Introduction

This Factsheet outlines the current progress in advancing Sustainable Public Procurement (SusPP) in Bangladesh based on a desk review. The review applies an analytical framework of six Pillars (or "building blocks") of SusPP systems.

The Framework is designed to make clear that countries do not need to follow a linear step-by-step path to build effective GPP systems. Rather it is important to examine local contexts and prioritize the Pillars with the most potential in the country. No matter where a country starts, a balanced approach to implementation calls for progress on all Pillars to some degree.

This Factsheet is organized as follows:

• "Country overview" section with an maturity rating and graphic, key achievements and remaining gaps, and timeline of key events.
• "State of Play and Forward Looking Analysis" section that summarizes the research findings from the desk review for each Pillar theme.
• "Key Stakeholders Driving the Agenda" explores opportunities for ADB teams to open discussions with country counterparts and add value to the work of partners.

The Factsheet is intended to be a living document that will be revised and improved as new information is uncovered and advances are made. It is designed to support the ADB training programs on SusPP.

If you have new information, please contact ychu@adb.org.

Bangladesh has committed to shifting to a green and inclusive growth strategy. Currently only 1% of GDP is allocated to environmental management, while an estimated 4.5% of GDP will be needed. To finance the transition, the Government proposes new regulatory and pricing policies, fossil fuel and pollution taxes, and mobilizing resources from global climate funds. Public procurement offers a powerful, as yet untapped tool, amounting to $24 billion in 2019 - 45.2% of the annual public budget and 8% of national GDP, that can contribute to building a more inclusive and climate-resilient growth trajectory.

With World Bank support, the country has made significant strides in building a more modern, transparent procurement system with new e-procurement tools and efforts to professionalize the procurement function. A draft Sustainable Public Procurement Policy has been developedand is expected to be adopted by September 2023. Procurement law reform is planned by 2025 at the latest.

SusPP can contribute to the achievement of the country's ambitions. Bangladesh is one of the world’s fastest growing economies but this has come with a high cost of environmental degradation, health effects and natural capital losses. 28% of all deaths were related to environmental risks, mainly air and water pollution. The country is the 7th most vulnerable in the world to climate-related hazards, with disasters costing 1-2% of GDP annually due to damages in livelihoods, infrastructure and production. Over 50% the population lives in areas of “high” climate exposure, 33% are subject to “very high” exposure. Vulnerable populations, women, poor and minority groups, are expected to be hardest hit, resulting in ever-increasing wealth disparities.

>> Snapshot of Sustainable Procurement Maturity Level

Maturity Level:

Early Stage

Key Links

• Official Government Procurement website
  
• E-procurement system

Key Achievements

• Sustainable Public Procurement Policy drafted with phased implementation plan to be adopted by September 2023
  
• Green growth ambitions at the core of national development plans, with clear environmental and social priorities that SusPP can help achieve (Box 1)
• Current Public Procurement Act prioritizes lowest price but contains provisions that allow consideration of energy savings and environmental characteristics
• Green suppliers present in country that offer "cleaner bricks", resource-efficient metal products, eco-friendly concrete alternatives, lead-free paints, sustainable packaging (jute).
  

Activities currently underway

• New draft of Public Procurement Act (PPA) that promotes sustainable procurement under review and expected to be enacted soon
• New central Public Procurement Authority with enhanced authority and autonomy proposed under the new PPA
  

Potential pathways forward

• Support planned fiscal reform to incentivize purchases of hybrid and electric vehicles, energy-efficient appliances, recycled materials, sustainable paper products.
  
• Design SusPP training and support pilot procurements with procuring authorities
• Support private sector to adopt green practices and technologies
• Conduct market readiness assessments for greening of key economic sectors
• Develop the voluntary green building rating system proposed in the 8th Five Year Plan
• Develop monitoring framework and system to track SusPP implementation

>> Timeline of Implementation of Sustainable Procurement Activities

2002

2016

2023

2006

2011

2021

2007

2008

2009

2022

Perspective Plan 2041 & 8th Five Year Plan prioritizes a shift to a green growth trajectory, including green procurement

8FYP proposes "Made in Bangladesh" procurement law reform

National Determined Contribution commits to 21.8% GHG emission reduction by 2030

Draft Sustainable Public Procurement Policy drafted and expected to be adopted in Sept 2023

National Climate Change Strategy & Action Plan calls for low-carbon development

Vision 2021 prioritizes the pursuit of an environmentally sustainable & socially inclusive development process

7th Five Year Plan set plans for a sustainable development pathway

Public procurement reform begins based on World Bank assessment

Roll-out of e-procurement system begins

Renewable Energy Policy promotes renewable energy as a green innovation

Public Procurement Act enacted prioritizing "lowest evaluated tender"

Draft Bangladesh Public Procurement Act (BPPA) under review that promotes SusPP

Pillar 1: Government Vision & Awareness of SusPP

Governments that establish a clear policy vision on SusPP can accelerate the shift from procurement as an administrative to strategic function, making clear how SusPP can deliver on important national social and environmental goals.

