritising Contracts and Setting Targets 20

2.5. Integrating SRPP in Procurement Procedures and Policies 22

2.6. Monitoring and Reviewing Progress 23

Chapter 3 Identifying needs and planning procurement 25

3.1. The Role of Needs Assessment in SRPP 25

3.2. Market Dialogue 27

3.3. What Kind of Contract? 31

3.4. Choosing a Procedure 33

3.5. Defining and Challenging Specifications 35

3.6. Using optional fields in the standard forms 35

Chapter 4 The procurement procedure 36

4.1. Defining the Subject matter and Identifying Relevant Rules 36

4.2. The Light Regime 38

4.3. Reservations 41

4.4. Technical Specifications 43

4.5. Compliance with Social and Labour Law, and Collective Agreements 46

4.6. Exclusion and Selection Criteria 48

4.7. Award Criteria 51

4.8. Evaluating Tenders and Verifying Commitments 54

4.9. Abnormally Low Tenders 57

Chapter 5 Setting and Enforcing Contract Terms 58

5.1. Turning SRPP Commitments into Reality 58

5.2. Contract Performance Conditions 59

5.3. Social Outcomes Contracting 63

5.4. Monitoring Compliance 64

5.5. Subcontracting 65

5.6. Dealing with Problems 67

5.7. Drawing Lessons for Future Contracts 68

The second edition of the Guide has been compiled under Contract No SI2.801176 – 728/PP/GRO/SME/18/D/021a between the European Commission and ICLEI – Local Governments for Sustainability, supported by Public Procurement Analysis (PPA). Neither the European Commission nor any person acting on behalf of the Commission may be held responsible for the use that may be made of the information contained in this publication. Important notice This Guide is intended to help public buyers and to encourage good practice. It is a non-binding document which does not affect the rights and obligations set in the EU legislation. It is subject to the evolution of procurement practice and the case law of the Court of Justice of the European Union, which remains the only body competent to authoritatively interpret Union law. The concepts, ideas and solutions proposed in this document are without prejudice to national legislation and may need to be adapted to take into account the national legal framework. Although the information in this Guide has been carefully checked, the European Commission accepts no liability concerning the specific cases mentioned in it. More information on the European Union is available on the Internet (http://europa.eu).

INTRODUCTION

Socially responsible public procurement (SRPP) is about achieving positive social outcomes in public procurement contracts. Procurement affects a large number of people: users of public services, those involved in production and delivery, or staff of the buying organisation. Beyond those directly affected, SRPP has the potential to influence the broader market on both the demand and supply sides.

By purchasing wisely, public buyers can promote employment opportunities, up and reskilling of the workforce, decent work, social inclusion, gender equality and non-discrimination, accessibility, design for all, ethical trade, and seek to achieve wider compliance with social standards. For some products, works and services, the impact can be particularly significant, as public purchasers command a large share of the market in sectors such as civil engineering, healthcare and transport.

To address societal challenges, public authorities need to step up efforts to deliver on all aspects of sustainability (social/ethical, environmental and economic). Public buyers are major investors in Europe, spending currently over 14 % of the EU’s gross domestic product. By using their purchasing power to opt for goods and services that deliver positive social outcomes, they can make a major contribution to sustainable development. This Guide offers them support in covering the social dimension of sustainable public procurement.

The current COVID-19 pandemic is likely to affect employment, increase inequalities, worsen the precariousness and the working conditions of workers globally, place further pressure on the delivery of certain services to the person, and impact smaller businesses. In their recovery strategies, EU Member States will need to improve social inclusion and fairness through education and skills, employment, and social and territorial cohesion, and ensure that the green and digital transitions will create jobs, sustainable growth and socio-economic resilience. Socially responsible purchasing practices are a powerful instrument in the toolbox of EU national administrations to reach these goals.

The purpose of this document is to raise public buyers’ awareness of the potential benefits of SRPP and to explain in a practical way the opportunities offered by the EU legal framework. When drafting this Guide, the Commission consulted widely with public buyers to identify good practices and examples of what can be achieved. These examples are featured throughout the text.

This Guide has been produced for public buyers, but also in the hope that it inspires others involved in procurement, whether as suppliers or service providers, private buyers, social economy players including social enterprises, or NGOs.

The chapters of this guide address all aspects of the procurement process, beyond the tendering procedure itself. They detail how social considerations can be introduced throughout the process, and provide numerous examples from actual practices of public buyers across the EU. In chapters 2 to 5, most sections are followed by a list of ‘good practices’. These are meant to further facilitate understanding of the text, by summarizing in concrete terms the essential points covered in each section and what public buyers can do in practice if they wish to take a socially responsible approach to the procurement process.

CHAPTER 1

Definition, purpose and benefits of socially responsible public procurement

1.1. Socially responsible public procurement and its definition

Socially responsible public procurement (SRPP) aims to address the impact on society of the goods, services and works purchased by the public sector. It recognises that public buyers are not just interested in purchasing at the lowest price or best value for money, but also in ensuring that procurement achieves social benefits (1) and prevents or mitigates adverse social impacts during the performance of the contract. As a public buyer you can consider social objectives throughout the entire procurement process, provided these are non-discriminatory and linked to the subject matter of the contract (2). In the European Union, SRPP must be carried out in compliance with the 2014 Public Procurement Directives (3) and the principles enshrined in the EU Treaty (4) and Charter of Fundamental Rights, as well as international agreements, such as the WTO Government Procurement Agreement (GPA) and bilateral Free Trade Agreements with procurement chapters (5), and the UN Convention on the Rights of Persons with Disabilities (UNCRPD) (6).

SRPP can be a powerful tool both for advancing sustainable development and for achieving international, national, regional or local social objectives. It views public procurement as a strategic instrument to spend public money efficiently and sustainably. Social considerations can be combined with green (7) and circular (8) criteria and procurement of innovation (9) for a more comprehensive approach to sustainability in public procurement (10). Improving professionalism and support to public buyers can greatly facilitate the successful use of social considerations and their integration with other considerations related to sustainability and quality (11).

Socially responsible public procurement helps public authorities deliver quality services and products to their communities, to achieve additional social and ethical benefits even when budgets are limited, and can therefore contribute to countering the negative impact of the COVID-19 crisis. The recovery from the pandemic will require EU public authorities to use all available tools and instruments to tackle negative socio-economic effects. The unprecedented financial resources, which will be available under the Recovery and Resilience Facility, will often be put to use through public procurement. It is therefore crucial that public buyers can fully exploit the flexibility of public procurement rules to make sure these resources are used to achieve the highest possible positive social and economic impact for their communities. Moving away from a lowest price logic and introducing considerations related to social integration, equality, fair and inclusive employment and ethical supplies is key to maximize the recovery effect of these resources.

This Guide features a range of examples of SRPP in practice from across the EU, showcasing different approaches and the achievement of real impacts, which can be used as a source of inspiration. You can find more examples of good practices from EU and Third Countries in the two reports ‘Making socially responsible procurement work – 71 good practice cases’ (12) and ‘Buying for social impact – Good practice from around the EU’ (13) available on the Commission’s webpage on support tools for public buyers (14).

1.2. Identifying and applying social objectives in public procurement

Public buyers have many ways to include specific social considerations in purchasing decisions. Below is a non-exhaustive list of examples of social objectives that you can pursue through public procurement. Remember however that compliance with mandatory social and labour rules in the performance of the contract is not a choice, but an obligation under the Public Procurement Directives (15). Chapters 4 and 5 of this Guide examine how you can address these issues at different stages of the procurement process. You should decide which of the below social considerations are relevant to your procurement, depending on your objectives and the subject matter of the contract.

Promoting fair employment opportunities and social inclusion

SRPP can be a driver towards:

— Employment opportunities for youth and older workers;

— Gender equality (e.g. facilitating work/life balance, reducing sectoral and occupational segregation (16), ensuring equal treatment in the workplace).

— Employment opportunities for people experiencing social exclusion due to long-term unemployment, homelessness, discrimination or other vulnerabilities;

— Societal participation and employment opportunities for persons with disabilities, including through inclusive and accessible work environments;

— Improved diversity policies, social inclusion and employment opportunities for persons from disadvantaged groups (e.g. migrant workers, people with a minority racial or ethnic background, religious minorities, people with low educational attainment and those at risk of poverty and social exclusion); and

— Up and reskilling opportunities for all workers.

Providing opportunities for social economy and social enterprises

Social economy organisations and social enterprises (17) can help to deliver the employment opportunities and social inclusion mentioned above, providing social returns from your spend. For example, the Public Procurement Directives provide the scope to promote social inclusion by reserving contracts for work integration social enterprises or those operators which employ at least 30 % persons with disabilities or disadvantaged workers (18). They also encourage public buyers to consider dividing contracts into lots, which may be more accessible to social economy organisations and social enterprises (19).

Promoting decent work

The International Labour Organisation (ILO) defines decent work (20) as:

‘Work that is productive and delivers a fair income, security in the workplace and social protection for families, better prospects for personal development and social integration, freedom for people to express their concerns, organize and participate in the decisions that affect their lives, and equality of opportunity and treatment for all women and men.’

