Changes from plenary report to adopted text

W. whereas the CJEU judgments on the participation of foreign bidders in EU public procurement procedures (Case C-652/22 and C-266/22) clarify that foreign bidders from countries that have not concluded a multilateral, plurilateral or bilateral agreement do not have secured access to the EU procurement market; whereas the CJEU reaffirmed the EU’s exclusive competence in this area and confirmed that in the absence of such agreements, contracting authorities may, in accordance with EU law, limit or exclude these bidders – a situation that may lead to divergent national practices;

X. whereas an increase in geopolitical tensions is leading to a reshuffle in international trade and new economic dynamics, resulting in the emergence of new strategic dependencies driven by import concentration and limited import substitutability, and poses risks to the stability of supply chains; whereas this requires the enhanced and strategic use of public procurement in supporting the EU’s economy and its capacity for resilience, reducing harmful dependencies and strengthening its strategic autonomy;

Y. whereas public procurement policies should promote European competitiveness and innovation;

Z. whereas the lowest price is an important award criterion in most tenders in the EU – in some Member States it is applied in up to 95 % of cases or is sometimes even the sole criterion in both the tender and award stages of a procurement procedure; whereas the ELA, in its May 2024 report, observes that reliance on the lowestprice criterion – particularly in labourintensive sectors where staff costs dominate – can exacerbate the occurrence of undeclared work and may undermine service or product quality, sustainability and social standards; whereas SME representatives and people interviewed from SMEs repeatedly report that contracting authorities ignore the horizontal social clause, noting that they award contracts solely on the basis of the lowest price, which encourages abnormally low bids and discourages the participation of bidders that comply with labour laws and practices;

AA. whereas the CJEU judgment in Case C-395/18 confirms that the requirements in Article 18(2) of Directive 2014/24/EU laying down that economic operators must comply, in the performance of public contracts, with obligations relating to environmental, social and labour law, constitute a binding principle, in the same way as the other principles referred to in paragraph 1 of that article, namely equal treatment, non-discrimination, transparency and proportionality; whereas the judgment also clarifies that Member States may take into account violations by subcontractors when determining grounds for exclusion, provided that the principle of proportionality is strictly respected;

AB. whereas public procurement represents a key tool to actively support the transition to a sustainable, inclusive and fair economy and can be used to promote social justice and decent working conditions; whereas contracting authorities should be encouraged to pursue public interest objectives through procurement, including social inclusion, quality jobs, equal opportunities, territorial cohesion and support for social economy actors;

AC. whereas unlocking the full potential of strategic public procurement requires shifting from a purely cost-based approach to one that also considers resilience and social and environmental value, including through respect for collective bargaining and fundamental labour rights;

AD. whereas subcontracting is crucial for fair competition for SMEs and their ability to rely on specialised expertise; whereas it can also enhance efficiency, innovation and SME participation in public procurement; whereas, due to legal ambiguities and weak enforcement, multiple layers of subcontracting may dilute accountability, increase risks of labour law violations and hinder effective enforcement;

AE. whereas the increasing digitalisation of procurement processes must be accompanied by robust cybersecurity measures, interoperability prerequisites and easy-to-use and harmonised digital platforms for procurement submissions, and ensure transparency and machine readability for analytical purposes; whereas digitalisation can, furthermore, contribute to simplifying access for businesses, particularly micro, small, and medium-sized enterprises, to public procurement, as well as reduce the bureaucratic burden for smaller contracting authorities;

AF. whereas rather than adopting a ‘European only’ stance, the EU should focus on the best possible quality, while taking into account a wide range of conditions, including price, safety, quality, sustainability, resilience and labour conditions; whereas it should also focus on the promotion of partnerships with its democratic allies;

AG. whereas despite the objective of the 2014 reform, efforts to promote the essential participation of SMEs in public procurement, their involvement remains limited because of large contract sizes, disproportionate administrative requirements, a lack of tailored support mechanisms that would enable them to compete effectively with larger entities, a lack of clarity in tender notices and recurring payment delays;

AH. whereas procurement strategies can promote an economic environment conducive to local growth, enhancing community wealth, job creation and long-term financial stability, thereby strengthening to the greatest extent possible the role of SMEs, including start-ups and social economy organisations, in public tenders;

AI. whereas Article 27 of the UN Convention on the Rights of Persons with Disabilities establishes the principle of equal employment opportunities in accessible and inclusive labour markets; whereas Directive 2014/24/EU on public procurement enables the incorporation of social criteria in contract awards, including measures that support inclusive employment and address social exclusion; whereas the EU strategy for the rights of persons with disabilities 2021-2030 acknowledges reserved contracts under Directive 2014/24/EU as one tool among others for ensuring accessibility standards;

