Public procurement in the EU is principally regulated by means of the domestic implementation of certain directives, including:

• Directive 2014/23/EU on the award of concession contracts (the Concessions Directive);
• Directive 2014/24/EU on public procurement (the Public Sector Directive); and
• Directive 2014/25/EU on procurement by entities operating in the water, energy, transport and postal sectors (the Utilities Directive).

The three directives are collectively referred to herein as the 2014 Procurement Directives.

Separately, Directive 2009/81/EC regulates the award of certain contracts in the fields of defence and security (the Defence Directive), whilst Regulation 1370/2007/EC regulates the award of certain public passenger transport services by rail and road.

In addition to the obligations that arise under the legislation referred to above, the Court of Justice of the European Union (CJEU) has established that the award of a contract for goods, works or services that falls outside the scope of EU procurement legislation (because, for example, the relevant value threshold is not met) may, nonetheless, be subject to obligations under the principles that emanate from the Treaty on the Functioning of the EU (TFEU) (the Treaty Principles). That would be the case where the contract is of certain cross-border interest – ie, in view of its nature, value or place of performance, the contract is of interest to a supplier in another EU member state.

The Treaty Principles include non-discrimination, equal treatment, transparency and proportionality. Compliance with these principles would generally require the carrying out of a sufficiently advertised procurement process based on objective criteria.

Review procedures and remedies for breaches of obligations under the 2014 Procurement Directives and the Defence Directive are dealt with under:

• Directive 89/665/EC on the application of review procedures to the award of public contracts; and
• Directive 92/13/EC on the application of review procedures to the award of contracts in certain regulated utility sectors (collectively, the Remedies Directives).

The Remedies Directives have been amended on numerous occasions, including by Directives 2007/06 and 2014/23. In addition to the remedies available at a national level, the European Commission may take action against member states in the CJEU in relation to any alleged breach of EU legislation. In that context, the European Commission has brought a number of infringement proceedings in relation to breaches of EU procurement legislation.

EU bodies, including the European Commission, have procurement-related obligations based on the obligations to which member states are subject under the Public Sector Directive and the Concessions Directive. The relevant rules are set out in Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council of 18 July 2018 on the financial rules applicable to the general budget of the Union.

Unless otherwise specified, the sections below relate to the application of the Public Sector Directive, which is the legislation under which most regulated contracts are procured in member states. Accordingly, references to “the legislation” should be construed as references to the Public Sector Directive. References to EU procurement law should be deemed to refer to the legal instruments mentioned above that create procurement-related obligations for member states.

EU procurement law obligations arise in relation to the award of certain contracts by “contracting authorities”, a term that is broadly defined and captures the overwhelming majority of public bodies. In addition, certain utility companies operating in the water, energy, transport and postal services sectors are subject to procurement regulation to the extent that they award contracts for the purposes of their utility activities. Such utility companies will be subject to procurement legislation to the extent that they are “contracting authorities” or “public undertakings” (a term that captures entities over which a member state exercises a dominant influence) or carry out their regulated utility activity on the basis of “special or exclusive rights” granted by a competent authority.

In the interest of simplicity, this chapter will use the term “contracting authority” to refer to any entity that has an obligation to carry out a procurement process under EU procurement law.

In principle, EU procurement law applies to the award of contracts for pecuniary interest that are concluded in writing between one or more contracting authorities and one or more economic operators, and that have as their object the execution of works, the supply of goods or the provision of services.

The term “pecuniary interest” means, broadly, consideration (whatever its nature). According to the case law of the CJEU, the provision of goods, works or services in exchange for the full, or even partial, reimbursement of costs can be sufficient for a pecuniary interest to be established.

The award of works or services concession contracts (above certain value thresholds) is also regulated. Concession contracts involve consideration that consists either solely in the right to exploit the works or services that are the subject of the contract or in that right together with payment.

The European Commission reviews and, if necessary, revises the value thresholds that trigger the application of the procurement rules every two years, primarily to ensure that they continue to correspond to the thresholds established in the context of the World Trade Organization’s plurilateral Agreement on Government Procurement (GPA), which governs access to the procurement markets of its signatory parties. The current thresholds have been in place since 1 January 2022.

