Economic Operator

The term "economic operator" is the EU procurement law equivalent of "supplier" or "bidder," but it is deliberately broad. It covers any entity that can participate in a public tender, regardless of its legal form or size. Using this neutral term ensures that procurement rules apply equally to all market participants and that contracting authorities cannot discriminate based on organisational form.

What is an Economic Operator?

Article 2 of Directive 2014/24/EU defines an economic operator as any natural or legal person, or public entity, or group of such persons or entities, including any temporary association of undertakings, which offers the execution of works, the supply of products, or the provision of services on the market. This definition is intentionally wide.

In practice, an economic operator can be:

• A limited company or corporation
• A sole trader or self-employed individual
• A partnership or limited liability partnership
• A consortium of companies bidding jointly (a temporary grouping for the purpose of a specific tender)
• A non-profit organisation or charity, if it offers the relevant service on the market
• A cooperative or mutual
• A public body, in some circumstances, if it competes commercially for contracts

The key qualifier is that the entity must offer goods, works, or services "on the market." Purely internal departments of a contracting authority that exist only to serve that authority do not qualify as economic operators, which is the basis of the in-house provision (Teckal) exemption.

When economic operators bid jointly as a consortium, they do not need to adopt a formal legal structure before submitting a bid. However, the contracting authority may require the consortium to adopt a specific legal form once the contract is awarded, if that is necessary for proper performance.

Why it matters for bidders

The breadth of the definition is protective. Contracting authorities cannot exclude you from participating simply because you are a small company, a sole trader, a non-profit, or a new entrant to the market. They can only apply exclusion grounds that are specified in the directive (such as convictions for serious crimes, grave professional misconduct, or poor prior performance) and selection criteria related to the economic, technical, and professional capacity required for the specific contract.

The principle that economic operators must be treated equally regardless of their form underpins the principle of equal treatment and the principle of non-discrimination, which are cornerstones of EU procurement law.

Example

A French municipality is procuring landscape maintenance services. The following entities are all economic operators entitled to submit a tender: a large national facilities management company, a local sole trader specialising in horticulture, a consortium of three small regional companies bidding together, and a social enterprise that employs people with disabilities. The municipality cannot restrict the competition to a preferred form of supplier.

Frequently Asked Questions

Can a company from outside the EU bid on European public contracts?

Yes, in many cases. EU procurement rules generally allow economic operators from third countries to participate if there is an applicable trade agreement. The WTO Government Procurement Agreement (GPA) grants suppliers from signatory countries (including the UK, US, Canada, Japan, and others) the right to compete on many EU public contracts. Some categories of contracts, particularly defence and security procurement governed by Directive 2009/81/EC, may restrict participation to EU or NATO-country suppliers.

Can a contracting authority limit participation to local or national suppliers?

No. Restricting competition to local or national suppliers would violate the principle of non-discrimination and the free movement of goods and services. Buyers can set objective technical and professional requirements, but those requirements cannot be written to exclude suppliers from other member states or other qualifying countries.

What is the difference between an economic operator and a subcontractor?

An economic operator is the entity that holds the contract with the contracting authority and is legally responsible for performance. A subcontractor is engaged by the main contractor to perform part of the work, but has no direct legal relationship with the contracting authority. Subcontractors may be required to be disclosed, and in some cases contracting authorities may require key subcontractors to meet selection criteria, but the main economic operator remains accountable.