NEW EU PUBLIC PROCUREMENT ACT – proposal from the European Commission

More negotiations and fewer procedures 
Contracting authorities are proposed to be given greater scope to negotiate with companies and thereby achieve better outcomes.

As part of the ambition to reduce complexity, the proposal suggests reducing the number of procurement procedures from five to three:

• An open procedure with the option of negotiations
• A simplified dynamic procedure with the option of negotiations
• An innovation procedure
   

Quality over lowest price
The proposal includes a requirement that at least 30 % of the evaluation be based on quality criteria, and 50 % for labour-intensive contracts. In practice, this means that lowest-price awards become the exception. The ambition is that this shall entail a shift towards more quality-driven procurement, which benefits companies that can offer added value beyond a low price.

Public procurement as a strategic tool
The proposal highlights public procurement as a tool for achieving broader policy objectives within the Union, with increased focus on social justice, fair working conditions, and environmental and climate goals. For companies, this means that sustainability and social responsibility may increasingly constitute competitive factors.

Security and economic resilience
The proposal introduces a dedicated chapter on security and resilience. Contracting authorities are given an explicit basis to assess tendering companies' ownership, control and financing structure where there is a risk of undue third-country interference or influence, as well as exposure to third-country legislation that may compel disclosure of sensitive information or interfere with contract performance. For critical infrastructure and other critical entities, contracting authorities may also require supply-chain diversification, including multi-sourcing, limits on dependency on a single third country or supplier, and stockpiling obligations within the EU.

European preference – a new playing field for companies
One of the more far-reaching elements of the proposal is the so-called European preference. It gives contracting authorities the possibility to restrict participation to companies from the EU and countries that have concluded relevant agreements with the EU on public procurement. Concretely, the proposal means, among other things, that contracting authorities are given the right:

• to reject tenders from companies outside this group,
• to impose origin requirements on goods,
• to apply evaluation preferences in favour of companies within this group, and
• to reject tenders where the value of goods originating within the group falls below 50% of the estimated value.
   

The proposal reflects in several respects the considerations made by the Court of Justice of the European Union in its recent case law (including Cases C-266/22 and C-652/22).

The European preference measures are optional for contracting authorities to apply – not automatically mandatory. However, the Commission may adopt delegated acts requiring contracting authorities to apply such measures in relation to companies, goods, services and works in third countries without agreements with the Union, where this is in the Union's interest.

For companies that offer services or goods originating wholly or partly outside the EU and outside countries that have agreements with the EU, the European preference represents a changed competitive landscape. 

Change to the maximum duration of framework agreements
The Commission proposes that the maximum duration of framework agreements be limited to three years when there is a single supplier and five years where there are several suppliers, unless special reasons justify otherwise. This represents a stricter limitation compared to the current main rules of eight years in the utilities sectors and four years in the classical sector.

A single digital procurement marketplace and the "once-only" principle
The proposal introduces an electronic eligibility service through which exclusion grounds, selection criteria and origin requirements are verified automatically against national databases. The service is linked to a common digital procurement platform connected to interoperable national platforms. Building on the "once-only" principle, suppliers would in principle only need to submit their information once, regardless of how many procurement procedures they participate in. If realised, the system is expected to reduce administrative burdens significantly.

A harmonised market
Unlike an EU directive, which leaves room for national interpretation, an EU regulation is directly applicable and creates the same legal conditions in all Member States. This reduces national differences and can facilitate cross-border participation by companies in procurement procedures.

What does the timeline look like
The regulation is proposed to enter into force twenty days after publication in the Official Journal of the EU and to start applying two years thereafter. The proposal will now be negotiated between the Member States and may therefore be subject to substantive changes before a regulation is finalised. Considering that negotiations can be expected to take at least one year, the rules will likely apply at the earliest in autumn 2029.

What should affected stakeholders do now
For stakeholders doing business in the public sector, the proposal entails both new opportunities and, in certain respects, stricter requirements. Although the proposal has not yet been adopted and it remains to be seen how the final text will look, it is wise for contracting authorities and companies to start analysing how the proposal will affect their operations.

Schjødt Scandinavia
Our Scandinavian cross-border team in EU and public procurement law will closely follow the continued preparation of the proposal and is well equipped to help you navigate the new regulatory framework. 

Rather than operating as separate national teams, matters are staffed according to the expertise required for each mandate, drawing on specialist experience across Denmark, Norway and Sweden. Clients therefore have a single point of access to specialist advice across Scandinavia without the need to coordinate separate national teams. This integrated way of working distinguishes Schjødt from other law firms.