European builders push for simpler public procurement rules

FIEC supports the proposal’s key objectives — simpler rules, fairer competition, and greater scope for quality and innovation — but points out that the success of the reform will ultimately depend on its implementation rather than on the legal form it takes.

A key area of concern is the Commission’s decision to replace the three existing Public Procurement Directives with a single Regulation, which will be directly applicable in the Member States.

FIEC states that it continues to favour the Directive model, considering that it allows greater scope for adaptation to national specificities and the particular circumstances of the construction market. According to the Federation, the transition to a Regulation represents a significant change and requires careful assessment of its implications for national administrative and contractual systems.

The fact that the new rules will apply directly, it adds, does not automatically mean that procedures will become simpler or more uniform. The real test will be the extent to which uncertainty, administrative burdens and reporting requirements are reduced for both contracting authorities and businesses, with particular emphasis on small and medium-sized enterprises.

From the Lowest Price to “Long-Term Value”

FIEC takes a positive view of a number of provisions that could change the way public works are designed and awarded. These include greater emphasis on market consultation, functional specifications, the possibility of alternative solutions, and the rejection of abnormally low tenders.

The objective is for procurement procedures to reward solutions that create value over the long term, rather than simply selecting the bid with the lowest initial cost.

The Federation nevertheless warns that greater flexibility in procurement procedures must be accompanied by transparency, protection of confidential business information, and financially viable contracts.

Negotiations, it notes, should be used to improve technical solutions and achieve a more appropriate allocation of risk, rather than evolving into successive rounds of price compression or requiring a large number of bidders to undertake disproportionately extensive design work before a contractor has even been selected.

FIEC is also closely examining the rules governing subcontracting, grounds for exclusion from procurement procedures, the protection of intellectual property, and transparency in “in-house” awards. The Federation calls for these rules to be proportionate, so that they do not restrict legitimate cooperation between specialised companies or limit SMEs’ access to public works contracts.

At the same time, it places particular emphasis on the predictability of contractual terms, appropriate price-adjustment mechanisms, and a balanced allocation of risks between the public sector and contractors.

The Major Challenge of Digitalisation

According to FIEC, the strongest element of the reform is the full digitalisation of public procurement.

The creation of a single European portal, the “once-only” principle — whereby businesses would not be required to submit the same information repeatedly — and the use of reusable electronic business certificates could significantly reduce bureaucracy and facilitate companies’ participation in cross-border procurement procedures.

“Digitalisation is not a burden that needs to be absorbed,” FIEC states, describing it instead as the most effective simplification measure included in the reform.

The transition, however, should take place gradually and be accompanied by training, guidance and financial support for SMEs, as well as interoperable information systems and alternative procedures during the transitional period.

FIEC, which represents construction companies in 28 countries through 33 national associations, is expected to undertake a more detailed assessment of the proposal in cooperation with its members.