Under this definition and in line with the 2030 Agenda for Sustainable Development (21), the EU promotes, within the EU and in global supply chains (22):

— Secure employment;

— Fair wages;

— Safe working conditions;

— Social protection;

— Equality of opportunity and treatment for all women and men;

— Gender equality and non-discrimination in access to employment;

— Social dialogue; and

— Safeguarding of rights at work.

Ensuring compliance with social and labour rights

The EU aims to promote social progress and improve the living and working conditions of European citizens (23). Public procurement contributes to these aims by ensuring that suppliers:

— Comply with applicable obligations in the fields of social and labour law established by Union law, national law, collective agreements in accordance with EU law;

— Comply with fundamental ILO conventions;

— Comply with the principle of equal treatment between women and men, including the principle of equal pay for work of equal value (24), and promotion of gender equality (25);

— Comply with occupational health and safety laws; and

— Fight discrimination on the basis of e.g. gender, age, disability, racial or ethnic origin, religion or belief, sexual orientation and create equal opportunities.

Accessibility and design for all

Procuring goods, services and works that are accessible to all, including persons with disabilities, is a fundamental aspect of SRPP and is compulsory in public contracts. Article 42 of Directive 2014/24/EU and Article 60(1) of Directive 2014/25/EU state: ‘technical specifications shall, except in duly justified cases, be drawn up so as to take into account accessibility criteria for persons with disabilities or design for all users.’

This provision supports the national authorities’ compliance with the UNCRPD (26), to which the EU and all its Member States are party. The UNCRPD establishes obligations on accessibility and the related UNCRPD Committee has identified buying accessible as a key issue for governments (27).

The UNCRPD (28) also recognises ‘the importance for persons with disabilities of their individual autonomy and independence, including the freedom to make their own choices’, and ‘have the opportunity to be actively involved in decision-making processes about policies and programmes, including those directly concerning them’. In other words, public buyers:

— Should strive to procure recognizing the needs of persons with disabilities and involving them in the purchasing process. Needs assessment and supplier engagement to ensure effective public services that take into account the objectives of social and professional inclusion, and the specific needs of your users are covered in Chapter 3 of this guide;

— Must take into account accessibility in technical specifications (29) to secure access for persons with disabilities to, for example, public services, public buildings, public transport, public information and ICT goods and services, including web-based applications; and

— May use award criteria to reward offers proposing higher standards of accessibility than those established in the technical specifications.

— May also include performance clauses to ensure that the services procured are executed in a way that ensures that the result is accessible, on the basis of a design for all approach.

Respecting human rights and addressing ethical trade issues

Public procurement can be used to address social issues within supply chains, such as human rights (30) or fair trade principles. Respect for basic human rights is an essential part of any business relationship entered into by a State, as set out in the UN Guiding Principles on Business and Human Rights (31). In addition, the Court of Justice of the European Union (CJEU) held in 2012 that fair trade considerations can form part of procurement decisions (32), and the Public Procurement Directives reflect this (33).

The broad scope of public procurement contracts (34), as well as the global nature of certain supply chains, entails a risk that human rights abuses could be linked to your procurement. Cases such as the Rana Plaza fire in Bangladesh are well known, but dangerous and inhumane working conditions also exist within Europe. The Public Procurement Directives require exclusion of economic operators convicted by final judgment of child labour and other forms of trafficking in human beings, and compliance with the Fundamental ILO conventions (35) should be verified by all public buyers. This Guide also looks at how human rights can be protected in procurement by:

— Increasing transparency in supply chains including through monitoring of subcontractors and sub-subcontractors;

— Analysing specific risks within supply chains;

— Requiring contractors and subcontractors to take measures to improve workers’ conditions in the supply chain and tackle potential or identified human rights violations in the production process; and

— Encouraging strict supplier codes of conduct for social responsibility.

Delivering high quality social, health, education and cultural services

The Public Procurement Directives set out a ‘light regime’ for specific social, health, education and cultural services, along with various other categories (36). Public buyers are encouraged to take into account ‘quality, continuity, accessibility, affordability, availability and comprehensiveness of the services, the specific needs of different categories of users, including disadvantaged and vulnerable groups, the involvement and empowerment of users and innovation’ (37). Quality standards can also be applied when procuring social services, such as the 2010 Voluntary European Quality Framework for Social Services (38). Section 4.2 looks at how public buyers have chosen to apply the light regime to achieve social benefits.

Setting and achieving smart SRPP targets in Nantes (France) Procurement objective Nantes Metropolitan Area has been implementing Responsible Public Procurement (RPP) since 2001. In 2017, a Responsible Purchasing Promotion Scheme (SPAR) was adopted to strengthen the coherence of the numerous initiatives developed over the previous 15 years, and to reinforce the links between procurement activities and initiatives to support SMEs. Approach SPAR created an internal guide for the implementation of responsible procurement, which highlighted practical methods and support available within the local area, and designed a SPAR Governance structure to oversee the development, implementation and monitoring of responsible procurement actions: — At the political level, all relevant elected members of the metropolitan council are informed about the upcoming investments to collectively decide on the social and environmental clauses in each of them. These members also regularly evaluate the impact of the SPAR. — At the technical level, the public procurement team works jointly with a network of CSR ambassadors in each directorate. The buyers support the operational directorates to integrate social and environmental clauses into their purchasing and to evaluate the quality of the offers received. Results Key SRPP achievements over the last two years in Nantes include: — Inclusion clauses in 143 works and in 1 918 services contracts, which represent 326 448 hours of employment for people facing obstacles in accessing the labour market; — Focus on diversification of contracts with an inclusion clause to broaden the scope of people concerned (e.g. works contracts reach more male than female unemployed); — Clauses related to combatting discrimination in several trial contracts, acknowledged by the award of a Diversity label to Nantes; — The use of reserved contracts, which allow Nantes to restrict a tender to sheltered workshops when appropriate. Lessons learned Defining, monitoring and updating the social and environmental criteria included in public procurement policy in partnership with all stakeholders is of central importance to the success of responsible procurement. It requires the identification of dedicated resources and the implementation of appropriate verification tools.

1.3. Purpose and Benefits of SRPP

At its most basic level, SRPP aims to ensure compliance with legal obligations in the social field. The Public Procurement Directives require EU Member States to take ‘appropriate measures’ to ensure that economic operators comply with applicable European Union law, national law, collective agreements and international environmental, social and labour law provisions in the performance of public procurement contracts (39). While Member States have implemented this provision in different ways, it is clear that social obligations cannot be ignored in procurement, not least to protect against unfair competition from operators who do not comply with these rules.

Declaration 22 regarding persons with a disability of the Treaty of Amsterdam already indicated that in drawing up measures with the aim of progressively establishing the internal market the institutions of the Community needs to take account of the needs of persons with a disability (40). The Treaty of Lisbon commits Europe to achieve a ‘highly competitive social market economy, aiming at full employment and social progress’ and to ‘combat social exclusion and discrimination, […] promote social justice and protection, equality between women and men, solidarity between generations and protection of the rights of the child’ (41). The size of public procurement and its importance to the internal market makes it a valuable tool to achieve these ambitions. SRPP can also contribute to international commitments, such as the UN Sustainable Development Goals (42). Sustainable development requires that economic operators listen to and take into account the views and rights of individuals, communities and civil society groups (43) – a topic explored further in Chapters 2 and 3.

In addition to the obligations laid out in the Public Procurement Directives and other legislation, applying SRPP helps public buyers to:

Identify compliance risks for social and labour law

Organisations which actively implement SRPP are more likely to identify compliance risks for legislation which applies to them directly or to suppliers. No public body wants to be in the headlines for illegal or unethical working practices at any stage in their supply chains. SRPP policy and actions help you to identify supply chain risks and minimise them during procurement and contract management.

Stimulate socially conscious markets

SRPP can create demand and incentives for more responsible and sustainable production. Public buyers can stimulate innovation and increased competition by challenging the market to create new and more socially sustainable solutions. Furthermore, it can boost the development of businesses which, beyond economic performance, seek to have a positive impact on society at large, such as social enterprises. For example, specifying ICT products that are accessible for persons with disabilities can help to bring better and more affordable products onto the market.

Demonstrate socially responsive governance

You can use SRPP to ensure you are responding to community values and needs as well as to meet growing public demand for governments to be socially responsible in their actions. It can thus help to increase levels of public trust in government. SRPP can also have a positive effect on the staff performing the contract, who are creating added benefit to their communities.

Support integration and inclusion

SRPP encourages the integration and inclusion of often marginalised groups in society (for example, persons with disabilities, persons at risks of poverty and social exclusion, minorities) in market activities. SRPP can create opportunities for businesses owned by such groups, as well as training and employment. SRPP also illustrates how social and economic considerations can be mutually reinforcing, for example social enterprises delivering public services in way that creates additional value through social outcomes and impacts.

