The NIGP Commodity/Services Code is an acronym for the National Institute of Governmental Purchasings' Commodity/Services Code. The NIGP Code is a coding taxonomy used primarily to classify products and services procured by state and local governments in North America .
102-527: The classification system was developed in the mid-1980s as a result of efforts by public procurement officials in Texas, Oklahoma, Florida, Illinois and other states, cities and counties to provide a mechanism to classify the products and services that used in public procurement . Led by Homer Forrestor, the Director of General Services in Texas, the group produced the initial codeset in 1983. The copyright for
204-623: A green economy . Through Sustainable procurement practices, governments can lead by example and deliver key policy objectives. Sustainable procurement allows governments to mitigate key issues such as greenhouse gas emissions , improve resource efficiency, recycling, among others. The key international organizations already increasingly recognize public procurement as a means of changing the unsustainable patterns of consumption and production. The United Nations, including its many affiliated agencies, recognize their own responsibilities in contributing to more sustainable patterns of development, maintaining
306-564: A microeconomic level, sustainable procurement offers the chance for economic redistribution. Targets might include creation of jobs and wealth in regeneration areas, or assistance for small and/or ethnic minority-owned businesses. For central governments, sustainable procurement is typically viewed as the application of sustainable development criteria to spending and investment decisions. Given high-profile socioeconomic and environmental concerns such as globalization and climate change , governments are increasingly concerned that our actions meet
408-662: A " triple baseline " of external concerns which the procuring organization must fulfill. Environmental concerns are the dominant macro-level justification for sustainable procurement, born out of the growing 21st century consensus that humanity is placing excessive demands on available resources through unsustainable but well-established consumption patterns. Sustainable procurement aims to promote conservation and responsible management of resources by using renewable or recycled materials wherever possible and reducing waste. Sustainable procurement also involves looking at production practices and making sure there are not any negative impacts to
510-449: A Green Procurement Toolkit. Green procurement can help local governments save money, create local green jobs and improve their environmental sustainability . Under sustainable procurement criteria any procuring organization must therefore take a broad approach to sustainability, reflecting localized economic, environmental and social needs as well as cross-cutting sustainable development strategies such as Life Cycle Assessment . ICLEI
612-494: A broad interpretation of sustainable procurement and have developed tools and techniques to support this engagement and collaboration. Procurement – the letting of contracts for goods, works and services on the best possible terms – has historically been based on two criteria, price and quality, with a view to maximizing benefits for the procuring organization. Sustainable procurement broadens this framework to take account of third-party consequences of procurement decisions, forming
714-405: A clear positive impact for waste pickers. The analysis of the case studies illustrates the diversity and strength of the recorded sustainable development impacts. Public purchasers can be clearly seen as key potential actors of society, able to impact a wide range of sustainable development fields. The UK in 2005 pledged to be a performance-leader in sustainable procurement by 2009 and commissioned
816-505: A country's essential security interests. Additionally, certain politically or economically sensitive sectors, such as public health, energy supply or public transport, may also be treated differently. Government procurement, is linked to economic growth, competition enhancement, policy achievement, and innovation promotion. Contract types in government procurement include fixed-price contracts , cost-plus contracts , time-and-materials contracts and indefinite-quantity contracts . One of
918-909: A decentralized system is more efficient, because of the information asymmetry between local and central government. Procurement centralization might also negatively impact supply side. Higher procured values might require higher capacity of supplying company and it might create barrier to entry for small or medium companies. Consequently, it might lead to monopolizing public procurement market. Critics also mention that only some goods can be purchased centrally. Goods that are heterogeneous or they have many characteristics are not suitable for this strategy. Under many jurisdictions, there are certain thresholds in value which oblige procurers to publish tender details and information on contracts awarded and expenditure incurred, and to follow specific procurement procedures. Greater transparency and regulatory compliance are incurred at higher levels of expenditure. For example,
1020-764: A demand - side tool in the innovation policy mix. Second, public procurement may also be used to innovate the public sector itself (public procurement of innovation), through the inclusion of "innovativeness" as a procurement goal (often as a secondary criterion). Third, novel procurement approaches (such as eProcurement or Public-Private Partnerships ) may be introduced to innovate public procurement processes and entities. Centralized purchasing means awarding procurement contracts on behalf of one or more procuring entities. This method has been used to gain various benefits emerging from demand aggregation. Centralized procurement can be done by ordinary contracting authorities or established central purchasing body. Centralized procurement
