Complying with EU procurement Law
The procurement activities of public sector bodies are governed by the European Union (EU) procurement regime. This complex legislation is aimed at promoting competition across member states and involves a specific EU Directive and Treaty.
The EU Commission is concerned that sustainable procurement may be used by member states to favour national industry. This is prohibited by the legislation as all suppliers must be treated equally and in a non-discriminatory manner. It is important that procurers seeking to implement sustainable procurement are aware of their need to comply with the EU procurement regime.
The detailed obligations of the EU legislation cannot be reduced to a single web-page; however, some key points should be kept in mind when considering sustainability in the letting of higher value contracts which are subject to the full scope of the legislation.
Pre-procurement
The EU procurement laws are not concerned with what public authorities intend to purchase, but seek to regulate how the procurement itself is carried out. Where relevant, procurers should refer to sustainability in the contract advertisement as this helps to indicate to potential suppliers that this agenda is important for the particular procurement. Procurers should carefully consider the supply market’s capability to respond to sustainability initiatives and how such initiatives may impact on certain market sectors (e.g. SME’s).
Specification
The subject matter of the contract (i.e. its specification) should not be defined in any way which discriminates, directly or indirectly, against suppliers from other EU member states. Procurers should be particularly mindful that when setting ‘mandatory’ elements of specifications, bidders must fully comply with these requirements in order to be considered for the contract. Sustainability elements of specifications may often be better treated as ‘desirable’ elements as this allows more flexibility when comparing competing offers.
Eco-labels are used to certify products that are deemed to be environmentally friendly. However, technical specifications should not require certification to a particular eco-label standard; although, specifications can be drawn from eco-label criteria.
Selection
Under the EU Directive, public sector bodies are only able to take account of suppliers’ economic, financial or technical capacity when selecting (or ‘pre-qualifying’) suppliers to tender. It is only possible to exclude suppliers on environmental or social grounds where these are core requirements of the contract. For example, it would be appropriate to require that suppliers bidding for a waste management contract have an environmental management system.
Award
It is possible to include social and environmental criteria in the award of contracts providing that they are linked to the subject matter of the contract. For example, it is permissible to require that a certain proportion of the specific contract being awarded is carried out by apprentices. However, award criteria that address whether a supplier employs apprentices in its wider organisation would not be allowed as such criteria would not be relevant to the performance of the specific contract (i.e. its subject matter). Procurers should ensure that award criteria are carefully drafted so that they do not discriminate against non-national suppliers in any way.
Contract conditions
Contract clauses can be included to require suppliers to carry out certain obligations in relation to sustainability, e.g. a requirement to take back packaging. Procurers should be aware that contract clauses are not negotiable and they should only be included if the supply market will be able to perform the contract in accordance with any stipulated clauses. Contract clauses should not play a role in determining which supplier is successful in winning the contract.
Relationship management
Once the contract has been awarded in accordance with the legislative requirements, procurers can work with suppliers on a purely voluntary basis to promote sustainability objectives.
Summary
The above guidance provides some key pointers for procurers looking to implement sustainable procurement whilst remaining compliant with EU procurement legislation. More detailed guidance is available from Procurement Lincolnshire.