Ensure effective public expenditure

The volume of public procurement and the limits placed on direct social intervention by budget restrictions can make procurement an attractive area for promoting social objectives. Strategic public procurement provides opportunities to use existing, planned budgets to make positive and innovative contributions to societal challenges.

1.4. Links to EU and International Policies and Legislation

This Guide focuses on the requirements and opportunities for SRPP, which arise under the Public Procurement Directives. However, many other instruments at EU and national level are relevant and affect how you implement SRPP. This section highlights some of the most important laws and policies affecting SRPP.

EU labour and non-discrimination law has been developed to protect workers across Europe. Such legislation provides workers with rights relating to equal treatment and non-discrimination (44), information about their working conditions, reconciliation between private and professional life (45), rights relating to non-standard work contracts (46), regulation of working time, protection of health and safety, and information and consultation of workers (47).

This legislation binds contractors and subcontractors in the EU, and public buyers must ensure these provisions are implemented in all workplaces. More detailed information about relevant legislation is given below and in Chapters 4 and 5.

The European Commission discusses and cooperates with different stakeholders across EU Member States on promoting quality and decent work practices in public procurement. In recent years, European social partners, namely trade unions and employers’ organizations have produced several sectoral guides on procuring best value, often with the financial support of the Commission. These guides concern contract catering services (48), private security services (49) and industrial cleaning services (50). These reference guides underscore the benefits of procuring services based on quality criteria and best value for money. The guides also provide specific examples in the field of security, cleaning and catering services contracts showing how a quality-based approach requires fair working conditions for employees. A guide on public procurement in the field of engineering services also exists, which includes indications on taking account of social considerations (51).

European Pillar of Social Rights

In 2017, the European Parliament, the Council, and the Commission proclaimed the European Pillar of Social Rights setting out principles for a fairer, more inclusive European Union, putting social priorities at the centre of the European agenda (52).

In January 2020, the European Commission presented the Communication ‘A strong social Europe for just transitions’ (53), which sets out the first reflections for an Action plan to implement the European Pillar of Social Rights. It also mentions socially responsible public procurement as a tool to use existing funds in a way that supports inclusion and job opportunities.

Concrete legislation has also been adopted at EU level, which puts this ambition for a fairer, more inclusive European Union into practice and affects procurement procedures. Directive (EU) 2019/1152 on transparent and predictable working conditions aims to ensure all workers, including those in ‘non-standard’ working arrangements, have access to information about their working conditions and are not subject to unfair terms. Specifically, it requires that by 2022 all workers in the EU:

— Have access to written information on the essential aspects of their work, from the beginning of the working relationship;

— Are not subject to probationary periods longer than six months unless exceptional circumstances apply;

— Can seek additional employment, with a ban on exclusivity clauses and without being subjected to adverse treatment, and with limits on incompatibility clauses;

— Know a reasonable period in advance when work will take place;

— Receive a written reply to a request to transfer to another more secure job; and

— Receive cost-free the mandatory training that the employer has a duty to provide.

Additionally, Member States need to enact rules to avoid the abuse of on-demand contracts such as arrangements in which workers are not guaranteed work from their employers (often referred to as ‘zero-hour contracts’). A strong set of enforcement provisions are also at the disposal of workers in case of no-compliance by their employer.

Public procurement contracts may include terms which ensure that employers respect these conditions (both contractors and subcontractors), and which provide for appropriate sanctions if they are breached.

Directive (EU) 2019/1158 of the European Parliament and of the Council of 20 June 2019 on work-life balance for parents and carers and repealing Council Directive 2010/18/EU, which the Member States need to transpose by 2 August 2022, introduces several new minimum entitlements in the area of family-related leave and flexible working arrangements, including:

— Paternity leave: fathers/equivalent second parents are able to take at least ten working days of paternity leave around the time of the birth of the child, compensated at least at the level of sick pay;

— Strengthening of the existing right to four months of parental leave, by making two out of the four months non-transferable from one parent to another, and compensated at an adequate level. Parents also have the right to request to take the leave flexibly;

— Introduction of carers' leave for workers providing personal care or support to a relative or to a person living in the same household as the worker. Working carers are able to take five days per year;

— Extension of the existing right to request flexible working arrangements (reduced working hours, flexible working hours and flexibility in place of work) to all working parents of children up to at least eight years old, and all carers.

Again, public procurement contracts may contain terms ensuring that these conditions are respected by employers, including both contractors and subcontractors.

Other upcoming Commission initiatives in the field of sustainability and labour rights (e.g. the proposal for a Directive on adequate minimum wages in the European Union (54)) may also have an impact, in the near future, on how public procurement contracts are to be performed.

European Accessibility Act

Directive (EU) 2019/882 on the accessibility requirements for products and services (55) – known as the European Accessibility Act (EAA) – sets common standards and obligations to harmonise accessibility requirements of certain product and services. As a result it will ensure that persons with disabilities and older adults can access products and services. It also reflects the obligation under the UN Convention on Rights of Persons with Disabilities (UNCRPD) to facilitate compliance with accessibility obligations for State Parties. It also facilitates ensuring that persons with disabilities have the opportunity to be actively involved in decision-making processes about policies and programmes, including those directly concerning them. The Directive covers the following products and services (56):

— Computers and operating systems

— Payment terminals and ATMs

— Ticketing and check-in machines

— Interactive self-service terminals providing information

— Smartphones

— TV equipment related to digital television services

— Telephony services and related equipment

— Access to audiovisual media services such as television broadcast and related consumer equipment

— Certain services related to air, bus, rail, and waterborne passenger transport

— Consumers banking services

— e-books

— e-commerce

— The answering to the single European emergency number ‘112’

Mandatory accessibility requirements for these products and services will apply from 2025 (57).

Improving accessibility of water fountains in the Basque Country (Spain) Introduction/procurement objective To address issues of plastic waste and to reduce spending on bottled water, Mutualia, a provider of social services and medical care, operating 17 service centres in the Basque country, decided to install water fountains connected to the public water network, offering tap water instead of buying bottled water. The goal was to offer high quality drinking water at varying temperatures. Approach The contract, which was below the EU threshold, was awarded to the most economically advantageous offer, weighted according to price (50 %) and quality (50 %). The quality criteria included accessibility considerations, such as the height of the fountains and ease of use for people with reduced mobility. Mutualia awarded more points to the company which offered water machines that were easy to use for people with difficulties in their vision or people with reduced mobility in their hands or arms. Results In January 2019 Mutualia introduced 40 new water fountains in its 17 service centres, and provided its staff with reusable water bottles. Mutualia is saving an estimated EUR 17 000 annually on water for its patients, employees, and visitors. Due to the inclusion of accessibility requirements, the winner offered bigger buttons for the identification of the type of water. In addition, the position in which the glasses are located makes it easier for people in wheelchairs to take and fill them. Apart from the position of the glasses, Mutualia took the height of the place where the glasses are filled into consideration, giving more points to those machines with a lower slot. Lessons learned By including accessibility criteria, Mutualia were able to ensure that the purchased water fountains work for all patients and visitors to the health centre. By enabling everyone to access water refill stations, they are not only helping people stay hydrated and healthy, but they are also saving an estimated EUR 17 000 in costs and significantly reducing plastic waste. Source: https://ec.europa.eu/environment/gpp/pdf/news_alert/Issue_91_Case_Study_173_Mutualia.pdf

Under Article 42(1) of Directive 2014/24/EU and 60(1) of Directive 2014/25/EU, accessibility requirements laid down in EU legal acts must be included in technical specifications where the procurement is intended for use by natural persons, whether members of the public or staff of the public buyer. Furthermore, Directives 2014/24/EU and 2014/25/EU require that, where mandatory accessibility requirements are adopted by a legal act of the Union, technical specifications are, as far as accessibility for persons with disabilities or design for all users are concerned, to be established by reference thereto. The EAA establishes such mandatory accessibility requirements for products and services covered by it. These mandatory accessibility requirements ensure that products and services are designed and produced in such a way as to maximise their foreseeable use by persons with disabilities. They should also be accompanied where possible in or on the product by accessible information on their functioning and accessibility features. In procurement documents, you may refer to harmonised standards or technical specifications for product or service delivery accessibility requirements developed by European standardisation organisations, for example EN 17161:2019 on Accessibility.

For products and services not falling under the scope of the European Accessibility Act (EAA), the accessibility requirements of the EAA are not binding. However, where the Accessibility Act or other EU legislation sets out accessibility rules and obligations for any product or service, if the features, elements or functions comply with the corresponding EAA requirements they can be presumed to also comply with the other legislation, unless otherwise provided. Public buyers may in any case decide to apply accessibility requirements that go beyond the accessibility requirements set out in EU Law. The EAA also includes voluntary accessibility requirements on the built environment used by clients of services covered by EAA Directive itself. Member States may decide to require compliance with these requirements (58).

