The proposal is for a Regulation – the Public Procurement Act –, revising Directive 2014/23/EU on the award of concession contracts, Directive 2014/24/EU on public procurement and Directive 2014/25/EU on procurement by entities operating in the water, energy, transport, and postal services sectors. This change would mean that the text will not need to be transposed into national law but instead would apply immediately and directly to all Member States. 

Public procurement is a powerful instrument as public authorities spend around 15% of EU GDP annually on the purchase of goods and services, but its potential to deliver on the EU’s social and environmental goals has not been realised thus far. While the 2014 Directive made strides towards enabling socially responsible and sustainable procurement, in practice, the Directive failed to achieve these ambitions. The revision is, therefore, an opportunity to develop the rules in a strategic, socially and environmentally conscious way, ensuring that the money is well spent.  

To this end, CECOP welcomes the strategic goals outlined in Art. 5, including the aim to reinforce the Union’s manufacturing and industrial base, the achievement of climate and environmental objectives of the Union, and the pursuit of a fair and inclusive society. Industrial and service cooperatives are key partners in reaching these goals. Guided by the seven cooperative principles and values of democracy, equality and solidarity, cooperatives apply higher social and environmental standards but often find it difficult to access public procurement, particularly due to the frequent emphasis on lowest price. As such, the new public procurement rules may be able to improve cooperatives’ access to it. 

Best Price-Quality Ratio: a step forward that needs stronger enforcement 

Indeed, one of the key issues with the 2014 Directive is the prevalence of price-only awarding while the uptake of social and environmental considerations was lagging. The proposal for the Public Procurement Act makes the Best Price-Quality Ratio (BPQR) the default method, with quality criteria linked to the subject matter of the contract, following for instance social or environmental considerations, where applicable. The Act also stipulates that the quality criteria will represent at least 30% of the total points awarded, and at least 50% in the case of labour-intensive contracts. This is a crucial step in the right direction. However, as long as the quality criteria are not strictly enforced and more clearly defined, and as long as public buyers may derogate from this if the quality of the product, service or works procured can be ensured by other means (Art. 98(5)), the intention of adding mandatory quality criteria remains weak. 

Quality criteria: a positive development with limited reach 

We are glad to see specific chapters on Socially Responsible Public Procurement (SRPP), Green Public Procurement (GPP), and Innovation.  

In terms of SRPP, CECOP welcomes the explicit inclusion of the ‘promotion of the social economy’ under the social considerations public buyers may take into account. Further considerations that would fall under SRPP according to Art. 55 (2), such as social inclusion and labour market integration of persons with disabilities and disadvantaged persons, quality jobs, training, upskilling and reskilling for workers, or gender equality and non-discrimination measures for workers, are all key elements that can enhance access to public procurement for worker and social cooperatives, as these enterprises generally place greater emphasis on inclusion, quality employment and non-discrimination as part of their business model and governance structure.

Similarly, having a specific chapter on Green Public Procurement is a welcome addition. Industrial and service cooperatives’ values include environmental consciousness, with many of them demonstrating it by, for instance, operating within the circular economy, being active in the prevention and management of waste or technological innovation related to circularity and decarbonisation. 

Indeed, innovation is also an important facet of the operations of many industrial and service cooperatives, who continue to strive for new approaches to combine efficiency and effectiveness, particularly in light of the green and digital transitions. 

Overall, the explicit inclusion of SRPP, GPP and innovation procurement is positive, however, without establishing clear minimum requirements and thoroughly embedding qualitative considerations into the award criteria, its reach will be limited.  

European preference to be strengthened through ownership and value retention 

The proposal for a Public Procurement Act also includes provisions related to European preference. With the aim to steer the Union towards strategic autonomy and increase its competitiveness on the global market, the EU has begun developing a ‘Buy European’ or ‘Made in EU’ concept. We welcome the inclusion of European preference in the proposal, however, we are calling for the concept of 'Made in EU' to go beyond the geographical location of production and also take into account whether the value generated remains within the Union.  

CECOP therefore calls for a ‘Made in EU’ concept that rests on an ‘Owned by EU’ foundation. A genuine European Preference should reward economic operators that retain ownership, profits and decision-making power in EU. Public procurement should therefore enable contracting authorities to award additional points to Union economic operators, including enterprises such as cooperatives with value-retention mechanisms, that keep ownership and profits within the Union and contribute to quality employment, social cohesion and long-term territorial development. 

