Sustainable Public Procurement
Development and analysis of tools for construction works
Benoît Loïc Verzat
Master of Science Thesis SoM EX 2008-06
Stockholm 2008
KTH, Department of Urban Planning and Environment Division of Environmental Strategies Research - fms
Kungliga Tekniska Högskolan
Analytical Description
NAME SURNAME
AUTHOR VERZAT Benoît
THESIS TITLE Sustainable Public Procurement : development and analysis of tools for construction works
KEY WORDS sustainable construction, sustainability, public procurement, life cycle
analysis, building environmental performance, Exhaustive Sustainable public procurement clauses Manual (MAD)
GEOGRAPHICAL
AREA France
ABSTRACT Embedded in the economic competition, public procurement has a
major role to play in being a driving force for the promotion of a globally positive competition that prides the best sustainable products and services, rather than only the more economically efficient ones. Responsible for a huge part of the human pressure on natural resources, and having a large share in the public funding, the built environment sector provides an important venue for the use of sustainable public procurement as a tool to enhance the sustainability of societies.
Selecting the best sustainable offer is a challenging task requiring environmental and social assessments that can only be based on complex life cycle thinking analysis. Through the development of the “Exhaustive Sustainable public procurement clauses Manual”, this paper analyses public procurement issues and their potential solutions, with a focus on the environmental performance in buildings procurement.
RÉSUMÉ Partie prenante de la compétition économique, la commande publique a
un rôle majeur à jouer pour la promotion d’une compétition globalement positive qui privilégie les produits et services écologiquement et socialement vertueux à la seule efficacité économique. Étant responsables d’une large part des pressions humaines sur l’environnement, et ayant une part significative dans la dépense publique, les marchés de travaux représentent un levier important pour l’amélioration du caractère durable de nos sociétés.
“Human activity is putting such strain on the natural functions of Earth that the ability of the planet’s ecosystems to sustain future generations can no longer be taken for granted.”
Table of content
1. Introduction... 9
1.1 Background – context of the thesis work ...10
1.2 Research problem and limitations ...10
2 Literature review and conceptual framework ... 12
2.1 Procurement and sustainability ...12
2.1.1 Procurement, competition and the market economy ... 12
2.1.2 Current competition patterns, environmental degradation and social inequalities ... 12
2.1.3 Procurement impact on sustainability ... 13
2.1.4 Sustainable procurement and access to information ... 14
2.1.5 Public procurement, a tool for society’s sustainability enhancement... 14
2.2 Sustainability in French public procurement policies...15
2.2.1 Gradual implementation of a legal framework for sustainable public procurement ... 15
2.2.2 The 2006 Public Procurement Contracts Code and sustainable procurement... 18
2.2.3 The “French national plan for sustainable public procurement”... 21
2.2.4 Sustainability approaches in Public Procurement Practices... 23
2.3 Sustainability approaches in the built environment sector...26
2.3.1 The built environment sector size ... 26
2.3.2 Construction sector key environmental issues and procurement’s means of improvement... 26
2.3.3 The specificity of the building sector in public procurement... 28
2.3.4 What tools for environmental procurement in the building sector? ... 29
2.3.5 Social concerns of the construction sector ... 38
3 The Exhaustive Sustainable Public Procurement Clauses Manual... 40
3.1 Purpose of the “Exhaustive sustainable procurement clauses Manual ” (MAD) ...40
3.2 Content of a MAD purchase sheet ...40
3.3 Target group of the Manual ...42
4 Research Methodology ... 44
4.1 Methodology of the Manual writing process...44
4.2 Assessing the capacity of the MAD to address sustainability ...45
5 Results... 46
5.1 Presentation of the construction sheets structure of the MAD...46
5.2 Presentation of the construction sheets samples ...49
6 Discussion... 51
6.1 Limitations due to the capacity of procurement to promote environmental sustainability ...51
6.1.1 Sustainable procurement facing cosmetic environmentalism: the potential of the LCA perspective... 52
6.1.2 Determination of requirements and purchased quantities impact on procurement’s sustainability ... 52
6.2 Limitations due to the public procurement legal framework and economic considerations ...53
6.3 Limitations to the LC perspective integration in the construction purchase sheets...55
6.3.1 Parallels between the LCA methodology and the content of MAD sheets... 55
6.3.2 LC perspective in the construction sheets ... 57
7 Conclusion... 60
References ... 61
Annexe 1 – Translated purchase sheet sample form the “Manuel Exhaustif des Clauses d’Achats Durables” (MAD) ... 67
Annexe 2 – Table of the French ecolabels for new buildings ... 72
Annexe 3 – MAD construction sheet : Chantier vert – gestion des déchets... 75
Annexe 4 – MAD construction sheet : Revêtements de sols souples ... 83
Annexe 5 – French summary ... 94
List of figures
Figure 1: First implementation of a "sustainable procurement policy"...23Figure 2: Map of the French territorial procurement networks ...24
Figure 3: Reasons of the local authorities’ difficulties in the implementation of environmental and social demands ...24
Figure 4: Demand intensity and market offer balance of sustainable public procurement ...54
List of tables
Table 1: Environmental issues of the built environment sector and change leverages ...27Table 2: Main steps of a construction process ...28
Table 3: Structure of the construction sheets of the Manual...47
Table 4: Example of MAD’s environmental and social demands for new building procurement ....49
List of acronyms
ADEME: Agence de l’Environnement de Maîtrise de l’Énergie (French Agency for Environment and Energy Management)
AMO: Assistance à Maîtrise d’Ouvrage (construction consulting)
BBC: Bâtiment basse consommation (Low energy consumption building)
CCTP: Cahier des Clauses Techniques Particulières (technical clauses of the tender package)
CICA: Confederation of International Contractors’ Association
DCE: Dossier de Consultation aux Entreprises (tender package)
EMAS: Eco Management and Audit Scheme
EU: European Union
FDES: Fiche de Déclaration Environnementale et Sanitaire (Environmental and health declaration sheet)
FU: Functional Unit
GNP: Gross National Product
HPE: Haute Performance Environnementale (high energy performance)
HQE: Haute Qualité Environnementale (high environmental quality)
ISO: International Organisation for Standardization
ITT: Invitation To Tender
LC(A): Life Cycle (Assessment)
LEED: Leadership in Energy and Environmental Design
MA: Millennium ecosystem Assessment
MAD: Manuel exhaustif des clauses d’achats durables (Exhaustive Sustainable public procurement clauses Manual)
MEDAD: Ministère de l’Environnement et De l’Aménagement Durable (French ministry of environment and sustainable planning)
MINEFI: Ministère de l’Économie et des Finances (French Ministry of Finance and Economy)
PPCC: Public Procurement Contracts Code
PUCA: Plan Urbanisme Construction Architecture (program of the MEDAD on urban development, construction and architecture.)