The Public Contracts Directive applies when the value of a works contract meets or exceeds EUR5,382,000. The value threshold for goods and most services contracts is EUR215,000 (or EUR140,000 for most procurements by central government bodies). The value threshold for social, educational, cultural and certain other types of services contracts (which are subject to a lighter form of regulation than other types of regulated contracts) stands at EUR750,000.

The Utilities Directive applies when the estimated value of a works contract meets or exceeds EUR5,382,000, or EUR431,000 for goods and most services contracts. The value threshold for services contracts for social and certain other types of services stands at EUR1 million.

The Concessions Directive applies when the estimated value of a works or services concession contract meets or exceeds EUR5,382,000. The same value threshold triggers the application of the Defence Directive for the purposes of works contracts. The value threshold for goods and services contracts under the Defence Directive is EUR431,000.

The above figures are exclusive of VAT.

Under the legislation, access to contract award procedures is guaranteed, and remedies for breaches of the legislation are available, to economic operators from:

• the European Economic Area (EEA) – ie, the EU member states, Iceland, Norway and Liechtenstein;
• a GPA state (other than an EEA state) but only in relation to procurements that are covered by the GPA; and
• other countries with which the EU has a bilateral agreement but only in relation to procurement covered by that agreement.

While most regulated contract award procedures in EU member states are generally open to all economic operators, there is no obligation for a contracting authority to consider the application or the tender of an economic operator from a country that is not covered under one of the above categories (a third-country economic operator). In addition, if there is a breach of the legislation, a third-country economic operator would not be afforded protection (including access to remedies) under the legislation.

Where the legislation applies, contracting authorities must generally meet their contractual requirements for goods, works and services by means of an advertised competitive contract award process that is based on objective, relevant and proportionate criteria. Underlying the legislation are the key obligations to treat economic operators equally and without discrimination, and to act in a transparent and proportionate manner. These obligations are relevant even before the procurement process has commenced; for example, the carrying out of a preliminary market consultation or the design of the procurement process must be consistent with these obligations. Equally, even after the procurement process has concluded with the signing of a contract, there is a prohibition on making substantive modifications to contracts, so as not to breach the above obligations.

Separately, the legislation prohibits contracting authorities from designing a procurement with the intention of excluding it from the scope of the legislation or artificially narrowing competition.

The steps that a contracting authority must take in carrying out an advertised competitive contract award process would depend on the procurement procedure used, but generally would include:

• advertising the contract by means of the publication of a contract notice in the Official Journal of the EU (OJEU), describing the requirement and inviting expressions of interest (within appropriate timescales as set out in the notice);
• determining whether an economic operator that has expressed an interest has the necessary legal and financial standing and the relevant technical and professional abilities to perform the contract;
• inviting a shortlist of qualified economic operators, selected on the basis of objective and non-discriminatory rules and criteria, to submit tenders or carry out negotiations before submitting tenders (with potentially multiple rounds of negotiations and bidding taking place before the submission of final tenders);
• evaluating the tenders submitted on the basis of pre-disclosed objective award criteria that must be linked to the subject matter of the contract, so as to determine the tender that is the most economically advantageous;
• notifying the contract award decision to all economic operators that have submitted a tender (and also, in certain cases, to those who participated in earlier stages of the competition);
• observing a standstill period of a minimum of ten clear calendar days (depending on the method used for the communication of the award decision), during which time the contract cannot be concluded;
• concluding the contract only after the expiry of the standstill period (if there is no legal challenge to the contract award decision before then); and
• advertising the contract award by means of publishing a contract award notice in the OJEU.

Contract award procedures must be advertised in the OJEU using the online Tenders Electronic Daily. National publication can only take place following publication of a contract notice in the OJEU. However, if the notice has not been published 48 hours after confirmation of the receipt of the notice by the EU Publications Office, contracting authorities are entitled to publish at a national level.

The advertisement of a contract must be made using standard online forms. These generally require the publication of the following information:

• the identity, address and other relevant details of the contracting authority;
• details as to how to access the procurement documents;
• a description of the procurement and the contracting authority’s requirements, including the nature and quantity of works, supplies or services, the estimated value and the duration of the contract;
• the award criteria;
• the conditions for participation, including any legal, economic and financial, technical and professional requirements; and
• details as to the procedure, including the type of procedure, and the time limit for the receipt of tenders or requests to participate.

