On Public procurement

MOTION FOR A EUROPEAN PARLIAMENT RESOLUTION

on public procurement

(2024/2103(INI))

– having regard to the Treaty on the Functioning of the European Union, in particular Article 114 thereof,

– having regard to Directive 2014/24/EU of the European Parliament and of the Council of 26 February 2014 on public procurement and repealing Directive 2004/18/EC,

– having regard to Directive 2014/25/EU of the European Parliament and of the Council of 26 February 2014 on procurement by entities operating in the water, energy, transport and postal services sectors and repealing Directive 2004/17/EC,

– having regard to Directive 2007/66/EC of the European Parliament and of the Council of 11 December 2007 amending Council Directives 89/665/EEC and 92/13/EEC with regard to improving the effectiveness of review procedures concerning the award of public contracts (Remedies Directive),

– having regard to the Commission work programme 2025 of 11 February 2025 entitled ‘Moving forward together: A Bolder, Simpler, Faster Union’ (COM(2025)0045),

– having regard to the Commission communication of 26 February 2025 entitled ‘The Clean Industrial Deal: A joint roadmap for competitiveness and decarbonisation’ (COM(2025)0085),

– having regard to the Commission communication of 29 January 2025 entitled ‘A Competitiveness Compass for the EU’ (COM(2025)0030),

– having regard to the Commission communication of 19 June 2024 entitled ‘2024 European Semester – Spring Package’ (COM(2024)0600),

– having regard to the Commission communication of 3 October 2017 entitled ‘Making Public Procurement work in and for Europe’ (COM(2017)0572),

– having regard to the opinion of the European Committee of the Regions of 4 December 2024 entitled ‘Shock-proofing European regions: Strengthening local and regional economic resilience in the strategic evolution of the Single Market’,

– having regard to the European Court of Auditors’ Special report 28/2023 of 4 December 2023 entitled ‘Public procurement in the EU. Less competition for contracts awarded for works, goods and services in the 10 years up to 2021’ (ECA Special Report),

– having regard to the Council conclusions of 24 May 2024 on the European Court of Auditors’ Special Report No. 28/2023 entitled ‘Improve a fair and effective competition for EU public procurement contracts awarded for works, goods, and services’,

– having regard to its resolution of 16 December 2020 on a new strategy for European SMEs,

– having regard to its resolution of 13 July 2023 on the state of the SME Union,

– having regard to the reports by Mario Draghi and Enrico Letta,

– having regard to Rule 55 of its Rules of Procedure,

– having regard to the opinions of the Committee on International Trade and the Committee on Employment and Social Affairs,

– having regard to the report of the Committee on the Internal Market and Consumer Protection (A10-0000/2025),

A. whereas public procurement represents approximately 14 % of the EU’s gross domestic product and serves as an important instrument for economic growth, innovation and social cohesion;

B. whereas the 2014 reform aimed to simplify procedures, enhance the participation of small and medium-sized enterprises (SMEs) and integrate strategic procurement objectives, yet challenges remain in efficiency, access to data and streamlining enforcement;

C. whereas the Commission’s final report entitled ‘SME needs analysis in public procurement’ points out that public procurement practices still need to be simplified and standardised;

D. whereas public procurement regulations must take into account the specific nature of different sectors and industries, recognising that a uniform approach to regulatory measures, such as payment terms, may not be suitable for all sectors, and that tailored provisions in sector-specific regulations are necessary to ensure that the overall procurement frameworks align with industry-specific operational and financial realities;

E. whereas a lack of transparency and fairness in procurement procedures, including concerns over favouritism, unclear selection criteria and insufficient oversight mechanisms, undermines trust in public contracting and creates opportunities for corruption;

F. whereas European businesses encounter significant difficulties in accessing international public procurement markets due to protectionist policies in non-EU countries;

G. whereas an increase in geopolitical tensions leads to a reshuffle in international trade and new economic dynamics and poses risks to the stability of supply chains;

H. whereas public procurement policies should prioritise economic feasibility over other objectives, ensuring that green products and services offered in tenders are competitive without undue reliance on government subsidies and preventing undue costs and the inefficient spending of taxpayers’ resources;

I. whereas the increasing digitalisation of procurement processes must be accompanied by robust cybersecurity measures and harmonised digital platforms for procurement submissions;

