EU is developing new procurement regulations aimed at supporting European companies and reducing reliance on foreign entities
The European Union has put forward new procurement regulations that prioritize European companies, with the goal of bolstering strategic industries and decreasing dependence on foreign suppliers.
The European Union has developed new public procurement regulations designed to provide European companies with a greater edge in obtaining government contracts, as Brussels seeks to lessen the bloc’s reliance on foreign suppliers and bolster strategic industries.
As per a draft proposal reviewed by Reuters, the reforms would enable public authorities to dismiss bids for significant public contracts if less than 50% of their content comes from within Europe. Although the measures do not implement a comprehensive “Buy European” mandate, they aim to provide EU-based companies with enhanced preference in key strategic sectors.
The proposal is a key part of the European Commission’s larger plan to strengthen the EU’s industry, secure important supply chains, and reduce reliance on foreign sources. While the draft does not explicitly refer to China, the Commission has already implemented comparable policies designed to decrease Europe’s dependence on Chinese production of essential materials and to address the bloc’s increasing trade imbalance.
If approved by all 27 EU member states, the new rules would change procurement decisions to focus less on the lowest price. Contracting authorities should be encouraged to focus more on strategic considerations, such as security, resilience, and long-term economic interests.
The initial plan to unveil the proposal in July has now been postponed until early September. EU officials have yet to offer an explanation for the updated schedule.
Public procurement constitutes approximately 15% of the European Union’s gross domestic product, amounting to an estimated €2.5 trillion in annual expenditures, thereby serving as one of the bloc’s most influential economic policy instruments.
The draft contends that public purchasing has gained significant importance in enhancing Europe’s competitiveness, protecting critical infrastructure, and minimizing exposure to external economic risks.
Under the proposed rules, authorities would have the ability to assess whether a bidder’s ownership structure, financing arrangements, or foreign control might present national security risks or open avenues for foreign interference.
Officials would also have the authority to evaluate whether companies are governed by laws in non-EU countries that might require them to reveal sensitive information or otherwise compromise the execution of public contracts.
The reforms would mandate that contracts be awarded based on the “best price-quality ratio,” with quality comprising at least 30% of the overall evaluation and a minimum of 50% for labor-intensive projects.
The proposed law aims to combine the EU’s three current public procurement rules into one regulation to reduce differences in how member states apply the rules and improve consistency across the EU.
The proposal mandates that procurement authorities take into account cybersecurity risks, supply chain resilience, strategic dependencies, and the safeguarding of critical infrastructure during the contract awarding process.
Furthermore, the Commission intends to create a digital procurement system across the EU that will include electronic business credentials, interoperable procurement platforms, and shared national and EU data spaces. This initiative aims to enhance transparency, oversight, and cross-border access to public contracts.
