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Public procurement act
Public procurement act
David Ashton, Members' Research Service
Context
Every year around 15 % of the combined GDP of the European Union's 27 Member States (roughly €2.6 trillion) is spent on public procurement. The perceived failure of the current EU public procurement system to deliver on the economic potential of this part of the EU's economy has led to calls for its review. To this effect, the European Commission proposed a public procurement act, repealing and replacing the current EU procurement acquis, on 9 September 2026.
Legislative proposal
2026/0265(COD) – Proposal for a regulation of the European Parliament and of the Council on public contracts and concessions, repealing Directives 2014/23/EU, 2014/24/EU and 2014/25/EU, and amending Regulations (EC) No 1370/2007, (EU) 2023/1542, (EU) 2024/1157, (EU) 2024/1252, (EU) 2024/1735, (EU) 2024/1781, (EU) 2024/2847, (EU) 2024/3110 and (EU) 2025/40, and Directives 2008/98/EC, (EU) 2019/882, (EU) 2022/2381, (EU) 2023/1791 and (EU) 2024/1760 (Public Procurement Act) – COM(2026)590, 9 September 2026.
Issue
Calls to tackle failings of the EU public procurement system began with a December 2023 report of the European Court of Auditors (ECA) and form part of the current policy drive to improve the EU's competitiveness. The European Commission therefore proposed a public procurement act in September 2026, repealing and replacing the current EU procurement acquis and consolidating procurement‑related provisions contained in sector‑specific EU legislation. The proposal aims to address issues the Commission previously identified with the implementation of the current directives.
Main points of the proposal
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The proposal would replace the current three horizontal procurement directives with a single regulation which would be directly applicable in Member States, thus aiming at uniform implementation at national level. To some extent, it is a consolidation of the current legislation. For example, the thresholds above which EU procurement rules apply set down in Article 2 are the same as those currently set by Directive 2014/24/EU (€5 404 000 for public works contracts and concessions for 2026‑2027), and a system for revision of those thresholds in line with the World Trade Organization Agreement on Government Procurement (GPA) is fundamentally unaltered from the earlier directives.
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The number of procedure types would be reduced. The proposal provides for three procedures – the open procedure, the dynamic procedure and the innovation procedure – as compared to five under Directive 2014/24/EU. By comparison with the current situation, the dynamic procedure is new and would allow for public buyers to establish a pool of potential contractors from which to choose ahead of the award of individual contracts. As with Directive 2014/24/EU, public buyers have the possibility to award tenders with a reduced level of competition in certain specific circumstances.
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In terms of contract awards, the proposal moves away from the existing rules' most economically advantageous tender (MEAT) concept, to award on the basis of 'the best quality for money' (Article 98). In this context, 'quality' encompasses 'beneficial, efficient or sustainable outcomes'. Such quality‑related aspects are to be weighted at at least 30 % in awards, although the Commission proposes flexibility for public buyers to deviate from this limit where alternative means exist to ensure quality. The use of that flexibility has to be justified.
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The proposal contains a systemisation of strategic grounds for the award of public contracts. Other than the European preference (see below), this concerns awards intended to promote sustainability and other environmental goals ('green public procurement') – procurement which responds to social goals and innovative procurement. The proposal rationalises such grounds for the award of contracts already present in sectoral legislation within a single legislative instrument.
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In addition, the proposal would oblige public buyers to have regard to security interests in procurement design and the implementation of the resulting contracts. Where a contract is to be carried out by a critical entity, public buyers are to include resilience and other supply‑chain considerations in the procurement.
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The proposal would allow public buyers to restrict procurement to economic operators from the EU or otherwise covered, or to goods, services or works which, broadly, originate from the EU or are otherwise covered. The proposal labels this a 'European preference' (Articles 70 to 77). In both contexts, 'covered' means from a country with which the Union has a free trade agreement (FTA) or customs union, or which is party to the WTO GPA. The procurement in question then has to fall within the scope of the EU's commitments under that FTA or customs union, or under the GPA.1 The Commission would produce a publicly accessible online portal specifying those commitments, so public buyers can determine which economic operators and which goods, services and works are 'covered'.
