Client: Ministry of Finance

Period: 2017

The main goal of public procurement is to purchase goods and services at the best possible price and this is how it should be. At the same time, public procurement can also have supplementary conditions and this aspect is not well known currently.

Public procurement is an impressive instrument – in 2016, approx. 2 billion euros were channelled through procurements, and contracts were signed with 3,541 tenderers. If the contracting authority, faced with comparable tenders in tender evaluation, prefers the one that promises to hire also people with reduced work capacity or the long-term unemployed, then it will create additional social value in addition to the primary subject of the tender.

This analysis focuses specifically on the feasibility of promoting the employment of risk groups through public procurements. Risk groups are defined as groups whose labour market prospects are limited compared to other groups. For instance, people with reduced work capacity, young people, non-Estonian speakers, etc.

Experience of other countries shows that the employment of risk groups can be used as a requirement in public procurement but it is far from being a common practice. Promoting the employment of risk groups requires a change of mindset in public procurement – as long as procurement is solely focused on the lowest possible cost, it will be impossible to develop any supplementary social value. Based on the experience of other countries, promoting such social value requires collaboration and information sharing between different institutions – if a contracting authority wants to award additional points for the employment of risk group workers in any procurement, they will need information on how and what exactly they can award points for. Tenderers would also need specialist guidance and practical advice, as good intentions alone are not enough to successfully integrate a person of reduced work capacity with a work team.

It is possible to promote the employment of risk groups through public procurement but this must be done in compliance with regulations. Meaning that all tenderers (incl. foreigners) must have equal opportunities to submit tenders, the risk groups must be clearly defined and the weight given to the promotion of this employment in tender evaluation must be proportionate to the subject of the tender. It must also be possible to check whether procurement requirements have been met in tenders and whether the tender conditions are being adhered to during contract performance.

Estonian tenderers are not eager to expand the tender evaluation criteria yet, but this might change in the future. An analysis into and some practical guidelines on how to integrate social values into public procurement would help to understand why and how to do this in practice.
The study was conducted in collaboration with LAW OFFICE NOVE.

The study was requested by the Government Office of Estonia and funded from the European Social Fund measure “Developing the quality of policy-making”.