J. whereas despite efforts to promote the participation of SMEs in public procurement, their involvement remains limited because of large contract sizes, excessive administrative requirements and a lack of tailored support mechanisms that would enable them to compete effectively with larger entities;

K. whereas procurement strategies must prioritise economic retention within local economies, enhancing community wealth, job creation and long-term financial stability, thereby strengthening the role of SMEs in public tenders;

Strategic objectives

1. Stresses that European public procurement should remain an essential pillar of the properly functioning internal market and broader economy, and that targeted reform is needed to unlock its true potential; cautions, however, that the increasing tendency to use public procurement as a vehicle for multiple, often conflicting policy objectives risks adding complexity, bureaucracy and procedural burdens, rather than delivering tangible market impact;

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;

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;

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;

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;

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;

Main challenges

7. 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 business and creating an uneven playing field;

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;

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;

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;

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;

Areas for improvement

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;

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

Digital transformation of European public procurement

14. Strongly believes that digitalisation should remain a key element in lowering costs and streamlining public procurement for contracting and bidding entities; points out, however, that to fully harness the potential of digital tools, the Commission and the Member States must completely rethink how future procurement legislation should facilitate digitalisation, rather than merely digitalising currently analogue processes;

15. Recommends a particular focus on automating certain processes, such as through moving to a transaction-based from an outdated notification-based system, reducing the amount of e-forms and integrating the European single procurement document and eCertis into broader administrative and business systems, especially considering the potential offered by disruptive technologies such as artificial intelligence;

16. Is convinced that the Commission, in dialogue with stakeholders, should assess which procedures provide little added value relative to their costs and then either automate them or eliminate them entirely;

17. Draws attention to the successful adoption of the GovTech procurement model in countries such as Poland, Lithuania and Denmark, as well as the Commission’s recognition of the model as a key tool in achieving the goals outlined in the EU 2030 Digital Compass;

Specific recommendations for improving European public procurement

18. Calls for a revision of the EU public procurement framework focused on reducing and simplifying the rules; stresses that the Commission should propose a harmonisation limited to essential aspects where it can deliver the greatest added value, such as digital procurement tools and the standardisation of tender procedures and structures for joint procurement at both national and cross-border level; emphasises that the objective should not be harmonisation for its own sake, but rather the improvement of efficiency and predictability, as well as the reduction of excessive administrative burdens on contracting authorities and bidders, while maintaining sufficient flexibility to ensure the prudent use of taxpayers’ money;

19. Requests the establishment of uniform guidelines, standardised monitoring mechanisms and effective enforcement tools to promote legal certainty and consistency across public procurement in the EU;

20. Supports the introduction of standard contract section templates across the Member States in order to create greater uniformity in tendering procedures and ensure legal clarity for contracting authorities and economic operators;

21. Recommends that the Commission fully utilise current tools to prevent unfair competition from non-EU countries;

22. Urges the Commission and the Member States to take decisive action against non-EU entities that exploit state subsidies to gain an unfair advantage in procurement processes; recommends the introduction of stronger measures against abnormally low bids put forward by non-EU entities such as mandating independent cost assessments and ensuring that price undercutting does not undermine fair market competition;

23. Seeks to ensure that public procurement incorporates mechanisms that support regional economic resilience, the equitable distribution of opportunities and the sustainability of local economies, which will balance out the disproportionate centralisation of economic activity in urban hubs; underlines, in this context, the role of agriculture producers and their supply chains;

24. Recommends the implementation of strategic procurement models that prioritise long-term value and resilience over short-term cost reductions, particularly in sectors such as healthcare, energy and security;

25. Supports the modernisation of procurement criteria to reflect advancements in technology and security, ensuring that new procurement frameworks allow for agile responses to changing economic and geopolitical landscapes;

26. Calls for enhanced SME support mechanisms to enable smaller businesses to effectively compete in public tenders, including a mandatory SME test on new rules, tailored financial instruments, technical assistance programmes and a reduction in bureaucratic constraints that disproportionately affect SME participation;

27. Calls for the simplification of selection criteria and the creation of a digital database for pre-qualified SMEs to streamline their participation in public procurement; stresses that the EU public procurement framework must ensure equitable access for SMEs and local businesses by promoting simplified procedures, proportional requirements and the mandatory division of contracts into smaller lots to prevent dominance by large entities;

28. Supports contract pricing flexibility through the introduction of provisions that allow price adjustments in response to inflation, material cost increases and changes in labour laws, ensuring contract viability without imposing financial strain on public authorities;

29. Calls for the establishment of special procurement rules for scientific research and innovation projects, recognising their critical role in driving economic and technological progress;

30. Supports a framework for robust emergency procurement measures that enables rapid response mechanisms for critical supply shortages, ensuring that procurement rules allow for accelerated processes without compromising competition and transparency;

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31. Instructs its President to forward this resolution to the Council and the Commission.

