This chapter examines the rationale, benefits and challenges of collaboration in public procurement. It reviews four main models, i.e. centralised purchasing, joint procurement, co-ordinated procurement, and knowledge-sharing networks, showing how they can generate savings, reduce duplication, and improve capacity. At the same time, trade-offs such as coordination costs and risks of reduced flexibility must be managed.
Enhancing Public Procurement through Collaboration in Slovenia
The Way Forward
Abstract
Efficient and effective public procurement is vital to governments’ core purpose. The principle of efficiency of the 2015 OECD Recommendation of the Council on Public Procurement recommends its adherents to “Develop and use tools to improve procurement procedures, reduce duplication and achieve greater value for money, including centralised purchasing, framework agreements, e-catalogues, dynamic purchasing, e-auctions, joint procurements and contracts with options. Application of such tools across sub-national levels of government, where appropriate and feasible, could further drive efficiency.” (OECD, 2015[1]).
Collaborative approaches in public procurement such as centralised purchasing, joint procurement, and community of practices can improve efficiency and effectiveness of public procurement through various benefits. The two key objectives of collaborative approaches in public procurement are (i) pooled procurement (buying together in bulk) and (ii) knowledge sharing. (Espín et al., 2016[2]) For the purpose of this paper, four types of collaborative approaches in public procurement will be examined: (i) centralised purchasing, (ii) joint procurement, (iii) co-ordinated procurement, and (iv) knowledge sharing through communities of practice (see the next chapter for more details of each collaborative approach). Both centralised purchasing and joint procurement aim at buying together in bulk by using the same tender and contract conditions. In centralised purchasing, a central purchasing body is established on a permanent basis at national or subnational level which arranges the procurement processes for a number of contracting authorities using tools such as framework agreements or dynamic purchasing systems. Joint procurement is carried out rather on an ad-hoc basis with agreements among two or more contracting authorities. Under co-ordinated procurement, contracting authorities collaborate with each other during the pre-tendering phase (e.g. defining the needs, market research), and/or use common tender conditions (e.g. technical specifications, contract conditions), but each contracting authority launches its own procurement procedure separately. Knowledge sharing does not aim at procuring together per se but fosters collaboration through sharing and exchanging good practices in a community of practice, as well as capability-building initiatives, which later might lead to procuring together.
Source: Adapted from (European Commission, 2008[3]) and (Zijderhand, 2017[4])
Collaborative approaches in public procurement can bring economies of scale through lower prices and transaction costs (less workload), higher level of capability, increased administrative efficiency from standardisation, and increased uptake of the strategic use of public procurement to address economic, social, and environmental policy goals. (OECD SIGMA, 2011[5]) Its potential pitfalls and challenges, in particular for centralised purchasing and joint procurement, include the additional time required for co-ordination, for contracting authorities to agree on common tender conditions given their potential different needs (see Box 2.1). (Zijderhand, 2017[4])
Collaborative approaches in public procurement can bring many benefits:
Lower price arising from economies of scale
Collaborative approaches through joint procurement and/or centralised public procurement that aggregate the demands of multiple contracting authorities drive better prices through economies of scale which arise from larger procurement volumes and potentially more attractive bids.
Increased appetite from economic operators
Under the right conditions, procurement based on an aggregation of the purchasing needs of several contracting authorities provides very interesting business opportunities for the private sector. With larger procurement volumes, an increasing competition in the market normally follows, affecting prices and other terms in ways that are favourable to the contracting authority purchaser. The potentially large sales volumes that can be expected under centralised or joint procurement mean that economies of scale can be exploited by a larger number of economic operators.
Reduction of transaction costs
Under collaborative procurement such as joint procurement and centralised public procurement, both contracting authorities and economic operators can benefit from a significant reduction of transaction costs (time and expenditures) spent on public procurement procedures. Contracting authorities do not need to spend substantial time and resources to organise public procurement procedures by sharing workload among them. Economies of scale and the reduction of transaction costs are attractive to economic operators, because they can deliver larger volume with less numbers of contracts and customers rather than having a large number of contracts and several customers with small contract volumes.