National strategy and action plan on SusPP

A draft Sustainable Public Procurement Policy of Bangladesh was released in February 2023 with adoption planned by September 2023. It was developed as part of the conditions agreed upon for a $4.7 billion loan programme with the World Bank. The Policy is designed to provide a basis for procuring entities to pilot SusPP, with lessons learned from the pilots to be integrated into a procurement law reform by 2024.

The Policy establishes "value for money" as the major consideration when implementing SusPP. The Policy provides step-by-step guidance on how to integrate sustainability criteria at all stages of the procurement process. It encourages procuring entities to take a Whole Life Approach (WLA) when assessing sustainability impacts including:

• Manufacture, delivery, installation;
  
• Operating costs including energy, water usage and maintenance;
• End of life costs including decommissioning and disposal

Sustainable bidders can be awarded even if price is 10% higher than non-sustainable offers. Certification by the BSTI - Bangladesh Standards and Testing Institution or ISO is required.

The Policy also encourages measures to expand participation by small and medium-sized businesses and women-owned enterprises. Suggested measures include minimizing the complexity of tender documentation,

dividing contracts into smaller lots, limiting the number of lots that can be awarded to one Tenderer, and allowing a longer period of time for submission of an expression of interest (EOI).

The Policy emphasizes the need to "gradually integrate" SusPP practices into the country's procurement system. The plan is to pilot SusPP at first focusing on six priority goods and services categories: paper and paper products, office suppliers, computer and other electronic equipment and supplies; office and other furniture or related wooden appliances, vehicles and other transportation equipment, and official paper-made publications. By 2024, a mandatory Guideline on SusPP is to be issued that will incorporate minimum SPP policy provisions in the standard tender documents. Full roll-out of SusPP across the country is planned after 2026, on the basis of a feasibility study and progress report that assesses the lessons learned from the pilot implementation.

Related national policies

Implementation of SusPP aligns with the country's green growth ambitions

outlined in the Bangladesh Delta Plan, Perspective Plan 2041, and 8th Five Year Plan (8FYP). “A sustainable development pathway that is resilient to disaster and climate change” is one of the six core themes of the 8FYP. The Government recognizes that while environmental conservation measures appear economically burdensome in the very short run, return on investment on sustainable development is expected to be high. A new procurement law “Made in Bangladesh” is proposed to mandate sourcing from national start-ups from both private and public purchasers. The 8FYP outlines the key environmental challenges and priority actions to be taken in Bangladesh (Box 1) - that SusPP can designed to help achieve.

Procurement reform is recognized as part of the Government work to "green" its Public Financial Management (Perspective Plan 2041). In addition, rebates and fiscal incentive are planned to support purchases of hybrid and electric vehicles, energy-efficient appliances, recycled materials and sustainable paper products.

Box 1. Environmental priorities & opportunities in 8FYP

Pillar 2: Legal & Regulatory Framework

Procurement law reform can be key to clear obstacles to implementation by establishing "value for money", not "lowest price", as a core procurement objective, and authorizing procurement approaches suited to SusPP.

Public procurement in Bangladesh is regulated by the Public Procurement Act, 2006, and Public Procurement Rules, 2008. This framework offers limited scope for government entities to incorporate sustainability into their public procurement activities for goods and works. The legislation sets 'lowest price' as the sole basis of selection, except for services where quality aspects can be considered (i.e. Quality and Cost Based Selection). Specific provisions within the Standard Tender Documents require contractors to avoid child labor, provide just wages, guarantee workplace safety and limit environmental contamination. However, enforceability of these clauses is limited due to the lack of clear penalties.

The Procurement Rules contain entry points for SPP such as provisions that allow “energy savings and other environmentally friendly considerations” to be included in design contests. It also allows procurements organized within the framework of financing agreements with development partners, like the ADB, to align with procurement rules set out by partners.