1122-588: A dishonest agent of the purchaser to select the supplier's bid, often at an inflated price. Other frauds in procurement include: Integrity Pacts are one tool to prevent fraud and other irregular practices in procurement projects. The G20 has recommended their use in their 2019 Compendium of Good Practices for Promoting Integrity and Transparency in Infrastructure Development. A major European Commission pilot project entitled Integrity Pacts - Civil Control Mechanism for Safeguarding EU Funds
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#17327655149871224-499: A market behavior which is credible, inspirational and exemplary, and proving that UN agencies stand behind the principles they promote. Through the development of procurement criteria that support sustainability principles, requisitioners and procurers can send strong signals to the market in favor of goods and services that promote sustainability. The United Nations agency destined to develop and promote resource efficiency and more sustainable consumption and production processes, including
1326-402: A persuasive case to those in the private sector resisting sustainable procurement practice. Fair trade and sustainable procurement demands the implementation of responsible practices in relation to workers, environment and society to be followed by suppliers as to promote a chain of sustainability between production and consumption. B Corporation (certification) (B Corp) demands support for
1428-589: A political target of 50% Green public procurement to be reached by the Member States by 2010. The European Commission has recommended GPP criteria for 21 product/service groups which may be used by any public authority in Europe. The United States Section 508 and European Commission standard EN 301 549 require public procurement to promote accessibility. This means buying products and technology that have accessibility features built in to promote access for
1530-509: A powerful impetus for implementing Voluntary Sustainability standards. For example, in 2012 Wal-Mart introduced the Wal-Mart Sustainability Index in response to claims that the company was notorious for unsustainably produced and sourced products. These Voluntary Sustainability Standards have important implications, not only for supply chain security, but also for rural development and climate change. An initiative by
1632-481: A reverse auction. In the internet field (e-procurement) there are executive orders (Decretos) which regulate public procurement, such as Decree nº 5.450, 31 May 2005 and Decree nº 7.982, 23 January 2013: the latter regulates procedures for specific situations of sharing acquisitions of goods or under portioned delivering. Burkina Faso 's Autorite de Regulation de la Commande Publique (ARCOP), established in July 2008,
1734-492: A social responsibility for both businesses and workers to promote sustainable procurement in the workplace. The UK's Sustainable Procurement National Action Plan argues that it is "something the best of the private sector is already doing – whether through enlightened leadership or shareholder pressure". It also argues that government purchasing power (circa £150bn in the UK alone) can apply sustainable procurement principles to present
1836-571: A specification file and is used with the 11-Digit Code to create a comprehensive purchase description. 11-Digit Class-Item-Group-Detail Code The 11-Digit Code is generally used to create, manage, and maintain line-item term contracts. It is also used to identify stock items in inventory. This level of the Code currently contains over 250,000 descriptions which provides a great amount of flexibility when creating contracts and tracking inventory. The NIGP Code can be accessed in several ways. The most common
1938-436: A supply-chain e.g. from mining to assembly and distribution. Often differences in the purchase price between a non-sustainable and sustainable alternative are negligible. Yet even where the sustainable option costs more upfront, savings of energy, water and waste over the lifetime of the product or service can provide significant financial savings. On a macroeconomic level, it can be argued that there are economic benefits in
2040-657: A tool for fostering social inclusion, equality and environmental objectives. The GLA also stated that their policy was "very much as a model for broader government procurement" but this expectation was not fulfilled in the UK Government's Sustainable Procurement Action Plan, published on March 5, 2007. The Action Plan, which incorporated answers to the Sustainable Procurement Task Force, was explicitly environment-oriented in approach (Ch 4.3) with wider social issues scarcely addressed. This
2142-476: A way that achieves value for money on a life-cycle basis while addressing equity principles for sustainable development, therefore benefiting societies and the environment across time and geographies. Procurement is often conducted via a tendering or competitive bidding process. The process is used to ensure the buyer receives goods, services or works for the best possible price, when aspects such as quality, quantity, time, and location are compared. Procurement
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#17327655149872244-622: A whole. In order to provide public and merit goods, the government has to buy input factors from private companies, e.g. police cars, school buildings, uniforms etc. This process is called government or public procurement. Government procurement regulations normally cover all public works , services and supply contracts entered into by a public authority. However, there may be exceptions. These most notably cover military acquisitions , which account for large parts of government expenditure, and low value procurement. The GPA and EU procurement law allow for exceptions where public tendering would violate
2346-497: A workplace canteen. Sometimes, the ultimate green procurement is the avoidance of the purchase altogether. For example, Seafood Watch lists which commonly consumed fish species are at risk of extinction or population decline, steering conscious consumers towards species with stable populations which can be consumed without threatening their existence or disrupting the ecosystem. Transparency around production can help companies and individuals make more sustainable purchasing choices. In
