Opinion of the European Economic and Social Committee

Review of the European public procurement legal framework

(exploratory opinion)

(C/2026/870)

Rapporteur:

Philip VON BROCKDORFF

Referral	European Commission, 20.3.2025
Legal basis	Article 304 of the Treaty on the Functioning of the European Union
Section responsible	Single Market, Production and Consumption
Adopted in section	14.11.2025
Adopted at plenary session	4.12.2025
Plenary session No	601
Outcome of vote (for/against/abstentions)	155/93/15

1. Conclusions and recommendations

1.1.

The European Economic and Social Committee (EESC) agrees that a review of existing EU legislation is necessary to enhance simplification, reduce administrative cost, and support further harmonisation in the single market, as well as to support innovation, competition and to improve the efficiency and integrity of public spending and provide better value for public money. Moreover, the EESC believes that the reform should support EU growth, collective bargaining, quality jobs, climate protection and, when appropriate, Made in Europe as argued by the President of the Commission in her State of the Union address.

1.2.

The EESC believes that a sustainable EU procurement policy can go beyond the narrow market failure paradigm, enabling strategic and public welfare-oriented procurement; enshrine social, innovation and environmental criteria as equal objectives; and ensure fair access to public procurement by private operators.

1.3.

Given that taxpayers money is spent through public contracts, these must be awarded on the most economically advantageous basis, while emphasising the importance of non-price criteria, e.g., quality, innovation, environmental, sustainability and social considerations, especially workers’ rights and collective agreements. The EESC is also of the view that the lowest price should not be the only deciding criterion for awarding a tender.

1.4.

The EESC calls for a holistic approach towards Services of General Interest (SGI) policies. Further, the autonomy of public authorities should also be fully respected. Public provision of services, public-public partnerships and in-house provision must always remain options.

1.5.

The EESC is of the view that public contracts should not be awarded to companies that systematically infringe core workers’ rights or collective agreements that they are bound to.

1.6.

Subject to appropriate legal criteria, and while ensuring minimum distortion to competition, the possibility to use in-house procurement for majority-controlled legal entities, as regulated in Article 12 of Directive 2014/24/EU of the European Parliament and of the Council (1), and direct award should be retained as part of the revision of the EU procurement directives.

1.7.

Retaining Article 77 of Directive 2014/24/EU is crucial: it allows contracts in the health, social, education and cultural sectors to be awarded specifically to non-profit organisations and social economy entities.

1.8.

The EESC recommends introducing a legal obligation to evaluate the effects of the existing thresholds for public service contracts.

1.9.

Public procurement can support a socially just, ecologically sustainable and economically resilient Europe, for the benefit of the common good.

1.10.

Finally, the EESC calls for mandatory price revision clauses to account for wage-related changes in collective agreements and/or labour legislation or inflation, and other relevant factors that affect the execution of a contract, such as energy costs.

2. Background to the opinion

2.1.

Public procurement represents a huge economic activity, with around 14 % of GDP equivalent to over EUR 2,4 trillion per year spent on public services, public works and supplies by government departments and state entities in sectors such as energy, health, transport and education. The public procurement framework is used to govern the way contracting authorities and entities purchase goods, works and services. The aim of harmonising public procurement rules at the European level is to achieve a single market and open procurement. The EESC is of the view that public procurement should continue to improve the efficiency and integrity of public spending, providing better value for public money, but should also be a tool to reinforce EU growth, climate protection, regional development, social justice, quality jobs and service. However, this potential has not been sufficiently exploited to date due to a lack of professional resources for conducting these procedures. This hinders regional autonomy and the effectiveness of the single market. A further point is that the current public procurement rules and the lack of effective social conditions have created downward pressure on labour costs and collective bargaining, and as a result impacting working conditions and wages.

2.2.

EU legislation currently sets out minimum rules on public procurement. It may be relevant, therefore, to focus on the case law of the European Court of Justice as well as the conclusions of the European Court of Auditors (2). Taken together, these conclusions show that public procurement law is often too complex and not strategic enough to achieve important goals. The Court of Auditors report also found that over the last decade, competition for public contracts has decreased, and that the 2014 reform of the EU directives failed in reversing it.

