EU proposes simpler public tender rules, 'Buy European' criteria to cut foreign dependence

By Julia Payne

BRUSSELS, July 9 (Reuters) - The European Commission has proposed new rules for public tenders that would create an EU-wide platform to improve access and slash paperwork for companies, and give EU governments the option to exclude bids based on EU content criteria.

Wednesday's proposal is the latest in a series of Commission measures to improve the Single Market, security and supply chain resilience, and prevent industrial decline following warnings by former European Central Bank president Mario Draghi and former Italian Prime Minister Enrico Letta. 

Public buying accounts for around 15% of the European Union's gross domestic product, or about €2.5 trillion ($2.91 trillion) in 2025, making it a powerful tool for tackling intense international competition and supply chain vulnerability. But critics, including Draghi and Letta, say that the bloc has not used procurement to harness its collective strength. 

Companies bidding for tenders complain they face a myriad of hard-to-navigate templates, languages and duplications across the bloc's 27 jurisdictions, from federal to regional. 

The new rules will simplify the tender process and make it harder for authorities to award contracts largely on the basis of cost to counter, for example, cheap goods offered by Chinese companies that may be subsidised.  

"This is a radical simplification, as we are moving from three directives to a single regulation," Commission Executive Vice President Stéphane Séjourné told reporters. 

"We believe that part of the economic response and the shift in Europe's economic model also stems from the internal market and its strengthening...It is therefore a strategic lever at a time when, in particular, China, India, the United States and all the major powers are now using this lever for their own industrial and economic strategies," Séjourné said.   

QUALITY, EUROPEAN PREFERENCE

Procurement is also a central part of the European Innovation Act, another initiative to promote EU competitiveness proposed on Wednesday. It is designed to provide sufficient demand for innovations to come to market by increased investment, including from public bodies.

The new regulation would replace the EU's three existing public procurement directives, reducing national discretion in how the rules are applied. The rules will cover all sectors except defence.  

Authorities would be encouraged — and in some cases required — to take account of risks linked to critical infrastructure, cybersecurity, supply-chain disruptions, strategic dependencies and foreign influence when awarding contracts.

Contracts would have to be awarded on the basis of the "best price-quality ratio", with quality criteria accounting for at least 30% of the total score and at least 50% for labour-intensive contracts. 

The measures stop short of a blanket "Buy European" requirement, but would allow European authorities to rule out bids for public contracts that have less than 50% European content by total value, restrict access to EU operators only, and favour EU companies in strategic sectors. Countries with which the EU has trade agreements and reciprocity on public buying will not be excluded. 

The new EU-wide digital procurement system would include electronic business credentials, interoperability rules for procurement platforms and national and EU-level procurement data spaces designed to improve transparency, oversight and cross-border access to contracts.

"It's a very simple solution for businesses and SMEs alike: just a single registration on this platform, rather than having to register as many times as there are public tenders to respond to," Séjourné said. 

($1 = 0.8601 euros)

(Reporting by Julia Payne, Editing by Catherine Evans)