What changed between the draft committee report and the plenary report

Added:P. whereas contracting authorities operate in diverse local and market contexts and must retain the freedom to define the subject, scope and strategic priorities of procurement in line with their actual needs and capacities; whereas the principle of proportionality and subsidiarity must be safeguarded in any EU-level approach to sustainable procurement;

Added:Q. whereas it is necessary to bolster trust in public procurement; whereas a lack of transparency and fairness in procurement procedures, including concerns over favouritism, unclear selection criteria, insufficient oversight mechanisms and insufficient exclusion and sanctioning, undermines trust in public contracting and creates opportunities for corruption; whereas the over-reliance on the lowest price criterion may in some cases exert downward pressure on the quality of services and safety and working conditions and may have a detrimental long-term economic impact on procuring authorities; whereas there have been cases of contracts being awarded in the absence of actual competition and with opacity and a lack of effective external control in the selection criteria, highlighting the urgent need to strengthen the principles of transparency, equality and legality at all stages of public procurement procedures;

Added:R. whereas European businesses, particularly SMEs, encounter significant difficulties in accessing international public procurement markets due to protectionist policies in non-EU countries, while the EU maintains one of the most open procurement markets globally, leading to unfair competitive disadvantages for EU companies; whereas, in addition to protectionist policies, fair competition is often distorted by product subsidisation on the part of governments of non-EU countries, discriminatory measures and a lack of reciprocity and legal certainty;

Added:S. whereas the EU has recently added the International Procurement Instrument and Foreign Subsidies Regulation to its trade defence toolbox to promote reciprocity in access to international public procurement markets and to ensure a level playing field for EU companies and products; whereas environmental, social, labour and due diligence requirements would apply to the economic operators of non-EU countries in accordance with Directives 2014/23/EU, 2014/24/EU, 2014/25/EU and 2024/1760 and other EU legislation;

Added:T. whereas the World Trade Organization (WTO) Agreement on Government Procurement 2012 has not yet been signed by all WTO members and its latest version does not include, among other things, the global labour and environmental standards adopted since its conclusion, nor an updated inflation adjustment mechanism;

Added:U. whereas the CJEU judgments on the participation of foreign bidders in EU public procurement procedures (Case C-652/22 and C-266/22) clarify that foreign bidders from countries that have not concluded a multilateral, plurilateral or bilateral agreement do not have secured access to the EU procurement market; whereas the CJEU reaffirmed the EU’s exclusive competence in this area and confirmed that in the absence of such agreements, contracting authorities may, in accordance with EU law, limit or exclude these bidders – a situation that may lead to divergent national practices;

Added:V. whereas an increase in geopolitical tensions is leading to a reshuffle in international trade and new economic dynamics, resulting in the emergence of new strategic dependencies driven by import concentration and limited import substitutability, and poses risks to the stability of supply chains; whereas this requires the enhanced and strategic use of public procurement in supporting the EU’s economy and its capacity for resilience, reducing harmful dependencies and strengthening its strategic autonomy;

Added:W. whereas public procurement policies should promote European competitiveness and innovation;

Added:X. whereas the lowest price is an important award criterion in most tenders in the EU – in some Member States it is applied in up to 95 % of cases or is sometimes even the sole criterion in both the tender and award stages of a procurement procedure; whereas the ELA, in its May 2024 report, observes that reliance on the lowestprice criterion – particularly in labourintensive sectors where staff costs dominate – can exacerbate the occurrence of undeclared work and may undermine service or product quality, sustainability and social standards; whereas SME representatives and people interviewed from SMEs repeatedly report that contracting authorities ignore the horizontal social clause, noting that they award contracts solely on the basis of the lowest price, which encourages abnormally low bids and discourages the participation of bidders that comply with labour laws and practices;

