7.2. Strategic use of public procurement
Public procurement can play an important role as a strategic policy lever to advance diverse policy objectives – such as protecting the environment, promoting sustainable development, achieving more inclusive growth, and promoting ethical behaviour and responsible business conduct. While delivering goods and services necessary to accomplish their missions in a timely, economic and efficient manner remains the primary objective of public procurement, government increasingly recognises its economic and governance relevance to pursue broader policy objectives.
In 2019, most of the countries in the Western Balkan region have developed some policies and strategies to support the strategic use of public procurement. In particular, a grand majority of them have procurement strategies and policies supporting small and medium-sized enterprises (SMEs). Only North Macedonia has not yet developed any formal strategy in this area, however some instruments to support participation of SMEs are implemented. In particular, the public procurement regulatory frameworks of the Western Balkans include provisions related to facilitating SMEs’ access to procurement opportunities of governments through simplifying contract award procedures, reducing administrative red tape, and providing training and consultation. In OECD countries, supporting SMEs is also a key policy objective addressed through public procurement – 94% of the countries surveyed have policies and strategies addressing this issue at the central level and/or at the level of specific procuring entities.
In contrast, the Western Balkans less commonly have policies and strategies addressing the strategic use of public procurement to support green procurement (Montenegro and Serbia), innovative goods and services (Montenegro and Serbia), women-owned businesses (Albania and Serbia), and responsible business conduct (Montenegro and Serbia). Except for women-owned businesses, more OECD countries address and reflect these policy objectives in public procurement frameworks. For instance, in terms of green public procurement, many OECD governments have in place specific legislative provisions to require contracting authorities to take into consideration energy efficiency, environmental considerations and life-cycle costs in procurement. In fact, the Strategy for the Development of the Public Procurement System in Montenegro 2016-2020 foresees integration of considerations on environmental impact, quality, innovation, etc. into the concept of best value for money in public procurement, and these developments would continue to be included in the forthcoming strategy for the next period. Yet, the sole criterion for awarding contracts is often the lowest price, which is detrimental to public procurement. Non-arbitrary, efficient and effective integration of such non-price considerations into public procurement processes would require not only enabling legal and regulatory frameworks but also reinforced capacity of the public procurement practitioners.
At the same time, the governments in the Western Balkan region need to exert more effort when it comes to measuring and monitoring the progress made in implementing these policies and strategies. Only Montenegro reported that it measures the results of strategies on green procurement; supporting SMEs in procurement; as well as integration of RBC considerations in public procurement. In comparison, three-fourths and two-thirds of OECD countries collect data on and monitor the implementation of the policies and strategies on green public procurement and SMEs support, respectively. Indeed, much fewer countries do so in relation to innovation, women-owned businesses and RBC.
Data for the Western Balkans – Albania, Bosnia and Herzegovina, Kosovo, Montenegro, North Macedonia and Serbia – were collected through the 2019 Survey for the Western Balkans on Public Procurement. Data for the OECD countries were collected through the 2018 OECD Survey on the Implementation of the 2015 OECD Recommendations on Public Procurement to which 31 countries responded.
The European Commission defines green public procurement as “a process whereby public authorities seek to procure goods, services and works with a reduced environmental impact throughout their life cycle when compared to goods, services and works with the same primary function that would otherwise be procured.”
Responsible business conduct refers to business contributing positively to economic, environmental and social progress to achieve sustainable development, and avoiding and addressing adverse impacts – whether from their own activities or through a business relationship – in the value chain.
Further reading
OECD (2019), Reforming Public Procurement: Progress in Implementing the 2015 OECD Recommendation, OECD Public Governance Reviews, OECD Publishing, Paris, https://doi.org/10.1787/1de41738-en
OECD (2015), Recommendation of the Council on Public Procurement, https://legalinstruments.oecd.org/en/instruments/OECD-LEGAL-0411
Figure notes
Data for the Czech Republic, Luxembourg, Switzerland, the United Kingdom, and the United States are not available. On data for Israel, see https://doi.org/10.1787/888932315602
Source: For the data on the Western Balkans, OECD (2019), 2019 Survey for the Western Balkans on Public Procurement; For the OECD data, OECD (2018), 2018 OECD Survey on the Implementation of the 2015 OECD Recommendations on Public Procurement
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