International Procurement: New Tool From EU

The EU has opened its public procurement markets to a significant degree to competitors from third countries and has been advocating for the end of protectionist measures.

With the aim to help EU companies with more opportunities to tender outside the EU, European Parliament has adopted yesterday, december 14 2021, its position on the international procurement instrument.

Parliament backed the overall aim of the proposed International Procurement Instrument (IPI) but tweaked its design, scope and member states’ discretionary powers in the way it is applied.

The IPI encourages public procurement markets in countries that protect this sector to be more open. It does so by introducing measures that limit non-EU companies’ access to open EU public procurement tenders if they come from countries that do not offer similar access to EU enterprises.

The instrument would empower the Commission to determine whether and to what extent companies from a third country must be subject to an IPI measure.

Commission can choose beetween to two types of IPI measures to resolve unequal access to public procurement markets:

  • adjusting the score given to bids made by companies subject to IPI (without affecting the price to be paid to the successful bidder);
  • excluding the company from bidding.

In addition, national contracting authorities can only opt out from IPI measures in two cases:

  • when all bids have been made by companies from countries subject to an IPI measure;
  • and in cases where the public interest overrides IPI considerations, such as in areas of public health or environmental protection.

However, MEPs insist that companies from least developed countries and vulnerable developing countries should be exempt.

MEPs establish different thresholds to determine which procurement procedures are subject to an IPI measure:

  • those worth at least €10 million for works and concessions (such as highway construction);
  • those worth at least €5 million for goods and services.

The adopted text serves as the negotiating mandate for the parliamentary delegation that is set to start talks on the final form of the instrument with the Council on the next 16 December.