Added:Y. whereas the CJEU judgment in Case C-395/18 confirms that the requirements in Article 18(2) of Directive 2014/24/EU laying down that economic operators must comply, in the performance of public contracts, with obligations relating to environmental, social and labour law, constitute a binding principle, in the same way as the other principles referred to in paragraph 1 of that article, namely equal treatment, non-discrimination, transparency and proportionality; whereas the judgment also clarifies that Member States may take into account violations by subcontractors when determining grounds for exclusion, provided that the principle of proportionality is strictly respected;

Added:Z. whereas public procurement represents a key tool to actively support the transition to a sustainable, inclusive and fair economy and can be used to promote social justice and decent working conditions; whereas contracting authorities should be encouraged to pursue public interest objectives through procurement, including social inclusion, quality jobs, equal opportunities, territorial cohesion and support for social economy actors;

Added:AA. whereas unlocking the full potential of strategic public procurement requires shifting from a purely cost-based approach to one that also considers resilience and social and environmental value, including through respect for collective bargaining and fundamental labour rights;

Added:AB. whereas subcontracting is crucial for fair competition for SMEs and their ability to rely on specialised expertise; whereas it can also enhance efficiency, innovation and SME participation in public procurement; whereas, due to legal ambiguities and weak enforcement, multiple layers of subcontracting may dilute accountability, increase risks of labour law violations and hinder effective enforcement;

Added:AC. whereas the increasing digitalisation of procurement processes must be accompanied by robust cybersecurity measures, interoperability prerequisites and easy-to-use and harmonised digital platforms for procurement submissions, and ensure transparency and machine readability for analytical purposes; whereas digitalisation can, furthermore, contribute to simplifying access for businesses, particularly micro, small, and medium-sized enterprises, to public procurement, as well as reduce the bureaucratic burden for smaller contracting authorities;

Added:AD. whereas rather than adopting a ‘European only’ stance, the EU should focus on the best possible quality, while taking into account a wide range of conditions, including price, safety, quality, sustainability, resilience and labour conditions; whereas it should also focus on the promotion of partnerships with its democratic allies;

Added:AE. whereas despite the objective of the 2014 reform, efforts to promote the essential participation of SMEs in public procurement, their involvement remains limited because of large contract sizes, disproportionate administrative requirements, a lack of tailored support mechanisms that would enable them to compete effectively with larger entities, a lack of clarity in tender notices and recurring payment delays;

Added:AF. whereas procurement strategies can promote an economic environment conducive to local growth, enhancing community wealth, job creation and long-term financial stability, thereby strengthening to the greatest extent possible the role of SMEs, including start-ups and social economy organisations, in public tenders;

Added:AG. whereas Article 27 of the UN Convention on the Rights of Persons with Disabilities establishes the principle of equal employment opportunities in accessible and inclusive labour markets; whereas Directive 2014/24/EU on public procurement enables the incorporation of social criteria in contract awards, including measures that support inclusive employment and address social exclusion; whereas the EU strategy for the rights of persons with disabilities 2021-2030 acknowledges reserved contracts under Directive 2014/24/EU as one tool among others for ensuring accessibility standards;

Added:AH. whereas applying the MEAT criteria, taking into account product life cycle and environmental impact, may support rational and long-term public procurement decisions;

Added:AI. whereas the transposition of European public procurement rules into national law is sometimes ineffective, leading to inconsistencies in implementation, legal uncertainty and barriers to access for economic operators; whereas, to prevent these implementation gaps and ensure consistent application, detailed guidance frameworks should be established to assist Member States in effectively transposing the rules;

Added:AJ. whereas systematic registers of contract performance can enhance the ability of contracting authorities to swiftly exclude unsuitable actors from procurement processes, including actors linked to criminal networks and foreign interference, prevent labour exploitation and enhance reliable contract performance; whereas the effective interoperability and cross-border accessibility of these registers across the Member States is important to strengthen transparency, safeguard public funds, support the internal market and reinforce the security and integrity of critical public infrastructure and services;

