Based on the Austrian sustainable procurement action plan, an open tender procedure was carried out to establish a national framework agreement for dairy products.
Via an open tender procedure Austria’s Federal Procurement Agency (BBG) aimed at supplying approximately 350 kitchens in public organisations via a framework contract. There were eleven bidders in total, five of which were dairies. Finally the contract was awarded to two companies, the value of which is approximately €3.8 million including VAT.
The challenge
Environmental impacts associated with intensive dairy farming and long distance dairy product distribution are a threat to a sustainable lifestyle. Promoting sustainable practices requires the collaborative action of stakeholders such as manufacturers, retailers, consumers, and policy makers. Public procurement can play an important role in raising consumer awareness and give support to the innovation competences of firms by setting a performance standard for sustainability criteria.
The innovation
Apart from principle procurement objectives, issues such as stimulating demand for organic and non-GM dairy products, minimising the barriers for smaller, regional dairy producers and encouraging natural food production methods were included in the call for tender. As a result, a reduction in CO2 due to a decrease in kilometres was achieved because of a contractual delivery stop on orders with a value below €100.[1] To ensure safety, quality and legality in the production of the dairy products, the contractor had to maintain an IFS certification[2], or equivalent, throughout the lifetime of the contract. The whole chain of custody must be certified, leading to a performance contract as well as waste reduction.
Why did it work?
Market analysis was conducted before tendering and the BBG set up working groups to decide upon the food criteria. Planned as demand-side policy, early market engagement activities included holding discussions with dairy producers and associations, providing advice on how to further develop the procedure. The contract was then divided into lots. It was specified that the most basic of the dairy products were required to comply with Austria’s action plan on sustainable procurement. This came into force in 2010, committing the organisation to implementing SPP[3] criteria from 16 different product groups, including food & drink.
Further deployment
The contract had a greater impact than originally expected. In the establishment of the national framework contract for dairy products which supplies approximately 350 kitchens in public organisations, 10% of the award criteria were weighted on the quantity of non-GMO products. As a result, the current contract now provides 90% GMO-free goods. As it has been experimented locally, the concept qualifies for an estimated level 4 on the generic maturity scale GML. Aiming at providing support to business by designing indicators encouraging dissemination of information, further implementation of the contract can help supporting local communities in their strategic planning. The contract helps strengthen responsible purchasing and create demand for low environmental impact dairy products, decreasing the carbon footprint in this field.
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