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Public contracts — setting out clear ground rules

The directive sets out rules on the use of public contracts for the provision of works, supplies or services by companies or individuals and the exemptions which can be applied.


The legislation specifies that when national authorities use public procurement to invite tenders to provide works, supplies or services, they must treat all applicants equally and not discriminate between them. They must also be transparent in their dealings.


The rules applicable to public contracts must be followed when the sums involved are above the following ceilings:

  • €5,225,000 for public works (from 1.1.2016);
  • €135,000 for central government contracts (from 1.1.2016);
  • €209,000 for local and regional government contracts (from 1.1.2016);
  • €750,000 for social and other specific service contracts.

The European Commission assesses these thresholds every 2 years to determine whether they should be changed in accordance with the EU’s international obligations.


The contract is awarded to the most economically advantageous tender to be identified in particular on the basis of the best price–quality ratio. This criterion takes into account such factors as the overall cost effectiveness, quality, environmental and social aspects, trading and delivery conditions.

Innovation and small companies

The legislation introduces a new procedure to promote the development of innovative products, services or works. To facilitate the participation of small companies, the new rules encourage public authorities to divide up large contracts into individual lots.


EU countries have to ensure that economic operators and their subcontractors comply with all applicable European and national environmental, social and labour requirements, collective agreements and any relevant international obligations.

The legislation tightens up provisions on abnormally low offers notably to prevent workers’ rights being abused.


Nothing in the legislation requires EU governments to contract out services they wish to provide themselves. Nor does it affect national social security legislation.

The water, energy, transport and postal services sectors are excluded from the directive. Instead, they are regulated by Directive 2014/25/EU.

In addition, some sectors such as electronic communications, research and development and defence and security can be excluded under certain conditions.


Communication from the Commission Guidance from the European Commission on using the public procurement framework in the emergency situation related to the COVID-19 crisis


Directive 2014/24/EU of the European Parliament and of the Council of 26 February 2014 on public procurement and repealing Directive 2004/18/EC (OJ L 94, of 28.3.2014, pp. 65–242)


Directive 2014/25/EU of the European Parliament and of the Council of 26 February 2014 on procurement by entities operating in the water, energy, transport and postal services sectors and repealing Directive 2004/17/EC (OJ L 94, of 28.3.2014, pp. 243–374).

Directive 2014/23/EU of the European Parliament and of the Council of 26 February 2014 on the award of concession contracts (OJ L 94, 28.3.2014, pp. 1–64).

last update 04.05.2020