The standard form used for the advertisement in the OJEU of a contract regulated by the Public Sector Directive may be accessed here.

The legislation expressly permits contracting authorities to carry out preliminary market consultations with a view to preparing the procurement and informing the market of their procurement plans and requirements. In carrying out such consultations, contracting authorities may seek or accept advice from independent experts or authorities, or from market participants. Such advice may be used in the planning and conduct of the procurement procedure, provided doing so does not have the effect of distorting competition and does not violate the principles of non-discrimination and transparency.

Where an economic operator has advised on or been involved in the preparation of the procurement process in some other way, the contracting authority is obliged to take appropriate measures to ensure that competition is not distorted as a result of the participation of that economic operator in the subsequent process. Such measures must include communicating to all other participants in the competition any relevant information exchanged with that economic operator in the context of preparing the procurement process and the fixing of adequate time limits for the receipt of tenders.

Where there are no means of ensuring the equal treatment of all economic operators, the economic operator who has been involved in the preparation of the process must be excluded from the procedure (but only after they have been given the opportunity to prove that their prior involvement is not capable of distorting competition).

The Public Sector Directive provides six procedures that may be used for the award of a contract.

Open Procedure

The contracting authority invites interested parties to submit tenders by a specified date. The process does not involve a separate selection stage, in that the tenders of all economic operators that meet the qualitative criteria for participation in the process must be evaluated and the contract awarded to the bidder with the most economically advantageous tender. Negotiations are not permitted under this procedure.

Restricted Procedure

The contracting authority considers applications from interested parties and invites a minimum of five qualified applicants (determined on the basis of objective and non-discriminatory rules and criteria) to submit tenders. The contract is awarded to the bidder who has submitted the most economically advantageous tender. Negotiations are not permitted under this procedure.

Competitive Procedure with Negotiation

The contracting authority considers applications from interested parties and invites a minimum of three qualified applicants (although two might be permissible in specific circumstances) to negotiate the contract with the contracting authority. Negotiations may involve successive bidding rounds, so as to reduce the number of tenders to be negotiated. Final tenders cannot be negotiated.

Competitive Dialogue

The contracting authority considers applications from interested parties and invites a minimum of three qualified applicants (although two might be permissible in specific circumstances) to conduct a dialogue with the contracting authority with a view to identifying the solution(s) capable of meeting its needs. A competitive dialogue may take place in successive stages in order to reduce the number of solutions to be discussed. There can be no substantive discussions following the submission of final tenders, although these may be clarified, specified and optimised at the request of the contracting authority. Limited (non-substantive) negotiations may also take place after the bidder with the most economically advantageous offer has been identified, with a view to finalising the terms of the contract.

Innovation Partnership

This aims to set up a partnership between a contracting authority and one or more economic operators for the development of an innovative product, service or works meeting the contracting authority's minimum requirements. At the conclusion of the innovation phase, the contracting authority can purchase the resulting products, services or works without the need for a new procurement process, provided that they correspond to the performance levels and maximum costs agreed between the contracting authority and the participants. The actual process for setting up an innovation partnership is based on the procedural rules that apply to the competitive procedure with negotiation.

Competitive Procedure without Prior Publication

In certain limited and narrowly defined circumstances, the legislation permits member states to allow contracting authorities to award contracts without first having to advertise the requirement. Such cases include where there is extreme urgency (not attributable to the contracting authority) or where the requirement can only be met by a particular economic operator as a result of technical reasons or the existence of exclusive rights (see 5.2 Direct Contract Awards).

In line with all other aspects of a procurement process, the conduct of negotiations (where this is permitted) is subject to the obligation to treat economic operators equally and without discrimination. Among other things, this means that the contracting authority cannot disclose the confidential information of one bidder to the other bidders without the former’s agreement. Any such agreement cannot take the form of a general waiver; consent may only be granted with reference to the intended disclosure of specific information.