2448-447: Is a membership organization of local governments who recognizes the power of Sustainable Public Procurement to achieve environmental, social and economic benefits. It encourages Public Procurement of Innovation as a means for achieving sustainability. Among its various activities, it offers a Sustainable Procurement Resource Center and a Procurement Forum, which can be used by procurers or by anyone interested in these topics. Procura+
2550-567: Is a network of European public authorities and regions that connect, exchange and act on sustainable and innovation procurement. On December 8, 2006, the Greater London Authority became the first public-sector body to publish a sustainable procurement policy, promising to award a "distinct competitive advantage" to those companies which demonstrated a commitment to sustainable procurement concerns. The policy reflected Mayor Ken Livingstone 's enthusiasm for public procurement as
2652-481: Is also used to address issues of social policy , such as inclusiveness, equality , international labor standards and diversity targets, regeneration and integration. Examples include addressing the needs – whether employment, care, welfare or other – of groups including ethnic minorities , children, the elderly, those with disabilities, adults lacking basic skills, and immigrant populations. Criteria for Socially Responsible Procurement can be applied to every stage of
2754-541: Is an expanded version of the 3-Digit class Code. Currently, it contains over 8,700 descriptions. This level categorizes vendors by class-item to allow your procurement software to automate bidder selection, produce no-bid response reports, vendor performance reports, and minority business and HUB reports by Code. Purchase history can be captured at this level as well. 7-Digit Class-Item-Group Code The 7-Digit Code provides an additional level of purchase description. It contains over 29,000 descriptions. It can be used to develop
2856-413: Is based on the idea that governments should direct their society while giving the private sector the freedom to decide the best practices to produce the desired goods and services. One benefit of public procurement is its ability to cultivate innovation and economic growth . The public sector picks the most capable nonprofit or for-profit organizations available to issue the desired good or service to
2958-417: Is beneficial in countries with a high level of human capital, but is detrimental in low-human capital jurisdictions. Government procurement involves a high risk of corruption, collusion and unwanted favoritism. An important role in this has the great size of financial turnover and the complexity of many procurement processes in which businesses interact very closely with politicians and civil servants. Often
3060-407: Is considered sustainable when organizations broadens this framework by meeting their needs for goods, services, works, and utilities in a way that achieves value for money and promotes positive outcomes not only for the organization itself but for the economy, environment, and society. Sustainable procurement is a spending and investment process typically associated with public policy , although it
3162-463: Is equally applicable to the private sector . Organizations practicing sustainable procurement meet their needs for goods, services, utilities and works not only on a private cost–benefit analysis , but also with the intention to maximizing net benefits for themselves and the wider world. In doing so they must incorporate extrinsic cost considerations into decisions alongside the conventional procurement criteria of price and quality, although in practice
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3264-433: Is heavily embedded in all forms of public sector goods and services, from health care to road maintenance, thus making it difficult for the government to monitor the impacts, positive or negative. Monitoring public spending and its impact is important to reform public procurement, especially when pending economic instability calls for proactive responses. In some cases, if a nation is extremely impoverished, it may not have
3366-478: Is no strict definition on how organizations implement sustainable procurement, there are two approaches that can be combined: This is where an organization examines a products movement along the supply chain and assesses the environmental credentials of themselves and of their suppliers . This path is commonly used when an organization wishes to understand the impact of a product or product range for strategic and marketing purposes. This approach can also provide
3468-531: Is often incorporated into the procurement software utilized by the entity for use in e-procurement . Categorization, reporting, and transparency are all key goals and benefits of this coding structure. The NIGP Code currently exists in English and Spanish versions. Cross references have been created for the NAICS , UNSPSC and MCC codesets. Version 24 is the current release for printed materials. The NIGP Code
3570-461: Is regulated by local legislation. For instance, directives 2004/17/EC and 2004/18/EC are dealing with this issue in the EU. Commonly mentioned benefits of procurement centralization are as follows: However, other centralization aspects are often criticized. Discussed drawbacks are often connected to the decentralization theorem stated by American economist Wallace E. Oates in 1972. The theorem claims that
3672-525: Is responsible for promoting green procurement and provides federal agencies with selling and purchasing guidelines and suggestions. Green procurement is primarily done by federal contracting personnel and program managers – but it is not restricted to such professionals. Clearly, sustainable procurement is not a practice of high-income countries only. For instance, Papua New Guinea, Ecuador and Brazil have all developed strategies to provide economic facilities to selected industries, while also addressing some of
