European governments will gain more options to exclude or treat less favorably bids from non-EU countries. An important factor will be whether European companies have similar access to public tenders in the respective country. This emphasizes the importance of reciprocal access to each other’s markets.
There will be no general obligation to buy exclusively from Europe. The reform currently proposed will give governments more room to prioritize European suppliers when making purchases and awarding contracts but does not mandate that all contracts go to companies from the EU. The new EU law will initially apply only to large industries, not to every minor procurement.
Less Dependence
The European Commission also wants to reduce strategic dependence on suppliers outside Europe. Public contracts should therefore be evaluated not only on direct costs but can be used to reduce risks associated with excessive reliance on foreign suppliers.
Promotion
Price should no longer be the decisive factor when awarding contracts. Governments must place stronger emphasis on quality and other conditions. For regular contracts, quality will have to weigh at least 30 percent. For labor-intensive contracts, a minimum of 50 percent is specified.
Origin
Sustainability and the reliability and origin of supply chains should also be given greater weight. China is not explicitly targeted in the new rules but plays an important role in discussions about cheap bids, subsidies, and foreign competition in European markets.
Industry Commissioner Stéphane Séjourné views procurement as a strategic tool. Other major economies also use their government spending to support their own economy and industry. According to the Commission, Europe must be better enabled to respond to this.
Simpler
At the same time, the reform aims to significantly simplify European procurement rules. The existing three separate directives will be merged into one directly applicable European regulation. This should reduce differences between national systems and lower the administrative burden for businesses.
The European procurement market represents approximately 15 percent of the EU’s gross domestic product and has an annual value of about 2.5 to 2.6 trillion euros. The proposal still needs approval from the European Parliament and EU countries and may change during those negotiations.