EXPLANATORY STATEMENT

Public procurement represents approximately 14% of the EU’s GDP and serves as a fundamental mechanism for economic growth, innovation, and social cohesion. However, the current framework is plagued by inefficiencies, administrative burdens, and declining competition. The rationale for reforming the EU’s public procurement framework is to enhance efficiency, competition, and economic sustainability.

Public procurement plays a vital role in ensuring the efficient allocation of resources and delivering essential services and infrastructure projects. However, despite past reforms, many challenges persist that hinder its effectiveness. This report aims to present a thorough justification for revising the current framework, identifying key areas requiring improvement, and recommending measures to optimize procurement policies to serve the best interests of European economies and societies.

Bureaucratic complexity and administrative burdens have become a major obstacle. The existing procurement directives contain 476 articles spanning 907 pages, creating significant compliance costs for both contracting authorities and suppliers. The length of administrative procedures has increased since 2021, delaying the delivery of essential public projects. There is a pressing need for simplification to facilitate participation, particularly for SMEs and cross-border suppliers.

A major issue is the fragmentation of regulatory frameworks across different Member States. While EU directives provide overarching guidance, national interpretations and additional requirements have led to inconsistencies that hinder efficiency. This results in businesses facing different rules and expectations depending on the country in which they bid for public contracts. Standardizing procurement processes and ensuring a more uniform application of rules will reduce complexity and increase accessibility.

Competition is declining, leading to increased market concentration. The European Court of Auditors’ Special Report 28/2023 highlights a worrying trend of declining competition in public procurement, with an increasing number of tenders receiving a single or no bid. The over-reliance on large-scale contracts favours dominant players, limiting access for SMEs and reducing innovation. Ensuring fair competition requires contract structuring that allows for greater SME participation, such as mandatory contract division into smaller lots.

SMEs form the backbone of the European economy, yet their participation in public procurement remains disproportionately low. Large-scale contracts often discourage smaller firms from bidding due to resource constraints and the complexity of requirements. By mandating contract division, ensuring fairer selection criteria, and promoting consortium participation for smaller firms, the market can be made more inclusive, fostering diversity and innovation in the bidding process.

Transparency and accountability remain inadequate. Public procurement processes lack sufficient oversight, with low publication rates for contract awards and limited accessibility to procurement data. Favouritism, unclear selection criteria, and insufficient oversight mechanisms undermine public trust and create opportunities for corruption.

The flaws in the current award criteria hinder the effectiveness of public procurement. The persistent focus on the lowest price criterion leads to suboptimal outcomes by disregarding long-term value, quality, and innovation. A shift toward the “Most Economically Advantageous Tender” (MEAT) principle must be reinforced to prioritize quality, and technological advancement over cost alone. Digital procurement tools should be leveraged to improve evaluation transparency and standardization.

The lowest-price approach fails to account for long-term cost efficiency, lifecycle costs, and sustainability. This often results in short-term savings at the expense of higher long-term operational costs. By shifting toward MEAT principles, procurement decisions will favour quality, durability, and strategic impact, ensuring that taxpayer money is spent efficiently.

Strategic considerations for economic and security stability must be incorporated into procurement policies. Public procurement should support the resilience of strategic industries, particularly in areas such as pharmaceuticals, energy, and defence. Procurement policies should prevent artificial market distortions by ensuring that non-viable technologies do not receive preferential treatment without a strong market rationale.

Geopolitical factors, global supply chain disruptions, and economic uncertainties highlight the need for procurement strategies that bolster domestic industries and reduce dependency on external suppliers. Strengthening industrial resilience through procurement policies can safeguard critical sectors and maintain economic stability.

