Sustainable Public Procurement in the Netherlands: Innovative Tools

1. Sustainable Public Procurement in the Netherlands Innovative tools WOUTER STOLWIJK November2015

2. Game changing ideas • Francis Fukuyama in ‘Political order and Political Decay’: • In contrast to private sector procurement, government purchasing is minutely procedural and subject to endless right of appeal. (page 485). • The result is that both law & procedural accountability are used to defeat the substantive ends that they were originally designed to serve. Procurement Week Wales/ Cardiff 2

3. Game changing ideas • The worship of procedure over substance is a critical source of political decay in contemporary liberal democracies. (page 543) • The best bureaucracies have the autonomy to use judgement in decision making, to take risks and to innovate. The worst mechanically carry out detailed rules written by other people. Ordinary citizens are driven crazy by bureaucrats who can’t use common sense and insist on mindless rule following. (page 533) Procurement Week Wales/ Cardiff 3

4. Vision of PIANOo • Public Procurement ≠ Fair distribution of purchasing budgets over suppliers • Public Procurement is about Value for Taxpayersmoney. • Public Procurement should not differ very much from professional private procurement titel van de presentatie

5. Public Procurement: a powerful policy instrument Public procurement in the Netherlands: €60 Billion (10% of Dutch GDP) A powerful instrument: • to influence markets to take sustainable measures • to achieve sustainable policy goals (reduction of carbon footprint, of air pollution, encouragement of fair trade, etc.)

6. 45 SPP categories Sustainable PP: Criteria development

7. Support by PIANOo expertise centre on public procurement • https://www.pianoo.nl/public-procurement-in-the-netherlands/sustainable-public-procurement-spp • Guidance documents • Workshops & meetings • Online discussions • Procurement Forum

8. Advantages Dutch 2010 approach SPP • Easily applicable (Copy-Paste) • Implementation activities relatively easy put into effect • Every authority uses the same criteria > tempting for market parties to invest in sustainability measures • Easy to formulate an unambiguous, measurable goal > Very usefull for organisations starting with SPP

9. Lessons Dutch 2010 approach SPP • Not much room for customised requirements, innovation, creativity etc • Relatively low ambition level because of generic nature of standard requirements • No integral approach (focus on productgroups, not on the relation between productgroups) • Standard criteria need continuous maintenance

10. The Dutch implementation approach • Environmental criteria Standard sustainable requirements in every public tender document • Social inclusion A contract performance condition. In most cases 5% of the tender price has to be spend on the improvement of employment opportunities for persons from disadvantaged groups • Social conditions in the supply chain A contract performance condition. Bidders can join a chain initiative (Fair trade, Utz etc) or ‘make an effort to improve social conditions in the supply chain in accordance to the best of one’s abilities’ (in most cases a project plan)

11. New developments in Dutch SPP • Higher ambitionsLess focus on standard minimum requirements, more focus on customisation,unique opportunities, innovation, market consultation, total cost of ownership etc. > The standard criteria have become the minimal level of SPP • Focus on the whole procurement process, not only the specification phase • A more strategic use of SPP Policy makers can use SPP as an instrument to achieve their own (local) sustainability goals > more focus on certain sustainability themes • A more integral approach Notably in procurement of infrastructure • A less active role of the Ministry of Environment Discussion about new ‘ownership’’ of SPP policy

12. The market knows better… invite innovations Promoting Sustainable products & processes Inviting new solutions innovations Excluding Unsustainable products & processes Procurement professionalism Solution shift from technical to functional

14. InnovationProcurement titel van de presentatie

15. InnovationProcurement • Innovation Procurement ≠ Innovative Procurement • Can be done with classical approach, provided there is substantial knowledge within the contracting authority. • Extra tools: competition, PCP, prototyping, experiments etc. titel van de presentatie

16. InnovationProcurement • https://www.pianoo.nl/sites/default/files/documents/documents/practicallessonsdecember2011.pdf • http://www.smart-spp.eu/ • http://www.innovatiekoffer.nl/ • http://www.innovatiemarkt.nl/ titel van de presentatie

17. InnovationProcurement • Know the market: • https://www.pianoo.nl/sites/default/files/documents/gerelateerd/know_the_market.pdf • CHARM: • http://www.rijkswaterstaat.nl/English/about-us/business-opportunities/market-consultation-charm/index.aspx titel van de presentatie

18. InnovationProcurement • Competitive dialogue: • https://www.pianoo.nl/sites/default/files/documents/documents/thecompetitivedialogueuk.pdf • PPI: • https://www.pianoo.nl/sites/default/files/documents/documents/procurementforinnovativeproposalsdecember2011.pdf titel van de presentatie

19. Further professionalization of public procurement is essential