Public procurement package : getting the best value for money

Public authorities will have more scope to decide how best to spend taxpayers' money on public works, goods or services thanks to new EU rules formally endorsed by the Internal Market Committee on Thursday. Rather than force authorities to accept the lowest bid, the rules would enable them to pick innovative solutions. For example, building a new road cleverly, rather than just cheaply, should ensure that it does not need to be rebuilt after five years.

Public procurement accounts for 19% of EU GDP, making it a powerful lever for achieving specific societal goals. The provisional deals struck with Council in July on three directives (on "classic" procurement, "utilities" and "concession contracts") would enable authorities to consider not only the price, but also environmental or social benefits or innovative ideas offered by a bidder.

For example, a contractor might want to ensure that good quality food is served in a kindergarten or hospital, or undertake to buy from a firm that employs people with disabilities.

Fair competition to provide best value for money

The new directives would also include tougher rules on "abnormally low" bids and subcontracting, so as to ensure compliance with labour laws and collective agreements. "These updates aim to fight dumping and ensure fair competition", said public procurement rapporteur Marc Tarabella (S&D, BE).

More innovative solutions

MEPs also inserted a new procedure to encourage bidders to offer innovative solutions. The draft directives provide for "innovation partnerships" enabling authorities to call for tenders to solve a specific problem without prescribing a solution. Authorities and bidders could then negotiate the most appropriate one.

Less red tape for bidders and easier access for smaller firms

Bidding would be simplified by providing a standard "European Single Procurement Document" in all languages and obliging authorities to share the details of eligible bidders from national databases. The system would be based on self-declarations and only the winning bidder would have to provide original documentation.

The new rules would also encourage the division of contracts into lots, so as to improve access to public procurement for small and medium-sized enterprises.

Concession contracts

Public authorities use concession contracts to hire private firms to supply services or to perform works, such as building roads, bridges or sports arenas.

New EU-wide rules would apply to public contracts worth €5 million or more. They would also give authorities more scope to pick the best offer, relying not only on the lowest price criterion, but also on environmental, social or innovation-related ones.

MEPs acknowledge the special importance of water as a public good and therefore agreed to exclude it from the scope of the concessions directive. However they also ask the Commission to assess the impact of this exclusion three years after the new directive has been transposed into member states' national laws.

"We have negotiated pragmatic, easy to apply new rules for works and services concession contracts so as to benefit all players: public authorities, economic operators and taxpayers" said concessions rapporteur Phillipe Juvin (EPP, FR).

The deals on the "classic" procurement and the "utilities" directive were both endorsed by 27 votes in favour, 1 against and 1 abstention. The deal on concessions was endorsed by 26 votes in favour, 2 against and 1 abstention.


The "Classic" procurement, Utilities (covering water, energy, postal and transport services) and Concessions directives are part of a package of four draft procurement laws tabled by the European Commission in December 2011. The fourth proposal, for a regulation on "third market access", is currently being examined by the International Trade Committee.

Next steps

The final plenary vote on the three agreements is scheduled for November.

Source : European Parliament