The European Commission has recently adopted a proposal for a Regulation on Public Contracts and Concessions, known informally as the Public Procurement Act. If legislated in its proposed form, the Public Procurement Act will introduce significant changes to how operators compete for and deliver public contracts across Europe.
The proposal aims to simplify procurement procedures, reduce administrative barriers and give greater importance to quality, sustainability and security. With public procurement accounting for approximately 15% of EU GDP, the reform will affect economic operators across a wide range of sectors.
The existing procurement framework
EU procurement is principally governed by three main Directives:
- Directive 2014/24/EU: public contracts for works, goods and services
- Directive 2014/25/EU: procurement in the water, energy, transport and postal services sectors
- Directive 2014/23/EU: concession contracts
These Directives are implemented through national legislation. The proposal would therefore repeal three current Directives including scattered procurement provisions in over fifty other EU acts, and consolidate them into a single Regulation applied directly in every Member State.
The objective is to reduce differences between national procurement rules, thereby facilitating cross-border participating in procurement processes.
More flexible procurement procedures
The proposal aims to establish two main procedures, alongside a separate innovation procedure:
- Open procedure: operators submit tenders from the outset, with or without subsequent negotiation
- Dynamic procedure: operators join a pool and are later invited to tender or negotiate as specific needs arise.
- Innovation procedure: public buyers identify a problem or need, and operators develop and validate a solution before it is procured.
The proposal would allow negotiation in a wider range of procurement procedures, while market consultation before launching a tender would be encouraged, bringing EU procurement closer to how private-sector purchasing works. This could give operators greater scope to contribute to the development of solutions that meet the buyer’s needs.
Connected digital procurement systems
The proposal creates a digital procurement marketplace by interconnecting Member States’ national electronic Procurement platforms. For operators, the key feature is the ‘once-only’ approach, whereby a bidder would be able to:
- Submit its qualification documents and credentials once, through a digital business profile;
- Reuse that information across procedures on any connected platform in the EU;
- Reduce repeated submissions of the same documentation for other tenders.
The infrastructure introduces automated checks of exclusion criteria. For SMEs, these changes could reduce the administrative burden of participating in tenders.
Greater emphasis on quality
While previously the norm was price-only awards, the Best Price-Quality Ratio (“BPQR”) would now become the default basis for awarding contracts. The quality criteria must carry a minimum weighting of 30% of total points and 50% for labour-intensive contracts.
Relevant considerations could include environmental performance, social value, innovation, security, resilience and applicable European preference requirements.
Public buyers are permitted to depart from these requirements through the “comply or explain” mechanism. Here quality must be secured through the alternative arrangements permitted by the proposal, including specifications or contract performance conditions. They would have to explain the basis for doing so.
For bidders, this means that tender responses, technical, environmental and social credentials will carry more competitive weight than under a price-only model. Operators that can document quality, sustainability and workforce practices will be better placed to compete and should consider building that evidence base now.
Fewer barriers for SMEs and new bidders
The proposal would reduce some common barriers to entry for SMEs that can prevent smaller or newer operators from competing. It would:
- Cap minimum turnover requirements, subject to justified exceptions;
- Restrict unjustified demands for previous public-sector experience;
- Require selection criteria to be necessary and proportionate to the contract.
The proposal would also retain rules allowing certain contracts to be reserved for eligible social enterprises, alongside special rules for social, health and educational services.
Security, resilience and “European preference”
The proposal would give public buyers additional tools and in some cases obligations, to address risks relating to:
- critical infrastructure and sensitive information;
- cybersecurity;
- supply-chain disruption; and
- undue third-country influence.
Contracts touching essential or important entities and critical infrastructure will have to satisfy specific resilience and security-of-supply requirements.
Financial thresholds and proposed timing
The proposed Regulation would apply to contracts meeting or exceeding the following estimated contract values (excluding of VAT):
| Threshold | Contract Category |
| €5,404,000 | works contracts and concessions |
| €140,000 | Supplies and services awarded by central government authorities |
| €216,000 | Supplies and services awarded by sub-central authorities |
| €432,000 | Supplies and services in the utilities sectors (water, energy, transport, postal) |
| €750,000 | Specified social, health and educational services |
The thresholds reflect the EU’s international procurement commitments and would be reviewed every two years. Contracts below such thresholds may still be subject to national procurement requirements and other applicable rules.
The proposal remains subject to negotiation by the European Parliament and the Council.