PNAAPD: Plan National pour les Achats Publics Durables (French national plan for sustainable public procurement)
UNEP: United Nation Environmental Program
RC: Règlement de Consultation (document of the DCE that describes in particular the way the candidates’ offers will be evaluated)
SD: Sustainable Development
1.
I
NTRODUCTION
In 2007, the French government fixed an ambitious objective through the National Action Plan for Sustainable Public Procurement (MEDAD, 2007a): to make France one of the most advanced European countries to implement sustainable public procurement.
Purchase in both private and public sector could be a considerable driving force for environmentally preferable product development and societal improvement towards sustainability. In order to be able to choose a product or service over another because of environmental and social concerns, access to reliable information describing the related impacts of the choice is indispensable. Thus, different types of tools, such as eco-labels, guidelines or tools for environmental assessment have been developed to guide buyers in making environmentally sound purchases.
Still, public entities’ use of sustainable procurement requirements appears to be staved off by legal framework subtlety and poor knowledge of the providers’ market (Factea, 2006). Indeed, to be successful in putting environmental and social demands within a procurement contract, it requires a careful assessment of what the sustainability issues related to the product or service are, of what available options or alternatives are on the market, and for what prices. In order to help the public entities answer those questions and thus to facilitate and enhance the use of sustainable requirements in public procurement, the author, within the consulting company Factea Durable, is developing an exhaustive manual for French public purchasing clauses (“Manuel exhaustif des clauses d’Achats Durables” – MAD). It aims to give to all public purchasers operational solutions to integrate sustainable development for 200 purchase categories, including supplies, services, and construction works.
Based on this experience of developing this tool on construction work purchase categories, we describe and analyze the integration of environmental and social demands in invitations to tenders (abbreviate: “ITT”) with a focus on environmental sustainability. The first part of this thesis provides a conceptual background, history and significance of procurement practices in affecting society’s sustainability. It also describes the legislation that framed the gradual integration of environmental and social demands in public procurement. Here we also emphasize the high responsibility of the construction sector in the global over exploitation of the earth ecosystems capacities, and give an overview of the tools available to implement more sustainable sound choices in the French public procurement context.
1.1
Background – context of the thesis work
The writing of this thesis has been accomplished within the Factea Durable Company which is part of Factea Group, a consulting company created in 2004. With presently around 20 employees, its principal action fields are: industrial strategic improvement consulting, sourcing and cost reduction consulting, with significant experience in cost reduction for local authorities. This favored link with public authorities revealed to the company a need for consulting services in sustainable public procurement. This need was confirmed by a research work of the company on sustainable procurement practices in public entities supported by the French Environmental Agency (Agence de l’Environnement de Maîtrise de l’Énergie - ADEME). Widening the activity field of the company, the subsidiary Factea Durable was created in the early June 2007 to give a visibility to the project development of the “Exhaustive sustainable procurement clauses manual”1 (abbreviate: MAD). This project was initiated in December 2006.
The activity of the author within the company was mainly supervising, structuring and writing the construction purchase categories sheets of the MAD. Those tasks were complemented by two others, partnership development that aims to ensure the review of the purchase category sheets by specialists, and the commercialization of the manual (contact, selling and enhancement of the commercial data base).
1.2
Research problem and limitations
The general purpose of this paper is to describe and analyze through a literature review the issues related to the integration of sustainable demands in public procurement contracts as a tool to enhance human societies’ sustainability. It aims to answer how one can build a tool that manages to answer sustainability issues of public procurement, especially the ones of new building construction. It also intends to present the “Exhaustive Sustainable public procurement clauses Manual” (MAD), its conceptual and legal context, and to point out its limitations and means of improvement.
The Life Cycle perspective is used as an analytical tool to assess the capacity of the MAD to address sustainability issues of procurement. Indeed, we support that this way of assessing purchases’ environmental performance is necessary to pursue sustainability objectives. The social pillar of sustainable development is not focussed in this report even if some important social aspects are treated.2
Sustainability issues of procurement are rather addressed through the practical point of view of writing an operational tool for purchasers than through going into details about conceptual questions. Indeed, the environmental impacts’ approach considered in this report is shaped by the possibility to include adapted demands within the procurement procedures. Therefore, while discussing sustainability issues, this report focuses on the purchaser as a specific actor that has a major role in decreasing society’s environmental burdens and social inequalities through its activity.
Since the MAD’s writing is an on going process, it is affected by confidentiality aspects. Therefore its entire content and some elements of the methodology cannot be fully developed.
1Manuel exhaustif des clauses d’Achats Durables (MAD) in french
2This emphasis on the environmental concerns does not reflect the content of the MAD which both integrates environmental and
Indeed, the MAD is still not published3 and used by the purchasers, so the assessment of the use of the manual by its targeted public is beyond the scope of this report.
Until now, developed tools (guides, trainings, etc.) in the field of sustainable public procurement, principally have concerned general purchases (small supplies, products for maintenance, vehicles, etc.) while construction contracts are not much integrated by the existing tools (ADEME, 2007d). Those contracts should however be treated with a special focus since they generally imply important budgets, high environmental impacts, employment concerns, specific actors, techniques, and legal regulation (ADEME, 2007d). It was therefore decided to present sustainable public procurement and the “Exhaustive sustainable procurement clauses manual” development with a special focus on construction works.
