SME’s call for EU public tender law reform

13 February 2023

SME’s call for EU public tender law reform

15 European start-up and SME associations have published a statement calling on EU leaders to reform the laws that govern public tenders in Europe. They argue that this is needed to “support the effective pursuit of the European Green Deal and the twin transition, to preserve European sovereignty and strategic autonomy, and to put European innovative start-ups on a level-playing field with third countries’ stakeholders.”

The statement is written in the context of the recent adoption of the US Inflation Reduction Act, which includes protectionist “Buy American” measures. In response, the European Commission is already planning to adapt State aid rules, and to implement new financial instruments, but the SME’s warn that the EC should do more to leverage public procurement as a tool for the development of innovative products and services in the EU.

The statement notes that innovation in the EU is currently mostly addressed through a limited R&D lens and that “in practice innovative start-ups are often shunned from public procurement processes due to risk-averse buyers who are not equipped to assess the added-value of innovative start-ups’ solutions, especially in addressing environmental challenges.”

For these reasons, the SME's note that new public procurement tools are needed, which should“include the revision and modernisation of EU procurement rules, the adoption of tailored criteria to ensure that the future European Sovereignty Fund will support investment in strategic areas, and a more effective promoting of innovation among public buyers. Such solutions require both amending and effectively implementing the EU institutional and legal framework, in compliance with international trade agreements and the equal treatment principle.”

More specifically this would mean that in each stage of the procurement process, public buyers should be guided by the following four principles:

  • Procurement rules should better account for technology and innovation, through the lens of the added-value for the European economy, as well as contribution of the products/services to sovereignty by including the security of supply dimension;
  • The circular economy must be part of the decision-making process of public buyers, assessing offers based on criteria regarding the production process, from inputs to transformation and distribution stages;
  • Adverse effects must be taken into account, in particular external environmental costs (including avoided greenhouse gas emissions), which impact the value of the services/products to be procured;
  • Overall, an appropriate long-term view of the life cycle of products/services must be ensured, including the management of end-of-life and ease and quality of recycling, for procurement to achieve more resource-efficient outcomes

The full statement can be read here


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