Case Study 38
Title | Joint Procurement of recycled paper in Greece |
Tool | Tool D: Joint procurement – Combining public procurement actions |
Within the framework of the LEAP project the Greek LEAP partners, Municipality of Amaroussion Development Company, Kalithea – Rhodes Sustainability Non Profit Municipal Company and the Municipal Enterprise of Holargos organised a joint procurement (JP) of recycled paper. The overall purpose was to benefit from the number of participants in the procurement action and thus the quantities demanded, in order to reduce barriers to the purchasing of green products, such as higher prices. At the same time the initiative was a great opportunity to stimulate the market for green products.
As with the LEAP JP activities in Spain – <case study 44 – JP of recycled paper in Spain> and Portugal – <case study 45 – JP of recycled paper in Portugal> it was decided that recycled paper was the ideal product with which to introduce the concept of JP to the country. Requirements do not vary much from authority to authority, and spending is relatively low. It therefore presents a simple product with low financial risk, with which to test JP procedures. The market for high-quality recycled paper is also not as highly developed in these countries as elsewhere in Europe, and as such JP may prove a useful market driver.
Overcoming internal barriers to setting up joint procurement
The element of the JP activity requiring most attention was the procedure followed. In Greece, public procurement activities and the public sector in general are surrounded by strict legislation. It was due to legislative issues that one of the 7 bodies participating in the JP activity, was forced to withdraw. During the planning stage it was decided to use the standard procedures of the Municipal Companies of the participating municipalities, as these are less strictly regulated. In the end the differences in the procedures used with those typically applied by the municipalities themselves were extremely minor.
Nevertheless they were enough to prevent one partner (the Municipality of Ancient Olympia)from proceeding with the actual procurement, with the withdrawal taking place only when the tender was completed and the contracts were to be signed. Unfortunately, it was the legislation that held them back and not the high costs or the lack of political commitment towards the environment!
Recruiting additional authorities
As mentioned above the level participation was of great importance to achieve the intended benefits of bulk buying. For this purpose, the three LEAP local authorities organised a small campaign in order to recruit additional non-LEAP authorities. The method used was the easiest, quickest and most effective one: dissemination to authorities with a history of previous cooperation. The outcome of the effort was quite rewarding. In total, 7 local authorities committed themselves to take part in the JP of recycled paper, (the 3 LEAP partners and 4 non-LEAP authorities):
- Municipality of Amaroussion Development Company
- Kalithea - Rhodes Sustainability Non-Profit Municipal Company
- Municipal Enterprise of Holargos
- Municipality of Ancient Olympia
- Municipality of N. Psichiko Environment and Sustainable Development Company
- Municipality of Rhodes Solid Waste Management Company
- Marathonios Development S.A
Although seven Authorities may not seem as a great number, given the lack of awareness and experience with either green procurement or JP in Greece, together with severe time restraints, in reality this represents a major achievement, and an excellent basis for building future activities
Model and contractual arrangements followed
The model is based around the decentralised full JP model presented in Tool D - <tool D, section 3.2 Model A – full joint procurement> with the seven local authorities acting as a team under the co-ordination of Amaroussion as Lead Authority. One tender was published, for one product, recycled paper with international best practice environmental and technical specifications, one price was offered taking in account the total quantity asked and finally seven identical contacts were signed – one separately for each Authority. The contracts signed were for one year with the possibility of extension under mutual agreement. The signing period lasted for about two months between April-May 2006.
The procedure, step-by-step
The first action taken was drafting the tender documents (tender publication document, evaluation report, contract) and conducting a market survey on prices and availability according to the specifications provided.
Having incorporated the quantities needed in the tender documents and their final approval, the consortia-team proceeded with the publication of the tender on 1 March 2006. The tender was published in newspapers at the national and local level, as well as the Official Journal of the European Union (OJEU). A period of 20 days was given for the offers to be submitted.
On the 20 March the evaluation committee – consisting of one representative from each participating Authority – met to evaluate the bids. Unfortunately only one compliant bid was submitted. However, the price offered was low and so a good result was achieved.
The final step was the contract signing.
Quick overview of the procedure:
Step 1 drafting the tender documents, conducting a market survey
Step 2 final approval of the documentation
Step 3 publication of the tender in local, national press and the OJEU
Step 4 evaluation committee announces the winner
Step 5 signing the contracts
A number of the actual documents used for the tender (in Greek and one in English) can be found in the Appendices of tool 4 – <Appendices tool D>
Results and benefits
Given that non competitive prices are one of the main barriers when dealing with green products, the reduced cost achieved with the JP activity is the most significant benefit. In total 430 boxes containing five packages of 500 sheets each, were demanded. The price offered per package was €2.34. The cost for the same paper for the Municipality of Amaroussion without the JP was €2.90 per package. This represents a 19% price reduction for Amaroussion. Even more impressive was the case of Kalithea-Rhodes. In Rhodes the amount paid for conventional paper is €2.40 per package. This means that in this case the recycled paper is cheaper even from the conventional one! A clear additional economic benefit was that administrative costs were much lower. From the Greek perspective it seems clear that such JP activities are a very good way to defeat the price barrier for green products.
In addition, the pilot activity served to raise awareness in the potential of JP. Through the publicity the JP activity generated, many Municipalities showed an interest. Even the supplier received calls for information on the possibilities of participation in similar future actions. The seven local authorities, by jointly procuring, can further be seen to have helped stimulate the market for recycled paper, strengthen co-operation among themselves, form a platform for similar activities in the future. In essence, the activity has greatly helped to promote green purchasing.
Future perspectives
One can expect the above mentioned benefits to be multiplied in similar actions in the future. The effort dedicated on JP was truly rewarding. This is the reason why similar future actions are expected. Hopefully the number of the participating authorities will be gradually increasing and the product will vary, giving signals to the market for a possible turn towards environmental friendly products.
For further information please contact:
Eleni Maglara
Municipality of Amaroussion, Greece
maglara@maroussi2004.gr
Funded by:
