With 1.9 trillion €/year, is [European] public procurement a remedy to business fear?

“When the going gets tough, the tough get going.” – Billy OCEAN

In times of fear, companies play safer strategies and turn to public procurement.The European Union public procurement market has always been attractive to companies, because over time it has demonstrated such qualities as resilience, accessibility and solvency. But how resilient and accessible is it today? Is it for everybody?

Nowadays, the outcome of factors like impermanence, interdependence and complexity of markets gives rise to growing waves of fear among investors, employees, entrepreneurs, managers, politicians and so on. It is now a decade that anxiety keeps creating obstacles from many components of the society alike:

  • banks scared taking risks re-investing into the economy,
  • students puzzled about their future,
  • populations asking for more direct democracy and turning their back on the ”increasingly suspicious” professional politicians for various forms of populism,
  • companies quicker applying lay-off strategies when markets “become” uncertain,
  • environmental concerns are becoming more concrete each day.


Even in a severe crisis (e.g. the housing bubble), public procurement always accounts for 15-25% of national GDP and GPA commitments (ref: EC DG GROWTH). With its €1.9 trillion, it therefore represents a huge business pillar which is always attractive to most market competitors.

Resilience of the public-sector market is therefore a long-term demonstrated fact and could be an instrument to address the impermanence or instability of markets.

Market accessibility

Recent EC Directives transposed into national laws targeted to strengthen the accessibility of this market to SME’s through:

  • Simplification:
    1. The European legislation for over 250,000 public contracting authorities is designed to open the EU's public procurement market to competition, prevent "buy national" policies and promote the free movement of goods and services.
    2. These new Public Procurement Directives pave the way for the digitalisation of public procurement. Their impact goes beyond merely making increased use of electronic tools, which now simplify the entire procurement cycle for both businesses and public buyers (e.g. The European Single Procurement Document (ESPD)).
  • Transparency:
    1. Public procurement authorities in the EU can use the Internal Market Information System (IMI) to verify the information and documentation they receive from companies in other EU countries.
    2. The new directives set out the proper framework for the prior publication of tenders, clear and unbiased technical specifications, equal treatment of bidders in all stages of the process and objective evaluation of tenders.
  • Digitalisation and accessibility:
    1. The new rules, including the new electronic self-declaration for bidders referred to above, pave the way for the digitalisation of public procurement, which will considerably increase the efficiency of the public procurement system and lead to billions in public savings.
    2. By limiting the turnover requirements and introducing the option of dividing tenders into lots, it is now easier for small and medium-sized enterprises (SMEs) to bid on public contracts. (Source: EC DG GROWTH)

Of course, this does not mean cheap paradise but all these measures are going to the right direction and responding to long-awaited requests from business actors:

  • to diminish the costs of tendering activities and deliverables;
  • to avoid “buy national” reflex (e.g. completely opposite to the “America’s first” message of POTUS Trump) to mostly focus on the best value market propositions;
  • transparency increased in various ways:
  • to achieve a leaner administrative qualification process through a “create once, use anywhere” policy for companies’ official information/documentation.

In a world of such great complexity, chances to be awarded public sector contracts are today greater for all players!


Up to now, EU member states and international institutions have always demonstrated a high degree of solvency. This is mainly because national budgets are pre-established and strictly follow EU budgeting rules. Also, and contrary to  general belief, EU public expenditures have kept growing, even after the 2008 housing bubble burst, to up to 49% of the EU GDP (ref: European Commission). Assisted also by a series of SME supportive directive, like the Late Payment Directive, public procurement is viewed as a strong means of counterbalancing the uncertainty of private markets evolution.


Even though public procurement is by no means a miracle:

  • MONEY is there: have no doubt! It is budgeted and recurrent!
  • The door to the market is more OPEN,
  • The tendering costs keeps diminishing,
  • PAYMENT TERMS: with 30 days average payment terms in Western Europe (Source: ATRADIUS), smooth cash flow management is part of the package.

So YES, European Union public procurement might be a partial remedy to business fear. This is a good time to make LONGTERM INVESTMENTS, evolve your organisation and enter this market. You just need to find what’s the right path to success for you.

“The best way to predict the future is to create it.” – Abraham LINCOLN

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