2.3.

This was also made very clear in the Enrico Letta report (3) and the Draghi report (4), which recognised the relevance of public procurement as an economic activity that can fully support the EU’s political, economic and social objectives. In this connection, the objective of public procurement should be to ensure that economic bidders compete on fair terms: unfair competition has a negative impact on both workers and bona fide companies. A collective agreement, therefore, should be considered as an objectively verifiable criterion in public procurement. Furthermore, public procurement, which is often price-sensitive, has yet to fulfil its potential for buying smart, green and socially responsible products and services. While the directives allow for the use of objective quality criteria, their practical application remains inconsistent (5).

2.4.

In response to these reports, in the political guidelines 2024-2029 the President of the European Commission launched a revision of the public procurement directives. The revision and simplification of public procurement rules and procedures is crucial to supporting the EU’s competitiveness compass. Against this background, the Commission launched an evaluation of the three legislative acts that regulate public procurement in the EU (‘how to buy’): Directives 2014/23/EU of the European Parliament and of the Council (6) (the Concessions Directive), 2014/24/EU (the Public Procurement Directive) and 2014/25/EU of the European Parliament and of the Council (7) (the Utilities Directive).

2.5.

The evaluation covers the period 2016-2024 and includes all Member States as well as EEA countries. The focus of the evaluation will be public procurement rules and how they affect competitiveness.

3. General Comments

3.1.

As stated in Section 2, every year public authorities across Europe spend over EUR 2 trillion on goods, services and works through public procurement processes. For many companies, especially small and medium-sized businesses (SMEs), winning a public tender can make a huge difference. However, fragmented procedures and complex requirements can be particularly burdensome for SMEs.

3.2.

One of the problems companies face when trying to apply for public tenders in the EU is fragmentation. Although the European Union has rules that seek to harmonise public procurement, each Member State still runs its own system. The strict procurement rules have also led to market concentration because the transaction costs are often too high for SMEs.

3.3.

Because of this fragmentation, companies need to check multiple websites, often only in the national language, making it even harder for non-local companies to understand requirements. In addition, because of market concentration, it is increasingly difficult for public entities to receive a minimum number of offers from potential suppliers.

3.4.

Another challenge faced by firms in applying for public tenders is a lack of transparency. In theory, companies should have equal access to information on tenders and clear reasons when contracts are awarded. In practice, however, transparency often breaks down because of incomplete tender listings.

3.5.

Yet another challenge facing companies is administrative complexity. Companies and public bodies must navigate a sea of documents, forms and compliance checks – and this administrative burden can be overwhelming, especially for smaller companies.

3.6.

When SMEs and start-ups or new businesses miss out or are pushed out of public procurement, this represents missed opportunities for competition and innovation. A study by the European Commission in 2017 found that 5-20 % of procurement spending could be saved through increased competition. Lack of competition could result in inefficient and low-quality public services. Most large-scale contracts, for instance, could be split into lots, thus giving SMEs a fair chance to participate.

3.7.

The EESC stresses the importance of the principle of Socially Responsible Public Procurement (SRPP) which aims to ensure that public authorities achieve positive social outcomes – such as employment, inclusion, and respect for labour rights – while supporting social economy enterprises. SRPP also delivers economic value by considering broader impacts, reducing social spending, and enhancing socio-economic well-being.

3.8.

It is evident that whereas public procurement offers huge opportunities, its full potential, especially at an EU-wide level, is not being realised. This has a limiting impact on economic growth potential within the EU and also externally in terms of businesses competing in international markets.

3.9.

Increased efforts for special training for contracting authorities and contracting entities on how to plan, prepare and monitor their procurements is required. Good market knowledge is also key for contracting authorities. Given that taxpayers money is spent through public contracts, these must be awarded on the most economically advantageous basis.

4. Specific Comments

4.1.

The EESC agrees that a review of existing EU legislation is necessary to enhance simplification, support further harmonisation in the single market, boost cross-border public procurement and support innovation, competition and quality public services across the EU. Moreover, the EESC believes that the reform should support EU growth, collective bargaining, quality jobs, climate protection and, when appropriate, ‘Made in Europe’ as argued by the President of the European Commission in her State of the Union address.

