Study after study shows that the EU’s public procurement framework is failing to guarantee decent work and democracy at work. Now, the European Commission must take decisive steps to ensure social public procurement. 

€2 trillion, around 14% of the European Union’s GDP, is spent every year by governments and public institutions across the EU for goods and services delivered by private corporations. But this money could be better spent. As the European Commission maintains flawed rules on public procurement, too many contracts go to companies violating labour rights and delivering bad services. We urge the Commission to change course.

too many contracts go to companies violating labour rights and delivering bad services. We urge the Commission to change course

The holes in the EU’s public procurement rules are all too well known. Reports, declarations, mappings, European Parliament hearings and studies have shed light on the multiple weaknesses that legitimise awarding public contracts to private companies solely based on the cheapest offer. This short-sighted approach not only undermines the quality of services and consumer products. It also hurts workers and businesses alike.

The core problem is the EU’s flawed Public Procurement Directive. It perpetuates a race to the bottom, rewarding companies that prioritise cost over quality of services and fair labour practices. It is workers that suffer the brunt of this system: exploitation, underpayment, lack of payment, overworked, discrimination, and violations of their basic rights.

The core problem is the EU’s flawed Public Procurement Directive

Employers, too, find themselves struggling to compete on quality when the primary criterion is price. In fact, trade unions and employers in the cleaning, security and catering sectors agreed that legal intervention is needed to guarantee social public procurement.

The consequences of flawed public procurement extend well beyond the workplace, as citizens ultimately get low-quality services and products. It’s a lose-lose-lose situation for everyone involved.

Therefore, and perhaps unsurprisingly, there is a broad political consensus – backed by overwhelming evidence – for a reform of the EU’s Public Procurement Directive.

Last September, a European Parliament study found that the Public Procurement Directive does not provide sufficient legal clarity on social public procurement – and would therefore need to be revised. At a subsequent hearing in the Committee on Employment and Social Affairs in the European Parliament, various experts unanimously backed up the study’s conclusions.

In December, a European Court of Auditors report found that the EU’s Public Procurement Directive did not meet its objectives: “Strategic (e.g. environmental, social and innovative) aspects are rarely taken into account in public procurement.”

Unfortunately, this isn’t news to the European Commission.

Already in 2021, when a public hearing of the IMCO/ENVI committee on sustainable public procurement delivered the same message, the Commission knows that the legal framework is failing. And it understands its voluntary approach to social public procurement isn’t working. In fact, on green public procurement, it has openly stated that “compared to a voluntary approach, mandatory criteria or targets will ensure that the leverage of public spending to boost demand for better performing products is maximised” (recital 87).

Yet, when faced with all this evidence, and political support for a revision, the European Commission sounds like a broken record. It continues to argue that the Directive is fit for purpose, that public authorities are free to include social criteria in their calls for tender, and that its good practice approach is largely sufficient.

the European Commission sounds like a broken record

This does not change the reality that without proper guarantees for public authorities that they can – and should – ensure decent working conditions through compliance with collective agreements in their tenders, companies that disregard workplace democracy have a competitive advantage. As a result, public money flows to the cowboys of the market instead of supporting social progress.

This risk is not theoretical. It’s concrete and tangible; a recent UNI Europa report lists a series of public contracts with blatant labour rights violations and low-quality services. By ignoring the ubiquitous evidence of the broken legal framework, the European Commission is contributing to a social race to the bottom.

But this week, the Commission has another opportunity to change course.

this week, the Commission has another opportunity to change course

During the European Parliament’s plenary session, we – Members of European Parliament from four different European political parties – will urge Commissioner Thierry Breton to address the obvious limitations of the directive, and to push for a political commitment to revise it.

This would make realising a commitment – that the EU already made – much easier. With the adoption of the minimum wage directive in 2022, the EU aims to increase collective bargaining coverage across member states to 80%. Public procurement is one of the most effective ways of achieving that target.

The Commission needs to stop ignoring the race to the bottom in awarding public contracts, and reform the Public Procurement Directive now. Europe’s working people deserve it.

The Commission needs to stop ignoring the race to the bottom

This opinion was originally published in the International Politics and Society journal, and can also be found there, via this link.