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Public buyers would be able to apply a favourable weighing to tenders by EU or covered economic operators or tenders which contain a higher proportion of EU or covered goods, services or works, and to reject tenders where the value of EU or covered goods, services or works is less than half of the total value. The Commission would be empowered to waive coverage of third‑county economic operators and goods, services and works in the event of non‑reciprocal treatment by the third county in question, or to avoid supply‑chain dependencies. There would be also flexibility for the Commission to extend coverage to additional third countries 'where this is in the interest of the Union'.
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There is some clarification of the rules for the division of contracts into lots in the proposal. For example, the proposal sets a threshold value under which a lot may be awarded without applying EU procurement procedures. Public buyers are obliged, 'where relevant', to consider the effect of division on SME participation. However, the proposal retains the current discretion for Member States to render obligatory the division of contracts into lots.
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The proposal mandates, as a general rule, online communication by public buyers. The Commission would ensure that all existing online platforms used by public buyers to conduct procurement procedures are interoperable (the digital procurement marketplace). Furthermore, the Commission would set up its own eProcurement platform, which would be open to use by public buyers and economic operators. Certain aspects of procurement procedures, namely verification of exclusion grounds, selection criteria and origin requirements, are to be handled electronically.
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Further, the proposal provides for the establishment of a national public procurement data space (NPPDS) in each Member State, where, in addition to procurement subject to EU rules, information on national procurement procedures and other procurement excluded from the scope of the regulation is to be stored. Information is to be transmitted from each NPPDS to a single public procurement data space (PPDS) managed by the Commission.
Parliament's prior position
On 9 September 2025, Parliament adopted a resolution on public procurement, based on a report tabled by the Committee on the Internal Market and Consumer Protection. It was adopted with 432 votes in favour, 95 against and 124 abstentions.
Parliament calls for a revision of the EU public procurement framework to strengthen competitiveness, support a more sustainable economy, enhance EU resilience and advance digitalisation. It emphasises that although the reform which led to the current framework aimed to simplify procedures, enhance transparency and promote participation by small and medium‑sized enterprises (SMEs), challenges persist on transparency, efficiency, broader use and alignment of non‑price criteria, and fraud and corruption prevention. It stresses targeted reform is needed to unlock EU‑level public procurement potential.
Parliament supports introduction of a European preference in 'targeted strategic sectors', subject to compliance with EU WTO obligations. It notes EU companies, particularly SMEs, encounter difficulties in accessing international public procurement markets due to protectionist policies in non‑EU countries leading to unfair competitive disadvantage. It requests the Commission conduct an in‑depth impact assessment on possible ways and implications of prioritising a 'European preference' in strategic procurement. As a basis for such a preference, Parliament suggests either the exemption currently afforded to the protection of 'essential security interests' under Article 15, Directive 2014/24/EU, or that currently applied by Article 85, Directive 2014/25/EU to procurement with third countries with which the EU does not have reciprocal market access arrangements.
Parliament recognises the importance of allowing contracting authorities to give greater weight to social and sustainability criteria, while calling for a balance between the development of 'sustainable and social procurement objectives' and a lighter regulatory and administrative burden. Indeed, the resolution notes the adverse effects of over‑reliance on the lowest price criterion, which may exert downward pressure on sustainability, the quality of services and working conditions.
Parliament also calls for simplification of the legal regime, which it sees as problematic for both tenderers and contracting authorities. It emphasises that procurement process complexity, excessive qualification criteria and increasing bureaucratic burden affect SMEs, local businesses and national contractors. Parliament asks the Commission to assess the most appropriate form of legal instrument for the reform.
Finally, flexibility should be ensured for purchasing authorities, and the EU's system should not determine what, but how to buy. The Commission's proposals for reform should be guided by the principles of value for money, fair competition and the fight against corruption.
Prior positions of other EU institutions
European Council
In both the conclusions of its special meeting of April 2024, and in its strategic agenda for 2024‑2029, adopted in June 2024, the European Council noted the importance of 'leveraging' public procurement to improving EU competitiveness. The strategic agenda observes specifically that this is 'crucial' to 'build[ing] up ... capacity in sensitive sectors and key technologies of the future'.