AJ. whereas applying the MEAT criteria, taking into account product life cycle and environmental impact, may support rational and long-term public procurement decisions;

AK. whereas the transposition of European public procurement rules into national law is sometimes ineffective, leading to inconsistencies in implementation, legal uncertainty and barriers to access for economic operators; whereas, to prevent these implementation gaps and ensure consistent application, detailed guidance frameworks should be established to assist Member States in effectively transposing the rules;

AL. whereas systematic registers of contract performance can enhance the ability of contracting authorities to swiftly exclude unsuitable actors from procurement processes, including actors linked to criminal networks and foreign interference, prevent labour exploitation and enhance reliable contract performance; whereas the effective interoperability and cross-border accessibility of these registers across the Member States is important to strengthen transparency, safeguard public funds, support the internal market and reinforce the security and integrity of critical public infrastructure and services;

Strategic objectives

1. Stresses that European public procurement should remain an essential pillar of a properly functioning internal market and broader economy, and that ambitious, targeted reform is needed to unlock its true potential, encourage production in the Member States and contribute to resilient, secure and strategic supply chains; stresses the need for the harmonised implementation of the current and the reformed legislative framework by the Member States; calls on the Commission to streamline and clarify the focus of public procurement goals, including those for strategic procurement, by establishing a more focused, economically viable, precise and non-conflicting set of objectives that are clear, measurable and capable of delivering tangible market impact; calls, therefore, for improved legal certainty and coherence in order to simplify the application of the rules by contracting authorities, emphasising that many procurement procedures are excessively lengthy, thereby delaying essential investment; adds that public procurement should bring value to the public in addition to contributing to balanced economic development across the EU;

2. Considers that global competition is increasingly shaped not only by market forces, but also by state-led industrial strategies, including foreign subsidies, overcapacity and discriminatory procurement practices, which threaten to undermine the competitiveness and resilience of European producers; stresses, in this context, the importance of reinforcing Europe’s strategic resilience and economic security by promoting the development of critical and nascent industries in key sectors; recognises the need to strengthen the single market and the EU’s strategic autonomy by introducing preference to European goods and services in targeted strategic sectors; supports exploring how public procurement can serve as a targeted tool to stimulate demand for innovative and sustainable European-made products and technologies, and to anchor industrial capacity within the EU; recognises, furthermore, the potential of EU-content or resilience criteria – if designed proportionately – to support long-term security of supply in sensitive areas; underlines, however, that any strategic orientation must remain anchored in legal certainty, transparency and fair competition, avoiding fragmentation of the internal market, distortion of international commitments or the alienation of strategic partners;

3. Acknowledges the Commission’s ongoing evaluation with regards to the revision of the legal frameworks for EU public procurement; highlights that the consultation process should include a regulatory impact assessment respecting free market principles and that its main objective should be delivering value through market-based solutions; calls, therefore, for showcasing the effect of potential new rules aimed at promoting the sustainable and social procurement objectives and measures necessary to ensure fair and effective competition, while at the same time achieving, to as great an extent as possible, the removal of excessive and unnecessary administrative barriers and streamlining regulatory provisions; highlights the importance for flexibility in determining the nature and inclusion of strategic considerations in public procurement procedures;

8. Emphasises that any revision should aim to strengthen the enforcement of future procurement laws and must address the complexity of the current rules and ensure legal certainty for contracting authorities; points out that procurement rules must respect the non-discrimination principle and provide clarity regarding the link to the subject matter, in line with the principles of legal certainty and obligations under the WTO Agreement on Government Procurement (GPA) and given the number of sector-specific laws;

9. Points to significant legal and administrative differences across the Member States and their procurement systems, ranging from varying degrees of autonomy for local authorities to differing procurement strategies; recognises the benefits of the directive format, which allows for such diversity while ensuring legal coherence and mutual respect for national systems; calls on the Commission to assess the most appropriate legal instrument in view of the forthcoming reform;

10. Reiterates that taxpayers’ money should be spent with utmost prudence and transparency so as to benefit citizens and, where economically feasible, support sustainable growth; considers that the revision of the directives should aim at completing the objectives set out in 2014 and adjusting to the new challenges Europe has to face; believes, therefore, that three guiding principles – value for money over the entire life cycle, fair competition and anti-corruption measures – remain valid in the context of the upcoming reform and should not be compromised;