Revised Directive on the Posting of Workers

A posted worker is a person who, for a limited period of time, carries out his or her work in an EU Member State other than the state in which he or she normally works (59). There are approximately 3 million posted workers (60) within the EU, many of whom are involved in delivering public services or works. The Posted Workers Directive (PWD) (61) was first adopted in 1996 and significantly amended in 2018. It aims to balance the freedom to provide services across borders with protections for workers. The 2018 revision strengthened the principle of equality between posted workers and those in the host State, including equal remuneration. Under the revised PWD (62) posted workers are entitled to all mandatory (63) terms and conditions of employment in the host state relating to:

(a) Maximum work periods and minimum rest periods;

(b) Minimum paid annual leave;

(c) Remuneration, including overtime rates; this point does not apply to supplementary occupational retirement pension schemes;

(d) The conditions of hiring-out of workers, in particular, the supply of workers by temporary employment undertakings;

(e) Health, safety and hygiene at work;

(f) Protective measures concerning the terms and conditions of employment of pregnant women or women who have recently given birth, of children and of young people;

(g) Equality of treatment between men and women and other provisions on non-discrimination;

(h) The conditions of workers’ accommodation where provided by the employer to workers away from their regular place of work;

(i) Allowances or reimbursement of expenditure to cover travel, board and lodging expenses for workers away from home for professional reasons.

After 12 months – or, where justified by the employer, 18 months – all mandatory terms and conditions under host state employment law become applicable to the posted worker, with the exception of (a) certain terms regarding the conclusion and termination of the employment contract, including non-competition clauses; and (b) supplementary occupational retirement pension schemes.

Public buyers should be aware of these requirements when evaluating tenders and monitoring compliance with labour law.

ILO conventions

The International Labour Organisation (ILO) fundamental conventions are mentioned explicitly in the Public Procurement Directives (64), and national public procurement laws and regulations also often require compliance with ILO conventions. The 8 fundamental conventions address:

1. Freedom of Association and Protection of the Right to Organise

2. Right to Organise and Collective Bargaining

3. Forced Labour

4. Abolition of Forced Labour

5. Minimum Age

6. Worst Forms of Child Labour

7. Equal Remuneration

8. Discrimination (Employment and Occupation) Creating a task force to monitor supplier working conditions in the City of Copenhagen (Denmark) Procurement objective The city of Copenhagen takes action against social dumping by including labour clauses in contracts to ensure fair working conditions for all employees working for its suppliers and sub-suppliers. Approach (1) Fair pay and working conditions (2) Fair competition for all businesses (3) More apprentice and work experience places for young people in education Employees of the City of Copenhagen’s suppliers and their subcontractors working in Denmark are entitled to a minimum rate of pay, including overtime rates, maximum work periods and minimum rest periods, and minimum paid annual holidays in accordance with both the labour clause and the Directive. Results Copenhagen has established a task force consisting of nine people to monitor compliance with the labour clauses by all of its suppliers, including subcontractors. The task force is entitled to visit all types of workplaces in Denmark at all times. The pay and working conditions of suppliers operating in various fields such as construction, cleaning and transport are monitored closely. Around 600 compliance checks are carried out each year. About one third are on-the-spot inspections while the rest are investigations into the conditions of specific employees based on documentation of pay, working hours, tax etc. The task force has a risk-based approach to its inspections focusing its primary efforts in fields where the risk of foul play is considered highest. In case of violations, a dialogue will be started with the employer. If no improvement can be observed, the employer must pay a penalty and ultimately, the city has the right to cancel the contract. Lessons learned It turned out that a visit-based approach implemented by in-house agents is more effective than outsourcing the monitoring of the working conditions. In general, the main contractor is held responsible for all breaches along the supply chain. Most of the breaches happen down the supply chain with subcontractors and sub-subcontractors. When a breach of a contract is suspected, it is crucial to collect information on the identity of the workers employed on the site and their exact working hours. This can at times be a difficult task. A pilot project has been started by the City of Copenhagen where workers have to register themselves using an ID card when they access and leave the work site. This system makes it easier to target contracts with an increased risk of social dumping by providing information on the number of workers employed, work type, employment form, working hours etc.

The Late Payment Directive (65)

Less than 40 % of businesses in the EU are paid within the terms agreed in contracts. The effects of late payment go beyond the specific contractual relations as they spill over the whole economy. When businesses are paid late, jobs are made redundant, payments to suppliers are delayed, and investments plans are postponed. The entire supply chain is put at risk and becomes less resilient.

Paying on time is an obligation under the Late Payment Directive (66).This obligation applies both in commercial transactions between public authorities and businesses and between businesses. Public buyers have to ensure prompt payment of their contractors by making payments within the 30-day time limit imposed by the Directive (this time-limit may be of 60 days only for public entities of the national healthcare service, where this is applicable) (67). Furthermore, there are actions public buyers can take during the public procurement process to increase the likelihood that subcontractors will be paid promptly during the performance of the contract. You can find more information on this in Section 5.5.

CHAPTER 2

An Organisational Strategy for Buying Social

2.1. Putting SRPP on the Agenda

SRPP requires leadership and commitment throughout management structures, from the political level, through to key decision-makers and budget holders. This chapter examines how this commitment can be secured and presents examples of organisational strategies for SRPP.

Highlight benefits and opportunities

In both smaller and larger communities, SRPP can help make measurable progress towards social goals, such as protecting human rights, promoting equality and creating high-quality employment and inclusion. So in principle, securing high-level support for its implementation should be easy.

SRPP can also contribute to global goals. For example, UN Sustainable Development Goal 12 – ‘Ensure sustainable consumption and production patterns’ – calls on governments to promote the use of public procurement practices to further the sustainable development agenda (Target 12.7) (68).

Address challenges and concerns

Adopting an SRPP strategy requires you to address possible concerns of leaders, managers, and budget holders, including the perceived additional cost and resources needed to buy social.

Showing SRPP in practice, either through examples from your organisation or other public buyers, is an effective way of demonstrating its benefits. This guide includes many case studies that demonstrate cost-effective, socially responsible procurement.

In addition, highlight the cost of not taking action, such as reputational risks, non-compliance with legislation, missed targets, or the indirect costs of social problems to the public sector.

Good practice

— Secure high-level support for SRPP by highlighting its obligations and opportunities, as well as the risks of inaction. Back up your case with real-life examples of social procurement already carried out in your organisation or by others.

2.2. Defining Objectives

As discussed in Chapter 1, there are many different social considerations, which may arise in procurement. Creating an SRPP strategy can help define the focus when buying social.

Identify existing objectives

Consider basing SRPP objectives on existing European, national, regional or local priorities – such as social inclusion or creating employment opportunities for disadvantaged groups. Identify these priorities and consider the potential contribution that procurement could make.

Map procurement policies and activities

As a public buyer, you may already have procurement policies in place, such as a green or sustainable procurement policy, or innovation or industrial strategies that target specific sectors. Map the existing procurement objectives and activities and identify opportunities to align SRPP with these objectives.

By identifying existing priorities and mapping current procurement policies and activities, you can identify the social objectives with the highest relevance. Anchoring SRPP objectives to existing policies and priorities can help to legitimise buying social and increase the attention and resources available for SRPP.

Good practice

— Understand your organisation’s existing social objectives, and consider how this aligns with current procurement policy and practice. Identify the potential synergies, gaps, or barriers to achieving social objectives through procurement.

2.3. Stakeholder Consultation

Effective SRPP involves many stakeholders, and consultation is a crucial step when developing an organisational strategy for buying social.

Stakeholder consultation on SRPP strategy development in the Procurement Office of the Federal Ministry of the Interior, Germany Procurement objective The Competence Centre for Sustainable Procurement at the Federal Ministry of the Interior (KNB) worked together with the Federal Association for Information Technology, Telecommunications and New Media (Bitkom) on a common strategy for the procurement of sustainable ICT products and services. The main goal of the joint initiative is for public buyers and suppliers to work together to ensure social standards and fair working conditions in the global supply chain of ICT production. Approach A delegation from Bitkom, made up of suppliers of different sizes and product portfolios from the ICT sector, and KNB negotiated the third version of the declaration between 2017 and 2019. According to the declaration, public buyers in the federal, state and local governments will be able to check whether large-scale contracts up to the third stage of the supply chain are transparent and review whether social labour standards have been complied with in the production of the procurement item. The declaration covers compliance with ILO core Conventions and Conventions number 1, 102, 131, 155 and 170. When a draft version was agreed, a stakeholder consultation was carried out. The experts from Bitkom and KNB invited over 20 representatives of civil society, churches and other public buyers to comment on the declaration and participate in a follow-up meeting. KNB and Bitkom directly implemented some suggestions, while some were noted for further evaluation or rejected. Following the publication of the new declaration in May 2019, KNB and Bitkom invited the stakeholders to a further meeting to explain the decisions made with regards to the proposed comments and input. Results The outcome of the stakeholder consultation was an updated version of the declaration of commitment. Many of the suggestions made by the stakeholders were included and helped to clarify certain aspects of the declaration. The process also helped KNB and Bitkom to link the declaration to civil society monitoring activities. The updated declaration, which includes stricter verification requirements for companies than before, serves as a template for the procurement of ICT products and services by public sector entities in Germany, who can use the declaration to help ensure suppliers fulfil contracts in a manner that is transparent and compliant with social labour standards. For large-scale contracts, this transparency can reach down to the third stage of the supply chain. Lessons learned The stakeholder involvement process was labour intensive, especially the evaluation of the comments provided. However, it was helpful in many respects, especially the feedback on the comprehensibility and clarity of the standard. Through this process, the parties could understand the views and needs of all stakeholders.

