New EU procurement rules could affect social security institutions.

On 9 September, the European Commission presented its proposal for a regulation on public contracts and concessions. The three existing public procurement directives would be brought together in a single regulation. The proposal aims to simplify procedures and give greater weight to quality in the award of public contracts. It would also make public procurement a stronger instrument of European industrial policy. According to Executive Vice-President Stéphane Séjourné, the proposed rules cover around 600 billion euros in public procurement. The Commission wants this spending to do more to strengthen the competitiveness of European companies and reduce dependencies on third countries.

The Commission says the reform would reduce the length of the EU procurement rules from around 900 to 200 pages. Presenting the proposal to the European Parliament on 14 September, Séjourné described this as a significant contribution to simplification. Whether a shorter rulebook will translate into simpler procedures remains to be seen.

Greater weight for quality

A central element of the proposal concerns award criteria. As a general rule, contracts would be awarded on the basis of the best price-quality ratio, rather than price alone. Quality criteria would have to account for at least 30 per cent of the total score, or at least 50 per cent for labour-intensive contracts. Public buyers would continue to choose the criteria relevant to each contract. They could depart from the minimum weightings if they can ensure quality by other means.

The proposal takes a broad view of quality. Alongside the technical and functional characteristics, public buyers could consider environmental, social, innovation, security and resilience aspects, as well as European preference. As a general rule, only the minimum weightings for quality criteria and compliance with applicable labour, social and environmental law would be mandatory. Beyond these requirements, public buyers could apply further environmental, social and innovation criteria and other quality considerations, provided they are linked to the subject matter of the contract. They would therefore retain discretion over the specific criteria they use.

European preference for security of supply

The proposal would also use public procurement more actively to strengthen the European economy and reduce dependencies on third countries. To this end, it introduces a "European preference", which would allow public buyers, under certain conditions, to restrict the participation of economic operators from third countries in procurement procedures. This could apply, for example, where EU operators do not enjoy comparable market access in the third country concerned or where security-of-supply risks arise.

The origin of the goods and services offered could also play a role. Public buyers could exclude tenders where the share of production in the EU accounts for less than 50 per cent of the tender value. The Commission could also make European preference requirements mandatory through delegated acts where this is in the Union’s interest.

Exceptions are envisaged where the required goods, services or works are unavailable in the Union, no suitable alternative exists or applying the preference would lead to disproportionate costs. The provisions of the Critical Medicines Act would remain unaffected by the new public procurement rules. The Council and the European Parliament have reached a provisional agreement on that Act. It aims to make the production of critical medicines in Europe more attractive, improve their availability in the Union and reduce dependencies on third countries.

A new EU public procurement marketplace

The proposal would establish an EU public procurement marketplace linking Member States’ electronic procurement systems. This should make it easier for businesses to access tender opportunities across the EU. Eligibility checks would be automated, while data exchange between public buyers’ procurement systems would be improved.

No increase in procurement thresholds

During the consultation on the revision of the EU public procurement rules, several stakeholders, including German Social Insurance (DSV), called for a substantial increase in the thresholds above which EU procurement rules apply (see the DSV position of 17 February). The Commission has not taken up this request. Apart from works contracts, the proposed thresholds for supply and service contracts would actually decrease. The threshold for social, health and education services would remain at 750,000 euros.

What does the reform mean for social security institutions?

The proposal matters to social security institutions in several ways. They award public contracts themselves, for example for IT systems and services. They are also involved in shaping the provision of healthcare, including through pharmaceutical rebate contracts. The greater emphasis on the best price-quality ratio and the European preference framework could therefore affect their procurement practices.

Social security institutions will also have to consider the proposed digital access to social security databases. It would allow public buyers to check whether bidders have paid their social security contributions. An operator whose failure to meet those obligations has been established by a final judicial or administrative decision would, as a rule, be excluded from the procurement procedure.

Finally, the proposal would also change the rules on subcontracting. Passing an entire contract on to subcontractors would no longer be allowed, and there would be greater transparency about the subcontractors involved. Member States could impose further restrictions where there is a heightened risk of breaches of social or labour law obligations.