Czech state to expand public contract conditions on hiring the unemployed

The Czech Labor Minister intends to implement the hiring of unemployed persons through public procurement contracts. Several municipalities have already introduced criteria for this.

Michal Migra, for example, was unemployed for four years before he got the opportunity to work for a construction company as an auxiliary worker on the reconstruction of the prefabricated apartment buildings at the Chanov housing estate in Most. The company pledged to employ at least 10 % of those involved in the project from the ranks of the long-term unemployed.

Most has been doing its best to include unemployed persons in its public procurement work since 2010. "We have never had any problem with any of the firms competing for the tenders meeting these conditions," said František Jirásek, head of the Public Procurement Department there.

The town has issued construction contracts worth CZK 60 million under such conditions so far. The approach is continuing this year, with the condition of hiring 10 % of the work force from the ranks of the long-term unemployed being applied to construction tenders worth CZK 190 million.

"This practice has proven that the use of such conditions does not increase the cost of public works," Jirásek said. Most is not the only municipality endeavoring to be guided by other criteria than just the lowest bid when spending state money.

The 10 % quota has also been introduced by the towns of Kadaň, Kolín, and Neratovice. However, for the time being such practices are extremely rare.

Czech Labor and Social Affairs Minister Michaela Marksová Tominová wants to enforce responsible procurement as part of standard practice. "It will depend on the type of contract – in large tenders for information systems, for example, it is hard to involve groups who have been disadvantaged on the labor market, while for cleaning or construction services it is possible," the minister said.

The European Union has also instructed the country to undertake the practice. An EU directive enhancing the opportunity for those issuing public tenders to include special environmental or social conditions as criteria has been in effect since 11 February of this year.

The Member States must incorporate the directive into domestic law by 2016. Experts have calculated that sophisticated criteria for winning public tenders will create new jobs, increase the qualifications of those on the labor market, and lead to more support for community life and for small and medium enterprises.

Currently, public tenders are usually issued with the unequivocal aim of purchasing goods or services as cheaply as possible. "In the future, good procurement should concentrate on receiving the highest possible value for the money invested. The state is a communicating vessel, it should be concerned about reducing public expenditures overall," emphasized Petra Francová, an expert in social entrepreneurship, at a recent seminar.