A new draft Bangladesh Public Procurement Act (BPPA) has been sent to the Cabinet Division for approval. It sets out a clear legal basis for sustainable public procurement in the country, through a provision stating:

"In order to ensure sustainable procurement, Procuring Entities shall…take into account social, economic and environmental issues and shall incorporate them in the procurement process."

The drafts SusPP Policy envisions a further amendment of the BPPA by 2025 to incorporate lessons learned from pilots supported.

Pillar 3: Institutions & Capacity

Implementing SusPP requires assigning clear roles and responsibilities to agencies across government and actors across society, equipping them with the strategic knowledge and technical skills needed for success.

Lead Agency

Public procurement in Bangladesh is coordinated by the Central Procurement Technical Unit (CPTU) under the Implementation Monitoring and Evaluation Division (IMED) division within the Ministry of Planning. However the CPTU's capacity has been limited due to its legal structure, a lack of autonomy in decision making, and limited staffing.

A new Bangladesh Public Procurement Authority (BPPA) with enhanced authority and autonomy on procurement policy-making and oversight is planned to be established under the draft BPPA Act. Its creation is motivated by conditions set by various multilateral lenders, including the World Bank. The existing CPTU will be assimiluated with the new Authority.

Steering Committee

A high level Steering Committee on SusPP headed by the Ministry of Planning is planned under the draft SusPP Policy. The Steering Committee will be responsible for approving policy and providing directives to the CPTU. It will provide guidelines for the selection (by procuring authorities) and market development (by suppliers) of sustainable products, works and services. It will provide a forum for coordination among multiple agencies and organizations across government.

Other key institutions

Adopting SusPP requires the engagement of public entities across government to fully capture nationwide benefits. Some of the key institutions to engage in early stages of implementation include:

• Local Government Engineering Department, one of the largest public sector organizations in Bangladesh responsible for major works projects.
  
• Bangladesh Bank, responsible for green finance and banking, including low-cost loans for RMB and leader industries to shift to environmentally friendly technologies.
  
• Sustainable and Renewable Energy Development Authority (SREDA), responsible for advancing green technologies and providing subsidies for renewable energy projects
  
• Finance Division and Economic Relations Division to support green fiscal policies and incentives and secure green financing from international sources.
  

Capacity Building

Implementation of SusPP will require a government-wide capacity building effort due to the breadth of procuring authorities across public bodies - over 1,300 authorities exist in Bangladesh. The CPTU is responsible for capacity building of procurement authorities in Bangladesh. A ambitious set of procurement training and professionalization activities are planned under the World Bank project.

The draft SusPP Policy assigns responsibility for issuing guidance notes on SusPP to the CPTU (Article 8.3). The high level SusPP Steering Committee will annually select a sustainable procurement "champion" amongst the procuring authorities to award and recognize SusPP achievements. Actions meriting recognition include: conducting awareness raising, reporting and performance tracking, integrating SusPP into contracts and achieving quality of impact, and work to develop a "code of conduct" for suppliers (Article 8.5).

Pillar 4: Market Practices

Market dialogue throughout the procurement process helps procuring entities to choose realistic sustainability criteria and ensure suppliers succeed in delivering on sustainability commitments over the contract duration.

The SusPP explicitly allows procuring entities to work with suppliers to identify sustainable products and services (Article 8.4). This removes uncertaintly that market dialogue is allowed in Bangladesh.

Supplier support programs

The tragic events at Rana Plaza in 2013 attracted global attention to improve working conditions in Bangladesh's RMG sector. Since then, several sectors have received support in international development projects and from multi-national companies seeking to build more ethical and sustainable supply chains, mainly the RMG and leather industries. Other projects have supported "cleaner bricks", resource-efficient metal products, eco-friendly concrete alternatives, lead-free paints and jute as a sustainable packaging material. National SMEs have received training on environment management systems, ecolabels and other certifications (e.g. Germany's Green Button certification).

Green financing

The Bangladesh Bank has established a “Green Transformation Fund” to provide low-cost loans for more environmentally-friendly production methods in the ready-made garment and leather industries along with other export oriented industries. The low-cost loans support initiatives to improve waste management, water conservation, energy efficiency, renewable energy, resources efficiency, and recycling activities.

Pillar 5: Procurement Operations

Various tools and procurement approaches can be employed to help procurers more easily identify environmentally friendly goods and services and attract a competitive market response.

Day-to-day procurement operations in Bangladesh are generally awarded on the basis of lowest evaluated price. Recent surveys show that some procurers have integrated environmental criteria and life-cycle costing into tender documents. However, this practice is done on a case-by-case basis, not a coordinated government-wide approach.