Maintaining reserved contracts while ensuring their full effectiveness 

We welcome the continued possibility to reserve contracts for enterprises whose aim is the social and professional integration of people with disabilities or disadvantaged persons where at least 30% of the workers are workers with disabilities or disadvantages. This is an important lifeline for work integration social cooperatives, whose democratic governance model empowers workers to participate directly in the decisions that shape their working lives and integration pathway. We are also glad that the restrictions are in place under the 2014 Directive (Art. 77) are removed, namely that the maximum duration of contracts can only be three years and that an enterprise that is awarded a contract cannot have been awarded a contract for the same services in the previous years. Removing these limitations will help ensure the continuity and stability of services that are often essential in particular for vulnerable populations, who rely on the uninterrupted provision of services and whose needs are best served through long-term, stable and trusted service providers. 

Enhanced SME participation with opportunities to do more 

The majority of cooperatives affiliated with CECOP members are small and medium-sized enterprises. In general, SMEs are often discouraged from bidding due to high administrative burden. We therefore welcome the establishment of interoperable eProcurement platforms and the National Public Procurement Data Spaces, which will facilitate access to public procurement for small and medium-sized cooperatives. However, we ask the EU to ensure that these platforms and data spaces are user-friendly and accessible, complete with all necessary guiding documents and relevant resources that can aid the digitalisation of procurement processes without excluding candidates. Furthermore, we call for harmonised templates that are systematically provided for all requested documents. 

One of the most effective ways to increase SME participation in public procurement is by dividing contracts into lots. We welcome the proposal stipulating that public buyers are strongly encouraged to divide contracts into lots by placing the burden on them to justify it if they do not do so. Similarly, another key way to promote the participation of SMEs is encouraging the setting up of business consortia. As micro, small and medium-sized cooperatives often struggle with disproportionate administrative requirements, bidding together as a consortium facilitates their access by making them better positioned to bid for and manage tenders. To this end, CECOP finds it positive that by default the same selection criteria that applies to other economic operators will apply to groups of economic operators, and that the selection criteria may be met by combining the abilities. 

In terms of modification of contracts, recent crises, such as the energy crises, have shown that the absence of price-revision clauses can create serious problems for contractors. Rising costs may erode profit margins or even force contractors to suspend performance in order to avoid providing services at a loss, which disproportionately affects SMEs. The proposed Regulation allows for the modification of contracts in certain cases, such as substantial changes in the applicable regulatory or legal framework or in case of disruptions, emergencies or crises having a significant economic, societal or operational impact. This is an important acknowledgement, however, we urge the EU to make price-revision clauses mandatory in other key instances, for example in the event of cost changes resulting from modifications in the labour law or collective agreements. By adding these mandatory price-revision clauses, the Regulation would ensure a fairer allocation of risk between contracting authorities and contractors, remove a significant barrier to small and medium cooperative participation, and ultimately strengthen the continuity in the delivery of services. 

We also welcome the expansion of the list of grounds for exclusion. However, we note the continued vagueness of the rule related to ‘grave professional misconduct by an economic operator’ (Art. 26(1)(c)), which often contributes to great uncertainty and litigation. We therefore call for the clarification of this point. 

In addition to facilitating access for SMEs, the revision of public procurement rules and particularly the emphasis on socially responsible and green procurement is a good opportunity to further promote access for cooperatives and the wider social economy family. While the proposal will make it easier for cooperatives to bid in certain ways, it would be important to increase contracting authorities’ knowledge of these enterprises and their added value by organising targeted trainings and other awareness-raising initiatives. By doing so, the uptake of socially responsible and green public procurement will be enhanced, while simultaneously improving social economy enterprises’ access to public procurement.  

Overall, the proposal for a Public Procurement Act shows an improved understanding of how public procurement can be better utilised to promote higher social and environmental standards and achieve strategic objectives. Nevertheless, weakened and limited provisions will lead to the Act not living up to expectations. The introduction of National Public Procurement Data Spaces connected to a Union-level Data Space is an important development for monitoring the functioning of public procurement.

Comprehensive and transparent data on the uptake of social, green and innovation criteria will be necessary to evaluate the extent to which the Act can deliver on its ambitions. 

As the proposal will enter the co-decision phase, CECOP expects the European Parliament and the Council to further strengthen several provisions to ensure that public procurement fully supports the Union’s social, environmental and industrial objectives. We stand ready to engage constructively with policymakers and stakeholders throughout the legislative process and to work hand in hand with the EU institutions to help deliver a more ambitious and effective framework.