Public procurement – price-taker or market-shaper?

Abstract

Purpose This paper examines the role of government procurement as a social policy mechanism within a multilateral open trading system. Government regulations globally are being transformed to foster more responsible business conduct in multinational enterprises (MNEs). Yet, concern that sustainability may present a discriminatory barrier to trade has stalled the progress of sustainable public procurement (SPP) at the international level, raising questions regarding the role and scope of the World Trade Organisation’s (WTO) Government Procurement Agreement (GPA) to align taxpayer-funded contracts with the United Nations (UN) Sustainable Development Goals. Design/methodology/approach With a focus on social sustainability, this paper reviews the grey and academic literature to assess the changing landscape of public procurement policy and supply chain legislation in high-income countries. Findings Frontrunner nations are adopting a mandatory approach to sustainable public procurement and due diligence legislation is elevating supply chain risk from reputational damage to legal liability. While technological innovation and the clean, green production of manufactured goods dominates the sustainable public procurement literature, the social aspects of sustainability poverty, inequality and human rights remain underrepresented. Research limitations/implications The scope of this paper is limited to the examination of government procurement covered by the WTO-GPA (2012). Smaller value contracts, under the WTO-GPA thresholds and the category of defence are beyond the scope of the paper. Social implications The paper focusses on the underserved topic of social sustainability in business-to-government (B2G) – business to government – supply chains arguing that for responsible business conduct to become a competitive advantage, it must be more meaningfully rewarded on the demand-side of all taxpayer-funded contracts in organisation for economic co-operation and development countries. The paper introduces the idea of priceless procurement as a mechanism to build system capacity in the evaluation of non-financial sustainability objectives. Originality/value To build the capacity to stimulate competition based on social and environmental policy objectives, the paper introduces the concept of priceless procurement in B2G contracts.

Game-changer business models for sustainable development

“…Another avenue for positive change and scaling up game-changer business models is public procurement. It can be nimbler and more dynamic than regulation, thus being a potential tool for experimentation and process innovation that can ultimately lead to a more empowered government procurement system with a market-shaping impact (Hamilton, 2022).…”

Business-Civil Society Collaborations in South Korea: A Multi-Stage Pattern Matching Study

“…Further, future research is needed to explore details of the dark side of stakeholder pressure (cf., Sinkovics et al 2016). Government intervention and policy are needed to safeguard against the harmful opportunism of the private sector as well as to guide and incentivize desired behavior (Hamilton 2022;Hofstetter et al 2021;Sinkovics et al 2021d). However, interventions are not without unintended consequences, and we need to learn more about how to create safeguards to recognize and remedy such consequences early in the implementation process.…”

The landscape of public procurement research: a bibliometric analysis and topic modelling based on Scopus

“…Moreover, Burghardt and Pashkevich (2021) examine the fundamental aspects of GPP and uncertainties in road marking materials, including paints, plastic masses and tapes. Lastly, Hamilton (2022) evaluates the emerging landscape of PP policy and supply chain regulation in high-income economies by examining the grey and academic literature. According to the findings of the review, leading nations are adopting a mandated approach to sustainable PP (SPP) and due diligence regulations are shifting supply chains from reputational harm to legal liability.…”