2
L
ITERATURE REVIEW AND CONCEPTUAL FRAMEWORK
2.1
Procurement and sustainability
2.1.1
Procurement, competition and the market economy
Procurement can be defined as the acquisition of goods or services at the best possible cost, in the right quantity and quality, at the right time, in the right place for the benefit or use of governments, corporations, or individuals, generally via a contract. The procurement act is therefore deeply embedded within the market economy and lies at the root of the economic actors’ competition: procurement requires a choice between goods/services according to cost, quantity and quality criteria.
The strength of a market economy is its related competition that raises between the economic actors, a competition which fires up innovation and improvement of the market offer. Indeed, this competition is perceived by most economists, like Alan Greenspan, former Chairman of the Board of Governors of the USA Federal Reserve, as a foundation of the market economy achievements: “On net, vigorous competition over the years has produced a significant rise in the quality of life for the vast majority of the population in market-oriented economies, including those at the bottom of the income distribution” (Greenspan, 2001).
Further, Amartya Sen Nobel price awarded for Economics in 1998, stressing the key role of competition in the market economy, defends that a state company privatisation could be efficient only if it promotes economic competition: “The logic of the market economy lies in competition” (Sen, 2000).
2.1.2
Current competition patterns, environmental degradation and
social inequalities
However, it appears that the current market economy competition is failing to promote a world where natural resources are used in such a way that current and future generations could benefit from a fine living environment. Hence, this competition, as a driving force for the promotion of economically efficient products and services, is actually threatened by its environmental viability. Indeed, according to the Millennium ecosystem Assessment (MA) (2005), the substantial net gains in human well-being and economic development mentioned above have been achieved at growing costs in the form of the degradation of many ecosystem services4.
This MA program, called by the UN Secretary General Secretary and initiated in 2000, is the result of 1300 scientists’ collaboration. It states that, “over the past 50 years, humans have changed ecosystems more rapidly and extensively than in any comparable period of time in human history” (Millennium Ecosystem Assessment, 2005). This ecosystem degradation increased risks of nonlinear changes, and the exacerbation of poverty for some groups of people.
The market economy, and its related competition and commerce stimulation, fails to be the driving force of human industries’ evolution towards better living environment, preserved
ecosystems, enhanced working conditions, and eradication of extreme poverty. Despite the world expansion of a global economy based on this concept of competition, the Human Development Report (2005) describes a world of deep economic inequalities: “human development gaps between rich and poor countries are in some cases widening and in others narrowing very slowly.” The bottom line of the MA (2005) findings is that “human actions are putting such strain on the environment that the ability of the planet’s ecosystems to sustain future generations can no longer be taken for granted”.
2.1.3
Procurement impact on sustainability
The international community, “concerned about the accelerating deterioration of the human environment and natural resources and the consequences of that deterioration for economic and social development”(UN General Assembly, 1987), was introduced to the concept of sustainability through the definition of Sustainable Development (SD) formulated by the Brundtland Commission5. It defined sustainable development as a development that "meets the needs of the present without compromising the ability of future generations to meet their own needs", where the needs of the world’s poor should be given an “overriding priority” (WCED, 1987). Sustainability would thus be a state of human society where the needs of current population are achieved, while the capacity of future generations to meet their own needs is secured.
This broadly used definition of sustainability is thus evoking the critical situation of present humanity: the way human beings are presently trying to meet their needs cannot last, future generation might not be able to meet their needs, including their vital needs. In other words, sustainability is the issue of humanity’s survival.
Now, for a vast majority of the humanity, a part of humans’ needs is being met through the act of purchasing. In this sense, purchasing and the way products and services are selected might highly influence the capacity of human societies to achieve sustainability. Hence, the current procurement pattern and its related competition fail to promote sustainability, it is rather undermining it.
Besides, it should be highlighted that not all societies and their related purchasing attitudes are putting the same pressure on natural resources and ecosystems. Indeed, according to GILL Manmohan S. (2005) it is especially the way rich nations/groups are over consuming the resources that might menace the very survival of humanity on this planet. Wolfgang Sachs, in his paper, “Development, the rise and decline of an Ideal” proposes thereby two different challenges with regards to sustainability:
"For industrial countries the challenge consists in bringing down resource flows without a decline in human well-being and in social justice. For Southern countries, however, the challenge consists in raising levels of resource consumption at a much smaller gradient than industrial countries did historically; increasing human being concurrently with equity” (Sachs, 2000, p.24)
Hence, the procurement habits’ impacts on environment are varying from one country to another, and France is confronted to the industrial countries’ challenge. Even if the ecological concerns arise in a global scale environmental pressure context, to be fair, the solutions should obviously be adapted to local contexts.
Consequently, procurement decisions are profoundly impacting human societies’ sustainability, and they can no longer stand to be solely based on economical efficiency considerations. Sustainable procurement, meaning the integration of environmental and social demands in the offer selection process, can be a powerful tool to conserve the creative forces of the market
competition towards, one can say, a “globally positive competition” which promotes the most environmentally and socially positive products and services.
2.1.4
Sustainable procurement and access to information
To be viable, every single company has the pressing necessity to sell its products or services. It has to respond to the demands of the purchaser and produce what will satisfy its expectations, for a competitive price. Thus in the case of standard procurement, the competition between companies is essentially based on quality, price and the firm’s image criteria.
How can social and environmental criteria be integrated to this competition? Why are the life cycle impacts of a product, including working conditions of the workers, not integrated to this competition? How can they be integrated when the purchaser has few or no access to viable and up-to-date information on those aspects? Giving access to life cycle information is a first indispensable step for the integration of sustainability criteria to the competition; and to make the economic competition an accelerator in the vital consumption pattern change.
