Report on Innovation Potentials in Eco-friendly Public Procurement
Researchers at LIAISE partner Environmental Policy Research Centre, FU Berlin, have recently published a report on the innovation potentials of environmentally friendly public procurement.
With an annual procurement budget of around 260 bn Euros – or 12% of the German GDP – the market power of the Federal, State and Local institutions is considerable. It is increasingly recognized in Germany that the consistent consideration of innovative products and services in public procurement can significantly support innovation policies from the demand side.
The Federal Government plans to unlock the so far insufficiently used innovation potential of public procurement within the framework of its “High-Tech-Strategy”. With the adoption of the inter-ministerial “Agreement for an Increased Innovation Orientation in Public Procurement”, six federal ministries (Federal Ministries for Economy and Technology; Interior; Defence; Transport, Building and Urban Affairs; Environment; and Education and Research) have enacted a set of measures that substantiate the guidelines of the high-tech-strategy and allow to consider a long-term and sustainable planning horizon in determining the most economic offer and thus give more leeway for innovations. Thereby, using analysis of life-cycle costs, it will be possible to valuate energy and resources more appropriately and to prefer technologies that can be expected to have lower total costs despite higher initial costs. New methods of steering – as functional service description, the permission of adjacent offers or a competitive dialogue – hold potential to strengthen the innovation orientation of procurement.
The aim of the project was to review, within the operational scope of the Environmental Ministry, how the agreement is implemented and to identify chances and obstacles of the implementation in cooperation with the responsible procurement agencies. Within the review, case studies on best practices were also conducted. On the basis of an empirical survey, tangible recommendations was made for improvements in the implementation. Another goal is to analyze universally valid possibilities and starting points for intensified innovation orientation in public procurement. Finally, the fundamentals for compliance with the agreement’s reporting obligation were provided.
The report also includes two case studies, conducted by FUB researchers: first, an analysis of public procurement policy and the procurement of the Royal Danish Playhouse in Copenhagen; and, second, an analysis of public procurement policy and the procurement of electric cars in China.
The full report (German version only) is available online.