PUBLIC PROCUREMENT rules focus on procedures that involve the use of taxpayers’ money. How can these procedures – right across the whole lifecycle of a public procurement – be used in a way that benefits taxpayers and wider society, while also ensuring that the process is fair to all vendors, foreign and domestic?
Examining the need for equality
In government procurement, a contracting authority must adhere to key principles of equality and non-discrimination. That means that they can’t favour a local vendor to the detriment of one outside the home territory. For example, its tender can’t quantify an amount of local spend, or state that people employed in the execution of the contract must be local residents. This does not mean however that procurement rules prevent the creation of local social good, such as local jobs. In fact, the contrary is true: there’s a big opportunity for governments to promote and achieve social good during the procurement process.
The Procurement Directive states this explicitly: contracting authorities may use social criteria (such as job creation) in the scoring process. It’s all about finding the right balance between what’s prohibited (“hire local” is prohibited) and the permitted social requirements.
Striking the right balance
There is a fine line between what is, and is not, discriminatory. So, how can the government walk this line? A multi-disciplinary team of expert advisers, including a legal public procurement expert, should be used to help the government strike the right balance. One key task would be to build a carefully considered job creation template. This would lead to several benefits:
· allow contracting authorities to state clearly that social value is important to them;
· provide a fully amendable template that enables consistency across tenders;
· put social value into the minds of potential vendors, and encourage them to think creatively about how to address this in their responses;
· avoid the inclusion of social value as an afterthought late in the procurement process.
Social value at the core of procurement
The social requirements must be knitted throughout the procurement process (from the notice, prequalification, instructions to tenderer, award of contract, and monitoring of the contractual obligation). With social requirements as part of the subject of the competition, these aims can validly be used as selection and/or award criteria and as contractual conditions. Clearly mentioned in the published contract notice, this attention to social value by the government will have a valuable knock-on effect through the whole government tendering ecosystem. In practice, this could look as follows:
· Any contract notice could include the relevant CPV (common procurement vocabulary) code for labour requirement and include as “other information” a statement explaining that the tenderer will be required to actively participate in achieving special social policy objectives (with reference to the specific social policies.)
· The tender documents can target specific groups (e.g. people who have been unemployed for over six months) without limiting same to a specific locality. This complies with EU procurement rules and gives a clear signal to tenderers that the contracting authority will welcome vendors who can return individuals to employment – wherever those people reside.
· Tender documents could also specify that employment opportunities must be published in local employment agencies and job centres.
The government must lead by example
To pave the way for job creation through public procurement, the government must adopt an overall job creation procurement strategy. In ancient Greek, the word strathgia meant the art of generalship, of devising and carrying out a military campaign. As with the military, procurement strategy requires a clear and adaptable roadmap. With the government providing strong leadership — in the form of clear wording in every tender that shows it supports social value creation — the ripple effect across society can be significant.
The government can maximise employment potential for State-funded ventures. It just needs to take the first step, and this can start with prioritising the enactment of
the Public Services and Procurement (Social Value) Bill introduced in the Seanad in 2017. This legislation would ensure a wider uptake of social values. Ireland should lead rather than try to catch up with the rest.
England enacted its successful Social Value Act in 2012 and Scotland did same with its Procurement Reform Act in 2014; it is not too late for Ireland, but a named Social Champion is needed to make this happen. The champion should ensure that all public procurement is subject to a simple statutory requirement of thinking – just thinking, with no further specification than that – about social value, and about how procurement processes could improve the community in the contracting authority’s administrative area. This change is still possible, but it requires a mindset shift and application of the well-known wisdom of Yoda: ‘Do or do not. There is no try’. So, which will it be for Ireland?
Bruno Herbots is a partner in HERBOTS Solicitor