Tweede Kamer updated on sustainable, inclusive, and geopolitically sound procurement policies
On 27 September, Prof Elisabetta Manunza will advise the Lower House Committee for Economic Affairs and Climate – at a round-table discussion on Procurement Policy – to improve procurement practice in a number of ways. In her position paper, Manunza describes three important aspects which should be further developed : using ‘good commissioning practices’ as a starting point; a national vision and consistent policy for (geopolitically) responsible and efficient procurement, making use of all available legal instruments; and, thirdly, better realisation of sustainability objectives through government procurement. Research into these matters is at the top of the agenda of the Utrecht University Centre for Public Procurement (UUCePP).
‘Good commissioning practices’ means that the government always considers the interests of society as a whole within the procurement procedure – alongside those of the government (as client) and of the market players directly involved. This means, among other things, that any negative effects on nature and liveability should be included in the ‘actual’ costs in public procurement. In this way, public procurement (annual volume in the Netherlands: €100 billion) will be able to have a very favourable impact on Dutch environmental and security policy.
Another requirement to maximise the positive impact of procurement on sustainability, inclusiveness and (geopolitical) security is to develop less fragmented, more centralised, coherent and consistent policies. For companies, a more uniform government policy will also be beneficial and allow them to make targeted investments and build knowledge in the longer term. Furthermore, there is a need for adequate screening systems to ensure the (geopolitical) security aspect within procurement procedures. More knowledge also needs to be developed and disseminated from the national government on what legal instruments are available to (local) governments to properly implement procurement policies. And finally, simpler, sometimes innovative procurement procedures and contracts that improve cooperation between government and market should be put in place.
Procurement benefits from innovative contract forms
To realise government projects of higher quality – and, if possible, faster and cheaper as well – good cooperation between government and market is essential. This cannot be achieved solely by adjusting procurement policy, but also requires contract forms that enable this cooperation. One example is the ‘two-phase contracts’ that have emerged in the construction sector in recent years. This is a tender in which the design phase and the realisation phase are separated. In the design phase, the client (the government) and contractor work closely together and discuss solutions and ideas, with openness and transparency about budget control and risks. This way of working requires a specific procurement framework, which leaves enough room to incorporate insights that emerge along the way, while allowing effective competition in line with EU legal requirements.
The third advice is to put the sustainability aspect of procurement at the top of the policy priority list, while putting a stop to non-commitment and “legal ambiguity” in this area. The Court of Justice of the European Union already ruled in 2020 that environmental law obligations are just as fundamental as other procurement law principles, such as equal treatment, non-discrimination and transparency. Furthermore, in order to achieve ESG goals, it is important to have better (rather than just more) competition, providing opportunities for innovative parties and social entrepreneurship. The market has a wide variety of parties with large differences between them: it is important for government buyers to get to know this market extensively, through market consultations, in order to achieve fair competition.