European Commission proposes major overhaul of EU public procurement rules

The European Commission has proposed a major overhaul of public procurement rules across the EU, aiming to simplify tendering, reduce administrative burdens and give public authorities greater scope to prioritise quality, resilience, sustainability and European industry.

image: Shutterstock

The proposed Public Procurement Act would replace three existing EU procurement directives with a single regulation covering public contracts and concessions. The Commission says the reforms are intended to make procurement faster and simpler while allowing public spending to support wider strategic objectives.

Public procurement represents around €2.6tn a year, equivalent to approximately 15% of EU GDP, making the reforms potentially significant for infrastructure sectors including transport, energy and construction.

One of the central changes would be a stronger focus on quality rather than lowest price. The Commission proposes that at least 30% of the evaluation of tenders should be based on quality criteria, which could include environmental performance, social considerations, innovation, security and resilience.

The proposals would also give contracting authorities greater scope to apply European preference criteria. These could allow buyers, within the EU's international commitments, to favour European products, services and economic operators or introduce conditions relating to European supply chains.

The Commission said the changes are intended to strengthen Europe's economic security and industrial competitiveness while maintaining competition within the Single Market. It estimates that simplifying procurement procedures could save businesses and public authorities around €650m a year in administrative costs.

Digitalisation is another major element of the proposed reforms. The Commission plans to establish an EU procurement marketplace providing a single digital entry point for procurement opportunities, with the aim of making tenders easier for companies to identify and participate in.

The proposals are particularly relevant to infrastructure projects, where procurement processes can involve lengthy procedures, extensive documentation and multiple stages of evaluation.

The Commission is also proposing changes to the way strategic projects and critical infrastructure can be procured, with greater consideration of resilience, security of supply and the wider economic value generated by contracts.

For UK infrastructure companies, the changes could affect the conditions under which they compete for EU projects. The UK retains access to parts of the EU public procurement market under the EU-UK Trade and Cooperation Agreement and its existing commitments under the WTO Government Procurement Agreement. However, the proposed European preference provisions could create different conditions for EU and non-EU suppliers in some procurements.

The Commission's proposals will now be considered by the European Parliament and EU member states before the legislation is finalised.