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Public procurement and social enterprise 28 October 2011

Posted by cooperatoby in EU, social economy, Social enterprise.
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Conclusions of the PASE project’s seminar “Public procurement and public social partnerships – The prospects for social enterprises and the reform of EU rules”, held in Forest/Vorst, Brussels, on 26th October 2011.

by Toby Johnson, moderator

The seminar has looked at two contrasting regional approaches to increasing the involvement of social enterprises in the delivery of public services. Marche’s approach is via legislation to facilitate contracting to social co-operatives, while in Flanders the approach is more pragmatic – working within the current rules rather than seeking to change them. We have also heard what the European federal bodies have to say about the reform of public procurement legislation that is under way. The chief point is that when you are dealing with social services, quality needs to pay a much more important role in purchasing decisions. The good news is that the Commission seems to have taken this on board. Whist we are unlikely to see the “cheapest offer” criterion abolished, we can expect more quality-oriented techniques to be used much more widely.

Build capacity of social enterprises

We need to take a businesslike approach. Firstly this involves collaborating pragmatically with partners from the private sector. This might be through sub-contracting or it might be through engaging in trilateral negotiations between the public, private and social enterprise sectors to define the best niches to expand into.
Secondly, evidence from both Italy and Flanders shows that a promising method is to focus on key business ideas – for instance social care of bicycle hire and repair. The technique of social franchising enables you to develop the business idea centrally and then roll it out across an entire country.
In some countries there is the fear that social enterprises might be used as a ‘Trojan horse’ to blaze the trail for the handing over of public services to private companies, but in many areas the contracts concerned offer so little profit that this is not an issue. In any case social enterprises are typically offering new and innovative services, not taking over existing ones.

Improve awareness among public authorities

National authorities need to build up knowledge centres. Some national websites are setting an example, such as Europa Decentraal (http://www.europadecentraal.nl) in the Netherlands.
As quality of service delivery is difficult to measure in advance, the accreditation of potential suppliers is a more realistic approach. As part of the Better Future for the Social Economy (BFSE) network, a learning network of ESF Managing authorities led by Poland, Lombardy has developed a tool for measuring the social added value of social enterprises. It is currently being piloted, and can be downloaded from: http://socialeconomy.pl/x/616186?projekt=531302.

Influence attitudes

The fourth of the project’s four areas of intervention should not, I think, be targeted so much at changing the attitudes of the general public – that’s too broad and slow a job – but of challenging vested interests. Not only existing suppliers but procurement officials. They don’t want to be given the job of judging imponderables like quality or jobs created, and they don’t want the risk of having their call for tenders challenged or cancelled for being unfair. They are quite naturally risk-averse. We need to make procurement officers life easy for them – not more difficult. Training courses have already been delivered in Britain and Sweden, and as the project has identified, more are needed.

We can also seek to influence the profession by working through the national professional institutions of procurement (see list at http://www.cips.org/en/aboutcips/Global-Partners-Links/).

Lobbying is needed, and much of this has to be local and national. Flanders offers a very clear case of this, where the social partners in the construction sector have so far succeeded in excluding social enterprises from bidding for contracts worth over €135,000 by denying them certification on the grounds that they constitute unfair competition. But the EU level is important in setting the tone, and there is certainly an appetite among decision-makers for bringing procurement to bear to address social problems.


PASE has also identified three follow-up actions that should be taken, and is researching ways to implement them:
1. An annual school for public-social partnership
2. Action plans using TSR (territorial social responsibility) and TQS (territorial quality standards)
3. An online self-assessment tool

PASE project: http://www.pase-project.eu


1. The futility of trying to pin down social enterprise « Toby at tipp(l)ing point - 21 November 2012

[…] I was totally distracted by a comment from Michael Guttmann from Hannover, who took part in the PASE project. He concluded by saying that social enterprise needs to have a common definition. Now this is the […]

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