ASU Center for Organization Research and Design

Using Product-Service Systems to Enhance Public Procurement

by Cuno van Geet; Ilia Neudecker; Laura Turley; Mervyn Jones; Natalie Evans

May 1, 2015

Sustainable or green public procurement is a growing trend that is beginning to lead vast supply chains towards implementing more sustainable practices and achieving environmental, social and economic objectives. The use of product-service systems (PSS) by public entities can also result in sustainability benefits. PSS are an innovative business approach that shifts the traditional business focus from selling physical products only (e.g. a washing machine) to selling a mix of products and services (e.g. cleaning services) that are jointly capable of meeting specific client demand (clean clothes). The key idea behind PSS is that consumers do not demand products per se, but are seeking the utility provided by products and services. One value-added of PSS lies in their potential to decouple consumption from economic growth, as they offer the possibility of meeting more needs with lower material and energy requirements.This technical report, Using Product-Service Systems to Enhance Public Procurement, examines the nexus between product-service systems and sustainable public procurement, drawing together international experience. The aim of this report is, in particular, to demonstrate how product-service systems can be used by governments in the context of sustainable public procurement (SPP) policies and initiatives, thus contributing to a more resource-efficient, lowcarbon and inclusive green economy. Some examples of the use of product-service systems by government organizations are given in the case studies in Annex I. The 10-Year Framework of Programmes on Sustainable Consumption and Production Patterns (10YFP) is a global framework that enhances international cooperation to accelerate the shift towards sustainable consumption and production (SCP) in both developed and developing countries. One of the key objectives of the 10YFP is to encourage innovation and cooperation among all countries and stakeholders. This technical report is a direct outcome of activities that were part of the 10YFP Sustainable Public Procurement Programme – the first formal programme launched under this new framework of international cooperation. The report was developed by partners in the Sustainable Public Procurement Programme of the 10YFP, in Working Group 3A on "product-service systems and their insertion in sustainable public procurement".This technical report is intended to assist governments in evaluating the potential of productservice systems to act as a driver in achieving their sustainability goals. The authors believe the report provides a basis for more research to determine the effectiveness of various PSS schemes and related products in regard to sustainable public procurement.