MONOGRAPH
No. 40
2012
Katriina Alhola
Environmental criteria in public procurement
Focus on tender documents
MONOGRAPHS of the
Boreal Environment Research
MONOGRAPHS OF THE BOREAL ENVIRONMENT RESEARCH
40
Katriina Alhola
Environmental criteria in public procurement
Focus on tender documents
Yhteenveto: Ympäristökriteerit julkisissa hankinnoissa
Tutkimuskohteena tarjousasiakirjat
The publication is available in the internet:
www.environment.fi/publications
ISBN 978-952-11-4069-3 (pbk.)
ISBN 978-952-11-4070-9 (PDF)
ISSN 1239-1875 (print.)
ISSN 1796-1661 (online)
Edita Prima Ltd
Helsinki 2012
Contents
List of original publications and author’s contribution....................................................5
List of abbreviations..............................................................................................................6
List of treaties........................................................................................................................7
List of cases...........................................................................................................................7
Abstract..................................................................................................................................8
Tiivistelmä..............................................................................................................................9
1 Introduction....................................................................................................................... 10
1.1 Background of the study............................................................................................ 10
1.2 Framework of the study............................................................................................. 11
1.3 Objectives of the study.............................................................................................. 15
1.4 Structure of the study................................................................................................ 15
2 Policy and legal background of green public procurement........................................ 16
2.1 Policy background..................................................................................................... 16
2.2 Legal background...................................................................................................... 19
2.2.1 Public procurement directives......................................................................... 19
2.2.2 Case law..........................................................................................................22
3 Research methods and data collection.........................................................................23
3.1 Methods in the research of green public procurement..............................................23
3.2 Analysis of the data...................................................................................................25
3.2.1 Analysis of calls for tenders and contracts......................................................27
3.2.2 Green Public Purchasing - record method...................................................... 31
3.2.3 Life cycle assessment.....................................................................................33
3.2.4 Environmental cost calculation.......................................................................34
3.2.5 Relevance – Potential – Steerability -measurement tool................................35
3.3 Collection of material................................................................................................36
4 Results...............................................................................................................................38
4.1 Environmental award criteria in public procurement.................................................38
4.2 Progress in the use of environmental purchasing criteria.........................................38
4.3 Most economically advantageous tender and determination of the
environmental impacts....................................................................................................40
4.4 Justification and applicability of LCA-based environmental criteria to public
procurement.................................................................................................................... 42
4.5 Green public procurement as a promoter of eco-design..........................................43
4.6 Use of contract clauses in green public procurement...............................................44
5 Discussion.........................................................................................................................47
5.1 Relation between environmental and legal aspects in public procurement.............. 47
5.2 Relation between environmental and economic aspects in public procurement..... 52
6 Conclusions.......................................................................................................................55
Acknowledgements ............................................................................................................57
References............................................................................................................................58
Environmental criteria in public procurement – Focus on tender documents
5
List of original publications and author’s contribution
Paper I: Parikka-Alhola, K., Nissinen, A. and Ekroos, A., 2006. Green award criteria in the most
economically advantageous tender in public purchasing. In G. Piga and K.V. Thai (eds), Advancing
public procurement. PrAcademics Press, Boca Raton, USA, pp. 257-279.
The author was responsible for the collection and analysis of the data as well as the content of
the manuscript. The section ’Discussion and conclusions’ was written jointly with Dr. Ari Nissinen.
Prof. Ari Ekroos commented on the paper.
Paper II: Nissinen, A., Parikka-Alhola, K. and Rita, H., 2009. Environmental criteria in the public
purchases above the EU threshold values by three Nordic countries: 2003 and 2005. Ecological
Economics, 68(6):1838-1849.
The author gathered and recorded the data for the year 2005 and re-analyzed and recorded the
data for 2003. The author was also responsible for submitting the revised version of the manuscript
and re-wrote Chapter 1. Chapter 2 was jointly written with co-authors. The calculation of odds
ratios (Chapter 3) was performed and analyzed by Docent (Ph.D) Hannu Rita. Dr. Ari Nissinen
was the initiator of the article, and was also principally responsible for outlining the paper and
writing Chapter 4.
Paper III: Parikka-Alhola, K. and Nissinen, A., 2012. Environmental impacts and the most economically advantageous tender in public procurement. Journal of Public Procurement, 12(1):43-80.
The author was responsible for gathering and calculating the data as well as writing the manuscript. Dr. Ari Nissinen supported the LCA calculations with his expertise, and both guided and
commented on the paper.
Paper IV: Parikka-Alhola, K., 2008. Promoting environmentally sound furniture by green public
procurement. Ecological Economics, 68(1-2):472-485. The author was responsible for the article.
Paper V: Parikka-Alhola, K. and Nissinen, A., 2012. Environmental impacts of transport as
award criteria in public road construction procurement. The International Journal of Construction
Management, 12(2):35-49.
The article was written by the author. Dr. Ari Nissinen initiated the subject of the relations between transport, LCA and public procurement, and commented in particular on Chapter 4.
Paper VI: Palmujoki, A., Parikka-Alhola, K. and Ekroos, A., 2010. Green Public Procurement –
Analysis on the use of environmental criteria in contracts. Review of European Community and
International Environmental Law, 19(2):250-262.
The article was written jointly by the author and Antti Palmujoki, Ph.D. The author coordinated
the manuscript. The author gathered the data for the year 2005 and analyzed the calls for tenders
for the years 2005 and 2007. Antti Palmujoki, Ph.D, analyzed the contract documents for the years
2005 and 2007. Prof. Ari Ekroos commented on the paper.
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Monographs of the Boreal Environment Research No. 40
List of abbreviations
CO2
CPV DfE
EC
ECJ
EIA
EMAS
EMM
EPD
EPP
ERPP
EU
FLEGT
GPP
IPP
ISO
IT
LCA
LCC
NCM
NMHC
NOX
OECD
OR
PMX
PP
PVC
RPS TED UNEP
YmVL (Finnish)
YOLL
Carbon dioxide
Common Procurement Vocabulary
Design for Environment
European Community
European Court of Justice
Environmental Impact Assessment
Eco-Management and Audit Scheme
Environmental Management Measures
Environmental Product Declaration
Environmentally Preferable Purchasing
Environmentally Responsible Public Purchasing
European Union
Forest Law Enforcement, Governance and Trade
Green Public Procurement (Green Public Purchasing)
Integrated Product Policy
International Organization for Standardization
Information Technology
Life Cycle Assessment (Life Cycle Analysis)
Life Cycle Costing
Nordic Council of Ministers
Non-methane hydrocarbons
Nitrogen oxide(s)
Organization for Economic Cooperation and Development
Odds ratio
Particulate matter (or fine particles), particles of 10 micrometers or less
Public Procurement (Public Purchasing)
Polyvinyl chloride
Relevance – Potential – Steerability
Tenders Electronic Daily
United Nations Environment Programme
Statement of the Environment Committee
Years of Life Lost
Environmental criteria in public procurement – Focus on tender documents
7
List of treaties
Treaty establishing the European Economic Community (the Treaty of Rome, 1957) signed in
Rome, 25 March, 1957. Available at: http://www.eurotreaties.com/rometreaty.pdf.
Treaty on European Union (1992) signed in Maastricht, 7 February, 1992. Official Journal of the
European Union C 191 of 29 July 1992.
Treaty establishing the European Community (1997) (Consolidated version), signed in Amsterdam,
2 October, 1997. Official Journal of the European Union C 340 of 10 November 1997.
Treaty of Lisbon (2007) amending the Treaty on European Union and the Treaty establishing the
European Community, signed in Lisbon, 13 December, 2007. Official Journal of the European
Union C 306 of 17 December 2007.
Treaty on the Functioning of the European Union (2010) (Consolidated version). Official Journal
of the European Union C 83 of 30 March 2010.
Kyoto Protocol (1998) to the United Nations framework convention on climate change signed in
Kyoto, 11 December, 1997. Available at: http://unfccc.int/resource/docs/convkp/kpeng.pdf.
List of cases
Case C-110/03. Opinion of Advocate General Ruiz-Jarabo Colomber delivered on 16 December,
2004. Kingdom of Belgium v Commission of the European Communities. European Court Reports, 2005, p. I-2801.
Case C-448/01. Judgment of the Court of 4 December, 2003. EVN AG and Wienstrom GmbH v
Republic of Austria. European Court Reports, 2003, p. I-14527.
Case C-513/99. Judgment of the Court of 17 September, 2002. Concordia Bus Finland Oy Ab,
formerly Stagecoach Finland Oy Ab v Helsingin kaupunki and HKL-Bussiliikenne. European
Court Reports, 2002, p. I-07213.
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Monographs of the Boreal Environment Research No. 40
Environmental criteria in public procurement
Focus on tender documents
Katriina Alhola
Department of Real Estate, Planning and Geoinformatics, School of Engineering, Aalto University,
Espoo, Finland
Alhola, K. 2012. Environmental criteria in public procurement – Focus on tender documents. Monographs of the Boreal Environment Research No. 40, 2012.
Abstract
Green public procurement (GPP) is about setting environmental criteria in the public procurement
process alongside the traditional purchasing criteria, e.g. price, quality and technical features of
products, services and works. GPP is considered to be one of the key policies that could be used to
promote the change of unsustainable patterns of consumption and production.
The use of environmental procurement criteria has increased during this decennium, as it has
been promoted by many international and national policies and programmes. Nevertheless, how
does this push for greener public procurement comply with the primary aims of public procurement
legislation – guaranteeing the best value for taxpayers’ money and the operability of the internal
market? The challenge is to combine economic and environmental issues so that purchasing decisions are compliant with law and jurisprudence. In this thesis, this issue is analyzed by examining
the relations of environmental and economic aspects as well as environmental and legal aspects in
public procurement.
This thesis uses several methods and tools to assess the greenness of public procurement; an
analysis of purchasing criteria, life cycle assessment and eco-label criteria. Environmental criteria
found in the tender documents are mirrored to the existing European procurement directives and
case law. The relation between economy and environment is studied within the concept of the most
economically advantageous tender as defined in the EU’s public procurement directives. Its content
and applicability in the assessment of economic and environmental performance of a purchase is
opened for discussion.
The results of this thesis suggest that economical, environmental and legal aspects can be combined in public procurement, though the linking of green criteria is specific to a single contract.
Despite the increased amount of green criteria in tender documents (i.e. calls for tenders and contracts), they mainly focus on those aspects that are undoubtedly covered by the procurement directives – possibly excluding some of the important environmental impacts of the product or service
from a life cycle perspective. However, systematically presented green criteria in calls for tenders
could give a signal to the manufacturers of the demand for environmentally preferable solutions,
and encourage them to invest in developing green products, i.e. eco-design.
Keywords: green public procurement, procurement directives, call for tender, procurement contract,
environmental criteria, the most economically advantageous tender, life cycle, eco-label, eco-design
Environmental criteria in public procurement – Focus on tender documents
9
Ympäristökriteerit julkisissa hankinnoissa
Tutkimuskohteena tarjousasiakirjat
Katriina Alhola
Maankäyttötieteiden laitos, Insinööritieteiden korkeakoulu, Aalto-yliopisto, Espoo
Alhola, K. 2012. Ympäristökriteerit julkisissa hankinnoissa – Tutkimuskohteena tarjousasiakirjat.
Monographs of the Boreal Environment Research No. 40, 2012.
Tiivistelmä
Julkisten hankintojen viherryttämisellä tarkoitetaan ympäristönäkökohtien huomioonottamista tavaroiden, palvelujen ja rakennusurakoiden hankintaprosessissa. Sekä kansainvälisellä että kansallisella tasolla ympäristöystävällisiä julkisia hankintoja pidetään yhtenä kestävän tuotannon ja kulutuksen edistämisen tärkeimmistä keinoista.
Euroopan Unionissa julkisia hankintoja säännellään hankintadirektiiveillä, joilla pyritään turvaamaan julkisten varojen tehokas käyttö, sekä EU:n sisämarkkinoiden toimivuus. Mielenkiintoinen kysymys on, miten ympäristötavoitteisiin pääseminen julkisten hankintojen viherryttämisellä
soveltuu näihin periaatteisiin. Toteutuvatko kokonaistaloudellisuus ja ympäristöystävällisyyden
kriteerit julkisissa hankinnoissa lain asettamien säännösten puitteissa? Tässä väitöskirjassa kysymystä pohditaan hankintojen ympäristönäkökohtien, kokonaistaloudellisuuden sekä olemassa olevan lainsäädännön pohjalta.
Hankinnan ympäristöystävällisyyttä arvioidaan mm. tarjouspyyntöjen ympäristökriteerien
analyysillä, elinkaariarvioinnilla sekä ympäristömerkkien kriteerien avulla. Tarjouspyyntöjen ja
sopimusten sisältämien ympäristökriteerien soveltuvuutta pohditaan hankintadirektiivien sekä
oikeuskäytännön pohjalta, josta löytyy esimerkkejä ympäristönäkökohtien huomioonottamisesta
hankinnoissa. Hankintojen taloudellisuuden suhdetta niiden vihreyteen lähestytään hankintadirektiiveissä määritellyn kokonaistaloudellisuuden käsitteen avulla; miten kokonaistaloudellisuus
ymmärretään hankinnoissa, ja miten se soveltuu taloudellisen ja ympäristöystävällisen hankinnan
määrittämiseen.
Väitöskirjassa todetaan, että taloudellinen ja ympäristöystävällinen hankinta on mahdollista
toteuttaa olemassa olevan lainsäädännön pohjalta. Ympäristökriteerien asettaminen ja niiden liittyminen hankinnan kohteeseen on kuitenkin hyvin tuoteryhmäkohtaista. Vaikka ympäristökriteereitä
käytetään tarjouskilpailuissa yhä enemmän, suuri osa julkisten hankintojen viherryttämispotentiaalista on silti edelleen hyödyntämättä. Käytetyt ympäristökriteerit kohdistuvat usein sellaisiin
ympäristönäkökohtiin, jotka voidaan hankintadirektiivien perusteella selkeästi tulkita hyväksyttäviksi. Näin jotkin tuotteen elinkaaren kannalta merkitykselliset ympäristönäkökohdat saattavat jäädä
huomioimatta. Järjestelmällisesti esitetyt ympäristökriteerit viestivät silti ympäristöystävällisten
tuotteiden kysynnästä, ja voivat pitkällä aikavälillä edistää ympäristömyötäistä tuotesuunnittelua.
Avainsanat: Ympäristöystävälliset julkiset hankinnat, hankintadirektiivit, tarjouspyyntö,
hankintasopimus, ympäristökriteerit, kokonaistaloudellisuus, elinkaari, ympäristömerkki,
ympäristömyötäinen tuotesuunnittelu
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Monographs of the Boreal Environment Research No. 40
1 Introduction
1.1 Background of the study
The public sector, as a major purchaser of goods, services and works, has gained much attention
in recent years in terms of achieving sustainable development through its purchasing operations.
Sustainable public procurement means that purchasing agencies take into account the economic,
social and environmental pillars of sustainable development in their purchasing process, and public
procurement is called ‘green’ when purchasers pay attention to environmental aspects (European
Commission, 2007). Green public procurement1 (GPP), in support of the objectives of sustainable
procurement, is thus an important contributor to the initiatives to promote the general goal of sustainable development (Nash, 2009; Walker and Phillips, 2009; United Nations, 2005; McCrudden,
2004; Mastny, 2003; Carter et al., 2000). ‘Green’, on the other hand, can be understood, e.g. as
reducing environmental impact across the entire life cycle, setting goals that can be objectively
measured and making progress in achieving them while also complying with legislation (Miller
and Szekely, 1995).
Green public procurement enables public authorities to respond to current environmental challenges. At its best, green purchasing criteria contribute to those environmental efforts that are
considered most important in terms of sustainability including, for example, the reduction of
energy consumption and green house gases, prevention of waste creation and chemicalization, use
of renewable resources and, on the other hand, promotion of eco-innovations. The large volume
of public purchases, covering approximately 18% of the EU gross domestic product (European
Commission, 2011a) implies that great potential exists for environmental improvements through
public procurement and possibilities to create markets for ecological products and services (European Commission, 2010a; European Commission, 2007; Larsen and Svane, 2005; Erdmenger,
2003). So far, this potential has been only marginally exploited (European Commission, 2010a,
p. 16; European Commission, 2008a, p. 6). Greening the public procurement would have both
short-term and long-term effects, rapidly decreasing, e.g. energy use in the public sector, and at
the same time affecting product design and the environmental characteristics of goods and services
over the long run (Swanson et al., 2005). For example, the public purchasing of green electricity
could have contributed towards one-quarter of the European Kyoto commitments if it had come
from newly constructed renewable energy facilities (ICLEI, 2003).
GPP, focusing on the green purchasing criteria, lies between the objectives of environmental
protection and the maintenance of the integrity of the internal market (Kunzlik, 2003). Public
procurement practices have been consolidated by the EU legislation in order to maintain and
develop the internal market in the EU, and to ensure the efficient use of public money. It is based
on public procurement directives, i.e. Directive 2004/18/EC on the coordination of procedures
for the award of public works contracts, public supply contracts and public service contracts, and
Directive 2004/17/EC, which coordinates the procurement procedures of entities operating in the
water, energy, transport and postal services sectors. Thus, in effect, all public procurement2 comes
under the auspices of EU single market regulations. Aspects concerning free movement of goods,
In addition to green public procurement – or green public purchasing – the terms eco-procurement (Pochampally et
al., 2008; ICLEI, 2005; Erdmenger, 2003) and environmentally preferable purchasing (EPP) (Coggburn and Rahm, 2005;
Micklus, 2002) have been used for the same purpose. Especially in the USA, green public purchasing is referred to as
environmentally preferable purchasing (EPP), but Li and Geiser (2005) introduced the term environmentally responsible public
procurement (ERPP) alongside EPP. Despite the variety of forms, these terms refer to the products and services whose
environmental impacts are considered less damaging to the environment when compared to competing products and
services in the market.
2
Few exceptions, e.g. defence equipment (Martin et al., 1997, p. 279).
1
Environmental criteria in public procurement – Focus on tender documents
11
promotion of competition, and non-discrimination of bidders have taken a leading role, which has
caused environmental considerations to comply with these concerns (Ekroos, 2008; Arrowsmith,
2009). The debate is focused over the justification of taking into account certain environmental considerations in public procurement decision–making, in the light of the EU legislation (see examples
in Bouwer et al., 2006, p. 34). Although the historical base for GPP is already provided in the EC
Treaties, focusing in particular on the notion of sustainable development3 and on the requirement
to integrate environmental protection into EU policies4, the green focus in public procurement
has so far been on the voluntariness to consider environmental aspects in the purchasing process.
Currently, however, a shift can be seen from clear freedom of choice to a slight push for member
states to use green procurement power to promote certain policies such as energy efficiency and
energy supplied from renewable sources (e.g. Directive 2009/33/EC on the promotion of clean
and energy-efficient road transport vehicles; Directive 2006/32/EC on energy end-use and energy
services). In practice, especially after the renewal of public procurement legislation in 2004, environmental criteria in public purchases have risen rapidly (Bouwer et al., 2005; Kippo-Edlund et
al., 2005; PricewaterhouseCoopers, 2009a).
1.2 Framework of the study
Public procurement has gained much interest among academics during this decennium as it has
emerged as a distinct area for legal study (Murray, 2009; Thai et al., 2004). Given the recent nature of this development, many aspects of public procurement law and policy remain somewhat
unexplored by scholars, one of which is the use of procurement as a tool to promote social and
environmental objectives, i.e. green public procurement (Arrowsmith and Kunzlik, 2009). Several
studies have already measured the ‘greenness’ of public purchases during the years 2003–2008
(Kippo-Edlund et al., 2005; Bouwer et al., 2005; PricewaterhouseCoopers, 2009a; see also Magerholm Fet et al., 2011; Michelsen and de Boer, 2009; Palmujoki, 2007) by examining the use
of environmental criteria in tender documents. Nevertheless, as for any policy instruments, the
progress in GPP needs to be analysed. In this thesis, methods for this are developed and the status
of GPP is measured (Articles I and II).
Intense political support for GPP has been provided by many international and national policies and schemes (e.g. European Commission 2008b; European Commission 2001a; Finnish
Government, 2009). The more in-depth development and setting of environmental criteria and
their interrelation and potential use for GPP are core elements of the Action Plan on Sustainable
Consumption and Production and Sustainable Industrial Policy (European Commission, 2008a).
