Recommendations for practitioners of public procurement in the functional economy

Recommendations, analysis and methodological guide

June 2021

Agence pour l’Environnement et la Maîtrise de l’Energie (ADEME)

This document, published in an ADEME booklet, is produced from the lessons learned from the COEF P pilot action conducted by CIRIDD from 2017 to 2021 in Auvergne-Rhône-Alpes, with the support of ADEME and the Region, and the commitment of 4 territories, with the objective of integrating the economy of functionality (EF) in public procurement. This is a first version of the deliverables, which will be enriched and illustrated at the end of the operation thanks to the different feedbacks collected. This document aims to disseminate the lessons learned from this action in order to develop new forms of consultation and cooperation in the territories, taking into account the opportunities offered by the economy of functionality. It is mainly addressed to elected representatives, managers and technicians.

The following elements are especially addressed to the management and the elected representatives engaged or interested in the launching of a dynamic of responsible purchases in connection with the economy of functionality (EF). It aims to provide an analytical approach, based on feedback from the COEF P action, in addition to the methodological guide which has an operational dimension, particularly for local authority technicians. The objective is to share the keys to understanding the issues related to the integration of the principles of the economy of functionality in public procurement.

To download : economiefonctionnalitecommandepubliquerapport.pdf (550 KiB)

Using public procurement as a lever to deploy the functionality economy

Implementing innovative and responsible procurement

The public procurement code, an obstacle to the functionality economy?

Public procurement is defined in the Environmental Code as a tool for the transition to the circular economy. Public procurement offers room for manoeuvre to take sustainable development into account, both in terms of purchasing procedures, economic models of contracts, tools and means…

However, some rules may appear to be obstacles to innovative and responsible purchasing, a category in which we place the functionality economy. The obligation to clearly state the need and the rules concerning the respect of equal treatment of candidates raise questions when, in a FE approach, it is a question of defining the need in a functional way, of strengthening cooperation with economic actors, of making the contract evolve during its life, etc.

To be able to exploit the room for manoeuvre in public procurement, certain obstacles must be overcome:

practices in the community, strength of habits, etc.).

The objective of the COEF P action was to remove these obstacles by

Good practices in favour of innovative and responsible purchasing

Certain measures provided for in the public procurement system encourage innovative and responsible purchasing (purchasing procedures, economic models for contracts, clauses, etc.). In addition, the COEF P action has highlighted the importance of good practices:

to ensure that the form of the contract is adapted to its content.

The application of the principles of the Functional Economy in public procurement

Constructing the contract

Functional economy is embodied in the market economic model. To achieve this result, a market construction method consistent with the objective of mainstreaming the functionality economy must be implemented.

1. Identify suitable markets for the application of the functionality economy:

services: if the local authority provides maintenance, repair, servicing (…) of a material good for example, the added value of a service is not

For example, if the local authority is responsible for the maintenance, repair or upkeep of a material asset, the added value of a functional offer will be limited.

to experiment.

2. Agree to (re)question the need:

It requires a mobilisation and cooperation effort.

Who will benefit from the solution?) The contract is part of a global vision and contributes to a public policy, a territorial project, etc.

3. Adopt a responsible purchasing approach:

Translating the functionality economy into a market

1. Reflections may not lead to a « 100% FE » market:

2. The EF can be translated in different ways in a contract:

3. 3. Complexity points:

Cooperation at the heart of the change of practices towards the economy of functionality

Steering a process of integration of the economy of functionality in purchasing

Internal support and management

The approach differs according to the type of local authority: the relationship with elected representatives is not the same in a department and in a city for example. The organisation of services and tasks (legal affairs, public procurement, purchasing, etc.) and the distribution of competences also vary.

1. The support of elected representatives is invaluable in supporting the process or overcoming blockages:

2. The role of the project leader is crucial:

3. Risk for the project manager: difficulty in delegating, tendency to carry the experimentation process at arm’s length. In the opposite direction, the difficulty of mobilising the different services or the final users of the contract may be encountered. For greater efficiency, it may be desirable to establish a co-sponsorship between two departments, such as public procurement and the environment, for example.

4. Useful step for a first approach: call on external support. In COEF P, the CIRIDD plays the role of an external viewpoint, facilitator, support in defining the need, contribution of resources, etc. An external « guarantor of cooperation » can also support the legitimacy of the project leader in his or her mobilisation of local authority services, users or beneficiaries who are less willing to get involved.

Adaptation to the system of constraints

1. More or less mature subjects / more or less established practices depending on the local authority (experience, skills, knowledge more or less developed):

2. The political context :

3. The « already there », the context: budgetary constraints, contracts already awarded, user habits, etc.

Strong needs for mobilisation and cooperation

1. The conditions for effective cooperation :

It is based on taking into account the constraints and resources of other actors.

Cooperation between services

1. The need for cooperation and transversality is strong:

An organisation is by nature divided into directorates, departments… Transversality and cooperation must nevertheless be part of the approach:

2. Obstacles to be overcome :

3. The potential useful effects to be highlighted in order to convince and mobilise :

Cooperation with companies

1. Opening the economic dialogue allows to favour the integration of the economy of functionality in the public order:

2. Dialogue is a source of performance (pending feedback from the implementation of the contracts selected in COEF P):

3. The market is not the only form of relationship with economic actors: other forms of relationship can be established around an issue (energy, food) rather than a market: monitoring, working groups, creation of a territorial « ecosystem », creation of a SCIC.

In short, public procurement is a lever to encourage the development of functionality economy offers on the territory. Through the life of the contract (design, awarding, implementation, monitoring…), the principles of this new economic model reexamine the practices of buyers. Indeed, the economy of functionality puts cooperation at the heart of markets, in multiple dimensions: inter-service during the definition of the need, between elected officials and technicians to establish the legitimacy of the approach, with companies to co-construct the solution and make it evolve over time … The lessons of COEF P and the analysis of feedback from the four territories involved have therefore fed the design of a methodological guide by step to accompany the technicians of local authorities wishing to apply the principles of the economy of functionality in the public procurement.


To go further

About public procurement :

About the functionality economy :

About Public Procurement in the Functional Economy :