11. Recognises, in this context, that while public procurement can be a useful tool for achieving strategic objectives, such as innovation and sustainability or supporting strategic industries in Europe that are essential to the security of industrial output and economic stability, it is an engine for fulfilling tasks whose primary function is to achieve the best value for public tax funds and thus ensure the efficient and transparent procurement of goods and services;

12. Urges the Commission, in the light of the economic slowdown and rising public debt, to carefully assess any legal changes that could further constrain the purchasing power of contracting authorities and limit available vendors, as such constraints could ultimately undermine citizens’ access to high-quality public services and infrastructure; underlines that due consideration must be given to the need for clear rules regarding the treatment of products and economic operators from non-EU countries; cautions, however, against the use of procurement for protectionist purposes; underlines, in this context, that European preference should be compliant with the EU’s WTO commitments;

13. Stresses that support measures should not distort the level playing field; reiterates the importance for European public procurement processes to remain as open as possible and insists that they must remain technologically neutral and competition-driven; highlights that long-term commercial viability should be a guiding principle when assessing technologies for public investment;

Main challenges

14. Recognises that significant discrepancies remain between Member States in their implementation and enforcement of public procurement rules, discouraging cross-border bids and the participation of smaller businesses and social economy enterprises, which creates an uneven playing field; notes the varying degrees of implementation of green public procurement across the Member States, with only one third introducing binding obligations and the remainder opting for voluntary approaches;

15. Notes that, in the context of procuring goods and services and in accordance with the constitutional structures of the Member States – particularly the protection of regional and local self-government under Article 4(2) of the Treaty on European Union – local authorities have the discretion to determine how to fulfil their procurement needs; recalls that they may choose to supply goods in house, cooperate with other public entities, or engage with the market through procurement procedures; believes that the freedom and autonomy of public authorities should be safeguarded and respected;

16. Regrets that competition in public procurement has significantly declined over the past decade, as pointed out in the ECA Special Report, resulting in an increased number of tenders with a single bid or no bids; regrets, furthermore, that the same report finds that contracting authorities implement strategic procurement to a very limited extent and the share of procedures using award criteria other than price is very limited; recognises that the use of strategic public procurement has remained limited due to the lack of legal certainty in the interpretation of the requirement for ‘link to the subject matter of the contract’ provided for contracting authorities and their consequent fear of litigation;

17. Notes that procurement procedures have become increasingly complex and burdensome, creating unnecessary administrative hurdles that deter a diverse range of suppliers, including cross-border suppliers, from participating, as well as restricting competition and leading to delays in the delivery of essential public projects; stresses that these issues also affect public contracting authorities, particularly smaller local and regional governments; cautions that the ECA Special Report indicates that the length of administrative procedures has increased since 2021; notes, additionally, that the lack of an interoperable digital infrastructure for procurement platforms remains a barrier for businesses, particularly SMEs, contributing to inefficiencies and increasing costs;

18. Is concerned that transparency and enforcement in procurement remains inadequate, as evidenced by persistently low publication rates for contract awards, limited accessibility to procurement data and ongoing risks of abuses, fraud and corruption; recalls that favouritism, unclear or biased selection criteria and insufficient oversight mechanisms for enforcement and sanctions undermine trust in public contracting and fairness; stresses the need to establish obligations for publication and reinforced justification for all awards by negotiated procedure without a prior call for competition, in order to guarantee a minimum level of competition, traceability and control, avoiding abuse of legal exceptions; urges the Commission to make use of advanced digital tools and platforms to increase transparency and accountability in public procurement processes and deter corruption practices;

19. Notes that, at present, public contracting authorities already have the option to consider factors such as innovation, resilience, sustainability and social considerations via award, technical specification or contract performance clauses, on a voluntary basis and depending on their decision, as explicitly permitted by the 2014 directives; notes that in certain cases public contracts continue to be awarded primarily on the basis of a lowest price criterion, also owing to insufficient training and financial and human resources, restricting procurement authorities from considering additional factors such as innovation and quality-to-price ratio, which leads to suboptimal long-term outcomes that are misaligned with citizens’ interests; stresses that reliance on the lowest-price criterion limits the ability of contracting authorities to take into account operational costs and to apply life cycle costing;