This need of providing consumers with environmental information on products has been highlighted by the international community since 1992, during United Nations Conference on Environment and Development (UNCED) held in Rio de Janeiro:
“4.22 [Governments] should also encourage the emergence of an informed consumer public and assist individuals and households to make environmentally informed choices by:
(a) Providing information on the consequences of consumption choices and behaviour so as to encourage demand for environmentally sound products and use of products;
(b) Making consumers aware of the health and environmental impact of products, through such means as consumer legislation and environmental labelling;
(c) Encouraging specific consumer-oriented programmes, such as recycling and deposit/refund systems.” (UNCED, Agenda 21, 1992)
Assessing products’ social and environmental performance, and providing the purchaser with this information so that it could be integrated in the procurement process, is thus essential to enhance societies’ sustainability. This great change capacity of sustainable procurement is that it stimulates environmental and social improvements directly within the economic system. The transformation is driven by the necessity of the suppliers to reach the market demand. The integration of environmental and social criteria in the purchasing habits promises to be a powerful tool to increase the capacity of our societies to demand under well informed status production and supply of sustainable products and services.
2.1.5
Public procurement, a tool for society’s sustainability
enhancement
sanitation services, intellectual services, computers, to pens and papers. It represents approximately 15 % of the French Gross Domestic Product (Novethic, 2006) and 16 % of the European Union’s GDP in 2002 (European Commission, 2007a), excluding the cost of salaries. Giving the large share of public procurement in the market economy, the integration of environmental and social performance evaluation by the public authorities in their procurement activities is a substantial driver to enhance industries’ capacities for more sustainable production and delivery of goods and services.
The 178 countries represented during the United Nations Conference on Environment and Development in 1992 stressed the necessity for governments to exercise their leadership through their purchasing practices:
“4.23. Governments themselves also play a role in consumption, particularly in countries where the public sector plays a large role in the economy and can have a considerable influence on both corporate decisions and public perceptions. They should therefore review the purchasing policies of their agencies and departments so that they may improve, where possible, the environmental content of government procurement policies, without prejudice to international trade principles.” (UNCED, 1992)”
The Organisation for Economic Co-operation and Development (OECD), also stresses the fact that environmentally sound public procurement can yield indirect benefits: by "kick-starting" markets for more innovative and environmentally-friendly goods and services, public procurement may encourage businesses to follow the governments' lead (OECD, 2002).
Besides, at a national scale, the French Ministry of ecology and sustainable development claims that the practice of environmental and social demands for public purchasing contracts promotes more sustainable production modes through the market operators (MEDAD, 2007a).
Hence, governmental authorities have been insistent on the necessity to develop and implement broadly sustainable public procurement. Nonetheless, we will see in the next paragraphs the legal framework’s evolution, which slowly allowed the integration of environmental and social criteria in public procurement. This way, public entities gain capacity and leverage to push the market towards a “globally positive competition” that promotes more sustainable goods and services.
2.2
Sustainability in French public procurement policies
2.2.1
Gradual implementation of a legal framework for sustainable
public procurement
2.2.1.1 The fundamentals of public procurement and the pregnance of EU legislation
Before the major changes of the EU legislation at the beginning of this century, the use of environmental and social requirements in public procurement was hardly legally feasible. For long, the regulation of public procurement have been strictly oriented to guaranty economic competition, prevent corruption, and was ruled by the logic of the cheapest offer selection.
Still, the European Union public procurement legislation first aims to guarantee “the attainment of free movement of goods” and “the attainment of freedom of establishment and freedom to provide services in respect of public works contracts”. It aims to ensure effective competition, non-discrimination, and optimal allocation of public funds through the choice of the best tender offer (EU Commission, 2001).
the European court and European directives have a major role in the evolution of environmental and social criteria in public procurement. Gaps of the European legislation and differences in its national interpretations made that a long maturation of the French administrative jurisprudence have been necessary until public purchasers have been reassured about the possibility of using social or environmental criteria (Colombani, 2007).
2.2.1.2 First uses of social criteria and determinant case law jurisprudence
According to the French public procurement legislation, before 2001, only pieces of information on the respect of some social aspects were to be demanded to the candidates: for instance, they had to prove that they respect their obligations related to the handicapped people employment (MEDAD, 2007a).
In 2001, a modification of the French legislation on public procurement first stated that the conditions set to the suppliers could aim, to promote the employment of persons that have professional insertion difficulties, to fight unemployment, and to protect the environment6. Based on this modification, several local authorities implemented social clauses giving preferences to professional insertion organisms7 especially for their construction works’ contracts (MEDAD, 2007a).
In 2002, the European jurisprudence stimulated the use of sustainable development (SD) criteria in public purchasing with the case law C-513/99 called “Helsinki Bus” case, which originally was the disputed award of a contract for renewing the bus network of Helsinki. It clarified the possibility to use environmental criteria during the attribution step of a public contract. Four conditions were given to use this kind of attribution criterion:
they should be linked to the subject matter of the contract;
they should not give unrestricted freedom of choice on the contracting authority, meaning any environmental requirements must be specific and objectively quantifiable; they should be expressly mentioned in the contract documents or in the tender notice;
and
they should respect the principles of public procurement legislation (European Commission, 2007c).
2.2.1.3 Sustainable public procurement objectives set by the French National Sustainable Development Strategy
In 2003, the Interministerial Committee for sustainable development published the National Sustainable Development Strategy that defined an action plan called « Vers un État exemplaire » (towards an exemplary state). This action plan proposed a modification of the Public Procurement Contracts Code (PPCC) to promote sustainable development criteria into procurement contracts. It also fixed the fallowing quantifiable objectives:
“- a 10% decrease in carbon dioxide emissions by 2008 for the administrations' "transport" function and a 10% decrease in public buildings;
- 20% water savings, a 10% reduction in energy consumption, and a 60% white paper recycling rate by 2008;
6Article 14 of the decree no 2001-210 March 7th 2001 on the PPCC (JORF of March 8th 2001).
7 A professional insertion organism specifically employs persons in difficult social situations such as recipients of the RMI (French basic
- 20% fleet renewal in the form of clean vehicles (excluding emergency vehicles) including, if possible, 5% of electric vehicles by 2004;
- to implement at least one circulation plan for at least one administrative establishment per year and per department from 2004 onwards,
- for 2005, 20% of new State constructions must comply with the high environmental quality (HQE) approach, or with the high energy efficiency (HPE) or equivalent label, and 50% as of 2008.” (Interministerial Committee for sustainable development, 2003, p.10)
With this “eco-responsibility” policy, the French government wants to apply to the public procurement the sustainable development principles, to promote these principles in other parts of the society, and to make the public entities the “exemplary”. This National Sustainable Development Strategy document presents public sustainable purchasing as a major tool to integrate sustainable development in the public administration.
