What happened
The European Commission has put forward a regulation to overhaul public-procurement rules across the EU. The measure would bring together and update three directives adopted in 2014.
Under the proposal, contracting authorities would normally assess tenders using a Best Price-Quality Ratio rather than price alone. Non-price elements would need to account for at least 30% of the assessment. For labour-intensive contracts, their share would rise to at least 50%.
Buyers would choose the relevant quality measures. These could cover environmental performance, social factors, innovation, security and resilience. Authorities could use another method, but would have to explain how they would maintain quality, including through minimum requirements.
Why it matters
Public purchasing represents roughly €2.5 trillion each year, or about 15% of EU gross domestic product. The proposal could therefore make sustainability and other non-price evidence more important for businesses competing for EU public contracts.
Companies bidding for those contracts may need to demonstrate environmental and climate performance across a product or service lifecycle. The proposed framework would also allow criteria intended to support circularity, efficient resource use and a high standard of environmental protection.
Social requirements could address inclusion of disabled and disadvantaged people, equality and non-discrimination, supply-chain human rights, social economy objectives and affordable housing. Businesses supplying EU public buyers should monitor how individual authorities translate these options into tender conditions.
Background
The Commission identified persistent weaknesses in the existing framework, including frequent reliance on price-only awards and limited use of environmental, social and innovation conditions, according to ESG Today.
What's next
The proposal will be negotiated by the European Parliament and the Council before it can take effect.