20. Emphasises that the complexity, excessive qualification criteria and increasing bureaucratic burden of procurement processes disproportionately affect SMEs, local businesses and national contractors, dissuading them from participating and thereby reducing the diversity of bids and undermining sustainable and innovative procurement; observes that SMEs continue to face difficulties in public procurement, despite the establishment of national and European mechanisms, owing in particular to recurring payment delays in some Member States, a lack of clarity and accessibility in national and European tender notices, as well as a lack of transparency in the candidate selection procedures, which contributes to a perception of opacity in the processes;

21. Recalls that the Strategic Analysis Report of 2023 on the construction sector by the European Labour Authority and the Commission report on the application and implementation of Directive (EU) 2018/957 of the European Parliament and of the Council of 28 June 2018 amending Directive 96/71/EC concerning the posting of workers in the framework of the provision of services (COM(2024)0320) have determined that long and complex subcontracting chains can pose numerous challenges for labour enforcement authorities when they are used to escaping legal responsibilities and may lead to unclear accountability and difficulty in ensuring compliance with public procurement contracts and labour obligations; notes, in that context, that the directive does not provide contracting authorities with sufficient tools to effectively address the non-performance of public contracts, and in some cases even hampers authorities wishing to take proactive measures;

Areas for improvement

22. Notes that there is currently a strong demand for updating public procurement thresholds in the light of the significant increase in inflation and construction costs in the EU; calls on the Commission to assess the possibilities for advocating an increase in the thresholds at international level and to introduce a mechanism taking into consideration inflation rates; points out that raising thresholds gives contracting authorities greater independence and possibilities to award contracts based on local needs; points out that excessively complicated procedures, which are characterised by a high degree of technical and legal complexity, together with administrative requirements that are sometimes disproportionate to the value of the contract, constitute one of the main problems in the public procurement sector and therefore the Commission’s efforts should go beyond merely negotiating threshold values;

23. Notes that while six different procurement procedures provide for flexibility, some of these are rarely employed, such as procedures for innovation partnerships, owing to their complexity and bureaucratic hurdles; believes that streamlining and aligning data reporting obligations for contracting authorities at national and EU level, as well as basic data interoperability requirements, has the potential to deliver added value; considers it essential that the Commission and the Member States systematically analyse procurement data in a comprehensive and structured manner in order to identify and address the underlying causes of declining competition and inefficiencies in procurement processes;

25. Stresses that procurement rules for public undertakings should be better aligned with commercial practices and ensure maximum flexibility to prevent unnecessary restrictions, cost inflation and delays in critical sectors such as energy and utilities; believes that the Commission should analyse this issue in the upcoming impact assessment;

26. Recalls with concern that a significant number of economic operators have experienced exclusion from public procurement procedures because of minor formal irregularities in their tenders, without being afforded the opportunity to remedy such defects, both in open and negotiated procedures; underlines that this practice is detrimental both to the economic operators, which may have invested considerable time and resources in preparing their tenders, and to the contracting authorities, which may be compelled to potentially exclude the MEAT criteria on purely formal grounds; stresses that such rigid formalism undermines the effectiveness, efficiency and competitiveness of public procurement procedures; calls therefore for the establishment of a general principle allowing for the regularisation or clarification of minor irregularities, without the need to cancel the tender, provided that this does not entail a substantial modification of the offer, and insists that this principle should be the rule rather than the exception; emphasises the importance of introducing more flexibility into public procurement procedures while ensuring legal certainty for contracting authorities, including for small and medium-sized contracting authorities;

27. Promotes fair competition among bidders through ensuring that award criteria be designed taking into account new entrants, start-ups, SMEs and innovative businesses, fostering market diversity and competitive pricing;

Digital transformation of European public procurement

28. Strongly believes that digitalisation should remain a key element in lowering costs and streamlining public procurement for contracting and bidding entities, especially very small entities and SMEs; suggests, however, that to fully harness the potential of digital tools, the Commission and the Member States must rethink how future procurement legislation should safely facilitate and secure digitalisation, rather than just digitalising current lengthy analogue processes; underlines the importance of public procurement platforms being accompanied by updated, clear and specific guidelines and instructions to ensure that all users, regardless of their level of experience, can effectively navigate and utilise these platforms; highlights the need for increased support and training for contracting authorities on the use of digital tools;

29. Calls for the Commission to adopt a digital-first approach in the revision of the EU public procurement legal framework; recommends focusing particularly on automating and ensuring the interoperability of certain processes, such as through moving to a transaction-based system from an outdated notification-based system, reducing the number of electronic forms and integrating the European single procurement document and eCertis into broader administrative and business systems; considers that this transition will reinforce the possibility of public scrutiny in the procurement process, especially considering the potential offered by disruptive technologies such as artificial intelligence; believes that this transition to automated, transaction-based systems would enhance real-time data capture, streamline procurement processes and allow for better data utilisation, which would be particularly beneficial for SMEs;