Council of the EU
The June 2024 Council conclusions on the ECA's Special Report 28/2023, discussed below, acknowledged the decline in competition in public procurement, the lack of significant overall improvement in the achievement of the main objectives pursued by the 2014 directives and the low level of direct cross‑border procurement. The insufficient use of strategic public procurement and shortcomings in Commission and Member State monitoring of developments in the public procurement market are noted. The Council considered public procurement legislation complexity hinders certain economic operators' participation. It noted the ECA finding that a low proportion of contracts are awarded to SMEs, and underlined the need to avoid unnecessary administrative burden. Finally, the Council observed the large share of contracts awarded to the lowest bidder in most Member States and warned against prioritising price as the sole award criterion.
The May 2025 Competitiveness Council debated public procurement, with all delegations emphasising the need to simplify the framework by reducing the number of legal acts and establishing clearer rules. Ministers also discussed which strategic objectives – such as environmental, social, economic sovereignty, and national security goals – public procurement could help to achieve, and debated whether and when an EU preference might be introduced. Many delegations advocated for national, regional, and local contracting authorities to have the flexibility to tailor application of sectoral criteria, including any EU preference, to their specific needs. They gave a strong signal that the revision should concentrate on simplifying EU procurement procedures, or 'how to buy', while allowing contracting authorities the choice to decide 'what to buy'.
A Polish Presidency note, prepared for the May 2025 Competitiveness Council, highlights the fragmentation of EU rules governing procurement. The paper refers to a 'proliferation' of procurement‑related provisions in discrete EU legislation, which appear in more than 30 different instruments. It further alleges the rules have moved beyond 'how to buy' towards 'what to buy', i.e. beyond a procedural framework.
In a note prepared for the December 2025 Competitiveness Council, a group of smaller Member States challenged the 'European preference' concept, not only as regards public procurement but as a horizontal policy approach. According to those Member States, the EU should be wary of introducing rules that could limit Member State ability to source the widest variety of goods and services, as such restrictions could harm EU competitiveness and reduce innovation. The approach could be damaging to trade relations and risk countervailing measures. Rather, the EU should seek to extend cooperation with like‑minded partners. A 'European preference' should only be used as a last resort and with reference to genuinely strategically sensitive sectors.
European Economic and Social Committee
On 3 December 2025, the European Economic and Social Committee (EESC) adopted an opinion on the review of the European public procurement legal framework. The EESC underlines the untapped economic potential of EU public procurement and calls for simplification and reduced administrative burden. It emphasises strategic procurement, in terms of non‑price criteria such as social, innovation and environmental criteria 'as equal objectives', and a European preference 'when appropriate'. Its analysis of non‑price criteria includes consideration for workers' rights and collective agreements.
European Committee of the Regions
A March 2026 European Committee of the Regions opinion on the evaluation of the public procurement directives recognised the burdens placed on local and regional contracting authorities by the current rules and called on the Commission not to add to that burden in the current review. It also called for focus on cross‑border procurement, which remains too low. It supports the introduction of some form of European preference, recalling that assessment of the concepts used should not fall on contracting authorities.
European Court of Auditors
The ECA's Special Report 28/2023, published in December 2023, identified declining competition for public contracts in the EU over the past 10 years. The Court looked at contracts awarded without a call for tender (direct awards); contracts awarded to a single bidder; and the average numbers of bidders (for all calls during the studied period taken together, regardless of contract value). While the first indicator showed a modest improvement, taken on average across the EU, the other two deteriorated in 2011‑2021.
According to the Court, and contrary to the Commission's evaluation (discussed below), SME participation in public procurement did not increase across the EU.2 The Court found both bidders and contracting authorities considered procedures were overly complex. Public tenders rarely take account of strategic factors such as environmental impact, social responsibility and innovation, and the Court found, despite the 2014 reform's introduction of the MEAT criteria, a large share of contracts was still awarded on the sole basis of the lowest‑price criterion in 2021, with the level of award in favour of the lowest bid exceeding 80 % in 8 Member States. Low procurement information publication rates reduce transparency, which is key to preventing fraud and corruption.
