ASU Center for Organization Research and Design

Moving Towards Performance-Based Specifications in Public Procurement

by Laura Turley

Dec 1, 2013

There are environmental benefits associated with the procurement of services instead of, or in addition to, discrete products. Under the right conditions, transitioning to a more service-intensive purchasing model can reduce natural resource consumption in the production, use and disposal phases of product life cycles. Generally, financial savings can be realized too—even in the short term. In order for public procurers who purchase goods, services, buildings and infrastructure on a significant scale to take advantage of these potential savings and benefits, performancebased specifications are invaluable tools. Performance-based specifications allow public authorities to specify their needs in general terms by describing what general functions they require (e.g. lighting, mobility, information management) rather than specifying the minute details of the inputs and process required to get there. The private sector can then innovate and generate savings in resource use and in operating costs. Generally speaking, suppliers are better suited than public procurers to know what options are available in the market, or to innovate and commercialize towards new products and services in order to meet a required performance level. Performance-based specifications are thus a tool with which, under the right conditions, public procurers can stimulate markets to deliver innovative and environmentally sound solutions.