Stakeholder consultation can involve surveys or interviews, or the organisation of workshops, seminars and conferences which gather together relevant internal and external stakeholders and encourage a collaborative approach to social responsibility through participatory dialogue. Consultations should be accessible in order to include persons with disabilities.

Establish the baseline of social procurement

Consulting stakeholders can establish a baseline of current social procurement practices. For example, are social requirements already included in some tenders? Is the market able to meet these requirements? To what extent do current expectations reflect best practice in the market?

Gather feedback and expert insights

Involving stakeholders in the strategy development process informs and improves its content, and can build commitment to achieving its objectives.

Different stakeholders to consult include:

— Public buyers – purchasing experts, whose skills are needed to prepare and evaluate tenders;

— Users – including employees and citizens as well as civil society (e.g. persons with disabilities and their organizations), who set the demand for goods and services, and who influence social expectations;

— Social partners, namely employers’ organizations and trade unions, who can help ensure the best working conditions of employees and compliance with national legislation and collective agreements before and during the execution of contracts;

— Businesses (including social economy organisations and social enterprises) – potential contractors and subcontractors, who provide insights into current practice, supply chains, and possibilities for improvement;

— Other bodies who can provide insights into labour issues;

— International organizations such as the Organization for Economic Cooperation and Development (OECD) and the International Labour Organization (ILO) provide guidance material and can be consulted for information;

— Trade or industry associations, which may be able to disseminate information and gather views from market participants; and

— Other relevant external organisations – including NGOs and citizen groups, who play a role in promoting social responsibility, technical experts (e.g. on accessibility), and whose involvement can increase the transparency and accountability of the SRPP strategy.

Identifying opportunities to support social enterprises in the City of Söderhamn (Sweden) Procurement objective Following a formal proposal of its town council, the City of Söderhamn started a process to investigate the opportunities to designate at least two procurements to take into account social criteria and focus on supporting social inclusion and social enterprises. Approach A needs assessment was carried out, and a dialogue started with social enterprises to match the buyer’s needs with the services available from social enterprises. The outcome of the needs assessment and the dialogue with social enterprises was a tender to purchase fresh fruit basket deliveries for employees of the municipality once or twice a week. Only social enterprises had the opportunity to participate and submit tenders for this contract, which was below the threshold for application of the Public Procurement Directives. Results The winning bid offered deliveries of ecological locally produced fruit baskets delivered by a work-integrated social enterprise. The supplier had the opportunity to hire a person that had been long-term unemployed to deliver the fruit baskets. The cost of the baskets was fully comparable with a commercial company delivering to the private sector. Furthermore, the supplier had previously received a monetary allowance from the municipality amounting to 60 000 EUR/year which is no longer needed. In 2016, the winning supplier had four employees, and by 2019, they had nine. Since winning this initial tender, the social enterprise has also established a centre which aims to help the municipality support the start-up of more social enterprises, with public procurement as one of the strategies for growth. Together with nine other social enterprises, it has also started a national association to gather all Swedish work-integrated social enterprises on a single website. Lessons learned A small public procurement can be very effective. In this case, it had a positive impact on both the commercial and social success of the supplier. Even though it was a small purchase, however, it still requires the time and dedication of the buyer and supportive management and guidelines.

Stakeholder consultation is valuable across all stages of strategy development, from the initial agreement of objectives to setting targets, implementation and monitoring of SRPP. An organisational approach to SRPP is only convincing if stakeholders understand the nature of the challenge, their role in the solution, and the positive impact that their actions can have.

Good practice

— Consult relevant stakeholders, both internal and external, to increase your understanding of barriers and opportunities to buying social, and to increase stakeholder buy-in to SRPP activities.

2.4. Assessing Risks, Prioritising Contracts and Setting Targets

Due to the limited resources of most public buyers, it is not possible to tackle all social issues across all products and services at once. Moreover, not all products and services have the same level of social impacts and risk. It can therefore make sense to prioritise a smaller group of products and services where SRPP can have the highest impact on your identified social objectives.

Assessing risk

A risk assessment of your organisation’s procurement can identify the social impacts associated with different purchase categories. For example, some sectors have a higher proportion of vulnerable workers or greater levels of gender inequality. Certain products may include raw materials or ingredients sourced from conflict zones or regions with low labour standards.

A risk assessment identifies events or conditions, which may prevent your procurement from meeting social objectives. It measures risk according to two factors: how likely is it that these events or conditions will occur? And if they do, to what extent will it impact on social objectives?

Issues to be considered in a risk assessment of products and services include:

— Basic working conditions – is there a risk that ILO Conventions, or relevant national or EU standards, are not being complied with within an industry? Are poor conditions a known problem in the production process (for example, textiles, electronics, paving stones) or service provision (for example, social dumping in catering, cleaning and construction)?

— Workforce – what labour type is used in the production or service provision, and what risks are associated with this? For example, does an industry typically make use of non-standard work e.g. zero-hour contracts, undocumented or migrant workers, or display differences in the treatment of workers based on gender, race or other factors?

— Continuity of services – is there a risk that by changing provider or terms of an existing contract you might adversely affect service users? Benefit and risk analysis should cover the potential effects on the safety and wellbeing of people who use services and their carers. This is particularly relevant for social services that assist people in vulnerable situations, older people, or persons with disabilities.

— Link to the subject matter – social requirements must have a sufficient link to the specific products or services being purchased (see Chapter 4). This link can be more difficult to establish for long and complex supply chains, such as those in the ICT sector. You should consider how far along the supply chain it is possible to evaluate risk.

One model for assessing risks is ranking – using a numerical scale – the likelihood of risks occurring and the consequences if they did. This ranking could also form part of a stakeholder consultation exercise. Products and services ranked highly in terms of likelihood and consequence, where you can establish a clear link to subject matter, should be targeted as a priority.

Risk assessment is also important for individual tenders. It helps you to identify points in the supply chain or service delivery where risks are high and ensures that the principle of proportionality is respected (meaning, requirements included in the tender are suitable to attain specific social objectives and do not go beyond what is needed).

Long and complex global supply chains lack transparency, and it can be difficult for public buyers to access information. However, many NGOs are working to make this information more accessible, for example, Electronics Watch (69) or Swedwatch (70). While some of this information may focus on retail and public consumption, it is still highly relevant to similar products procured by the public sector. It can help to identify social risks for which verification tools and programs exist, thereby avoiding undue restrictions on competition.

Assessing risks in public procurement at the Agency for Public Management and e-Government (Difi), Norway Procurement objective The Agency for Public Management and eGovernment (Difi) in Norway has provided a list of high-risk products for public buyers to help them build awareness of the need to perform due diligence on human rights compliance. This list helps public buyers allocate appropriate resources to evaluating bids and to follow-up SRPP criteria during the contract phase. The list includes different sectors, e.g. construction materials, electronics and ICT, furniture, office supplies, textiles and food, and covers all tiers of the production process – from raw material extraction to final assembly. Approach Difi takes data for the risk-assessments from reports, articles, films and academic research. Suppliers, and to some degree industry organisations/initiatives, have also been interviewed to provide input to the understanding of the supply chains. Trading data has been used for the mapping of the supply chains, as transparency and traceability are often limited. Results The Difi High-Risk List provides useful information about the risk within product groups as well as specifically in the selected product categories. It can serve as a guidance tool for addressing the principle of proportionality concerning which product groups and specific product categories to choose when using SRPP instruments in the planning of the procurement activity. It can also help suppliers of high-risk products to prioritise human rights due diligence in their global supply chains. More information on the High-Risk List can be found here: https://www.anskaffelser.no/public-procurement/socially-responsible-public-procurement/information-about-high-risk-products Lessons learned There are several inherent difficulties in gaining access to supply chain information. There is, in most cases, a lack of transparency due to a complex and dynamic web of suppliers from raw materials to production, to arrival in Europe, or for services provided by domestic and non-domestic actors. The Difi High-Risk list is a useful tool for public public buyers when making decisions concerning which products to choose as part of SRPP. Using the list can decrease the risk that human rights violations have occurred in the supply chain of high-risk products. However, the list is not exhaustive. Products which are not currently on the list could still be high risk, and in these cases, public buyers should do further research on the human rights risk associated with those products and services.

Prioritising contracts

Not all contracts provide the same opportunities to meet social objectives. A prioritisation exercise can help to identify contracts with the highest potential impact. To prioritise contracts, consider the following questions:

— What social risks, or potential social benefits, are linked to the contract and how important are they?

— Are contracts of sufficient size and duration to influence supplier practices? If not, can you work with other public bodies to pool demand in the category?

