Social and environmental goals in the new Spanish Public Contracts Act. Public procurement is not only the procedure to obtain goods and services for the administrative bodies. His mayor role Is to serve as an instrument to achieve political objetives. Public contracts are, in some, a way to implement public policies. Even if it’s not necessary to remember that almost between 15-20% of GIP is spended through public procurement. In every simple contract we find the expression of an administrative policy. Of course is more clear when the Administration spends building a new infrastructure, but even in a typical and simple contract for cleaning services in a public school we can find policy. The last Directive exprime this idea when it says:
§2 “Public procurement plays a key role in the Europe 2020 strategy, set out in the Commission Communication of 3 March 2010 entitled ‘Europe 2020, a strategy for smart, sustainable and inclusive growth’ (‘Europe 2020 strategy for smart, sustainable and inclusive growth’), as one of the market-based instruments to be used to achieve smart, sustainable and inclusive growth while ensuring the most efficient use of public funds. For that purpose, the public procurement rules adopted pursuant to Directive 2004/17/EC of the European Parliament and of the Council (4) and Directive 2004/18/EC of the European Parliament and of the Council (5) should be revised and modernised in order to increase the efficiency of public spending, facilitating in particular the participation of small and medium-sized enterprises (SMEs) in public procurement, and to enable procurers to make better use of public procurement in support of common societal goals.
The European directive is new including a new perspective of the social and environmental criteria in public contracts across its articles: ambiental and social labels, flexibilizes the link between the object of the contract and social and ambiental objetives, recognition of life cycle and the sustainability of the production process of the works, supplies and services as a element in the public procurement, and among other important issues, enacting the new innovation partnership for the development and subsequent purchase of a new, innovative product, service or works.
The new Directive is one of the reasons why our recent Act 9/2017 of Contracts of Public Sector focus his articles in obtaining political, social and ambiental objetives through the public contracts. The other one is our tradition, especially after the 2007 Contracts Act, that links public contracts and social objetives. I guess that our high level of unemployment is the cause of this perception of the public procurement in Spain.
In other words, when the Public Administration take the decision to open a public procurement a window is open for that administrative body to achieve, indirectly, its political objectives. Not only to obtain goods or a services. Even more important: to promote new goals that are positive for the society, because public procurement serves to change behaviors. Social protection, gender policy, environmental protection, employment for groups with a high level of unemployment… even compliance with tax legislation are objectives that can be accomplished through public procurement.
I think it’s necessary to remark one argument. Competition policy is absolutely important, but if we have only this objective, we have a magnifying glass that distorts the vision of reality. That is what happened with some decision of the European Court of Justice, whose doctrine has been modified in the last Directives.
I said early that the Spanish Act 9/2017, approved on November 8th, has favored the achievement of social, environmental and innovation goals. There are many mesures, direct and indirect whose objective is the obtention of an additional value for money in public contracts. There are actions that brake some negative behaviors of the Spanish administration. When we analyze jointly all the previsions in the Act we have the perception that a new understanding of the quality appears to the eyes of the Administration.
For that reason, I think that even more important that the “new regulation” is the transformation of the public administration. If some one analyze the PPP in health sector, it can be affirmed the bas performance of the public administration and even more, the waste of public money. It was a problem of how the contracts were designed and the skills of the public administration monitoring it.
I don’t have any statistics about the skills of the Spanish administration in public procurement. But I have the facts coming from a French one, about its civil servant in public procurement, that are disheartening: 60% of the workers in public procurement didn’t have legal skills nor they had a special exam (in public procurement and in public contracts). The didn’t have previous training in these areas. Even more, 60% of the workers in public contracts lack knowledge about the economic sector on which they develop their activity. For me it’s the most important problem that the European Union has with public procurement and public contracts.
Come back to the new Spanish Act. In this direction the key to understand the new system is article 1.3. Paragraph 1 and 2 are related to “economical and competitive aspects in public procurement” and in paragraph 3 we can read two remarkable aspects: first that pubic procurement introduce in a transversal and mandatory way, social and environmental criteria linked with the object of the contract. Secondly, the conviction that its inclusion provides a better value for money in the contractual provision, as well as a greater and better efficiency in the use of public funds. I have to remark, also, that this prevision wasn’t in the Project of the Act send by the Government to the Parlament but after the amendments submitted by the left wing party it was accepted unanimously by every parties in our Parlament.
From this point I want to give notice of some specific elements that we can find through this extremely long act:
From a qualitative point of view, it is very important the amendment to a administrative practice of the last years: the adjudication of the contract is not only depending on the price but it will consider other aspects of the contracts, that affect to the performance and social and environmental issues. In the last years, specially in the crisis years, it has been a tendency to decide the tender only taking into account the price. Some people say that it’s also a path to fight against corruption, but, from my point of view, it has nothing to do with it. Overall, the results were very unsatisfactory.
This idea is now on our new article 131, saying that the public sector shall base the award of the contract in best price-quality ratio; “which shall be assessed on the basis of criteria, including qualitative, environmental and/or social aspects, linked to the subject-matter of the public contract in question” as is in article 67 of the Directive.
Even more, the Spanish article 127 imposes the obligation on the administration to considere the introduction of social, environmental and innovation elements in every procedure. Those elements can affect also to the suppliers that want to tender in the procedure.
According to article 145, social and environmental clauses can be related to many aspects of the contract among we can find the following: social integration of people with disabilities, disadvantaged people or members of vulnerable groups; the gender equality plans that are applied in the execution of the contract and, in general, the equality between women and men; promotion of female hiring; the improvement of working and salary conditions; stability in employment; hiring of a greater number of people for the execution of the contract; training and protection of health and safety at work; application of ethical criteria and social responsibility to contractual provision; or the criteria related to the supply or use of products based on fair trade during the execution of the contract.
And he environmental characteristics may refer, among others, to the reduction of the emission level of greenhouse gases; the use of energy saving and efficiency measures and the use of energy from renewable sources during the execution of the contract; and the maintenance or improvement of natural resources that may be affected by the execution of the contract.
The next aspect is related to the conditions of execution. In article 70 of the Directive, that are prometed: “Contracting authorities may lay down special conditions relating to the performance of a contract, provided that they are linked to the subject-matter of the contract within the meaning of Article 67(3) and indicated in the call for competition or in the procurement documents. Those conditions may include economic, innovation-related, environmental, social or employment-related considerations”.
This idea is in article art. 202.1 of our new Act, but in a new point of view: is mandatory to include at least one social, environmental or innovative clause for the execution of the contract.