Improved knowledge and experiences in procurement processes by learning from each other
Collaborative approaches in public procurement can support contracting authorities that do not have enough capacity and/or capability of carrying out public procurement procedures by themselves. Collaborative procurement enables the pooling of skills and expertise from different contracting authorities, allowing them to benefit from each other's procurement expertise and competencies. This benefit could be particularly relevant to relatively small contracting authorities with limited capability and experiences, as well as for complex procurement processes such as innovation procurement, new types of procurement procedures and the new subject matters of contract. Indeed, according to 2025 OECD survey data, over one third of responding countries encouraged joint bidding to improve access to public tenders for specific categories of businesses, such as small and medium enterprises (SMEs) (OECD, 2025[6]). Moreover, experienced officials within central purchasing bodies or contracting authorities can implement the procurement procedures on behalf of smaller, less-experienced contacting authorities, and thus can help reduce potential risks (e.g. risk of complaints, poor or insufficient quality of products, and inadequate tender conditions / contract terms).
Increased administrative efficiency from standardisation
Joining forces through collaborative approaches in public procurement leads to standardisation and harmonisation among contracting authorities and therefore increases administrative efficiency.
Increased uptake of strategic use of public procurement
Collaborative approaches in public procurement increase the uptake of public procurement as a strategic tool to address economic, social, and environmental policy goals. Economies of scale and pooled knowledge and experiences gained through collaborative approaches encourage contracting authorities with limited knowledge and financial resources to undertake procurement procedures to address global challenges.
However, there are also some challenges in collaborative approaches:
More time required for co-ordination
Each contracting authority has specific needs regarding tender conditions and technical specifications of the goods/services/works to be procured. As a result, reaching a consensus on these requirements takes time. However, with greater experience in collaborative approaches, the time needed for co-ordination is expected to decrease.
Less flexibility in meeting the technical needs of each contracting authority
Standardisation, arising in particular from centralised purchasing schemes such as framework agreements, leads to the difficulty in meeting the technical requirements of each contracting authority due to their different and specific needs preferences on the technical specifications and requirements of the goods/services/works to be procured. As a result, contracting authorities may need to compromise and end up procuring goods that do not fully meet their specific needs. This is particularly true when products are not homogenous and where various substitutes exist in the market. Under this context, joint procurement is more appropriate to reflect individual needs than framework agreements, which are more suited for standardised products / needs. Under the context of joint procurement, however, if one contracting authority (in most cases a lead contracting authority) has stronger negotiation power over other contracting authorities, the tender conditions could end up being further tailored towards the needs of that contracting authority than others, potentially creating a lack of trust among contracting authorities.
Higher risk of market concentration
With respect to the market, centralised or joint procurement brings about the risk of higher market concentration and the development of monopolies, as larger volumes disproportionately benefit large suppliers and may create barriers to market entrants and SMEs (OECD, 2018[7]). This situation may restrict competition, with a resulting deterioration in terms of sourcing. Over time, this problem may grow if the supplier market becomes more concentrated.
Source: Prepared by the author based on (OECD, 2011[8]), (OECD, 2018[7]) (European Commission, 2008[3]), (Bakker et al., 2008[9]) and (Zijderhand, 2017[4]).
2.2.1. Centralised purchasing
When several contracting authorities have identified common needs, they can establish an institutional structure for centralised purchasing to procure on their behalf. A CPB is a contracting authority which provides centralised purchasing services such as framework agreements, dynamic purchasing systems, technical advice, and procurement agent services to carry out an individual procurement procedure on behalf of contracting authorities (see Box 2.2 for more details on the definition of a CPB and centralised purchasing services).
Under the latest EU Directive on public procurement (2014/24/EU, hereinafter referred to as the Directive), already transposed to all EU member states, including Slovenia, a central purchasing body (CPB) is defined as a contracting authority providing centralised purchasing activities and, possibly, ancillary purchasing activities under the Article 2(16).
Article 2(14) of the Directive defines centralised purchasing activities as activities conducted on a permanent basis, in one of the following forms: (i) the acquisition of supplies and/or services intended for contracting authorities; and (ii) the award of public contracts or (iii) the conclusion of framework agreements for works, supplies or services intended for contracting authorities. Article 2(15) defines ancillary purchasing activities as activities consisting in the provision of support to purchasing activities, in particular in the following forms: (a) technical infrastructure enabling contracting authorities to award public contracts or to conclude framework agreements for works, supplies or services; (b) advice on the conduct or design of public procurement procedures; (c) preparation and management of procurement procedures on behalf and for the account of the contracting authority concerned.
