Supporting Sustainable Public Procurement in the Context of Socio-Technical Transitions

By Paula Antunes

Supporting Sustainable Public Procurement in the Context of Socio-Technical Transitions

Public procurement can shape production and consumption trends and represents a stimulus for both innovation and diversification in products and services, through a direct increase in demand. In recent years, the interest in demand-side policies has grown and several approaches have emerged, such as Green Public Procurement (GPP), Sustainable Public Procurement (SPP) and Public Procurement of Innovation (PPI), representing strategic goals to be achieved through public procurement. In this context, there is a need to guide and support public organizations in the uptake of GPP, SPP and PPI practices. To respond to the challenges raised by the operationalization of such strategies, this paper proposes a new tool—the SPP Toolbox—for guiding public organizations as they re-think the procurement process, raising their ambitions and broadening their vision, thus changing the organizational approach towards culture, strategies, structures and practices. This toolbox integrates insights from GPP, SPP and PPI objectives and practices, in the context of the emergence of socio-technical transitions. The toolbox coherently links GPP, SPP and PPI, allowing flexibility in terms of goals, yet promoting an increasing complexity of institutionalized practices and skills—from GPP to SPP and then from SPP to PPI, organized in a framework fully integrated into the organizational strategy. The high purchasing power of public organizations and of public authorities in particular, is a market factor with enormous potential, representing 16% of the gross domestic product of the EU and covering a wide range of goods and services, including: office equipment, building components, transport vehicles, building maintenance, transport services, cleaning, catering and works. In other words, public procurement can shape production and consumption towards more sustainable trends, by stimulating innovation in the value chain and promoting the diversification of the products and services mix.

In recent years, the interest in demand-side policies has grown and several approaches have emerged, such as Green Public Procurement (GPP), Sustainable Public Procurement (SPP), Public Procurement of Innovation (PPI) and, more recently, Circular Procurement (CP), representing strategic goals to be achieved through public procurement. At the European level, in particular, GPP has increasingly played a central role in environmental policies, while PPI and CP are also becoming a priority on the European agenda. The current literature on this topic acknowledges that GPP, SPP and PPI are able to support innovative activities, as discussed below. However, procurement of innovation challenges currently institutionalized practices and skills, requiring a different approach from that used in the procurement of regular off-the-shelf goods. That is, different types of coordination may be required, in order to enhance the effectiveness of public procurement as a strategic (eco)-innovation policy instrument. It is well established that sustainable development requires large scale transformations in the way societal functions are fulfilled, involving a “transition” or “system innovation” away from the prevailing socio-technical system—which includes technology, regulations, user practices, markets, cultural meaning, infrastructures and networks—towards another. Thus, public procurement should seek to contribute to sustainable development—addressing environmental and social consequences, within the broad vision of inducing socio-technical transitions. We argue that GPP, SPP and PPI approaches would benefit from considering insights from socio-technical transitions theory. To address this gap, the Sustainability Transition Procurement Model (STP Model) was developed. This model maps out the key factors that influence the transformation of socio-technical systems towards sustainability, integrating different approaches towards public procurement, i.e., GPP, SPP and PPI, in a multi-level framework. Within public organizations, local authorities are particularly relevant, since they have a territorial responsibility for both economic well-being and quality of life of their constituents and hence they are likely to find particular types of unmet needs and market failures, corresponding to a high potential for steering innovative activities.

These contributions justify the focus of our research on the ability of public organizations to re-think the procurement process, fulfilling their potential to shape supply chains and market development and, ultimately, contributing to socio-technical transitions. This re-thinking should address the organization’s wider strategies and purchasing and contractual cycles, as well as the range of procurement methods being used. Despite the high interest in public procurement policies, the uptake of GPP, SPP and PPI practices among European public organizations has been limited. Furthermore, PPI is a costly and time-consuming process, requiring a greater degree of in-house competencies, as a higher effort is needed to develop innovative solutions than for regular forms of procurement. In order to overcome this hurdle, additional efforts are required to support local authorities in the process of broadening their ambitions and vision. Having said that, the aim of this paper is to address this gap and respond to these challenges, by further developing the STP Model into a tool—the SPP Toolbox—which assists public organizations, including public authorities, in the institutionalization of GPP, SPP and PPI practices, changing the organizational approach towards culture, strategies, structures and practices, in the context of the emergence of socio-technical transitions.