— Are socially preferable alternatives available and affordable? Would the inclusion of social considerations restrict competition unduly?

— How long is the supply chain of a product? How can procurement effectively target the point in the supply chain at which risks occur, or benefits can be realised?

— Can social objectives be directly targeted by verifiable procurement criteria? Alternatively, is there a more effective way to deliver the policy using other tools available to the public buyer?

— How visible will the social action be? Can it help to raise broader awareness of social issues in supply chains among staff, suppliers, and perhaps even the general public? Is there a reputational risk of not taking action in this area?

— Do opportunities exist to reserve a contract for social organisations which directly support the employment of persons with disabilities or disadvantaged persons?

Another consideration when prioritising contracts, especially when making SRPP mandatory, is the procurement threshold at which you will introduce social requirements. The Public Procurement Directives only apply to tenders whose value exceeds defined thresholds based on the nature of the contract and the purchasing body (71). You may also pursue SRPP in contracts below these thresholds, or which fall outside of the scope of the Directives.

Setting targets

Setting targets demonstrates a commitment to social goals, increases motivation, and provides a framework for measuring progress.

In each relevant product or service category, set a specific target related to each social objective. Effective targets are measurable (can be quantified), achievable (set according to the current baseline), and specify the date of achievement.

Good practices

— Understand the social impacts of your procurement by conducting a risk assessment. Where necessary, consult with experts within other departments of your organisation (such as the labour department), unions, suppliers, or with independent NGOs, to better understand the supply chains and working conditions of products and services that you procure.

— Create an SRPP strategy, which outlines the procurement categories or specific contracts where you will prioritise SRPP. For each priority, set a measurable and achievable target, to be achieved by a specific date.

2.5. Integrating SRPP in Procurement Procedures and Policies

Consider the following when implementing SRPP into procurement procedures and policies:

— The legal and regulatory framework – including how SRPP complies with EU and national procurement legislation and with the EU’s international obligations;

— The institutional framework – including whether procurement is centralised or decentralised, and what this means for managing and monitoring SRPP;

— The management structure – including the creation of new structures to steer the integration of SRPP, such as a working group involving key stakeholders, or the naming of SRPP champions within relevant departments;

— Assigning responsibilities – including identifying leaders, experts and buyers in appropriate positions who can drive action and ensure achievement of targets;

— Access to expertise – including engaging experts within your organisation on issues relevant to SRPP, cooperating with relevant departments or organisations either internally or externally, and reaching out to other organisations who may be able to advise or steer the implementation of SRPP measures;

— The availability of professional capacity and resources – consider if capacity building activities or the provision of clear guidelines and criteria is required.

Supporting integration through communication

Widely communicate the objectives of SRPP to integrate it within the organisation. Ensure the role and responsibilities of staff throughout your organisation are explicit. Internal communication activities can include seminars, newsletters, or inclusion on your organisation’s intranet.

External communication is also essential. Communicating social objectives to the market in advance of publishing tenders provides time for suppliers to react. Communicating objectives to the public also increases your accountability and sets an example which can inspire wider action. It may also help to build consensus around practices involving the use of social considerations.

Finally, sharing knowledge with other public buyers on good practice (or avoidable risks) can help speed up learning on SRPP. This knowledge-sharing can take place at a local, regional, national or even international level. In particular, knowledge-sharing within the EU can help raise the standards required by public buyers across Europe, promoting greater social responsibility as a norm.

Procura+ Network Working group on Socially Responsible Procurement of ICT Procurement objective The Procura+ Network created the Interest Group on Socially Responsible Public Procurement to foster exchange on procurement activities and to support public buyers in procuring information and communication technology (ICT) hardware products. The group includes public buyers from across Europe, including the Greater London Authority, the City of Stockholm, Barcelona City Council, Advanced Procurement for Universities and Colleges Scotland (APUC) and the City of Haarlem. Approach The members of the Interest Group communicate and share their knowledge of SRPP through regular physical and virtual meetings. With support from Electronics Watch and ICLEI Europe, the group is developing criteria, specifications and clauses that consider social responsibility throughout the whole supply-chain of ICT products. Results By sharing their experience and best practice examples, the participating public buyers can build up their SRPP knowledge and expertise. The group also serves as a platform to present upcoming tenders and to facilitate exchanges between public buyers and potential suppliers and resellers with regards to their respective needs and capabilities. As a joint effort, the group has developed a specific set of criteria: ‘How to procure fair ICT hardware – criteria set for socially responsible public procurement’. The document includes selection criteria, technical specifications, award criteria and contract performance clauses. The criteria set is ambitious as it goes beyond smelter level and addresses issues at the mining stage, too. Lessons learned Engaging with other buyers from the public sector and sharing market insights is rewarding as it allows public buyers to identify common needs and to develop strategies on how to purchase socially responsibly produced products that fit the needs best.

Good practice

— Integrate your SRPP strategy into your procurement activities. Assign responsibilities, consider establishing a management group, and communicate your social procurement objectives widely, so that staff and suppliers are aware of the expectations, and other public buyers are encouraged to take similar measures.

2.6. Monitoring and Reviewing Progress

Collecting data on SRPP performance

Effective implementation of SRPP involves setting up a monitoring system which measures progress towards targets. Monitoring systems range from simple databases which record the use of social criteria, to specialised systems integrated with e-procurement platforms.

Integrating SPP monitoring into existing reporting systems in Flanders (Belgium) Procurement objective The Government of Flanders has been working on sustainable public procurement (SPP) since 2008 when it set the target of 100 % SPP by 2020 for its public procurement. During the period 2009-2015, two action plans were adopted to guide progress towards this target, after which SPP became a part of an integrated strategy on public procurement. It has set minimum sustainability criteria for nine product groups, plus guidance and criteria suggestions on a further 17 product groups. The products purchased must meet these criteria for Flanders to call the procurement sustainable. Approach In 2017, monitoring SPP was integrated into the contract management system of the Government of Flanders. All procurement equal to or greater than EUR 30 000 has to be registered in the contract management system, and the following nine mandatory SPP questions have to be answered: 1. Use of essential sustainability criteria: entirely integrated in the tender document / not or partially integrated in the tender document / the procurement doesn’t concern a product group for which essential criteria were defined 2. Use of other sustainability criteria: one or more other sustainability criteria in tender document / No other sustainability criteria in tender document 3. Certificates on environmental management required: relevant and in the tender document / relevant but not in the tender document because of specific reasons / not relevant 4. Access limited to social enterprises: yes / no 5. Part of the contract performance phase reserved for social enterprises: yes / no 6. Use of non-discrimination clause : yes / no 7. Use of a social clause in the tender document aimed at employment, education and training: yes / no 8. Use of ethical clause: relevant and in the tender document / relevant but not in the tender document because of specific reasons / not relevant – Procurement doesn’t concern goods with high risk 9. Innovative procurement: the innovation is situated in a pre-commercial phase of research and development/ the innovation is situated in both the pre-commercial as the commercial phase / The innovation is situated in the commercial phase ( (PPI) / there’s no innovative aspect Lessons learned Monitoring the use of the tool is necessary to ensure its effectiveness. After noticing a drop in the reported use of SPP between 2015 and 2016, Flanders was able to address important barriers to its 2020 target, including integrating sustainability clauses in tender templates and identifying framework agreements where future action was needed. Sources: http://www.procuraplus.org/fileadmin/user_upload/Procura__case_studies/Procuraplus_case_study_Flanders.pdf and https://overheid.vlaanderen.be/monitoring-duurzame-overheidsopdrachten%20

Linking the monitoring of SRPP to existing reporting systems and audit procedures is most effective. You are likely to require adjustments to your systems, such as the insertion of new data fields into monitoring software. Also, consider external, independent auditing of SRPP performance, including benchmarking the public buyer against past performance or the performance of other organisations.

Reviewing and improving SRPP

Periodically review the results of monitoring to ensure progress towards targets and that actions are making the desired contribution to objectives.

Communicate with colleagues and externally when the organisation meets its targets. The process of consultation and target setting then starts again – ensuring continuous improvement on social objectives.

Systemic market change is not possible if good outcomes happen in isolation. SRPP can help demonstrate the ability of the market to meet higher standards, and communicating this can help to raise broader stakeholder expectations.

Good practice

— Monitor the implementation of SRPP, and periodically review results, to ensure progress and make necessary adjustments to the strategy or procurement practices.

CHAPTER 3

Identifying needs and planning procurement

3.1. The Role of Needs Assessment in SRPP

Assessment of needs can be the first stage in the procurement cycle for SRPP, before launching a tender. Needs assessment aims to ensure that real demand for the goods, services or works exists, and to identify the ways of meeting that need in the most socially responsible manner. Assessing real needs in terms of outcomes sets the scope and nature of requirements, allowing a more flexible and potentially cost-effective response from the market. In an SRPP context, needs assessment is about:

— Ensuring that what is purchased meets social requirements;

— Designing procurement and contracts to allow flexibility over time and ensure that a wide range of organisations, including social economy organisations and social enterprises, non-profit or voluntary bodies can participate; and

— Increasing social impacts and outcomes: checking whether the procurement offers opportunities to advance relevant social and ethical outcomes.

