Public Procurement Act: A Major Reform of European Public Procurement and Concession Rules

The proposal would replace the three 2014 public procurement directives with a single regulation. As a directly applicable legal instrument, the regulation would not require transposition into national law. Consequently, Luxembourg’s Law of 8 April 2018 on public procurement and Law of 3 July 2018 on the award of concession contracts would need to be amended or repealed accordingly.

Luxembourg, like the other Member States, would have less scope to adapt the European framework to its national legal system, as the same rules would apply uniformly across all 27 Member States.

The current EU framework is notably based on https://eur-lex.europa.eu/eli/dir/2014/24/oj and https://eur-lex.europa.eu/eli/dir/2014/23/oj.

2. SIMPLIFICATION OF PROCUREMENT PROCEDURES

The various procedures currently available, including the open procedure, restricted procedure and competitive dialogue, would be replaced by three procedures: an open procedure, a dynamic procedure and an innovation procedure.

Negotiation would become available across all procurement procedures at the discretion of the contracting authority, marking a significant departure from the current framework. Under the existing regime, negotiation is permitted only in limited and duly justified circumstances. The broad availability of negotiations would therefore constitute a genuine paradigm shift in public procurement practice.

Preliminary market consultations would also be encouraged as a standard preparatory tool, while selection criteria would be limited to those that are necessary and proportionate.

Further information on the existing EU framework is available on the https://single-market-economy.ec.europa.eu/single-market/public-procurement_en.

3. BEST PRICE-QUALITY RATIO AS THE DEFAULT AWARD CRITERION

The lowest-price criterion would no longer be available as the default option. Instead, the Best Price-Quality Ratio, or BPQR, would become the default award methodology under an “apply or explain” approach.

A minimum weighting of 30% would be allocated to quality criteria. This minimum weighting would rise to 50% for labour-intensive contracts involving significant social considerations.

4. INTRODUCTION OF AN EU PREFERENCE MECHANISM

This is one of the proposal’s most significant innovations. Contracting authorities would be permitted, and in certain circumstances required, to apply EU preference requirements, notably by restricting participation to economic operators established in the EU or EEA, or in countries covered by relevant international trade commitments, including the https://www.wto.org/english/tratop_e/gproc_e/gp_gpa_e.htm and applicable free trade agreements.

The European Commission would also be empowered to exclude economic operators from third countries not covered by such international commitments from certain procurement procedures.

5. SECURITY, RESILIENCE AND STRATEGIC PROCUREMENT

A new chapter would require contracting authorities to assess and address risks relating to cybersecurity, strategic dependencies and supply-chain resilience, particularly in connection with contracts involving critical infrastructure.

Environmental requirements, including circularity and energy efficiency, and social requirements, including working conditions, accessibility and equality, would also be consolidated and strengthened. The European Commission could additionally impose mandatory green procurement requirements for certain categories of products.

These objectives are consistent with the EU’s broader environmental and industrial policy priorities, including the https://commission.europa.eu/strategy-and-policy/priorities-2019-2024/european-green-deal_en and the https://commission.europa.eu/strategy-and-policy/priorities-2019-2024/europe-fit-digital-age/industry_en.

6. AN INTEGRATED DIGITAL ECOSYSTEM

The proposal would establish a European interoperability network, an electronic eligibility service, and national and European data spaces designed to replace the fragmented systems currently in place.

As part of this new digital architecture, Luxembourg would be required to establish a National Public Procurement Data Space.

7. TIMELINE

Negotiations between the European Parliament and the Council are expected to be concluded by the end of 2027.

The regulation is expected to apply two years after its entry into force, meaning that the new framework could become applicable around 2029 or 2030.

Contracting authorities and economic operators would therefore be well advised to anticipate these far-reaching reforms and assess their potential operational and compliance implications at an early stage.