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Procurement: Good practice from Berlin

Advancement of women in public procurement – claim and reality

Good practice from Berlin

This article is published in the FemCities Conference Documentation 2010 and based on a conference presentation by Marianne Rühl-Andresen, Senate Administration for Economics, Technology and Women’s Issues, Land Berlin.

Rühl-Andresen, in her practical approach to the issue of “advancement of women in public procurement – claim and reality“ addressed the seeming discrepancy in this statement with a view to the situation in Berlin, and subsequently described the “Berlin Model“. Since the FemCities Conference in June 2010 both the Berlin law on tendering and procurement (July 8, 2010) and the 9th amendment to the equality act have come into force (Nov. 18, 2010). The presentation makes reference to but does not elaborate on this. The regulation on the advancement of women is currently (spring 2011) being revised in accordance with relevant statutory regulations. Editor‘ note: The amandments came into force 29. Juli 2011, information on this is inserted by the editor within the article in italic. Detailed information (in German) can be found here:

http://www.berlin.de/sen/frauen/recht/landesgleichstellungsgesetz/frauenfoerderverordnung/.

Legal basis

The 1991 Equal Opportunities Act for Berlin (LGG) already provided that public procurement in Berlin be tied to the objectives set out for the advancement of women. However, it took another eight years for this principle to become reality. There was political resistance to overcome and there were legal concerns to smooth out. The road was a rocky one strewn with obstacles, raised mainly by business and politics.

The claim was moulded into legal form in 1999: it appears in section 13 of the LGG in ist amended version and in the resulting regulation on the advancement of women and the reconciliation of work and family life in public procurement, also known as regulation on the advancement of women (FFV) which, might I add, has not been questioned legally to this day and which, contrary to predictions at the time, has not spelt the doom of any business or the economy in Berlin as a whole. (The economic crisis, as we all know, was caused by the doings of others.)

Section 13 of the LGG standardizes the obligation to tie public procurement in the Land Berlin to the objectives set out for the advancement of women and the reconciliation of work and family life. This obligation is considered a term of contract, not an award or selection criterion. In other words, public contracts in Berlin are awarded exclusively to bidders who commit themselves in advance to continue, implement or introduce measures for the advancement of women. Only then will they be selected according to the award criteria, i.e. according to suitability and economic efficiency.

According to section 13, paragraph 1 of the LGG advancement of women is mandatory for contracts above 50,000 Euros (since 2011: 25.000), a value estimated by the office for awarding contracts, and businesses with more than ten employees. Section 13, paragraph 2 of the LGG entitles the Senate, i.e. the executive authority, to issue a decree which regulates

  • which companies are concerned,
  • the substance of measures for the advancement of women,
  • monitoring of implementation and
  • consequences in case of non-compliance.

The regulation for the advancement of women (FFV) picks up on the legal provisions set out in section 13 of the LGG and goes a step further to specify that the entire construction industry is excluded from these provisions. It also establishes a clear-cut procedure for the advancement of women in public procurement. The procedure essentially follows along the idea to provide streamlined yet efficient administrative work and to ensure equal opportunities, i.e. to avoid unfair competition. The latter in particular is to be achieved through standardized obligations to inform and declare.

Obligation to inform: The offices for awarding contracts in the Land Berlin, prior to awarding a public contract, must assess whether the requirements of the regulation for the advancement of women have been fulfilled and, provided this is the case, make a note to the effect in the public announcement of a contract or public competition. Thus, all potential contractors have been duly informed of the fact that they must pay heed to the requirements for the advancement of women.

Obligation to declare: once the offices for awarding contracts have signalled in the announcement that the regulations on the advancement of women do apply, potential contractors, who at this stage of the procedure are referred to as bidders, when submitting their tender, must also submit a separate declaration on how many people they employ and, in those cases where they employ more than ten people, on which of the measures of advancement set out in the FVV they already carry out, are planning to continue or introduce. The nature and extent of these measures depend on the actual size of a company, i.e. the number of employees. Bidders must also declare that they adhere to the applicable equal treatment law. The latter covers all national and European provisions on the equality between women and men, including the General Equal Treatment Act (AGG), amongst others. In the event that a bidder on legal grounds is unable to perform all or selected measures, they shall substantiate and prove this, as the case may be. Legal grounds for exception in practice apply to foreign bidders only. I should like to mention in this context that potential contractors must also ensure that subcontractors assigned by them also adhere to these obligations. Violations incurred by a subcontractor are considered the fault of the contractor.

Scope of application: advancement of women in public procurement in Berlin is mandatory subject to the following conditions:

  • The public contract is awarded by an awarding office of the Land Berlin.
  • The contract volume is in excess of 50,000 Euros.
  • The company has a staff of more than ten.
  • The contract covers supplies and services (no construction works).
  • There are no legal barriers.

Editor’s note: Since 29. Juli 2011 the amended legislation came into force:

  • The public contract is awarded by an awarding office of the Land Berlin.
  • The contract volume is in excess of 25,000 Euros (or 200.000€ in case of construction work).
  • The company has a staff of more than ten.
  • The contract covers supplies, services and construction works.
  • There are no legal barriers.

