The European Commission presented draft legislation on 9 September 2026 that fundamentally alters how public contracts are awarded across the bloc. The proposal mandates that price cannot be the sole determinant in tender evaluations. Instead, quality criteria must account for a minimum of 30 per cent of the scoring matrix. This shift is designed to favour domestic suppliers who can claim European origin or superior sustainability standards.

Alongside the weighting change, member states gain explicit authority to exclude bidders from countries that do not offer reciprocal market access. The Commission identifies China as the primary target of this measure. Officials argue that Chinese firms benefit from state subsidies and protected home markets, creating an uneven playing field for European competitors bidding on infrastructure and technology contracts.

Reciprocity as a weapon

The draft regulation formalises the use of procurement as a geopolitical tool. While Chinese companies may be barred from specific tenders, the rules explicitly exempt partners who maintain open procurement markets. Authorities in Brussels confirmed that firms from the United States, United Kingdom and Japan will not face similar restrictions. This distinction underscores that the measure is not blanket protectionism but targeted retaliation for closed markets.

Stéphane Séjourné, the European Commissioner responsible for trade, indicated that national authorities will hold the discretion to apply these exclusions. The Commission provides the legal framework, but individual capitals decide when to invoke the clause. This decentralised approach aims to balance EU-wide strategic goals with national economic interests, though it risks inconsistent application across the single market.

Defining quality in contracts

Under the new trade policy framework, contracting authorities must evaluate bids using a price-quality ratio. The mandatory 30 per cent allocation for quality allows buyers to prioritise factors beyond cost. One permissible criterion is a 'Made in Europe' label, which directly advantages local manufacturers over imported goods even if the latter are cheaper.

Sustainability metrics also qualify as quality indicators under the proposal. This dual focus aims to support the EU's industrial base while advancing climate objectives. Critics argue that embedding origin labels into scoring systems effectively subsidises European firms through public spending. Proponents counter that it corrects distortions caused by foreign state aid and dumping practices that undermine local production capacity.

Berlin shifts position

The proposal marks a significant adjustment in German economic policy. Friedrich Merz, who serves as Chancellor in this legislative period, had previously criticised protectionist tendencies within the EU institutions. His administration now supports the measures, reflecting a broader consensus in Berlin that free trade principles require enforcement mechanisms to function fairly.

German industry faces intense competition from subsidised Chinese imports in sectors ranging from steel to renewable energy technology. The Chancellor's office views the procurement rules as a necessary defensive layer alongside existing anti-subsidy investigations. This alignment between Berlin and Brussels reduces the likelihood of member state veto threats during the legislative negotiation phase.

Risks of fragmentation

Delegating exclusion powers to member states introduces complexity for multinational bidders. A company barred from bidding in France might remain eligible in Poland, creating a fragmented compliance landscape. Legal challenges are expected from affected third-country firms who may argue that discretionary exclusions violate international trade commitments under World Trade Organization rules.

The Commission must now navigate the ordinary legislative procedure with the European Parliament and the Council. Negotiations will focus on the precise definition of quality criteria and the threshold for invoking exclusions. Industry lobbyists are already preparing amendments to ensure the rules do not inadvertently raise costs for public authorities or delay critical infrastructure projects across the union.

People mentioned

Organisations

European Commission · Christian Democratic Union