Why is reform needed?

At present, the main EU public procurement rules are set out in three directives. The Commission proposes replacing them with a single directly applicable regulation.

In the Commission’s view, the current system has several shortcomings:

  • The rules are complex and not always sufficiently flexible;
  • Competition in public procurement has declined;
  • Participation by small and medium-sized enterprises and cross-border participation remain limited;
  • Too many public contracts are still awarded primarily on the basis of price;
  • Environmental, social and innovation criteria are still used relatively rarely in public procurement;
  • E-procurement systems across the EU are not interoperable.

Which procurements would the new Regulation apply to?

The new Regulation would apply to procurements with an estimated contract value excluding VAT of at least:

  • EUR 140,000 – supply and service contracts awarded by public authorities;
  • EUR 216,000 – supply and service contracts awarded by other contracting authorities;
  • EUR 432,000 – supply and service contracts awarded by contracting entities in the utilities sectors;
  • EUR 750,000 – contracts for social, health and education services;
  • EUR 5,404,000 – works contracts and concessions.

Procurements below these thresholds would generally remain subject to Member States’ national rules. In practice, this would mean that national procurement rules would continue to apply to them in accordance with the scope of the relevant national legislation.

Fewer procedures and greater flexibility

The proposal would also significantly simplify the system of procurement procedures by providing for two main procedures:

  • the open procedure – any interested economic operator could immediately submit a tender for the procurement in question;
  • the dynamic procedure – the procurement would take place in several stages: first, the contracting authority would select candidates meeting the requirements and then invite them to submit tenders.

Under either procedure, the contracting authority could choose whether to apply selection criteria at all and whether to negotiate with tenderers. Preliminary market consultations would also be more clearly regulated and encouraged – before launching a procurement, the contracting authority could consult market participants to better understand the solutions available on the market and prepare the procurement requirements.

What would this mean in practice?

Negotiations would evolve from a relatively limited tool into a much more widely available part of the procurement process.

Negotiations could not alter the grounds for exclusion, selection criteria or award criteria, or materially change the subject matter of the procurement.

Greater emphasis on quality, not just price

The proposal provides that contracts would generally be awarded on the basis of the best price-quality ratio.

Quality criteria would have to account for at least:

  • 30% of the total score;
  • 50% in the case of labour-intensive contracts.

The evaluation could also take into account, for example, environmental and social considerations, innovation, security, supply resilience, the qualifications of the professionals involved, or after-sales support.

The contracting authority could depart from these minimum percentages where quality can be ensured through technical specifications, contract performance conditions, or a combination of these instruments.

Public procurement as a tool for broader policy objectives

The proposal envisages broader integration of environmental, social and innovation considerations, with particular emphasis on:

  • Green procurement – the circular economy, energy efficiency, recycled and refurbished materials, and the possibility of setting mandatory requirements for specific product groups.
  • Socially responsible procurement – working conditions, social inclusion, accessibility, skills development, gender equality and human rights in supply chains.
  • Innovation procurement – the contracting authority could define the problem to be solved rather than prescribing a ready-made technical solution in advance.

Fewer barriers for businesses

To make procurement more accessible, particularly for SMEs, the proposal would restrict participation requirements that unjustifiably exclude potential suppliers, for example:

  • Previous experience specifically with public contracts could not be required without specific justification;
  • Excessive turnover requirements would be restricted;
  • Division of contracts into lots would be encouraged, allowing a business to tender only for the lot it is capable of performing rather than for the entire contract.

Greater importance of European origin in public procurement

The proposal provides for instruments that, in certain cases, would allow contracting authorities to:

  • restrict the participation of suppliers from third countries;
  • require goods or services to have a specified EU origin or an origin covered by the EU’s international commitments;
  • give such tenders preferential treatment in the evaluation.

In certain cases, the contracting authority could even reject a tender if the value of goods, services or works of EU origin or of an origin covered by the EU’s international commitments represented less than 50% of the tender’s total estimated value.

Why?

The Commission links this to security of supply and the aim of reducing the risk of the EU becoming overly dependent on a limited group of third-country suppliers, particularly for critical goods and technologies.

A unified digital environment

The Commission does not plan to replace national e-procurement systems with a single common platform. Instead, the intention is to interconnect them so that information and documents can be used across borders.

One of the key principles would be “once only” – businesses would not have to resubmit information that the contracting authority can verify electronically.

For example, certain data relating to taxes, social security obligations, insolvency or grounds for exclusion could be verified automatically.

From proposal to new regulatory framework

At present, the new public procurement regulation is still only a proposal. The European Parliament and the Council will have to agree on its final wording, so individual elements may still change during the legislative process.

Although the final content of the Regulation may still change, the proposal already outlines the main directions of the reform – more uniform rules, more flexible procedures, a lower administrative burden and greater emphasis on quality, security and other strategic objectives.