Is the EU gearing up for a public procurement revolution?

Hello! This is Lorène, writing from Brussels, today is 15 September, and here is your weekly update on what matters most in the European Union.

This week’s briefing digs into the Commission’s newly proposed Public Procurement Act, a sweeping overhaul of how the EU spends some 15% of its GDP.

We were very happy to get Orlaith Sheehy, Partner at McCann FitzGerald LLP, to walk us through it. Orlaith specialises in public procurement law, with a practice spanning procurement strategy, guiding public buyers through live processes, and litigation involving challenges to procurement decisions.

And don’t miss my selection of suggested good reads at the end of the newsletter.

A big thanks to Joe Pearn for his help putting this edition together. Feel free to share this newsletter with friends and colleagues, follow us on LinkedIn, and feel free to reach out at contact@whatsupeu.co

Best,

Lorène de Gouvion

The Commission’s proposal for a Public Procurement Act, published on 9 September 2026, signals a material change in EU-wide public purchasing.

The key priorities behind the proposed regulation are to drive simplification, flexibility and efficiency in public purchasing, which accounts for approximately 15% of Europe’s GDP. Previous directives have generally not achieved those goals, with the procurement market seeing declining competition, limited SME and cross-border participation, and fragmented procedural rules. It remains to be seen whether the new Act will have greater success on this front.

What is proposed now is wider than a purely procedural reform. While it consolidates rules and simplifies procedures, it also places a greater emphasis on strategic procurement, bringing a new geopolitical focus to the rules underpinning the EU’s public procurement market.

It is a key plank in the EU’s competitiveness agenda and complements the Industrial Accelerator Act and EU Innovation Act in this respect. Main chapters within the Act are dedicated to wider EU focus areas such as security and resilience, European preference and green public procurement.

Structural reform

The move to a regulation rather than a directive is novel, bearing in mind that the EU procurement rules have been housed in directives for over 50 years. The shift in legislative provision is aimed at ensuring a more harmonised application of the rules across Member States.

The consolidation of the public sector, utilities and concessions regimes within a single regulation is a practical and (generally) welcome proposal, reflecting the fact that the various regimes have become steadily more aligned over the years.

One casualty of this proposal, however, is the lack of additional flexibility for utility undertakings in determining the duration of framework agreements. In the proposed Public Procurement Act, all public buyers are limited to 3 years for a single supplier framework, and 5 years for a multi-supplier arrangement (removing the longer duration previously available to utility purchasers).

Radical simplification of procedures

The biggest change for public buyers is that negotiating with suppliers becomes normal. Under the 2014 directives it is the exception. The standard procedures run on sealed bids: a public body publishes what it wants, suppliers submit offers, and the contract goes to the highest scoring bid, with no discussion in between.

That rule exists to prevent favouritism, since a buyer who can talk to bidders can also potentially steer the outcome. Negotiation is currently permitted only in defined situations, generally for more complex needs, and the choice of procedure must be justified.

The proposal reverses this. Any public body would be entitled to negotiate improved tenders in any contract, without having to justify their choice of procedure. The proposed Act obliges buyers to run negotiations carefully, so as to avoid the risk of steering the outcome.

Another proposed change is worth noting. Currently, public buyers can assess suppliers’ capacity first and invite only the strongest cohort to bid. The proposal removes that step, so every supplier meeting the minimum requirements would enter the negotiation, and the field would narrow only through rounds of negotiation on the offer itself.

Price also carries less weight than before. The use of lowest price must now be justified, and contracts would generally be awarded on the best price-quality ratio, with quality criteria accounting for at least 30% of the assessment.

European preference measures

One of the more notable aspects of the Act is the introduction of "European preference" measures.

While EU procurement rules have traditionally been relatively agnostic to the origin of suppliers or product, the proposed Act would give public buyers greater scope to favour EU suppliers and "covered" suppliers, i.e. those from a jurisdiction which is party to a treaty with the EU covering public procurement.

Rather than mandating protectionism, it creates an enabling framework: it gives public buyers the option to favour EU and “covered” suppliers, and separately reserves to the Commission a power to make some of these preferences mandatory.

In practice, a buyer could choose to restrict participation by non-EU suppliers in a tender, reject non-EU tenders, require minimum levels of EU or covered content, apply evaluation preferences for covered suppliers at award stage and, in some cases, reject tenders where covered goods, services or works account for less than 50% of the total tender value. The proposal also introduces a framework for determining whether operators, goods, services or works are "covered", supported by a Commission-managed online tool.

The Commission would also have powers to restrict access for certain third-country operators, including where equivalent access is not provided to EU suppliers, where security of supply concerns arise, or where restrictions are considered necessary to protect essential EU interests.

Taken together, these measures would mark a significant change in the approach to third-country participation in EU procurement markets. However, a number of practical questions remain, including how origin requirements will be assessed in complex supply chains and how compliance with content thresholds will be verified in practice.

These measures may also prove a source of trade friction. Non-covered suppliers, Chinese suppliers in particular, look most exposed, and they may well characterise the measures as protectionist and respond in kind potentially through export controls.

Much will be ultimately settled not by the Act itself but by sector-specific legislation such as the Industrial Accelerator Act, Chips Act 2.0, Cloud and AI Development Act, which will set the detailed rules for their respective sectors.

Transparency, digitalisation and procurement data spaces

The proposal seeks to improve how procurement information is collected, shared and accessed across the EU through a more integrated digital framework.

Member States would have to establish National Public Procurement Data Spaces (NPPDS), feeding into an EU-level data space managed by the Commission. This is intended to support greater transparency and facilitate monitoring of procurement markets, SME participation, cross-border procurement and strategic procurement objectives.

