UNI Europa welcomes EU Council’s call for review of Public Procurement Directive

On 24 May 2024, EU ministers adopted Council conclusions on competition for EU public procurement contracts (after a report by the European Court of Auditors). The conclusions call on the European Commission to make an urgent assessment of the necessity of a revision of the Public Procurement Directive.

UNI Europa welcomes the Council’s call to undertake a long-overdue, in-depth analysis of the Directive and an improved use of strategic procurement, including socially responsible public procurement. Currently, the EU’s public procurement rules are skewed to favour price in the awarding of contracts over all other considerations. Under these circumstances, companies consistently turn to undercutting working conditions by suppressing their workers’ fundamental collective bargaining rights.

That’s why UNI Europa urges a revision of the Directive to ensure that only companies with collective bargaining agreements with their workers receive public tenders. This aligns with the commitments to improving public procurement rules in the La Hulpe declaration adopted by the Council in April 2024 and the message of Enrico Letta’s report on the single market.

One major obstacle is legal uncertainty created by the Directive. Effectively, this leads to a deterrent for public buyers that intend to include collective agreements as procurement criteria. In labour-intensive industries in particular, it disincentivises the broad participation of companies in public tender processes, as the sectoral social partners in cleaning, security and catering have said in joint statements.

The Council conclusions make several positive references to public procurement reform:

• “the Commission to undertake, without delay, an in-depth analysis of the existing legislative framework on public procurement (including Directives 2014/23/EU, 2014/24/EU, and 2014/25/EU) to assess whether a revision is necessary during the 2024-2029 term in light of the major commitments that the EU made in order to achieve its sustainable development objectives by 2030”
• “contrary to the objectives of the Procurement Reform 2014, ECA noticed [… ] an insufficient use of strategic public procurement [and] shortcomings in the Commission’s and the Member States’ monitoring of developments in the public procurement market”
• “the need for the Commission and the Member States to … consult the relevant stakeholders to prevent the emergence of possible barriers, identify and overcome the main obstacles to sustainable procurement and fair and effective competition”
• “in addition to carrying out the in-depth analysis, it is essential to achieve a better understanding of the root causes behind the decrease in competition in public procurement”

The Council conclusions also call for an EU-wide strategic action plan on public procurement. This plan should include a revision of the EU Public Procurement Directive to ensure that only companies with collective agreements receive public funds. That would allow public tender processes to be leveraged for the 80 per cent target collective bargaining coverage across the European Union as set out in the EU Minimum Wage Directive. Public money should not fuel a race to the bottom. There should be “no public contract without collective agreement.”