When public procurement meets social responsibility

An update from Brussels

On 5 September, Euclid Network attended a high-level round-table exploring socially responsible public procurement, organised by the European Parliament’s Intergroup on Social Economy.

Some of the key things we heard:

The European Commission reaffirmed their willingness to push Member States to use their purchasing power as a way to invest in positive social change. The potential is enormous: every year, over 250 000 public authorities in the EU spend around 14% of the EU’s GDP on the purchase of services, works and supplies.

Elżbieta Bieńkowska, European Commissioner for Internal Market, Industry, Entrepreneurship and SMEs, stressed that considering social clauses in public contracting remains voluntary (as per directive); this is an area where the EU can only advocate for — but not impose — more harmonisation and systematisation in practices. So, making public procurement more socially responsible, she said, means “we need to showcase more good practices, and discuss practicalities — even the difficult ones”. (This, of course, is an area where Euclid Network can help: let us know if you want to share your experience or a good practice among our network.)

MEPs present reaffirmed the principles of the 2014 directive supporting social responsibility and the contracting of social impact-focused organisations. These principles are:

1. Fighting against the “lowest price” in favour of the “most favourable offer”, which includes social and environmental criteria. If the contracted company commits to helping to integrate disadvantaged groups, then the public administration is no longer requested to base their awarding decision on price alone
2. Fighting against “cascade sub-contracting” which can lead to ‘social dumping’, in other words imposing responsibilities and clarity on subcontractors
3. Fighting against abnormally low offers by imposing respect for social and labour laws (also to fight social dumping)
4. Establishing reserved tendering procedures to companies that promote the integration of disadvantaged groups

It’s important to note, though, that European public procurement rules — including this directive — apply only to contracts over a certain value, depending on the sector (e.g. for public works the threshold is €5,225,000; for central government contracts it is €135,000; for social and other specific service contracts it’s €750,000).

Member state officials and a few national SE networks, as well as ENSIE, took stock of the initial results of the directive’s transposition into national law and the uptake of its social clauses. A few countries (Luxembourg and Austria) are still in transposition phase.

Looking at the transposition of the law in Spain, José Luis Rodríguez Zapatero, former Spanish Prime Minister and President of the Forum for Socially Responsible Procurement (Fundación ONCE), stressed that favouring socially responsible public procurement is a “pre-distributive” policy, allowing the community to save money on the long run.

Marzena Rogalska, Head of Unit for Public Procurement at DG GROW (European Commission), stressed that politicians need to understand that public procurement is also political. She also encouraged social enterprises to actually bid!

Read more:

• Directive 2014/24/EU on public procurement
• Euclid Network Memo to GECES (10 September 2015)
• Buying Social: A Guide to Taking Account of Social Considerations in Public Procurement (This is from 2011; expect an update soon.)

“Marzena Rogalska, Head of Unit for Public Procurement at DG GROW (European Commission) encouraged social enterprises to actually bid! ”