3774-482: Is seeking to evaluate the effectiveness of Integrity Pacts in reducing corruption in 17 EU-funded projects in 11 Member States with a total value of over EUR 920 million. The OECD has published guidelines on how to detect and combat bid rigging. One issue of public procurement is the inability of governments to measure economic productivity, because as the size of public procurement systems substantially grows, so do their complexity and influence. Public procurement
3876-402: Is structured as follows: 3-Digit Class Code The 3-Digit class Code has a brief general description. This level contains 219 Commodity (Product) Classes and 55 Service Classes totaling 274 Classes. The 3-Digit Code is primarily used to generate periodic expenditure history by department for fiscal planning, budget execution, and accounting. 5-Digit Class-Item Code The 5-Digit class-item Code
3978-632: Is the Bangladesh government 's highest decision-making body regarding public procurement. The Swiss Challenge system is utilised in Bangladesh to procure infrastructure development through public-private partnerships . Belize is a member of CARICOM . Government procurement is subject to the Contractor-General Act, No. 6 of 1993, which received the Governor-General 's assent on 5 January 1994. The Act provided for
4080-803: Is the Organic Cities Network, which aims to use more food from organic farming in their public institutions. Since 2018, the public debate in Germany has centered on the German Supply Chain Act , a mandatory due diligence law for companies. A legislative proposal for the Supply Chain Act has entered the parliamentary process in March 2021. In 2014, the Department for Environment & Rural Affairs has defined
4182-837: Is the central authority on procurement for the American Samoa Government (ASG), being responsible for the procurement of all construction, goods, and services including the management, control, warehousing, and sale of stores/inventory commodities contained in its warehouse. Public procurement in Angola is governed by Law No. 20/10 of 7 September 2010, the Public Procurement Law, and Law No. 2/2011 on Public-Private Partnerships in Angola. The Public Procurement Law repealed Law No. 7/96 of 16 February 1996 and Decree No. 40/05 of 8 June 2005. Public expenditure,
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4284-453: Is the regulatory oversight body which ensures fairness in government procurement processes. Its role is to monitor the execution of all government contracts and it may impose sanctions, initiate lawsuits, and publish the names of fraudulent or delinquent businesses. Sustainable procurement Sustainable procurement or green procurement is a process whereby organizations meet their needs for goods, services, works and utilities in
4386-494: Is the responsibility of the producer, the economic benefit is minimal. Even modest economic gains are not always distributed fairly, and there were noted cases of those in positions of authority benefiting more that farm laborers, female farmers, or farmers who are too poor to pay the upfront cost of certification. In Gothenburg , the Meal Program, which sets a 50% organic quota (100% for meat) for all municipal facilities,
4488-532: Is typically instrumental: authorities seek to address policy through procurement . Government departments and local bodies can use procurement to address certain chosen agendas in buying solutions that will contribute to the community or environmental goals, or to diversity or equality targets. To help local governments improve sustainability and reduce environmental impacts the California Sustainability Alliance , has developed
4590-461: Is used to ensure that purchasing reflects broader goals linked to resource efficiency , climate change , social responsibility and economic resilience, for example. This framework is also known as the triple bottom line , which is a business accounting framework. The concept of TBL is narrowly prescribed, and even John Elkington , who coined the term in the 1990s, now advocates its recall. Indeed, procurement practitioners have drawn attention to
4692-541: Is via the NIGP Code web search tool, the NIGP Living Code , which hosts a search engine for the Code for end users. The site also has a download section, which provides for end user download of the entire codeset or modifications to the codeset since the last download by the user. The download file can be formatted as an Excel, tab-delimited or CSV file. In addition, the Code is available via printed format in
4794-539: Is when a governing body purchases goods, works, and services from an organization for themselves or the taxpayers. In 2019, public procurement accounted for approximately 12% of GDP in OECD countries. In 2021 the World Bank Group estimated that public procurement made up about 15% of global GDP. Therefore, government procurement accounts for a substantial part of the global economy. Public procurement
4896-686: The Kingdom of Bahrain , based in Manama , regulates procurement and undertakes procurement activity for the kingdom's public bodies. The Board was established in 2003 under the directives of His Majesty King Hamad bin Isa Al Khalifa . Bahrain has observer status with respect to the Government Procurement Agreement . The Cabinet Committee on Public Purchase ( Bengali : সরকারী ক্রয় সংক্রান্ত মন্ত্রিসভা কমিটি )
4998-444: The public sector has led to the consideration of using public procurement as a stimulus to foster innovation . The activities of public procurement and innovation intersect in three specific areas: public procurement for innovation, public procurement of innovation, and innovative public procurement. First, multiple studies have established that public procurement for innovation is a viable and efficient tool to stimulate innovation as
5100-445: The triple bottom line . B Corps are incentivized to buy local , organic , and from other B Corps. This promotes a chain of sustainable businesses that amplifies its effectiveness. The private sector also implements various Voluntary Sustainability Standards (VSS), such as certifications and accreditations, in order to ensure sustainable procurement, as well as to protect company brands. Reputational risks and concerns have proven to be