Strategic objectives

Change 3

Changed:1. Stresses that European public procurement should remain an essential pillar of thea properly functioning internal market and broader economy, and that ambitious, targeted reform is needed to unlock its true potential;potential, cautions,encourage however,production thatin the increasingMember tendencyStates and contribute to useresilient, secure and strategic supply chains; stresses the need for the harmonised implementation of the current and the reformed legislative framework by the Member States; calls on the Commission to streamline and clarify the focus of public procurement asgoals, aincluding vehiclethose for multiple,strategic oftenprocurement, conflictingby policyestablishing objectivesa risksmore addingfocused, complexity,economically bureaucracyviable, precise and proceduralnon-conflicting burdens,set ratherof thanobjectives that are clear, measurable and capable of delivering tangible market impact; calls, therefore, for improved legal certainty and coherence in order to simplify the application of the rules by contracting authorities, emphasising that many procurement procedures are excessively lengthy, thereby delaying essential investment; adds that public procurement should bring value to the public in addition to contributing to balanced economic development across the EU;

Change 4

Removed:2. Calls, therefore, on the Commission to fully align the public procurement reform with its strategic objectives aimed at reducing bureaucracy, simplification and boosting European competitiveness; advises against measures that could compromise any of these principles;

Added:2. Considers that global competition is increasingly shaped not only by market forces, but also by state-led industrial strategies, including foreign subsidies, overcapacity and discriminatory procurement practices, which threaten to undermine the competitiveness and resilience of European producers; stresses, in this context, the importance of reinforcing Europe’s strategic resilience and economic security by promoting the development of critical and nascent industries in key sectors; recognises the need to strengthen the single market and the EU’s strategic autonomy by introducing preference to European goods and services in targeted strategic sectors; supports exploring how public procurement can serve as a targeted tool to stimulate demand for innovative and sustainable European-made products and technologies, and to anchor industrial capacity within the EU; recognises, furthermore, the potential of EU-content or resilience criteria – if designed proportionately – to support long-term security of supply in sensitive areas; underlines, however, that any strategic orientation must remain anchored in legal certainty, transparency and fair competition, avoiding fragmentation of the internal market, distortion of international commitments or the alienation of strategic partners;

Removed:3. Recognises that, in order to make public procurement more accessible, particularly for SMEs, updated versions of directives must aim at substantially reducing the current 476 articles or 907 pages of law and must continue to be strictly procedural in character, specifying how rather than what to buy;

Added:3. Acknowledges the Commission’s ongoing evaluation with regards to the revision of the legal frameworks for EU public procurement; highlights that the consultation process should include a regulatory impact assessment respecting free market principles and that its main objective should be delivering value through market-based solutions; calls, therefore, for showcasing the effect of potential new rules aimed at promoting the sustainable and social procurement objectives and measures necessary to ensure fair and effective competition, while at the same time achieving, to as great an extent as possible, the removal of excessive and unnecessary administrative barriers and streamlining regulatory provisions; highlights the importance for flexibility in determining the nature and inclusion of strategic considerations in public procurement procedures;

Removed:4. Reiterates that taxpayers’ money should be spent with utmost prudence and transparency; believes, therefore, that three guiding principles – value for money, competition and anti-corruption measures – remain valid in the context of the upcoming reform;

Added:4. Calls, therefore, on the Commission to fully align the public procurement reform with its strategic objectives aimed at reducing bureaucracy and regulatory burdens, simplification, maintaining high social and environmental standards, guaranteeing ambitious local economic development, promoting access for SMEs and boosting the EU’s competitiveness and security, including by addressing harmful dependencies in respect of certain vital products and services; advises against measures that could compromise any of these principles;

Removed:5. Recognises, in this context, that while public procurement can support strategic industries essential to the security of industrial output and economic stability, it must not be misused to artificially sustain failed policies, such as the Green Deal, or to subsidise non-viable products and services that cannot otherwise compete with traditional market alternatives;

