Governments are increasingly using procurement’s vast potential and economic power (12% of GDP in OCED area) in a strategic way to influence all areas of well-being. While they have to ensure that every cent of public money is efficiently spent, governments also seek to maximise impact on the economy, achieve broader policy objectives and address societal challenges. Tracking this impact and evidencing the outcomes of policy decisions systematically is largely unchartered territory.
As the biggest economy in Europe, Germany boasts one of the largest public procurement markets in the region. Public procurement represents an estimated 15% of German GDP, an immense sum of EUR 500 billion per year. Public procurement has a considerable impact on all areas of well-being, including the economic, human, social and environmental dimensions.
Germany was one of the first countries to recognise the diverse effects of public procurement, acknowledging both its strategic and economic dimensions. Germany asked the OECD to review its federal procurement system, and the aspects that have a critical impact on the effectiveness of policies for inclusive growth and citizen well-being. One major output of this review beyond the German public procurement system is the development of a systematic lens to track the impact of public procurement by applying the OECD Framework for Measuring Well-Being and Progress to public procurement, as presented in the review.