The data to be included is very extensive, covering not only procurement documents, but also contract documents down to the level of individual payments. Documents must be transmitted to the NPPDS as soon as possible after creation, giving rise to a potentially onerous administrative burden.

Next steps

The proposed Act will follow the ordinary legislative procedure. The 2014 procurement Directives took approximately two years from proposal to adoption, and those Directives were building on an existing framework rather than recasting it entirely as a single Regulation.

Given the breadth and political ambition of this proposal, (involving the merger of three Directives, the introduction of Made in Europe interventions, new data obligations and sweeping procedural changes) the legislative process for the Act would take at least as long if not longer. It is currently envisaged that the Act would take effect two years from publication in the Official Journal.

ECB HIKE • The European Central Bank raised its deposit rate by 25 basis points to 2.50% on Thursday. This second hike of 2026 comes as the conflict in the Middle East keeps pushing inflation above target. The main refinancing rate rises to 2.65% and the marginal lending rate to 2.90%, effective 16 September.

New ECB projections see headline inflation averaging 3.0% this year, easing to 2.5% in 2027 and 2.1% in 2028. Underlying inflation, which excludes energy and food, is expected to stay higher for longer, averaging 2.6% in 2027. Growth forecasts were revised upwards, to 0.9% this year and 1.4% next.

HOUSING ACT • The European Commission proposed on 9 September the Affordable Housing Act, the EU’s first common framework for assessing whether restrictions Member States and cities choose to adopt on short-term rentals or long-term vacancies, in areas under housing stress, comply with single market rules. Over half of city dwellers call housing an urgent problem, according to the Commission’s own Eurobarometer survey.

The Act doesn’t grant new powers; housing policy stays a national, regional and local choice. But before imposing a restriction, authorities must show at least three years of adverse effects on affordability and enforce the EU’s existing short-term rental registration rules, giving them legal cover against the single market challenges some measures have faced in court.

The proposal fulfils a pledge von der Leyen made in her 2025 State of the Union address, part of a wider Affordable Housing Plan alongside new State aid rules and a construction strategy. It is now in the hands of the European Parliament and Council.

EU CANADA PACT • The EU and Canada are working toward a sweeping new partnership spanning trade, security and critical raw materials. Von der Leyen is expected to unveil the plans in her State of the Union address on 16 September, with Canadian PM Mark Carney expected to address the European Parliament the next day.

Ambassadors from all 27 Member States met in Brussels this week to discuss the plan, hours after the US banned Canadian exports of dairy, alcohol and motorbikes.

Short of EU membership, the two sides want to get as close as legally possible, with cooperation floated on the Arctic, Erasmus student exchanges and military-industrial projects. A summit in Canada is scheduled for 29 and 30 October, though officials caution the talks remain at an early stage.

BEER CARTEL • As Munich’s Oktoberfest opens on 19 September, the city’s beer rules face their most serious legal test in decades. On 11 September, Bavaria’s top court heard a challenge to how the festival’s largest tents are allocated, just eight days before the first keg is tapped. A separate citizens’ referendum push is gathering pace to force a new brewery onto the approved list.

Local rules limit beer sales to six breweries under a purity standard dating to 1487, requiring barley, hops and water sourced from a well within Munich’s city limits. Brewer Giesinger Bräu spent €12.4 million drilling a qualifying well but still hasn’t been added to the list. It needs 35,000 referendum signatures to force a city council vote; it has 21,000 so far.

In 1990, a Bavarian prince lost a nearly identical case, despite his family having invented the festival in 1810. Then, judges accepted the city’s argument that the rules protect the event’s character and don’t unlawfully restrict competition.

SETTLEMENTS BAN • Twelve countries, including the UK, France and Canada, announced on Tuesday they will sanction trade with Israeli settlements in the West Bank, citing "unprecedented levels" of settler violence and expansion. The list also includes Ireland, Spain, Poland, the Nordics and Iceland.

Ireland and Spain had already imposed their own restrictions, and France spent weeks pushing for an EU-wide ban that was ultimately blocked by other Member States. The UK also moved to ban imports of settlement goods, and promised action against firms providing construction, financing or real estate for settlement expansion.

EU foreign policy chief Kaja Kallas said all Member States agree the settlements are "illegal under international law," even as Member States remain divided. Trade is an exclusive EU competence. Israel retaliated by ordering the British consulate in Jerusalem closed, and threatened further countermeasures.

• CEO Dario Amodei, writing on his personal blog, argues that AI labs "must pace the frontier," deliberately slowing capability gains so that safety work can keep up. Citing accelerating recursive self-improvement and a recent incident in which a swarm of AI agents launched unprompted cyberattacks and tried to hack their own evaluators, he warns a more capable swarm could soon seize much of the internet, and proposes embedded external evaluators, and coordinated global standards. It’s striking to read from the head of a frontier lab, but the plan rests on rivals choosing to brake too, and little in the industry’s incentives suggests they will.
• The Economist, in its cover leader, sets Europe’s spreading panic about Islam against the numbers. With the AfD taking 44% in Saxony-Anhalt and 60% of French voters backing a headscarf ban, and a share of the population in several countries now deems Islam incompatible with Western values. Yet, Muslims are just 6% of Europe’s population, the higher birth rates among newcomers even out within two generations, "no-go zones," creeping sharia and a demographic "great replacement" are shown to be myths. Perception has become its own political fact here, largely detached from the demographics it claims to describe, and naming that gap is what the mainstream keeps flinching from.