Procurement category: Waste management services.

Social/environmental impacts targeted: circular, energy-neutral and low-maintenance, promotion of an inclusive labour market.

Relevant EU legislation/policy/guidance: A new Circular Economy Action Plan For a cleaner and more competitive Europe (2020).

Background

Sicoval consists of 36 French municipalities in the southeast of Toulouse (Lauragais area). It is situated in the Occitanie region, and its population is approximately 84,000. Since several years, SICOVAL has been dedicated to preventing waste inside its borders. Given the need to renew its household waste management services in 2026, the contracting authority decided to take this opportunity to further reduce the amount of waste in the area by adopting an innovative approach. 

Traditionally, waste management service providers are paid according to the amount of collected waste. Preventing waste is not in the interest of the companies, and this responsibility remains on the shoulders of citizens and policy makers. Through this initiative, the contracting authority aimed to design a new way to procure waste management services which builds on the principles of the Economy of the Functionality and the Cooperation (EFC), a new economic model which challenges the logic of ownership and linear growth by placing use, cooperation, and territory at the heart of its strategies. SICOVAL wanted to test a model where service providers:

• are financially incentivised to contribute to the reduction of waste production in their area of operation;
• commit to raising awareness at local level on the need to reduce waste, in cooperation with key stakeholders, such as citizens, communication agencies, and NGOs.

The contracting authority took inspiration from the waste performance contracts, designed by the French Agency for Ecological Transition to support the French Circular Economy Law’s targets. These contracts innovated the waste management sector by moving from a focus on collected tonnes to targets for reducing the volume of residual household waste, thus reversing the model and the economics of the contract. SICOVAL went a step further by requesting service providers to develop a progress plan focusing on the key factors influencing the service quality (e.g. waste reduction, user engagement and satisfaction, partnership building, citizens’ quality of life).

Procurement objectives 

The French Circular Economy Law of February 2020 gave mayors more authority to prevent littering, support businesses in their eco-design projects (bonus/malus-type incentives), and help citizens adopt new consumption habits (harmonization of information on sorting, etc.). Waste reduction goals are also included in the law (e.g., -15% of household waste by 2030).

In line with the French Circular Economy Law and its long-lasting commitment to waste reduction, SICOVAL decided to use this initiative to achieve:

1. financial objectives: to optimise service costs by linking the contractors’ remuneration to performance objectives;

2. technical objectives: to reduce the produced waste and to make the whole waste collection process more efficient and effective;

3. qualitative objectives: to improve citizens’ quality of life by integrating sustainable development performance objectives in the contract.

Tender requirements

Subject matter: Prevention and collection of household waste.

Amount of the service contract: 

• About 3.000.000 euros per year;
• Lump-sum bonus of 300.000 € to carry out awareness raising activities in collaboration with communication agencies, NGOs, and other relevant stakeholders;
• Annual bonuses starting after one year of awareness raising activities if objectives are reached (up to 167 500 € for the Lot 1 – waste prevention and collection of household and similar waste and up to 12 500 € for the Lot 2 – prevention and collection of bio-waste). If the objectives are not met, the contracting authority foresees a penalty.

Duration of the contract: 8 years (6+2).

Lots

The tender was divided into two lots:

1. Waste prevention and collection of household waste;

2. Prevention and collection of bio-waste.

The procurement process was launched as a negotiated procedure with a call for competition according to articles L. 2124-3 and R. 2124-3 of the French Public Procurement Code. This procurement method allows contracting authority to engage in negotiations with one or more bidders to refine initial offers and terms before receiving final tenders. Unlike open or restricted procedures, this method allows iterative dialogue to tailor solutions to the authority’s needs. 

Directive 2014/24/EU, transposed in France through the French Public Procurement Code, permits a Competitive Procedure with Negotiation under narrowly defined conditions, such as when pre-existing solutions are inadequate or specifications demand adaptation. This procedure allows negotiations while retaining transparency and fair treatment.

The preparatory work took 18 months. It allowed the contracting authority to better know the capacity of the potential service providers, what practices could help raise awareness among citizens on waste reduction. It also helped define realistic technical specifications.

Timeline of the process:

Technical specifications

Lot 1

Bidders were required to describe how they would: 

• Collect and transport household waste door-to-door;
• wash containers;
• carry out ancillary services related to collection management.

Lot 2

Bidders were required to describe how they would:

• Collect and transport bio-waste door-to-door;
• wash the bins at voluntary drop-off points and bin shelters;
• carry out awareness and communication actions to prevent waste in collaboration with communication agencies and NGOs.

Award criteria

The two lots were awarded against the following criteria: (a) quality (50%), including proposed progress plan (30%), proposed engagement methods (20%), (b) price (40%), and (c) environmental performances (10%).

Candidates were assessed against the following criteria:

Quality (50%) - Assessed against a set of technical considerations developed by SICOVAL and the quality and consistency of the plan

Subcategories:

Proposed progress plan (30%)

The Plan will focus on:

Social aspects, such as:

• Hiring of disadvantaged workers;
• providing workers with training opportunities;
• improving employees’ working conditions;
• combating discrimination at work;
• promoting gender equality.

Environmental aspects, such as:

• Reducing waste (-13% by 2030 – baseline: 132 kg per inhabitant);
• improving the management of the waste collection services (- 8% of annual sorting rejection rate by 2030);
• reducing GHG emissions for collection services (-20% by 2028). - type of motorisation.