4.2.

Limited public procurement requires proper justification, and authorities must ensure access to procurement for private undertakings. The EESC is of the view that EU procurement policy can take into account social, environmental and innovation objectives. Access to public procurement should always be linked to the respect of the right to collective bargaining and compliance with relevant labour and social regulation and applicable collective agreements signed by the most representative social partners according to national labour law and practices.

4.3.

The EESC believes that EU coordination should help avoid fragmentation but not undermine the national or regional scope for action – especially where social, environmental or public welfare objectives are pursued. The call for coordination is legitimate if it aims at transparency, comparability and administrative simplification – for example through standardised eForms, common thresholds, interoperable databases or EU-wide procurement indicators. However, such coordination should not undermine social and strategic national objectives, including regional value creation. Therefore, any standardisation must be measured against the criteria of proportionality, efficiency and consistency of objectives, not simply the reduction of deviations. Moreover, a separate chapter on intellectual services should also be introduced, recognising their unique characteristics and providing tailored rules for eligibility, procurement thresholds and cooperation modalities (8). The same should apply to business and labour-intensive sectors.

4.4.

The EESC is of the view that public tenders must be awarded on the most economically advantageous basis for the best use of tax-payers’ money. Therefore, the Most Economically Advantageous Tender (MEAT) could be the gold standard. Hence, costs should not be the only deciding criteria and the public tender criteria should be based on relevant non-price considerations: quality, innovation, environmental, sustainability and social considerations, especially workers’ rights and collective agreements. The EESC also agrees with any revision of legislation that results in joint procurement mechanisms being strengthened and institutionalised. These mechanisms would facilitate multiple EU companies to engage in collective purchasing with the aim of offsetting rising costs associated with strategic investments, through economies of scale and better negotiating power (9).

4.5.

The EESC calls for a holistic approach towards Services of General Interest (SGI) policies, as opposed to the current sectoral approach of EU policies, recognising the central role of modern SGI in promoting sustainable prosperity and competitiveness. In this spirit, the EESC calls on the Commission to act by following up the Letta report in the form of an SGI action plan (10).

4.6.

The EESC is of the view that public contracts must be awarded to companies that fully respect workers’ rights, the right to collective bargaining and conditions set out in collective agreements. Companies that use supply chains that do not respect human rights should also not be allowed to participate in public tenders. The EESC also notes the obligation in public procurement to comply with ILO labour standards, EU and national labour law and the terms and conditions in collective agreements, both at national and regional levels, including universally or generally applicable ones and sectoral collective agreements. This obligation should be included in the contract notice and made obligatory under performance conditions and selection criteria for all economic operators. Guaranteeing the right to collective bargaining, safeguarding fair working conditions and respecting collective agreements should always be considered mandatory award criteria, giving an advantage to tenderers whose workers – including subcontractors’ workers – are covered by collective agreements. Excessive chain contracting via subcontractors should also be limited. Considering the abuses in subcontracting chains and the difficulties in enforcement, the EU public procurement rules should promote direct jobs and include stricter regulation of subcontracting, including by ensuring equal treatment, introducing joint and several liability, using dissuasive sanctions and limiting the length of subcontracting chains to a maximum of one or two sub-levels.

4.7.

Equally, companies that hide behind tax havens should not be awarded public contracts and the EESC recommends specific exclusion criteria for tax avoidance and evasion, transparency regarding ownership structures, and a functional European tax haven blacklist. Provisions on more transparency, oversight and anti-corruption must be compulsory. However, transparency measures should not become a new bureaucratic exercise for companies, SMEs in particular, preventing them from participating in tenders.

4.8.

Subject to appropriate legal criteria, and while ensuring minimum distortion to competition, the possibility to use in-house procurement for majority-controlled legal entities, as regulated in Article 12 of Directive 2014/24/EU, and direct awards should be retained as part of the revision of the EU procurement directives. The EESC is also of the view that direct award under Article 4 of Directive 2014/24/EU can be a proven instrument that enables public contracting authorities to respond quickly, easily and in compliance with the law to specific needs – especially in the social, cultural and public welfare sectors – but this should be used carefully, while ensuring a fair process.

