Public procurement refers to the process by which public authorities, such as government departments or local authorities, purchase work, goods or services from companies. To create a level playing field for businesses across Europe, the law of the European Union sets out rules that govern this process. These rules regulate the way public authorities and certain public utility operators enter into work, supply and service contracts. For example, the construction of a road, the purchase of computers or the hiring of economic consultants by public authorities will have to abide by European public procurement rules. These are transposed into national legislation and apply to tenders whose monetary value exceeds a certain amount. For tenders of lower value, national rules apply.
As public procurement accounts for a substantial portion of the taxpayers’ money, governments are expected to carry it out efficiently and with high standards of conduct in order to ensure high quality of service delivery and safeguard the public interest. These rules aim to achieve a fair and transparent selection-process that is free of any fraud or corruption and where the competition between companies fully plays. The result of this should be the selection of the company who represents the “best value for money”, taking into account all relevant factors. More recently, public procurement rules have started to cover additional policy goals such as environmental sustainability and social inclusion.
As breaches to the public procurement rules seriously harm the public interest, multiple sanctions, such as criminal sanctions, exist both for public authorities and companies breaching the legal framework with regards to public procurement.