Added:5. Recalls the consistent EU policy objectives reflected in various regulations, such as sustainability, labour standards, human rights, innovation, resilience and circularity, in the context of the upcoming reform; emphasises the need to tackle gold-plating, prevent the emergence of possible barriers during the upcoming reform, and to identify and overcome the main obstacles to sustainable and resilient procurement, guarantee security of supply and ensure fair and effective competition;

Removed:6. Opposes the preferential treatment given to green technologies in public procurement; stresses that if a technology cannot sustain itself in the market without subsidies, it is a clear indication that it may not be commercially viable; insists that public procurement must remain technology neutral and competition-driven;

Added:6. Recognises that, in order to make public procurement more accessible for smaller actors, including social economy organisations involved in public procurement, and particularly for SMEs and start-ups, updated versions of directives must aim at reducing the current 476 articles or 907 pages of law and must continue to be procedural in character, specifying how rather than what to buy; stresses, however, that sufficient flexibility should be maintained for contracting authorities to adapt procurement processes based on their specific needs, ensuring efficiency and the best value for money;

Added:7. Emphasises that any revision should aim to strengthen the enforcement of future procurement laws and must address the complexity of the current rules and ensure legal certainty for contracting authorities; points out that procurement rules must respect the non-discrimination principle and provide clarity regarding the link to the subject matter, in line with the principles of legal certainty and obligations under the WTO Agreement on Government Procurement (GPA) and given the number of sector-specific laws;

Added:8. Points to significant legal and administrative differences across the Member States and their procurement systems, ranging from varying degrees of autonomy for local authorities to differing procurement strategies; recognises the benefits of the directive format, which allows for such diversity while ensuring legal coherence and mutual respect for national systems; calls on the Commission to assess the most appropriate legal instrument in view of the forthcoming reform;

Added:9. Reiterates that taxpayers’ money should be spent with utmost prudence and transparency so as to benefit citizens and, where economically feasible, support sustainable growth; considers that the revision of the directives should aim at completing the objectives set out in 2014 and adjusting to the new challenges Europe has to face; believes, therefore, that three guiding principles – value for money over the entire life cycle, fair competition and anti-corruption measures – remain valid in the context of the upcoming reform and should not be compromised;

Added:10. Recognises, in this context, that while public procurement can be a useful tool for achieving strategic objectives, such as innovation and sustainability or supporting strategic industries in Europe that are essential to the security of industrial output and economic stability, it is an engine for fulfilling tasks whose primary function is to achieve the best value for public tax funds and thus ensure the efficient and transparent procurement of goods and services;

Added:11. Urges the Commission, in the light of the economic slowdown and rising public debt, to carefully assess any legal changes that could further constrain the purchasing power of contracting authorities and limit available vendors, as such constraints could ultimately undermine citizens’ access to high-quality public services and infrastructure; underlines that due consideration must be given to the need for clear rules regarding the treatment of products and economic operators from non-EU countries; cautions, however, against the use of procurement for protectionist purposes; underlines, in this context, that European preference should be compliant with the EU’s WTO commitments;

Added:12. Stresses that support measures should not distort the level playing field; reiterates the importance for European public procurement processes to remain as open as possible and insists that they must remain technologically neutral and competition-driven; highlights that long-term commercial viability should be a guiding principle when assessing technologies for public investment;

Main challenges

Change 5

Changed:7.13. Recognises that significant discrepancies remain between Member States in their implementation and enforcement of public procurement rules, discouraging cross-border bids and the participation of smaller businessbusinesses and creatingsocial economy enterprises, which creates an uneven playing field; notes the varying degrees of implementation of green public procurement across the Member States, with only one third introducing binding obligations and the remainder opting for voluntary approaches;

Change 6

Removed:8. Regrets that competition in public procurement has significantly declined over the past decade, as pointed out in the ECA Special Report, resulting in an increased number of tenders with a single bid or no bids;