Where the competitive procedure with negotiation is used, negotiations are not permitted once final tenders have been submitted. However, where the competitive dialogue procedure is used, final tenders may be clarified, specified and optimised at the request of the contracting authority. Limited (non-substantive) negotiations may also take place after the identification of the most economically advantageous tender, with a view to finalising the terms of the contract.

The legislation permits the conduct of an open or restricted procedure at the discretion of the contracting authority. The use of the other procedures outlined in 2.3 Tender Procedure for the Award of a Contract is only permissible where specific conditions are met.

The competitive procedure with negotiation and the competitive dialogue can be used only where one of the following conditions applies:

• the needs of the contracting authority cannot be met without the adaptation of readily available solutions;
• the contracting authority’s needs include design or innovative solutions;
• the contract cannot be awarded without prior negotiation because of specific circumstances related to its nature, complexity or financial and legal make-up, or because of risks attaching to them;
• the technical specifications cannot be established with sufficient precision by the contracting authority; or
• in response to an open or restricted procedure, only irregular or unacceptable tenders were submitted.

As noted in 2.3 Tender Procedure for the Award of a Contract, the innovation partnership, which also involves negotiations, may be used where there is a need for the development of new products, services or works, whilst the use of the negotiated procedure without prior publication is considered an exceptional procedure that can only be used in limited and narrowly construed circumstances (see 5.2 Direct Contract Awards).

The legislation generally requires contracting authorities to offer online unrestricted and full direct access to the procurement documents from the date of the publication of the contract notice in the OJEU (although certain exemptions apply).

The definition of the “procurement documents” in the legislation is broad and essentially captures all documents that are relevant to the carrying out of a procurement process, including the contract notice, the technical specifications, an invitation to tender or negotiate, any document that describes the requirements or the rules of the competition and the proposed conditions of the contract. Although the wording of the legislation does not clarify this issue, it is arguable that this obligation applies only in relation to documents that are capable of publication at the start of the process. However, this interpretation has yet to be confirmed by the courts. In view of the uncertainty over this issue, it is not unusual for contracting authorities to issue some of the procurement documents as drafts at the start of the process and then re-issue them in a final form at a later stage of the process.

The legislation sets certain minimum time limits, but these vary depending on which procedure is used and whether certain conditions are met.

Open Procedure

As a general rule, the minimum time limit for the receipt of tenders is 35 days from the date on which the contract notice was sent to the OJEU for publication. However, this time limit may be shortened to 30 days where the contracting authority accepts the submission of tenders by electronic means, and to a minimum of 15 days in certain circumstances, including where the requirement is urgent.

Restricted Procedure and Competitive Procedure with Negotiation

The minimum time limit for the receipt of requests to participate in the process is generally 30 days from the date on which the contract notice was sent to the OJEU for publication. This period may be reduced to a minimum of 15 days if the requirement is urgent. The minimum time limit for the receipt of tenders (or initial tenders in the case of the competitive procedure with negotiation) is 30 days from the date on which the invitation is sent. This limit may be shortened to between ten and 25 days in certain circumstances, including where the requirement is urgent.

Competitive Dialogue Procedure and Innovation Partnership

The minimum time limit for the receipt of requests to participate is 30 days from the date on which the contract notice is sent to the OJEU.

Regardless of any minimum time limits permitted by the legislation, contracting authorities have an obligation to take into account the complexity of the contract and the time required for drawing up tenders when fixing the time limits for the receipt of tenders and requests to participate.

In determining whether interested parties might be eligible for participation in a procurement process, contracting authorities may only take into account a candidate’s suitability to pursue a professional activity, its economic and financial standing, and its technical and professional ability.

The legislation sets out detailed rules as to how these criteria may be taken into consideration at the selection stage of a procurement process and the type of evidence that contracting authorities may ask applicants to provide to prove compliance with specific requirements in this regard. In this context, contracting authorities have an obligation to ensure that any selection requirements they impose are related and proportionate to the subject matter of the contract.

Separately, the legislation requires contracting authorities to consider whether applicants have committed certain offences that would normally require their exclusion from the competition (the mandatory exclusions). Contracting authorities may also exclude – or may be required by a member state to exclude – from the competition interested parties that find themselves in certain situations (the discretionary exclusions).