Preparation of the proposal
Ursula von der Leyen's 2024-2029 political guidelines promised to revise the EU's public procurement legislation. Flagging at this stage that the revision 'will enable preference to be given to European products in public procurement for certain strategic sectors', her 2025 State of the Union address again promised to 'introduce a "made in Europe" criteria in public procurement'.
The reform was further flagged by the Commission in the competitiveness compass, the Clean Industrial Deal communication and the single market strategy. In the single market strategy, the Commission promised the revision would simplify 'overly complex EU rules'. Announcing the reform in its 2026 work programme, the Commission viewed it inter alia from the perspective of stimulating investment in the EU economy.
On 14 October 2025, the Commission published an evaluation of the current horizontal procurement directives. The evaluation was supported by a public consultation.
The evaluation found that the directives were partially effective in providing simpler, more flexible procedures. The directives' failure to ensure flexibility in practice is evident: between 2017 and 2024, only one of the procedures and procurement techniques introduced by the directives – the open procedure – was used in 82 % of cases.
The directives were also partially effective in maintaining market competition. Access to procurement improved, e.g. contract notices published in TED increased 70 % and the real value of procedures above the EU thresholds doubled. Furthermore, the higher the call's value, the higher the number of tenders submitted. SMEs' share of contracts increased – from 64 % of TED contracts and 47 % in terms of value (pre‑2014) to 71 % and 55 % respectively (2017‑2024). However, the directives were not able to prevent contracts being awarded to a single bidder.
The evaluation notes the voluntary basis on which Member States could adopt green, innovation and social aspects in procurement – the 'strategic objectives' criteria introduced in 2014 – led to uneven adoption across the EU. While the 'strategic objectives' were integrated in sector‑specific EU legislation (e.g. defence, environment, energy and digital), incoherences were found between this legislation and the directives, which led to uncertainty and implementation issues.
The evaluation found the directives' objectives remain highly relevant to current needs defined by a changed geopolitical and economic environment. Therefore, enhancing the EU internal market via procurement is key to ensuring economic security and strategic autonomy. Simpler and less burdensome procurement addresses the need for increased economic competitiveness and public procurement supports climate‑ and environment‑related needs. However, the need for the EU to effectively react to the current geopolitical and economic context requires adapting the 'strategic objectives' concept to meet new realities, e.g. a 'European preference' approach.
On 3 November 2025, the Commission opened a further public consultation to gather views in preparation for the revision. This consultation ran until 26 January 2026. The Commission published a factual summary of the responses received on 27 March 2026. The Commission reported that, overall, respondents supported moving away from price‑only awards, greater flexibility and reducing the administrative burden through digitisation. In terms of strategic procurement, respondents overall favoured environmentally‑friendly procurement and innovative procurement, in that order, though public authorities insisted on administrative simplification and simple rules. Finally, there was overall support for a 'European preference' in critical industries, as well as a more generalised system of 'European preference'.
Points of view
Public authorities tend to take the view that the rules need to be more flexible. This applies to public buyers at different levels within Member States. For example, in its response to the evaluation consultation, the Ministry of Economy and Innovation of the Republic of Lithuania advocated a lighter procurement regime to be used in emergencies, to avoid lengthy legal challenges. The Ministry noted the 'unprecedented increase of public procurement provisions contained in EU sectoral legislation' is making the EU procurement framework increasingly 'complex and difficult to implement in practice'. The Ministry equally advocated a 'streamlining of sectoral regulation' along with more flexibility in applying social criteria in public procurement, arguing current restrictions limiting social criteria evaluation to aspects 'linked to the subject‑matter of the contract' prevent a more comprehensive assessment of economic operators' broader sustainability practices.
The City of Paris also advocated measures to increase flexibility and simplification. Its contribution highlighted the constraints facing public buyers, calling for freedom to use the negotiated procedure without justification It also proposed expanding the use of non‑competitive procurement where no suitable tender is submitted, regardless of the initial procedure.
