Public contracts

Validation date: 05/2011

Public procurement is the process whereby public authorities - including all levels of government and public agencies - buy goods and services or commission work. These contracts make up a significant share of the EU market, accounting for about 16% of its gross domestic product (GDP).

EU-wide public procurement

Companies based in one EU country can bid freely for public authorities' contracts in other EU countries. Authorities throughout the EU used harmonised, transparent procedures for selecting contractors. The Small Business Act for Europe is further promoting measures that make it easier for smaller businesses to bid for public contracts on an equal basis with larger competitors.

A revision of the EU Public Procurement Directives is currently under preparation. The Commission proposal is scheduled for the end of 2011.

Online tendering

The EU promotes online tendering as a way of making life simpler for businesses and saving them time and resources.

After evaluating progress made in adopting electronic procurement, the Commission consulted on how to expand the use of electronic procurement in Europe. Comments and suggestions were invited to contribute for an ambitious but realistic EU eProcurement policy.

e-CERTIS is a free, on-line information system for companies and contracting authorities helping identify the different certificates and attestations frequently requested in procurement procedures.

e-CERTIS

Thresholds

Public contracts above a certain value are regulated by two European directives:

one dealing with public works, supply and service contracts;
the other with the procurement procedures of entities operating in the water, energy, transport and postal services.
Directive on contracts in the water, energy, transport and postal services industries
Directive on procedures for public works contracts, public supply contracts and public service contracts [527 KB]

The directives cover contracts above certain thresholds (which are due to be updated in November 2011):

public works contracts worth over €4 845 000;
public supply and service contracts worth over €125 000 in the case of central government authorities, €193 000 for sub-central entities or €387 000 for entities operating in the water, energy, transport and postal services industries.

In the interests of transparency, all calls for tender over the relevant thresholds must be published in the EU's Official Journal and are accessible free of charge via the Tenders Electronic Daily (TED) webpage.

Remedies

European legislation guarantees firms equivalent levels of legal redress against contract-awarding authorities that do not comply with the rules.

Remedies

Special rules

There are special rules governing contracts in certain fields.

Defence contracts are still largely covered by national legislation. The EU aims to create an EU market for defence equipment while preserving national security interests;
On contracts for services of general interest (e.g. energy, telecommunications, transport, radio and television, postal services, schools, health and social services), the EU produces common rules to improve competitiveness while respecting the diversity of national systems.
Defence procurement
Services of general interest

Public-private partnerships

Public-private partnerships are an increasingly popular method for running, constructing or renovating infrastructure or providing a service. They operate in various sectors - transport, public health, education, national security, waste management and water and energy distribution. The EU aims to ensure effective competition for public-private partnerships and clarifies how EU rules should apply to the choice of private partners.

Public-private partnerships

Green public procurement

By taking account of environmental factors when awarding contracts, public authorities can encourage business involvement in developing green products, services and technologies.

Green public procurement in Europe

International rules

The EU adheres to World Trade Organization (WTO) agreement on fair international competition for public contracts. This agreement, known as the Agreement on Government Procurement (GPA), has 39 members including the 27 EU countries. The agreement bans discrimination in the awarding of public contracts and lays down procedural rules.

The Agreement on Government Procurement

Resources

The SIMAP portal provides information on tendering for EU public contracts and free access to Tenders Electronic Daily (TED), which gives details of all high-value European contracts published in the EU's Official Journal. National public procurement databases can also be accessed via SIMAP.