5202-451: The 'sustainability pillars' of procurement, which can be underpinned by one or several instruments for development, such as those proposed by Amartya Sen : (1) economic facilities, (2) social opportunities, (3) protective security, (4) political freedoms and (5) transparency guarantees . And to procure in a sustainable way involves looking beyond short-term needs and considering the longer-term impacts of each purchase. Sustainable procurement
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#17327655149875304-401: The 7 and 11 digit levels typically are processed within 2–3 days, although codes can be generated within 24 hours under certain circumstances. Updates to the Code are published weekly to the nigp.com site for download by users. Codes requested directly from users are typically delivered via extract files to the user, with general release of the new codes in the weekly website update. In 2009,
5406-488: The Aid by Trade Foundation, for example, trains smallholder farmers to produce sustainable cotton in exchange for exclusive contracts with international brands and retailers. The initiative creates a shared value opportunity wherein the companies benefit by securing their supply chains and meeting the growing consumer demand for sustainably sourced products, while the smallholder farmers are able to grow their businesses. Likewise,
5508-541: The Alphabetical Index Book and the Class Item Book. Maintenance and additions/clarifications to the Code come from three primary sources: codes generated by direct customer requests, codes identified as part of coding services, and codes identified from seated working groups. Additions/clarifications at the 3 and 5 digit level are typically processed within 24 hours. Code requests targeted at
5610-623: The GPA applies to the letting of "any procurement contract with a value that reaches or exceeds the amounts ('thresholds') set in the Agreement". A framework agreement is another method for aggregation of demand. It is a type of two-stage bid tendering procedure, that establishes incomplete contracts awards with one or more suppliers for given period of time. The discussed advantage is an administrative costs reduction again as tender procedure do not have to be duplicated for agreed period of time. On
5712-664: The Marine Stewardship Council leverages its certification program to encourage consumers to buy sustainably sourced fish and fisheries to fish more sustainably. The purpose of the program is not only to address growing concerns around the long-term viability of global fish populations, but also to prevent the collapse of the Northern cod fishery. In 2008, the European Commission developed a catalog for Green Public Procurement (GPP), which contains
5814-436: The NIGP Code went green by classifying items that fit sustainable procurement and providing a tool for reporting on green spend. The Code was updated to identify “environmentally certified” products, which have been set up as a green counterpart of standard classes. There is a set of 10 initial Class Code selections that cover everything from computer accessories to janitorial supplies to paper products. This initial set of codes
5916-601: The State Budget. Its activity is based on: The main duties and competencies of the Public Procurement Agency are: The Public Procurement Commission (PPC in English, KPP in Albanian) is a quasi-judicial state body with responsibility for providing legal protection in relation to public procurement. The US Department of Commerce reports that businesses "occasionally complain about problems in
6018-490: The around 1 billion people worldwide who have disabilities. Government procurement can have the aspiration of cost minimization. A concern with public procurement is corruption ; companies have much to gain from bribing public officials to obtain these procurements. In societies where corruption is endemic and enforcement is low, public officials are incentivized to accept bribes due to either necessity or greed. Academic research shows that discretion in procurement decisions
6120-466: The business-led Sustainable Procurement Task Force to formulate appropriate strategy. Broad-based procurement strategies are prominent across the EU while it is an increasingly influential concern elsewhere, most notably Canada. The US federal government requires certain green procurement practices in its buildings and supports the wide and inclusive use of them. The General Services Administration , an independent establishment and government corporation,
6222-418: The company's expenses, and may exceed 80% in sectors such as in retailing, electronic and automotive industries - with all this purchasing power, the private sector has a great ability to influence markets. Influencing procurement practice within a private-sector firm is not straightforward for governments, meaning that the companies themselves often have to be self-motivated to embrace sustainability. It becomes
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#17327655149876324-536: The consequences of the financial crisis of 2007–2008 was an attempt to reduce public spending in order to control public debt . This trend has affected government procurement for its significant share in public spending. Therefore, various purchasing strategies have been implemented to increase quality and to decrease cost of government procurement. These strategies include public e-procurement , centralized purchasing or framework agreements . A United States federal memorandum issued in 2005 created an expectation that
6426-856: The criteria for organic food as well as for animal products produced in compliance with animal welfare standards. An Austria-wide instrument is the Austrian Action Plan for Sustainable Public Procurement (naBe Action Plan). There is also the program ÖkoKauf in Vienna , which specifies criteria for the procurement of food by the public hand in Vienna. Sustainable procurement can be found in various institutions, e.g. Competence Center for Sustainable Procurement (KNB), Competence Center for Innovative Procurement (KOINNO), and National Quality Center for Nutrition in Kita and School (NQZ). In addition, there