Procurement techniques and electronic instruments used by CPBs include framework agreements (Article 33), dynamic purchasing systems (Article 34), electronic catalogues (Article 36) and electronic auctions (Article 35). Both procurement techniques and electronic instruments can increase competition, aggregation and digitalisation of procurement processes, and streamline public purchasing.
Article 39 of the EU Directive also states that a Member State shall not prohibit its contracting authorities from using centralised purchasing activities offered by central purchasing bodies located in another Member State.
Source: (European Commission, 2014[10])
CPBs are established in a majority of OECD countries and are recognised as a tool to improve capacity and expertise, achieve better prices through economies of scale and lower transaction costs (OECD, 2019[11]). According to a recent OECD survey, only one responding country had no CPB, while a national or federal CPB exists in 93% and regional or local ones exist in 40% of responding countries (OECD, 2025[6]). CBPs can be established at national and/or subnational level and for specialised sectors (e.g. health, ICT). For example, Adda AB in Sweden is a CPB that provides municipal and regional authorities with centralised purchasing services such as framework agreements and DPS (see Box 2.3).
Adda AB, a CPB in Sweden, provides Swedish municipalities and regions with centralised purchasing services such as framework agreements and DPS. Adda AB is established within Swedish Association of Local Authorities and Regions (SKR). SKR acts as a network for knowledge exchange and co-ordination, the provision of services and professional advice across different areas to support and contribute to the development of municipalities and regions. All of Sweden's 290 municipalities and 21 regions are members of SKR.
As of August 2024, Adda AB manages over 120 active framework agreements and dynamic purchasing systems for 18 categories such as energy, vehicle, office supplies, ICT, travels, healthcare products and vaccines, and educational materials. In order to develop relevant framework agreements and DPS that are beneficial to its clients, Adda AB has a constant dialogue with municipalities and regions, and actively listens to their needs. Municipalities, regions and municipal entities can use Adda AB’s services by paying an annual service fee of SEK 1 000 (approximately EUR 90). To meet sustainability requirements, Adda AB followed up with suppliers regarding sustainable supply chains, i.e. human rights, workers’ rights, and environmental considerations between 2013 and 2023, and developed a database, Hållbarhetskollen, which evaluates suppliers’ performance. The database can be freely consulted by its clients.
Source: (Adda, n.d.[12])
2.2.2. Joint procurement
Article 38 of the EU Directive defines occasional1 joint procurement as the conduct of a procurement procedure in which “Two or more contracting authorities may agree to perform certain specific procurements jointly”. Contracting authorities can therefore jointly conduct a single procurement procedure either by acting together or by entrusting one lead contracting authority with the management of the procurement procedure on behalf of all contracting authorities (European Commission, 2014[10]) The key characteristic of joint procurement is that one tender will be published on behalf of all participating contracting authorities. (European Commission, 2008[3]) This characteristic distinguishes joint procurement from co-ordinated procurement whereby each contracting authority launches separate procurement procedures following their co-operation based on the common tender conditions such as technical specifications.2
Source: Created by the author by adapting (Zijderhand, 2017[4])
Joint procurement can be carried out among contracting authorities within the same country or among contracting authorities from different countries. Article 39 of the EU Directive also allows for cross-border joint procurement involving contracting authorities from different EU Member States, although Recital 73 of the EU Directive mentions that it may lead to legal difficulties concerning conflicts among national laws. (European Commission, 2014[10])
There are two typical models of joint procurement, based on the capacity of contracting authorities to award a contract to the successful bidder: full joint procurement and “piggy-backing” joint procurement. Under a full joint procurement, all participating contracting authorities are expected to purchase the subject matter of contract. The full joint procurement could be what is often called as “classic” joint procurement. Under piggy-backing joint procurement, on the other hand, a lead contracting authority carries out the procurement on its own but provides other contracting authorities with the option of procuring the same subject matter of contract by using the same contract conditions (see Box 2.4 for an example of piggy-backing clause). (European Commission, 2008[3])
Lewisham is acting as a lead authority for a number of UK local authorities and their associated purchasing organisations participating in the LEAP project. These are currently Lewisham, Sandwell Metropolitan Borough Council and ESPO (Eastern Shires Purchasing Organisation). The Contract may also be used by other London Boroughs and similar organisations who are members of the LCSG (London Contract and Supplies Group). The quantities of procured items are specified to the London Borough of Lewisham who will make use of the contract for its supply arrangements as a lead authority of piggy-backing joint procurement. The other Authorities and Organisations identified may elect to make use of the resulting contract at some future date.
