Synergies and tensions between environmental and social goals in public procurement

OECD countries spend almost 15% of their GDP on procurement and twenty-eight percent of government expenditure are used to procure goods, services and labor (OECD, 2021). Procurement is therefore a powerful policy instruments, and states increasingly use public procurement to reach broader policy goals. This is referred to as “social”, “horizontal” or “strategic” procurement (OECD, 2019). Purchasing decisions are not taken on the basis of competitive price only, but by considering social, environmental or other strategic goals. They figure in production as well as products and address the entire procurement process from preparing a call for tender, through selection and contracting as well as application. Examples include low carbon emission vehicles in public transport to push climate change or employment of minorities for municipal care facilities to address social inequalities. The focus of this paper is the eco-social nexus in strategic procurement. Meeting different strategic goals at a time can be challenging, e.g. whether to purchase products paying attention to biodiversity or those produced in a handicapped workshop. Social and environmental goals can be mutually supportive, complement each other and create synergies. Or they might produce tensions and lead to trade-offs and to overall mal-performance. What is more, in the literature social and environmental goals are expected to interact differently with price. Social goals are considered to conflict with price efficiency, e.g. where enterprises do not respect collectively agreed wages they will usually offer contracts at lower price. Environmental goals have more potential to go hand in hand with low costs. Examples are developments or patents that help to secure competitive advantages or reduce consumption. Given the overall dominance of competitive price in public procurement, this importantly impacts on the eco-social nexus. The paper conceptualizes social and environmental goals and discusses how they are employed along the procurement process running from preparation to selection and application. Based on the existing literature it discusses synergies, tensions and trade-offs between social and environmental goals in procurement, as well as the conditions that favor one or the other and illustrates them with examples from the EU and national level.