Procurement category: Social services, in particular accommodation services for refugees

Relevant EU legislation/policy/guidance: Articles 18.2, 46, 57, 58 and 74-76 of Directive 2014/24/EU

Background

Berlin is one of the 16 Federal States of Germany – and its capital city – with 3.78 million inhabitants (2024). The State Office for Refugees Berlin (LAF) was set up on 1 August 2016 and employs about 600 staff (2023). Its responsibilities are to 1) register, provide social care, offer counselling and ensure accommodation for refugees; 2) offer medical care, midwife care and initial psychosocial counselling in cases of acute trauma; 3) channel the benefits from the “Education and Participation Package”, i.e., grants for school expenses; 4) run programmes to involve volunteers and promote civic engagement.

Since 2015 there has been a persistently high number of refugees in Germany (2.6 million end of 2023), out of which 1,14 million were refugees from Ukraine. In early July 2024 Berlin hosted about 35,000 refugees in shared accommodations. One important sub-category of refugees are asylum seekers, i.e., persons who have submitted a request to obtain asylum (240,000 cases in Germany in total in 2023).

The services procured by LAF described in the call of 19 July 2023 are operating services for refugee accommodation (CPV-Code 85311000-2 “Social work services with accommodation”). These operating services for refugee accommodation and social work activities were tendered via an open call.

Relevant regulatory framework, including features of control and monitoring in the State of Berlin:

• Calls for tender have to respect the objectives and provisions of the public procurement legislation of the State of Berlin (BerlAVG) of 20 April 2020.
• The BerlAVG requires from all companies providing goods, works or services in a public contract the compliance with the pay conditions set out in the collective agreements applicable in the industry or economic sector or specific branch in which the bidder is active (Art. 9). The details are defined by the Implementing Order of 1 November 2022 in relation to the Statutory Order of 18 December 2022. The Statutory Order of 9 April 2024 sets – again on Art. 9 – the minimum wage per hour relevant for public procurement procedures for Berlin to 13.69€ (as of 1 May 2024). Art. 8 requires respect for the ILO Core Labour Standards. The regulatory framework is in line with the Posting of Workers Directive 2018/957/EU. It takes into account insights and requirements from the ECJ Rüffert Ruling (2008) which partly also implied an adjustment of the regulatory approach.
• An Implementing Order of 21 December 2022 set out the monitoring framework for the contract conditions relevant for the compliance with social and ecological measures.

Procurement objectives

The procurement objectives regarded the provision of the following services: 1) the administration of the accommodation, 2) the reception and accommodation of the refugees, 3) their social counselling and care and 4) the supply and management of the accommodation.

No specific market consultations or engagement research were carried out. The LAF gave two main reasons for not going for this option: 1) The type of service procured was not new; 2) The LAF knew of the interest in submitting bids by a range of potential service providers to bid. Several of them had already executed similar contacts in the last 3 to 5 years for the LAF. In most recent years, bidders stemmed from a pool of 20 to 25 (Berlin/Brandenburg-based) social economy entities/social enterprises or conventional businesses. In nearly all cases, they previously offered the type of services object of this call for tender.

Tender requirements

The tender documents used a combination of division into lots, exclusion grounds, selection criteria, award criteria and contract performance clauses, to pursue social objectives.

Division into lots

The contract was divided into 3 lots for the provision of very similar services, in the territory of the State of Berlin (12 districts) which also has the status of a city. The main difference between the different lots is that they had different durations (29, 19 and 12 months) and a different starting date. Bidders could submit offers for a maximum of 2 of the 3 lots tendered. The tender documents stipulate that all contracts can be renewed twice, for 1 year (lots 1 and 2) or for 3 months (lot 3). The contracting authority decided to divide the contract into 3 lots for two main reasons: firstly, to ensure the continuation of service provision in case one provider encounters financial problems or is unable to fulfil its contractual obligations for whatever reason; and secondly, to allow smaller providers to submit bids and participate in procurement procedures for public contracts.

Exclusion criteria

Bidders had to provide a self-declaration, formulated as a minimum requirement, that there are no entries in the Central Criminal Register due to a final conviction by a court of key operational staff which the bidder intends to employ for the execution of the contract – i.e., (main and deputy) facility management staff, social workers and childcare – or due to a final conviction to a fine for the enterprise. The non-pay of taxes or social contributions, subsidy fraud, corruption, money laundering, involvement in human trafficking or the non-respect of environmental or social standards figure in the list of infractions.

Selection criteria

These are requirements related to, on the one hand, the financial and technical capacity of the bidder and, on the other, the technical and professional ability of (key) staff performing the contract. Firstly, bidders had to provide 1) suitable references from the last 3 years concerning operating services for comparable social institutions, 2) at least 2 different references in relation to services on counselling, care and administration in comparable social institutions with temporary or permanent accommodation and/or the housing of persons, 3) a description of the quality assurance measures in place and 4) an indication which parts of the contract might be subcontracted. To prove the technical and professional ability of the staff proposed to perform the contract, bidders had to submit a breakdown of the number of employees to perform the contract by function and qualification level, including for social service professionals, such as social workers, psychologists, social care workers, childcare workers, and the management staff.

Award criteria

Tenders were evaluated on the basis of the most economically advantageous tender: 70% of the total scoring was given to quality criteria and 30% to the cost criterion. The following quality criteria were applied to the 3 lots:

• Quality of the concept to manage and deliver the service: 50%. Description of the concrete range of services the bidder intends to offer and of the provisions defined to ensure their quality.
• Quality of concept for kicking off the service: 10%. As above for the starting phase.
• Quality of the concept for involving volunteers and civil society organisations: 10%. Description of planned activities involving volunteers and civil society organisations to complement the guidance, care and psychological support by professionals. This reflects the recognition of benefits for both the service quality and the service users, i.e., the refugees, stemming from their involvement.