Some recent proposals for the revision of a number of EU directives aim at developing criteria that
would be more useful for green public procurement. For example, it is suggested that minimum
requirements and advanced performance benchmarks should be set within the Directive on ‘Ecodesign for energy-using products’, i.e. the EuP Directive5 (European Commission, 2008b, p. 3; see
also Leire and Thidell, 2009 and Kautto, 2008). It is the first directive requiring the incorporation
of life-cycle-based environmental considerations into the product development process (Kautto,
2007) while ensuring the free movement of energy-using products, increasing energy efficiency
and environmental protection, and the security of the energy supply (European Commission,
2003a). The design phase is actually the most effective way to decrease environmental impacts
and increase product value and utility (Clark, 2007). This is studied in Article IV by examining
how the environmental purchasing criteria actually correspond to eco-design objectives of certain
5
3
4
Treaty on European Union (1992) Article 2.
Treaty establishing the European Community (1997) Article 6.
Directive 2005/32/EC.
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Monographs of the Boreal Environment Research No. 40
product group. The Commission will introduce eco-design requirements for fourteen priority
product groups during 2007-2012, and these include a number of products commonly purchased
by public authorities, i.e. office and street lighting (Kunzlik, 2009).
The exemplary role of public authorities in procurement policy is also explicitly recognized in
Directive 2006/32/EC on Energy End-use and Energy Services, that imposes obligations on member states to meet certain energy efficiency targets in the public sector by taking measures listed
in the directive, most of which relate to procurement decisions (Directive 2006/32/EC; Kunzlik,
2009). Similarly, directive 2009/33/EC on the Promotion of clean and energy-efficient vehicles,
requires that lifetime energy and environmental impacts of vehicles are taken into account in purchases of road transport vehicles (Directive 2009/33/EC). This directive is applied in Article III.
Nevertheless, how does this push for greener public procurement comply with the primary
aims of public procurement legislation: to guarantee the best value for taxpayers’ money and the
functioning of the internal market? In other words, is it possible to combine economic and environmental issues in a way that the purchase is compliant with the EU legislation? In this thesis,
this question is examined by analyzing the relation between environmental and economic aspects,
as well as the relation between environmental and legal aspects in public procurement (Figure 1).
The relations between environment, economy and law can be clarified by first examining the
meaning of ‘environmental’ or ‘green’ purchase. All the criteria that seem to be ‘green’ in the mind
of the purchaser may not be such when studied in more detail. Conversely, for certain product
groups, green purchasing criteria may be lacking some important environmental aspect. In an
ideal case, environmental criteria should be defined by a comprehensive and detailed Life Cycle
GREEN PUBLIC PROCUREMENT
Environmental
criteria in tender
documents:
measuring status
and progress in
GPP
ECONOMY
The most
economically
advantageous
tender
GPP criteria as part
of the most
economically
advantageous tender
Figure 1. Framework of the study.
ENVIRONMENT
LAW
Environmental
impacts (LCA)
Green criteria
(Eco-labels)
EU principles
PP directives
Case law
GPP criteria that could
promote eco-design in
companies
GPP criteria that are
compliant with the EU’s
legal framework and
assured by contract
clauses
Environmental criteria in public procurement – Focus on tender documents
13
Analysis (LCA) (European Commission, 2003b) or by using eco-label criteria6 (European Commission, 2004a). Several LCAs for the purpose of public procurement have been carried out to
assess the environmental impacts of purchases, e.g. road construction (Birgisdóttir et al., 2006;
Olsson et al., 2006; Mroueh et al., 2001; Stripple, 2001; Eskola et al., 1999; Pereira et al., 1998),
buildings (Tarantini et al., 2011; Li et al., 2009; Lloyd et al., 2005; Sterner, 2002a), defence material
(Hochschorner and Finnveden, 2006) and plastics (Baitz et al., 2005). However, the experience of
using LCA-based award criteria in a real purchase can still be regarded as surprisingly limited in
the literature. In this thesis, the LCA approach is applied in an actual purchase to illustrate the most
important environmental aspects of a purchase in detail, and to compare the award decision based
on life cycle assessment to the ‘real’ award decision based on the purchaser’s equation (Article III).
The relation between environment and law has been discussed in the literature from the viewpoint of the basic principles and legal framework of public procurement in the EU (Arrowsmith
and Kunzlik, 2009; Ekroos, 2008; Ekroos and Nissinen, 2007; Kunzlik, 2003). Although the public
procurement legislation allows for requirements on materials, emissions, energy consumption,
waste-handling and many other environmental considerations, it may still limit some environmental criteria applied in the call for tender if they are potentially contradictory to the EU principles
or are not obviously linked to the subject matter of the contract. At the centre of the debate are
purchasing criteria concerning externalities arising from production and consumption of products,
services or works supplied, e.g. delivery or production impacts or disposal effects (Kunzlik, 2003;
Arrowsmith and Kunzlik, 2009). This issue is often referred to and analyzed through the two exemplary cases of European Court of Justice (ECJ), concerning production process7 and consumption externalities8, e.g. the level of noise and NOx emissions. In both cases, the Court ratified the
benefit of the greener choice. In this thesis, the environmental impacts of transport and transport
distance of materials form the core of discussion because they are an inherent part of the scientific
method LCA, but – due to the legal framework – it is not obvious that the tenders can be valued
in relation to the environmental burdens of transport without potentially discriminating against
some bidders (Article V).
Despite the renewal of the EU’s procurement directives (2004), important issues remain unresolved – namely, the use of GPP to promote environmental and social objectives that are not
necessarily connected with the procurement’s functional objective. However, award criteria could
be an effective approach in promoting environmental and social aspects in public procurement
process, as they might sometimes be easier to justify than other mechanisms (Arrowsmith, 2009,
p. 190). Environmental award criteria are examined in Article I. Yet another major mechanism
for promoting social and environmental policies is the use of contractual requirements related to
contract performance (Arrowsmith, 2009, p. 159). Indeed, delivered goods and services may be
different than the ones specified in calls for tender and bids, if the contracts agreed between the
public authority and the bidder lack certain contract clauses. This issue is studied in Article VI.
The relation between economy and environment is discussed through the concept of the most
economically advantageous tender, which is – as defined in the EU’s public procurement directives – a basis for combining environmental aspects, price and other award criteria in the public
procurement decision making while providing the best value for taxpayers’ money. It is introduced
as a weighted sum of varying value adding parameters preferred by the purchaser, including environmental criteria.9 The directives do not, however, determine how the purchasers should build the
environmental criteria or how to measure and compare the environmental impacts of products and
services procured. Indeed, there could be different means to assess the ‘greenness’ of competing
8
9
6
7
Eco-label criteria are based on the scientific method of LCA.
Case C-448/01, Wienstrom GmbH (2003).
Case C-513/99, Concordia Bus Finland Oy Ab (2002).
Directive 2004/17/EC, Article 55; Directive 2004/18/EC, Article 53.
14 Alhola
Monographs of the Boreal Environment Research No. 40
tenders. This thesis illustrates how these various conceptualizations of environmental criteria and
measurements of environmental impacts may lead to different assessments in determining the most
economically advantageous tender (Article III).
Although economic aspects of public procurement have been the area of interest in many research papers, the content of the most economically advantageous tender has gained only little
attention (e.g. Bovis, 2006; Mielisch and Erdmenger, 2002; Kalima, 2001) and the research has
focused rather on the monetary aspects and economic effectiveness of public purchasing operations (Piga and Thai, 2007; Soudry, 2003) or formulating suitable award systems (Lundberg and
Bergman, 2011; Mateus et al., 2010; Meijer and Telgen, 2007). This is surprising due to the fact
that the concept of the most economically advantageous tender has been used in the procurement
practice since the renewal of public procurement directives in 2004 as an option to award tenders
based on ‘lowest price’. This thesis clarifies how the most economically advantageous tender is
interpreted among public purchasers (Article I), and discusses whether the metric, i.e. a weighted
summation of economic and environmental aspects, could be an appropriate indicator of economic
and environmental performance of tenders.
Many academic studies in the field of green procurement and economic performance have been
addressed to the private sector organizations (e.g. Björklund, 2010; Leire, 2009) and often the point
of interest has been the benefits gained from greening of the supply chain and the firm’s economic
performance (Seuring and Müller, 2008; Humphreys et al., 2003; Sarkis, 2003; Schaltegger and
Synnestvedt, 2002; Zsidisin and Siferd, 2001). The results indicate that procurement is an important
factor in greening the value chain (Günther and Scheibe, 2005) and in reporting organization’s environmental performance (Baboulet and Lenzen, 2010). In addition, it is shown that environmental
purchasing allows the company’s environmental progress whilst enhancing a firm performance
(Carter, 2005; Carter et al., 2000). Recently, similar results have also been received in the public
sector. A study carried out on the EU level found out that, in contrast to common perception, GPP
can lead to an approximate 1% decrease in costs for the purchasing organization in the public
sector10 when using a Life Cycle Costing (LCC) approach in calculating the financial impact of
GPP (PricewaterhouseCoopers, 2009a).
Generally, the research in private sector procurement is not directly applicable to public procurement because of the large scale, complexity and legal restrictions and regulations in formulating the
public procurement criteria to ensure the solicitation of suppliers in a fair way (New et al., 2002;
Hartley, 1991). This means that public procurement is undertaken with considerable attention to
procedural detail (Bala et al., 2008; Lian and Laing, 2004; New et al., 2002). Although in recent
years, the greening of the public sector has gained more interest in academic studies (Arrowsmith
and Kunzlik, 2009; Preuss, 2009; Walker et al., 2009; Walker and Brammer, 2009; Walker and
Preuss, 2008; Bala et al., 2008; New et al., 2002), there is only a limited experience on the quantitative analysis on the use and progress of environmental purchasing criteria. Although there have
been many national initiatives towards greener public procurement, and many practical guidance
and reports resulting from these initiatives, scientific papers concerning the use and state of environmental purchasing criteria have been scarce, and thus green public procurement has remained
as a relatively new and unexamined area of interest (Tazelaar, 2008).
There are mainly two product groups leading to cost reductions through GPP – construction and transport (PricewaterhouseCoopers, 2009a, p. 7).
10
Environmental criteria in public procurement – Focus on tender documents
15
1.3 Objectives of the study
The purpose of this thesis is to clarify some aspects related to the use of green criteria in public
procurement. It is in accordance with the environmental integration principle11 to support and
promote sustainable development by greener purchasing in public organizations in Finland and
internationally. This thesis focuses on the use of green criteria in tender documents, especially in
the award decision and contract clauses. The quantity and quality of environmental purchasing
criteria is examined, as well as the compliance of certain LCA-based environmental criteria to
public procurement legislation. A method to measure the present status of GPP as well as progress
between years is presented. As motivated by the efforts of the EU on encouraging public sector
to use its purchasing power to promote certain policies, e.g. to meet certain eco-design criteria,
this study is also extended to assess the potential of green procurement criteria to contribute on
environmental product improvements in the long run.
The main research questions of the thesis are:
• To what extent environmental criteria are implemented in the award decision, i.e. in the most
economically advantageous tender? (Article I)
• How much progress has occurred in applying environmental purchasing criteria in calls for
tenders before and after the issuing of the new public procurement directives? (Article II)
• How do various conceptualizations and measurements of environmental impacts contribute
to the assessment of the most economically advantageous tender? (Article III)
• Could LCA-based environmental criteria be applied and justified in public procurement award
decision? (Articles III, IV and V)
• Could green purchasing criteria (in calls for tenders) promote greener products in the long
run? (Article IV)
• To what extent are environmental contract clauses capable of guaranteeing greener purchases?
(Article VI)
1.4 Structure of the study
This thesis consists of two parts, i.e. summary and articles. In the first part, the political and legal
background of green public procurement is presented as well as the material, methods, results,
discussion and conclusions of the study. The second part is based on six articles. Articles I and II
focus on the existence of green criteria in calls for tenders before and after the renewal of the EU
procurement directives, and the progress in GPP occurred during this period (between the years
2003 and 2005). They also present the method to measure the current status and progress in GPP.
Article I examines the concept of the most economically advantageous tender and article III illustrates the contribution of different measurements of environmental impacts to the ranking of
competing tenders based on the most economically advantageous tender (case: purchase of services, i.e. goods transportation). Article IV examines the nature of green criteria that could possibly
promote environmental improvements and eco-design solutions in the long run (case: purchase of
products, i.e. furniture). Articles V and VI focus more on the jurisprudence on the existing green
criteria; article V analyses the suitability of certain environmental criteria, i.e. transport distance
as an award criterion (case: purchase of works, i.e. road construction) and article VI examines the
relevance of environmental contract clauses in the final contracts in terms of their comprehensiveness and enforceability to guarantee the implementation of ‘green’ purchase.
Referred in the Treaty on the Functioning of the European Union (Consolidated version, 2010) Article 11 (ex Treaty
establishing the European Community (1997) Article 6).
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2 Policy and legal background of green public procurement
2.1 Policy background
Environmental protection has played a role in European Community policy since the EC Treaty
(1957)12 but currently, over 50 years later, it is much more clearly positioned in Community agreements and policies. Particularly since the Rio Conference (1992), the focus has been on the sustainability of actions whilst maintaining the EU’s single market principles of free movement of goods,
equal treatment and transparency.13 In the Maastricht Treaty14 (1992) sustainable development was
taken in article 2 as one of the fundamental aims of the Community, i.e. “to promote throughout
the Community a harmonious and balanced development of economic activities, sustainable and
non-inflationary growth respecting the environment”.15 The Amsterdam Treaty16 (1997), which
entered into force in May 1999, further promoted the environmental aims of the Community by
stating “…a harmonious, balanced and sustainable development of economic activities…, sustainable and non-inflationary growth…, a high level of protection and improvement of the quality
of the environment…” in article 2 of the Treaty. However, the essential link between sustainable
development, including environmental and other aspects and an internal competitive market was,
for the first time, provided in the Amsterdam Treaty (article 6). This integration principle specifies
that environmental protection requirements must be integrated into the definition and implementation of the Community policies and activities referred to in article 3, in particular with a view
to promoting sustainable development.17 The principle of environmental integration recognizes,
however, that environmental policy alone cannot achieve the environmental improvements needed
as part of sustainable development (European Commission, 2004b). Thus, the changes required to
reduce environmental pressures can be achieved through a process of environmental integration
in different sectors, i.e. “inclusion of environmental concerns in processes and decisions of public
policy making that are predominantly charged with issues other than the environment” (Hertin and
Berkhout, 2003, p. 40). No substantial changes concerning the aim of sustainability was made to
the Lisbon Treaty (2007), which states that the Union “…shall work for the sustainable development of Europe based on balanced economic growth and price stability, a highly competitive social
market economy, aiming at full employment and social progress, and a high level of protection
and improvement of the quality of the environment…”.18
In the EU, the Fifth Environmental Action Programme (1992 – 1999) emphasized the shared
responsibility of consumers and the public and private sectors for environmental protection, so that
environmental factors should be integrated into the purchasing decisions of consumers and public
bodies (Kunzlik, 2003; European Commission, 1999). Also, the Organization for Economic Cooperation and Development (OECD) provided a recommendation on GPP in 2002 (OECD, 2002).
In the USA, the Environmentally Preferable Purchasing programme has guided public purchasers
since 1993 (US Environmental Protection Agency, 2006). Another example (among many) was
offered by Japan (Erdmenger et al., 2001) where the government adopted the first “Action Plan
for the Greening of Government Operations” in 1995, indicating objectives and methods required
to achieve a greening of public procurement by the year 2000.
14
15
16
17
18
12
13
Treaty establishing the European Economic Community (1957) Article 36.
Treaty establishing the European Economic Community (1957) Article 3.
i.e. Treaty on European Union (1992).
Treaty on European Union (1992) Article 2.
i.e. Treaty establishing the European Community (1997).
Treaty establishing the European Community (1997) Article 6.
Treaty of Lisbon (2007) Article 2.
Environmental criteria in public procurement – Focus on tender documents
17
Further, the Sixth Environmental Action Programme, adopted in 2002, identified actions relevant
to public procurement (European Commission, 2007). These were communicated in the Green
Paper on Integrated Product Policy (IPP), which raised interest towards product-oriented environmental focus (European Commission, 2001a; see also European Commission, 2001b). The aim
of IPP is to reduce the environmental impacts of products throughout their life-cycle, also taking
into consideration the market and competitiveness concerns (European Commission 2003b, p. 6).
Increased demand for greener products by GPP, in competition with the more traditional products,
is well-suited to this market-oriented approach of IPP (Rubik and Scholl, 2002; Li and Geiser,
2005). IPP also emphasizes that public authorities must act as ‘leaders’ in the process of green
management and ‘in changes of consumption towards greener products’ (see: Kunzlik, 2003). In
addition, the member states were encouraged to develop publicly available action plans by the
end of 2006, i.e. national action plans for greening their public procurement.19 For example, the
objective in Finland was to take the environment into account in 70% of central governmental
purchases by the year 2010, and in 100% by the year 2015. The same figures for municipalities and
local governmental purchasers were, respectively, 25% and 50% (Ministry of Environment, 2008;
Finnish Government, 2009). Generally speaking, the Commission proposed that, 50% of all tendering procedures should be green by the year 2010, where green means compliant with the common
‘core’ GPP criteria endorsed by the Commission (see: European Commission, 2008b, p. 8).20
In summer 2008, the EU Commission published an Action Plan on Sustainable Consumption
and Production, focusing on the key policy instruments developed in IPP, in which GPP is seen
as one of the key tools (European Commission, 2008a). GPP has been the driving force in the
integration of other IPP instruments, namely eco-labelling and extended producer responsibility (Li
and Geiser, 2005). Moreover, the Nordic Council of Ministers (NCM) has stressed the importance
of GPP in the strategy for sustainable development, and has initiated coordination efforts so that
public buyers in all Nordic countries can benefit from each other’s experience (Nordic Council
of Ministers, 2004a). In addition, the United Nations Environment Programme (UNEP) actively
promotes sustainable procurement by facilitating global consensus on the integration of sustainable development considerations in procurement at all levels and by being a source of practical
tools, particularly with regard to contributing to the collection of purchasing criteria respective to
sustainability (Clark, 2007).
GPP also plays a key role in many other policy initiatives in the EU level and nationally, e.g.
climate change policies and the Environmental Technologies Action plans (European Council,
2006; Mogens, 2006). At the EU level, one of the latest interests has emerged from the use of public
demand as a promoter for innovation (Clement et al., 2011; European Commission, 2010a; Hommen and Rolfstam, 2009; Aschhoff and Sofka, 2009; Edler and Georghiou, 2007). Green public
procurement is one instrument to stimulate the greening of markets as GPP accelerates the diffusion
of eco-efficient products and enhances incentives for more sustainable innovations, in particular
through technology procurement21 (Scholl et al., 2010; Rubik et al., 2009). In September 2006,
the EU Commission issued a paper on innovation strategy, highlighting the importance of public
At the beginning of 2008 only 14 member states had adopted national action plans (European Commission, 2008b)
but in September 2010, already 21 member states had adopted a national action plan or equivalent document (European
Commission, 2011b).
20
In 2011, the Commission commissioned a study with the aim of measuring if this target has been met. Although
the uptake of Green Procurement in the EU-27 is significant, it appears that the 50% target has not been met. 26% of
the last contracts signed in the 2009-2010 period by public authorities in the EU included all surveyed EU core GPP
criteria. However, 55% of contracts included at least one EU core GPP criterion, showing that some form of green
procurement is being done at a large scale. (Renda et al., 2012, p. vii)
21
Technology procurement is a specific application of green public procurement. It is oriented towards the stimulation
of sustainable innovations to develop new technologies pushing suppliers’ innovation processes, in order to develop
’greener’ products. It gives the possibility of developing and demonstrating new technological solutions that are not
yet available. (Rubik et al., 2009, p. 93, 110)
19
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procurement in innovations and in the creation of the leading market, especially in sectors where the
public authority is a significant purchaser (European Commission, 2006). In November 2006, the
Nordic Council of Ministers also organized, jointly with the Norwegian Ministry of Environment
and GRIP, an ‘International Roundtable on Developing Public Procurement policies for Sustainable
Development and Innovation’ (Report from the International Roundtable, 2009). Furthermore, in
2010 the EU Commission clearly communicated the call for a fair and transparent internal market
that rewards innovation, and the wider use of green public procurement in developing the market
for environmental goods and services (European Commission, 2010b, p. 20) revealing at the same
time, that major part of public procurement in Europe was still not aimed at innovation, despite
the opportunities under the EU procurement directives (European Commission, 2010a, p. 16).
