New EU Public Procurement Act proposal moves towards quality but needs stronger social safeguards

Today, the European Commission presented a proposal for a new Public Procurement Act. The proposed Regulation would replace the three existing EU directives on public contracts, utilities procurement and concessions with a single, directly applicable set of rules.
CESI supports the objective of making procurement simpler and more consistent across the EU. It also welcomes several elements that reflect priorities set out in CESI’s previous advocacy work on public procurement.
In particular, the proposal recognises that procurement should contribute to social justice, fair working conditions and social dialogue. It requires public buyers to take appropriate measures to ensure compliance during contract performance with applicable social and labour law, including obligations established by collective agreements (Articles 5(c) and 4(4). These provisions offer a stronger basis for preventing public contracts from being carried out at the expense of workers’ rights.
CESI Secretary General Klaus Heeger said: “The proposal represents progress towards a procurement system in which quality and working conditions matter alongside price. It responds to several concerns raised by CESI before, but it does not yet ensure that social considerations will really be applied consistently. The negotiations must turn positive principles into clear and enforceable obligations so that public money supports quality jobs and collective bargaining rather than social dumping.”
The proposed shift towards the best price-quality ratio as the standard award method is particularly welcome, compared to currently applicable rules according to which contracting authorities may still award contracts on the basis of price or cost alone, unless Member States prohibit or restrict this possibility (Article 67(2) of Directive 2014/24/EU). Quality criteria would generally have to account for at least 30% of the available points and at least 50% in labour-intensive contracts.
This addresses an important CESI demand: Public authorities should not be driven towards the cheapest tender irrespective of its employment and social consequences, as it is too often the case under the currently applicable rules. Awarding contracts principally on price can place responsible employers, including those applying collective agreements, at a disadvantage compared with operators that compete through lower wages or poorer working conditions.
However, the proposal allows public buyers to depart from the minimum quality weightings when they consider that quality can be secured through specifications or contract-performance conditions (Article 98(5). The co-legislators should narrow and clarify this derogation, require a substantive justification and ensure that it cannot become a route back to price-only tendering.
For labour-intensive services in particular, a meaningful share of the required quality weighting should be reserved for social considerations such as remuneration, occupational health and safety, workforce stability, training and respect for collective bargaining.
The proposal creates a dedicated chapter on socially responsible public procurement and explicitly identifies high-quality jobs, collective bargaining, improved working conditions, training, gender equality, non-discrimination and human rights in supply chains as possible social considerations.
This recognition is positive, as is the clarification that such considerations may be included in specifications, award criteria, selection criteria and contract-performance conditions. Nevertheless, in Article 55(1) and (3) a central provision states that public buyers “may” apply them. It therefore falls short of CESI’s demand for mandatory social criteria in procurement procedures. The European Parliament and the Council should establish a more binding social conditionality covering compliance with EU, national and sectoral labour rules, collective agreements, minimum-wage requirements and occupational health and safety standards.
In Article 26(1)(a) the proposed rules also allow, rather than require, the exclusion of an economic operator for breaches of applicable obligations. CESI calls for serious or repeated infringements of labour law, collective agreements and occupational safety rules to lead to effective exclusion from procurement procedures. Importantly, these obligations should apply throughout subcontracting chains, accompanied by sufficient transparency and effective monitoring.
Moreover, unfortunately, the proposal does not establish specific safeguards for workers when a service passes from one contractor to another. Frequent re-tendering can create uncertainty over continued employment, pay, working conditions and recognition of length of service. The co-legislators should therefore add transition provisions protecting employment and existing terms and conditions, alongside timely information and consultation of trade unions and workers’ representatives.
In terms of implementation, new and simpler procedures will only deliver better outcomes only if public buyers have sufficient staff, expertise and resources to design contracts, assess social criteria and monitor their execution. CESI therefore welcomes the emphasis on professionalisation, data and governance in public authorities issuing tenders, while stressing that implementation capacity in public administrations must be adequately supported.

‍