6528-465: The custodian of the NIGP Code in 2001. The firm is responsible for licensing, overseeing code change requests, publication of version releases, communication with end users, phone support, training, integrity of the codeset, and commodity coding services for the conversion of contract and inventory files. The NIGP Code is most commonly used to classify vendors and to track spending data for use in strategic sourcing and spending analysis . The database
6630-691: The data file was transferred to the National Institute of Governmental Purchasing (NIGP), an organization founded in 1944, and the NIGP Code was born. The NIGP Code is now the standard taxonomy for classifying commodities and services for 33 states and thousands of local entities within North America (utilized by entities in 47 states, plus the District of Columbia, Canada, and Puerto Rico). NIGP appointed Periscope Holdings, Inc. , as
6732-413: The discretion of buyers, typically with the intent of reducing corruption. Procurement fraud can be defined as dishonestly obtaining an advantage, avoiding an obligation or causing a loss to public property or various means during procurement process by public servants, contractors or any other person involved in the procurement. An example is a kickback , whereby a dishonest agent of the supplier pays
6834-490: The environment such as pollution, biodiversity loss or habitat disruption . This is a sufficiently influential issue that environment-centric procurement (green procurement) is sometimes seen to stand alone from sustainable procurement. The most straightforward justification for green procurement is as a tool with which to address climate change , but it offers the broader capacity to mitigate over-exploitation of any and all scarce resources. Green procurement introduces into
6936-837: The establishment of the Office of the Contractor-General. The Contractor-General is an independent, non-political appointment made by the Governor-General acting on the recommendations of both Houses of the National Assembly . Government procurement in Brazil is regulated by a number of different laws with different procedures depending on the importance and the value of the procurement. The most important law about government procurement which contains basic rules of public procurements and administrative contracts
7038-417: The fact that buying from smaller firms, locally, is an important aspect of sustainable procurement in the public sector. Ethics, culture, safety, diversity, inclusion, justice, human rights and the environment are additionally listed as important aspects of SPP. Sustainable procurement involves a higher degree of collaboration and engagement between all parties in a supply chain. Many businesses have adopted
7140-504: The fashion industry, more consumers and companies are aware of the damage textile dye pollution does to waterways and the communities that rely on them, and as a result, companies and individuals can seek out producers who use natural or nonhazardous dyes. In support of sustainable development the organization should develop and publish 'Sustainable Development Procurement Guidelines and Procedures'. When it comes to purchasing products or services, referral to these guidelines would help make
7242-583: The form of efficiency gains from incorporating whole-life costing into decision-making. (Note: in contrast to most arguments from sustainable procurement proponents, these can be purely private benefits accrued by the procuring organization.) In addition, the creation of sustainable markets is essential for long-term growth while sustainable development requirements foster innovation . There are also potential global applications: sustainable procurement can favor fair trade or ethical practice, and allow extra investment to channeled towards developing countries . On
7344-849: The framework for sustainable food procurement in the Plan for Public Procurement. In addition, the Animal Cruelty Free Food Procurement Policy was issued in 2009 to promote animal welfare in the procurement of animal products. The Sustainable Trade Initiative (IDH) is a collaboration between private companies, NGO's and the Dutch government to advance sustainable procurement with the goal of addressing United Nations Development Goals of reducing poverty and supporting environmental sustainability and Fair Trade. This joint effort increased voluntary sustainability certification among producers in developing countries as well as
7446-600: The indicators and limitations of positive effects of sustainable certifications, drawing on diverse studies including those of the Committee on Sustainability Assessment and others examining Fair Trade and Rainforest Alliance as effective vehicles for improving the livelihoods of farmers. The committee on Sustainability Assessment found modest evidence of improved net income, crop yield and sustainability practices among certified coffee & cocoa farmers across 12 countries, as opposed to non-certified coffee & cocoa farmers in
7548-752: The management services was redesigned; toner cartridges for laser printers were the main objective in France; in Hong Kong and China the nations aimed to improve traffic with LED traffic light retrofitting; organic food for school children was the focus in Italy; sustainable construction was the focus in England; consultancy and temporary staff services were renovated in Scotland; and in the United States, there
7650-489: The necessary funds or a large enough private sector to even procure companies to issue the goods or services to the people. Thus, omitting public procurement as a potential governing practice. Cost-plus contracts can incentivize cost overruns. Albania 's Public Procurement Agency ( Agjencia e Prokurimit Publik ) is a central body with legal and public personality reporting to the Prime Minister , and financed by
7752-455: The needs of the present without compromising the needs of the future. Public spending, which accounts for an average of 12% of GDP in OECD countries, and up to 30% in developing countries, wields enormous purchasing power. Shifting that spending towards more sustainable goods and services can help drive markets in the direction of innovation and sustainability , thereby enabling the transition to