GPP is of crucial importance also in the Europe 2020 strategy22 as one of the market-based
instruments that should be used to accelerate the shift towards a resource efficient and low-carbon
economy and improve the framework conditions for business to innovate (e.g. European Commission, 2011c; European Commission, 2010a; European Commission, 2010c). Thus, public
procurement rules should insist on efficiency conditions to increase energy savings and spread
innovative solutions, notably in buildings and transport (European Commission, 2010c). The
Europe 2020 strategy also stresses that public procurement policy must ensure the most efficient
use of public funds and that procurement markets must be kept open EU wide (European Commission, 2011d, p. 3).
At the same time with the international political support, governmental and non-governmental
initiatives for promoting green procurement have been established (European Commission, 2011e;
GRIP, 2003). In recent years, Internet-based tools23 have become the most important instrument in
many countries to deliver environmental information to purchasers, side-by-side with the work to
develop environmental criteria for various product groups (Johnstone, 2001; Bouwer et al., 2005).
Currently, a set of common GPP criteria has been established in the EU’s GPP Toolkit (European
Commission, 2011e) for 18 sectors, which have been identified as most suitable for implementing
GPP.24 The criteria are based on existing European and national eco-label criteria where appropriate, as well as on information collected from stakeholders in industry and civil society (European
Commission, 2008b, p. 5). This set of environmental purchasing criteria is complemented by
environmental criteria for other 8 sectors issued by the Nordic Council of Ministers (Nissinen et
al., 2009). In addition, the EU Commission has published a guidebook in several languages (European Commission, 2004a), and national guidebooks have also been published: e.g. in Finland
a guidebook was published in 2004 that took the new public procurement directives into account
(Nissinen, 2004). In 2005, two brochures for promoting environmentally friendly procurement
were published, one addressing local politicians and leaders, and the other one procurement officers. They were distributed extensively to public organizations in Finland, Norway and Sweden, e.g.
in Finland to over 1 200 leaders and purchasers in the public sector (Nordic Council of Ministers,
2004b). In 2011, a practical guide ‘Driving energy efficient innovation through procurement’ was
targeted to public authorities in order to assist them in achieving the most innovative, energy ef See: Communication from the Commission – Europe 2020. A strategy for smart, sustainable and inclusive growth.
Brussels 3.3.2010 COM(2010) 2020 final.
23
Examples of the databases: EU Training Toolkit on GPP, http://ec.europa.eu/environment/gpp/training_toolkit_en.htm [14.9.2009]; Hymonet database (in Finnish), http://www.hymonet.com/hymonet/ [14.9.2009]; EKU - The
Swedish Tool for Ecologically Sustainable Procurement, http://ec.europa.eu/environment/etap/inaction/pdfs/
june06_gpp_sweden_eku.pdf [14.9.2009].
24
The first set of criteria, developed in 2008, includes: 1) Construction 2) Food and catering services 3) Transport and
transport services 4) Energy 5) Office machinery and computers 6) Clothing, uniforms and other textiles 7) Paper and
printing services 8) Furniture 9) Cleaning products and services 10) Equipment used in the health sector. A second set
of GPP criteria was developed in 2010 for 8 new product groups including: 1) Windows, glazed doors and skylights
2) Thermal insulation 3) Hard floor-coverings 4) Wall panels 5) Combined heat and power 6) Road construction and
traffic signs 7) Street lighting and traffic signals 8) Mobile phones.
22
Environmental criteria in public procurement – Focus on tender documents
19
ficient solutions within their procurement actions (Clement et al., 2011). It is evident that internet
tools, guidebooks and other GPP information tools have helped the setting of environmental criteria
in tender documents during the last few years (see e.g. Tazelaar, 2008; Clark, 2007).
2.2 Legal background
Two essential elements – the aim of sustainable development and the integration principle – can be
noted from the early 1990s onwards in the Community environmental policy. Up to the present day
it has formed the framework of integrating economic and environmental interests in the decisionmaking related to EU activities.25 In addition, public procurement is subject to the EU common
market principles:26 in particular, the principles of free movement of goods27, freedom of establishment28 and freedom to provide services29 including the principles derived therefrom – such as the
principle of equal treatment30 as well as that of non-discrimination31 and the mutual recognition32
of sustainable development in international and national law, the principle of proportionality33 and
that of transparency34. These principles are referred to in the public procurement directives and
applied in the case law of public procurement.
2.2.1 Public procurement directives
The current legislation on public procurement is based on the European Commission procurement
directives renewed and adopted by the European Parliament and Council on 31st March, 2004
including Directive 2004/17/EC coordinating the procurement procedures of entities operating in
the water, energy, transport and postal services sectors and Directive 2004/18/EC on the coordination of procedures for the award of public works contracts, public supply contracts and public
service contracts.35
The early directives of the 70’s concerning public procurement36 focused on prohibiting hidden
protectionism in the form of national public purchasing regimes (McLachlan, 1985) but otherwise
were limited in scope and effectiveness (Cox, 1993), applying only to the purchase of works and
supplies and excluding services, energy, telecommunications, transport and water sectors (Martin
et al., 1999). These early directives were followed by the public procurement directives issued in
1993,37 which also included the important sectors that were earlier excluded, and all public procurement (except defence) was now subject to the EU legislation. Nevertheless, it was not until
Treaty on the Functioning of the European Union (Consolidated version, 2010) Article 11; Treaty on European Union
(1992) Article 2; Treaty establishing the European Community (1997) Article 6.
26
Treaty establishing the European Economic Community (1957) Article 3; Directive 2004/18/EC, Recital 2.
27
Freedom of movement of goods, i.e. barriers to the free movement of goods within the EU may not be caused.
28
Freedom of establishment, i.e. an economic operator (whether a person or a company) is enabled to carry on an economic activity in a stable and continuous way in one or more member states.
29
Freedom to provide services, i.e. an economic operator is enabled, without having to be established, to provide services
in one member state on a temporary basis in another member state.
30
Principle of equal treatment, i.e. to ensure equality of treatment for individuals irrespective of nationality, sex, racial
or ethnic origin, religion or belief, disability, age or sexual orientation.
31
Principle of non-discrimination, i.e. none of the suppliers shall be discriminated against due to location or nationality.
32
Principle of mutual recognition, i.e. to guarantee the efforts in question without the need to harmonize member states’
national legislation.
33
Principle of proportionality, i.e. any action by the community shall not go beyond what is necessary to achieve the
objectives of the Treaty.
34
Principle of transparency, i.e. information regarding forthcoming contracts and the rules to be applied should be
readily available to all interested bidders.
35
Both came into force 30th April, 2004.
36
Directive 70/32/EEC, provision of goods to the state; Directive 71/304/EEC, public works contracts; Directive
77/62/EEC, coordinating procedures for the award of public supply contracts.
37
Directives 93/36/EEC; 93/37/EEC; 93/38/EEC (See also: Directive 92/50/EEC).
25
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the renewal of the public procurement directives in 2004 that the directives explicitly provided
opportunities to take environmental aspects into account in the various phases of the public procurement process. These current procurement directives (2004/18/EC and 2004/17/EC) refer to article
6 of the Treaty of establishment (1997)38, which states that environmental protection requirements
are to be integrated into the definition and implementation of Community policies and activities,
with a view to promoting sustainable development in particular. These directives clarify how
contracting authorities may contribute to the environmental aspects of a purchase, whilst obtaining
the best value for money for their purchase and prohibiting discriminatory purchasing policies.
Basic rules on setting the award criteria are based on two possibilities: (1) lowest price only
or (2) the most economically advantageous tender from the point of view of the contracting authority.39 If the most economically advantageous award criterion is chosen, the purchaser may
apply numerous award criteria combined with price, including, for example, quality, technical
merit, aesthetic and functional characteristics, environmental characteristics40, running costs, costeffectiveness, after-sales service, technical assistance, delivery date and period of completion.41
The list given in the directives is not exhaustive, and other criteria can also be used. In practice,
the directives leave considerable space for the purchasers’ interpretations in defining and calculating the most economically advantageous tender. In the literature, this concept is also defined as
‘optimal usability of goods for a certain purpose’ or the ‘optimal relation between the price and
quality’ (Kalima, 2001). Mielisch and Erdmenger (2002) present a definition according to which
the most economically advantageous bid is determined from the ratio: quality / price relationship,
in which such specifications could be the technical value, date of delivery, after-sales service and
technical assistance or environmentally relevant qualities, among others. HM Treasury (2006)
uses the concept ‘value for money’ in the same context defining it as ‘the optimum combination
of whole-of-life costs and quality (or fitness for purpose) of the good or service to meet the user’s
requirement’ and underlines that it is not the choice of goods and services based on the lowest
cost bid (HM Treasury, 2006, p. 7).
The contracting authorities must set out the environmental criteria in the calls for tenders. If
a public purchaser uses ‘the most economically advantageous’ as a basis for the award decision,
the contracting authority shall specify in the contract notice or in the call for tender, the relative
weighting which it gives to each of the criteria chosen to determine the most economically advantageous tender. Weighting can be expressed by providing for a range with an appropriate maximum
spread. Where weighting is not possible for demonstrable reasons, the contracting authority shall
indicate the criteria in descending order of importance.42
Using environmental criteria elsewhere in the bidding process than in the award phase makes
it possible to use the bid price as the only award criterion but still prefer the ‘green’ product. They
can, for example, be specified in technical specifications that are detailed prescriptions of the
characteristics that the product or service must perform or otherwise the tender will be rejected
(European Commission, 2004a). These may include, e.g. material selection, chemical content and
functional characteristics of products (Bouwer et al., 2005). Technical specifications shall afford
equal access for bidders and should not create unjustified obstacles to open competition. For example, requiring such an environmental certificate that is barely used and is purely national may
be discriminatory at least towards bidders from other EU states. Thus, the contracting authorities
Article 2 in Treaty of Lisbon (2007).
Directive 2004/17/EC, Article 55; Directive 2004/18/EC, Article 53; The Public Procurement Act of Finland,
348/2007, Section 62.
40
The Finnish version of the directive describes the environmental characteristics in direct translation as ’environmental friendliness’.
41
Directive 2004/18/EC, Article 53.
42
Directive 2004/18/EC, Article 53(2).
38
39
Environmental criteria in public procurement – Focus on tender documents
21
may, e.g. indicate that the products and services bearing the eco-label are presumed to comply with
the technical specifications laid down in the contract documents, but they must also accept any
other appropriate means of proof as well. (Directive 2004/18/EC43; European Commission, 2004a;
Guidelines on Greening Public Procurement by Using the European Eco-label Criteria, 2001).
According to the procurement directives, the opportunity to require environmental characteristics
in technical specifications or award criteria exists only when these requirements are linked to the
subject matter of the public contract in question.44 In particular, it is the meaning of the subject
matter of the contract that may prove to be of most analytical importance for assessing the legality
of procurement (McCrudden, 2009, p. 308).
Environmental performance demands, i.e. aspects that are included in, e.g. the environmental management system or the quality system or similar, can be presented as qualifications for
contractors, i.e. qualitative selection criteria. Evidence of the economic operator’s technical
abilities may be furnished by the indication of the environmental management measures that the
economic operator will be able to apply when performing the contract.45 Directive 2004/18/EC46
accepts EMAS47 and environmental management standards based on the relevant European or
international standards,48 but other evidence of equivalent environmental management measures
should be accepted as well.
Environmental criteria can also be indicated already in the definition of the contract, e.g.
‘energy-saving bulbs’. This can even be seen as “the desire to develop new ‘green’ products”
(Arrowsmith, 2009, p. 159). They can also be present in the contract clauses,49 which may, in
particular, concern relevant additional environmental and social considerations (European Commission, 2004a). Environmental contract clauses can involve the level and execution of environmental protection in the performance phase of the goods or services. The contracting authority
can, e.g. specify the way the goods are to be supplied and even the method of transport, or may
require that the supplier takes back and recycles or reuses any packaging that comes with the
product (European Commission, 2004a). Contract clauses can also be general in form concerning,
e.g. the environmental management system of the supplier (Lusser and Willsher, 2009). Contract
requirements might also require compliance with applicable legal norms laid down by another
member state or a third country in cases when the contract is performed outside the awarding state
(Arrowsmith, 2009, p. 161). Contracting clauses should not, however, play a role in determining
which bidder gets the contract – so any of the bidders should, in principle, be able to follow them.
Public bodies are constituted with the domestic legal and constitutional order of member states.
Their purchaser autonomy is constrained by domestic law in order to ensure, for example, that
they operate within the scope of their lawfully constituted functions and comply with budgetary
and good governance requirements (Arrowsmith and Kunzlik, 2009). National legislations vary in
detail, though procurement directives do not leave much space for national peculiarities or interpretations (Ekroos, 2008). One of the examples of a national modification or amendment is section 2 of
the ‘Public Procurement Act’ of Finland, which came into force June 1, 2007 (Public Procurement
Act of Finland, 2007). It requires authorities to organize their public procurement so that purchases
can be carried out as economically and systematically as possible and in the appropriate completeness, taking the environmental aspects into account. This section, entitled “principles that should
be taken into account in public procurement”, is not binding but “principled provision” – meant
Article 23(6).
Directive 2004/18/EC, Article 53.
45
Directive 2004/18/EC, Article 48(2) (f).
46
Article 50.
47
Regulation (EC) No 761/2001 of the European Parliament and of the Council of 19 March 2001 allowing voluntary
participation by organizations in a Community eco-management and audit scheme (EMAS).
48
This refers e.g. to the ISO 14001 environmental standard series.
49
Directive 2004/18/EC, Article 26.
43
44
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as a guide for the authorities. Indeed, it seems to be the only ‘progressive’ provision in the Public
Procurement Act of Finland. The Act in all other respects follows the directive. (Ekroos, 2008)50
In Sweden, the new public procurement legislation came into being on January 1st, 2008 (Public
Procurement Act of Sweden, 2007). The previous act stated as a fundamental principle on public
procurement in Sweden that all public procurement shall be made in the spirit of good business
practice (“affärsmässighet”). This principle was given the same content in Swedish jurisprudence as the fundamental EU principles regarding public procurement. This term has now been
abandoned in the new Act and has been replaced with an enumeration of all the fundamental EU
principles. (Public Procurement Act of Sweden, 200751; Hane and Bergqvist, 2008). Interestingly,
this principle of ‘affärsmässighet’ used to be repeatedly referred to in the complaints and legal
reasoning of public procurement decisions in Sweden (Carlsson and Åström, 2008). However, the
government has stated that no material change is intended by this change (Hane and Bergqvist,
2008; Regeringens Proposition, 2006/07:128, p. 156-157).
2.2.2 Case law
The preparation of the EU’s procurement directives between 2001 and 2004 stimulated active
debate on the possibility of adopting environmental characteristics in public purchasing. Nevertheless, it was the case law that actually paved the way for GPP. Although the European Court
of Justice (ECJ) is not directly charged for setting the procurement regulations, their decisions in
GPP have become an important source of procurement practices and policies (e.g. Ekroos, 2008;
Kunzlik, 2003). From an environmental perspective, the milestone ECJ cases have been the Helsinki Bus case52 and the Wienstrom Renewable energy case53. In the Helsinki Bus case (2002),
the Court, for the first time, confirmed the possibility of taking environmental award criteria into
consideration when assessing the most economically advantageous tender. Referring to article 6 of
the Treaty establishing the European Community (1997), the Court emphasized that environmental
requirements, in the manner of other requirements, have to comply with the general principles
of the EU. An important statement was that environmental requirements should be linked to the
subject matter of the contract and should not give the contracting authority unrestricted freedom
of choice. In addition, this case showed that in practice, the definition of the most economically
advantageous tender does not limit the non-price award criteria to direct economic benefit to the
procuring entity, but the economic advantage could include advantages affecting society as a whole.
It is not necessary for each individual award criterion to give an economic advantage to the contracting authority, but taken together (i.e. economic, quality, environmental, etc.) the award criteria
must allow for the determination of the best value for money. (European Commission, 2004a)
The Court’s decision has been considered important from the environmental point of view
because it diminishes, for example, the demand that environmental aspects should be economic
by nature (e.g., Kunzlik, 2003). Also in the Wienstrom case54 (2003), concerning the procurement
of renewable energy, the Court found that it was acceptable to make use of environmental award
In the legislative process in the parliament, the environment committee proposed in its statement to the economic
committee that the draft would be modified (YmVL 29/2006 p. 4) as follows: section 2.1 should be modified to more
strongly direct that environmental aspects should be taken into account. They suggested deleting, at the end of sub-item
2, “taking into account environmental aspects” whilst adding a new sentence: “In public procurements, environmental
aspects must always be taken into account when possible”. The committee argued that, modified as proposed, the
section would direct the inclusion of environmental aspects into procurement more effectively. (Ekroos, 2008, p. 437)
51
Public Procurement Act of Sweden, Chapter 1, Articles 9-12 (General provisions).
52
Case C-513/99, Concordia Bus Finland Oy Ab (2002).
53
Case C-448/01, Wienstorm GmbH (2003).
54
In this case, the bidders had to prove that they would supply at least a minimum amount of electricity per year
from renewable energy sources equivalent to the estimated annual consumption of the federal services.
50
Environmental criteria in public procurement – Focus on tender documents
23
criteria, even if they did not provide an immediate economic benefit to the contracting authority.
The Court also decided that it was clearly admissible to establish an award criterion that was related to the production method of the purchased product, if this was relevant for the product. This
also included the possibility to set contract standards relating to social and environmental matters
that were higher than those in non-mandatory European standards or in directives. (Arrowsmith
and Kunzlik, 2009)
Despite the Wienstorm case, the production process has still remained as a problematic area
in public procurement due to its uncertainty in terms of ‘linked to the subject matter of the contract’ (Ekroos, 2008). Authorities may not include requirements which relate to the production
processes and methods by which a product is made, unless they affect a characteristic of the endproduct in use (Kunzlik, 2009). In most cases, environmental requirements are clearly linked to
the product itself, its performance or disposal, but in some cases this ‘linking’ may need some
kind of argumentation from the environmental point of view. In some cases, the distinctiveness
of products according to their environmental characteristics will not be possible without criteria
that go into the production process as well. (Ekroos, 2008, p. 435, 438). Examples are renewable
energy, organic food and sustainable and legally logged timber. Also paper products may contain
many invisible and potentially harmful environmental substances. (European Commission, 2009,
p. 23-24). Moreover, the environmental impact of production cannot be neglected in the case of
green buildings (Tarantini et al., 2011). It is suggested, however, that production process-related
requirements are possible55 in technical specifications that are obligatory requirements, as long
as they realize the general principles – e.g. equal treatment, transparency and proportionality
(Ekroos, 2008; Ekroos and Nissinen, 2007). The possible violation of these principles depends
on the facts of each case.
These two ECJ cases are good examples of enabling the consideration of environmental aspects
in public procurement, as long as the criteria are adequately specified and objectively quantifiable (European Commission, 2004a, p. 35). Consequently, the use of general and immeasurable
environmental criteria is restricted in order to follow the EC principles of transparency and nondiscrimination of bidders.
3 Research methods and data collection
3.1 Methods in the research of green public procurement
The research area of public procurement has developed into a research discipline in itself during
this decennium, when it was recognized as separate and different from that of the private sector (Murray, 2009) and the first international conference on public procurement was organized
in 2004 (Thai et al., 2004). However, during this relatively short period, several qualitative and
quantitative methods have already been used in the research of public procurement and applied
to also measure the use of green purchasing criteria. These methods include e.g. questionnaires,
interviews, analysis of tender documents and case studies.
Before 2003, the state and progress in GPP was measured by questionnaires (e.g. EuroFutures
Ab, 2002; Ochoa & Erdmenger, 2003) and interviews (GRIP, 2001). However, Kippo-Edlund et
al. (2005) reviewed several questionnaire studies and found that the response rate had been low
See: Directive 2004/18/EC, Article 23; Directive 2004/17/EC, Article 34; the Public Procurement Act of Finland,
Section 44. Also, the guidance related to the directive allows for technical specifications on production processes (European Commission, 2004a).
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in all of them. In addition, such studies obviously give insight for the most part to the practice of
green purchasers (e.g. EuroFutures Ab, 2002; Ochoa and Erdmenger, 2003), and public purchasers
may over-estimate their actual environmental focus (Michelsen and de Boer, 2009)56. For example,
respondents often reply ‘implemented’ also on issues that are only in the planning stage, perhaps
as an attempt to appear more proactive than they really are (Bowen et al., 2001). As it relies considerably on a single group of information sources, i.e. procurement managers, public procurement
research has suffered from an in-built bias (Murray, 2009).
