Impulses for Socially Responsible Public Procurement of Municipalities in Global Value Chains (ISOPP)

Municipalities can demand the compliance with social criteria when tendering goods, services or works. They thus have a powerful lever to promote fair working and living conditions both nationally and internationally. The project "Impulses for Socially Responsible Public Procurement of Municipalities in Global Value Chains (ISOPP)" aims to generate knowledge for a broader and more effective use of this lever.

Project Lead:
Maximilian Müngersdorff

Project Team:
Andreas Stamm
Tim Stoffel

Financing:
Engagement Global and the German Federal Ministry for Economic Cooperation and Development

Time frame:
2020 - 2021 / ongoing

Co-operation Partner:

Service Agency Communities in One World

Project description

In many countries, municipalities account for a large share of total public procurement expenditure. In Germany, this share is over 50%, with local authorities spending around EUR 250 billion annually on goods, services and works. In other European countries, local authorities play a key role in public procurement as well; in many countries of the Global South, their importance is steadily increasing. Municipalities in Europe and usually also in the Global South have the opportunity to request sustainability criteria in their tenders, including criteria for compliance with social requirements. They thus have a powerful lever to promote fair working and living conditions both nationally and internationally.

However, most local authorities have so far been reluctant to use this lever, partly because of existing knowledge gaps of how to implement it in practice. The project "Impulses for Socially Responsible Public Procurement of Municipalities in Global Value Chains (ISOPP)" aims to fill these gaps with practical knowledge. ISOPP is run by the German Development Institute (DIE) in close cooperation with the Service Agency Communities in One World (SKEW) and financed by the Federal Ministry for Economic Cooperation and Development (BMZ).

Four topics were identified that play a central role in the successful and effective implementation of Socially Responsible Public Procurement (SRPP): communication with the market, purchasing groups, digitisation and verifying compliance with social standards. Besides those content topics, facilitating international exchange between practitioners and experts is a further key component of ISOPP and crucial to inform our research as well as to circulate its results.

Communication with the market for SRPP
Procurement officers often make insufficient use of communication possibilities with market actors. This leads to an information deficit on both sides. Furthermore, especially procurers in countries of the Global South are sceptical about an exchange with market actors, particularly because of worries about corruption and lack of transparency. We thus analyse the potential of different communication formats between public authorities and market actors to integrate SRPP criteria in tenders in a transparent manner.

Purchasing groups and SRPP
Bundled procurement by several public authorities in purchasing groups has two key advantages for the integration of sustainability criteria: First, the larger volumes involved make it easier for bidders to switch their product portfolio. Second, bundled procurement simply allows more sustainable products, services or works to be procured. However, the integration of sustainability criteria in tenders of German purchasing groups is, up to now, rather the exception than the rule. We aim at identifying conditions that make the inclusion of respective criteria in such tenders more likely.

Digitisation of public procurement and SRPP
Digital instruments and platforms have so far been used only cautiously in public procurement of German municipalities. However, this will change in the near future as the digitisation of public administration moves on. The question is how to integrate sustainability criteria in the development and implementation of respective solutions in public procurement. Building on experiences of German and international pioneering municipalities, we will develop approaches and recommendations for such an integration.

Verification options for SRPP
Public purchasers mainly use self-declarations and labels to prove sustainable production conditions and product characteristics. Alternative verification options such as target-oriented measures or codes of conduct are only used in exceptional cases. There is a lack of knowledge about whether and how sustainability criteria are passed on along the supply chain and whether and when there are differences depending on the verification option. In addressing those questions, we will generate new knowledge to better classify the effectiveness of those options.

Dialogue and transfer events on SRPP
International dialogue and transfer events with municipal practitioners are important places for mutual learning and the transfer of research results into practice. We will organise respective events in 2020 and 2021 to discuss our research with practitioners and to connect German procurement experts with their international counterparts.

Events

Project Coordination

Sonja Packschies

Current Publications

Sustainable finance: International standards are important

Berensmann, Kathrin
External Publications of 27 October 2020