Added:14. Notes that, in the context of procuring goods and services and in accordance with the constitutional structures of the Member States – particularly the protection of regional and local self-government under Article 4(2) of the Treaty on European Union – local authorities have the discretion to determine how to fulfil their procurement needs; recalls that they may choose to supply goods in house, cooperate with other public entities, or engage with the market through procurement procedures; believes that the freedom and autonomy of public authorities should be safeguarded and respected;

Removed:9. Notes that procurement procedures have become increasingly complex and burdensome, creating unnecessary administrative hurdles that deter a diverse range of suppliers, including cross-border suppliers, from participating, as well as restricting competition and leading to delays in the delivery of essential public projects; cautions that the ECA Special Report indicates that the length of administrative procedures has increased since 2021;

Added:15. Regrets that competition in public procurement has significantly declined over the past decade, as pointed out in the ECA Special Report, resulting in an increased number of tenders with a single bid or no bids; regrets, furthermore, that the same report finds that contracting authorities implement strategic procurement to a very limited extent and the share of procedures using award criteria other than price is very limited; recognises that the use of strategic public procurement has remained limited due to the lack of legal certainty in the interpretation of the requirement for ‘link to the subject matter of the contract’ provided for contracting authorities and their consequent fear of litigation;

Removed:10. Is concerned that transparency in procurement remains inadequate, as evidenced by persistently low publication rates for contract awards, limited accessibility to procurement data and ongoing risks of fraud and corruption; recalls that favouritism, unclear or biased selection criteria and insufficient oversight mechanisms undermine trust in public contracting;

Added:16. Notes that procurement procedures have become increasingly complex and burdensome, creating unnecessary administrative hurdles that deter a diverse range of suppliers, including cross-border suppliers, from participating, as well as restricting competition and leading to delays in the delivery of essential public projects; stresses that these issues also affect public contracting authorities, particularly smaller local and regional governments; cautions that the ECA Special Report indicates that the length of administrative procedures has increased since 2021; notes, additionally, that the lack of an interoperable digital infrastructure for procurement platforms remains a barrier for businesses, particularly SMEs, contributing to inefficiencies and increasing costs;

Removed:11. Highlights that public contracts continue to be awarded primarily based on the lowest price criterion, restricting procurement authorities from considering additional factors such as innovation and quality-to-price ratio, which leads to suboptimal long-term outcomes misaligned with citizens’ interests;

Added:17. Is concerned that transparency and enforcement in procurement remains inadequate, as evidenced by persistently low publication rates for contract awards, limited accessibility to procurement data and ongoing risks of abuses, fraud and corruption; recalls that favouritism, unclear or biased selection criteria and insufficient oversight mechanisms for enforcement and sanctions undermine trust in public contracting and fairness; stresses the need to establish obligations for publication and reinforced justification for all awards by negotiated procedure without a prior call for competition, in order to guarantee a minimum level of competition, traceability and control, avoiding abuse of legal exceptions; urges the Commission to make use of advanced digital tools and platforms to increase transparency and accountability in public procurement processes and deter corruption practices;

Added:18. Notes that, at present, public contracting authorities already have the option to consider factors such as innovation, resilience, sustainability and social considerations via award, technical specification or contract performance clauses, on a voluntary basis and depending on their decision, as explicitly permitted by the 2014 directives; notes that in certain cases public contracts continue to be awarded primarily on the basis of a lowest price criterion, also owing to insufficient training and financial and human resources, restricting procurement authorities from considering additional factors such as innovation and quality-to-price ratio, which leads to suboptimal long-term outcomes that are misaligned with citizens’ interests; stresses that reliance on the lowest-price criterion limits the ability of contracting authorities to take into account operational costs and to apply life cycle costing;

Added:19. Emphasises that the complexity, excessive qualification criteria and increasing bureaucratic burden of procurement processes disproportionately affect SMEs, local businesses and national contractors, dissuading them from participating and thereby reducing the diversity of bids and undermining sustainable and innovative procurement; observes that SMEs continue to face difficulties in public procurement, despite the establishment of national and European mechanisms, owing in particular to recurring payment delays in some Member States, a lack of clarity and accessibility in national and European tender notices, as well as a lack of transparency in the candidate selection procedures, which contributes to a perception of opacity in the processes;