Regulatory simplification and procedural efficiency are critical. The number of articles and pages in procurement directives should be reduced to focus strictly on procedural aspects. Documentation requirements must be streamlined, and digital procurement platforms integrated to lower compliance costs. Standard contract templates should be introduced across Member States to create uniformity and predictability in tendering procedures.

Competition and SME participation should be enhanced. An SME test should assess the impact of new regulations on smaller enterprises. Contract structuring must ensure equitable access for SMEs, including digital pre-qualification databases to facilitate their participation. Selection criteria and subcontracting rules should be simplified to prevent large players from dominating the market.

Transparency and oversight should be improved. All contract awards above a specified threshold must be published to ensure market-wide visibility. An independent audit mechanism should be established to monitor procurement integrity and enforce anti-corruption measures. A standardized performance evaluation framework for contractors should be developed to ensure accountability in service delivery.

Clear guidelines should be defined for prioritizing contracts that contribute to economic resilience, supply chain security, and technological leadership. Flexibility in contract pricing should be introduced to account for inflation, material cost fluctuations, and labour law changes. Rapid-response procurement mechanisms for emergencies should be established, allowing expedited processes without sacrificing competition or transparency.

Digital transformation and innovation support are essential. The adoption of digital procurement tools must be expanded to reduce bureaucratic constraints and increase efficiency. The use of GovTech solutions in pre-commercial procurement should be promoted to facilitate innovation-driven purchasing models. E-procurement procedures should be standardized across the EU to ensure a seamless and interoperable procurement ecosystem.

A more digital approach will lead to better procurement outcomes, reduce human error, and create an efficient, competitive, and transparent market. Automated assessment tools, data analytics, and AI-driven risk evaluation systems can transform the way procurement decisions are made, ensuring consistency and efficiency.

The proposed report based on experience shared by many stakeholders aims to balance efficiency, competition, and economic sustainability in public procurement. By reducing bureaucracy, enhancing market access, and reinforcing transparency, the EU can establish a procurement framework that not only delivers better value for taxpayer money but also strengthens Europe’s competitive position in strategic industries. These reforms are crucial for ensuring that public procurement remains a robust tool for economic growth, industrial resilience, and long-term innovation.

By addressing administrative inefficiencies, fostering fair competition, and aligning procurement policies with strategic industrial and economic priorities, the European Union can create a more sustainable and resilient public procurement landscape that benefits businesses, governments, and society as a whole.

ANNEX: ENTITIES OR PERSONS FROM WHOM THE RAPPORTEUR HAS RECEIVED INPUT

Pursuant to Article 8 of Annex I to the Rules of Procedure, the rapporteur declares that he received input from the following entities or persons in the preparation of the draft report:

Entity and/or person

Pracodawcy RP

Amazon Europe Core SARL

DIGITALEUROPE

Hewlett Packard Enterprise

SAP

The Danish Chamber of Commerce

Veolia Environnement

Confederation of European Security Services

EUROPEAN FEDERATION OF BUILDING AND WOODWORKERS

BUSINESSEUROPE

European Federation of Public Service Unions

European & International Booksellers Federation

SMEunited aisbl

European Chemical Industry Council

Danish Trade Union Confederation EU Office

EUROPEAN TRADE UNION CONFEDERATION

Deutscher Landkreistag

Conseil des Communes et Régions d'Europe

PETITA I MITJANA EMPRESA DE CATALUNYA

OpenForum Europe

Red Cross EU Office

Bentley Systems

FoodServiceEurope

Danish Industry

Water Europe

Związek Województw Rzeczypospolitej Polskiej

Medicines for Europe

Polski Komitet Energii Elektrycznej

ProVeg International

Fair Trade Movement

SustainablePublicAffairs

Social Services Europe

European Railway Industry Association

Architects’ Council of Europe

The Sustainable Energy Finance Association

The Open Cloud Coalition

NetApp Ireland Limited

The list above is drawn up under the exclusive responsibility of the rapporteur.

Where natural persons are identified in the list by their name, by their function or by both, the rapporteur declares that he has submitted to the natural persons concerned the European Parliament’s Data Protection Notice No 484 (https://www.europarl.europa.eu/data-protect/index.do), which sets out the conditions applicable to the processing of their personal data and the rights linked to that processing.