7854-464: The organization become a leader in environmentally responsible purchasing. Although various corporate giants have publicly acknowledged adopting sustainable procurement and reducing their carbon footprint, they have miserably failed to match their promises. The most widely discussed examples include Disney's initiative to introduce sustainable paper sourcing policy in 2012 and 3M promising to reduce its greenhouse gas emissions. Sustainable procurement
7956-468: The other hand, the term "Winner's curse" is associated with framework agreement as there is a price uncertainty in time. All of these three procurement strategies are not mutually exclusive. So, framework agreements can be processed centrally through e-procurement. In the European Union , the commission has adopted its communication on public procurement for a better environment, where proposes
8058-450: The outcomes of the whole process. There is a great amount of competition over public procurements because of the massive amount of money that flows through these systems; It is estimated that approximately eleven trillion USD is spent on public procurement worldwide every year. To prevent fraud , waste , corruption , or local protectionism , the laws of most countries regulate government procurement to some extent. Laws usually require
8160-488: The personal interests of the public officials are not the same as the interests of the public. The vulnerability of public buyers to private subversion has led every country to restrict the discretion of procuring entities in what they buy and pay. But while the regulation of the private sector empowers public officials and enables them to extract bribes in exchange for regulatory relief, the regulation of government constrains public officials. Public procurement regulations reduce
8262-432: The private sector and in the civil society. Sustainable procurement is as applicable to the private sector as the public sector , and certainly its proponents aspire to see its application across all areas of the economy due to a vast amount of material available on the internet for organizations and companies wishing to improve their sustainability performance. Acquisition of goods and services may account for over 50% of
8364-442: The procurement process a comparison between alternatives based on the criterion of their environmental impact. This comparison is extended to all stages of the procurement process, from the design stage, to the tender evaluation and realization stages. Examples of green procurement range from the purchase of energy-saving light-bulbs to the commissioning of a new building from renewable sourced timber or organic food being served in
8466-525: The procurement, finance and IT functions within federal government departments would work together to generate savings through a process of strategic sourcing . Public e-procurement stands for replacing various phases of public procurement with electronic means. Purpose of using e-tools is reducing administrative costs by automation. E-procurement can also mitigate some barriers to entry for smaller suppliers, consequent increase of competition can reduce price of procurement. The large buying power of
8568-710: The procuring authority to issue public tenders if the value of the procurement exceeds a certain threshold. Government procurement is also the subject of the Agreement on Government Procurement (GPA), a plurilateral international treaty under the auspices of the WTO . Government procurement is necessary because governments cannot produce all the inputs for the goods they provide themselves. Governments usually provide public goods , e.g. national defense or public infrastructure. Public goods are non-rival and non-excludable, which means that one individual's consumption does not diminish
8670-435: The promotion of sustainable resource management in a life cycle perspective for goods and services in both developed and developing countries, The United Nations Environmental Programme, UNEP , drafted sustainable public procurement implementation guideline to aid in the consideration of society, economy, and the environment in procurement processes. The Marrakech Task Force on Sustainable Public Procurement (MTF or SPP) which
8772-669: The provision of services, the leasing and acquisition of goods, and public works contracts regulated through the Public Procurement Law. Argentina has observer status with respect to the Government Procurement Agreement . The Australian government 's procurement activity is governed by the Commonwealth Procurement Rules and overseen by the Department of Finance . The rules were revised on 1 January 2018. States and territories also have their own procurement policies and legislation. The Tender Board of
8874-523: The public entities who promote these priorities through their procurement processes. Some of the social impacts are directly targeted by tenders, such as the participation of companies employing disabled persons in the French case or the fight against illiteracy in Scotland. Other impacts are the results of the specific purchase, as in the State of São Paulo case (notebooks using recycled paper) which demonstrates
8976-690: The quantity or quality of the commodity available to others, and individuals cannot be prevented from freely consuming the commodity, or "free-riding" . Consequently, private markets cannot provide public goods. Instead the government provides those goods and finances them by raising taxes from all citizens. In addition to public goods, governments often also provide merit goods , such as education or health care. Merit goods are private goods which are rival and excludable and are therefore provided by private markets. Nevertheless, governments also provide merit goods because of reasons of equity and fairness and because they have positive externalities for society as
9078-700: The rate of purchasing certified goods from the private sector. Public funding from the IDH was found to have catalyzed the industry trends of sustainable production certification and procurement in sectors such as cotton, cocoa, tea and others. Additional changes have taken place as a result of the partnership, such as the "Beyond Chocolate" movement that has emerged to include social benefits such as farmer field schools focusing on increasing productivity, as well as forming new partnerships between private and public sector stakeholders to assess living income and prevent issues like sexual harassment. The initiative also looked closely at