2.2.1.4 Implications of the 2004 and 2005 PPCC modifications
It is only the modification of the PPCC on the 7th of January 2004 that explicitly allowed public entities to use environmental performance demand as any other technical demand. This modification specifies that environmental demands can be included in every aspect of a public procurement: in the determination of requirements, in the technical specifications, in the execution conditions, and in the criteria of the offer selection.
The possibility to implement social considerations has been reinforced in the November 20048 and January 20059 legislation modifications. They enabled the public entity to reserve a “lot” of the contract to handicapped people. Indeed, the article 53 of the PPCC was modified in order to introduce the possibility to use the performance in terms of professional insertion10 as a consideration of the public contract’s awarding.
In March 2005 an Environmental Charter was integrated within the French constitution and claims in its article 6: “The public policies have to promote a sustainable development. For this, they have to conciliate the protection of the environment, the economic development and the social progress.” This gave to the sustainable development integration in public procurement a constitutional rank. Finally, in the last modification of the French public procurement legislation to date, the word « sustainable development » was introduced in the PPCC the first of August 2006. In the next paragraph we linger on this document that strongly frames French Public procurement’s capacity to consider sustainable demands.
8 Décret n° 2004-1298 du 26 novembre 2004 relatif à diverses dispositions concernant les marchés de l'Etat et des collectivités
territoriales
2.2.2
The 2006 Public Procurement Contracts Code and sustainable
procurement
2.2.2.1 Fair competition fundamental rules of the French Public Procurement Contracts Code
The French “Code des Marchés Publics” or Public Procurement Contracts Code (PPCC) is fixing the purchasing rules for public institutions of the state and local authorities. Unlike individuals or private companies, public entities usually cannot freely deal with potential contractors for contracts above a certain cost threshold.
The PPCC is fixing two main principles: 1) the public dealings are made after a competitive call, and 2) dealings are subject to controls (ENTPE, 2004). In order to promote a fair competition and equal opportunity among candidates, the public entity has to announce publicly the deals that are planned, and it has to provide the candidates with clear information on the rules that will be applied for the selection of the contractor.
Thus a fundamental aspect of the public purchasing is the transparency of the company consultations (ENTPE, 2004). All the candidates should receive the same information. Indeed the PPCC is constructed in such a way that it promotes competition between the providers, and lowers as much as possible risks of corruption.
The DCE “dossier de consultation aux enterprises” (invitation to tender package) aggregates all the documents transmitted to the candidates by the public authority. The Règlement de Consultation – RC” and the “Cahier des Clauses Techniques Particuliaires” (CCTP) are two key documents of the invitation to tender package where environmental and social considerations are to be included. The RC (consultation rules) gives details about the way the candidates’ offers will be evaluated and selected, while the CCTP describes the technical specifications.
Even if the procedures to be applied for a specific public dealing depend on the value of the contract, all aim to ensure the equity of treatment of the different candidates. If asked for, the public authority has the obligation to communicate to the eliminated candidates the justification of their elimination. These reasons must be founded and merited so that they do not expose the public entity to juridical disputes. In an event of juridical disputes, where the contractor wins the case over the government’s contract decision, damages to the contractor will have to be financially compensated.
Therefore, in public procurement, environmental and social requirements ought to be clearly stated in the invitation to tender package and should not constitute arbitrary elements for interpretation during the award procedure.
2.2.2.2 Five procedural venues where sustainability concerns are allowed to be included by the PPCC
In august 2006, France adopted a new version of its PPCC that transposed the EU directives of 2004. If some attempts had been implemented before, they were only partial and isolated initiatives. The Public Procurement Contracts Code 2006 has provided France with a more solid legal basis to promote sustainable procurement.
In the following sections we will analyze the possibilities available to the purchasers to include sustainable considerations in their invitations to tender, through the description of the 5 stages of a public tender procedure:
1 - Determination of requirements (article 5)
According to the PPCC, the description of the needs that justify contracts should be carefully determined. The Article 5 of the PPCC 2006 says:
“ The nature and scope of the requirements to be met are precisely determined by the public entity before any call for competition or any negotiations not preceded by a call for competition take place, taking into account the objectives of a sustainable development.”11 (PPCC article 5) [Author’s translation]
In November 2006, the French Minister of Economy, Finance and Industry was asked to give some precisions on the obligation of the public contracts to integrate SD in the “definition of requirements”. It resulted in a limitation of the impact of this obligation. The Minister explained what was meant in the Article 5: for each of the public contracts, the public entity has the obligation to question the possibility to include SD demands. But these demands might be related to only one of the three pillars of sustainable development, i.e. environment, social and economy. And also, that the public entity does not have to justify the absence of sustainable demands regarding the private companies that would compete for a Public Procurement Contract. However, the public entity has to justify the absence of SD analysis towards the public procurement inspection body (MEDAD, 2007a).
Nonetheless, one can question the capacity of those organisms to assess the respect of an obligation that seems to be juridically very vague (Pohardy, 2007). Only a clear jurisprudence with the statement of an administrative judge, which might come in a few years, would give a clear interpretation of the scope of this obligation.
2- Technical specifications (article.6)
The public purchaser should translate its requirements in terms of technical specifications in the invitation to tenders documents. The PPCC 2006 indicates that those specifications can refer to:
- official standards
- environmental performances or functional requirements, which can be defined thanks to ecolabels such as “NF Environnement”, the “European Flower”, or to factory certification such as ISO 14 000 or EMAS.
The Article 6 of the PPCC 2006 is giving an official acceptance of the use of ecolabels in public procurement. However, the public purchaser cannot demand a specific brand or a specific label without mentioning “or comparable” in order to preserve an effective competition between the candidates. The purchaser who wants to buy specific ecolabelled products can also give a full description of the technical specifications of this label without naming it. Then the company would have to prove that its product is corresponding to the purchaser’s demands. This alternative allows letting the company free to obtain a certification, which could be relatively expensive. Besides, the firm can go further than the ecolabel requirements in terms of environmental performance.
