The European Commission has presented a decidedly ambitious reform relating to public procurement. A rich market, which in Europe is worth around 2,500 billion euros a year. We are talking about 15% of the Union’s GDP.
The aim is to reduce the fragmentation of the single market by simplifying the rules. It also intends to give a “European preference” to the products and services of the Old Continent. A sort of push to buy European, without however triggering a real obligation.
The commissioner for the single market, Stéphane Séjourné, expressed his opinion in this regard: “The value of public procurement in Europe is more than a community budget over seven years”. This reform, therefore, has gigantic potential, and here is what it provides in detail.
Single regulation and digital platform
We will move to a single regulation, which is the heart of the proposal. The three directives dating back to the last decade will be replaced, subject to the approval of Parliament and Council. This regulation will be applicable in all Member States, which differentiates it from a directive.
Everything will be simplified above all thanks to a single digital platform, on which public bodies will be able to publish the planned tenders, attracting companies from all over the Union. A response to requests that have been coming for years from companies that wanted a more open and still too national market.
The standard award criterion also changes, which will be the best quality-price ratio, with quality expected to account for at least 30%.
What is European preference
The most delicate point is the so-called European preference. The Commission stays away from a blanket obligation. No “Buy European” as an imperative, therefore, at least in this area. This remains limited to the strategic sectors already regulated by two measures under discussion:
- Industrial Accelerator Act;
- Cloud and AI Development Act.
By simplifying the rules, the reform will allow public bodies to include criteria in tenders which, in fact, can favor European suppliers. Until now, EU rules discouraged similar choices, fearing appeals. Now the text introduces a “horizontal European preference framework” for procurement. All in line with the Union’s international obligations.
The reciprocity clause: who is left out
There is an important limitation to highlight. Any European preference will in no way apply to goods and services coming from countries that have reciprocity agreements with the Union. Just think about:
- Norway;
- Swiss;
- Japan;
- Australia;
- New Zealand.
These therefore remain treated as equals, as usual. The reciprocity obligation, however, excludes, among others, China and India. The opening of tenders to other member states then depends on precise value thresholds:
- 5.4 million euros for concessions;
- 140,000 euros for supplies and services.
Returning to Séjourné’s words: “The great powers use public procurement as an instrument of power”. In practice it does not exclude that “Buy European” could also find space in electoral campaigns.
How much is it worth and what changes
Public procurement accounts for 15% of European GDP and affects key sectors such as:
- transport;
- infrastructure;
- energy;
- schools;
- healthcare.
According to the Commission, this reform will bring administrative savings of 649 million euros per year. There will be 80 million lower costs for public bodies and 570 million for businesses. For the moment, however, we are talking about a proposal, which will have to go through a long legislative process before becoming law. If this were the case, it would be a historic change for Italy, net of the many rewrites our procurement code has undergone.