4.9.

Retaining Article 77 of Directive 2014/24/EU is crucial: it allows contracts in the health, social, education, and cultural sectors to be awarded specifically to non-profit organisations and social economy entities. This protects these sensitive areas from commercial displacement, promotes fair competition for non-profit organisations, and strengthens social cohesion, cultural diversity, and public welfare-oriented services.

4.10.

The EESC reaffirms its support for using public procurement to advance inclusive social policy goals, including ensuring obligatory accessibility requirements to meet the needs of older persons and persons with disabilities. It highlights the proven value of Reserved Contracts in promoting employment for persons with disabilities and supports their continued use for social economy enterprises working in the open labour market in specific sectors.

4.11.

The EESC recommends a legal obligation to evaluate the effects of the existing thresholds e.g., EUR 5 186 000 for public works contracts or EUR 750 000 for public service contracts for social and other specific services listed in the annexes on internal trade, in line with recital 134. At the same time, it is necessary to assess the relevance and success rates of cross border procurement procedures, including in the social service sectors (which has a very low level of cross border procurement). The EESC also recommends that the interests of SMEs and social economic enterprises should be promoted through, inter alia, a revision of thresholds which would help SMEs be awarded contracts from the municipalities more easily (11).

4.12.

Finally, the financial sustainability of contracts, especially in labour-intensive sectors and construction, impacts the working conditions of essential workers and the quality of Services of General Interest provided to European citizens. The EESC therefore calls for mandatory price revision clauses to account for changes in wages in collective agreements or labour legislation, as well as annual inflation rates above the European Central Bank’s 2 % target, changes in energy prices and any other major changes that affect the execution of a contract.

Brussels, 4 December 2025.

The President

of the European Economic and Social Committee

Séamus BOLAND

(1) 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, 28.3.2014, p. 65, ELI: http://data.europa.eu/eli/dir/2014/24/oj).

(2) In 2023, a report on public procurement by the European Court of Auditors in the EU, followed by Council Conclusions (C/2024/3521), highlighted the need for action to review the rules and procedures that negatively impact competition in public procurement. It was also recognised that existing legislation does not allow the full potential of the EU’s public procurement market to be realised.

(3) Letta report.

(4) Draghi report.

(5) See the data award criteria based on price alone in the EU Single Market Scoreboard: Access to Public Procurement.

(6) 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, p. 1, ELI: http://data.europa.eu/eli/dir/2014/23/oj).

(7) 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, 28.3.2014, p. 243, ELI: http://data.europa.eu/eli/dir/2014/25/oj).

(8) Also, in relation to intellectual services, specific provisions should be added that prioritise quality, innovation and life-cycle considerations over price, and promote competitions.

(9) This is especially true where the supply of services or materials is restricted. Furthermore, joint procurement could also help offset any increase in costs non-pricing criteria might cause.

(10) Opinion of the European Economic and Social Committee – The role of services of general interest (SGI) for competitiveness, social cohesion and democracy in the European Union (own-initiative opinion) (OJ C, C/2025/5143, 28.10.2025, ELI: http://data.europa.eu/eli/C/2025/5143/oj), 1.6 and 3.15.

(11) In the case of large contracts with EU-wide tendering, it is more difficult for small companies to participate in public procurement, as they cannot compete with large corporations. In addition, the complex (EU-wide) procurement procedures are easier for large companies to manage than for smaller companies with few employees. In the period 2020-2022, 80 % of public sector contracts went to just ten contractors, according to different studies.