Note: LEAP refers to Local Authority EMAS (*) and Procurement * EMAS: Eco-Management and Audit Scheme
Source: (European Commission, 2008[3])
The benefits of full joint procurement are to achieve economies of scale through buying in bulk and ensure that the specific needs of participating contracting authorities are reflected in the tender documents. However, it will require more workload to co-ordinate different needs among participating contracting authorities, although this workload is expected to diminish with experience. On the other hand, piggy-backing joint procurement requires less workload for piggy-backing contracting authorities, as they do not have to carry out their own procurement procedure. A lead contracting authority only needs to state in the tender notice that other contracting authorities listed there may also wish to set up a contract with the successful bidder at a later date during the timeframe of the original contract by piggy-backing it. However, the full benefits of joint procurement arising from economies of scale through buying in bulk are partly lost, as piggy-backing joint procurement is optional and therefore there is no guarantee that piggy-backing contracting authorities will award a contract. In addition, specific needs of piggy-backing contracting authorities will not be reflected, as the tender is carried out based on the needs of a lead contracting authority. However, it can be a great starting point in establishing relations among participating contracting authorities, which can later lead to a full joint procurement initiative.
2.2.3. Co-ordinated procurement
Under co-ordinated procurement, each contracting authority launches procurement procedures separately, unlike centralised purchasing and joint procurement. However, contracting authorities collaborate with each other during the pre-tendering phase (e.g. market research, developing tender documents, criteria and technical specifications), and/or use common tender conditions (e.g. technical specifications, contract conditions) provided by a central organisation.
Pre-tendering collaboration
Contracting authorities can work together in the pre-tendering phase, while having separate procedures as the outcome. By joining forces on common elements in the procurement process, contracting authorities can save time and resources without the obstacles of legal and organisational differences. Common elements can include conducting market analysis, developing tender documents, and developing specifications and criteria. Tenders can look very similar and happen at the same time in a harmonised way, but contracting authorities have the opportunity to adapt the requirements and processes to meet their own needs and legal structures. (Zijderhand, 2017[4]) In Germany, for example, several German cities collaborated to develop tender documents for electric buses together with transport associations, and each of them launched their own tender procedures with similar conditions. (Zijderhand, 2017[4])
Procurement based on common tender conditions
Central organisations or purchasing bodies can also provide support in drafting common specifications, criteria, or contract templates on behalf of contracting authorities, either as a general recommendation for specific product categories or to be used in more complex tenders. This can happen both at the initiative of the central organisation, or at the request of contracting authorities. (Zijderhand, 2017[4])
Source: Created by the author by adapting (Zijderhand, 2017[4])
For example, the European Commission published common EU green public procurement criteria that can be used to reduce the environmental impacts of government purchases (European Commission, n.d.[13]). In the Netherlands, common specifications were prepared by a leading authority such as Talking Traffic and the Ministry of Infrastructure and Water Management. Different contracting authorities can then use these common specifications for their own tender procurement process. This standardisation can help contracting authorities without the capacity to develop their own criteria and provide the market with a common approach.
In Chile, since 2018, ChileCompra, the national central purchasing body, has been providing co-ordinated procurement services to contracting authorities, which has led to significant savings (see Box 2.5).
Since 2018, ChileCompra has been promoting co-ordinated procurement, enabling public agencies to pool their demand for goods and services to obtain better prices, improve efficiency, and share expertise. This approach has delivered significant savings and strengthened procurement capacity across government.
As such, two models are currently used for co-ordinated procurement:
Mandated co-ordinated procurement: ChileCompra leads the process on behalf of several institutions, based on formal requests and meeting conditions such as high standardisation, large budget relevance, significant aggregation potential, and sufficient market capacity.