The exclusion period is five years from the date of the economic operator’s conviction in relation to mandatory exclusions, and three years from the date of the relevant event (a reference that case law has interpreted as the date when the wrongful conduct was established) in relation to discretionary exclusions. The right or obligation to exclude is limited to a maximum of three years where discretionary grounds for exclusion apply, and five years where the grounds for exclusion are mandatory. In both cases, the legislation permits a longer or shorter exclusion period if this is set by final judgment.

An economic operator that finds itself in one of the circumstances that require or permit disqualification may avoid this if it can demonstrate to the satisfaction of the contracting authority that it has taken appropriate "self-cleaning" measures.

When using a competitive procedure other than the open procedure, contracting authorities may restrict participation in a competition to only a small number of qualified applicants. The legislation requires the decision of which applicants should be shortlisted to be made on the basis of objective and non-discriminatory criteria or rules, which must be disclosed at the start of the process.

The legislation requires the shortlisting of a minimum of five applicants when using the restricted procedure and a minimum of three when using the competitive process with negotiations, the competitive dialogue and the innovation partnership.

However, where the number of applicants meeting the relevant requirements is below the minimum number set in the legislation, the contracting authority may continue with the procedure by inviting the applicants that meet the minimum conditions for participation, provided that there is a sufficient number of qualifying applicants to ensure genuine competition.

A contracting authority must award the contract to the bidder with the most economically advantageous tender, from the point of view of the contracting authority. The tender that is the most economically advantageous must be determined by reference to price or cost alone, or the best price-quality ratio, which must be assessed on the basis of criteria that are linked to the subject matter of the contract. These may include qualitative, environmental or social aspects. The cost element may also take the form of a fixed price or cost, on the basis of which bidders then compete on quality criteria only.

The criteria must not have the effect of conferring an unrestricted freedom of choice on the contracting authority (which would be the case if, for example, the criteria were not clearly defined). The criteria must also ensure the possibility of effective competition, enabling an objective comparison of the relative merits of the tenders. They must also be accompanied by specifications that allow the information provided by the tenderers to be effectively verified in order to assess how well the tenders meet the award criteria.

The selection criteria must be disclosed at the start of the process, including the grounds for exclusion and the objective and non-discriminatory criteria or rules on the basis of which the contracting authority will determine the qualified applicants that will be invited to participate in the competition. Equally, the award criteria and their weightings must be disclosed in the procurement documents that are published at the start of the process.

Over and above the specific obligations in the legislation that relate to the disclosure of selection and award criteria, the case law of the CJEU has clarified that a contracting authority must disclose all elements to be taken into account in the evaluation (which are likely to affect the preparation of tenders), including sub-criteria and their weightings.

In practice, and in order to limit the risk of non-compliance in this context, contracting authorities in many member states tend to disclose the full evaluation methodology at the start of the procurement process or, at the very least, well in advance of the submission of tenders, allowing a reasonable opportunity for bidders to take account of the methodology when preparing their submissions.

The legislation does not create an explicit obligation for contracting authorities to inform unsuccessful applicants of the decision to reject their application to participate in a competition and the reason for that decision in a timely manner.

Instead, the legislation provides that, where the contracting authority has not informed an applicant of its decision to reject its application and the reasons for that decision at an earlier stage in the process, the contracting authority must do so before commencing the standstill period that must precede the award of the contract (see 3.4 Requirement for a "Standstill Period").

In practice, contracting authorities choose to inform unsuccessful applicants of their rejection and the reasons for it without undue delay, not least so as to limit the risk of a challenge against that decision at a later stage in the process.

Separately, the legislation provides that where an unsuccessful applicant makes a request in writing for information about the reasons for the rejection of its request to participate in the competition, the contracting authority is required to provide this information as quickly as possible and, in any event, within 15 days of receiving the written request.

Bidders must be informed about the contract award decision as soon as possible after that decision has been made. In notifying bidders of that decision, the contracting authority must specify:

• a summary of the reasons for the decision, including the relative advantages and characteristics of the successful tender;
• the name of the successful tenderer; and
• confirmation of when the standstill period (see 4. Review Procedures) will expire.