ANNEX

The following amendments, which received at least a quarter of the votes cast, were rejected in the course of the debate (Rule 74(3) of the Rules of Procedure):

Amendments 3 (4.3) and 5 (1.5) voted together:

New Point 4.3

Insert new point after current 4.2

Section Opinion

Amendment

Social conditionalities remain a debated issue within the EESC. While part of the EESC supports introducing mandatory requirements for social conditionalities in public procurement, another part of the EESC emphasizes the need for a proportionate approach that does not create obstacles to competition, cross-border participation or SME involvement in public procurement. In this regard, the EU procurement framework already enables the use of social considerations, and their application must remain firmly grounded in existing legal frameworks. Companies bidding for public contracts should indeed comply with national social legislation and international standards; however, contracting rules should not introduce new mandatory social conditionalities or automatic requirements to adhere to collective agreements. Such obligations risk interfering with the diversity of national collective bargaining systems protected under Member States’ competence, distorting competition, hindering cross-border procurement, discouraging participation, particularly by SMEs, and generating unintended impacts on production and subcontracting arrangements.

Reason

The amendment reflects in a balanced manner the existing differing views within the EESC. It aims to underline that, from the Employers’ Group perspective, it is essential to ensure that social conditionalities are applied proportionately and within existing legal frameworks. While social considerations form part of a legitimate policy objective, their application must not interfere with national labour standards or the organisation of collective bargaining systems, which fall under the prerogative of Member States. Procurement rules should therefore not impose new mandatory requirements or automatic adherence to collective agreements, as such obligations could distort competition, hinder cross-border participation, discourage SME involvement, and create unintended effects on production and subcontracting arrangements. Overall, the amendment seeks to strike a careful balance between promoting social objectives and safeguarding market efficiency, legal certainty, and the competitiveness of the Single Market.

New Point 1.5

Insert new point after current 1.4

Section Opinion

Amendment

Social conditionalities in public procurement remain an area of divergence within the EESC. While part of the EESC advocates mandatory social requirements, another part stresses the importance of a proportionate and legally grounded approach that does not create new barriers to competition, cross-border participation, or SME access, nor interfere with national collective bargaining systems. The latter view is based on the fact that existing EU procurement framework already permits the integration of social considerations, and companies bidding for public contracts are expected to comply with national legislation and international standards.

Reason

The amendment is intended to reflect in Chapter 1 the amendment at the proposed new point 4.3 (as indicated above).

Outcome of the vote:

For:	108
Against:	133
Abstentions:	13

Amendments 4 (4.4) and 6 (1.6) voted together:

New Point 4.4

Insert new point after the proposed new point 4.3

Section Opinion

Amendment

Regulation of subcontracting chains in public procurement remains an area of divergence within the EESC. While part of the EESC calls for strict limits on subcontracting chains, promoting direct employment and stronger enforcement mechanisms such as joint liability and equal treatment obligations, another part of the EESC favours greater transparency and accountability but warns against rigid EU-level restrictions. The latter view is based on the fact that such limits could hinder participation and notes that existing instruments, including those provided under the Corporate Sustainability Due Diligence Directive (CSDDD), already enable contracting authorities to address risks in subcontracting chains. A proportionate, case-by-case approach, grounded in the current legal framework, is therefore considered more appropriate than introducing new prescriptive requirements.

Reason

The amendment reflects in a balanced manner the existing differing views within the EESC regarding subcontracting chains. While the Employers’ Group supports transparency and accountability, rigid EU-level restrictions should be avoided, since existing instruments, including those under the Corporate Sustainability Due Diligence Directive (CSDDD)—already enable contracting authorities to manage risks. Overall, the amendment seeks to strike a careful balance between promoting social objectives and safeguarding market efficiency, legal certainty, and the competitiveness of the Single Market.

New Point 1.6

Insert new point after the proposed new point 1.5

Section Opinion

Amendment

Regulation of subcontracting chains in public procurement remains an area of divergence within the EESC. While part of the EESC advocates stricter limits to promote direct employment and stronger enforcement, others emphasize transparency and proportionality, cautioning that rigid EU-level restrictions could hinder participation. The latter view is based on the fact that existing legal instruments– particularly those stemming from the Corporate Sustainability Due Diligence Directive – already equip contracting authorities to manage risks in subcontracting chains. In this context, a differentiated and case-specific application of existing rules appears more appropriate than the introduction of new prescriptive requirements.

Reason

The amendment is intended to reflect in Chapter 1 the amendment at the proposed new point 4.4 (as indicated above).

Outcome of the vote:

For:	108
Against:	135
Abstentions:	15