Sustainable Public Procurement in the Sao Paulo State Government: An in-depth case study

The State Government of Sao Paulo, Brazil has made significant strides in integrating sustainability into its public procurement processes, and, as such, serves as an important role model on how to use procurement to promote sustainable development.

The present case study documents in detail the initiation and expansion of the Sao Paulo Sustainable Public Procurement program; explains how its promoters overcame legal, institutional, administrative, market and mindset hurdles; and assesses the legal, administrative and procedural improvements needed to expand the program further.

Since 1995, the Sao Paulo Government has adopted policies aimed at improving efficiency and transparency in government procurement. In 2004, a Working Group provided initial technical and legal guidance on the adoption of sustainability criteria in procurement. The group included representatives from different sections of government, levels and areas. During this first decade of the new millennium, Sao Paulo developed a legal framework that allowed for sustainable public procurement. It included, among other elements, the creation of an electronic procurement system and laws accounting for socio-environmental concerns. Eventually, nine criteria for government policies and measures were agreed upon, including incentives to social policies, transparency, water and energy consumption savings and adoption of technologies with lower greenhouse gas emissions. The State also made a deliberate effort and investment to train public servants on SPP.

The Sao Paulo SPP program now includes socio-environmental criteria in the technical specifications and contracts, using, among others, labels but not yet life cycle analyses. In construction works, the SPP program focuses mainly on sustainability criteria for the consumption of timber. To avoid concerns about corruption and enhance efficiency in the decentralized procurement system, the State does not explicitly include socio-environmental criteria during the reverse auction. It does foresee a sanctioning regime for non-compliance, which allows for the State Government to exclude suppliers and service providers that do not comply with socio-environmental norms or specifications from public procurement.

While the State Government has advanced relatively quickly and with limited resources, there are still challenges left and opportunities present to level up sustainable public procurement. The IISD study identifies potential to upgrade SPP in reporting and accountability; specification of goods, services and construction works; socio-environmental responsibility of suppliers; contract monitoring and management; and information exchange and dissemination. Some concrete examples include the evaluation of sustainable purchases over the total value of purchases to measure the benefits of SPP, adopting at the state level the preferential status of goods with the Socio-Environmental label, developing socio-environmental and quality criteria for the pre-qualification of suppliers, and intensifying information exchange with the Federal Union, other States and Municipalities.