This chapter presents strategic public procurement as a policy tool and locates it in the context of the 2014 EU Directives on public procurement and the 2015 OECD Recommendation on Public Procurement. The chapter also discusses the frequency and magnitude of strategic public procurement use in Estonia.
Strategic Public Procurement and Professionalisation Initiatives in Estonia
Diagnostic Report
Abstract
Accounting for 12.9% of GPD in the OECD in 2021, public procurement provides governments with a powerful lever to achieve policy goals, such as economic, environmental and social progress, if used strategically (OECD, 2023[1]). The 2015 OECD Recommendation on Public Procurement provides a comprehensive framework for the strategic use of public procurement, as highlighted in particular by the principle of ‘Balance’. (OECD, 2015[2])
i) Evaluate the use of public procurement as one method of pursuing secondary policy objectives in accordance with clear national priorities, balancing the potential benefits against the need to achieve value for money. Both the capacity of the procurement workforce to support secondary policy objectives and the burden associated with monitoring progress in promoting such objectives should be considered.
ii) Develop an appropriate strategy for the integration of secondary policy objectives in public procurement systems. For secondary policy objectives that will be supported by public procurement, appropriate planning, baseline analysis, risk assessment and target outcomes should be established as the basis for the development of action plans or guidelines for implementation.
ii) Employ appropriate impact assessment methodology to measure the effectiveness of procurement in achieving secondary policy objectives. The results of any use of the public procurement system to support secondary policy objectives should be measured according to appropriate milestones to provide policy makers with necessary information regarding the benefits and costs of such use. Effectiveness should be measured both at the level of individual procurements, and against policy objective target outcomes. Additionally, the aggregate effect of pursuing secondary policy objectives on the public procurement system should be periodically assessed to address potential objective overload.
Source: (OECD, 2015[2])
Typically, strategic public procurement is used to support green objectives (green public procurement), social inclusion and responsible business conduct (socially responsible public procurement) or innovation (innovation procurement), though other specific policy objectives may be pursued, too (e.g. circularity). Specifically, public procurement can be used to purchase goods and services with a reduced environmental impact, thereby contributing to green objectives. Furthermore, public procurement can also contribute to social responsibility and deliver social outcomes. Public buyers can for instance promote employment opportunities, decent work, social inclusion, accessibility, design for all, ethical trade, and seek to achieve wider compliance with social standards. For some goods, works and services, the impact can be particularly significant, as public buyers command a large share of the market in sectors such as construction, healthcare, and transport. Public procurement also offers an enormous potential to stimulate innovative products and services. It can help governments boost innovation at both the national and local level and ultimately improve productivity and inclusiveness.
The legal framework established by Directive 2014/24/EU empowers Member State governments to utilise their ‘purchasing power’ to advance strategic policy goals, such as social, environmental, and innovation objectives when procuring goods, services, and works. The Directive sets out that contracting authorities shall award public contracts to the most economically advantageous tender, and may use qualitative criteria, such as social, environmental and innovative characteristics to determine what is most advantageous. In addition, the 2017 Commission Communication “Making public procurement work in and for Europe”, clearly specified “Ensuring wider uptake of strategic public procurement” as one of the six priority areas to transform public procurement into a powerful instrument, together with other five priorities: professionalising public buyers, improving access to procurement markets, increasing transparency, integrity and better data, boosting the digital transformation of procurement and cooperating to procure together. (European Commission, 2017[3]) Thus, the European Union aims at achieving its priorities on digital and green transitions (the twin green & digital transition, the EU). Furthermore, the EU supports Member States to implement strategic public procurement policies by providing guidance and best practice sharing frameworks on including strategic criteria in public tenders.
In Estonia, public procurement accounted for 15.3% as a share of GDP and 34.9% as a percentage of total general government expenditures in 2023 (OECD, 2025[4]). Estonia widely recognises public procurement as a strategic tool to support the green and digital transition and to contribute to social sustainability. However, the uptake of strategic public procurement is still limited in the country: in 2023, 9.5% of the total procurement (by number of procedures) was considered as green public procurement, 0.7% as socially responsible procurement, and 0.2% as innovation procurement (Ministry of Finance, 2024[5]).
Source: Ministry of Finance, 2024
Source: Ministry of Finance, 2024
The data shows that there is potential to improve the strategic use of public procurement in Estonia. The strategic use of public procurement, however, requires skilled public procurement workforce and capable institutions, alongside with other enablers. In this regard, in 2019, Estonia piloted the testing of the European competency framework for public procurement professionals (ProcurCompEU). The pilot confirmed the need for further work on the professionalisation of the procurement function and for developing capability-building mechanisms to facilitate the uptake of strategic public procurement.
The present diagnostic report provides a comprehensive analysis of i) the use of strategic public procurement in Estonia, and ii) public procurement professionalisation initiatives. It takes stock of the current landscape of strategic public procurement and professionalisation in Estonia to provide the Government of Estonia with recommendations on further actions. The report is organised as follows: Chapter 2 analyses the use of strategic public procurement by applying an analytical framework that takes into account the enabling environment for such procurement to occur. Chapter 3 discusses the actual practices of strategic use of public procurement in Estonia, based on the OECD survey carried out to grasp the perceptions of public procurement officials in Estonia on strategic public procurement. Chapter 4 analyses the current state of play of professionalisation initiatives in Estonia. Lastly, Chapter 5 wraps up the analysis by presenting the action plan for the way forward for enhancing strategic public procurement and professionalisation.
References
[3] European Commission (2017), Making Public Procurement work in and for Europe, https://ec.europa.eu/commission/priorities/jobs-growth-and-investment/investment-plan_en (accessed on 19 March 2025).
[5] Ministry of Finance (2024), “2023. aasta riigihangete valdkonna statistika ja kokkuvõte (2023 - Public procurement statistics and summary)”.
[4] OECD (2025), Government at a Glance 2025, OECD Publishing, Paris, https://doi.org/10.1787/0efd0bcd-en.
[1] OECD (2023), Government at a Glance 2023, OECD Publishing, Paris, https://doi.org/10.1787/3d5c5d31-en.
[2] OECD (2015), OECD Recommendation on the Council on Public Procurement, http://www.oecd.org/gov/public-procurement/recommendation/OECD-Recommendation-on-Public-Procurement.pdf (accessed on 28 May 2018).