Existing tools

Only a few tools exists in the country to guide procuring authorities to design sustainable procurements. Environmental and social thresholds are included in instructions to bidders, bid data sheets and General Conditions of Contract for Civil Works. These provisions are generally focused on risk-reduction and compliance of existing laws, rather than encouraging environmentally-friendly technologies and innovations.

Planned tools

The development of a voluntary green building rating system is proposed in the 8FYP to guide eco-friendly building design, construction and management. SusPP principles are expected to be piloted in the following priority categories: paper and paper products, office supplies, computer and other electronic equipment, office and other furniture or related wooden appliances, vehicles and transport equipment and official paper-made publications.

Pillar 6: Monitoring & Impact Measurement

Monitoring systems are essential to gather the information needed to keep SusPP implementation on course and communicate on the benefits achieved for the country.

Procurement monitoring framework and KPIs

Quarterly procurement performance reports are made available through the e-procurement platform. These reports do not track SusPP at present. The World Bank is supporting the Digitizing Implementation Monitoring and Public Procurement Project (DIMAPPP) that aims to fully digitize public procurement and monitoring in the country

The draft BPPA (currently under Cabinet Division review) assigns responsibilities for monitoring of public procurement to the proposed Bangladesh Public Procurement Authority. The Authority will be responsible for submitting annual reports on all purchase activities, as well as managing the data and information collected on the e-procurement system.

Meanwhile, the draft SusPP Policy assigns responsibility for monitoring SusPP implementation to the CPTU. The Policy will be reviewed every six months by the high level SusPP Steering Committee to inform policy implementation. Two important sustainability key indicators are highlighted for regular monitoring:

• share of women-owned enteprises participating in the public procurement process; and
  
• number of pre-selected public service organizations (PSOs) that uses the SusPP rated criteria in their relevant contract documents.

Citizen engagement

The country has made significant progress in engaging citizens to improve procurement monitoring. Site-Specific Citizen Monitoring Groups have been created, made up of local representatives trained to monitor implementation of contracts, currently in place in 48 sub-districts. An online Citizens’ Portal makes public procurement data available for viewing by procuring entities and citizens, aligned with the Open Contracting Data Standard (OCDS). This Portal could potentially be expanded to include tracking of SusPP.

Projects Supported by ADB

The Asian Development Bank (ADB) aims to support the Government of Bangladesh shift to sustainable, resilient, and inclusive growth over the country partnership strategy (CPS) period (2021–2025). ADB supports the capacity of the executing agency by extending the procurement professionalization program.

• In the transport sector, supporting low-carbon, resource-efficient road and railway construction and adoption of mass transit, hybrid and e-vehicles, along with related charging infrastructure.
  
• In the education and health sector, requiring the planting of trees to reduce noise pollution and use of lead-free paints in schools and hospitals
  
• In all sectors, increasing the participation of SMEs and women.
  

Other Initiatives supported by National/International Agencies

The World Bank (2021- present) has supported procurement modernization in Bangladesh since 2002. The 2021 financing supports the development of a policy and implementation roadmap for sustainable procurement, support to small and medium-sized and women-led enterprises and scaling-up citizen engagement. The Bank also supports the Digitizing Implementation Monitoring and Public Procurement Project (DIMAPPP) that includes activities to promote SusPP.

USAID (2012-2021) supported Bangladesh to improve efficiency in energy generation, bolster regulation of emissions, and expand the use of clean and renewable sources of energy, including solar and wind power.

Switch Asia has been active in Bangladesh in since 2009 supporting SMEs and industries to switch to eco-friendly production. Early projects focused on improving environmental technologies in the textiles and leathers industries and promotion of jute as a sustainable packaging material. More recent support has focused on resource-efficient metal products and environmentally friendly building materials, especially “cleaner bricks”.

GIZ (2021-2014) supports (international) purchasing and (Bangladeshi) producing companies to collaborate as partners to improve compliance with human rights, social and environmental due diligence obligations.

Further Reading

Central Procurement Technical Unit (2023). Sustainable Public Procurement (SPP) Policy of Bangladesh - Draft.

Al Mamun, Abu Jafar (2020). Sustainable Procurement Practices in Bangladesh: BRAC a Case Study, Masters thesis submitted to the Department of BRAC Institute of Governance and Development.

Rahman S, Islam Z, Morshed R. "Readiness for integrating sustainability issues in public procurement process of Bangladesh", International Journal of Engineering, Business and Enterprise Applications, 15-238; 2015.

World Bank. Public Procurement transformation in Bangladesh.

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