9180-473: The reduction of CO 2 emissions, of waste production, and of water consumption. The Ferrara study (Italy) and the recycled paper case (São Paulo, Brazil) show positive environmental effects. Although the social component of sustainable development has often been considered as the most neglected one, the eight case studies show a strong commitment from public purchasers to tackle social issues. Employment and social inclusiveness issues are considered essential by
9282-419: The same countries. There were also indirect positive impacts from sustainability standards such as improved transparency in global value chains and marketability of certified goods. However, the findings from these studies show that while there may be small economic benefits to certified farmers, it is often not enough to significantly improve their quality of life, and since the cost burden of certification itself
9384-504: The sustainability pillars in their procurement practices: for example, adopting environmental standards and giving preference to smaller and local suppliers, women-owned businesses and peasant family farmers. Papua New Guinea's Vision 2050 and Ecuador's Buen Vivir plan have also addressed social opportunities and intergenerational equity , and Brazil's Fome Zero Food Acquisition Programme has addressed protective security and geographical equity . At market-level, sustainable procurement
9486-447: The sustainable impacts of a potential supplier's approach are often assessed as a form of quality consideration. These considerations are typically divided thus: environmental, economic and social, but it should go beyond and encompass a series of equity principles for sustainable development, such as intragenerational equity, intergenerational equity, interspecies equity, procedural equity, and geographical equity . These can be seen as
9588-401: The taxpayers. This produces competition within the private sector to gain these contracts that then reward the organizations that can supply more cost-effective and quality goods and services. Some contracts also have specific clauses to promote working with minority-led, women-owned businesses and/or state-owned enterprises . Competition is a key component of public procurement which affects
9690-659: The technical and financial criteria of contracts, resulting in biased and distorted competition" and that "improper implementation of [Albania's] public procurement procedures" has also been noted as a problem. Albania has observer status with regard to the Government Procurement Agreement and is negotiating accession. Presidential Decree No. 10-236 of 7 October 2010, supplemented and amended by Presidential Decree No. 12-23 of 18 January 2012, regulates public procurement in Algeria . The Office of Procurement, based in Tafuna ,
9792-538: Was a push for the sustainable transportation of waste. The eight case studies reveal a diversity of environmental impacts at various stages of the products' life cycle. The purchase of remanufactured ink cartridges by the French Ministry of Education has led to a decrease in the amount of waste generated at the manufacturing stage. The construction or services case studies (Yorkshire and Humber Region, UK, and Oregon, USA) demonstrate significant impacts related to
9894-523: Was determined by a Code Green Workgroup that was made up of representatives from states, cities, counties, schools, and Green Seal. Code subscribers are currently utilizing the codes in their reporting of Sustainable Procurement and/or Environmentally Preferable Purchasing initiatives. Product types that are currently covered include janitorial supplies, office supplies, computer software, computer hardware, paint, and paper products. Public procurement Government procurement or public procurement
9996-431: Was introduced. In 2010, Malmö set the goal of switching all its food procurement to organic products by 2020. The procurement platform Sustainability Compass is financed by Switzerland's Federal Department of Economic Affairs, Education and Research (SECO). Its guidelines recommend reducing the proportion of animal products and giving preference to plant products and organically and fairly produced goods. While there
10098-729: Was managed by Switzerland from 2006 to May 2011 established an approach for the effective implementation of sustainable procurement. This approach was named the MTF Approach to SPP. Since then, the United Nations Environmental Programme have worked together with the Swiss government to develop a project to implement sustainable procurement worldwide. The project named Capacity Building for Sustainable Public Procurement in Developing Countries
10200-541: Was perhaps surprising, as was press disinterest in the publication. Despite its acknowledged importance among senior politicians and business leaders, publication of the Action Plan received only one national newspaper report, and that was markedly flippant in tone. Sustainable procurement outside of the United Nations is happening everywhere, in the international community, in states and local authorities, in
10302-496: Was piloted in seven countries: Chile, Colombia, Costa Rica, Lebanon, Mauritius, Tunisia, and Uruguay. Since then, the list of countries adopting this newly designed approach to developing has increased, adding more advanced and industrialized nations to be used as case studies to measure the efficiency and benefits of the implementation of sustainable public procurement. In Brazil, the project involved recycled paper; in Costa Rica,
10404-561: Was the Law nº 8.666, 21 June 1993, which contained rules for public tenders and for restricted tenders. This law was succeeded by the law Lei 14.133/21 , 1st , April, 2021. There are different rules regulating procurement of public services, as Law nº 8.987, 13 February 1995 (Concession and Permission of Public Services); Law nº 12.462, 4 August 2011 (Differentiated Procurement – RDC in Portuguese) and Law nº 10.520, 17 July 2002, which deals with
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