To overcome this potential bias, researchers have used several complementary methods in addition to questionnaires. Kippo-Edlund et al. (2005) used a new method to measure the state of
GPP in Nordic countries in 2003. This method was based on ranking the environmental criteria
in the calls for tender according to a prepared list. Later, Bouwer et al. (2005) used both a questionnaire and this new method to study the situation in 2005 in the EU countries. In 2008, the
status of GPP in the EU was again measured by questionnaires, which were formulated so that the
relationship between the behaviour and the results of respondents was examined by first asking
questions concerning environmental policy, procurement policy and the implementation of green
procurement in the organization, and then asking questions about the use of green criteria (based
on the GPP training toolkit) within the most recent procurement contract (PricewaterhouseCoopers,
2009b, p. 47-59). In addition, the study provided additional indicators to measure the greenness
of public procurement – including, for example, the calculation of CO2 and the financial impacts
of GPP (PricewaterhouseCoopers, 2009b; see also Pierrard, 2003; Cadman and Dolley, 2002, for
assessing the potential of GPP). Questionnaires were used again in 2011 when the EU Commission commissioned a study on monitoring the uptake of core GPP criteria for ten priority product/
service groups in the EU-27 (Renda et al., 2012). The questionnaire included a general section that
contained questions on the respondent’s role in the public sector, level of government, estimated
level of GPP uptake, etc. and another section focused on each of the ten product groups concerning
the last contract that a given procurement authority signed in the period 2009-2010. In addition,
the respondents were asked to provide general information on their total procurement in the 20092010 timeframe for the certain product group. (Renda et al., 2012, p. 28)
At the same time, Michelsen and de Boer (2009) have done comparison between the intent of
the purchasers and the actual implementation of environmental procurement criteria by sending
questionnaires in 2008 to purchasers in Norwegian municipalities and, in addition, to the potential suppliers, in order to see to what extent suppliers and purchasers agree on the importance of
environmental demands in the selection of suppliers. They found that there were discrepancies
between the degree to which the public purchasers say they focus on environmental aspects in the
final selection of suppliers, and the perception of the potential suppliers suggesting a much lower
focus on environmental aspects than the purchasers claim (Michelsen and de Boer, 2009). This
reflects the assumption that the information gained is filtered through the views of the respondents
(Creswell, 2009).
Case studies have also been used in the research of GPP in scientific research as well as in nonacademic papers (e.g. Tarantini et al., 2011; Bala et al., 2008; Hochschorner and Finnveden, 2006;
Sterner, 2002b; EcoProcura, 2006; Ecosmes, 2004). Often the rationale for selecting a case study is
to obtain more detailed information about the contextual conditions of a phenomenon (Yin, 1994).
Within the context of green public procurement, this could be e.g. to examine a single purchase
of a specific product group and its environmental impacts. The outcome of case studies could be,
for instance, the introduction of best green practices in the market to the purchasers (e.g. ICLEI,
2006; Swanson et al., 2005).
Similar results have been obtained from the research of green procurement in the private sector (see: Leire, 2009,
p. 45).
56
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Case studies have often been carried out by a scientific method – LCA. Formerly, LCA has been
applied into public procurement mostly on a conceptual or simplified level (European Environment
Agency, 1997) without doing a highly quantitative analysis, or by using standard modules for data.
The aim of the simple assessment has been to understand the relative advantages, disadvantages
and uncertainties for various products (Hirschhorn, 1993; Christiansen, 1997). However, interest
in applying LCA-based information in more detail in green procurement decision-making and
environmental management has increased in recent years (e.g. Tarantini et al., 2011; Baitz et al.,
2005; see also Svensson, 2006; Olsson et al., 2006; Hochschorner and Finnveden, 2006; Petkovic
et al., 2004; Mroueh et al., 2001).
The research of legal aspects in public procurement includes methods that can be classified into
doctrinal legal methods, interdisciplinary legal studies and comparative law research (Hasson et
al., 2009). Doctrinal legal methods use interpretative methods to examine cases, statutes and other
sources of law in an attempt to seek out, discover, construct or reconstruct rules and principles
turning much of law, legal reasoning and legal studies into a formal activity (Banakar and Travers, 2005, p. 7). These methods are widely used in the analysis of public procurement (e.g. Bovis,
2008; Bailey, 2007; Bovis, 2006; Caldwell et al., 2005; Arrowsmith, 2004; Soudry, 2003; Kalima,
2001) and to some extent also in the research of green public procurement focusing – however,
mostly on analyzing the Court decisions and the further implications of case law (Arrowsmith and
Kunzlik., 2009; Wedin, 2009; Carlsson and Åström, 2008; Kunzlik, 2003) and less on analyzing
the environmental criteria in tender documents and contracts (e.g. Palmujoki, 2007).
Interdisciplinary legal studies draw on the other disciplines – in particular, other social sciences
such as political science, economics or sociology, or humanities such as history – taking many
different forms in which the ‘legal’ elements of the research may even become incidental (Hasson
et al., 2009). Using, e.g. economic arguments in the interpretation of law is possible; bearing in
mind, however, that the strongly binding sources of justice, such as the law and national regulation and the weakly binding sources of justice – such as the preparation of law and case law – will
take precedence over the arguments based on e.g. economics (Määttä, 1999). In green public
procurement research, at least the ‘law and economics’ and ‘law and environment’ approaches
explaining current law on the basis that it reflects economic and environmental thinking can be
found (Arrowsmith and Kunzlik, 2009; Ekroos, 2008; Ekroos and Nissinen, 2007; Kunzlik, 2003).
Also the approach of ‘law and history’ has been used when examining the role of environmental
protection in EC competition law and policy (Kingston, 2009).
Comparative law research is a theoretical study of legal systems by comparison with each other,
and has gained practical importance due to the increased globalization of world trade and the move
towards harmonization of laws, e.g. within the European Union (Norman, 2006). Comparative
law research has been commonly used in the field of public procurement (e.g., Bianchi and Guidi,
2010; Comba, 2009; Rubach-Larsen, 2009; Timmermans and Buyninckx, 2009; Treumer, 2009;
Yukins, 2006; Schwartz, 2002) and has recently gained more interest also in the field of GPP (e.g.
Zang, 2011; Caranta and Trybus, 2010).57
3.2 Analysis of the data
In this thesis, several methods, i.e. qualitative, quantitative and mixed methods (Creswell, 2009)
are applied in the analysis of the data. The analysis of calls for tenders and contracts (presented in
more detail in Chapter 3, Section 3.2.1) is used to study the quantity and quality of environmental
In addition, a comparative study about norms and regulations across various legal systems (EU vs USA) was
undertaken as part of the ’Environment and Law Research Programme’ of the Academy of Finland (Hietanen, 2009;
Hietanen, 2007).
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procurement criteria. It is based on the method used in the studies of Kippo-Edlund et al. (2005)
and Bouwer et al. (2005) and was selected because it is not affected by the potentially subjective
views of the purchasers. In articles I, IV and VI the recording and assessment of the environmental criteria in the calls for tenders is based on this method, and also the data that is re-analyzed
in article II was initially recorded as based on this method. In article I, the method is modified
to also cover the other elements of the most economically advantageous tender, in addition to
the environmental aspects. The method is also modified in article IV to assess the environmental
aspects of furniture in more detail, and in article VI where contract clauses of actual purchases
are examined. In article II, the method is referred to as Green Public Purchasing - record method
(GPP – record method) as it is developed further to measure the progress of GPP and the statistical
differences between the countries, years and product groups studied. This GPP - record method is
explained in Chapter 3, Section 3.2.2.
In articles III, IV and V – which are case studies – several methods are combined to examine the
environmental impacts and aspects of products, services and works. The product groups under the
case analyses, i.e. office furniture, transportation and road construction, were selected due to the
fact that they are recognized among the key sectors suitable for GPP in the EU having significant
environmental impacts and large volume in the public procurement (e.g. European Commission,
2011e). In article III, published LCA studies and the Environmental Product Declaration (EPD)
developed by the Volvo Group are used to assess the environmental impacts of tenders (quantitative study). Qualitative analysis in article V is also based on the life-cycle approach, where the
role of LCA in determining the award criteria is analyzed by putting the LCA results into the legal
framework of public procurement in the EU. Life cycle assessment – including the EPD Calculator tool – is presented in Chapter 3, Section 3.2.3. In addition, a method proposed by the EU
Commission to calculate the costs of environmental impacts (Directive 2009/33/EC) is applied
in article III. This Environmental cost calculation method is explained in a more detailed manner
in Chapter 3, Section 3.2.4.
In article IV, a mixed approach is used. A product group of furniture was selected under a qualitative case study examination, and the quantitative analysis of the green criteria in the furniture
calls for tenders is applied, i.e. Chapter 3, Section 3.2.1. However, the method is completed to
cover all the environmental aspects (and apparent environmental criteria) of furniture by using the
information of several eco-labels and environmental product declarations for furniture. In addition,
an RPS method (Nordic Ecolabelling Steps, 2001) is used to assess the relevance, potential and
steerability of each environmental criterion in promoting eco-design strategies (defined by van
Hemel and Cramer, 2002; Besch, 2005). This Relevance – Potential – Steerability -measurement
tool, which is the qualitative part of the examination, is explained in Chapter 3, Section 3.2.5.
Although the results from case studies provide little basis for scientific generalization (Yin,
1994), a case study approach is seen as essential in this thesis in order to illustrate the most
economically advantageous tender and environmental impacts of tenders (Article III) as well as
examine some specific issues, such as the applicability of using life cycle assessment in the award
process (Articles III and V), and the contribution of GPP to eco-design (Article IV) in certain
product group.
The analysis of legal aspects, i.e. the applicability of certain LCA-based award criteria in the
light of the EU’s legal framework is considered throughout the articles but especially focused in
articles IV, V and VI. The following requirements as based on the procurement directives and
Treaty principles are considered in the analysis:
Environmental criteria in public procurement – Focus on tender documents
27
1) A link to the subject matter of the contract (Directive 2004/EC/18, Article 53).
2) The principle of the free movements of goods, services and capital (EC Treaty, Article 3;
Directive 2004/EC/18, Article 53)58, i.e. barriers to the free movement of goods, services and
capital within the EU cannot be imposed.
3) The principle of non-discrimination (EC Treaty, Article 3; Directive 2004/EC/18, Article 53)59,
i.e. none of the suppliers shall be discriminated against due to location or nationality.
In addition, in the assessment of environmental criteria in the calls for tenders (Articles I, II, IV
and VI) – i.e. whether they are well-defined or not – transparency is concerned with regard to the
environmental criteria being clear and understandable, and the availability of information on which
the decisions are based is considered in accordance with:
4) The principle of transparency60 (EC Treaty, Article 3; Directive 2004/EC/18, Article 53).61
In article VI, the analysis of environmental criteria in calls for tenders is extended to the final
contracts to examine to what extent the green criteria of calls for tenders could be implemented
and assured by contract clauses. The analysis of the environmental criteria in article VI is completed by the same method (i.e. Chapter 3, Section 3.2.1) as in articles I and IV, but in addition,
contract clauses are considered in some detail. This includes the assessment of the existence and
applicability of environmental criteria in the contracts in the light of EU legislation (i.e. issues
1-4 stated above). But as with the contract requirements, issues relating to the proportionality
principle62 and national legislation63 are of special importance. Also, the comprehensiveness and
enforceability of the drafted terms and conditions in the contracts are discussed in article VI,
highlighting contract practices that could be the most functional and practical from the procuring
authorities’ point of view.
3.2.1 Analysis of calls for tenders and contracts
The ‘greenness’ of each call for tenders is assessed by reading through the whole document and
recording all the environmental criteria that exist in the document (method used in Kippo-Edlund
et al., 2005 and Bouwer et al., 2005). A pre-done list of possible environmental criteria is used as
an aid to this work (Table 1). This list is used for the analysis of the data in articles I, IV and VI
whilst meanwhile searching for possible new kinds of criteria as well.
Article 26 in the Consolidated version of the Treaty on the Functioning of the European Union (2010).
Article 18 in the Consolidated version of the Treaty on the Functioning of the European Union (2010).
60
Transparency is concerned with the quality of being clear, obvious and understandable without doubt or ambiguity
(C-110/03 Belgium v. Commission, point 44. In: Prechal and de Leeuw, 2008, p. 202). Transparency means that ”the
process through which public authorities make decisions should be understandable and open, the decisions themselves
should be reasoned and as far as possible, the information on which the decisions are based should be available to the
public” (European Ombudsman FIDE Report 1998. In: Prechal and de Leeuw, 2008, p. 202).
61
Article 15 in the Consolidated version of the Treaty on the Functioning of the European Union (2010).
62
Treaty of Amsterdam (1997) Article 3 states: ”Any action by the Community shall not go beyond what is necessary
to achieve the objectives of this Treaty”. More specifically, the principle of proportionality means that any measure by
a public authority that affects a basic human right must be appropriate, reasonable and necessary in order to achieve
the intended objective (LawEuropa, 2007).
63
Contractual requirements might also require compliance with applicable legal norms laid down by a state other
than the one awarding the contract (Arrowsmith, 2009, p. 161).
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Table 1. A pre-done check list of environmental criteria in the calls for tenders
Environmental criterion
Description of the criterion
Definition of subject matter
the product/service is specific to
environmental technology
It is already clear from the definition of the subject matter that the subject of
the purchase is respective to environmental technology. List of examples: solar
cells, fuel cells, gas buses, etc.
the product/service is clearly
specific to environmentally sound
products/ services/works other
than environmental technology
The subject of the purchase is clearly an environmentally sound one.
List of examples: cleaning service performed with ecologically sound
cleaning agents, accommodation service fulfilling the criteria of the European
ecolabel for tourist accommodation services or the Nordic ecolabel for
accommodation services, reused products (e.g. old copiers that have been
repaired and serviced).
environment mentioned in subject
matter
E.g. environmental cleaning products, etc.
Qualitative selection criteria (i.e. technical capability of the supplier)
EMM, specified environmental
management measures
Specified environmental management measures are required (dealing with
waste collection, proper use of chemicals, eco-driving, etc.).
environmental policy
Environmental policy is required.
environmental programme
An environmental programme is required.
EMS
An environmental management system is required.
EMM of subcontractors
Specified environmental management measures are required of subcontractors.
environmental training and
knowledge
Training of the personnel about environmental aspects in their work, and/or
related knowledge of personnel is required (may overlap with EMM above).
waste, energy and water data
The supplier must be capable of delivering information on waste amount,
energy use and water use and emissions.
other, well-defined
other, not well-defined
Technical specifications (i.e. obligatory requirements)
product/service specific to
environmental technology
The requirements have been presented so that the subject of the purchase is
specific to environmental technology. List of examples: solar cells, fuel cells, gas
buses, etc.
energy use
Requirement is presented for energy use (fuel, electricity, etc.) of a house,
vehicle, machine, office equipment, etc.
emissions to air or water
Requirement is presented for emissions of a vehicle, machine, appliance, etc.
noise
Requirement is presented for the noise emissions of a vehicle, machine,
appliance, etc.
machine norm or standard
Requirement is presented for machine (or some parts of it, e.g. catalyzer),
appliance, etc. that must fulfil a certain norm or standard dealing with energy
use, emissions and/or noise (note: not energy labels or ecolabels).
fuel, hydraulic oil, spare parts
Requirement is presented for a machine, appliance, etc., that it must be able to
use environmentally sound fuel (e.g. ethanol-based fuel), lubricant or hydraulic
oil (biodegradable and/or biobased oils) or spare parts (refilled ink-cassette for
a laser-printer, etc.).
material choice
Requirement is presented for the material choice of the product (note: not
choice of recycled material).
material amount
Requirement is presented for the material amount in the product.
recycled material
Requirement is presented for the material choice so that a certain fraction of
recycled material is required (e.g. recycled fibres in copying paper).
chemical content
Requirement is presented for the chemical content of the product.
long guarantee
Requirement is presented for the length of guarantee (which is an important
indicator of the assumed durability and service life of the product).
Environmental criteria in public procurement – Focus on tender documents
29
recycling/reuse system
Requirement is presented for existing recycling or reuse system for the
product.
recyclable
Requirement is presented for product being recyclable (in principle).*
packaging material
Requirement is presented for the packaging material choice (e.g. not PVC).
package recycling/reuse system
Requirement is presented for existing recycling or reuse system for the
package.
recyclable package
Requirement is presented for package being recyclable (in principle).*
LCA-based EPD
Requirement is presented for existing LCA and/or LCA-based environmental
product declaration (e.g. Swedish EPD, www.environdec.com/).
criteria-based EPD
Requirement is presented for environmental product declaration that is based
on environmental criteria (i.e. questions and answers).
EU ecolabel or criteria
Fulfilment of EU ecolabel criteria (all or part of them) for a specific product/
service is required.
other ecolabels or criteria
Fulfilment of other ecolabel criteria (all or part of them) for a specific product/
service is required.
EIA
As part of the planning/designing of a city plan/other plan/system, an
environmental impact assessment (EIA) and a plan to diminish environmental
effects are required.
production energy
Requirement is presented for the energy use in the production process of a
product.
production emissions
Requirement is presented for the emissions in the production process of a
product.
production chemicals
Requirement is presented for the chemicals used in the production process of
a product.
production recycling
Requirement is presented for the recycling of waste in the production process
of a product.
production material efficiency
Requirement is presented for the amount of material used in the production
process of a product.
environmental effects of transport
per km
Requirement is presented for the environmental effects of transport, regarding
only the type of transport (flight/boat/truck/train etc.), emissions and/or energy
use per transport km.
vehicle drive distance in service/
work contracts
Requirement is presented for vehicle drive distances in performing service or
work contract.
environmental effects of transport
Requirement is presented for the environmental effects of transport, regarding
both transport distance and unit emissions/energy use.**
transport distance of products
Requirement is presented for the transport distance of products.**
other, well-defined
other, not well-defined
not variants / variants
Record if the environmental requirements are compulsory for all tenders, or if
they are compulsory only for some variants.
Award criteria
energy use
Low energy use (fuel, electricity, etc.) of a house, vehicle, machine, office
equipment etc. is considered as a positive aspect for the award.
emissions to air or water
Emissions of a vehicle, machine, appliance, etc.
noise
Noise emissions of a vehicle, machine, appliance, etc.
machine norm or standard
Machine (or some parts of it, e.g. catalyzer), appliance, etc., fulfilling a certain
norm or standard that deals with energy use, emissions and/or noise (note: not
energy labels or ecolabels).
fuel, hydraulic oil, spare parts
A machine, appliance, etc., that is able to use environmentally sound fuel (e.g.
ethanol-based fuel), lubricant or hydraulic oil (biodegradable and/or biobased
oils), or spare parts (refilled ink-cassette of laser-printer, etc.).
material choice
Material choice of the product (note: not choice of recycled material).
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material amount
Material amount in the product.
recycled material
Material choice, so that a certain fraction of recycled material is required
(e.g. recycled fibres in copying paper).
chemical content
Chemical content of the product.
long guarantee
Length of guarantee (which is an important indicator of the assumed durability
and service life of the product).
recycling/reuse system
Existing recycling or reuse system for the product.
recyclable
Product being recyclable (in principle).*
packaging material
Packaging material choice (e.g. not PVC).
package recycling/reuse system
Existing recycling or reuse system for the package.
recyclable package
Package being recyclable (in principle).*
LCA-based EPD
Existing LCA and/or LCA-based environmental product declaration
(e.g. Swedish EPD, www.environdec.com/).
criteria-based EPD
Environmental product declaration that is based on environmental criteria
(i.e. questions and answers).
EU ecolabel
Fulfilment of EU ecolabel criteria (all or part of them) for the specific product/
service.
other ecolabels
Fulfilment of other ecolabel criteria (all or part of them) for the specific
product/service.
EIA
As a part of planning/designing of a city plan/other system, environmental
impact assessment (EIA) and a plan to diminish environmental effects.
production energy
Energy use in the production process of a product.
production emissions
Emissions in the production process of a product.
production chemicals
Chemicals used in the production process of a product.
production recycling
Recycling of waste in the production process of a product.
production material efficiency
Amount of material used in the production process of a product.
environmental effects of transport
per km
Environmental effects of transport specific only to the type of transport (flight/
boat/truck/train etc.), emissions and/or energy use per transport km.
vehicle drive distance in service/
work contracts
Vehicle drive distances in performing service or work contract.
environmental effects of transport
Environmental effects of transport specific to both the transport distance and
unit emissions/energy use.**
transport distance of products
Transport distance of products.**
The following criteria should be presented in selection criteria, but in practice they have often been presented in award
criteria, and that is why are also recorded here:
EMM, specified environmental
management measures
Specified environmental management measures (dealing with waste collection,
proper use of chemicals, etc.).
environmental policy
Environmental policy.
environmental programme
Environmental programme.
