On 9th September 2026, the European Commission issued its proposals for a significant change to the legal regime that governs the EU's vast public procurement market.
Public contracts account for around 15% of the EU's GDP every year. They are central to the European economy, covering everything from transport, transport , infrastructure, and energy to education and healthcare. Current rules governing the award of these contracts have been in place in Ireland since 2016, but following a review by the Commission earlier this year, these are to be overhauled.
It is proposed that an EU Regulation will replace the three existing public procurement Directives which regulate public sector, utilities and concession contracts valued above certain financial thresholds. A single instrument, directly applicable in Ireland, is intended to provide a more coherent, harmonised and simplified legal framework which will drive competition and innovation and help achieve the economic, political and strategic objectives of the EU. According to a 2023 study by the European Court of Auditors, competition for public contracts decreased in the ten years to 2021, the incidence of single bids increased and procurements took longer to complete. The Commission's proposals are a direct response to these failings, however they go much further by also seeking to address the serious geopolitical, climate and social challenges that the EU faces today.
Simplification
The Commission has described the draft Regulation as "an act of radical simplification" and it is true that some of the complexity of the current Directives is absent from the proposals. In particular, there will only one principal legal instrument where currently there are three, albeit some specific rules will continue to apply to concession contracts and in the utility sector. The four main procurement procedures prescribed by the Directives – open, restricted, competitive dialogue and negotiated will also cease to be available. Public buyers will in the future have a basic choice between two procedures – an open procedure or a dynamic procedure (similar to what we know today as a dynamic purchasing system); each of these may incorporate a selection stage and/or negotiations with bidders, if the buyer so chooses. In general, it seems that procedures can be shorter and the rules governing them will be more flexible. An innovation procedure is also available for public buyers to use for addressing 'societal challenges' and when their needs cannot be met by the market without some innovative research and development. Importantly, the fundamental principles of equal treatment, non-discrimination, proportionality and transparency continue to apply no matter what procedure is adopted.
Framework
It is proposed that a single party framework will be limited to a duration of three years and a multi-party framework may not exceed five years except in exceptional circumstances where longer terms are justified by the framework's complexity or specialised nature. Call-off contracts may not extend beyond the duration of a framework agreement by more than 50% of the duration of the framework.
EMPHASIS ON QUALITY & ENERGY EFFICIENCY
Under the proposed new rules the weighting on quality must be at least 50% when procuring labour-intensive contracts (i.e. where labour normally accounts for at least 50% of the contract value), and at least 30% when procuring other contracts - unless quality can be otherwise ensured by contracts specifications conditions for performance or any combination of these with award criteria (in which case this must be explained when the contract is being advertised). These changes are intended to curtail the use of evaluation methodologies which are based on price or cost only.
EUROPEAN PREFERENCE
One of the biggest changes proposed is the introduction of 'EU preference' requirements. Public buyers may restrict their procurements to economic operators from EU countries and countries which are party to certain trading arrangements with the EU (so-called 'covered countries'). Buyers may also require that the goods, services or works to be procured originate in the EU or in covered countries and they may reject a tender where the value of EU/covered goods, services or works in the tender amounts to less than 50% of the total estimated value of the tender. Public buyers may even apply a percentage price reduction or allocate additional points when evaluating EU or covered operators, or where a tender contains a higher proportion of EU or goods, services and/or works from covered countries when compared to other tenderers. Specific rules will apply when determining the origin of economic operators, goods, services and works.
ADJUSTMENTS & MODIFICATIONS
Public buyers may include mechanisms in tender and contract documentation which enable them to 'adjust' contracts without triggering the rules on modification. Such mechanisms must be clear, precise, unequivocal and objectively justified; they must also maintain the economic balance of the contract. Buyers will not be required to conduct a new procurement procedure if a modification is not substantial; this will be the case where the modification accounts for less than 15% of the initial contract value or does not introduce terms which, had they formed part of the original procedure, would have changed the conditions of competition or essential terms or conditions of the contract. Substantial modifications may only avoid triggering the requirement for a new procurement where they do not alter the initial economic balance of the contract in favour of the contractor, and they fall into one of three safe harbours, namely:
- additional works, services, or supplies have become necessary during the performance of the contract and a change of contractor is not technically or economically feasible;
- the modification is necessary due to circumstances which could not reasonably have been anticipated by a diligent public buyer and which significantly affect the performance or feasibility of the contract; or
- the original contractor is replaced by another entity as a result of an insolvency, take-over or restructuring exercise.
In addition, if a modification is to exceed 50% of the initial estimated value of the contract, the buyer must generally publish a summary of the modification and the justification for it; where the modification value is below this 50% threshold and any of the three safe harbours is relied upon, a summary must be published within 20 days of the modification date.
STRATEGIC OBJECTIVES
The Commission has placed significant emphasis on green and social procurement, which feature more prominently than in the Directives. Circularity and resource efficiency may be taken into account and buyers may only procure goods, services or works which have "high energy efficiency" unless this is not technically feasible. Buyers are also obliged to impose accessibility requirements to enable use by persons with disabilities. The draft Regulation also aims to improve EU economic security and resilience and protect the security of supply, public health, critical infrastructure. Measures are included to enhance cybersecurity checks and manage technology and other risks. This can include mandatory security standards and risk management requirements in the contract specifications, security-focused selection/award criteria, and contract conditions such as security audits. Buyers may also exclude high risk ICT suppliers at any stage and terminate contracts for non-compliance with security requirements.
USE OF DATA
Finally, the proposal seeks to facilitate access to procurement information, data, and digital tools by establishing a common digital ecosystem for public procurement. National and EU 'data spaces' will be established to record and allow sharing of information and enable better monitoring of the public procurement market. Public buyers and tenderers will in the future interact with an 'electronic eligibility service' portal (to be operated by the Commission) to register origin information and confirm whether they are subject to exclusion grounds and satisfy selection criteria.
NEXT STEPS
Negotiation on the draft text of the Regulation are likely to continue throughout 2027. The European Parliament and the Council of the European Union will debate amendments before the text is agreed. The scale and novelty of the reforms will necessitate a two-year transition period before the agreed Regulation begins to apply in 2029 or 2030.
Ireland holds the presidency of the European Council until the end of 2026 and will play a key role in the legislative process. The Government has designated the Regulation a top-priority file. Irish officials are tasked with chairing initial working party sessions and steering early council-level negotiations to establish a unified position among Member States.
Public buyers and economic operators alike should start to consider the implications of the new procurement regime for their activities and taking steps to prepare for a significant change in the rules. Those wishing to provide feedback on the proposals currently have until 22 November 2026 to express their views to the Commission (although this period may be extended).
This briefing is provided for general information purposes only and does not constitute legal advice.
For more information on the draft Regulation and its implications, please contact Peter Curran, Aíne Smith, Pat McInerney or your usual contact in Beauchamps. With many thanks to Dylan Murphy for his contribution.