The notice communicating the contract award decision is normally sent electronically, although facsimile and “other means” are also permissible in principle.

In certain circumstances, the contracting authority also has an obligation to also notify the contract award decision to rejected applicants, and to bidders that might have been eliminated at earlier stages of the competition.

The relevant legislation requires the contracting authority not to conclude the contract before the expiry of a standstill period, following the notification of the contract award decision to bidders. The length of that period depends on the means of communication used to notify the contract award decision. Where all bidders have been notified of that decision electronically, the standstill period must be a minimum of ten clear calendar days.

It is for member states to determine which body or bodies should be responsible for review procedures. At the same time, the Remedies Directives require that a review body that is not judicial in character must always give written reasons for its decisions.

In addition, any allegedly illegal measure taken by a non-judicial review body or any alleged defect in the exercise of the powers conferred on it must be capable of judicial review or review by another body that is a court or tribunal within the meaning of Article 267 of the TFEU and independent of both the contracting authority and the review body.

A party that has concerns about the validity of a contracting authority’s decision (regardless of whether or not it has standing to bring a challenge under procurement legislation) may complain to the European Commission. The European Commission is not obliged to pursue that complaint further, but if it does, this may ultimately lead to infraction proceedings, under Article 258 of the TFEU, against the member state of the contracting authority for breach of an EU law obligation.

Member states must ensure that the review procedures available for a breach of the legislation include a provision for powers to:

• take interim measures, including measures to suspend a contract award procedure or the implementation of a contracting authority decision, with a view to correcting the alleged infringement or preventing further damage to the interests concerned;
• set aside – or ensure the setting aside of – decisions taken unlawfully, including the removal of discriminatory technical, economic or financial specifications in the invitation to tender, the contract documents or any other document relating to the contract award procedure; and
• award damages to persons harmed by an infringement.

Where damages are claimed on the grounds that a decision was taken unlawfully, the relevant legislation also allows member states to first require the setting aside of the contested decision.

Separately, member states must ensure that a contract is considered ineffective by a review body independent of the contract authority where:

• the contract was awarded without the prior publication of a notice in circumstances where one was required;
• there has been a breach of the automatic suspension or standstill obligations, depriving the claimant of the possibility to pursue pre-contractual remedies, and this is combined with an infringement of the procurement legislation that has affected the claimant's chances of obtaining the contract; and
• in certain circumstances (under the Public Sector Directive), there has been a breach of requirements for the award of contracts under a framework agreement or a dynamic purchasing system.

Member states decide whether the consequences of a contract being rendered ineffective should be the retrospective or prospective cancellation of contractual obligations. If the latter, this must also be accompanied by a fine, which must be effective, proportionate and dissuasive.

As noted in 4.2 Remedies Available for Breach of Procurement Legislation, member states must ensure that review procedures include a provision for powers to take interim measures.

In addition, when a body of first instance that is independent of the contracting authority reviews a contract award decision, member states must ensure that the contracting authority cannot conclude the contract before the review body has decided either the claim or an application for interim measures (to lift the prohibition on concluding the contract).

The relevant legislation permits member states to require a complainant to first seek review with the contracting authority. In that case, member states must ensure that the submission of such an application for review results in the immediate suspension of the possibility to conclude the contract. This suspension must last at least until after the expiry of ten calendar days, with effect from the day following the date on which the contracting authority has sent a reply by electronic means.

A breach of the legislation is actionable by any economic operator that is owed a duty under the legislation and that has been, or risks being, harmed by an alleged infringement of the legislation. As noted in 1.4 Openness of Regulated Contract Award Procedure, a contracting authority owes a duty of compliance with the legislation to economic operators from the EEA, a GPA state (other than an EEA state) or a country with which the EU has a bilateral agreement, but in relation to the latter two only to the extent that the procurement in question is covered by the GPA or that agreement, respectively.