EMS
Environmental management system.
EMM of subcontractors
Specified environmental management measures of subcontractors.
environmental training and
knowledge
Training of personnel concerning the environmental aspects in their work and/
or related knowledge of personnel.
other, well-defined
other, not well-defined
Contract clauses
recycling/reuse system
Contract clauses require existing recycling or reuse system for the product.
package recycling/reuse system
Contract clauses require existing recycling or reuse system for the package.
Environmental criteria in public procurement – Focus on tender documents
31
recycling/reuse service
Contract clauses require that the supplier takes care of product collection and
recycling when it becomes waste.
package recycling/reuse service
Contract clauses require that the supplier takes care of package collection and
recycling as well as delivering the product.
reused packages
Contract clauses require that supplier uses reusable packages and takes them
away when delivering the product.
reporting and monitoring of
environmental data
Contract clauses require that the supplier and manufacturer records and
monitors and reports, e.g. energy use, possible emissions to water and air, as
well as waste amounts.
other, well-defined
other, not well-defined
* Concerning products with regard to which a recycling system exists in any part of the three Nordic countries
(Finland, Sweden and Denmark).
** These criteria can be contradictory to the EU procurement law, which states that only requirements having a link
to the subject matter of the contract can be taken into account in the technical specifications and award criteria.
3.2.2 Green Public Purchasing - record method
The analysis of the green purchasing criteria is expanded in this thesis to measure the progress
in GPP between the years, referred to as the GPP - record method (Figure 2). In addition to the
analysis of calls for tenders, i.e. collection of the empirical material and examining the existence
of environmental criteria (and assessing whether each criteria is well-defined or not) and recording the criteria found, three other subtasks are added: assessing the apparent greenness of product
groups, analysis of the statistical significances of the apparent differences between countries and
years, and presenting the results of the green calls for tenders in each country as well as the progress
from one year to the next (Article II and Figure 2).
Calls for tenders are classified into product groups based on the CPV numbers given in each call
for tender, due to the fact that the product groups differ with respect to their apparent greenness.
For example, good sets of environmental criteria for paper products are offered by eco-labels (e.g.
Nordic Swan and EU Flower) and by GPP web tools. On the other hand, there are no criteria sets
for services such as insurance. Consequently, there are considerable differences between the product groups with respect to their eco-labels and other bases for green purchase, and the proportion
of green calls for tenders varies between the product groups. The ‘apparent greenness of product
groups in public purchasing’ respective to each product group is assessed on two basis. First,
whether environmental criteria exist for the product group, either in eco-labels or GPP web tools
Collection of
material
Search for calls for
tenders from TED
database (or other
databases).
Order documents
of calls for tenders
from purchasers.
Recording
(and assessing)
environmental
criteria in the
calls for tenders.
Assessing
Apparent
Greenness of
Product Groups
Statistical
analyses
of the differences
in the proportions
of 'green' calls for
tenders between
countries and from
year to year.
Presenting the
results
Proportions of green
calls for tender.
Significance of
the apparent
differences between
countries and from
year to year.
Figure 2. The GPP record method for measuring the environmental soundness of public purchasing (Article II).
32 Alhola
Monographs of the Boreal Environment Research No. 40
(with a view to the European eco-label and Nordic Swan eco-label as well as the GPP web tools).
If yes, the apparent greenness of such product group is at least on the medium level. If not, it is at
a low level. If environmental criteria exist for the product group, the next step is to check whether
there are well-known (e.g. eco-labeled) ‘green’ products fulfilling the environmental criteria on
the market. If yes, the value of apparent greenness is at a high level. A rationale for this is that if
such products existed on the market, this would increase the apparent greenness of the product
group in the eyes of purchasers.
Generally, the non-existence of eco-label criteria for a product group does not necessarily
mean that the environmental performance of the products in this group is poor. For example, the
development process of eco-label criteria for a certain product group may confront opposition and
blocks across the industry, and thus the eco-label will not obtain validity, though there would be
potential eco-label criteria for such a product group (Nadaï, 1999). For some reason, there may be
green products on the market in product groups with existing eco-label criteria but no eco-labeled
products. However, this method tries to develop an indicator that would reflect the greenness as
seen by the public purchaser and assumes that the existing environmental criteria and eco-labeled
products would serve as a basis for such an indicator.
The statistical analysis in article II is carried out using logit models, where the effects of the
explanatory factors are summarized as odds ratios (Collet, 1991). This method is applicable to the
sample due to the fact that each of the individual findings can be categorized in one of the given
groups, i.e. ‘green’ or ‘non-green’ tenders. The odds ratio is the ratio of the odds of a condition
occurring in one group to the odds of it occurring in another group.
Example of odds ratio (applied and modified from Westergren et al., 2001):
If the probabilities of the condition in each of the groups are p/(1-p1) (first group) and q/(1-q1)
(second group), then the odds ratio (OR) is:
= [(p1 * (p1+p2)) / (p2 * (p2+p1))] / [(q1 * (q1+q2)) / (q2 * (q2+q1))]
= (p1 / p2) / (q1 / q2)
= p1q2 / p2q1
Table 2. Example of odds ratios.
Condition 1 (green)
Condition 2 (not green)
Total
Group 1
p1 = 100
p2 = 120
220
Group 2
q1 = 80
q2 = 130
210
Odds of group 1 = 100/120 = 0.83333
Odds of group 2 = 80/130 = 0.61538
OR = 1.35417 (Group 1 has an increased probability to be green compared to Group 2)
An odds ratio of 1 indicates that the condition under study is equally likely to occur in both groups.
An odds ratio greater than 1 indicates that the condition is more likely to occur in the first group.
Consequently, an odds ratio less than 1 indicates that the condition is less likely to occur in the
first group. (Westergren et al., 2001). The odds ratio must be greater than or equal to zero if it is
defined (Westergren et al., 2001; Collet, 1991; Rita, 2004).
In article II, the explanatory factors in the logit models are country, year and product group. The
three countries (Denmark, Finland and Sweden) and the two years (2003 and 2005) are compared
with respect to the proportion of green calls for tenders. As the product groups differ with respect
to their apparent greenness, and as the distribution of calls for tenders into product groups vary
between the countries, product group is also taken into account in the analyses. This enables the
separation of the impact of country and product group as determinants of the proportion of green
calls for tenders.
Environmental criteria in public procurement – Focus on tender documents
33
One part of the statistical analysis in article II is to calculate the statistical significance of the
results. It is essential to examine that the condition (greenness of calls for tenders) has not arisen
by chance due to the difference in product groups of three countries and two years. The p-value is
the frequency or probability with which the observed condition would occur if the null hypothesis64
was true. If the obtained p-value is smaller than the significance level, then the null hypothesis is
rejected. If p > 0.1, there is said to be no evidence to reject the null hypothesis, i.e. it is not statistically significant, whereas if p < 0.05 some statistical significance exist. Statistical significance
is strong if the p-value is less than 0.01 but greater than 0.001, and overwhelming if p < 0.001.
Generally, the difference found in the data is statistically significant when its probability to occur
by chance is less than 5%. (Collet, 1991, p. 26-29)
3.2.3 Life cycle assessment
Life cycle assessment (LCA) is a methodological framework for estimating and assessing the
inputs, outputs and potential environmental impacts of a product system throughout its life cycle
(ISO, 2006a). Environmental life cycle assessment is becoming an increasingly effective tool for
determining ecological impacts (Hutchins and Sutherland, 2008). The goal of LCA is to identify
and quantify environmental impacts of products and services, which then assists in comparing the
environmental performance of products or services in order to choose the most environmentally
preferable choice regarding e.g. climate change, tropospheric ozone formation, eutrophication,
acidification, depletion of natural resources and human health impact. In public procurement, LCA
could help to learn about the environmental aspects of the product, fulfil customer requirements,
define environmental criteria for GPP and choose between alternatives (Hochschorner and Finnveden, 2006; Tarantini et al., 2011). More generally, life cycle assessment provides possibilities
to introduce innovations as well as methods and systems where the performance requirements can
also favour competition for environmental development (Sterner, 2002a). In this thesis, LCA was
selected as a tool to measure the environmental impacts of tenders because it provides the best
framework for assessing the potential environmental impacts of products, and thus is an important
tool supporting IPP (European Commission, 2003b). In article III, LCA is conducted in order
to analyze the environmental impacts of three competing tenders. In article IV, the potential of
environmental award criteria based on eco-labels65 is assessed, and in article V, the use of LCAbased environmental criteria in the actual purchase of road construction is analyzed and discussed.
In article III, life cycle assessment is carried out by following the LCA framework provided in
the ISO 14040 and ISO 14044 standards (ISO, 2006a; ISO, 2006b). The main stages include the
definition of goal and scope, life cycle inventory analysis, impacts assessment and interpretation
of results. The inventory analysis in article III is based on the data from an Environmental Product Declaration (EPD) Calculator (www.volvo.com/trucks), which provides the exact inventory
data, i.e. the emission end energy consumption rates for the three competing tenders. The EPD
Calculator is an environmental impact calculation programme developed by the Swedish truck
manufacturer Volvo, in which the environmental data is based on LCA screening studies on the
relevant trucks and parts, carried out during product development as well as later (Mårtensson,
2008). The European Commission DG Environment has evaluated several EPD schemes, and has
designated the Volvo EPDs (e.g. Volvo Cars EPD and Volvo Trucks EPD) as among those EPD
schemes that fulfilled a number of selection criteria derived from the standard ISO TR 14025
(Environmental labels and declarations – Type III environmental declarations): e.g. the life cycle
Null hypothesis is the description of data treated as valid unless the actual analysis of the data contradicts this
assumption, e.g. assumption that no variation occur in the data (See: Collet, 1991, p. 26).
65
Eco-label criteria are based on the scientific method of LCA.
64
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Monographs of the Boreal Environment Research No. 40
basis is in conformity with the ISO 14040 (Environmental management – Life cycle assessment)
series (Bogeskär et al., 2002).
The impacts assessment phase includes the selection of impact categories, classification, characterization, normalization and weighting. In article III, characterization factors for emissions in
each impact category are taken from earlier studies, i.e. characterization factors for climate change,
eutrophication, acidification and depletion of tropospheric ozone (referred to in Nissinen et al.,
2007) and for human health impact (van Zelm et al., 2008 and Krewitt et al., 2001). Characterization factors for the European region (van Zelm et al., 2008) are adjusted with the country-specific
damage factors (YOLL per kt of pollutant) for Sweden (Krewitt et al., 2001), so that the variation
in impacts resulting from the same tonne of pollutant emitted in various regions with varying
population distributions would be eliminated. For example, the PM10 damage factor (YOLL per kt)
for Sweden is 7.3 compared to the EU-15 average of 56.7 (Krewitt et al., 2001). For the purposes
of normalization, the reference value for the impact categories is calculated on the basis of the
total Swedish emissions and energy use in 2006 (Statistic Centralbyrå, 2008; Energy Information
Administration, 2008). Weights are based on Seppälä et al. (2009).
3.2.4 Environmental cost calculation
Environmental cost calculation method is used to calculate the monetary costs of environmental
impacts of tenders (Article III). The environmental loads that resulted in the inventory phase of
the LCA (by the Volvo EPD Calculator) are monetized as based on a method proposed by the EU
Commission’s Directive 2009/33/EC on the promotion of clean and energy-efficient road transport vehicles, which aims at promoting and stimulating the market for clean and energy-efficient
vehicles and improving the contribution of the transport sector to the environment, climate and
energy policies of the Community.
The directive establishes a harmonized methodology for calculating the lifetime cost of pollutant emissions and fuel consumption, in order to monetize the environmental impacts for inclusion in the purchasing decision. This calculation method enables comparison of the performance
of vehicles under the categories of energy consumption, CO2 emissions, NOx, PM and NMHC
emissions, which together make up the total operational costs. It also enables comparison on the
basis of total lifetime costs plus the initial capital cost of a vehicle66. The calculation highlights
the relative strengths and weaknesses between different vehicles, which may help to make the
purchasing decision. However, for the transportation services, the cost calculation method provides
the cost of energy consumption doubled, considering that the cost of fuel is already included in
the bid price. Thus, this method is appropriate as such in the purchase of a vehicle, but for the
purchase of transportation services it may need some adjustment, e.g. including only the costs
of emissions. Complementary to the legislation on Euro norms, which sets maximum emission
limits, this approach monetizes the actual pollutant emission and does not require any additional
standard setting.67 However, the directive does not comment on the weights that the environmental
impacts should have in the final decision.
According to the directive 2009/33/EC, the lifetime cost of energy consumption for the operation of a vehicle can be calculated by multiplying the lifetime mileage by the energy consumption
per km and by the cost per unit of energy, i.e. per unit of diesel (or petrol) before tax. The lifetime
cost for the CO2 emissions resulting from vehicle operation is obtained by multiplying the lifetime
mileage by the CO2 emissions in kg/km and by the cost per kg. The lifetime cost of the pollutant
emissions for the operation of a vehicle can be calculated by adding up the lifetime costs for NOX,
Clean and energy-efficient vehicles initially have a higher price than conventional ones (Directive 2009/33/EC).
Directive 2009/33/EC (20).
66
67
Environmental criteria in public procurement – Focus on tender documents
35
NMHC and PM emissions. The lifetime cost for each pollutant can be calculated by multiplying
the lifetime mileage by the emissions in g/km and by the respective cost/g given in the Annex of
the Directive 2009/33/EC.
3.2.5 Relevance – Potential – Steerability -measurement tool
In article IV, the contribution of environmental procurement criteria to environmental improvements of products, i.e. eco-design is discussed. Eco-design (or design for environment, DfE) is
understood as “The integration of environmental aspects into the product development process, by
balancing ecological and economic requirements. Eco-design considers environmental aspects at
all stages of the product development process, striving for products which make the lowest possible
environmental impact throughout the product life cycle” (European Environment Agency Glossary, 2009). Environmental product design can have a decisive effect on, e.g. material selection,
product structure, the manufacturing and finishing techniques applied to the product, packaging
and product labelling, the functional properties of a product and the efficiency of the end-of-life
treatment (Kärnä, 2002).
The potential of environmental purchasing criteria to promote certain eco-design solutions is
assessed in this thesis by using the RPS measurement tool (or RPS selection tool). The method
was first developed to determine whether eco-labelling is a suitable instrument for a certain
product group (Nordic Ecolabelling Steps, 2001). In the method, three dimensions, Relevance
(R), Potential (P) and Steerability (S) of eco-label criteria are assessed. Relevance (R) is associated with the importance and scope of certain environmental impact of a product. Potential (P)
refers to the possibilities and reality of manufacturers to reduce this environmental impact. The
third dimension, steerability (S), measures the degree to which eco-label criteria can influence
the environmental impact under assessment, i.e. is it possible to determine criteria that the manufacturers are able to fulfil and that can be verified from the product or production chain. (Nordic
Ecolabelling Steps, 2001)
In this thesis, the relevance, potential and a steering effect of GPP criteria to product eco-design
are assessed by this same method (Article IV, case furniture). The level of relevance (R) of each
environmental criterion in the calls for tender is assessed on the basis of the importance and scope
of the environmental impact, i.e. is there an environmental impact related to such criterion and
how great is the impact? If so, then potential (P) is evaluated against the existing environmental
improvements and experience of the technical solutions in the industry, i.e. can anything be done
about the environmental impact within the near future? If yes, then the steerability (S) – the measurement of the degree to which GPP criteria can affect the environmental impact – is also assessed.
The RPS value (high, medium, low) for a product can be calculated by R x P x S. If, e.g. the
product has high R but low P – indicating that the relevance of the environmental impact is remarkable but there does not exist a solution to the impact (there is a lack for alternative technological
solution) – the RPS is low (Nordic Ecolabelling Steps, 2001). An example of high RPS is the energy
consumption of a personal computer having high R and high P, and in addition, the criteria that
would direct the product development towards a less energy-intensive direction has been developed
and can easily be verified from the product; thus, the steerability is also high (Nissinen, 2004).
The assessment of green procurement criteria by RPS is descriptive in nature, and the availability of information determines how precise the assessment can be. In this thesis, the information to assess relevance (R) of environmental impacts of furniture is taken from scientific articles,
databases and eco-labelling criteria documents. Eco-label information is comprehensive due to
the extensive research and testing of the furniture in its life-cycle in the labelling scheme. The
relevance is considered high or medium based on whether eco-label criteria exist for the environmental aspect. The potential (P) and also the relevance (R) of environmental criteria were also
36 Alhola
Monographs of the Boreal Environment Research No. 40
discussed and supported by a group of experts68, who did have an insight to the latest developments
in the industry. Steerability is expected to be high or medium if a certain criterion is included in
the eco-label schemes. This represents an expression of the extent to which manufacturers are
able to control their production (choice and documentation of subcontractors, processes, raw materials, etc.) (Nordic Ecolabelling Steps, 2001). Steerability of eco-label criteria is not, however,
directly applicable to GPP criteria, since the restrictions of the public procurement directives can
contribute to the steering effect of the criteria when used in GPP, and thus these restrictions are
taken into consideration.
3.3 Collection of material
The empirical material for this thesis contains documents of tender competitions, i.e. calls for
tenders and the subsequent contracts between the purchasers and winning bidders. In the collection
of material, the calls for tenders were identified from the TED database69 in the order they were
published during the collection period, and the organizations were asked to send the documents.
Public organizations such as those of the central government as well as local authorities, bodies
governed by public law and organizations from special sectors – e.g. public water and energy
supply – were included.
The empirical material of the analysis in articles I and II covers 180 calls for tenders over
EU-threshold values in Finland, Sweden and Denmark (i.e. 60 from each country), the calls for
tenders being published at the time interval 21.7. – 29.9. 2005. For the comparison of the years
of 2003 and 2005 (Article II), also the material for the year 2003 that was used in Kippo-Edlund
et al. (2005) was re-analyzed.70
The material of the analysis in article VI covers 156 document sets, i.e. calls for tenders with
subsequent public procurement contracts between the purchasers and winning bidders. The first
part, i.e. 78 sets of documents, were collected regarding calls for tenders that were published
between April and September 2005, and the second part, i.e. another 78 sets of documents, were
collected regarding calls for tenders that were published between May and October 2007 in the
TED database.
In articles III, IV and V, the data from actual procurement cases is analyzed in more detail. The
cases represent the different categories of purchases, i.e. products (furniture), services (goods
transportation) and works (construction). These groups were selected for deeper analysis, as
they contribute to the particularly important sectors71 that could stimulate the supply of greener
purchases (European Commission, 2008c). The case study in article III concerns a procurement
of a goods transportation service in a Swedish municipality in 2006, and it was selected as based
on two specific conditions: environmental aspects were included as award criteria and the award
decision was based on the most economically advantageous tender. The material for article III
consists of the call for tender and three bids that participated in the tender competition. Additional
The Finnish furniture panel, a group of 20 members including experts in the furniture industry, retailing, recycling,
purchasing, furniture testing laboratories, etc. (Nissinen and Parikka, 2007). Members of the panel were consistent in
their view about the importance and scope of certain environmental impact.
69
Available at: http://ted.publications.eu.int. TED (Tenders Electronic Daily) is an electronic database that contains
all active calls for tenders published in the Official Journal (OJ S), and in addition gives access to the OJ S archives for
the past five years (Europa Publications Office, 2007). The Supplement to the Official Journal (OJ S) includes calls for
tenders for products, services and works meeting specific threshold values according to the procurement directives
that must be informed throughout the European Union.
70
The sampling period for the year 2003 had included two weeks in March and two weeks in May (Kippo-Edlund
et al., 2005).
71
In certain sectors, such as construction, transport, office equipment and cleaning services, public purchasers could
give strong signals to the marketplace by asking for greener goods, thereby stimulating the supply of more environmentally friendly goods and services (European Commission, 2008c, p. 3).
68
Environmental criteria in public procurement – Focus on tender documents
37
information was obtained from the purchaser and bidders from their internal data sources, e.g.
environmental reports. This additional data was requested by email or phone conversations, and
received by email.