Added:20. Recalls that the Strategic Analysis Report of 2023 on the construction sector by the European Labour Authority and the Commission report on the application and implementation of Directive (EU) 2018/957 of the European Parliament and of the Council of 28 June 2018 amending Directive 96/71/EC concerning the posting of workers in the framework of the provision of services (COM(2024)0320) have determined that long and complex subcontracting chains can pose numerous challenges for labour enforcement authorities when they are used to escaping legal responsibilities and may lead to unclear accountability and difficulty in ensuring compliance with public procurement contracts and labour obligations; notes, in that context, that the directive does not provide contracting authorities with sufficient tools to effectively address the non-performance of public contracts, and in some cases even hampers authorities wishing to take proactive measures;

Areas for improvement

Change 7

Removed:12. Notes the ongoing debate on updating public procurement thresholds; stresses, however, that the revision should instead focus on reducing administrative burdens and simplifying procedures, as these remain the root cause of many challenges; stresses that addressing these issues effectively would eliminate the need for a discussion on threshold adjustments;

Added:21. Notes that there is currently a strong demand for updating public procurement thresholds in the light of the significant increase in inflation and construction costs in the EU; calls on the Commission to assess the possibilities for advocating an increase in the thresholds at international level and to introduce a mechanism taking into consideration inflation rates; points out that raising thresholds gives contracting authorities greater independence and possibilities to award contracts based on local needs; points out that excessively complicated procedures, which are characterised by a high degree of technical and legal complexity, together with administrative requirements that are sometimes disproportionate to the value of the contract, constitute one of the main problems in the public procurement sector and therefore the Commission’s efforts should go beyond merely negotiating threshold values;

Removed:13. Advocates a clearer distinction between contracting authorities and public undertakings, recognising that the latter often engage in business-driven projects;

Added:22. Notes that while six different procurement procedures provide for flexibility, some of these are rarely employed, such as procedures for innovation partnerships, owing to their complexity and bureaucratic hurdles; believes that streamlining and aligning data reporting obligations for contracting authorities at national and EU level, as well as basic data interoperability requirements, has the potential to deliver added value; considers it essential that the Commission and the Member States systematically analyse procurement data in a comprehensive and structured manner in order to identify and address the underlying causes of declining competition and inefficiencies in procurement processes;

Added:23. Advocates a clearer distinction between contracting authorities and public undertakings;underlines that the freedom and autonomy of public authorities must always be safeguarded and respected; emphasises that the 2014 reform explicitly acknowledges the right of public authorities to provide and organise their services independently through their own institutions, businesses or public undertakings; stresses that the direct provision of services by public or local authorities, the in-house provision of services and public-public cooperation are and should remain available options;

Added:24. Stresses that procurement rules for public undertakings should be better aligned with commercial practices and ensure maximum flexibility to prevent unnecessary restrictions, cost inflation and delays in critical sectors such as energy and utilities; believes that the Commission should analyse this issue in the upcoming impact assessment;

Added:25. Recalls with concern that a significant number of economic operators have experienced exclusion from public procurement procedures because of minor formal irregularities in their tenders, without being afforded the opportunity to remedy such defects, both in open and negotiated procedures; underlines that this practice is detrimental both to the economic operators, which may have invested considerable time and resources in preparing their tenders, and to the contracting authorities, which may be compelled to potentially exclude the MEAT criteria on purely formal grounds; stresses that such rigid formalism undermines the effectiveness, efficiency and competitiveness of public procurement procedures; calls therefore for the establishment of a general principle allowing for the regularisation or clarification of minor irregularities, without the need to cancel the tender, provided that this does not entail a substantial modification of the offer, and insists that this principle should be the rule rather than the exception; emphasises the importance of introducing more flexibility into public procurement procedures while ensuring legal certainty for contracting authorities, including for small and medium-sized contracting authorities;