The European Commission has proposed a major overhaul of the EU's public procurement framework, replacing three existing 2014 directives with a single regulation and introducing new criteria aimed at strengthening European industry, supply chain security and competitiveness.
Public procurement accounts for around 15% of EU GDP, making it one of the bloc's most significant economic tools.
Shift away from lowest-price awards
One of the most significant changes is the move away from awarding contracts primarily on the basis of the lowest bid.
Under the proposal, the best price-quality ratio would become the default method for awarding contracts.
The Commission proposes:
- A minimum weighting of 30% for quality criteria.
- A minimum weighting of 50% for labour-intensive contracts, including significant social criteria.
Quality criteria could include environmental, social and innovation-related factors, depending on the nature of the contract.
Greater emphasis on sustainability and social goals
The proposed framework incorporates a range of environmental considerations, including:
- Circular economy principles.
- Repairability.
- Reusability.
- Recycled content.
- Energy efficiency.
Public authorities would generally be required to purchase products, services and works with high energy-performance standards unless technically impossible.
The proposal also strengthens social objectives such as:
- Social inclusion.
- Quality employment.
- Decent working conditions.
- Accessibility for people with disabilities.
- Gender equality.
- Skills development.
- Human rights protections within supply chains.
Introducing a "European preference"
The Commission is also proposing a stronger European preference mechanism.
Rather than imposing a blanket obligation to buy European products, the proposal would allow contracting authorities to:
- Restrict participation in certain tenders.
- Require minimum European-origin content.
- Award advantages during bid evaluations.
- Exclude suppliers, products or services from certain third countries where strategic interests justify such action.
The approach would operate alongside the EU's international trade commitments and procurement agreements with partner countries.
Supply chain security and strategic autonomy
The Commission says the new framework should help reduce strategic dependencies and allow contracting authorities to consider risks linked to:
- Critical infrastructure.
- Cybersecurity.
- Sensitive information.
- Supply chain disruptions.
- Critical dependencies.
- Influence from third countries.
EU officials argue these provisions could provide greater support for European firms in sectors such as security, cybersecurity, cloud computing, artificial intelligence, clean technologies and critical medicines.
Digitalisation and simplification
The proposal also seeks to modernise procurement procedures through greater digitalisation.
Key measures include:
- Interconnected national e-procurement systems.
- A European digital eligibility service.
- Digital business credentials.
- Application of the "once-only" principle for data submission.
- National procurement data spaces feeding into an EU-wide platform.
The goal is to improve transparency, monitoring and cross-border participation while reducing administrative burdens.
Support for SMEs
The Commission is proposing measures to make public procurement more accessible for small and medium-sized enterprises (SMEs).
The changes would:
- Limit excessive turnover requirements.
- Reduce unnecessary experience criteria.
- Encourage contracts to be divided into smaller lots.
- Increase opportunities for SMEs to compete for public contracts.
Expected savings
According to Commission estimates:
- Contracting authorities could save an average 4.4% per procurement procedure.
- Businesses could save around 8.9% per procedure.
Annual business savings are estimated at approximately €1 billion, while public authorities could achieve annual savings of about €220 million.
Business concerns
BusinessEurope welcomed efforts to simplify procedures, improve data collection and increase transparency.
However, the organisation warned that using procurement policy to pursue too many strategic objectives could reduce competition and increase complexity.
It argued that priority should remain on strengthening competition and creating a genuinely integrated European procurement market.
What happens next?
The proposal will now be examined by the European Parliament and EU Council through the ordinary legislative process.
Negotiations are expected to focus particularly on the scope of the proposed European preference measures and potential requirements for strategic sectors.
Source: CNA