Thus, purchasing authorities can decide to recognize the corresponding eco-label as proof of compliance, but it also has to accept other means of proof of conformity with the specifications. Authorities can never require tenderers to be registered under an ecolabelling scheme, because that would be considered discriminatory according to the PPCC. Nonetheless, for public purchaser,
11This is not an official translation of the PPCC 2006 since the only English version available on the French legislation web site
ecolabels are much easier to handle since they give them an assurance on the environmental performance without having to deal with a range of raw complex technical information.
3- Application selection (articles 43, 45-II, 45-IV)
The purchasing authority that wants to buy a certain product or service needs to ascertain whether the tender firms have the necessary financial and technical competence for performing the contract. It also has to make certain that tenderers should not be excluded based on a series of grounds for exclusion specified in the PPCC. Those grounds for exclusion concern the tender firm itself and not its offer. They relate for instance to its compliance with tax and social security legislation, its good (non criminal) behaviour and so forth.
These exclusion criteria offer few possibilities for including environmental and social elements. In particular, the article 43 says that companies are banned to tender if they do not respect their obligation to employ handicapped workers (article L 323-1 of the labour code12). Besides, the article 45 allows the public purchaser to select the candidates according to the technical, economical, financial, and professional capacities. This implies that the candidate can be judged on its experience like its capacity to employ more environmentally friendly techniques, like on its experience in “HQE” constructions, in low energy building design for instance. It enables the public entities to ask the Candidates to present certifications proving that they have a certified Environmental Management System such as EMAS or ISO 14 001. Once the candidate application has been accepted, his offer can be judged by the public purchaser, on which sustainable development criteria will be used.
4- Offer selection (article 53)
The offer selection corresponds to the attribution justification of the contract. Among the criteria of decision accepted, the Article 53 specifies that the purchaser can select the offer according to its environmental performance, the global cost utilisation, and the professional integration of persons excluded form the labour market. However the PPCC mentions that the use of these criteria should not be discriminatory and should be “linked to the subject matter of the contract”.
The difficulty in defining this “link” tightens the space in which public purchasers may introduce their environmental and social criteria. In some cases, this link can be more easily justified. For instance, demanding electric buses rather than diesel buses could directly benefit to the population because electric buses might reduce the local air pollution. However, for an invitation to tender on paper, linking environmental requirements to the purpose of the tender is harder: the paper factory is rarely situated in the area of the purchasing entity. The water pollution of the paper factory is not properly « linked » to the need of paper of the local authority which could be situated hundreds of kilometres from the production site.
We are confronted here to another limit of the legal framework with respect to sustainable public procurement. A facilitation of sustainable procurement should imply a better definition of this “link” in order to enable a real integration of environmental and social demands in the tenders. The complexity of linking the environmental concerns to the subject matter of the contract forces the public procurement to be ”myopic”, focusing on the citizens’ direct needs rather than viewing and integrating global environmental picture and global costs.
5 – Execution conditions (article 14)
The execution conditions refer to elements of the contracts that are not strictly related to the purchaser’s needs but rather related to the way the candidates should realize the service or deliver
the good. Delivery in reusable containers, employing long-span unemployed, or the collect and the recycling of product waste can be execution conditions for instance.
Article 14: The definition of a contract's performance conditions provided in the conditions of contract may include social or environmental elements that take into account sustainable development objectives that conciliate economic development, protection and enhancement of the environment and social progress. Such performance conditions shall not have a discriminatory13 effect in regard to potential bidders. [Author’s translation]
In order to use such execution conditions the public purchaser has the obligation to be able to assess the commitment of the selected candidate. Therefore, the public entities should fix those conditions according to their means, and of course, according to the capacity of the market to satisfy those conditions.
These are the main dispositions and articles related to the integration of sustainable development in the PPCC 2006. Another sustainable development specificity of the PPCC 2006 is the facilitation of the small company access to public procurement contracts. Even if it is something absent from the European directives, the French Public Procurement Contracts Code aims to give small businesses better chance to bid for public contracts:
- The article 52 mentions that the absence of experience for related kind of contract cannot be a pretext to exclude a candidate
- The contracts have to be divided into “lots”, and global contracts should be justified and use only for specific situations (Article 10).
In addition to this recent legal framework, a document called “French National Plan for Sustainable Public Procurement” has a key role in the definition of the French public sustainable procurement policy.
2.2.3
The “French national plan for sustainable public procurement”
The French National Action Plan for Sustainable Public Procurement14 was created in November 2006 during the inter-ministerial committee headed by the Prime Minister where the National Strategy for Sustainable Development15 was actualised. With this document, France wishes to become “one the most involved European Union country in the implementation of sustainable public procurement until 2009”. Published in March 2007, the PNAAPD10 was adopted at the end of an interdepartmental and public dialogue process. It was meant to federate all the efforts on the matter and to give objectives to the local authorities. The ambition of this Plan is to be the national and official guide of the integration sustainable demands in the public procurement.
It gives useful indications to public purchasers on the French sustainable procurement objectives with some specific technical targets for several purchase categories. For instance, in new building procurement, the transmission coefficient for windows is recommended to be set at least at 1,8 W/m² K. The PNAAPD also sets general objectives of 50 % buildings constructed with a
13This non discriminatory principal implies that the number of companies which are able to answer the invitation to tenders are
“sufficiently” numerous to preserve competition. It is rather ambiguous since there is no fixed number.
High Environmental Quality (HQE®) approach16, or obtaining high energy performance label17 (or similar) until 2009. In addition it fixes a 100% goal for the products made of wood to come from legal origin and sustainably harvested forests until 2010.
Even if the PNAAPD sets such sector objectives that can help public purchasers, one can regret the absence of quantitative objectives concerning the share which the sustainable procurement must take in the total public procurement. Anyhow, with the PPCC 2006 and the publication of this document, France entered in a new phase where sustainable requirements have their place in public procurements’ procedures. Given this relatively incentive context one can wonder what is the present state of the integration of environmental and social demands in public procurement practices?