Quality aspects, such as:

• Increasing user satisfaction (90% of satisfied citizens).

Tools and methods to cooperate with relevant local stakeholders as members of the consortium (20%)

By including this aspect, the contracting authority aimed to lead the contractors to work with relevant stakeholders who can contribute to preventing and better managing household waste in the territory. Stakeholders include communication agencies, NGOs and social enterprises specialised in awareness raising activities.

Tools are assessed according to their capacity to:

• Engage a wide and diverse range of stakeholders;
• facilitate the dialogue between stakeholders and the creation of co-solutions;
• engage citizens in the process.

Price (40%)

The environmental performances (10%) - Assessed against a set of technical considerations developed by SICOVAL and the quality and consistency of the strategy to reach the performances

The contractors will be asked to:

1. Prevent and reduce waste by adopting responsible practices and encouraging citizens to do the same;
2. optimise usage and lengthen the lifespan of products (including packaging) they use to implement the contract;
3. reduce waste which has not been sorted/ correctly sorted at the source.

At the start of the contract, the provider will be encouraged to reduce waste through a bonus/malus system and through a bonus devoted to improve the current waste prevention measures through awareness activities targeting citizens and relevant local stakeholders. During the implementation phase, contractors’ remuneration will not be linked to the quantity of prevention tools and collected waste, but to the impact of these tools on waste reduction (performance-based approach). This aspect will be verified through inspection activities, such as physical routine site inspections, and non-routine site inspections.

Contract performance clauses

The elements of the Progress Plan will have to be fulfilled during the contract performance. If the objectives of the Plan are not reached, the service providers will lose the foreseen bonuses.

Awarding the contract

The two Lots were awarded to:

LOT 1 : PAPREC, Terre EFC Occitanie, Rose primaire, Pro-portions

LOT 2 : Cler Verts, La Poste, Pro-portion, Humus&associés, Samba, and Dire Environnement

The contract will be implemented from the 1st of January 2026 to the 31st of December 2031.

Verification

The contracting authority will verify the execution of the contract through meetings with the contractors, as well as monthly and annual activity reports.

Results

The contracting authority received three offers under Lot 1 and three offers under Lot 2.

Even if the implementation of the contract is not started yet, the initiative has already had an impact in terms of:

• Innovation: The contracting authority wants to move from a model where the contractors are based according to the collected waste and the adopted prevention measures to a system where contractors are paid according to their performances in terms of waste prevention, as well as partnership building. Through this initiative, the contracting authority is challenging the current modus operandi, and testing an innovative and sustainable business model.
• Awareness raising  The negotiation phase was a concrete opportunity for the contracting authority to rethink, together with the potential service providers, the way waste was managed, as well as to generate innovative ideas to prevent waste. The progress plan will also be a concrete tool to keep the conversation open throughout the implementation of the contract.
• Networking: Since candidates were also assessed against the stakeholder engagement criteria, the call led waste management service providers to build partnerships with NGOs, communication agencies and other relevant stakeholders, thus starting the creation of a richer ecosystem in support of waste reduction and prevention.

Environmental and social impacts 

Building on the principles of the Economy of the Functionality and the Cooperation, SICOVAL has the ambition to use this contract to test a new waste management governance and more sustainable business models that allow to:

• Reduce the tonnage of waste;
• Raise awareness among citizens and all relevant stakeholders on how to prevent waste and how to reuse and value the produced waste;
• Build local partnerships aiming at preventing waste.

The implementation of the contract will require cultural, organisational, and systemic changes among the internal and external stakeholders involved in the waste management process, thus stimulating new and more sustainable approaches and solutions. Waste prevention and management will be considered as a whole and according to the hierarchy of treatment methods: avoid, reduce, reuse, recycle, recover.

Lessons learned

This good practice shows how public procurement can be strategically used to promote the transition towards more sustainable business models and economic systems. By moving away from the standard way of procuring and being open to test new approaches, the contracting authority is not only meeting its needs but also supporting its sustainability goals. It is also promoting cultural and organizational changes aiming at having a positive impact on the environment and society as a whole.

Advice to other contracting authorities:

• To foresee enough time (at least 1 year) for the preparatory phase: The dialogue with the relevant stakeholders is key to ensuring the effectiveness of the initiative. The approach requires the active engagement of all stakeholders, and participation requires time.
• To use the negotiated procedure to promote innovative solutions and approaches: Given the goals and objectives of the initiative, the two rounds of negotiations were essential to design the requirements of the new contract. The contracting authority had the opportunity to better know the available solutions in the market, the risks, and the opportunities. The procedure allowed the contracting authority to be innovative and realistic at the same time.
• To allow space for a dialogue throughout the implementation of the contract: Given the innovative approach of the contract, the dialogue between the concerned stakeholders can not stop at the beginning of the implementation of the contract. The monitoring meetings, the updates of the Progress Plan, and the regular reports are ways to keep the dialogue open throughout the whole process so that certain features of the waste management services can be adapted during the implementation period.
• To look at public procurement as a tool to achieve strategic goals and pilot new models and approaches: The contracting authority used its knowledge in the field of the Economy of the Functionality and the Cooperation to make public procurement a tool to test new business models that have the potential to contribute to sustainable consumption and production patterns. Public procurement is not clerical work, but a concrete instrument policy makers can use to achieve social, environmental and economic objectives.

More information

Contact persons: Mikhael PHILIPPON, Public Procurement Director, and Jeremy GADEK, Circular Economy Project Manager

Contact information and website