European Commission proposes preferences for EU companies in public procurement
On September 9, the European Commission in Brussels presented a draft Public Procurement Act (PPA). It is intended to turn public contracts into an instrument of the EU’s new industrial policy and give preference to companies from the internal market in procurement for infrastructure, education, energy and healthcare.
As Politico Europe reports, annual public procurement in the EU amounts to about €2.5 trillion, or almost 15% of the bloc’s GDP. According to European Commissioner for Industry Stéphane Séjourné, the new rules will cover approximately €600 billion of such contracts.
Quality in procurement criteria
The draft provides that price will no longer be the only key criterion when determining the winner of a tender. Quality criteria must account for at least 30% of the assessment, and up to 50% for labour-intensive contracts. These include environmental and social factors, innovation, security and resilience.
At the same time, contracting authorities will still be able to choose a bid based solely on price if quality requirements are defined by technical specifications. The European Commission notes that public authorities can already apply environmental or social criteria, but do so unevenly across EU countries. Some procurement authorities fear litigation if they do not choose the cheapest bid.
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Preference for goods and services from the EU
The PPA is intended to give contracting authorities additional tools to prioritize goods and services from the EU. They will be able to restrict participation in tenders, set requirements for the origin of goods, and reject bids in which the share of goods and services from the European Union is less than 50% of the contract value. Member states will also be able to completely exclude Chinese suppliers from certain tenders.
Séjourné called the draft an “act of radical simplification.” The Commission proposes adopting the document in the form of a regulation rather than a directive, despite objections from the majority of member states. It is also planned to consolidate three directives and about two dozen smaller acts, which, according to the Commission’s estimate, should save public authorities €650 million annually.
Separately, the European Commission announced the European Innovation Act. The initiative is intended to make public contracting authorities anchor customers for new products and help bring innovations developed in Europe to market.
