Unlocking Europe’s €2 trillion potential: calls for overhaul in public procurement policies

However, to fully harness this economic opportunity, a comprehensive revision of existing frameworks is deemed essential, according to a recent report authored by Enrico Letta, the former Prime Minister of Italy, focusing on the single market.

Letta emphasized the imperative of leveraging the public procurement market as a strategic instrument for fostering social value and facilitating the EU’s aspirations towards green and digital transformations. Notably, Letta pointed out shortcomings since the 2014 reform, highlighting complexities in procedures, insufficient SME access, and inadequate consideration of environmental, innovative, and social dimensions.

Recent analysis by the European Court of Auditors (ECA) echoed concerns, indicating a decline in competitiveness within the public procurement landscape over the past decade. Industry stakeholders, represented by BusinessEurope, emphasize the need for a thorough investigation into the root causes behind this competitiveness deficit before advocating for framework revisions.

Conversely, workers’ representatives, including Olivier Roethig of the services union UNI Europa, advocate for immediate reconsideration of existing rules, citing a decline in the number of bidders per procedure and prolonged procurement timelines. Roethig contends that the current framework overly relies on the goodwill of public authorities, often leading to suboptimal outcomes and neglect of social progress.

Dennis Radtke, a center-right German MEP, stresses the importance of prioritizing factors beyond cost-effectiveness, such as service quality and environmental impact. Moreover, Radtke advocates for favoring European companies to bolster strategic independence and regional economic growth.

Letta’s report underscores the adverse effects of prioritizing the lowest bid, compromising quality, sustainability, and social value. Moreover, it warns against the undermining of local supply chains by favoring cheaper imports with lower labor and social standards.

Proposed solutions include streamlining procurement objectives, enhancing data management, and aligning policies with EU’s green and digital ambitions. Lawmakers, such as Radtke and Nikolaj Villumsen, advocate for mandatory social clauses in public tenders to uphold labor standards and prevent exploitation.

Instances of abuse within public tenders, such as reported underpayment and lack of workers’ rights during the pandemic, underscore the urgency of reform. The upcoming meeting of EU industry ministers in Brussels on May 24 holds promise for advancing discussions on enhancing public procurement practices to better serve EU policies and societal well-being.