The European Commission has presented its Public Procurement Act: a roughly 200-page Regulation set to replace some 900 pages spread across three ageing Directives. Simplification is one objective. The bigger ambition is to make the trillions governments already spend each year work harder for European industry. The thinking is simple: If public procurement amounts to around 15% of EU GDP (some 2 trillion euros per year), why not use more of that money to strengthen European competitiveness and fight deindustrialisation? Whether the new rules can actually make that happen is another question.
The Public Procurement Act would overhaul the rules governing how authorities buy everything from office supplies and hospital equipment to trains and major infrastructure.
The Commission wants to make that process simpler. Three Directives from 2014 would be replaced by one directly applicable Regulation, while the existing maze of procurement procedures would largely give way to two main options – an open and a dynamic procedure – alongside a separate route for innovative products that still need to be developed. New national and European procurement data spaces should also allow companies to reuse information rather than repeatedly submitting the same paperwork.
But simplification is only half the story. The Commission increasingly sees the enormous purchasing power of European governments as an instrument of industrial policy.
Quality over quantity
One of the biggest changes concerns how winners are selected. The best price-quality ratio would become the default basis for awarding contracts. Quality would normally have to account for at least 30% of the score, rising to 50% for labour-intensive contracts.
That gives public buyers more room – and in many cases an obligation – to look beyond the cheapest offer. Environmental performance, working conditions and other social considerations, innovation, and security and resilience can all influence which bidder wins.
That is a significant change in a market where price still dominates: the Commission’s procurement scoreboard shows that around 54% of procedures are currently awarded on the basis of the cheapest bid.
Why not European?
The second shift is more political. Under the new rules, public authorities would have a clearer legal basis to favour European companies and products. Depending on the procurement, they could restrict participation, give qualifying European bids additional points or an adjusted price advantage, or reject bids containing too little European or eligible partner-country content.
For the most part, however, they can do this – they do not have to. European preferences remain voluntary by default, although the Commission could make them mandatory for particular countries, products or sectors.
That distinction may determine how transformative the Act ultimately becomes.
The Commission can provide governments with more tools to buy European, but it cannot ensure that they use them. Public authorities still have budgets, deadlines and administrative constraints. And the increasingly elaborate calculation of price, environmental performance, social impact, innovation, resilience and origin assumes something more fundamental: competition.
There, Europe already has a problem. The Commission’s latest scoreboard puts the benchmark for procedures receiving only one bid at 28%. The European Court of Auditors found that the share of single-bid procedures increased from 23.5% in 2011 to 41.8% in 2021, while the average number of bidders almost halved from 5.7 to 3.2.
That exposes the tension at the heart of the reform. Brussels wants procurement to become simpler while asking public buyers to pursue more objectives at once. It wants governments to choose better – and, increasingly, European – offers. But sophisticated award criteria matter considerably less when there is only one offer on the table.
The Public Procurement Act could make government money work harder for Europe. First, Europe needs enough companies competing for it.