Examples of how needs assessment may affect social impacts and outcomes in procurement:

— A local authority chooses more flexible and varied mobility options to provide increased freedom of transportation for older citizens and persons with disabilities;

— A local authority provides social and care services tailored to the needs of individuals with specific attention to gender aspects (72);

— A government department includes a clause in a construction contract for employment and training opportunities for unemployed and disadvantaged people;

— A hospital asks a provider of medical equipment for transparency in its supply chain to monitor and verify the labour conditions of workers in conjunction with civil society organisations.

Needs assessment has the potential to save money as well as generating social returns, making it an essential part of pre-procurement. It may require a cultural shift within an organisation – away from thinking in terms of the number of units purchased to thinking about how to meet needs sustainably and with social outcomes in mind.

User consultation

The users of a product, service or work are often not the same people buying it. They may be other individuals within the same organisation, employees of another public body, or citizens (e.g. hospital patients, residents, school or university students). Consultation can identify social issues and ensure the tender is designed to make the most of any opportunities for positive social impacts. The following techniques may be used to consult users before launching a procurement:

— Launch a questionnaire or online survey to determine user needs and preferences;

— Observe and analyse existing use patterns;

— Invite all relevant stakeholders to a meeting to review current practices and plan together for improved social outcomes in the next procurement; and/or

— Invite all users to attend supplier demonstrations, held as part of preliminary market consultation (see Section 3.2);

— Make the questionnaire accessible for persons with disabilities.

Consulting users with special mobility needs in the City Of Rotterdam (The Netherlands) Procurement objective In Rotterdam, 30 000 citizens with special needs make use of transportation services. There are different services available to different target groups, which in the past has led to fragmented and sometimes insufficient services. The City of Rotterdam decided to integrate all mobility services, operate their fleets more efficiently and as a result, provide transportation that serves the needs of their customers best. Approach Rotterdam undertook comprehensive customer-focused research to uncover the unmet needs and customer journeys that called for multidisciplinary solutions. The city used an innovative Forward Commitment Procurement procedure, in which it communicated its social needs and desired outcomes to the market in advance of the tender launch and agreed to purchase the newly created service if it met specifications. The market dialogue process included representatives from end-user groups giving direct feedback. Results The winning contractor is a consortium of various market parties, including SMEs, that is now implementing a user-centred transportation service with mechanisms for constant improvement. The service offers mobility customisation (including a personal mobility budget), so Rotterdam can account for users’ personal preferences and characteristics on a day-to-day basis. It also provides personal support and coaching for learning to travel more independently for clients to increase their autonomy. Additionally, drivers are in direct contact with wellbeing organisations to monitor and respond to clients’ needs. The procured vehicles are nearly entirely zero-emission (electric), and the annual investment exceeds EUR 2m in social return on investment. Lessons learned Do not underestimate the complexity and resources required for meaningful dialogue. Start the process early so that you can get all the required information in detail from users and suppliers, assess the legal aspects of the approach, and ensure that the customised solution is as close to user needs as possible.

Creating a needs statement

Based on the information gathered during the user consultation, it should be possible to formulate a simple needs statement, which describes the reason for the purchase and account for any alternatives to purchasing.

The needs statement can be used both to develop the business case for procurement and to inform suppliers during preliminary market consultation and tendering. Key stakeholders, such as service users, citizens or NGOs, can be asked to review, challenge and endorse the statement of needs from a social perspective.

Good practice

— Make needs assessment one of the first activities of your procurement process. Consulting with colleagues and end-users helps to ensure you are buying the right product or service, and in a way that can provide positive social outcomes.

Example of SRPP in a Needs Statement The public buyer requires a renewal of a cleaning services contract for daily cleaning of all municipal buildings. To meet its social policy commitments, after consultation with the current employees and other stakeholders, the public buyer requires that the contract is carried out with the following social considerations: — Fair remuneration of employees, including for any overtime worked; — Career progression, including training and adapted rotas for attending courses; — Balancing work/ family commitments, using full and part-time contracts with family-friendly rotas and shifts; — Occupational health, through the use of non-harmful cleaning products.

3.2. Market Dialogue

Before tendering, market consultation is typically used to identify potential suppliers and relevant products and services. Suppliers are given time and notice to prepare for the tender; for example, mainstream and social enterprises might form partnerships to strengthen social outcomes.

Some procedures – particularly competitive dialogues or competitive procedures with negotiation, may also allow for more opportunities of dialogue with bidders during the tendering process. Following a tender, bidders should be offered a debrief on the results and advice for how to improve their social offering in future tenders.

Market dialogue for SRPP can:

— Identify potential bidders and solutions with positive social impacts;

— Build capacity in the market to meet social needs and requirements;

— Inform the design of the procurement and contract so that social criteria are relevant, linked to the subject matter, achievable and non-discriminatory;

— Help suppliers to submit bids that have strong social elements; and

— Provide feedback to suppliers after the process.

Benefits of market dialogue include improved planning and management of SRPP, especially when undertaken as part of a needs assessment process. These activities also improve public buyers’ understanding of the capacity of potential bidders to meet social aims and ambitions. Dialogue can increase your trust and credibility with suppliers, and many welcome the chance to react to social requirements ahead of the procurement launch. In short, market dialogue can help create the conditions needed to deliver SRPP both internally within the public buyer and in the market.

3.2.1. Preliminary market consultation

EU rules specifically allow for preliminary market consultation with suppliers, stating that (73): ‘Before launching a procurement procedure, contracting authorities may conduct market consultations with a view to preparing the procurement and informing economic operators of their procurement plans and requirements.’ They also state that in a market consultation you can seek advice from independent experts, authorities or market participants, provided this does not have the effect of distorting competition and does not result in a violation of the principles of non-discrimination and transparency.

In practice, it is crucial to ensure that preliminary market consultations are published transparently and well in advance. Furthermore, any information you provide to participants during the market consultation is also made available to other economic operators that are not able to participate in the market consultation, and that adequate time is allowed for the submission of tenders. Public buyers have a responsibility to ensure that all bidders are treated equally in procurement procedures so market consultation should not result in an unfair advantage or disadvantage for a bidder (74).

3.2.2. Preparing for preliminary market consultation

The first step of any preliminary market consultation process is to consider what the outcomes of your contract should be – including social outcomes. Picking the right team from within your organisation to engage with the market is also an important preparatory activity. Involve procurement staff, technical staff and managers and, where relevant, end users, as well as internal or external experts with specialised knowledge on the social elements of the contract.

Next, analyse the market to think about how suppliers could meet social needs for the planned product, service or work. Questions to consider include:

— Is the market mature enough to deliver the social requirements? Are existing suppliers capable of meeting the social needs, or are there new suppliers with social innovations entering the market?

— Will the market be technically capable of meeting social requirements? For example, can suppliers react to demands for information on supply chain working conditions, or to community benefit clauses relating to employment creation? How will such commitments be verified and enforced?

— How many suppliers can provide what is required? Does market capacity mean there will be competition for the tender, or will the social demands potentially restrict bids?

— Can social requirements bring suppliers from different business models, such as social economy organisations and social enterprises, together in a socially innovative way? How would this work, and what can the design of the tender do to promote this?

— Do suppliers operate differently or provide other goods or services in different geographical areas, and how would this affect the social aspects of the offer?

Desktop research and analysis of the particular market may uncover socially responsible solutions that are already available, or suppliers may be developing new products and approaches that can meet social needs.

Finally, before directly consulting with the market, talk to colleagues in other public buyers to find out what they are purchasing to address social problems, and their lessons learnt. Understanding what works (or does not work) from another public buyer can also get decision-makers and the more risk-averse colleagues on board with a new social approach to the procurement.

3.2.3. How to engage the market

There are several strategies and methods for engaging with the market. Much depends upon the resources and time available, and the level of social innovation required.

Supplier and market sounding questionnaires

Questionnaires are a useful and comparatively quick method for getting information, and for gauging the level of interest and capacity of suppliers to deliver social solutions. Questionnaires should be advertised as widely as possible, in the expectation of gaining maximum supplier participation.

Analysis of the responses received should help to develop the scope and next steps of the procurement strategy and process. Be mindful of not using the data to give direct or indirect advantage to any potential supplier, even if unintentionally. The transparent avoidance of such advantage should be an objective of this approach.

Prior Information Notice (PIN)

A Prior Information Notice (PIN) is a typical method for providing the market with early notification of intent to award a contract/framework and can be used to initiate a market consultation exercise. A PIN is published on the Tenders Electronic Daily (TED) website, reaching operators outside of your home region, who may have different approaches to social aspects.

A PIN does not create any obligation to commence a procurement procedure and award a contract, but where possible it should contain details and timelines for the planned procurement, as this helps to focus the minds of participants. Be sure to state in the PIN what form of response you are requesting from the market, whether completion of a questionnaire, individual responses or participation in a market consultation event.

