Public procurement in the EU: A shift in approach is needed

Abstract

Public procurement (PP) in the EU faces major challenges. Competition is limited. Geopolitical tensions are rising. Innovation and sustainability are lagging behind. AI is advancing rapidly. Etc. These challenges arise in a context where tendering has become a lawyers' paradise. Across the EU, a culture has emerged that prioritizes legal formalism and paper tenders over dialogue. At the same time, there is a lack of data that captures aspects such as contract execution. To address these issues, a shift in approach is needed. 1. Prioritize policy goals over rigid rule compliance Legal compliance is essential, but it should not become an objective in itself. Core goals such as global competitiveness, innovation, and sustainability, should be emphasized more clearly and become the foundation of the new directives. The goals are currently often overshadowed by strict interpretations of the law. A comply or explain mechanism for integrating sustainability could help give such a goal more attention. The focus should not be on mandatory sustainable award criteria or weightings though. This is a rigid approach and doesn't align with decision-making theory (e.g. a tender for 2 nd-hand office furniture doesn't necessarily require a sustainability award criterion) and research about scoring rules. Finally, better data is needed to measure whether the goals are achieved. The current data is often of low quality and not goal-oriented but focused on tender processes. 2. Encourage dialogue between buyers and suppliers The current directives don't encourage buyers to engage in dialogue with suppliers. Yet, dialogue-based PP enables greater innovation, less rigid specifications, etc. The current directives have, however, contributed to a risk-averse culture and a paper-based tendering standard. This applies to tenders above the thresholds but also below, where the majority of PP takes place. Many buyers replicate the methods they have learned for EU tenders in private ones, even when this is overly complex. One way to address this is to provide more opportunities for dialogue with suppliers: • Allow more flexibility within open and restricted procedures, giving (not requiring) member states the option to include a structured dialogue round. This could lead to fewer tender decisions based on paper only and create more room for innovation etc. • Make the competitive procedure with negotiation a default option, as is the case in the UK and make a prequalification round optional.