Background to GPP, SPP and PPI Approaches

Green Public Procurement (GPP) is based on the use of environmental criteria in public tendering, developing capacity for green supplies and markets and stimulating the innovation capabilities of suppliers. It aims to achieve value for money, while reducing the environmental impact of purchased products and services over their whole life-cycle. GPP is becoming a cornerstone of environmental policies, both at the European Union and Member State level, as well as worldwide. Its role in supporting sustainable consumption and production patterns has strongly increased and currently it is spreading throughout public authorities]. By operating as a market trigger, GPP can act as a strong stimulus for eco-innovation. Sustainable Public Procurement (SPP) is the procurement of goods and services incorporating environmental, economic and social concerns into tendering and, therefore, into the procurement process. The approach is therefore very similar to GPP, adding social concerns. PPI is understood as a tool for stimulating the development of new products—goods, services or systems but it can also refer to public procurement that attempts to open up innovation possibilities, without necessarily targeting new products. PPI induces radical, new-to-the world breakthrough technologies; promotes incremental innovations where existing products are adapted to the local context and are, thus, new to a country or a region; promotes new organizational and/or technological capabilities; and, promotes innovations in mature markets. Public procurement of innovation requires more radical approaches than GPP and SPP, resulting in a complex and interactive process where there is a key activity of learning by interaction. The most immediate practical implication is that evolving from GPP to SPP and from SPP to PPI, requires public organizations in general and public authorities in particular, to have an improved approach, involving an increasing complexity of institutionalized practices and skills, as has been already demonstrated elsewhere. On the other hand, GPP, SPP and PPI practices need to be fully integrated into organizational strategies, in order to allow the significant shift from “purchase-cost” to “life-cycle cost” approaches, as well as to carry out the corresponding cultural, managerial and operational changes required to effectively contribute to sustainability.

The SPP Toolbox

The SPP Toolbox is a step-by-step tool developed to operationalize the STP Model in public organizations, including public authorities (available online at http://sppbizzi.eu/en/login). The tool is aimed at procurement officers, officers from other departments and top-level decision makers belonging to public organizations, such as local authorities, regional authorities and central government bodies. The SPP Toolbox targets procurement organizations and their transformative potential for contributing to the niche formation process through the use of GPP, SPP and PPI approaches. Therefore, the SPP Toolbox assembles a range of perspectives, as well as practical skills, concerning the key factors mapped out at the niche level of the STP Model.
First, the toolbox integrates insights from GPP, SPP and PPI approaches, allowing different practices, according to the organization’s vision, procurement strategy and the level of ambition that was defined. This allows for flexibility in terms of goals yet promoting an increasing complexity of institutionalized practices and skills—from GPP to SPP and then from SPP to PPI. The results from the SPP Toolbox testing, based on three case studies, suggest that public organizations need to follow a learning curve by gaining experience, starting with GPP and then moving towards SPP and ultimately to PPI. As shown both in the cases of Loures and LIPOR, this is an iterative process that builds on experience and broadening of the vision. Second, the toolbox follows a systemic approach embedded into the organizational strategies and the management cycle. The integration of new procedures into organizational strategies allows that the considerable cultural, managerial and operational changes required contribute effectively to sustainability. Third, it includes insights from socio-technical transitions framework, considering public procurement as an additional mechanism for niche formation, through the three main niche processes: (i) shaping of expectations—articulating expectations and visions in order to attract resources and new actors and provide direction to the process; (ii) building social networks—new combination of actors, in order to promote the emergence of new social networks; and, (iii) learning processes—enabling social embedding to increase chances of successful diffusion.

 

This is an excerpt of the journal article: SPP Toolbox: Supporting Sustainable Public Procurement in the Context of Socio-Technical Transitions, by Paula Cayolla Trindade, Paula Antunes and Paulo Partidário. Published: December 2017 in Sustainability 2018, 10(1), 67; DOI: https://doi.org/10.3390/su10010067 under a Creative Commons Attribution License (CC BY 4.0). 

Paula Antunes
Professor

Dr. Paula Antunes currently works with the NOVA School of Science and Technology, NOVA University Lisbon. She was Head of the Department of Environmental Sciences and Engineering of FCT NOVA (2006-09) and director of CENSE – Centre for Environmental and Sustainability Research (2007-13). Her research focuses in mapping and assessment of ecosystem services, circular economy models, sustainability assessment, participatory decision-support tools and environmental policies.