Connecting cities Building successes

Matthew Baqueriza-Jackson was the Lead Expert for Procure and is currently the Network Expert for Making Spend Matter. He represents URBACT on the EU Urban Agenda Partnership for Innovative and Responsible Public Procurement and believes the way cities buy goods and services can change for a better economic, social and environmental future.

The ‘Buying a Better Future’ LAB session at the 2018 City Festival focused on the process of procurement and particularly the activities and findings of the Procure Action Planning Network. Procure had for focus shifting the behaviour of 11 cities as to how they purchased goods and services.

Traditionally the process of procurement has been seen as very bureaucratic, technical and boring. Our work through Procure has sought to shift procurement so that it is exciting and intrinsically linked to addressing the economic, social, technological, and environmental challenges facing cities. Over the course of the last two and a half years, we have realised that change is possible around procurement across a range of different political and policy contexts.

Buy with a conscience

Our core learning in Procure has been that if we are to shift the process of procurement then it cannot just be about buying something in a transactional way; instead it needs to be a cycle where social and environmental consideration are included at each stage of the process.

First, cities need to understand where their procurement spend goes. Secondly, they need to identify areas where procurement activities can potentially be beneficial. Thirdly, they need to think about the applicability of those results when designing goods and services. Then they need to ask questions about those outcomes when seeking suppliers to deliver those goods and services through tender. They also need to consider responses to those questions alongside cost and quality. And finally, they need to monitor the contribution suppliers make as part of the delivery of the good or services.

All of our Procure partners now think in this way when buying goods and services. The cycle of procurement is part of their Integrated Action Plans. The purpose of the LAB was to spread this knowledge, learning and skills to a wider audience of city practitioners. The session was designed to be very interactive, with training about the cycle of procurement and each of the stages above, mixed with 3-minute contributions from Procure partners and tasks related to each step.

The LAB used the scenario of a city called Socialville, which is a mid-sized city with a range of economic, social and environmental challenges. It has high levels of unemployment and particularly youth unemployment. It has poor air quality and high carbon emissions. And, it has an under-utilised SME base, particularly in relation to construction activities. It also has a procurement spend of around 50million Euros and was planning on procuring three major contracts in the next financial year: the building of a new school; the purchase of waste collection vehicles; and a senior citizen’s care service.

It was clear at the outset of the session that many of the city participants had not really thought about procurement being strategic before and had largely perceptions that the process could not be changed to deliver wider positive economic, social and environmental results. We therefore set out to change those perceptions.

Step by step

Spend

The first task focused on spend analysis, a tool that commences the cycle of procurement and some Procure partners have used to explore where their procurement spend goes geographically, sectorally and by business type. The City of Nagykallo in Hungary has used it particularly to identify how much is spent with Nagykallo based organisations and importantly where there is scope to engage with the market prior to a procurement exercise. Participants in the LAB worked together to undertake spend analysis for the City of Socialville.

Positive outcomes

The second task focused on identifying outcomes and the types of issues which procurement can potentially address in cities. Most cities will have an economic or overarching city strategy with outcomes such as reducing unemployment or improving skills; however very few translate these into social and environmentally focused procurement frameworks.

The Metropolitan City of Bologna in Italy has and is utilising the process of procurement as a means of growing SMEs in the city and addressing environmental challenges. Participants in the LAB worked together to explore the issues facing Socialville and to develop outcomes and associated measures which procurement processes could potentially address.

Commissioning

The third task focused upon commissioning, which is the process used to design goods and services. It is at this stage that there is the greatest opportunity to think about social and environmental considerations. It is also at this stage that cities can undertake pre-procurement engagement. The City of Lublin in Poland has been thinking increasingly about how it can innovate in procurement; they have been working with the market to design new approaches to social care challenges, for example. Participants in the LAB worked together to link their identified outcomes to the three contracts which the City of Socialville were looking to procure.

Tender 

The fourth task focused upon tendering, which is when cities ask potential suppliers questions about the goods and services they are looking to procure and also about how they are going to deliver particular social and environmental outcomes. The City of Koszalin in Poland has been asking questions around ‘non-price’ criteria for a couple of years, including those associated with social and environmental outcomes and recognises particularly the importance of relating them to the nature of the contract. Participants in the LAB worked together to develop questions relating to the outcomes and measures they had developed.

Decisions

The fifth task focused upon decision-making and the criteria used to weight the responses of suppliers to procurement opportunities. Cities largely evaluate social and environmental considerations using three techniques: quantitatively; qualitatively; and on a pass/fail basis. However, the City of Preston in the UK explained how they also evaluated on value and credibility. Participants in the LAB worked together to identify how they were going to evaluate against their questions.

Monitoring

The sixth task focused upon monitoring. This is the element of the cycle of procurement which many cities neglect. Too few cities in Europe are effectively monitoring social and environmental outcomes. This is however incredibly important in holding suppliers to account in the delivery of wider outcomes.

The LAB’s findings for the City of Socialville

Each of the groups of participants in the LAB were given the opportunity to present the findings of their discussions for each of the six tasks for the City of Socialville and to reflect upon their learning from the session. As a group, we identified nine key areas of learning:

1. The experience of cities around procurement varies, with some remaining focused upon price as the primary criteria;
2. It is important that cities ask the right questions around social and environmental considerations;
3. Cities need to think about how the process of procurement can address economic, social and environmental challenges;
4. Procurement can bring added value – it is not just about buying a good or service or construction project;
5. Procurement is exciting – it can be technical and boring (quite rightly), but it can also be used strategically;
6. Cities need to recognise that they can engage with the market prior to procurement and that engagement can lead to innovation and cooperation;
7. Cities need to become much better at monitoring outcomes around social and environmental criteria;
8. Spend analysis is a fundamental starting point to the cycle of procurement and acts as the evidence base for change;
9. The Procure methodology is helpful for other cities to think about the way in which they undertake procurement.

The LAB session at the URBACT City Festival reiterated the increasing importance of public procurement as an urban theme. The way in which cities buy goods and services can have knock-on effects on so many different economic, social and environmental agendas. Cities however have to view the process of procurement as a cycle and embed such considerations throughout the process. The cities involved in the Procure Network and the LAB are forerunners in a new approach to public procurement. The cycle of procurement needs to be mainstreamed and I will be working hard through the Making Spend Matter Transfer Network and the EU Urban Agenda Partnership on Innovative and Responsible Public Procurement to realise it.