Among the many tasks facing the incoming European Commission is a project to revise the European Union’s public procurement rules – a complex body of regulation comprising six directives, two regulations and numerous delegated acts, not to mention national-level rules. The revision should reduce red tape, but also “help ensure security of supply for certain vital technologies, products and services,” in the context of the multiple challenges the EU faces, from climate change to Russian military aggression.
Public procurement currently accounts for about 14% of EU GDP. Reforming the rules – likely to be done by Stéphane Séjourné, nominee for the role of Commission Executive Vice-President for Prosperity and Industrial Strategy – will have three aspects. First, complex regulations covering a broad range of assessment criteria must be simplified. Second, the reform should not take too long, as it is needed to help the public sector tackle current challenges. And third, trade-offs must be navigated when deviating from best-price criteria.
On simplification, the reform should align non-price criteria across EU countries to simplify the single market and ensure that public-sector spending meets the EU’s broader aims. Currently, although the EU rules encourage judging of bids on the basis of non-price criteria (for example on environmental and social performance) as well as on price, most public procurement still awards contracts to the lowest bidder, often overlooking qualitative assessment.
On average, 60% of procurement decisions rely solely on price, but this varies hugely. In Croatia and France only 1% and 8% of contracts respectively are awarded only on a lowest-price basis, while in Cyprus and Slovakia the rates exceed 90%. These differences reflect different national rules, complicating cross-border bidding.
Including binding qualitative criteria – such as contribution to environmental protection and innovation aspects – is essential to ensuring that procurement aligns with EU objectives. However, EU law mandates such qualitative standards only to a very limited extent. Instead, the EU recommends many ‘best practices’, but EU countries are free to choose which to apply. Even when applied, these standards vary by country and don’t consistently support EU-wide goals.
On timing, public procurement is one of the EU’s most effective tools for achieving environmental, social and security objectives, along with economic prosperity, but there is little sign that the reform will be treated as urgent. At his confirmation hearing in the European Parliament on 12 November, Sejourné anticipated that a reform proposal could come in 2026. Once delays, negotiations and national implementation are factored in (on average, it takes about 20 months for an EU law to move from initial proposal to approval and about two years for transposition into national law), the reform may not take effect until the end of the decade. Given current environmental, economic and geopolitical pressures, this elongated timeline risks missing critical opportunities to demonstrate tangible progress before the next European election.
On trade-offs, non-price criteria are important to align procurement activities with EU goals, but this of course can come at a cost. Incorporating green requirements may lead to purchasing of more expensive products that comply with certain standards, such as ‘green’ labels. These criteria might also reduce competition and strain supply chains, especially for goods with limited availability or those that must meet strict green standards.
In some cases, qualitative requirements might even be abused to favour specific suppliers, risking uncompetitive awards. Finally, in some areas for which EU supply is underdeveloped (eg solar panels, batteries), non-price criteria risk either exacerbating trade dependencies or weighing on inflation in the short term, as supply might only adjust over time. Without ‘buy Europe’ provisions, EU public procurement may become dependent on foreign suppliers that offer green goods but potentially conflict with geopolitical priorities. Yet, introducing such clauses could elevate prices until EU supply chains adapt.
Strict application of non-price standards can also exert pressure on national budgets at a time when the EU’s investment needs are estimated at about €800 billion annually. Fiscal sustainability must also be taken into account, especially in the wake of the early-2024 reform of EU fiscal governance rules, which impact national authority decisions to increase expenditure. The reform suggests an average adjustment of 2% of GDP over the medium term.
There is, unfortunately, no easy way to balance the various considerations. The push for qualitative criteria in procurement stems from both geopolitical realities and political pressure, not least from the European Parliament. In the reform, it will be essential to strike a balance between simplification and needed qualitative improvements, while keeping procurement policy aligned with the EU’s broader goals in a timely manner. Effective use of EU-level tools and clear communication on adoption and long-term planning will help ensure public administrations and businesses are prepared for these reforms.
About the authors:
Marie-Sophie Lappe is a Research Assistant at Bruegel.
Francesco Nicoli is assistant professor of political science at the Politecnico Institute of Turin. He also serves as professor of political economy at Gent University and he is affiliate fellow at the department of economics of the University of Amsterdam as well as non-resident fellow at Bruegel.