Questions and answers on the EU Public Procurement Act

Why is the Commission proposing the Public Procurement Act? 

Public authorities in the EU spend around €2.6 trillion (15% of GDP) a year on public procurement. This makes public procurement rules key for ensuring public funds are invested efficiently in line with the Union's wider policy objectives.

The European Commission's evaluation of the procurement rules found that these face significant shortcomings, including high administrative burden, legal uncertainty and limited strategic use of procurement, reflecting similar findings by the European Court of Auditors. 

Therefore, the Commission is today presenting a new Public Procurement Act to make public procurement a more efficient investment tool and address shortcomings in the current rules. The new Act will deliver better value for money and advance strategic objectives, including single market integration, economic autonomy, security, social and ecological sustainability, and innovation. The Act also reflects the central role of public procurement highlighted by Mario Draghi and Enrico Letta's reports which identify it as a strategic tool to strengthen the Union's industrial base, support innovation and the clean and digital transitions, and reinforce economic security and strategic autonomy.  

How do the new rules support effective public investments? 

To make public procurement a more effective investment tool, the proposal simplifies procedures for public buyers and companies, allowing them to focus on outcomes rather than administration. 

A key tool is the new Digital Marketplace for procurement, a one-stop shop that connects public buyers and companies across the EU. By facilitating access and participation in procurement procedures, it should boost competition and thus improve quality. The new rules allow public buyers to put greater emphasis on quality in contract awards, helping ensure procurement delivers wider environmental, social, safety and security benefits, in line with the Union's strategic objectives. 

How does the Act simplify the procurement legal framework?  

The new Public Procurement Act simplifies the existing procurement legal framework.

First, it replaces three existing procurement Directives with a single Regulation. This creates a simplified, coherent, and harmonised framework, reducing fragmentation, limiting gold-plating, and increasing legal certainty. A single rulebook creates common legal standards and procedural guarantees while allowing public buyers more freedom to meet their needs.  

The new Act consolidates procurement provisions from sectoral legal acts, establishing one set of public procurement rules. This includes horizontal rules on 'how to buy' (such as exclusion grounds for companies' participation) and 'what to buy' provisions from sector-specific acts (such as energy efficiency or circularity) as well as empowerments in sectoral acts allowing the Commission to adopt specific procurement requirements.   

The radically simplified procedures and conditions for their use will save public buyers valuable time and resources and enable better value for money.  

What simplifications do the new rules bring for public buyers?  

The new rules allow public buyers more flexibility in the way they conduct their procurement, enabling them to choose which procurement procedure to use. The rules clarify situations when direct awards can be used, in particular for emergencies and crises, and how to implement security aspects.  

Under the new rules, public buyers will have added flexibility to negotiate contracts in all procurement procedures, if they choose so. Public buyers are also free to choose for each individual procurement procedure the quality criteria under the new Best-Price Quality Ration award principle that they consider best suited to meet the needs of their procurement. 

In-house contracts and public-public cooperation remain fully excluded from the scope of the public procurement rules. When local and regional authorities share their own resources, including for remuneration only, they will in future be excluded from the rules with an aim to lower administrative burden and facilitate cooperation. 

What is the new Digital Marketplace?  

The Commission proposes to create, jointly with Member States, a Europe-wide Digital Marketplace to simplify procurement procedures across the Single Market. This one-stop shop will make it easier for companies to access procurement procedures and simplify the process for public buyers. The marketplace will allow public buyers to perform automated eligibility checks on companies and use integrated data to ensure transparency and accountability, while also using procurement more strategically. For instance, buyers will be able to determine which third country companies and goods have access to EU procurement markets on the same conditions as EU companies and products, facilitating economic security and European preference considerations.  

The digital procurement marketplace will establish a network of interoperable systems by linking existing national or local e-procurement platforms, thereby reducing existing fragmentation. To this end, the Commission and Member States will develop common standards. The Commission's estimates show that the digital procurement marketplace could yield recurrent annual savings of €220 million for public buyers (€4,700 per public buyer or €700 per procedure). 

Why do new rules make the best price-quality ratio the standard method for awarding contracts? 

The Procurement Act proposes a new approach for awarding public contracts, placing greater emphasis on long-term public benefit rather than focusing only on the lowest upfront cost. As a general rule, public buyers should consider tenders based on both price and quality criteria and award contracts accordingly. Such quality criteria can include technical characteristics and functional merits of the product or service purchased as well as address environmental, social, or security considerations. This will help to make public spending more efficient and promote strategic policy objectives of the Union.  

In awarding contracts, quality criteria should carry a minimum weighting of 30% (or 50% for labour-intensive contracts). However, public buyers are allowed to award a contract based on price only, where the quality of the procured works, supplies or services can be sufficiently ensured through specifications or conditions for the performance of the contract. The rules give public buyers ample flexibility and discretion to select appropriate quality criteria according to the needs of each contract.  

How do SMEs benefit from the new procurement rules? 

The simplification measures described above will promote the participation of SMEs in procurement procedures. The new rules will lead to reduced administrative burden for small companies, especially thanks to the new Digital Marketplace where SMEs will have to enter their essential data only once. Public buyers will need to actively consider dividing contracts into smaller lots to facilitate SME participation in procurement. The new Act furthermore includes provisions facilitating the formation and participation of consortia or groups and on prompt payment obligations through the supply chain, which should specifically benefit SMEs. 