The relevant legislation requires a claim seeking the remedy of “ineffectiveness” to be made within a period of six months starting from the day following the date of the conclusion of the contract. Where the contracting authority has published a contract award notice in the OJEU, or has informed the relevant economic operator of the conclusion of the contract and provided a summary of the reasons leading to the award of that contract, the period for bringing a claim is shortened to 30 days from the date of publication of the contract award notice, or the date on which notice of the conclusion of the contract (together with a statement of reasons) was provided to the relevant economic operator.

As regards the limitation period that may apply to claims for other types of remedies, this is for member states to decide, subject to certain conditions. These include a requirement for the minimum time period to be ten calendar days starting from the day after the date on which the decision was notified electronically to a tenderer or candidate, or, where a decision is not subject to any specific notification requirements, ten calendar days from the date of the publication of the decision concerned.

Separately, in Case C–406/08, Uniplex, the CJEU concluded, among other things, that the period for bringing proceedings seeking to have an infringement of the public procurement rules established or to obtain damages should start to run from the date on which the claimant knew, or ought to have known, of that infringement.

All member states are required to ensure that decisions taken by contracting authorities in relation to regulated contracts are reviewed effectively and, in particular, as rapidly as possible. At the same time, the length of proceedings varies greatly between member states. National review systems where alleged breaches of procurement law are dealt with (in the first instance) by specialist tribunals or boards tend to deal with claims more quickly than court-based review systems.

The number of claims varies between more than a thousand to fewer than ten per year, depending on the member state.

The costs vary greatly between member states, with court-based review systems likely to be more costly.

The 2014 Procurement Directives incorporate provisions that regulate the modification of contracts, following their award. These prohibit substantial modifications. In brief, a modification will be deemed substantial when it:

• renders a contract materially different in character from the one initially concluded;
• introduces conditions that, had they been part of the initial procurement procedure, would have:
1. allowed for the admission of other candidates than those initially selected;
2. allowed for the acceptance of an offer other than that originally accepted; or
3. attracted additional participants to the procurement procedure;
• changes the economic balance of the contract in favour of the contractor in a manner that was not provided for in the initial contract;
• extends the scope of the contract considerably; or
• involves the replacement of the original contractor (unless "safe harbour" provisions apply – see below).

Safe Harbour Provisions

At the same time, the relevant legislation incorporates certain provisions that specify the conditions under which a modification would not be deemed to constitute a substantive modification, and, as such, would be permissible (generally referred to as the "safe harbour" provisions). These rules differ in certain respects, depending on whether the contract is subject to the Public Sector or the Utilities Directive, or whether a concession contract is awarded by a contracting authority in the exercise of an activity that is not regulated under the Utilities Directive. Briefly, modifications would not be deemed to be substantive where they:

• have already been provided for in the original procurement documents in clear, precise and unequivocal review clauses, provided that these do not alter the overall nature of the contract;
• relate to the provision of additional requirements by the original contractor that are outside the scope of the original procurement, but where a change of contractor is not possible for economic or technical reasons and where it would cause significant inconvenience or substantial duplication of costs for the contracting entity, and the value of the modification does not exceed 50% of the value of the original contract (this value rule does not apply to utility procurements);

• have become necessary as a result of circumstances that a diligent contracting authority could not foresee, and the modification does not alter the overall nature of the contract and the value of the modification does not exceed 50% of the value of the original contract (this value rule does not apply to utility procurements);
• are limited to the replacement of the original contractor in certain circumstances, including where this is the result of corporate restructuring, and the new contractor meets the original selection criteria and this does not entail other substantial modifications and is not aimed at circumventing the rules;
• are not "substantial" within the meaning of the legislation (as described above); and
• are of a value that is below:
1. the relevant value threshold for the application of the rules; and
2. 10% (for services or supplies) or 15% (for works) of the value of the original contract, and provided that there is no change to the overall nature of the contract – the value must be calculated cumulatively if there are successive modifications.

The second and third safe harbour provisions also require the publication of a "modification of contract" notice in the OJEU.

