THE INCLUSION OF A “COMMUNITY BENEFITS” CRITERION IN A PUBLIC PROCUREMENT MECHANISM: PECULIARITIES OF THE INFLUENCE ON SUSTAINABLE REGIONAL DEVELOPMENT

Author
, Doctor of Law, Associate Professor, Deputy Director, Ukraine, Kiev
, PhD in Law, Academic Secretary, Ukraine, Kyiv

In heading

 Law;

Signed print

 30.06.2020

Issues number

 2020 - № 3 (42)

Page

 89-116

Type of articles

 Scientific article

Code UDK

 346.546

ISSN print

 2411-5584

Abstract

 Problem setting. Ukraine, like other UN member states, has joined the global process of ensuring sustainable development. In this context it is important to do research on the potential of public procurement in maximising social, economic and environmental benefits for citizens, considering the large sums of public money involved in public procurement. Some countries, within certain types of public procurement, analyze its social value, and set “community benefits” requirements, which are an integral part of their national sustainable development strategies. That is, contracting authorities, when purchasing goods, works and services to perform their functions, provide additional impact of procurement on the community, which they represent. It provides an opportunity to consider the peculiarities of socio-economic development of the respective regions or cities. This issue is especially relevant for Ukraine in the context of the need to restore the vital functions of cities in the post-conflict territories of Donetsk and Luhansk regions, controlled by Ukrainian authorities. However, Ukraine has introduced a narrow approach to public procurement, when the value for money is primarily based on the lowest price and there are no connections between public procurement and socio-economic development programs.
Recent research and publications analysis. The implementation of “community benefits” requirements and additional goals of public policy in public procurement is highly debated issue within the foreign scholars, however, there is no analysis of this problem among Ukrainian scientists. In the context of Ukraine’s obligations within the EU-Ukraine Association Agreement the authors give special consideration to the European Union law and practice.
Paper objective is to define on the basis of foreign experience ways and legal framework for the use of “community benefits” requirements as additional goals to the functional purpose of procurement, with the emphasis on certain regions of Ukraine to consider the peculiarities of their socio-economic development.
Paper main body. The authors give special consideration to the potential ways of implementation additional goals of public policy to public procurement, in particular using award criteria, technical specifications and contract. The article provides an overview of the so-called economic approach to procurement, according to which the contracting authority has to act like a private purchaser, whose decisions should be based only on economic considerations. Some important cases of the Court of Justice of the EU were analyzed. Current research is focused on the experience of foreign countries in assessing social value of public procurement and using “community benefits” requirements in public procurement. The article covers the concept of value for money in public procurement. Authors make suggestions how “community benefits” requirements could be implemented in Donetsk and Luhansk regions controlled by Ukrainian authorities, during the postconflict recovery.
Conclusions of the research. In the context of sustainable development requirements, the authors emphasize on the inappropriateness of the ‘narrow’ approach to public procurement, according to which the subject of procurement must be used or consumed by contracting authorities within the performance of their functions. It is substantiated that every public procurement has its own value and benefit for citizens. However, by using the
‘community benefits’ requirements the contracting authority could broaden environmental, social and economic benefit of the procurement. It provides an assessment of the impact of procurement on consumers (community) of goods, works and services and the ability to consider the peculiarities of socio-economic development of regions or cities of Ukraine. “Community benefits” requirements should be part of the development strategy of the
contracting authority, should not discriminate against bidders, be clearly defined in the tender documents, be related to the subject-matter of the contract, be measurable and comply with the principle of proportionality. The principle of proportionality should underlie the decision of the contracting authority on the relevance of applying the “community benefits” requirement in each case. The article suggests that the concept of value for money has to be expanded. Public procurement should be considered as one of the legal means of achieving the goals of strategic documents of socio-economic development.
Short abstract for an article
Аbstract. The present article is dedicated to the ways of maximizing the economic, social and environmental benefits that can be derived from the use of public funds in public procurement by setting ‘community benefits’ requirements as ‘horizontal’ aims to the functional purpose of public procurement, with emphasis on Donetsk and Luhansk regions of Ukraine to take into account the peculiarities of their socio-economic development during
the post-conflict recovery. Special consideration is given to the concept of value for money in the context of sustainable development goals in public procurement.

Keywords

 public procurement, sustainable development, ‘community benefits’, ‘horizontal aims’, value for money, Donetsk region, Luhansk region, post-conflict recovery.

Reviewer

External reviewer

Article in PDF

 № 3 89-116

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Code DOI

 10.31359/2411-5584-2020-42-3-89

30.06.2020