EU Treaty Principles (TFEU) in Procurement

The Treaty on the Functioning of the European Union (TFEU) is the foundational legal document of the EU's internal market. While the TFEU does not contain specific procurement rules, its core articles on free movement of goods (Articles 34-36), freedom of establishment (Article 49), and freedom to provide services (Articles 56-62) give rise to a set of general principles that the European Court of Justice has consistently applied to public procurement. These principles matter because they apply even to contracts that fall below the financial thresholds of the procurement directives or to entities not covered by those directives, provided the contract is of sufficient cross-border interest.

What are the EU Treaty Principles in procurement?

The Court of Justice has derived five core procurement principles from the TFEU, which together define the minimum obligations that public buyers must meet when awarding any contract that could attract interest from suppliers in other EU member states:

Transparency. Contracting authorities must ensure an adequate degree of advertising to allow suppliers from other member states to submit tenders. The level of transparency required is proportionate to the cross-border interest of the contract: a large, specialised services contract requires more advertising than a small local works contract. This principle is codified and amplified in Directive 2014/24/EU, but it applies independently of the Directive to below-threshold contracts of cross-border relevance.

Equal treatment and non-discrimination. All suppliers, whether domestic or from other EU member states, must be treated equally at every stage of the procurement process. Technical specifications, selection criteria, and award criteria must not favour domestic suppliers by requiring a local presence, local references only, or products that only domestic suppliers can provide.

Proportionality. Any requirement imposed on tenderers must be proportionate to the nature and value of the contract. Requiring excessive financial guarantees, disproportionate insurance levels, or irrelevant technical qualifications for a straightforward contract breaches this principle.

Mutual recognition. Certificates, qualifications, and technical standards issued or recognised in one EU member state should be accepted in others. Contracting authorities cannot insist on domestic certification where an equivalent from another member state is available.

Legal certainty and the avoidance of arbitrary decisions. Award decisions must be based on pre-published, objective criteria. Changing criteria mid-procedure or applying undisclosed factors violates both the transparency and equal treatment principles.

These principles underpin the entire structure of the procurement directives. They also apply directly to concession contracts below the threshold of Directive 2014/23/EU, to mixed contracts, and to below-threshold public contracts that attract or could attract cross-border bidders.

Why it matters for bidders

The TFEU principles give cross-border suppliers a basis for challenge even where no specific directive applies. If a Spanish public body below the EU threshold awards a contract through an opaque process that clearly favours a domestic supplier, a supplier from another EU member state can argue that the TFEU principles were breached. This is the foundation of the European Commission's approach to monitoring below-threshold procurement and is why the remedies framework extends, through national courts, to TFEU-based claims as well as directive-based ones.

For bidders, the principles also shape what you can expect from any public buyer in Europe: pre-published criteria, equal treatment of your qualifications and certifications, and decisions based on the stated criteria.

Example

An Italian IT company learns that a French regional council awarded a below-threshold software contract through a closed competition advertised only in the local French press, specifying that bidders must have a French registered office. The contract value and the specialised nature of the services suggest clear cross-border interest. The Italian company can argue that France has breached the TFEU principles of transparency and non-discrimination by restricting competition to domestic suppliers without justification.

Frequently Asked Questions

Do TFEU principles apply in the UK after Brexit?

No. The TFEU no longer applies in the UK. UK procurement is governed by the Procurement Act 2023 and national common law principles. However, UK suppliers bidding for contracts in EU member states remain subject to the TFEU principles and the procurement directives as applied by EU contracting authorities.

How do I know if a below-threshold contract has cross-border interest?

The European Court of Justice has assessed cross-border interest based on the contract value, the geographic location of the authority (near a border, in a major city), the specialised or standardised nature of the supply, and other objective factors. There is no bright line; it is a case-by-case assessment. The European Commission's guidance on below-threshold procurement provides practical indicators.

Can contracting authorities require local establishment for below-threshold contracts?

Only if they can justify the requirement on non-discriminatory grounds. In most cases, requiring a local registered office for a services contract has no objective justification and would breach the TFEU freedom of establishment principle. Authorities may impose local presence requirements only where genuine operational necessity (not mere administrative convenience) requires it.