10 important changes in the proposed public procurement regulation
The EU Commission has published a proposal for new public procurement rules, aimed at modernising and simplifying the public procurement framework and making it more flexible and effective. The proposed new regulation follows extensive discussions with, and reports by, several stakeholders, such as contracting authorities, suppliers, and trade unions.
The proposed public procurement regulation includes several important changes in relation to the current directives. In this blog post we will highlight ten of the most important changes.
1. One regulation instead of three directives
The proposed regulation replaces the three 2014 directives with a single, directly applicable regulation, bringing together the rules governing classical procurement, the utilities sectors, and concessions in one unified framework. Unlike directives, regulations are directly applicable in all Member States and do not require national transposition. The proposal is therefore intended to eliminate the fragmentation that has resulted from divergent national implementation of the existing directives.
2. Only three main procedures
The proposal contains only three main procedures: an open procedure in which suppliers submit an initial tender directly, and a dynamic procedure in which suppliers first register and are then invited to submit tenders or negotiate for individual procurements during the procedure’s period of validity. These procedures are supplemented by an innovation procedure for the development and procurement of innovative solutions.
3. More room for negotiation
Both the open and the dynamic procedure may be used with or without selection criteria and with or without negotiation, giving contracting authorities considerably greater flexibility than under the current procurement procedures.
4. More detailed rules on the negotiations
Article 33 of the proposed regulation sets out in greaterdetail how negotiations are to be conducted. For example, public buyers are expressly required to ensure that any disclosure of information during negotiations does not adversely affect the commercial interests of the economic operators participating in them.
5. Introduction of a European preference
The proposal introduces a new mechanism for giving preference to tenders submitted by European suppliers and so-called “covered economic operators”, such as suppliers originating from a third country that is party to the World Trade Organisation Agreement on Government Procurement (GPA). Which economic operators, goods, services or works are “covered” will be set out in an online tool that is to be made available by the Commission. Under the European preference mechanism, public buyers may restrict participation or reject a tender. They may also impose certain requirements for the goods, services and works to be offered, or, for evaluation purposes, apply a percentage reduction to the tender price. The Commission may also, under certain circumstances, require public buyers to apply any of the European preference requirements in relation to economic operators, subcontractors, goods, services and works that are not covered.
6. New principle of best quality for public money
The proposed regulation establishes the principle of best quality for public money as a guiding principle for public procurement, thereby serving the objective of efficient public spending and investment.
7. Increased focus on quality
As a general rule, contracts are to be awarded on the basis of the best price-quality ratio, with a requirement that quality criteria be given a weighting of at least 30 % and at least 50 % for labour-intensive contracts. An exception to this rule is if the public buyer can demonstrate that quality is ensured by other means (a ”comply or explain” model).
8. Electronic suitability verification replaces the ESPD
The proposal introduces an electronic suitability verification service based on digital business credentials and digital company profiles, applying the once-only principle. These digital credentials and profiles are intended to serve as the primary evidence ofthe absence of exclusion grounds, fulfilment of selection criteria, and origin requirements. Member States are to connect the relevant national registers (criminal records, tax and social security databases, insolvency registers, and others) to this digital tool free of charge by 15 June 2029 at the latest, in order to enable automated verification.
9. Contract modifications up to 15 % always permitted
The proposal raises the threshold for non-substantial modifications for all contracts from 10 to 15 % of the original contract value. Modifications within this limit may be made without a new procurement, provided they do not disturb the original economic balance of the contract.
10. Greater scope for public buyers to take security considerations into account
Under the proposed regulation, public buyers shall take appropriate measures to ensure the protection of the security and public safety interests of the Union or one or more Member States. Relevant security and public safety interests may include, e.g. protection of critical infrastructure, prevention of espionage, crisis preparedness or ensuring public health.
The Commission’s proposal is only the starting point, and negotiations between the Parliament and the Council are expected before a final text is agreed. It is difficult to predict when the new public procurement regulation will enter into force. If the legislative process takes approximately two years, as was the case for the adoption of the current public procurement directives, the new regulation could be adopted in late 2028. The Commission has further proposed a two-year delay before the new rules become applicable. Accordingly, the new framework is unlikely to apply before 2030.
The proposed regulation in its entirety can be found here.
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Martin Bogg and Johan Persson Ed, part of our EU & Competition team of experts.