Measures of advancement

Another question arises as to which measures will meet the legal requirements set out for the advancement of women, as well as those for striking a balance between work and family life. Advancement of women in public procurement is not simply a matter of creative potential on the part of contractors. Rather, the catalogue in section 2 of the FFV provides for a total of 18 measures of advancement. The measures to be taken essentially depend on the size of a company. Potential contractors, at the time of submitting their tender, commit themselves to carrying out, continuing or introducing a set number and type of measures for the advancement of women in accordance with the number of their employees:

  • Companies with eleven to 20 employees must select a minimum of one measure from section 2, nos. 1 to 17.
  • Companies with 21 to 500 employees must select a minimum of three measures from the catalogue in section 2 of the FFV.
  • Companies with more than 500 employees must select a minimum of three measures, one of them from nos. 1 to 6 in section 2 of the FFV.

The catalogue distinguishes between hard and soft measures of advancement. It was prepared taking into account the fact that small and medium-sized enterprises must not be exposed to the same requirements as large companies. It may be difficult for a small company to appoint a person in charge of women’s issues or adopt and implement a qualified plan for the advancement of women. Offering flexible working hours or part-time work, on the other hand, should be fairly easy to achieve regardless of a company’s size.

Monitoring implementation

Let us now take a look at the further procedure: once the deadline for submission of tenders has expired the awarding office comes into the procedure. In a first step it will assess the formalities of the submitted tenders. It takes a look at whether the declarations in accordance with annex 2 of the FFV have been completed as required. With the formalities in order the tenders are opened and assessed as to their substance.

Aspects of advancement of women are not considered at this point. Contracts are awarded exclusively on the basis of the usual criteria (suitability and economic efficiency). So fundamentally it is immaterial which measures a company has selected from the catalogue in section 2 of the FFV. The regulation on the advancement of women does not set out preferences.

Contractors in performing their contract shall ensure that all obligations resulting from FFV are heeded and implemented. On this account the offices for awarding contracts, in accordance with section 4 of the FFV, may require contractors to prove in a suitable way their adherence to the contractually assumed obligations under the FFV. Only the awarding offices have a right to require such proof and in this respect bear great responsibility in the implementation of the regulation on the advancement of women.

What happens if the provisions and obligations under the FFV are not heeded?

Instances to the effect might include, for example, lack of or insufficient declarations on the part of the bidders, measures of advancement not having been implemented, equal treatment laws not adhered to or inaccurate information provided. Depending on the nature of violations of the regulation on the advancement of women the following sanctions may be imposed:

In the event the awarding office receives no or insufficient declarations in accordance with section 1 of the FFV the tender is not opened and subsequently not assessed either. In this case the procedure for this bidder is irrevocably concluded at any early stage. To safeguard equal opportunities it is not possible to remedy defects after the closing date. Bidders who provide false information may be excluded from public procurement for a maximum of two years.

This is also true for violations against the obligation to continue or introduce measures of advancement on the part of contractors and subcontractors assigned by them.

Claim and reality

So much for the ideal established by law. What I have done up until now is explain the claim for the advancement of women and equality in the context of public procurement. Now I would like to shed light on reality and bring us down to earth again.

Surveys and random sampling carried out by the member of Senate responsible for women’s issues have revealed that probably as few as 15% of all public contracts awarded in Berlin are subject to the regulation on the advancement of women. This is due on the one hand to the high threshold value of 50,000 Euros and to the exclusion of the construction industry on the other hand. Inquiries with the contract awarding offices in Berlin give evidence to the fact that proof of implementation of the measures set out in the FFV is required to a very limited extent only. Since there is no obligation to carry statistics valid data are not available, which means that statements on the efficiency of the advancement of women cannot responsibly be made. The current situation would give rise to speculation only in this respect.

Need for amendments.

Because of the experience described, Berlin is considering the following amendments:

  • Lowering the threshold value to 25,000 Euros
  • Expanding the scope to cover construction works
  • Developing systematic controlling
  • Improving control of proofs on the part of the awarding offices
  • Introducing obligation for awarding offices to carry statistics and report to the member of Senate responsible for women’s issues
  • Stepping up sanctions

In view of the upcoming amendment of the Berlin equal treatment law the Senate has already come to an agreement to reduce the threshold value to 25,000 Euros, to include the construction industry and to introduce the obligation to carry statistics and report.

The amendment has been referred to the Berlin parliament to be discussed in the relevant committees after the summer break, which gives rise to the assumption that the regulation on the advancement of women will be revised in the autumn of this year (i.e. autumn 2010), and that Berlin will take further steps to harmonize claim and reality in the context of the advancement of women in public procurement.

Linking public procurement to other objectives

In the discussion on the legitimacy and efficiency of linking public procurement with measures for the advancement of women, socio-political issues are gaining significant ground. There has already been a request to discuss ecological aspects and additional training places in the context. Most recently there has been a call for considering minimum wages when awarding public contracts. The amendment to the Berlin procurement law currently debated in parliament (summer 2010) picks up on this issue. From the practical perspective employment of women and men with a migration background is also increasingly addressed. Thus, it seems that advancement of women in public procurement serves as a model for other, equally legitimate objectives. Yet it also runs the risk of being lost amidst the racket of demands.

Conclusion

It is fair to say that linking the advancement of women with public procurement provides an important tool for improving the situation of women in the private sector.