Public Procurement

Public procurement encompasses every purchase made by public bodies using public money, from office supplies bought by a local council to major infrastructure projects commissioned by national governments. In Europe, it represents approximately 14% of GDP, making it one of the most significant drivers of economic activity in the region. The rules governing how this money is spent exist to prevent corruption, ensure competition, and deliver value for taxpayers.

What is Public Procurement?

At its core, public procurement is the structured process through which a contracting authority identifies a need, invites economic operators to compete for a contract, evaluates their offers, and awards a public contract to the most suitable supplier. The process is heavily regulated to ensure that public money is spent effectively and that suppliers across Europe can compete on equal terms.

In EU member states, the primary legislative framework is Directive 2014/24/EU (covering standard public sector contracts), Directive 2014/25/EU (covering utilities sectors such as water, energy, transport, and postal services), and Directive 2014/23/EU (covering concession contracts). Together these directives set out the procedures, thresholds, and principles that national procurement laws must implement.

In the United Kingdom, public procurement is now governed by the Procurement Act 2023, which came into force in February 2024. The Act replaces the body of EU-derived law that applied before Brexit and introduces a single unified framework covering central government, local authorities, NHS bodies, and other public entities. Norway, Switzerland, and other EEA or associated countries have their own national frameworks, but all are influenced by EU procurement principles through trade agreements and international commitments under the WTO Government Procurement Agreement (GPA).

Why it matters for bidders

Understanding how public procurement works is the first step to winning public contracts. The market is large, relatively stable, and bound by rules that prevent buyers from arbitrarily favouring incumbent suppliers. This means that a well-prepared bid from a company of any size can, in principle, succeed against an established incumbent.

The rules also create obligations on buyers: they must publish opportunities in advance, give all interested suppliers the same information, and explain why they made their decision. This transparency creates a level playing field and makes it possible for bidders to challenge unfair outcomes through review and remedies procedures.

Example

A regional health authority in Germany needs to procure laboratory testing services. Because the value exceeds the EU threshold for service contracts, the authority must follow the procedures in Directive 2014/24/EU, publish a contract notice in the Official Journal of the EU (OJEU) via the TED platform, allow a minimum tender period, evaluate bids against published criteria, and notify unsuccessful bidders of the outcome before signing the contract.

Frequently Asked Questions

What types of organisations must follow public procurement rules?

Any body that meets the definition of a contracting authority is bound by procurement rules. This typically includes central government departments, local and regional authorities, public universities, hospitals, and any body that is publicly funded, publicly controlled, or established to serve a general interest need. Private companies are generally not covered unless they operate under a special or exclusive right in a regulated sector, in which case Directive 2014/25/EU may apply.

Are all purchases subject to procurement rules?

No. Rules apply above certain financial thresholds that are set by the European Commission and updated every two years. Below those thresholds, contracting authorities must still observe general principles such as transparency and non-discrimination, but they have more flexibility in how they run the process. Some categories of contracts, such as in-house arrangements (the Teckal exemption) and public-public cooperation agreements, may be entirely exempt.

How do I find public procurement opportunities in Europe?

EU above-threshold contracts must be published on TED (Tenders Electronic Daily), the online supplement to the Official Journal of the EU. Below-threshold and national opportunities are published on national and local procurement portals. Bidovate aggregates these sources so European suppliers can find relevant opportunities across multiple countries from a single platform.