Responding to the proposal, an Austrian Landesregierung (state government) expressed a preference for retaining procurement legislation in the form of directives, rather than consolidating into a regulation. It further called for freedom for public buyers to choose between price and quality when deciding on contract awards.
In its response, BusinessEurope called for simplification and reduced administrative burden. Any review of the current rules should be limited and evidence‑based, with BusinessEurope critically clarifying that simplification 'should not be understood as entailing new regulations to solve the problem'. It equally emphasised the importance of harmonisation between sectoral legislation and the overall procurement framework. After adoption of the proposal, BusinessEurope welcomed, in particular, the digitisation of procurement. However, it cautioned that public sector spending is not sufficient by itself to address problems with the EU's competitiveness. It also called for a continued focus on simple procurement rules.
In its response to the evaluation consultation, the European Construction Industry Federation (FIEC) also supported simplification and administrative burden reduction to ensure a growth‑friendly and 'favourable business environment'.
Prior to adoption of the proposal, SMEunited focused on problematic implementation of the current rules, rather than their content. It pointed to contracting authorities' failure to use the existing power to divide contracts into lots. SMEunited also referred to the continued use of the lowest‑price criterion as stifling demand for a wider variety of innovative tenders, which SMEs could provide. Reacting to the proposal, it called for Member States to exercise the proposed discretion, unchanged from the current directives, to make the division of contracts into lots mandatory.
Environmental and other NGOs call for the further development of environmental and social award criteria. Some call for those criteria to be made mandatory. In its contribution to the evaluation consultation, Impact Europe saw the absence of mandatory legal obligations for the integration of environmental, social and innovation criteria in public procurement as limiting the uptake of such procurement. A lack of engagement with enterprises providing these solutions, and a lack of understanding of such offers, also limits uptake. Responding to the proposal, ICLEI Europe (local governments for sustainability) welcomed the shift towards the award of contracts on the basis of quality.
Trade unions call for increased safeguards to secure labour standards in publicly contracted firms ('buying decent work'). In its contribution to the evaluation consultation, the European Trade Union Confederation (ETUC) highlighted how use of lowest price as the sole selection and award criterion has had a 'clear negative impact on working conditions' under public contracts. ETUC called for a revision of the procurement directives that promotes 'quality jobs and guarantees the respect of workers'. It argued that public procurement procedures should clearly indicate selection criteria, including support for collective bargaining and promotion of direct jobs, and that those criteria, including social criteria, should be mandatory. After adoption of the proposal, ETUC welcomed the recognition that 'the role of collective bargaining' is a consideration to be taken into account as part of socially responsible procurement.
European Parliament supporting analyses
- Ashton, D. and Karamfilova, E., EU public procurement legislation: Implementation and upcoming review, EPRS, European Parliament, March 2026.
- Guadagno, F., Giffoni, F., Reiter, O. and Schito, M., Developing lead markets through "Made in Europe" - Evaluating mandatory procurement instruments and their economic impact, Policy Department for Transformation, Innovation and Health, Directorate‑General for Economy, Transformation and Industry, European Parliament, September 2026.
Further references
- Capgemini Invent, Ecorys, van der Ende, M., Flickenschild, M. et al., Cost-benefit analysis on the quality and efficiency of public procurement procedures – Final report, Directorate‑General for Internal Market, Industry, Entrepreneurship and SMEs, European Commission, November 2025.
- Rosa, I. d., Tátrai, T. and Tresó, D., Evaluation of transparency and integrity – 2014 public procurement directives, Directorate‑General for Internal Market, Industry, Entrepreneurship and SMEs, European Commission, August 2025.
- World Bank, Competition in the European Union's Public Procurement Markets (2018-2023), September 2025.
Endnotes
Classification
Policy areas: Internal Market and Customs Union
Committees: Internal Market and Consumer Protection (IMCO)
Statement on the use of AI
Any AI‑generated content in this text has been reviewed by the author. Perplexity was used to broaden the range of sources available to the author.
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