Public procurement accounts for around 14% of the European Union’s gross domestic product, making it a vital lever for growth, competitiveness, sustainability and social cohesion. On 9 September 2025, the European Parliament adopted a comprehensive resolution on public procurement, recognising both the achievements of past reforms and the persistent shortcomings that hinder Europe’s ability to harness procurement as a strategic policy tool.
The Context: From 2014 Reform to 2025 Challenges
Directive 2014/24/EU and its companion texts marked a turning point, introducing the “most economically advantageous tender” (MEAT) criteria in order to shift away from an exclusive focus on price. These reforms aimed to improve transparency, support SMEs, encourage innovation and integrate social and environmental objectives.
Yet, over a decade later, challenges are still remaining. The European Court of Auditors’ Special Report 28/2023 revealed that in most Member States, contracts continue to be awarded on the basis of lowest price, in some cases up to 95% of tenders. This trend undermines the quality of services, encourages abnormally low bids and heightens the risk of undeclared work, as noted by the European Labour Authority. At the same time, local and regional authorities, who are the EU’s largest public investors, face a shortage of resources and expertise, coupled with complex legal requirements that slow down projects.
Strategic Objectives: Procurement as an Engine of Resilience
The resolution calls for a bold reform aligned with the Union’s wider goals of competitiveness, sustainability and industrial sovereignty. Public procurement, it argues, must serve as more than a neutral procedure. It should strengthen resilient supply chains, promote European-made goods and technologies in strategic sectors, and encourage innovation.
In line with the European Commission’s 2025 work programme and the “Clean Industrial Deal”, Parliament supports exploring “EU-content” or resilience criteria to secure supply chains in sensitive areas. However, it warns that such measures must remain anchored in legal certainty, fair competition and compliance with WTO obligations, so as not to slide into protectionism.
Main Challenges Identified
Declining Competition: Competition has weakened, with a growing number of tenders attracting only one bid or none at all. Complex procedures, fear of litigation and lack of legal clarity about using social or environmental criteria contribute to this trend.
Lowest Price Trap: The over-reliance on price-based criteria leads to downward pressure on quality, working conditions and sustainability standards. SMEs in particular report being discouraged from participating in tenders where compliance with labour law makes their bids uncompetitive against cheaper rivals.
Administrative Burdens: The current procurement directives amount to more than 900 pages of law. Excessive bureaucracy and disproportionate requirements deter SMEs and small contracting authorities. Payment delays and opaque selection procedures add further barriers.
Digital Gaps: Despite progress, digitalisation of procurement remains patchy. The European Single Procurement Document (ESPD) has not fully simplified participation. Lack of interoperability between national platforms continues to obstruct cross-border competition.
International Competition: The EU maintains one of the world’s most open procurement markets, but many non-EU countries restrict access to their own markets, creating unfair asymmetries. State subsidies abroad further distort competition. Recent rulings by the Court of Justice (C-652/22 and C-266/22) confirmed that non-EU bidders without trade agreements cannot claim secured access to EU tenders.
Areas for Improvement
Parliament’s resolution highlights several priorities for reform:
Sustainability and social clauses: Procurement should systematically integrate environmental and labour standards, as confirmed by CJEU case law (C-395/18). Socially responsible procurement can promote decent work, equality and territorial cohesion.
Updating thresholds: Current EU thresholds have remained virtually unchanged in real terms since 1994. Adjustments for inflation would relieve smaller authorities and allow more contracts to be tendered locally.
Simplifying procedures: A general principle should allow minor irregularities in tenders to be corrected, avoiding exclusion on purely formal grounds.
Digital-first approach: Procurement must move towards automated, interoperable and AI-assisted systems. The planned European Public Procurement Data Space is expected to improve transparency, detect fraud and open more opportunities for SMEs.
Combatting corruption: Stronger transparency rules, mandatory publication of negotiated procedures, and EU-wide registers of exclusions and conflicts of interest are proposed.
SME support: Simplified criteria, digital databases of pre-qualified SMEs, and proportional requirements would help level the playing field. Training and guidance for contracting authorities remain crucial.
A Balanced Way Forward
The resolution recognises procurement as both an economic tool and a vehicle for social, environmental and industrial goals. But it also insists on prudence: reforms must not undermine taxpayers’ money, create protectionist distortions or add new layers of red tape. The guiding principles of the upcoming reform, Parliament affirms, should remain with a value for money over the entire life cycle, a fair competition, and anti-corruption safeguards.
The European Parliament’s 2025 resolution is a call to unlock the untapped potential of public procurement. If implemented, the reforms could transform procurement into a driver of innovation, sustainability and strategic autonomy, while ensuring legal certainty and accessibility for SMEs. Ultimately, the challenge lies in balancing efficiency with ambition like reducing bureaucracy while elevating standards, remaining open to fair competition while defending European industries, and turning procurement into a true instrument of resilience in an era of global uncertainty.
Sources:
Public procurement European Parliament resolution of 9 September 2025 on public procurement (2024/2103(INI))
