Sustainability in public procurement law

Thursday, 4 June 2020

The consideration of aspects that are unrelated to public procurement, such as environmental and climate protection or sustainability, is nothing entirely new in public procurement law, but will become even more important in the near future!

Public procurement law is competition law. It is intended to force contracting authorities to carry out procurements in competitive procedures in order to use public funds as sparingly as possible. At the same time, the dominant position of contracting authorities is to be restricted through competition in the award of contracts. "Aspects unrelated to public procurement" in tenders, especially in the context of determining the best bidder, were therefore actually frowned upon. Nevertheless, they have "crept into" public procurement law and have now achieved a quite prominent position. Public procurement law is changing from competition law to the law of economic governance, because certain aspects unrelated to public procuement – such as sustainability and environmental protection – are to be taken into account or promoted in public procurement. For this reason, there has long been a discussion about the extent to which environmental aspects may and, above all, should be taken into account in public procurement procedures. Public procurement law has thus been given a "secondary purpose": sustainability and environmental protection. Even before the "new" public procurement directives, a Commission Communication on the consideration of environmental concerns as well as a handbook on green procurement were issued. The Federal Procurement Act (Bundesvergabegesetz; "BVergG") 2002 and its procurement principles already required the consideration of environmentally relevant aspects, e.g. the life cycle costs of a product. In the legislative materials for the Federal Procurement Act 2006, environmental properties were also listed demonstratively as permissible award criteria

In the procurement principles of the BVergG 2018 – very similar to the previous requirement – there is a requirement to take into account the environmental compatibility of the service. New in comparison to the BVergG 2006 is the mention of material efficiency, waste and emission avoidance and soil protection. However, this did not entail any material change. The law is more concrete in the special requirements for the procurement of road vehicles. Here the contracting authority has to take into account operational energy and environmental effects such as energy consumption, CO2 emissions etc during the entire product lifetime. Environmental compatibility can be taken into account at several points – for example, aspects unrelated to public procurement can be taken into account in the description of the service, in the definition of the technical specifications, by setting concrete award criteria or by corresponding conditions in the service contract. The contracting authority thus has a wide scope to consider environmental aspect at public procurement procedures.

Public procurement is regarded in Austria and in the European Union as an effective tool for the expansion and promotion of environmental and climate protection. In the current government programme, the government has also committed itself to sustainable public procurement and emphasised that it will use public procurement law as the most important instrument for combating climate change. The best bidder principle is to be extended to include binding ecological criteria for the products and services offered and regionality (within the conditions of EU public procurement directives) is to be strengthened. There is no more concrete information from the government programme and so far there have been no legal amendments of the BVergG.

With the EU's "Green Deal" and the call of some countries – including Austria – for a "green reconstruction" after the Corona crisis, there can be no other option than to further promote the consideration of environmental compatibility in public procurement procedures, since a boost in public investment is a very decisive step to revive the economy.