On 9 September, the European Commission unveiled its Public Procurement Act, a Regulation proposal to simplify and modernise EU procurement rules. It merges three existing EU Directives into a single, 200-page framework aiming at reducing administrative burdens, accelerating digitalisation and aligning public spending with the Single Market’s strategic environmental and social goals.

EBC welcomes the inclusion of several of its demands, notably structural reforms to safeguard construction supply chains and improve liquidity for micro-enterprises and SMEs. It effectively bans financial subcontracting (the subcontracting of an entire contract) and clearly reaffirms the liability of the main contractor in subcontracting chains. It also improves payment transparency through proactive digital tracking, enabling public buyers to transfer due payments directly to subcontractors upon request, and explicitly encourages advance payments under conditions. Finally, it attempts to clarify the role of Building Information Modelling as the standard approach for high-value construction procurement.

The proposal maintains current thresholds, with a two-year transition period before full application and a mandatory review every seven years. Regarding the division into lots of bigger contracts, it is not rendered mandatory but public authorities are called to justify why not and avoid macro clustering of works. More radically, the Commission wants a shift toward the Best Price-Quality Ratio as the standard award criterion; a positive direction that requires clarification on practical implementation to ensure it benefits SMEs. Additionally, the proposal establishes a mandatory 30% quality weighting floor, which rises to 50% for labour-intensive fields like construction, in theory steering public buyers away from a purely lowest-price mindset.

The text also seeks to lower entry barriers for small businesses by capping minimum annual turnover requirements at 50% of the estimated contract value, under conditions. To boost the digitalisation of procurement, it establishes a two-tier digital procurement data space connecting a new EU-level electronic ecosystem directly with national databases and enabling the use of digital business credentials based on the “only-once” principle to simplify eligibility checks and replace the dysfunctional European Single Procurement Document, as requested by EBC. The introduction of new standardisation requests for harmonised standards to govern procurement document processes can also help SMEs if designed appropriately.

However, the Commission resisted several critical demands advocated by construction SMEs. The text sets no SME participation targets, omitting EBC’s requested 30% contract value reservation for micro-enterprises and SMEs. It also lacks a principle of limitation for vertical subcontracting tiers and maintains the legacy 20% cap on market sales for in-house procurement. Overall, novel processes and practices need unambiguous definitions and further detail to ensure a level playing field for SMEs.

EBC President Jean-Christophe Repon noted: “The Commission’s ambition to simplify and make public markets more accessible for our artisans is heard, with positive steps to cut red tape and halt the lowest-price race to the bottom. Clearer rules for lots, banning financial subcontracting and a mandatory, digitally enabled ‘only-once’ principle can benefit small construction companies if implemented correctly. However, omitting a minimum level of direct participation in public procurement for micro-enterprises and SMEs and a general principle of limitation of tiers for vertical subcontracting chains inconstruction means our work is far from over. New frameworks should not create more bureaucracy or other dependencies for small companies in practice, EBC will be vigilant that the legislative process delivers genuinely fair competition for Europe’s construction crafts and SMEs.”

The EBC Secretariat is analysing the text in depth and will engage with EU institutions and stakeholders throughout the legislative process.

To access the full Public Procurement Regulation proposal, click here.

To access the EBC Position Paper on Public Procurement, click here.

To access the EBC Policy Note on Construction Subcontracting chains in Public Procurement, click here.