Contract performance clauses

In accordance with Art. 9.1 BerlAVG and to give full effect to the horizontal social clause, Art. 18.2 of Directive 2014/24/EU, bidders were obliged to pay minimum hourly rates, as well as wages on the basis of collective agreements. This is technically realised by asking the successful bidder to apply the special contractual conditions on minimum hourly pay and adherence to collective agreements (of April 2024) [Wirt-214]. The related obligations had to be passed on to subcontractors. The tender documents specify that in case of a joint tender, these obligations apply to all the participants of the bidding consortia (and for the winning bid, to the provider consortia, too).

Results

The social considerations used throughout the procurement process included in the tender documents led to offers which were in line with all the requirements defined. 11 bids were received for lot 1, 8 for lot 2 and 1 for lot 3. Nearly all bidders were able to meet the requirements for the technical and professional ability of the staff and the contract performance clauses.

The staff of the LAF did not encounter any important issues to assess the offers received. This is partly due to the fact that bids were submitted by a large majority of experienced service providers which are often also known to the LAF staff.

The total volume of services procured was 10,510,463.20€. The two contractors – A for lots 1 and 2, B for lot 3 – are not-for-profit organisations with the legal status of non-profit limited liability companies (gGmbH) from Berlin.

The generally good experiences with the call for tenders and public contracts as presented in this Case Study led the LAF to the conclusion that the procedures are appropriate and that there is no need to consider any changes for calls to procure social work services with accommodation for refugees.

Social impacts

Social impacts targeted:

• Improved support structures for and labour market and social inclusion of refugees.
• Improvement of working and pay conditions for social service workers.
• Increased quality of service provision by focusing on quality requirements, including requirements related to the technical and professional ability of the proposed staff, a user-centered approach and involvement of civil society organisations, volunteers and local communities.

Compliance with labour conditions is assessed (cf. for more details below “Monitoring of contract”). As the LAF does not measure or assess the social impact – i.e., the external effects – of the public contracts it tenders, it is not possible to provide any information on quantitative effects linked to this or similar public contracts.

Potential cumulative effects if other contracting authorities issued tenders with similar characteristics: 1) Increase of decent employment and improvement of pay conditions for the workers of  these social services; 2) Improved labour market and social inclusion of refugees thanks to the employment of qualified staff and by involving volunteers and civil society organisations; 3) More “social peace” in the neighborhoods of the accommodations for refugees and better integration perspectives due to joint activities with local inhabitants.

Monitoring of contract 

Beyond the compliance with the (minimum) pay conditions in line with Art. 9 BerlAVG as set out in the contract notice which need to be proven by documents to be submitted by the service provider at the attribution of the public contract, there is – as the general approach – no systematic monitoring of the contract performance conditions during or after the execution of the contract. The two main reasons for this are 1) the assumption that the hourly minimum wage of 13.69€ (amount applicable on 31 August 2024) applicable for public tenders in the State of Berlin will not be undercut in such tenders, as the service providers have to attract qualified staff to execute the contract and 2) the situation that the numbers of staff members of the LAF to operate detailed checks “on the ground” are limited.

In Berlin, controls of public contracts are done by means of a double-track approach, based on the Implementing Order of 21 December 2022. The LAF has a Quality Assurance Unit to regularly run announced and non-announced controls. It focuses on staff numbers, the actual offer of the social work and guidance services for the refugees, maintenance and cleaning of the premises and compliance with the employment-related requirements. The “Central Control Unit” under the auspices of the Regional Ministry and Administration for Economic Affairs, Energy and Public Enterprises (SenV WEB) supports all contracting authorities on control tasks. It is tasked with controlling on a random sampling base 5% of all public contracts (i.a., focusing on breaches of labour law or the prevailing sectoral or branch-based collective agreements). To be able to fulfil its tasks, this unit also obtains documents from the LAF and decides which service providers should be scrutinised on which items.

Conclusions

The key factors for success of this initiative are centred on the following aspects, which are possible source of information for other Member States and contracting authorities:

• Political commitment.
• Connecting the political process with actual practice and involving all the relevant actors.
• At the technical level, the work has been carried out with rigour and quality, which has legitimised the process and made it possible to give it continuity.
• Legal frameworks are important: In order to support and promote the implementations of the BerlAVG, the competent government units of the State of Berlin, SenV WEB and the Regional Ministry and Administration for Employment, Social Affairs, Health, Integration, Diversity and Anti-Discrimination (SenV ASGIVA), 1) issued ordinances, executive orders and guidance, 2) offered regular training for their staff and 3) developed forms and templates.
• Setting up and financing support structures: They set up a dedicated webpage which contains relevant news and a newsletter, coordinated by the Regional Ministry and Administration for Economic Affairs, Energy and Public Enterprises. They also contracted a “Competence Centre Fair Public Procurement in Berlin” as a single point of contact for all bidders, which provides advice and practical support on all ecological or social aspects of public procurement procedures and tenders.

More information

Contact: Landesamt für Flüchtlingsangelegenheiten Berlin (LAF), ZS A Justiziat & Vergabe, Berlin. Senatsverwaltung für Arbeit, Soziales, Gleichstellung, Integration, Vielfalt und Antidiskriminierung (SenV ASGIVA), Abteilung II "Arbeit und Berufliche Bildung", Unterabteilung IIB, Berlin.

Tender documents available online in English and German.