“Sustainability must become a criterion for quality” – a podcast episode on sustainable procurement
While the Bernese police correctly procured its new fleet of electric cars, another canton fluffed because it focused on Tesla. In the 13th episode of the BFH Wirtschaft podcast, procurement law expert Rika Koch and Thomas Fischer, head of law at KAIO Bern, talk about how public procurement can become more sustainable and why you shouldn’t just ask one supplier.
Rika, you examine the practical implementation of public procurement and look in particular at the sustainable component as well as competition. Since the revision of the procurement law, it has been stipulated that social and environmental sustainability should be taken into account. Do you think the law goes far enough?
Rika Koch: I have to answer in the negative. I used to think that one could go further than, for example, WTO law, i.e. higher-level international law, allows. Switzerland has simply adopted the minimum standard. Other countries are stricter. They say you have to procure publicly in some sectors, for example. At the BFH, I have a lot of contact with practitioners and I have to say: considering that the implementation is not easy, it is an ambitious law. It has the sustainability requirement and the individual implementation across the individual products and service sectors is left to the procurement agencies, so let’s say the federal government itself, or the cantons or the municipalities, and gives them a certain amount of leeway and that is politically and practically very clever.
And you also examine the competition components..
Rika Koch: Yes, because competition is very important in procurement law. It is one of the three fundamental pillars. It’s just that we have to learn to think of competition in a new way. Competition does not mean that the cheapest offer wins. The purchase price is important, but it should not be the decisive feature. We do not want overpriced luxury products, not at all. But, this also applies to the private sector, to the suppliers, that sustainability is counted towards the quality of the product or service. In this way, suppliers who can deliver this quality through sustainability criteria have a fair competitive advantage.
Many companies are already focusing on sustainability. Regardless of the revision of the law, is this sustainable change in procurement already taking place indirectly?
Rika Koch: Absolutely. The public sector is not necessarily the pioneer in asking for these criteria. We have a very innovative economy in Switzerland that has long since recognised this.
Thomas, you are responsible for public procurement in the Canton of Bern. Can you give us a current example?
Thomas Fischer: In the Canton of Berne, procurements are made every day. Even large ones. We have a budget of about 12 billion francs. A particularly good example of how we have built more sustainability into our procurement practice is our vehicle procurements. In the canton, these are centrally located at the cantonal police, at the central procurement office for mobility. You don’t think of police officers as the greenest people, but I am impressed by how these colleagues have managed to give sustainability a lot of weight in the tendering process for the vehicle fleet of the Canton of Berne. The starting point was CO2 emissions, which were limited and which were to be reduced to zero as far as possible. This was also well received by the market and we have now been able to procure a good and increasingly green fleet of vehicles.
Rika Koch: I have to smile because Thomas brought up this example. It is very interesting and gratifying to see how the Canton of Bern does it. But there was another canton that was in the headlines because the police there wanted to procure electric vehicles as well. But they formulated the tender in this way: We need Teslas for our vehicle fleet, and we need the ones with the doors that open upwards at an angle. This was criticised because it is discriminatory, i.e. it restricts competition, if you demand a specific brand. Electric vehicles are great, but this must be opened up to the entire electric vehicle market. The police there have also said that they want this for reasons of sustainability.
So there needs to be further training for those who do the tendering?
Rika Koch: Absolutely. That is a central part of professionalisation. Or even just awareness. It needs sustainability in procurement and how to do it, which is really complicated. That was also a learning experience for me. As a lawyer, you think, okay, now we have a law, now everything is fine. That is a very naïve assumption, because the law has to be lived. And we all have to learn and practise how to do that first, and for that you need further training.
So the law does not say how much CO2 would have to be saved if it were awarded. Are there any other concrete indications?
Thomas Fischer: Yes, in the Canton of Bern we have given ourselves some. For some years now, we have had a procurement policy of the government council for the central procurement offices. There, even before the new law came into force, the government council gave us political guidelines on how we should deal with the three dimensions of sustainability, social, ecological and economic. With the new law, we have written the ordinance for ourselves, for the cantonal administrations, or rather the government council has written it into our specifications: We have to check sustainability criteria for all procurements. In the law, it is an optional provision. However, we have made it a mandatory provision for us in order to do justice to the goals of the government council, which wants to better anchor and promote sustainability in the canton. And at the moment, we are in the process of drawing up directives together with the stakeholders in the canton on how to implement this in individual sectors. We would like to offer procurers a concrete menu of criteria that they can apply depending on the procurement sector in order to make sustainability measurable.
This is an abridged version, listen to the whole episode here.