Evaluation of Public Procurement Directives: EBE’s response to the public consultation

Public procurement represents nearly 14% of the EU’s GDP, making it one of the most powerful tools public authorities have to shape markets and accelerate the green transition. Yet, the current EU public procurement directives fall short of supporting Europe’s climate and energy efficiency objectives.

The Public Procurement Directives (2014/23/EU and 2014/24/EU) do not provide sufficient tools to public bodies to reach the energy efficiency goals set in recent EU legislation:

1) The lowest-price criterion remains the main consideration in public procurement, which is hampering the strategic use of public procurement and implementation of key EU legislation for public procurers. 60,1% of public contracts are awarded solely based on a price criterion. For public works, this number is up to 52,5%. The directives should prefer the life cycle costing (LCC) as detailed in Article 68. Currently, this tool is not used widely enough, mostly due to the lack of methodology or skills in public authorities.

• This could be better implemented by referring to existing methodologies such as LCA or the GWP (as detailed in the Green Public Procurement (GPP) guidance for office buildings) while guaranteeing material neutrality principle. For buildings, this would favour the supply of energy-efficiency products technologies and services, considering both the upfront and the operational costs (which represent 75% of the life-cycle costing, according to the GPP criteria).
• The Directive should plan capacity and skills building (including training in technical, legal, digital, financial and sustainability expertise) for contracting authorities. This will guarantee upskilling in bids evaluation based on LCC and environmental performance. To do so, the European Commission should use the results from EU-funded projects such as nZEB-ready (H2020).
• Digital tools can provide the necessary support to public authorities in evaluating bids and their environmental impact. The Article 22 of Directive 2014/24/EU opens the possibility for Member States to use Building Information Modelling (BIM) and should be better implemented across Member States.

(2) The current public procurement framework fails to create lead markets for products and services contributing to reaching the EU’s climate goals. The voluntary nature of the non-price criteria hampers market signals to provide long-term visibility for companies operating in the energy efficient buildings industry.

(3) The 2014 public procurement Directives are not in coherence with key EU legislation from the Green Deal. This does not equip public authorities with the necessary tools to reach their goals e.g. renovating 3% of public buildings’ floor area, applying the Energy Efficiency First principle (Energy Efficiency Directive – EED); bringing all new buildings occupied or owned by public authorities to the Zero Emissions Buildings Standards by 01/01/2027 (Energy Performance of Buildings Directive – EPBD).

In addition, renovation works and energy efficiency solutions and products are not in the scope of the Directives (they are not included in the Annex II and in Article 2 of Directive 2014/24/EU). However, per Article 7 of the EED, the public procurement Directives must provide public procurers with the required tools to reach their energy efficiency goals. Our recommendations for Directive 2014/24/EU:

• Article 2 must include “energy renovation works” defined as “works to improve the energy performance of public buildings”.
• Article 76 must include a criterion on energy performance in line with Article 7 of the EED.
• Following the model set out in the GPP guidance for office buildings, Annex II must include all renovation works, such as insulation, indoor lighting, taps, showerheads, efficient windows, BACS, decarbonised heating and cooling solutions, digital tools and nature-based solutions reducing energy-related greenhouse gas emissions.

(4) The GPP implementation is too fragmented to foster sustainability considerations in public procurement. The European Commission must include these guidelines in the Directives and guarantee a better implementation, harmonisation, and simplification of GPP criteria.

• The voluntary format for the GPP created implementation disparities between Member States, which led to market barriers. The Commission must include the GPP criteria in the Directive to provide a clear legal basis.
• The GPP criteria can be harmonised using existing and recognised buildings certification schemes, such as the life cycle GWP from EPC, MEPS, Level(s), etc.
• The GPP guidance for buildings does not fully cover the public buildings stock, as it currently focuses on office buildings. To ensure coherence with EU legislation, to simplify procedures for public procurers and to support the EU’s industry, these guidelines need to be revised to include other types of buildings (social housing, educational).

(5) The inconsistent implementation of Directive provisions hinders public procurers from using digital tools. Technologies such as simulation, 3D modelling, digital twins, and BIM assist in bid evaluation, environmental impact assessment, life-cycle costing, and decision-making. The procurement framework should incentivize and support public authorities to lead the digital transition.