16 Cf. paragraph 2.3.4.5
2.2.4
Sustainability approaches in Public Procurement Practices
2.2.4.1 A recent implementation of global sustainable procurement policiesFew data exist on the state of implementation of sustainable public procurement policies in France. This is partly due to the recent integration of sustainable procurement practices in public entities as illustrated in a research work of Factea Sourcing supported by the French Agency for Environment and Energy Management (ADEME). Indeed, a large share of the 44 local authorities questioned have done their first “sustainable procurement” in 2005/2006 (cf. Figure 1).
Figure 1: First implementation of a "sustainable procurement policy"
The difficulty to have a visibility on sustainable public procurement might also be linked to the huge number of public purchasers, and to the amount of local authorities that are responsible for more than half of the public procurement (Achat Public, 2004).
According to the literature (Factea Sourcing, 2006, Achat Public, 2004) there is generally no specific sustainable procurement unit within small local authorities. The writing of environmental or social specifications in invitation to tenders is mainly done by the procurement direction (“Direction Achats”) or the juridical direction (“Direction Juridique”). Thus sustainable procurements are treated as normal procurements, which might be seen as positive but also causes difficulties since the directions are confronted to lack of competence about sustainability matters. However to overcome difficulties in integrating environmental and social demands in their contracts, more and more public purchasers are joining networks where they can share experiences.
2.2.4.2 Networks for sustainable public procurement
In 2000, the first local authorities’ networks were created with the objective to support the integration of sustainable development in public procurement. They unite public entities that work with thematic topics on the technical and juridical characteristics of specific procurements. In October 2005 a website (www.achatsresponsables.com) and a national inter-network was created, being run by the association “Eco Maires” and “Cités Unies de France” and supported by ADEME. The extent of this network is illustrated Figure 2.
Date of the first sustainable procurements
“In which year did you implement a global sustainable procurement policy?” - 2006, France numbers of answers -
Fair trade Organic products Recycled products Eco-labelled products
Before
Consideration of social aspects
Figure 2: Map of the French territorial procurement networks
For all local authorities, and especially for the smallest, it is extremely important to belong to a network, in order to group certain procurements and integrate sustainable demands. Indeed, the more purchases there are, the more contractors will submit adequate offers. Moreover, the interest of those networks is to share best practices.
2.2.4.3 Local authorities difficulties in sustainable procurement policy implementation
In the beginning of 2007, questionnaires were given to approximately 4000 French local authorities, in order to gain knowledge on the practices and needs of local authorities towards sustainable procurement. The French Environmental Agency that implemented this study received 307 answers, which although it is not statistically representative, gave interesting elements and findings. For instance, the Figure 3 illustrates aspects identified by local authorities as hindrances to the implementation of sustainable procurements. It shows that the knowledge of the market is most problematic, facing questions like: what are the more environmentally and socially friendly products? How can those products be recognized them? How to define criteria?
Figure 3: Reasons of the local authorities’ difficulties in the implementation of environmental and social demands
0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% M a rk e t k n o w le d g e T e c h n ic a l c h a ra c te ri s ti c d e fi n it io n In s u ff ic ie n t o ff e r J u ri d ic a l d if fi c u lt ie s O ff e r e v a lu a ti o n P ri c e C o n tr o l o f th e m a rk e t e x e c u ti o n C u lt u ra l re lu c ta n c e L a c k o f fo rm a ti o n 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% M a rk e t k n o w le d g e T e c h n ic a l c h a ra c te ri s ti c d e fi n it io n In s u ff ic ie n t o ff e r J u ri d ic a l d if fi c u lt ie s O ff e r e v a lu a ti o n P ri c e C o n tr o l o f th e m a rk e t e x e c u ti o n C u lt u ra l re lu c ta n c e L a c k o f fo rm a ti o n
“What main difficulties are you confronted to during the implementation of an eco responsible procurement?”
Region integrated in the sustainable procurement network
Figure 3 shows that the market knowledge and the difficulty to formulate adequate technical specifications are the two most frequently mentioned hindrances to the implementation of sustainable procurement. The ADEME’s study (2007a) also reveals that when internal expertise on sustainable procurement is lacking, local authorities rely instead on external sources like web sites and publications. They often do small scale invitation to tender tests to experiment the use of environmental or social clauses for one specific procurement contract. Indeed, sustainable procurement appears to be limited by public purchasers’ fear of procurement juridical dispute, and by their difficulties to formulate environmental or social technical specifications that fit market reality.
2.2.4.4 Follow ups to raise effectiveness of sustainable procurement policies
Case study analyses of sustainable procurement policies presented in the PNAAPD (MEDAD, 2007a) show that those policies should be coupled with an efficient follow-up management. Indeed they might lead to changes that have to be accepted internally. For example buying biofuel vehicles forces the users to go to equipped oil-station that are not common. Further more, printers that allow two-sided printing are only efficient in terms of paper use reduction if the users know how to use this function and fix the printing parameters. It is also essential to communicate and give incentives so that the users accept to change their habits, so that they could be conscious of the positive aspects of a sustainable procurement approach. For instance to buy recyclable products is useless if the wastes are not sorted so that they can be effectively recycled. Therefore tools to help the public entities to integrate sustainable requirements in their market should include use phase recommendations so that these aspects could be highlighted.
Keys of success appear to be linked with political will and the raising of local authorities’ employees’ consciousness and their understanding of the issues related to sustainability (MEDAD, 2007a). The awareness rising of the persons that are writing the specifications is really important since it’s much simpler for them to rewrite their former invitation to tenders (MEDAD, 2007a).
* * *
2.3
Sustainability approaches in the built environment sector
2.3.1
The built environment sector size
In high-income countries such as France, people spend most of their time in buildings or travelling along roads and railways or through airports, which in their entirety constitute what can be defined as the built environment (CICA and UNEP 2002). The built environment sector embraces the provision and management of human society’s physical setting, ranging from the large-scale civic surroundings to the personal places. The social and environmental impacts of all these activities are of course considerable. Indeed, the very quality of the built environment in large measure determines the living conditions of society (CICA and UNEP 2002).