Material for article IV consists of calls for tenders concerning office furniture. A total of 40
calls for tenders of furniture during the time period 10. November 2005 – 31. January 2006 from
Finland and Sweden were identified in the TED database and requested by email, 31 of which
were received, covering 15 calls for tenders from Finland and 16 from Sweden.
The case analyzed in article V represents an example of purchase of construction work. The
article is an analysis of the road construction procurement project known as ’The improvement of
Highway 9 between the towns of Turku and Lieto’, also known as the ‘Highway 9’ –pilot project,
carried out in the year 2004 by the Finnish Road Administration (Finnra). This specific case was
selected in order to assess the use of environmental award criteria that were based on life cycle
assessment of road construction work.
Table 3. Summary of material collection and research methods.
Articles
Sources of primary data
Research methods
Nature of the outcome
Article I
- Calls for tenders
(TED database)
Analysis of calls for tenders
(Ch. 3, Sec. 3.2.1)
Qualitative and quantitative information
on the use of GPP criteria and the content
of the most economically advantageous
tender. Comparison between Finland,
Sweden and Denmark.
Article II
- Calls for tenders
(TED database)
- Kippo-Edlund et al., 2005
Analysis of calls for tenders
(Ch. 3, Sec. 3.2.1)
GPP –record method
(Ch. 3, Sec. 3.2.2):
- assessing apparent
greenness (eco-labels)
- statistical analyses
(logit models)
Quantitative information on the use of
green purchasing criteria during the years
2003 and 2005.
Statistic significance of the differences
in green purchasing criteria between
countries (Finland, Sweden, Denmark),
years (2003 and 2005) and different
product groups.
Article III
- Call for tender and
three tenders
- EPD (Volvo)
- Swedish Statistics Central
- Scientific articles
(e.g. Seppälä et al., 2009;
van Zelm et al., 2008;
Nissinen et al., 2007;
Krewitt et al, 2001)
Case study on a single
purchase:
- LCA (including EPD
Calculator -tool)
(Ch. 3, Sec. 3.2.3)
- Environmental cost
calculation method
(Ch. 3, Sec. 3.2.4)
Numeric rates for environmental
impacts, calculated by LCA and costs of
environmental impacts.
Discussion on the contribution of different
measurements of environmental impacts
to the ranking of the most economically
advantageous tender.
Article IV
- Calls for tenders
(TED database)
- Eco-label criteria
- Scientific articles,
(e.g. van Hemel and
Cramer, 2002; Besch,
2005)
Case study on purchases of
a certain product group:
- Analysis of calls for
tenders (Ch. 3, Sec. 3.2.1)
- RPS method
(Ch.3, Sec. 3.2.5)
- Analysis of legal aspects
(Ch. 3, in Sec. 3.2)
Descriptive qualitative assessment of the
potential, relevance and steerability of
GPP criteria to promote eco-design of
products.
Article V
- Call for tender
- LCA data (KorkialaTanttu et al., 2005)
Case study on a single
purchase
- Analysis of legal aspects
(Ch. 3, in Sec. 3.2)
Qualitative analysis on the use of certain
environmental criteria in the award
process.
Article VI
- Calls for tenders
(TED database)
- Final contracts
- Analysis of calls for
tenders and contracts
(Ch. 3, Sec. 3.2.1)
- Analysis of legal aspects
(Ch. 3, in Sec. 3.2)
Quantitative information on the existing
environmental criteria in the calls for
tenders and contracts.
Qualitative assessment of the
applicability of environmental clauses and
comprehensiveness and enforceability
of drafted terms. Comparison between
Finland and Sweden.
38 Alhola
Monographs of the Boreal Environment Research No. 40
4 Results
4.1 Environmental award criteria in public procurement
The content of the most economically advantageous tender and environmental award criteria as a
part of it were examined in article I. In the tender documents (from Finland, Sweden and Denmark
in 2005), about 90% of the procurement decisions were based on the most economically advantageous tender, one third of which included environmental criteria. The weight for environmental
award points was about 5%, the highest weight being 20%. As proportioned to the total sample,
the average weight for green criteria in the award decisions was only 3.3%. The dominant award
criteria were price (51% of weight) and quality (37% of weight) leaving less weight to delivery
terms (7%) and social issues (1.7%).
Environmental award criteria that were often used included environmental policy, environmental
management system, material choice, chemical content, guarantee, recycling and reuse system
(Table 4). However, the use of environmental criteria varied between product groups. They were
more often presented for product groups such as transportation services, vehicles, paper products,
cleaning services, office machines and furniture, construction works and chemical products. It is
evident that for product groups like education or consultancy services, health and social services
and many IT-related services such as software, there have not been obvious existing environmental
criteria, which was reflected in the low number of environmental criteria found in these product
groups.72
4.2 Progress in the use of environmental purchasing criteria
A purchase can be green even if environmental aspects among the award criteria did not exist. In
these cases, environmental criteria may be written into the description of the contract, technical
specifications, selection criteria or contract clauses. Taken these into account, 55% of the Finnish
and 80% of the Swedish calls for tenders included some kind of environmental criteria in the year
2005.73 This data was used in article II, where the ‘greenness’ of public procurement in Finland,
Sweden and Denmark was compared to an earlier study from the year 2003 (Kippo-Edlund et
al., 2005) to measure the progress in GPP before and after the issuing of the new procurement
directives (in 2004).
In 2003, there were significantly (p < 0.05) more environmental criteria in the calls for tenders
in Denmark and Sweden than in Finland, and this difference was even clearer when the analysis
for product groups was done, i.e. taking into account the distribution of the calls for tenders into
product groups with different apparent greenness. In 2005, the Swedish calls for tender were
‘greener’ than the Finnish ones, but there was no longer any significant difference between Finland and Denmark. Looking at the comparison of the years 2003 and 2005, i.e. the progress in
‘greenness’, both Finland and Sweden showed an increase in the use of environmental criteria, but
Denmark did not. In Table 5, the values of odds ratio above one indicate the increase in probability
of a green call for tender; values below it, decrease.
However, the situation may change when the relations between greenhouse gas emissions of buildings and production of services are more generally understood.
73
Respectively, the average rate for the EU was 45% (Bouwer et al., 2005).
72
Environmental criteria in public procurement – Focus on tender documents
39
Table 4. Environmental award criteria in the calls for tenders (N=162)*)
Environmental award criteria
Finland
Sweden
nE,FI=53
nE,SE=54
Environmental policy
3
9
Environmental management system
1
6
Other: Environmental issues (not well-defined criteria)
7
1
EU eco-label or other eco-label
3
Chemical content
3
Recycling / reuse system
2
2
Packaging material
2
Noise
Environmental programme
1
Material choice
1
Machine norm or standard
1
1
Energy use
1
Environmental certificates
2
Environmental training (Eco-driving)
1
Recyclable
1
1
Fuel, hydraulic oil, spare parts
Environmental management of subcontractors
Environmental training and knowledge
1
Regular information about environmental issues
1
Recycled material
1
“Environmental class” of the product
1
Environmental laws
1
Environmental reporting
1
Actions towards environmental protection
1
Specified environment management measures
1
Biogas, ethanol, electricity or hybrid
1
Information on the material used for certain purposes
1
LCA-based EPD
Production energy
Production recycling
Production chemicals
Criteria that were also checked but not found in the award criteria of the tenders:
Emissions to air or water
Material amount
Package recycling / reuse system
Recyclable package
Criteria-based EPD
Environmental impact assessment
Production emissions
Production material efficiency
Environmental effects of transport per km
Vehicle drive distance in service / work contracts
Environmental effects of transport
Transport distance of products
-
Denmark
nE,DK=55
4
6
5
3
3
1
3
5
3
2
1
2
1
N=162
2
2
1
1
1
1
16
13
13
6
6
5
5
5
4
3
3
3
2
2
2
2
2
1
1
1
1
1
1
1
1
1
1
1
1
1
1
-
-
Total sample: 180 calls for tenders in 90% (162) of which the purchasing decision was based on the most economically advantageous tender.
*)
40 Alhola
Monographs of the Boreal Environment Research No. 40
Table 5. Comparison of countries and years with respect to the proportion of green calls for tender among all calls
for tender, using a logit model with the proportion of green calls for tender as response (Article II).
Odds Ratios for a call for tender to be green
Comparison of countries
Year
2003
Adjustment for product category distribution
Comparison of years2
2005
No
Yes
No
Yes
No
Yes
Finland
1.001
1.00
1.00
1.00
3.36*
3.60*
Denmark
3.94*
5.21*
1.07
1.31
0.91
0.89
Sweden
3.81*
5.29*
3.06*
4.07*
2.70*
2.81*
Country
Denmark and Sweden are compared to Finland.
2005 is compared to 2003.
* The comparison (between countries or years) is statistically significant, p < 0.05.
1
2
4.3 Most economically advantageous tender and determination of
the environmental impacts
In article III, the contribution of different measurements of environmental impacts to the ranking
of the most economically advantageous tender was examined. A comprehensive LCA study and a
cost calculation method (Directive 2009/33/EC) were conducted to see how close in ‘greenness’
the competing tenders actually were. The cost calculation method was used in two ways: firstly,
to calculate the costs of energy and emissions and secondly, only the costs of emissions. The case
study of a transport service indicated that the difference in the environmental impacts between
the three competing tenders was, in reality, not as great as the purchaser had experienced by using
his own equation for environmental award points. In the actual procurement case, the purchaser
awarded only the ‘greenest’ option highly for environmental award points, giving the two others
only half of that or zero environmental award points. However, these two tenders were quite close
to the greenest one in environmental impacts when the award points were calculated by the LCA
and cost calculation method.
The most economically advantageous tender was defined by the purchaser, consisting of only
two award criteria: bid price with 70% weight and environment with 30% weight. In the case
study, the winning bid (A) was the most economically advantageous tender whatever the method
of calculating the environmental award points was, whereas the order of tenders B and C would
have changed according to which method was used for the calculation of environmental award
points (Table 6).
Table 6. The ranking of the most economically advantageous tender, i.e. award points of bids determined by three
different methods regarding environmental impacts.
Cost calculation method (Directive 2009/33/EC)
Purchaser’s award
system
LCA
Cost of energy and
emissions (€)
Cost of emissions (€)
Tender A
85
87.03
97.5
89.60
Tender B
79.63
66.98
75.97
69.86
Tender C
57.30
70.44
80.05
72.17
In article III, the application of LCA in the transportation service clearly showed the most important
environmental impacts of the service, which the procuring authority should focus on, i.e. set the
award criteria so that they promote fuel savings and cleaner vehicles. The LCA showed that climate
Environmental criteria in public procurement – Focus on tender documents
41
change impact was the most important environmental aspect, followed by the health effect caused
by primary (PM10) and secondary particles (affected by NOX). It appeared that fuel consumption
was the most important factor influencing the results of LCA, in addition to emissions of NOX
and PM. The results also indicated that relatively small actions, such as eco-driving and the selection of a reasonable vehicle for a certain purpose as well as the requirements for new technology,
could have a significant effect on the environmental impacts of the service – e.g. the eco-driving
component would have lead to about 10–13% less environmental impacts.
The results of the environmental impact assessment showed that tenders A and B were the most
environmentally preferable choices; winning bid A having only 2% more environmental impacts
than tender B, whereas tender C clearly showed more environmental impacts (Figure 3). Compared
to tender C, the environmental impacts of ‘best practice’ – i.e. the Euro 5 truck74 – would be approximately 44%. During its one-year operation, tender A would cause about 0.00005% of total
annual environmental impacts in Sweden (Figure 3).
The awarding system that the purchaser used for calculating environmental impacts had, of
course, a major impact on ranking the tenders according to their ‘greenness’, giving a high environmental preference to tender B, which indeed was shown to be the most environmentally
preferable, also by reference to the LCA and environmental cost calculation method. However, the
weight for bid price turned the alternative A as the most economically advantageous. The analysis
of the weights showed that the weight for environmental award points should be meaningful; the
30% weighting, although high75, did not have an impact on the order of superiority in the actual
case. The weight for the environment should have been about 37% in order to change the ranking
of tenders in the actual competition in favour of tender B.
0,00007
0,00006
0,00005
0,00004
0,00003
0,00002
0,00001
0,00000
A
B
C
Euro 5
Health effect (particles)
Primary energy consumption
Tropospheric ozone formation
Acidification
Adequate eutrophication
Climate change
Figure 3. Environmental impact assessment of the tenders and a reference vehicle, Euro 5.
A hypothetical ’best practice’ case concerning the environment (the Euro 5 truck) based on the trucks meeting Euro
5 norms as available on the market which could, in principle, be used for such services was determined, in order to
compare the results of the tenders.
75
In many transportation service contracts, weight for environment is below 10% (Palmujoki, 2007). Also, if the monetized environmental costs are proportioned to the bid prices of the tenders, it shows that the share of environmental
costs is only 10–13% of the bid price, which is low compared to the actual weighting of 30%.
74
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Monographs of the Boreal Environment Research No. 40
4.4 Justification and applicability of LCA-based environmental
criteria to public procurement
Life cycle assessment, as a scientifically grounded method to identify the most important environmental aspects to be awarded in the tender competition, was applied and analyzed through case
studies in articles III, IV and V. In article III, the application of LCA in the transportation service
clearly showed the usefulness of LCA as finding out the most important environmental impacts
of the purchase which the procuring authority should focus on (Chapter 4, Section 4.3). In addition, in article IV, the applicability of LCA-based criteria (i.e. eco-label criteria) for furniture
were analyzed from the viewpoint of procurement rules, and the results are presented in Chapter
4, Section 4.5 in more detail, whilst also discussing their supportiveness for eco-design strategies.
In article V, the use of LCA-based environmental criteria in road construction procurement was
focused. In the centre of the debate was transport distance, which was used among the award criteria in this specific case. Several LCAs have been carried out to assess the environmental impacts
related to road construction (e.g. Mroueh et al., 2001, Stripple, 2001, Olsson et al., 2006, Eskola
et al., 1999 and Pereira et al., 1998), which all show the significance of the environmental impacts
of transportation in road construction works, i.e. the emissions and energy consumption. However,
it has been considered that transport distance cannot be taken into account in the evaluation of
tenders as such, because it could be regarded as a discriminatory criterion (European Commission, 2004a). According to the Treaty principles of free movement of goods and services and the
principle of non-discrimination, the purchasing authorities are not free to impose requirements,
e.g. on transportation, unless they think carefully about their linking to the subject matter of the
contract (Directive 2004/18/EC).76
In the analysis of the road construction case (Article V), it was considered that in a large
construction work project, the origin of bidders and the transport distances of materials are not
directly linked to each other. Due to the high costs of transportation (Infra, 2004), it seems obvious
that all the bidders – regardless of the location of the company – would use the shortest possible
distance to provide the aggregate and other materials and, if possible, prefer to use materials
that are from the region nearby if the criteria for materials is not strictly imposed in the contract.
Transport distance is thus important not only from the environmental point of view but also from
the economic perspective.
It was considered in article V that the transport distance was an acceptable criterion in this case,
as the environmental award criteria were based on a scientific method LCA and transport distance
was an essential component in it, and thus could not be excluded from the assessment. The rationale
for this was that the focus was not actually on the transport distance but on the units that were used
for the environmental loads of modes of transport. However, it could be recommendable not to
state ‘transport distance’ as such in the award criteria, but rather to include transport distance in
the calculation of the environmental impacts of transportation by asking for the data for the determinants of the environmental impacts of the transport in the work contract, i.e. data on transport
distance, mode of transport and type of vehicle, and the units of environmental load for these. For
example, by using CO2 emissions as a criterion, the idle time of trucks and machinery would also
be included in the assessment.
Directive 2004/18/EC Article 53; Treaty on the Functioning of the European Union (Consolidated version, 2010)
Article 26.
76
Environmental criteria in public procurement – Focus on tender documents
43
4.5 Green public procurement as a promoter of eco-design
Paper IV analyzed (as a case study of furniture) to which extent the most important characteristics
of environmentally sound furniture were taken into account in procurement criteria, and whether
the environmental criteria found in the calls for tenders were relevant from the perspective of ecodesign strategies (defined by van Hemel and Cramer, 2002; Besch, 2005) (Figure 4).
Environmental criteria in the calls for tenders of office furniture fell into three main categories,
covering product-related criteria, corporate level environmental performance and recycling facilities. In the calls for tenders, green criteria focused on the toxicity of furniture, e.g. the use of
fewer chemicals in the furniture, and the use of chemicals that are less damaging to health and
environment. In addition, reducing the depletion of natural resources was focused. Requirements
on these aspects seemed to support eco-design strategies such as the ‘selection of low-impact
materials’, ‘optimization of lifetime’ and ‘waste management optimization’. As assessed by the
RPS tool, these environmental impacts were relevant, also having the potential to be influenced
through new technological solutions, and steerability by eco-labels and standards. However, if only
one (or few) suppliers that are able to provide the required technology exist, this may become an
obstacle from the discriminatory point of view, and thus is not legally trouble-free in every case.
There are also eco-design strategies related to the production processes and distribution of
furniture that GPP cannot support at the moment. Although these are aspects with high relevance
and potential, they now have fairly low steerability by GPP. Due to the fact that the criteria must
be product-specific (Directives 2004/18/EC and 2004/17/EC), only requirements that have a link
to the subject matter of the contract can be taken into account in the technical specifications and
award criteria, and thus issues promoting eco-design strategies but defined rather loosely – such
as ‘optimization of production techniques’ and ‘distribution optimization’ – cannot be directly
steered by GPP. Although there are some furniture eco-label criteria for production processes, it
is not straightforward to what extent the production processes can be taken into account in the
procurement of furniture.
None of the criteria existed in the calls for tenders that would pose requirements for the distribution either. Setting criteria concerning the transportation distance could be regarded as discriminatory. Criteria for the company’s logistics systems can only be used if the logistics is a main part
of the service. It could be possible to add contract clauses concerning the method of delivery:
however, this requires taking into consideration the non-discrimination of various suppliers (European Commission, 2004a).
The appearance of environmental procurement criteria in the calls for tenders can make positive
contributions to the design and manufacturing of environmentally improved products in the furniture industry. The successful promotion of eco-design by GPP requires, however, that the green
criteria presented in the calls for tenders are relevant with respect to environmental impact and
that they may have influence on the impact. The RPS selection tool seemed to be an appropriate
way to assess the relevance, potential and steerability of the criteria in the calls for tenders. The
assessment showed that though there are comprehensive eco-label criteria for furniture, all the
criteria may not have similar steerability if presented as GPP criteria. In GPP, the steerability was
low, e.g. for the criteria concerning distribution and production processes. In addition, environmental criteria presented in the calls for tenders must be well-defined, and a proof of fulfilment of
the criteria should be required: otherwise, the environmental requirements may not be understood
and documented by the bidder, and the criteria will not gain a desired effect.
44 Alhola
Monographs of the Boreal Environment Research No. 40
- Recycling / reuse
service or system
- Easy assembly
and dismantling
- Easy care and
cleaning
- Training of
personnel
New concept Reduction of
developmaterial
ment
use
Waste
management
optimisation
Optimization
of production
techniques
Eco-design
of furniture
Reduction of
Selection of
environmental
low-impact
impacts
materials
during
use
Optimization Distribution
of initial
optimisation
lifetime
- Guarantee
- Durability
- Product range,
adaptability
- Ergonomics
- Purpose of use
- Spare parts and
repair services
- Packaging material
- Package recycling
/ reuse system
- Production
chemicals
- Production
emissions
- Chemical content
(variety of criteria)
- Material choice
- Emissions to air
or water
- Eco-label criteria
- M1 -labeled
materials
- Forest certified
wood
Criteria that could support all strategies:
Environmental management system, Environmental program, Environmental policy,
Quality management, Environmental product declaration (EPD)
Figure 4. Environmental criteria found in calls for tenders of office furniture supporting eco-design strategies.
4.6 Use of contract clauses in green public procurement
The material studied in article VI implied that the use of environmental criteria in public procurement contracts has increased to a certain extent between 2005 and 2007, being more common in
the Swedish procurement contracts as compared to the Finnish ones. In 2005, only about half of
the ‘green’ purchases77 included environmental criteria in the contract clauses as well; whereas
in 2007 the rate was approximately two thirds. Especially in the procurement of transportation
services, Swedish purchasers used environmental criteria almost without exception. Still, the use
of environmental criteria only in calls for tenders remains a much more common practice than
stipulating them in the contract clauses, too.