30. Stress that establishing pan-EU procurement data architecture with reliable, structured data collection is crucial to driving better intelligence and improving procurement performance across the Member States; stresses, in addition, the importance of promoting interoperability between public databases in order to speed up checks on the accuracy of the requirements by operators and to avoid requesting information already available in various public databases; welcomes, in this context, the Commission’s initiative for a European public procurement data space (PPDS); considers that this initiative has the potential to improve transparency and to support the prevention of misuse of funds, fraud and corruption, as well as to create more procurement opportunities for SMEs and ensure that public spending achieves better value by combining European and national procurement datasets; requests that the Commission explore options for introducing a public procurement digital passport, with special attention paid to SMEs, as a tool to promote SMEs’ participation in public procurement; underlines the need to use current tools such as eForms, eTender, eCertis and the PPDS more effectively in order to move away from analogue processes towards fully digital systems to make procurement decisions smarter;

31. Notes that the introduction of the European single procurement document (ESPD) has not fully achieved its objective of simplifying and facilitating the participation of companies in public procurement, owing to the persistence of operational difficulties that continue to complicate companies’ access – particularly very small entities and SMEs – to procurement procedures; calls on the Commission to streamline and clarify standard procurement documentation, including the ESPD; encourages the Commission and the Member States to explore how procurement systems can interface with other well-functioning administrative systems and databases at national and EU level to improve the EU’s internal market;

32. Calls on the Commission and the Member States to ensure the enforcement of uniform cybersecurity standards aligned with the Cyber Resilience Act and the NIS2 Directive, where applicable, in all relevant EU public procurement legislation, as well as to ensure that EU data protection rules are complied with throughout all stages of the procurement process;

33. Calls for the harmonisation of electronic identification and authentication processes across the Member States to ensure secure, efficient and trusted digital public procurement throughout the EU;

34. Is convinced that the Commission, in dialogue with stakeholders and social partners, should assess which procedures provide little added value relative to their costs, administrative burden or contribution to quality and then either improve, automate or eliminate them entirely;

35. Draws attention to the successful adoption of the GovTech procurement model in countries such as Poland, Lithuania and Denmark, as well as the Commission’s recognition of the model as a key tool in achieving the goals outlined in the EU 2030 Digital Compass; believes that building upon successful national experiences and fostering the development of a European GovTech market serves as an opportunity for the public sector to rapidly and efficiently access tailor-made digital solutions, while also supporting a digital-oriented public procurement reform; underlines that the use of GovTech in pre-commercial procurement has so far enabled less financially resourced municipalities to form multi-partner consortia, a model that can be scaled up for larger national projects; notes, however, the existence of certain challenges that undermine the effective use of GovTech and believes that this should be addressed in the future;

Specific recommendations for improving European public procurement

36. Calls for a revision of the EU public procurement framework to boost European competitiveness, promote a more sustainable economy, build resilience, ensure legal certainty, while digitalising procedures, reducing and simplifying the rules both for contracting authorities and bidders, and ensuring security of supply for certain vital technologies, products and services, promoting quality jobs and delivering services for citizens, including by respecting collective bargaining agreements in accordance with national laws and practices; stresses that the Commission should propose harmonisation where it can deliver possibly the greatest added value, such as digital procurement tools and the standardisation of tender procedures and structures for joint procurement at both national and cross-border level; in this vein, encourages the use of digital procurement tools to facilitate cross-border participation and calls for the promotion of cross-border public procurement in the single market, particularly in border regions; emphasises that the objective should not be harmonisation for its own sake, but rather to enhance legal certainty, efficiency and predictability, as well as reduce excessive administrative burdens on contracting authorities and bidders, while increasing flexibility, freedom of choice and autonomy for contracting authorities, to ensure the prudent use of taxpayers’ money;

37. Highlights the need to train contracting authorities, including giving an explanation of the rules and adequate clarification of the use of non-price criteria, including the legal basis for the MEAT criteria and the need to ensure the application of Article 18(2) of Directive 2014/24/EU to offer legal certainty to contracting authorities so that they feel more confident using them, while maintaining adequate oversight and data access options; encourages the Commission to further strengthen the professionalisation and training of procurement officials and suggests that the Commission increase funding for further training of contracting authorities to effectively implement the EU public procurement framework;