Joint co-ordinated procurement: Two or more entities jointly manage the procurement, with ChileCompra providing advisory support but not acting as purchaser. Participating agencies begin by signing a Collaboration Agreement, which can be joined later by other entities through a letter of accession. They jointly define the technical specifications, evaluation criteria, and procurement strategy, with ChileCompra offering guidance and templates. The procurement is conducted through a competitive procedure—either an open tender or a large-scale framework agreement—ensuring transparency and fairness. Co-ordination meetings, market analysis, and consensus-building are integral parts of the process before the call for tenders is launched.
As a result, co-ordinated procurement has generated substantial savings, nearly 39% in 2024 and significant reductions in market prices in areas such as ambulances, IT equipment, and telecommunications services. It has fostered collaboration and knowledge-sharing among participating institutions, enabling them to learn from each other’s experiences and strengthen their procurement skills. Standardising technical specifications and administrative procedures has also streamlined processes, reduced duplication, and increased efficiency in public procurement.
However, in terms of challenges, these processes require more preparation time, as agencies must align on technical requirements, bidder qualifications, and administrative documentation. Some agencies have needs for more specialised goods or services that may not fit well within aggregated procurement, requiring careful balancing to maintain economies of scale. Moreover, while participation in mandated co-ordinated procurement has grown, joint co-ordinated procurement remains underutilised despite its potential benefits.
Source: Information shared by ChileCompra
2.2.4. Knowledge sharing through communities of practice
The capacity of the public procurement workforce is a key element to ensure a sound procurement system to deliver efficiency and value for money. (OECD, 2015[1]) Among the various initiatives to professionalise the public procurement workforce, establishing a community of practice or a centralised online portal is a valuable collaborative approach. A community of practice is a shared platform in which procurement practitioners can exchange knowledge and experiences, ask questions, or share documentation. Activities related to communities of practice include, but are not limited to, setting up a discussion forum to exchange information and ask questions to other practitioners, issuing a regular newsletter about developments concerning the legal framework, methodological guidance, exchanging good practices or practical advice, and/or holding regular conferences or capability-building activities (OECD, 2023[14]). According to a recent survey of OECD and accession countries, national communities of practice for public procurement exist in 58% of respondent countries (OECD, 2025[6]). The Public Buyers Community is a well-known community of practice across the EU level (see Box 2.6).
The Public Buyers Community Platform complements the European Commission’s strategy to improve public procurement in the EU by bringing together public authorities and other stakeholders. As of August 2024, it consists of 21 communities of practice such as Central Purchasing Bodies (CPB) Network and Procurement of AI. The Central Purchasing Bodies (CPB) Network was established in 2012 and comprises 21 CPBs from 20 countries across the EU. The objective of the network is to provide CPBs with a platform to discuss common issues encountered in public procurement and centralised purchasing, and share experiences on a wide array of topics such as strategic procurement, competition etc.
Source: (European Commission, n.d.[15])
Communities of practice can bring many benefits, and help foster continuous learning among procurement professionals, reduce duplication of efforts by pooling existing knowledge and tools, and enable rapid dissemination of new policies, guidance, or innovative practices. At subnational level, such platforms can be especially useful to smaller municipalities that may lack in-house expertise, providing them with access to advice and solutions tested elsewhere. However, putting in place and maintaining a community of practice may also face potential drawbacks. Sustaining participation in the community of practice over time requires adequate participation from contracting authorities, and dedicated resources to facilitate discussions and update contents, otherwise the community of practice may be inactive or underused. Communities of practices also need to ensure the contents and information disseminated is in line with official policies and guidance at the national level.
Under the context of a collaborative procurement approach at subnational level in Slovenia, establishing a community of practice will be relevant not only to share knowledge and good practices, and develop capacity-building initiatives but also to provide information on the tools / services available to municipalities (such as framework agreements open to municipalities) and to facilitate dialogue on potential collaboration such as joint procurement. These elements will be discussed further in the next chapter.
References
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← 1. The word “occasional” is used to distinguish joint procurement (less institutionalised, not permanent) from central purchasing services provided by central purchasing bodies which are established on a permanent basis.
← 2. It should be mentioned that the Recital 71 of the EU Directive mentions coordinated procurement as one of different forms of joint procurement. However, this report distinguishes joint procurement (one procurement procedure based on the same tender conditions) from coordinated procurement (separate procurement procedures based on the same tender conditions)