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Procurement

Sustainable public procurement – Lexology

Another way to enhance the potential of your business’ sustainable solutions is to actively use such sustainable virtues in public tenders. Participating in public procurement may be a beneficial way to secure substantial orders from public authorities, and the sustainable dimensions of your business have the potential to be a useful advantage when competing for a public tender.

In public procurement, sustainability may be integrated in several steps of the process. The Danish Public Procurement Act (Udbudsloven) includes a number of possibilities for public authorities to include sustainability in public procurement and there are also ways for the potential suppliers/bidders to (lawfully) affect the tender in a more sustainable direction.

Choise of award criterion

As an example, when using the award criterion ”best price-quality ratio”, public authorities may specify award criteria related to sustainability, e.g. environmental and innovation characteristics of purchased goods or services, and when using the award criteria ”best price-quality ratio” or ”cost” public authorities may use criteria related to the life cycle costs of such goods and services.

6 ways to include sustainability

The Confederation of Danish Industry has published a position paper (in Danish: ”Grønne offentlige indkøb uden unødvendige omkostninger”). This paper lists six ways in which sustainability can be included in public procurement:

  1. The purchase is based on EU’s green procurement criteria and, for instance, the requirements behind label schemes like the EU Ecolabel.
  2. The purchase is based on total cost of ownership where the life cycle of the product and the operating costs are incorporated.
  3. The purchase includes considerations about – and possibly specific requirements for – the after-use phase of the product.
  4. The procurement emphasises quality in the evaluation of the tender offers.
  5. The procurement’s preliminary market consultation focuses on optimising the logistic setup for delivery of the product.
  6. The contract contains an innovation clause which encourages continuous improvements in the operation and the green profile of the purchase, including CO2 emissions.

Market consultations on sustainable public procurement

Before a public authority initiates a specific tender, it is perfectly legal for the authority to have a dialogue with potential suppliers on how to best incorporate sustainability in the tender. This dialogue can take place in the form of a market consultation, and the initiative to start-up such a consultation may come from the public authority but also from potential suppliers.

Thus, market consultations may be your business’s opportunity to elaborate on the potential for sustainable solutions and lead the procurement in a direction towards more sustainability. When doing so, it can be a good idea to use the recommendations of the position paper of the Confederation of Danish Industry, or other recognised sources which support the inclusion of sustainability in public procurement, as a point of departure.

There are very few specific rules governing the way in which a market consultation may take place, so the public authorities have much flexibility in arranging and carrying out such consultations. Market consultations may, for instance, be held in writing (e.g. by e-mail exchange), in meetings, in telephone conversations, etc., and they may be held with one or more actual or potential suppliers or third parties.

However, public authorities must always observe the basic principles of equal treatment and transparency. Therefore, they must take appropriate measures to ensure that competition is not distorted by the market consultations.

Such measures will be to ensure that information which has been exchanged in the market consultations will be included in the tender documents in so far as the information is relevant for the tenderers to submit a competitive offer. The public authorities must ensure that no tenderer has received information in the market consultation which will give such tenderer an undue advantage in the subsequent tender, unless such information has been made available to all tenderers as part of the tender material. Further, the public authorities must ensure that deadlines for submitting applications to participate in a tender and/or tender offers are set reasonably to allow all tenderers to have equal opportunities in the tender.

In practice, market consultations, often held on the initiative of potential suppliers, are an effective way of promoting innovative ideas for sustainable procurement. The legal framework for market consultations presents perfect opportunities for your to elaborate on the potential of sustainability and lead the procurement in a direction towards more sustainability

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