The examined contract clauses differed from each other, especially in their accuracy. One distinctive feature between the countries (Finland and Sweden) was that the environmental criteria
stipulated in the Swedish calls for tenders and final contracts were set out in more detail. From a
contract law point of view, the transport related contracts, in particular, were comprehensive and
skillfully drafted so that the procurement authorities would be able to ensure in most circumstances
that the agreed environmental criteria would be met. On the other hand, many of the analyzed
i.e. purchases that include environmental criteria in the calls for tenders.
77
Environmental criteria in public procurement – Focus on tender documents
45
procurement contracts stipulated that the contractor must comply in all activities with the prevailing
environmental laws. For example, several contracts included referrals to the procuring municipalities’ own environmental programmes, without clear stipulation with regard to the extent to which
the environmental programme should be followed.
The enforceability of environmental terms and conditions in procurement contracts was also
examined to discover whether the agreed environmental criteria could be supervised by the procuring authority and could, in such terms, be effectively enforced in the case of a breach of contract.
In this respect, many terms and conditions regarding environmental criteria in the procurement
contracts were vague. In many cases, the procurement authority had not reserved the right to
inspect the compliance with the agreed environmental criteria. However, few contracts in which
the option to monitor and inspect the activities of the contractors was included also had clearly
drafted contract terms according to which the contractor was obliged to pay liquidated damages if
there was a breach of the environmental criteria it had agreed upon. The amount of the liquidated
damages varied between 500 - 1000 €, which seems, in terms of the principle of proportionality78,
a reasonable amount to ensure compliance. This kind of formulation of procurement contract
enables the procurement authority to react to possible breaches of contract with efficient means –
since with a preset sanction, the procurement authority does not have to deal with the frequently
difficult question of the assessment of damages caused by a breach of contract.
Breach of environmental criteria may not cause any direct damages to the procuring authority,
so claiming for damages or even verifying a breach of contract might prove to be a difficult exercise, since such a breach could be considered insignificant from the procurement authority’s point
of view. In this case, the question relates to defining a disruption in execution: can the contract
be considered correctly fulfilled, even if the execution differs somewhat from the description of
obligations? 79 Finnish contract law and jurisprudence, for example, does not expect perfect performance in fulfilling the contract. If the performance of the contractor is flawless in its detectable
qualities but the environmental criteria of the manufacturing process have not been met, it can be
argued with merit that the contractor has nevertheless delivered the agreed goods or services, and
the failure to comply with the agreed environmental criteria is a secondary concern and thus can
in some cases be considered insignificant or irrelevant from the buyer’s point of view. This might
well be the case when the procurement authority cannot provide any evidence that the possible
breach has had any direct impacts.
Treaty of Lisbon (2007) Article 3b.
See, e.g. Hemmo, 2003, p. 116–117.
78
79
• Progress in GPP
was found in Finland
and Sweden between
2003 and 2005.
• Year – country
interaction was
statistically significant.
• Adjustement for
product groups was
relevant for results.
• Logit models is a
suitable tool to
measure progress by
comparing shares of
green purchases.
Article II
Article I
• LCA and the cost
calculation method
gave more
comprehensive
results in awarding the
tenders than the
purchaser’s award
system in relation to
environmental impacts.
• Weight for
environment should
be significant in
order to change the
superiorityof tenders.
Article III
How do various
conceptualizations
and measurements
of environmental
impacts contribute
to the assessment
of the most
economically
advantageous
tender?
• 74% of furniture
GPP criteria concern
product and quality
issues, e.g. chemicals
durability, guarantee.
• GPP criteria could
support eco-design
strategies such as:
’selection of low impact
materials’, ’optimization
of life time’ and ’waste
management
optimization’.
Article IV
Could LCA-based
environmental
criteria be applied
and justified in
public procurement
award decision?
• Environmental
impacts of transport
play a crucial role
for certain purchases,
e.g. construction.
• Transport distance
as an award criterion
is not necessarily
discriminative; in the
case the focus is on
the environmental
loads of transport
(not on the distance).
Article V
Could green
purchasing
criteria (in calls
for tenders)
promote greener
products in the
long run?
• Green criteria are
more common in calls
for tender than in
actual contracts.
• Green contract clauses
are often general
in nature.
• It might be difficult to
show the consequences
of a breach of
environmental
contract clauses and
require compensation.
• Good examples:
right to monitor
regularly, moderate
monetary sanction.
Article VI
To what extent
are
environmental
contract
clauses
capable of
guaranteeing
greener
purchases?
Alhola
• 90% of decisions
was based on the
most economically
advantageous
tender in 2005.
• Green criteria
were considered as
part of the most
economically
advantageous
tender in 1/3 of
award decisions.
• Weight for green
criteria was 5-20%.
How much
progress has
occurred in
applying
environmental
purchasing
criteria in calls
for tenders?
To what extent
environmental
criteria are
implemented in
the award
decision?
46 Monographs of the Boreal Environment Research No. 40
Figure 5. Main research questions and some key results of the articles.
Environmental criteria in public procurement – Focus on tender documents
47
5 Discussion
Consensus that environmental objectives should be incorporated in public procurement may be
relatively easy to achieve (Snider and Rendon, 2008). However, integrating green criteria into the
most economically advantageous tender whilst obtaining adequately high quality purchases at a
low cost and complying with the EC legal principles – notably of the free movement of goods and
non-discrimination of the bidders as well as the overall limits of the procurement directives – may
not be straightforward in practice. This thesis identifies the contexts – environment, economy and
law – and illustrates the relations between them, highlighting the possibility of economical and
green public purchases to be implemented in compliance with the EU procurement law.
5.1 Relation between environmental and legal aspects in public
procurement
Studies of calls for tenders showed that the purchasing decision is frequently based on the most
economically advantageous tender, which implies that there are expectations to also include environmental criteria into the award decision. This study supports the views of the previous studies
on GPP (Kippo-Edlund et al., 2005; Bouwer et al., 2005 and PricewaterhouseCoopers, 2009a)
that public purchasers in Finland and Sweden seek to consider environmental aspects quite often.
Despite the difference between the research methods used in Bouwer et al. (2005), PricewaterhouseCoopers (2009b) and Renda et al. (2012), similar results can be found with regard to the top
countries in the EU presenting most environmental criteria.80 Indeed, the countries studied in this
thesis – Finland, Sweden and Denmark – are among the top seven EU countries in implementing
elements of GPP, meaning that they consistently have more calls for tenders with green criteria
than other EU countries (Bouwer et al., 2005; PricewaterhouseCoopers, 2009a; see also: Brammer
and Walker, 201181). In addition, there has been a notable progress in the use of green criteria after
the renewal of public procurement directives in 2004, especially in Finland and Sweden. The large
increase in the proportion of green calls for tenders between the years 2003 and 2005 in Finland
and Sweden seems logical, due to the active work and guiding efforts for GPP in these countries
during that time period, supported by the EU Commission.
EU’s procurement directives require that public purchasers must specify the weights for price
and other award criteria in advance. It can be easily agreed that the scoring system for the most
economically advantageous tender must be published beforehand, but the question arises whether
these scoring systems including weights will ensure effective bidding, i.e. provide competitive,
transparent and optimal or best value tenders. In fact, it has been argued at least in the Swedish
context that assigning values to quality characteristics is not the same as assigning weights and,
in practice, it is not apparent how to design a good scoring rule (Lundberg and Bergman, 2011).
Identifying suitable criteria and relevant weights, all of which are likely to vary as a function of
many factors, is perhaps one of the most critical issues directly related to the procurement success
(Watt et al., 2010). It is almost intuitive to think that the weight of each criterion reflects its relative
importance (Mateus et al., 2010).
In the recent survey on the GPP uptake in the EU-27 (Renda et al., 2012) Finland featured a relatively low GPP
uptake compared to other ’top countries’. However, due to the low response rate, these results have to be read with
caution (Renda et al., 2012, p. iv, 40, 49).
81
The extent and nature of sustainable procurement practices varies significantly across regions internationally. For
example, in Scandinavia, the emphasis is greater on environmental aspects of procurement whereas other areas of
sustainable procurement are focused around the world being most developed among the UK organisations and in
Eastern Europe (Brammer and Walker, 2011).
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Monographs of the Boreal Environment Research No. 40
In many studied calls for tenders, though the important environmental criteria were found,
the weighting for environmental criteria was fairly low, mostly below 10%.82 This relatively low
weight makes it possible to win a contract without providing any environmental efforts.83 Also,
in the analyzed case study, the environmental criteria had no influence on the order of superiority of the tenders, and the bid price dominated the results. Generally, as a result of the ‘lowest
price dominance’, the long-term effects of a purchase may be overlooked by the short-term goal
of achieving a low-cost purchase. On the other hand, this may also illustrate the difficulties that
the purchaser faces when deciding upon the methods and weights to use for the evaluation of the
tenders (Varnäs et al., 2009). The low weighting for environmental criteria also contributes to
the implementation of the purchase, i.e. a breach of contract does not exist if it does not have a
significant or substantial meaning to the buyer. If the environmental criteria have been awarded
a 3 - 5% weighting in the evaluation of the tenders, such criteria could be regarded as secondary
obligations in the procurement contract, which can be considered insignificant or irrelevant with
respect to the contract. Thus, it is quite possible that, given a court case, such damages would not
be compensated.
In principle, the environmental aspects of purchases should be defined by a detailed life cycle
analysis or by using eco-label criteria (European Commission, 2008b; European Commission,
2003b; Siemens, 2003; Kunzlik, 2003). It is suggested that the relevance of eco-labels for green
procurement will increase, and the possibilities of using eco-labelling in green purchasing in the
public sector are evolving (Leire and Thidell, 2009). In addition, this study indicated that several
GPP criteria could promote eco-design of products, and thus, consequently, certain eco-design
criteria of products could be applicable as procurement criteria and lead to remarkable reductions
in environmental impacts of purchased products. Due to the EuP Directive (2005/32/EC), there
already are adopted eco-design implementing measures for 12 energy-using products, and ecodesign preparation studies are being undertaken for other 10 energy-using products (European
Commission, 2011f). In addition, there are efforts in many other industries to create eco-design
measurements, for example in the automotive sector (Muñoz et al., 2006), fashion and textiles
industry (Niinimäki, 2006) and furniture industry (Bovea and Vidal, 2004). These eco-design
measurements – either formally implemented or still under preparation – could have a steering
effect towards more environmentally sound products in the market when used as GPP criteria.
In the light of several EU directives, Community policies and schemes as well as national efforts, public purchasers are strongly encouraged to apply for more environmental criteria in their
procurement. It is interesting to which extent the EU’s legal framework complies with this push to
promote certain EU policies. At the moment, the public procurement directives underline the linking of each criterion to the subject matter of the contract, and the principles of non-discrimination
and free movement of goods, which may still question the suitability of certain LCA-based environmental aspects to be used as purchasing criteria, notably criteria concerning transport distance
and production process (Ekroos, 2008; Ekroos and Nissinen, 2007; Kunzlik, 2003; Arrowsmith
and Kunzlik, 2009). However, in some cases, the most direct environmental benefit may come
from focusing on environmental concerns that go beyond the legal requirements or regulations
(Marron, 2003). Thus, these two very interesting legal issues in public procurement should not be
avoided completely if purchasers seek to achieve most environmental benefits.
In this thesis, the transportation issue was discussed in more detail and it was seen as an acceptable criterion for certain purchases (i.e. construction work), as long as the true aim of setting
such criterion was to obtain environmental targets instead of discrimination of bidders. Indeed, in
The Commission suggest that in order to be effective and give a clear signal to the market, the environmental award
criterion needs to be given a significant weighting, for instance 15% (European Commission, 2008d, p.7).
83
However, quality was given a significant weight among the award criteria in the studied calls for tenders, and often
a green product could be rated highly in quality performance as well and vice versa (see e.g. Manget et al., 2009).
82
Environmental criteria in public procurement – Focus on tender documents
49
the case of procurement of products the discriminatory nature of this criterion of environmental
impacts of transportation can evidently be justified. But in a major construction work, the origin
of bidders and the transport distances of materials are not directly linked to each other. It can also
be considered that the transport distance was an essential component in the scientific method LCA
which was used to determine the environmental impacts in the most economically advantageous
tender, and thus could not be excluded from the assessment. Then the focus would not actually
be on the transport distance but on the units that are used for the environmental loads of transport
modes. Thus, a criterion referring directly to the distance travelled, rather than the actual environmental impacts of transportation, might not be acceptable. This conclusion is compliant with the
statement that the linking of the criterion to the subject matter of the contract is specific to a single
contract, and it should be made clear beforehand with explicit specifications in order to follow
transparency in the procurement (Ekroos and Nissinen, 2007).
Nowadays, it seems that public procurement politics allow somewhat more widespread interpretations to implement the life cycle thinking into the most economically advantageous tender,
especially the production related issues as far as they are relevant when defining the contract
item from a life cycle perspective (European Commission, 2008b). The Commission has further
clarified how to take the production process and other life cycle-based environmental impacts
into account in the tendering process, by stating that all production process related criteria (of
eco-labelling schemes for instance) can be considered as appropriate for defining a product in
a tendering procedure provided that the criteria have to be measurable / verifiable so as to treat
bidders in the same way and allow effective verification of bids against tender documents, and
that the criteria concern the production of the products which are to be supplied to the purchasing
authority (European Commission, 2011e; European Commission, 2011a84; European Commission,
2008b85; European Commission, 2008d). Arrowsmith and Kunzlik (2009) interpret the EC law
even more widely, giving considerable flexibility to member states not merely to favour energy
supplied from renewable sources but also to favour the purchase of products that are themselves
made with green energy. For example, it is suggested that green energy measures are not solely
production measures but relate to the characteristics of the product itself, and it is in the light of
the integration principle86 that authorities sometimes consider the overall environmental impact
of a product across all stages of its life when implementing environmental objectives through
procurement (Arrowsmith, 2009, p. 173).
Except the analyzed case study of the Finnish road construction procurement, the purchasing
criteria in the studied calls for tenders were formulated so that they were compliant with legal
requirements. This means that the environmental criteria used in public purchases focus on those
purchasing criteria that are undoubtedly covered by the directives, and thus the environmental
award criteria are often based on the environmental performance of the use phase and exclude the
production phase. For example, no contract was found that would have contained clearly legally
conflicting environmental clauses. In addition, environmental criteria in the calls for tenders were
often quite straightforward and easy to assess, i.e. asking for environmental programme or management system. It is somewhat questionable whether some of these criteria really make a difference
in the environmental profile of the tenders and promote the award of greener choice. For example,
in some cases, environmental policy was asked in the award criteria, and the bidders were awarded
In technical specifications and in award criteria, contracting authorities should be allowed to refer to a specific
production process, a specific mode of provision or services, or a specific process for any other stage of the life cycle of
a product or service, provided that they are linked to the subject-matter of the public contract (European Commission,
2011a, p. 10, 24, Article 40 in the proposal).
85
Stating that GPP is ”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” (European Commission, 2008b, p. 4).
86
Treaty on the Functioning of the European Union (Consolidated version, 2010) Article 11.
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Monographs of the Boreal Environment Research No. 40
equally if only the environmental policy existed despite the contents and scope of it. Instead, the
correct place for asking for the environmental policy would be in the selection criteria, and the
award criteria could have been targeted to product or service features that could better progress the
greenness of the purchase. This brings up the question as to whether or not green criteria will lead
to any actual environmental benefits in many purchases. This is, however, considerably dependent
on the product group in question. In this thesis, some of the studied purchasing documents were
such that efforts to include environmental criteria into the purchasing criteria of these product
groups would not necessarily lead to true environmental benefits or make the procurement more
environmentally friendly, e.g. procurement of consulting or accounting, etc., not having apparent green criteria. However, there were also several product groups that concerned products or
services with apparent environmental criteria, but in which the bid price was the decisive factor
and environmental criteria were not included at all. This indicates that a great deal of unexploited
greening potential still exist in the field of public procurement.
Overall, the criteria in the calls for tenders and contracts were such that they are not proactive
enough to respond to the aim of more life-cycle based purchasing criteria underlined in the Community policies (e.g. European Commission, 2008b; European Commission, 2008d). Although the
results of this study are in accordance with the numeric GPP target of the EU Commission that by
the year 2010, 50% of all tendering procedures should be green (European Commission, 2008b)
many of the environmental criteria in the examined calls for tenders, and especially in the contracts do not meet the quality requirements of the Commission’s target, i.e. they are not compliant
with the common ‘core’ criteria defined by the Commission (see: European Commission, 2011e).
Also, according to the most recent study on the uptake of GPP in the EU-27, only 26% of the last
contracts (of the surveyed ten product/service groups) signed by public authorities included all
the EU core GPP criteria. However, the percentage of last contracts that included at least one EU
core GPP criterion was 55% (Renda et al., 2012).
Although the previous studies (Kippo-Edlund et al., 2005; Bouwer et al., 2005 and PricewaterhouseCoopers, 2009a) and the latest study (Renda et al., 2012) on GPP in the EU show that the use
of environmental criteria is increasing, the uptake of EU GPP criteria varies significantly across the
EU-27 countries as well as across product groups (Renda et al., 2012). Thus, it seems that public
authorities need guidance and practical help to facilitate the GPP criteria. One challenge for the
purchasers is to know what types of environmental information a supplier is able to provide; i.e.
if criteria are too strict no suppliers are able to meet them, and if too low, these environmental
requirements may loose credibility (Leire, 2009). In addition, some of the environmental criteria
that are often presented in the calls for tenders, notably concerning chemical content, are already
substantially addressed by legal regulations, and one could say that GPP criteria concerning them
bring no extra benefit to the environment. However, these are not necessarily controlled at the
moment, and thus it may be beneficial to explicitly state them in the call for tender. For example,
though the majority of the EU timber trade is with countries having effective enforcement of
forest legislation, illegal logging is a serious problem in some countries and regions from which
the EU imports timber products. In this respect, as public authorities are important consumers of
timber-based products, they could have a significant impact in reducing the demand for illegally
logged timber. (European Commission, 2004a)87
For example, the UK Government has had a timber procurement policy since 2000, which requires that all timber and
wood-derived products procured by central government departments, their executive agencies and non-departmental
public bodies must be from independently verifiable legal and sustainable or FLEGT-licensed (Forest Law Enforcement,
Governance and Trade, the EU FLEGT Action Plan http://www.euflegt.efi.int/portal/home/flegt_intro/flegt_action_plan/) or equivalent sources, or recycled timber (The UK public procurement policy on timber, 2010; see also:
Scholl et al., 2010, p. 46).
87
Environmental criteria in public procurement – Focus on tender documents
51
In this thesis, it became evident that environmental aspects have often been considered of particular importance in the call for tender but their formulation in drafting the contract has received
no special attention, or the contractual terms are drafted in a general form. From a contract law
perspective, it is difficult to see any advantages in drafting very general terms where the practical
meaning is vague and indefinite, and enforceability is unclear. On this account, it may be presumed
that the consequences of possible breaches of terms of contract relating to environmental issues
will, in reality, remain insubstantial. It is suggested, however, that with contract requirements,
criteria relating solely to individual contracts would not be hindrances to trade (Arrowsmith and
Kunzlik, 2009, p. 132-136, 178) and thus, there could be further potential in the use of contractual
clauses to make purchases greener. In addition, as concluded in this study, the possibility of monitoring the contractor and imposing immediate and predetermined sanctions for breach of contract
might be a useful method to guarantee that agreed green criteria will be honoured.
Currently, the public procurement legislation enables the consideration of environmental criteria
in the tendering process, and the concept of the most economically advantageous tender is relatively
open for the development of various kinds of environmental criteria. However, the results of this
thesis comply with the conclusions of earlier studies that uncertainty regarding the legislation
contributes to risk-averse behaviour among procurement officers, meaning that they make decisions that reduce the risk of legal conflict especially when it comes to the execution of the free
trade principle (Carlsson and Waara, 2007; Mielisch and Erdmenger, 2002). The complexity of
public procurement tends to favour on past practices and avoiding risks (Borg et al., 2006). This
may also be one reason why procurement has remained reactive in nature, i.e. focused mainly on
practical means rather than strategic ends (Leire, 2009; Snider, 2006).
The need to simplify and update the European public procurement legislation is recognised in the
Green Paper on the modernisation of EU public procurement policy which calls for a review of the
EU public procurement system to increase its efficiency and effectiveness (European Commission,
2011d). The existing tools and methods should be modernised in order to increase the efficiency
of public spending, to make better use of public procurement in support of common societal goals,
e.g., protection of the environment, higher resource and energy efficiency and combating climate
change, promoting innovation and social inclusion, and ensuring the best possible conditions for
the provision of high quality public services (European Commission, 2011d). The revisions should
result in simpler and more flexible procurement procedures for contracting authorities and provide easier access for companies, especially SMEs, leading to more environmentally sustainable,
socially responsible and innovative goods, services and works (European Commission, 2011g).
