EU proposes procurement rules to favor European suppliers

The European Commission has proposed a broad overhaul of EU public procurement rules that would encourage authorities, schools, hospitals and other public bodies to buy more goods and services made in Europe. The plan stops short of binding “made in Europe” quotas, but seeks to reassure public buyers that EU rules do not force them to choose the cheapest bid.

Public procurement is estimated by EU officials to amount to 15% of the bloc’s gross domestic product, about €2.6tn (£2.2tn) a year. The proposed rules would require buyers to place greater emphasis on quality, environmental sustainability and local supply chains. Public agencies would need to give a minimum 30% weighting to quality when setting contract conditions, or explain why they did not. Labour-intensive contracts would require a minimum 50% weighting for quality.

Brussels is responding to concerns that Chinese companies, sometimes backed by state subsidies, are making deeper inroads into European transport and infrastructure markets. Stéphane Séjourné, the commission’s lead official on industrial policy, said public buyers would be able to favor European bids and restrict or reject bids from countries that lack procurement agreements or do not follow binding international rules.

The draft regulation must still be approved by the European parliament and EU ministers and is likely to change. EU officials said UK firms should not be disadvantaged because reciprocal market access agreements remain in place, while an online tool would show which non-EU countries are covered by procurement deals.