The Procurement Agenda for the Transition to a Circular Economy

Abstract

The circular economy (CE) has emerged as an upcoming promising solution to global sustainability. Some policymakers have issued legislations to encourage the adoption of CE, and academics have published studies addressing CE from different approaches. However, adopting CE entails a disruptive shift from a linear economy to a closed-loop economy, where economic growth is decoupled from consumption growth. Though it is difficult to develop a uniform, structured approach for incorporating CE into procurement, this paper attempts to fill the current knowledge gap by proposing a holistic framework to embed CE into the procurement process. The procurement ecosystem is very complex, and this study accordingly dismantles the ecosystem into basic components. The integration of CE for each component is addressed separately. Propositions have then been developed for each element within the procurement ecosystem to embrace CE. The research findings suggest that governments can play an important role in promulgating laws and regulations that encourage CE within procurement. The buyer should be willing to pay a premium for circular products or services; training is needed to address CE when drafting the agreement and during the technical and proposal evaluation. In regard to the bidders’ prequalification evaluation, a certain weight should be assigned to the adoption of CE. Furthermore, the bid–award system should give preferential treatment to circular materials or services.