The proposal for the new EU directive on public procurement is based on enabling approach
providing contracting authorities with the instruments needed to contribute to the achievement
of the Europe 2020 strategic goals (European Commission, 2011a, p. 9). It gives public purchasers for example the possibility to base their award decisions on life-cycle costs of the products,
services or works to be purchased, including costs from raw material acquisition or generation of
resources until disposal, clearance and finalisation. The costs to be taken into account do not only
include direct monetary expenses but also external environmental costs if they can be monetised
and verified (by e.g. using a common European Union methodology for the calculation of life-cycle
costs) (European Commission, 2011a, p. 10, 24, Article 67 in the proposal).
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Also some other recent proposals for the revision of a number of EU directives aim at developing criteria that would be more useful for green public procurement.88 This puts pressure on public
authorities to demand for products with lower carbon footprint and more eco-efficiency during their
life cycle. It is thus surprising that the legal boundaries are still not straightforward. This may be due
to the fact that legal disputes and court decisions in the area of GPP are scarce. Indeed, so far the
EU public procurement legislation itself has shown basically only good examples89 of balancing the
environment and the market (Ekroos, 2008, p. 429) and thus the conclusion is that so far legislation
has not posed a problem in taking environmental aspects into account in public procurement. So,
public purchasers at all level have a crucial role in implementing and monitoring the GPP criteria
in calls for tenders and actual contracts. So far they have been free to choose whether, and which
environmental criteria they use in the purchasing process but could it be more efficient if the use of
environmental criteria would become legally binding? Mandatory GPP criteria could be enforced,
for example, to the purchases of the ‘priority sectors’ defined by the EU including product groups
that are most suitable for GPP and for which common GPP criteria have been established (European Commission, 2011e). Then it would also be possible to objectively measure the outcome of
the purchase and to compare the situation between member states. Mandatory measurements are
also proposed in the Commission Communication (European Commission, 2008a) that suggests
that the implementing measures under the Labelling Directive90 will identify one of the labelling
classes as a level below which public authorities would not be allowed to procure. This level will
be set on the basis of the outcome of impact assessments for relevant product groups (European
Commission, 2008a, p. 6). Generally, the mandatory nature of the environmental criteria could
be expressed in the public procurement legislation, and the product groups that it concerns could
then be specified in the Government Resolution. This would be the next step from voluntariness
and pressure to mandatory measurements that would be likely to stimulate the progress of GPP.
5.2 Relation between environmental and economic aspects in
public procurement
The economic and environmental aspects of public procurement were studied through the concept
of the most economically advantageous tender. As presented in the EU procurement directives, it
is a basis for combining the economic and non-economic criteria, e.g. environmental criteria in
the public procurement decision making. In this thesis, it was examined how well this concept,
i.e. a weighted sum of various aspects formulated by the purchaser, would actually illustrate the
economic and environmental performance of a purchase.
Environmental criteria as part of the most economically advantageous tender were presented
in one-third of the examined calls for tenders. Green criteria as such do not, however, guarantee
that the purchasing authority succeeds to implement green procurement options. In an ideal case,
environmental purchasing criteria should be based on life cycle thinking (European Commission,
2008b; European Commission, 2003b; Siemens, 2003; Kunzlik, 2003). In this thesis, a compre ”Product labelling under the Energy Labelling Directive and Ecolabel Regulation will be further developed and,
following a review of the Ecodesign Directive in 2012, complemented as appropriate by an Ecodesign Labelling
Directive to provide consumers with information about the energy and/or environmental performance of products.
The energy efficiency and environmental criteria under these schemes will be used to establish a harmonised base for
public procurement and incentives provided by the EU and its Member States”. (European Commission, 2008a, p. 4).
It is suggested that minimum requirements and advanced performance benchmarks should be set within the Directive on ‘Ecodesign for energy-using products’, i.e. the EuP Directive (Directive 2005/32/EC) (European Commission,
2008b, p. 3). In addition, Directive 2009/33/EC states that authorities should take into account lifetime energy and
environmental impacts when purchasing road transport vehicles.
89
ECJ cases: C-513/99 Concordia Bus Finland Oy Ab (2002); C-448/01 Wienstorm GmbH (2003).
90
Directive 2010/30/EU of 19 May 2010 on the indication by labelling and standard product information of the
consumption of energy and other resources by energy-related products.
88
Environmental criteria in public procurement – Focus on tender documents
53
hensive LCA study and the cost calculation method (Directive 2009/33/EC) were applied to a real
public procurement case in order to calculate the environmental impacts of three competing tenders.
The results were then compared to the purchaser’s equation of the most economically advantageous tender, which used a single environmental criterion favouring new environmentally sound
technology. The results showed that the measurement of environmental impacts of the tenders
may have a contribution to the ranking of tenders in terms of the most economically advantageous
tender. This is of course also affected by the purchaser’s scoring system for award criteria. These
scientifically grounded calculation methods would, however, position the competing tenders on
a more equal level, or at least on a continuum of environmental award points compared to the
purchaser’s equation. On the other hand, placing the tenders in a continuum of environmental
impacts would not necessarily amply reward those service providers that have really put some
effort into green technology and environmental product characteristics. Thus, instead of ranking
the tenders proportionally in a continuum, should we significantly compensate those small steps
that could more quickly lead to eco-improvements in products and services? This ‘compensation
for best practice’ could be seen as a way to promote environmental product improvements. Thus
it seems to be fair enough to select the most important criteria, set the weighting for the criteria at
moderately high and award the most progressive tender in that area the most. Of course, there is
always the possibility to use environmental criteria in the technical specifications and then compete
solely on price, and the outcome could still be both economical and environmentally friendly. In
this case, however, the purchaser would settle for a decent level of greenness but fail to reward
for better environmental performance and to promote opportunity for possible best green practices
and environmental innovations.
It seems that the use of LCA in actual purchases is not likely to take place as a practical tool in
the comparison of purchasing choices unless the system for environmental impacts and the weights
for different impact categories is solid (see e.g. Gloria et al., 2007 for developing software for
weight set in applying LCA to real world decisions based on panelists view for the US markets).
Although it is time consuming and probably so far impossible for the purchaser to use LCA in
their daily work, this scientific method gives a good basis for developing guidance for public
procurement bodies, e.g. providing information on how to target the environmental focus in the
award decision. For example, this case study indicated that few carefully selected environmental
criteria in the call for tender were sufficient enough to bring up the purchasing options that were
the greenest ones also in other, probably less significant, environmental aspects. The results also
indicated that relatively small actions, such as eco-driving, the selection of a reasonable vehicle
for a certain purpose, and requirements for new technology could have a remarkable effect on
the environmental impacts of the service with moderate or no added costs. There already exist
many LCA-based practical tools that provide guidance on environmental aspects of products and
services, e.g. the EU’s Internet-based GPP toolkit (European Commission, 2011e), eco-labels and
other check lists, which are often based on life cycle thinking.
In addition to applying green procurement criteria, the public purchaser confronts a challenge to
incorporate economic (and other non-economic) criteria into the most economically advantageous
tender. Discussion about the relation of green, economic and quality issues in public procurement
is accurate, and the question arises where the balance should be drawn. There does not exist a
uniform practice as to how to measure the economic efficiency of a purchase, or how to define
the quality of it. The public procurement directives do not clearly define the concept of the most
economically advantageous tender, either. However, when other than economic targets for public
procurement are also regarded, i.e. environmental issues, competitive concerns and social issues,
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the purchasing decision may not be purely economic in nature (Bovis, 2006) and due to the case
law91 it does not even need to be so.
The interpretations of the most economically advantageous tender leave much space for purchasers’ preferences and thus subjectivity of award criteria. The preferences and award systems
of different purchasers were indeed not consistent in the examined calls for tenders. The award
system, i.e. how the most economically advantageous tender is calculated may hinder the transparency of the awarding procedure in practice (Chen, 2008; Meijer and Telgen, 2007). These risks and
shortcomings are due to the relative award system.92 If an award system was fully transparent, the
bidders would be able to calculate their scores and thus optimize their tender while they are drafting it, without having knowledge of the other tenders (Chen, 2008). Many award systems in the
examined calls for tenders used relative scores, which imply that the winning bid would not be truly
the most economically advantageous as the purchaser’s award system was not fully transparent.
Thus, it appears that due to several shortcomings, e.g. difficulties in identifying suitable award
criteria and setting weights (Watt et al., 2010; Mateus et al., 2010) and inconsistent scoring rules
and non-transparent rating systems (e.g. Chen, 2008; Meijer and Telgen, 2007; Lundberg and
Bergman, 2010) which may further lead to a submission of non-optimal tenders by the bidders
(Lundberg and Bergman, 2011) the concept of the most economically advantageous tender does
not necessarily indicate which of the purchasing options provides the best economic utility whilst
also being an environmentally preferable option. It seems that the usefulness of the concept ‘the
most economically advantageous tender’ in public procurement lies at the moment in formulating
green (and other non-economic) purchasing criteria into procurement decision, and legitimizing
(green) purchasing options that are not based solely on price. But in order to assess the relation
of economic and environmental aspects of purchases, we would need another – more objective
– measurement.
One measurement for the relation of economic efficiency and greenness of a purchase could be
eco-efficiency. Generally, the concept of eco-efficiency indicates how many environmental impacts
are borne in exchange for the value of the unit. Theoretical interpretations of eco-efficiency suggest
that it can be used to compare products and services in their economic and environmental performance (e.g. Ehrenfeld, 2005; Kobayashi et al., 2005). Although eco-efficiency is widely examined
and used in business life (see, e.g. Lehni, 2003; Ehrenfeld, 2005; Kobayashi et al., 2005; Brattebo,
2005; Daly, 1996) it has so far only been theoretical within the context of public procurement and
not applied as a common practice. Eco-efficient purchasing has been introduced by GRIP (1998)
as: “maximizing the value added, including usefulness, pleasure, user satisfaction, satisfaction
of needs, contribution to efficient operations, while minimizing the environmental impact”. This
broad definition thus covers the aspects that can be included in the most economically advantageous
tender. However, a standardized formula or method for calculating comparable eco-efficiency rates
in public procurement would need to be developed.
For eco-efficiency calculations, the scientific grounded data about environmental impacts of
various products and services is currently increasingly available in the form of e.g. eco-labels,
GPP toolkit and standards, which would help to calculate the environmental impacts of these
purchases. However, the interpretation of the economic performance could pose a problem, as it
ECJ case: C-513/99 Concordia Bus Finland Oy Ab (2002).
Example from Chen, 2008, p. 409: ”The number 50 (points) is the maximum score that can be obtained for the price
criterion. If the maximum score for the other criteria equals 50 points, the maximum total score will be 100 points. If we
have three tenders, for example, A, B and C with prices of 40 €, 50 € and 80 € respectively, the scores will be 50 points;
50 × 40 / 50 = 40 points; and 50 × 40 / 80 = 25 points. The difference between the scores of B and C is therefore 40 – 25
= 15 points. If, however, tender A is declared invalid afterwards, the lowest price is raised to 50 € and now the score
of B will be 50 points, and the score of C will be 50 × 50 / 80 = 31.25 points. So the difference between the scores of B
and C has grown from 15 points to 50 – 31.25 = 18.75 points and it would be possible that the ranking between B and
C is changed by declaring tender A invalid.”
91
92
Environmental criteria in public procurement – Focus on tender documents
55
can be wide-ranging; from a monetary unit (price) to overall user satisfaction (e.g. Lehni, 2003;
Verfaillie and Bidwell, 2000; GRIP, 1998; Honkasalo, 2001; see also Braungart et al., 2007, p.
1339 for different variations). In public procurement, the economic benefit actually results from
the lower price, i.e. the lower the bid price the higher the award points for price. Thus, one could
say that the higher bid price93 could lead to a distorted eco-efficiency rate in case where all the
tenders fulfil the quality criteria (i.e. technical specifications) set by the purchaser, and compete
mostly on price. In real life, however, products and services are rarely that similar in quality
that only the criteria defined in the call for tender could be used as an objective indicator of the
product or service value. There is no common set of criteria for quality, either. It is understood
as the capability to exceed customers’ expectations (Berry et al., 1988), representing elements of
technical and functional quality of products and services, responsiveness to the customers’ needs,
timely delivery of products, among others (Stanley and Wisner, 2001). It may also include other
determinants, such as safety, consumer protection, hygiene, environmental and health concerns
(Wright, 1997; see also Maignan et al., 2002). In addition, for many products the higher purchasing price is compensated by lower lifecycle costs (LCC), i.e. acquisition costs, operational costs
and end of life costs (Leire and Thidell, 2009).
Thus, could we think that the bid price (in competitive markets) could still explain differences
in the real quality of the products, and that the higher bid price reflects this additional quality
exceeding the criteria valued by the purchaser? So, if we think that the bid price reflects the true
overall customer satisfaction – taken, of course, that the markets is competitive – then the bid
price could be considered as an objective measurement of the product or service value in the ecoefficiency rate, although in the ranking of the most economically advantageous tender it would
get less award points (i.e. least benefit to the buyer). On the other hand, it is suggested that if bids
are to be evaluated according to a combination of price and quality related issues, then the procuring authority should put a monetary value on quality that can be added to or subtracted from
the actual bids, rather than transform bid prices into scores that can be added to a quality score
(Lundberg and Bergman, 2011). In a public purchase this kind of valuation might be appropriate
if the monetary value of quality (and other determinants)94 could well be estimated, and thus the
weighting of the determinants would not pose a problem in order to assess the economic value of
the purchase in the eco-efficiency rate.
Despite these challenges, eco-efficiency could be one of the methods that provide environmental comparisons in relation to the economic aspects in public purchases. Still, it is unlike that a
standardized or systematic eco-efficiency formula could be developed for all purchases, but the
eco-efficiency calculations in public procurement should rather focus on certain product and service
groups, and should be performed by specialists that prepare examples and national or EU level
recommendations of environmental criteria for specific products groups.
6 Conclusions
Green public procurement has progressed a long way in the EU history from principles into practice. However, today the debate of the importance and significance of GPP is probably the most
topical as ever. Despite the intense political pressure, development of practical tools, and more
precise interpretations of the procurement directives due to Community Communications and case
law, which have helped to identify and address the most debatable issues in green public procurement, the formulation of clear, detailed and proactive environmental purchasing criteria remains
as a challenge especially in the implementation of contracts but also to some extent in formulat In case where the bid price (instead of price award points) is used as an indicator of economic performance.
Except for environmental criteria as they would be valued in the denominator of the eco-efficiency rate.
93
94
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ing the calls for tenders. This may be partly because, for some requirements, e.g. transportation
and production, there is no clear vision on how they should be treated in the light of procurement
directives or jurisprudence.
This study identified three areas of importance in fostering the environmental performance of a
purchase, i.e. defining the environmental criteria in the calls for tenders, formulating a transparent
scoring system for the most economically advantageous tender with a moderately high weight for
environment, and controlling the fulfilment of green criteria by contract enforcement mechanisms.
The attributes of the most economically advantageous tender could provide a more realistic indicator of the value of the product or service to the purchaser than the bid price if the award criteria
were defined clearly and comprehensively. Several well-defined elements in the award criteria, e.g.
costs, quality criteria, functional characteristics and environmental and social issues could make
the ‘maximum value added’ or ‘user satisfaction’ of the tenders more comparable, and render the
bid price less crucial in determining the winner.
The study showed that the environmental criteria used by the purchasers are weighted to a
relatively low degree in order to contribute the final selection of suppliers. In addition, they are
relatively easy to fulfil, and the follow-up of the criteria needs more attention in the contracts.
Thus, there could be potential for further progress in GPP by adding more detailed environmental
criteria with the weight of a higher degree that would promote actual environmental benefits, and
to develop general contract clauses and various kinds of framework contracts that include environmental clauses. In addition, there could be possibilities for further progress in generating legislation
related to GPP, for example, by enforcing mandatory GPP criteria to some key product groups.
The implementation of green procurement criteria may work as a signal to the suppliers and encourage them to continuous environmental improvements, and the fulfilment of the criteria implies
a greater probability of environmentally preferable purchase. However, setting green purchasing
criteria or adding more environmental criteria do not necessarily mean that the purchase is more
environmentally friendly than other variants of the same product or service. GPP criteria may vary
a lot depending on the products, services and works being purchased. For many product groups,
only a few key criteria cause the greatest environmental impacts, which should be recognized in the
purchasing process and separated from those that are secondary from the environmental point of
view. So, implementing green procurement criteria requires expertise on environmental, economic
and legal issues as well as the technical features of the product. Thus there is a call for developing
and promoting more standardized methods and tools to help public purchasers to facilitate the use
of environmental criteria in such a complex framework.
Studying green procurement criteria could have practical implications in the field of public
procurement. For the procurement practitioners, this thesis provides an insight into the important environmental aspects of products and gives the list of environmental criteria that could be
considered in their purchasing process, as well as explaines the legal challenges in formulating
and integrating environmental criteria in public procurement. The methods and tools used in this
thesis provide good material and guiding information which could be used to ground decisions
for greener choices. For policymakers, this study gives the overview of the issues that would need
most ‘greening’, and for academic research it offers insights in measuring the state and progress
of GPP as well as its potential to contribute to sustainable production and consumption.
As this study provided an insight into the comparison between the subjective choices of decision makers, i.e. the most economically advantageous tender and the quantitative results of
environmental impact assessment, a further study could be applied in developing a more objective measurement of the relation between economic and environmental aspects of products and
services, i.e. eco-efficiency of public purchases. It would not try to replace the concept of the
most economically advantageous tender, but could be used as a tool to help public purchasers to
Environmental criteria in public procurement – Focus on tender documents
57
formulate economic, quality and green award criteria that would be better balanced in the most
economically advantageous tender.
Acknowledgements
This Ph.D process has been highly rewarding and interesting and most of all – a great learning
experience. It originated as a project of the Academy of Finland research programme of Environment and Law. I want to express my gratitude to the initiators of the project, Prof. Ari Ekroos and
Dr. Ari Nissinen, who were also my supervisors, for offering me this research opportunity. I also
thank the Academy of Finland for funding the most part of the research.
I am grateful to Professor Ari Ekroos for guiding me into the world of EU law, and sharing his
time by giving professional comments, ideas and clear answers. I want to give my warmest thanks
also to Dr. Ari Nissinen for his guidance and support at every step of the journey. He supervised
this work by giving great ideas and comments while also encouraging me to develop my own
insights. His expertise in many areas of environmental research is overwhelming, not to mention his positive attitude towards work and life, which made the research project and co-writing
of articles an inspiring learning experience and provided me with lot of confidence. I also thank
Docent Hannu Rita for sharing his expertise on statistical analyses. Writing an article jointly with
him was a privilege to me. I also thank my co-author, Lawyer Antti Palmujoki (Ph.D) for sharing
his academic and practical knowledge about contract law.
My warm thanks go to all my wonderful co-workers in SYKE for their support and interesting
discussions as well as laugh and memorable moments. I am very grateful to Professor Jyri Seppälä for his encouragement during the process as well as to Kimmo Silvo, Head of Unit, for his
support in finalizing this thesis. Special thanks go to Katariina Matalamäki and Ritva Koskinen
for helping me in organizing the publishing process and for copy-editing. In addition, I want to
thank my research fellow at Aalto University, LL.M Riikka Hietanen, for sharing her opinions and
effort during this project. I thank the pre-examiners Professor Kalle Määttä and Dr. Petrus Kautto
for giving their time and contribution to this thesis.
I highly appreciate the help from my family and friends over the past years. I thank my mother
Leena and mother-in-law Mervi for helping me in daily routines and being there when ever I
needed. I warmly thank my sister Elina for her support and encouragement. I also send my warmest thoughts to my dear father Tauno who would have been very proud of me. Likewise I think
our beloved Mimma who believed in me probably the most.
Finally, I give my special thanks to my dear husband Tommi for caring, understanding and being supportive during the past seven years. I thank also Tuomas and Emmi for not only putting
my creativity and organizing skills to the test but also for providing me with life full of happy and
exciting moments.
58 Alhola
Monographs of the Boreal Environment Research No. 40
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MONOGRAPHS of the Boreal Environment Research
No. 40
ISBN 978-952-11-4069-3 (print.)
ISBN 978-952-11-4070-9 (PDF)
ISSN 1239-1875 (print.)
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2012