In the public sector, procurement managers are now required to comply with new sustainable regulations and to look for suppliers able to provide a sustainable offering. Stating that contracts can only frame part of the interaction and that parties often turn to more negotiated agreements, we investigate whether sustainable expectations within public hospitals could impact supplier management and imply rearrangements between public buyers and private providers. Data were collected from fifteen French hospitals through semi-structured interviews. Findings first highlight the sustainable expectations of public buyers from global key providers, and, second, that sustainable procurement does impact the relationship by creating new rules. Building on these results, managerial implications are suggested.
Sustainability defined as business simultaneously achieving three inter-linked goals – economic prosperity, environmental protection and social equity (Elkington, 2002) – has become a major topic within the field of industrial marketing. The topic of sustainable procurement is often linked to the wide terminology of “green supply chain management” (Bai & Sarkis, 2010, p. 1201). As Sarkis, Quinghua, and Kee-hung (2011) recall, the original goal of sustainable procurement in the early 20th century supply management literature was to avoid waste and that was not for environmental reasons but for economic ones. Later on, the concept evolved towards “green purchasing” including environmental awareness (Björklund, 2011, Chen, 2005, Min and Galle, 1997, Min and Galle, 2001 and Robey, 2009). From this perspective, a significant number of publications debate about how and why firms are launching “greener” procurement processes (Bai and Sarkis, 2010, Carter and Rogers, 2008, Handfield et al., 2002, Koplin et al., 2007, Sarkis, 2003 and Sarkis et al., 2011). However, little is known about public procurement practices where few empirical studies have been conducted (Walker, Di Sisto, & McBain, 2008). The pressure exerted by external constituencies on organizations to conform with a set of expectations in order to gain legitimacy and thus secure access to vital resources has nevertheless long been accepted within the public sector (Beckert, 1999 and Crossan et al., 1999). The legal framework on Sustainable Public Procurement (SPP) is applied in France through laws, decrees and government guidelines. In particular, the purpose of the ordinance (No. 2005-649), passed in 2006, was to set up the Public Procurement Contracts Code (PPCC). This legal instrument provides, on the one hand, legitimacy to public purchasers to include sustainable development rules in their demands, and, on the other hand, the opportunity for providers to become aware of markets through public Web sites, allowing them to prepare their response. At their level, French public hospitals implement the European Union Directive on public procurement (2004/18/EC) whose purpose is to encourage open and transparent competition delivered through competitive tendering throughout the European Union. This new regulation requires rearranging the interactions between public purchasers and private providers. Moreover, it has been demonstrated that business actors do not simply comply with sustainable orientation, but rather with elaborate responses impacting the creation of new rules (Heide and John, 1992 and Veal and Mouzas, 2011).
In our study, we investigate the new sustainable procurement expectations, from the buyers' point of view, within the French public healthcare sector, which is facing additional environmental requirements. Our research objective is to examine the impact of sustainable public procurement on supplier management. The specific research question we want to address is “What are the implications of sustainable regulation on public buyers' expectations, and consequently what kind of new agreements does it imply?” Our analysis is supported by two streams of literature: the first one concerning sustainable procurement (Sharma et al., 2010, Sinding, 2001 and Walker and Brammer, 2009), and the second one dealing with implicit and explicit relationships in a “norms-based” legal framework (Macneil, 2000, Mouzas and Ford, 2012 and Nee, 1998). The aim of this paper is to report on our interpretation of the data collected among fifteen French public hospitals. We have structured the paper so that we first briefly review the current state-of-the-art on sustainable public procurement and on contracting. We learn from these crossed viewpoints that new rules, such as umbrella agreements and relational norms, are developed by parties in order to address the new environmental regulations. This serves as the foundation for our design of qualitative investigation conducted with public procurement actors, as described in Section 2. We then present our findings around five themes, and demonstrate that new expectations generate rearrangements within the interactions between public buyers and private suppliers. We finally conclude by discussing the results with regard to possible managerial implications of the elements of renegotiation.