In most countries of the world, the built environment constitutes more than half of total national capital investment, and the construction represents as much as 10% of GNP. In many high income countries it accounts for up to half of all the raw materials weight taken out of the earth’s crust, as well as producing a considerable waste stream. In Europe, the built environment accounts for about 40% of energy use rising to as much as 50% in some countries if construction activities (including materials production and transport) are also taken into account (CICA and UNEP 2002). More so, operating costs in public buildings, especially heating, air conditioning, domestic hot water production, waste management and water consumption represent a significant part of the public funding. The Works tenders represent around 45% of the French public procurement (Mission pour les échanges dématérialisés, 2007).
Hence, the built environment industry is responsible for a large part of the human actions that put much strain on the environment and threaten the ability of the planet’s ecosystems to sustain future generations. Given the considerable share of Works tenders in the total public procurement, there is a real potential for public procurement actors to significantly impact the built environment sector in its capacity to propose sustainability oriented solutions. In other words, the integration of environmental and social demands in public works contracts is therefore a chance for human societies’ sustainability enhancement.
2.3.2
Construction sector key environmental issues and procurement’s
means of improvement
In the following table, we summarize the construction industry’s major role in the global human activities environmental impacts, presenting the main environmental issues and their identified change leverages. Drawing up a comprehensive list of all issues which impact the sustainability of construction activities and the built environment would be unrealistic. The environmental issues selection is based on the French norm NF P01-01018 (AFNOR, 2004) that defines the different health and environmental impacts that are important to consider in construction products.
18To simplify the table, three of these impacts are not integrated: photochemical ozone formation (hydrocarbons emitted measured in
Table 1: Environmental issues of the built environment sector and change leverages19
19This table is the result of a literature review compiling in particular ICLEI (2007) and European Commission (2002) Environmenta
l issues Description Procurement change leverage
Energy consumption and global warming
In high income countries, the construction, operation and demolition of built facilities account for about 40% of all energy end-use consumption and a similar percentage of greenhouse gas emissions. (European Commission, 2002)
The potential for reducing greenhouse gas emissions in existing and new buildings is greater than that of any other sector, and therefore represents the most significant objective for reducing emissions in order to reach the targets laid
down in the Kyoto Protocol (European
Commission, 2002).
Select experienced architects in green construction
Prefer material that require low energy consumption for its production and transport
Put energy efficiency criteria in the invitations to tenders to encourage better building conception, insulation to reduce or even eliminate the need for air-conditioning in the summer months while reducing the amount of energy required for heating in the winter. Encourage the use of local renewable
energies (solar panel, biomass heating, wind power, etc.)
Water
consumption water consumption both with the kind of material The construction industry is strongly influencing used during the construction phase and with the water facilities constructed chosen for the use phase.
Prefer construction material with labels that integrate water management concerns for construction materials Impose low water consuming devices
for sanitation
Encourage the use of low water consumption construction materials Promote rain water collecting systems Raw material
consumption and waste management
Almost half of all materials extracted from the earth’s crust are transformed into construction materials. Moreover, these same materials when they enter the waste stream, account for some 50% of all waste generated prior to recycling, recovery or final disposal (European Commission, 2002).
Construction materials represent 40% of all transported goods in France and 18% of ton.km with 500 million tons annually (350 to 400 million ton of aggregate and 100 million ton of concrete) (UNICEM).
Include waste management demand in
the contract so that the companies integrate it in their offers.
Encourage the use of biodegradable, recycled or recyclable products.
Support the use of sustainably harvested resources
Air, soil and water pollution
Material construction production, as other industrial process, is a source of air and water pollution. Construction sites also are sources of many toxic substances, such as paints, solvents, wood preservatives, adhesives and sealants, released into air, soil, water, and hazardous to workers. They affect the quality of the internal environment of the buildings which is an essential element to the health of its occupants.
Put demands to use low-toxicity substitutes and low VOC (volatile organic compound) materials Use labelled products
The impacts and related change leverages are listed with a Life Cycle (LC) approach. For instance, the energy performance of the building is not only related to its use phase. But the embodied energy, i.e. energy for material extraction, manufacturing, transport, conception of the construction material is also considered. Other environmental impacts such as biodiversity lost or urban sprawl would have been integrated to this table if the building sector were to be analysed through an Environmental Impact Assessments (EIA) or a Strategic Environmental Assessment (SEA) methodology. However, those impact assessment methodologies are used for planning decisions that often come prior to the writing of any ITT. Indeed, the building environmental impacts’ approach considered in this paper is shaped by the possibility to include adapted demands within the procurement procedures of a project. The next paragraph presents the usual steps of a building construction process.
2.3.3
The specificity of the building sector in public procurement
Public procurement contracts of the building construction sector are characterised by the complexity of a procedure composed of several invitations to tenders: project owner consulting, architectural conception, execution of works and its different “lots”: heating, ventilation, hot water supply, painting, etc. For a same product (a building), different ITT are written at different steps of the project, but not by the same entities (the architect ITT is written by the project owner, while the execution firms ITT is written by the architect).
The use of environmental and social demands can come in at different stages of the construction procurement contracts. Depending on the project owner capacity, the size of the project and its cost, the number of different project’s aspects tendered can vary (architect, construction firm, building services) and thus the opportunities for inserting demands into tendering procedures will also differ. However, in the following table, we present the main general steps for a building construction
Table 2: Main steps of a construction process 20
1. Project development
This first step, probably one of the most important one in the building process, corresponds to the definition of the “needs”, for which, according to the 2006 PPCC, sustainable development criteria should be considered.
All project stages will be impacted by the decisions taken at this phase, so here we can find the highest potential for sustainable building design. Parameters like, the choice of site, the orientation, the size of the building, etc., will strongly influence the environmental performance of the building. However, this phase is not included in a procurement process in the sense that no “sustainable clauses” can be formulated since the orientations are decided by the public entity internally.
Nevertheless, if the public authority does not have the necessary internal technical capacities, it can contract a building project consulting (called in French “assistance à maîtrise d’ouvrage” or AMO). The invitation to tender for this contract can therefore integrate both environmental and social considerations in order to build an environmental and social impact assessment of the project.