How does the proposal facilitate environmental and social considerations?   

The Public Procurement Act identifies environmental, climate-related and social objectives to which public procurement may contribute, providing legal certainty for their integration into procurement procedures. A key tool is making the price-quality ratio standard for the award of contracts, facilitating the integration of environmental and social considerations. The Act also clarifies how to apply such considerations throughout the procurement process, in line with overarching principles such as linking them to the subject matter of the procurement contract.   

As regards environmental considerations, the Act encourages the use of labels, especially the EU Ecolabel, the EU scheme for environmental excellence. Wider use should facilitate bid evaluation and reduce internal market fragmentation. 

To promote socially responsible procurement, an enhanced quality threshold of at least 50% quality award criteria is set for labor-intensive contracts. The Act further specifies that working conditions affecting the workers involved in the execution of a public contract are considered as linked to its subject matter, allowing public buyers to reward fair working conditions and high-quality jobs. The Act recognises the importance of subcontracting but prohibits the subcontracting of entire contracts without own-value contribution and introduces added transparency. It maintains provisions on accessibility obligations, reserving contracts for certain organisations and special regimes for social, health and educational service contracts.  

How does the proposal support innovation?  

Public procurement is a key lever for innovation. The Public Procurement Act introduces a reformed and simplified innovation procedure for the purchase of innovative goods, services and works. It complements the procurement procedure for contracts pertaining exclusively to R&D services, exempted from the Public Procurement Act and regulated by the European Innovation Act (EIA) also adopted today. Contrary to the procedure foreseen under the EIA for the procurement of R&D services, the innovation procedure under the Public Procurement Act allows public buyers to procure within one procedure both R&D services and the resulting goods, services and works. The innovation procedure is a versatile instrument able to accommodate different challenges, such as design contests. Overall, the act includes several instruments to promote the participation of innovative companies in procurement, including by clarifying that in innovation procedures, intellectual property rights arising in the procedure should generally remain with the companies developing them.   

How does the Act address procurement's role in ensuring security and resilience?  

In an increasingly tense geopolitical situation and evolving range of risks that may affect EU security, resilience and preparedness, procurement offers an important tool to ensure that public money is spent in ways that do not compromise the security and safety of European citizens.  

To strengthen security and public safety, the Act identifies a broad range of risks that may affect public purchases of critical technologies and infrastructures, such as the possibility of cyber-attacks, espionage, harmful foreign interference, or overreliance on suppliers based in third countries.  

Furthermore, it obliges public buyers to consider such risks throughout the procurement process, from the initial planning stages to the execution of the contract. Should these risks materialise, the new rules equip public buyers with a large toolbox of effective measures, such as excluding bidders or terminating contracts.  

What does ‘European preference' mean for the EU and for third countries? 

The proposed Act establishes a new common EU framework of European preference mechanisms, to ensure that public spending supports EU security, resilience and fair competition by reducing harmful dependencies, addressing unfair practices and strengthening European industrial capacity.  

This horizontal framework lays out the general rules for cases where sector-specific legislation requires the application of EU preference or other restrictions, unless otherwise provided. More specifically, it clarifies which operators and products are covered by the EU's international procurement commitments, such as the WTO Government Procurement Agreement or relevant Free Trade Agreements, and therefore have full access to EU procurement markets, and those that do not. A dedicated Commission online tool will help buyers determine supplier and product origin and identify applicable requirements. Public buyers will thus have the possibility to exclude offers from third countries with whom the EU does not have international procurement commitments.  

The Act moreover codifies existing case law, confirming that public buyers may apply European preference requirements to non-covered operators, products or services. Where the Union's strategic interests so require - for instance where there are threats to economic security or security of supply, or a trade partner fails to grant access to its procurement markets to EU operators despite a legal commitment to do so - the Commission is empowered to adopt delegated acts making these requirements mandatory, in line with the EU's international legal obligations. 

What are the main changes the Act brings to the concessions regime?  

The new Public Procurement Act integrates the concession rules into the general procurement framework to align the rules and simplify the legal regime while keeping specific provisions for concessions where needed to take due account of their specificities.  

The Act seeks to strengthen the ability of public buyers to design, implement and enforce effective concessions that serve the public interest, ensure transparency and fair competition, and deliver the best value for money. At the same time, it aims to better reflect EU priorities such as resilience, sustainability, security of supply and technological autonomy in the design, award and oversight of concessions. 

Will the new rules provide sufficient safeguards against fraud and corruption in public procurement? 

While the proposal gives public buyers greater discretion and flexibility, it strengthens monitoring, data exchange and transparency to ensure accountability. The Digital Marketplace will enable integrated data collection and lifecycle monitoring, from planning to contract execution. This will provide better quality data to strengthen market intelligence, inform policymaking and help prevent and detect fraud, corruption, collusion and other irregularities. Overall, the proposal moves procurement away from a fragmented, control-heavy approach towards a more digital, data-driven and efficient system, with stronger transparency and oversight. 

The proposal requires proportionate measures to prevent and combat fraud, favouritism, collusion, and conflicts of interest, including the use of tools such as Arachne+ (a data mining and risk-scoring tool designed to help detect and prevent fraud, conflicts of interest, and irregularities in procurement) and mandatory electronic integrity declarations for high‑risk procedures. 

For more information 

Public Procurement Regulation

Press Release 

Factsheet