Forward procurement plan

A forward procurement plan gives suppliers advance notice of upcoming contract opportunities and allows them time to plan and prepare to submit good quality responses. The plans can include a needs statement to provide more specific information for suppliers on your social needs and requirements.

Meet the Buyer / Meet the Supplier events

Events where potential buyers meet with potential suppliers provide a forum where:

City of Haarlem (The Netherlands) consults the market on socially responsible ICT solutions Procurement Objectives In 2019, the City of Haarlem hosted a ‘Meet the Buyer’ event for suppliers and resellers of ICT products and services. The goal of this preliminary market consultation was to review the current market response and assess the market readiness to include socially responsible award criteria and contract clauses in an upcoming ICT hardware tender. Approach In advance of the event, Haarlem asked all providers who wished to participate in the Meet the Buyer event to prepare responses to specific questions in advance. This included asking suppliers: 1. What they require a public buyer to provide in tender documentation to fully inform their proposed solutions for supply chain responsibility improvements? 2. What standards relating to social responsibility should the public buyer expect as the acceptable minimum from a capable supplier for this tender? 3. Would they be willing and able to disclose information related to their supplier responsibility program to public buyers upon request? 4. Are labour and human rights performance data used in sourcing decisions? How could this be verified? 5. Is their company, or the supply chain, taking steps to address labour and human rights impacts during the extraction phase of production? Again, how could this be verified? 6. Do they have a supply chain which can (a) fulfil all the requirements; and (b) be mobilised fairly soon after the contract award? The event format provided suppliers with the opportunity to deliver ‘pitch slams’, meaning short presentations with the aim of informing public buyers about the current state of play and what could be possible in response to the upcoming tender. A key element of the event was a World Café Session, providing public buyers and suppliers an opportunity for direct in-depth discussion on themes raised during the day. In this case, other public buyers were invited to attend and host a table to exchange with suppliers, multiplying the engagement effect. Results By sharing information about Haarlem’s upcoming tender and related key questions in advance of the Meet the Buyer event, suppliers and resellers were able to prepare in advance. This is especially important for sectors with complex supply chains as well as cutting-edge criteria, as one supplier representative cannot be expected to have a complete overview of operations. The World Café resulted in new insights for Haarlem regarding the upcoming tender, not only encouraging the new criteria for social responsibility but combining them with a circular procurement model as well. Lessons learned Meet the Buyer events are most successful when the buyer has a clear objective or identified need to discuss with the market. This should be communicated in advance in order to allow suppliers to consider their own position. Try to strike a balance between providing information, which can focus discussion on the day, and not overloading suppliers with too much information. To receive key insights, provide dedicated space for direct exchange and not only plenary-style sessions.

— Buyers can discuss their needs, including social requirements;

— Suppliers can provide information about their products and services, and how they can deliver contracts in a socially responsible manner; and

— Other relevant stakeholders, such as social partners or NGOs, can provide expert input.

Many public buyers hold ‘Meet the Buyer’ events, where suppliers are invited to attend an open day and meet the people responsible for the purchase of specific goods and services. Suppliers can find out more about contract opportunities and develop a better understanding of procurement policies and procedures. In some cases, suppliers may also be asked to present their solutions and approaches.

3.2.4. Dialogue during and after the award procedure

Supplier dialogue during a tender

While care is required for communication with bidders during the formal procurement process, it is still possible to engage with bidders on social aspects of their tenders. This is particularly true for certain procedures such as the competitive dialogue, competitive procedure with negotiation, or procedures under the light regime (see Sections 3.4 and 4.1.1). In these procedures, it may be possible to improve social aspects of the initial offers of bidders, by providing feedback based on the award criteria for the tender.

Engaging the market for socially responsible workwear in Ghent (Belgium) Procurement objective In 2014 the city of Ghent updated its procurement policy to include social goals such as encouraging employment of disadvantaged groups, fostering local economic growth and integrating international standards and fair trade principles. In 2016 Ghent, together with the Association of Flemish Cities and Municipalities (VVSG), embarked on a mission to procure fairer workwear. The main objectives were to integrate guarantees regarding international labour conventions and to increase transparency throughout the textile supply chain. Approach Ghent undertook the procurement in three phases: first was an analysis of prior public tenders, looking for best practices in the Flanders region when it comes to incorporating sustainability in specifications for workwear. Second, Ghent and VVSG conducted an extensive market study that assessed the readiness of the market, transparency of supply chains and the potential of labels in the sector, and collected supplier viewpoints on sustainable demand and the use of social clauses in public procurement. Ghent realised that the market was not ready to deliver the level of environmental and social performance required, so in the third phase it created a Toolbox for Socially Sustainable Workwear for suppliers that provides them with guidance to improve over the course of contracts. The city divided the framework agreement into five lots that required varying levels of social and environmental performance, with the toolbox defining each level, and the proof bidders had to submit. The toolbox also details the journey towards more responsible workwear, which suppliers commit to through contract clauses. Results Where possible, the procured workwear is now made of organic and fair-trade cotton, and recycled polyester. The maturity of social considerations varies depending on the category of clothes and different ambitions were formulated. Transparency in the supply chain was asked from the suppliers, but in one category this transparency went further than in others. Overall, the goal was to activate the contractor to participate in a process of continuous improvement of social conditions over the course of the framework. Supplier performance is verified by third parties, working in partnership with Ghent to deliver improvements. Lessons learned The market is willing to cooperate to improve working conditions in the supply chain continuously, but suppliers need to be engaged, stimulated and supported to do so. Contract clauses are only a part of the solution; to be successful, dialogue and partnership with suppliers are essential, and this should start before the tender is launched and continue during the performance of a contract.

Post-tender supplier debrief

Debrief unsuccessful bidders following a tender to inform them of the reasons why their proposal fell short and explain how it performed against social criteria. A debrief can address bidder concerns, collect feedback on the procurement process (including social criteria), and encourage suppliers to improve their social offering for the next procurement opportunity. Additionally, a ‘win-review’ with the successful supplier can involve discussion of the strengths and weaknesses of the social elements of the bid, and implementation and monitoring during the contract.

3.2.5. Managing risks in market dialogue

Carry out market dialogue with care and in such a way as it does not distort competition. Potential risks include:

— Unfairly advantaging one supplier, e.g. by shaping the specification in favour of one potential supplier or solution;

— Engaging in a way that disadvantages one or more suppliers; or

— Failing to protect a supplier’s intellectual property rights or commercially sensitive information.

Steps to help manage the risks involved in market dialogue include:

— Plan how and when to engage with the market;

— Make the process clear to all suppliers and manage expectations;

— Treat all suppliers equally – do not discriminate;

— Share the same information with all suppliers;

— Keep records of meetings;

— Ensure the same information is made available as part of the procurement documents; and

— Allow enough time for bids to be submitted – including by those not involved in the market consultation.

Consulting the market can feel daunting, but the social gains can be significant if the process can transparently shape the market to deliver new solutions that genuinely meet the needs of users.

Good practices

— Make sure to research the market before engaging with suppliers. The more knowledge you have of social innovations and possibilities for improvement, the more realistic your needs statement looks, leading to productive and relevant dialogue.

— Effective market dialogue can take time and resources, but different options are available. Consider the method that is proportional to your means, the size and value of the procurement, and the social risks involved.

3.3. What Kind of Contract?

Contract design can play a crucial role in determining the social impact of procurement.

Size and duration of the contract

Ensure the size of the contract is not an obstacle to participation by organisations that can offer social value, including SMEs, social economy organisations and social enterprises. Smaller contracts, including the division of contracts into lots, may facilitate access by organisations that are already active in delivering social benefits, as the size may be more suited to their production capacities. However, contracts which are too small may limit the field of competition and restrict the scope for investment in social outcomes. Be aware that it is prohibited to subdivide a contract with the effect of circumventing EU obligations, unless this is objectively justified (75).

Contract duration can also play a significant role in determining the scope for social returns. Short contracts, of one year or less, may make it difficult for the contractor to invest in and deliver social outcomes. This is especially true if new methods or systems are being introduced, for example, to monitor human rights along the supply chain or to train previously unemployed staff. Such initiatives take time to bed down and to demonstrate results, so consider this when deciding on the contract length. If the duration of the contract is insufficient, it can also negatively affect the quality and continuity of a service. This may have detrimental effects on certain beneficiaries of the services (such as people in vulnerable situations). One approach is to make contract renewals/extension conditional upon attainment of specific social outcomes, as well as overall satisfactory performance.

Use of lots

EU rules highlight the possibility to divide contracts into lots and require public buyers to explain where the decision is taken not to do this (76). Use of lots within SRPP can ensure that smaller operators, social economy organisations or social enterprises can compete – as they may not be able to deliver all aspects of a large contract. It is also possible to limit the number of lots awarded to any single bidder, based on objective and non-discriminatory criteria, established in advance (77). Using lots may help you to ensure that multiple organisations are involved in delivering social benefits.

Public buyers can decide how to define l