Leaked draft offers first insight into the reform of the EU public procurement framework.

In Mid-July, a draft Regulation on public procurement and concessions was leaked, offering a first indication of the direction in which the reform of the EU public procurement framework may be heading. The European Commission is officially due to present its proposals for the revision of the procurement rules on 9 September. While the draft may still be subject to changes before then, it is already attracting considerable attention and sparking intensive debate.

From three Directives to one Regulation

The Commission appears to be planning to consolidate the existing Directives on public procurement, utilities procurement and concession contracts into a single Regulation, with the aim of simplifying the legal framework and reducing administrative burdens through more streamlined procedures. The draft also highlights the growing role of public procurement as an instrument of industrial policy. To this end, it seeks to provide a clearer legal basis for green public procurement, further specify social policy objectives and create greater scope for innovation procurement. Under the proposed rules, the lowest-priced tender would no longer automatically secure the contract award. Instead, quality criteria would have to account for at least30 percent of the overall evaluation, rising to at least50 percent for labour-intensive contracts.

A European Preference

An entire chapter is dedicated to the concept of a "European Preference". Under the proposal, public procurement would be used more strategically as a tool of industrial, security and trade policy, thereby contributing to strengthening Europe's competitiveness and resilience.

Contracting authorities would be able to restrict participation in procurement procedures to economic operators and subcontractors established in the European Union, as well as to operators from third countries covered by the EU's public procurement commitments. This would notably include companies from countries that are parties to the WTO Agreement on Government Procurement (GPA) or have concluded a bilateral or multilateral trade agreement with the European Union.

Furthermore, contracting authorities could require that the goods, services or works offered originate in the Union or comply with specified European origin requirements. They would also be able to give preference to EU-based economic operators, provided that such preference has been clearly set out in the procurement documents from the outset.

Stricter rules on subcontracting

Long subcontracting chains have repeatedly come under scrutiny in the debate on fair working conditions, particularly in the cross-border context. They are widely regarded as lacking transparency, making it more difficult to establish responsibility and creating opportunities for labour exploitation and unfair competition. Business organisations have therefore long called for stricter rules. t an event hosted by the European Parliament in early July, the European Builders Confederation (EBC) and the European Federation of Building and Woodworkers (EFBWW), among others, called for excessive subcontracting chains to be limited as part of the ongoing reform of the EU public procurement framework.

The leaked draft reflects these demands. It would prohibit the complete subcontracting of awarded contracts. Intended subcontracting arrangements would have to be disclosed already at the tender stage. In addition, transparency requirements relating to subcontracting would be strengthened. Contracting authorities would also be able to require that certain critical tasks be carried out exclusively by the main contractor. As a result, excessively complex subcontracting chains would become significantly more difficult to establish.

Initial reactions

Initial reactions to the leaked draft have been mixed. Criticism has primarily come from local and regional authorities, which view the proposed changes as marking a fundamental shift in the public procurement framework. In particular, they argue that the proposals would reduce their room for interpretation and question whether the new rules would genuinely simplify procurement procedures. Environmental NGO ECOS has also expressed disappointment, arguing that environmental considerations would remain voluntary and are therefore unlikely, in its view, to make a meaningful contribution to the decarbonisation of the economy. By contrast, the construction sector has broadly welcomed the move away from an exclusive focus on the lowest-priced tender. Sources in the European Parliament have also responded positively, particularly to the Commission's efforts to simplify the EU public procurement framework.