The legislation permits member states to allow contracting authorities to award contracts without having to advertise the requirement in the OJEU and conduct a competitive tender process in certain limited circumstances, including where:

• no tenders, no suitable tenders, no requests to participate or no suitable requests to participate have been submitted in response to an open or restricted procedure, provided that, among other things, the initial conditions of the contract are not substantially altered;
• the requirement can be met only by a particular economic operator as a result of technical reasons or the existence of exclusive rights;
• it is strictly necessary to make the direct award for reasons of extreme urgency brought about by events unforeseeable by the contracting authority, and the time limits for the open, restricted or competitive procedure with negotiation cannot be complied with;
• insofar as is strictly necessary, for reasons of extreme urgency brought about by events unforeseeable by the contracting authority, it is not possible to comply with the time limits for the open or restricted procedures or the competitive procedures with negotiation; and
• additional supplies are necessary, and a change of supplier would oblige the contracting authority to acquire supplies with different technical characteristics, which would result in incompatibility or disproportionate technical difficulties in operation and maintenance, and where certain other conditions are met.

In Simonsen & Weel A/S v Region Nordjylland og Region Syddanmark (Case C-23/20), the CJEU considered a request for a preliminary ruling by the Public Procurement Appeals Board of Denmark (Klagenævnet for Udbud) in relation to a framework agreement for the supply of certain equipment for patients receiving home care and in institutions. The contract notice did not include any information as to the estimated value of the framework agreement or the estimated or maximum quantities to be supplied under the framework.

In its referral, the Danish Board asked the CJEU to consider, among other things, whether a contracting authority had an obligation to state this information in the contract notice and, if so, the consequences of failing to comply with that obligation.

In its decision, the CJEU ruled that a maximum quantity and/or value must be indicated in the contract notice advertising a framework agreement. The CJEU stated that this must indicate the maximum amount for the framework agreement as a whole, but the contracting authority could lay down additional requirements (eg, maximum amount for each of the contracting authorities entitled to use the framework). Alternatively, it would be permissible for a contracting authority to state the maximum amount figure in the specifications (as opposed to the contract notice), provided that these specifications were made available at the point of publishing the contract notice.

The CJEU also clarified that modifications to framework agreements would be permissible if they were made within the limits of the permitted modification grounds under the 2014 Procurement Directives.

As to remedies, the CJEU ruled that a failure to comply with the obligations to indicate a maximum value for a framework agreement would not be deemed a failure to publish a contract notice and, therefore, would not give rise to the remedy of ineffectiveness under the Remedies Directives. In this regard, the CJEU also noted that the remedy of ineffectiveness should be confined to the most serious infringements of EU public procurement law. The alleged breach in this case did not fall within that category.

In Klaipėdos Regiono Atliekų Tvarkymo Centras UAB (Case C-927/19), among other issues, the CJEU considered the extent of a contracting authority’s confidentiality obligations that arise in relation to commercially sensitive information contained in a tender. This request for a preliminary ruling related to the contested decision of a Lithuanian contracting authority to award a public services contract for the collection and transportation of municipal waste. In principle, disclosure of that information was relevant for the purposes of demonstrating that the award decision was fair and compliant with the contracting authority's procurement law obligations.

In its judgment, the CJEU confirmed that a contracting authority must not disclose confidential information contained in a bidder’s tender to a competitor. However, this is subject to the bidder in question demonstrating the genuinely confidential nature of the information in question. Where this is demonstrated, the contracting authority must instead communicate the essential content of the information requested in a neutral form (to the extent possible). It should be noted that this approach is potentially restrictive and, as such, is unsatisfactory. The UK litigation practice of sharing confidential information in the context of “confidentiality rings” would seem preferable.

The EU is not currently contemplating any substantive changes to its public procurement legislation.

However, long-standing proposals for the introduction of new legislation that would seek to create incentives for reciprocity of access for EU businesses in foreign public procurement markets seem to have gathered steam more recently.

The proposal known as the International Procurement Instrument (IPI) was first put forward by the European Commission in 2012. It was then revised and reissued in 2016. Under the proposed IPI, the European Commission would have the power to investigate third-country restrictive public procurement practices that affect EU businesses, and would then seek to negotiate a more equitable access for EU businesses to the public procurement markets of those countries. If this cannot be achieved, the EU could then restrict access of that country’s businesses to the public procurement markets of EU member states by introducing certain measures that would penalise the bids of such foreign nationals. A provisional agreement on the adoption of the Commission’s proposal was reached in March 2022.