Damning ECA report on public procurement in the EU

The European Court of Auditors (ECA) last week released a damning report on public procurement in the EU (Special report 28/2023). The ECA is the EU’s external auditor. Its mission is to improve and assure the EU’s financial management so that it collects and spends its money according to the rules.

Around €2 trillion (AUD$3.3 trillion) or 14 % of the EU’s gross domestic product, is spent each year on public procurement.

ECA report overview

In a shocking conclusion the ECA report says that over the last decade, competition for public contracts has decreased. They also found that 2014 reforms have not shown signs of reversing it. Overall, there is a lack of awareness of competition in public procurement.

The 2014 reform aimed to make procurement more flexible and simpler; improve access by SMEs; and be more strategic. It aimed to reinforce transparency and reduce corruption and fraud.

They conclude that key goals of the EU’s 2014 reform to ensure competition, have not been met. Simplifying and shortening procurement procedures has not occurred.

Some key findings of the ECA report

Some key findings of the ECA report are:

  • significant increase in single bidding (only one bid on a tender)
  • high level of direct contract awards
  • limited cross-border procurement between member states
  • procurement procedures still give rise to high administrative burdens
  • the share of SME participation has not significantly increased
  • strategic (e.g. environmental, social and innovative) aspects are rarely considered
  • publication rates remain low—meaning transparency as a safeguard against fraud and corruption is being negatively affected
  • the EU Commission and the member states pay insufficient attention to competition in public procurement

Key recommendations of the ECA report

The key recommendations of the ECA report are for the EU Commission to:

  • clarify and prioritise public procurement objectives
  • close the gaps in the public procurement data collected
  • improve monitoring tools to allow better analysis
  • deepen the root cause analysis and put forward measures to overcome key obstacles to competition in public procurement

Comparison with Australia

Based on the Auditor General’s department reports Australian government procurement does not show the same trends (although there has been a recent concern about the significant increase in consulting tenders being offered). These are some figures from 2012 –13 to 2021–22:

  • procurement through tendering over the last decade is $565 billion with the Building and Construction and Maintenance Services category being $36B
  • The number of contracts procured through limited tender (one or more potential supplier are approached) has remained relatively consistent
  • Management and Business Professionals and Administrative Services has shown an increase over the last 10 years, from 21,317 contracts in 2012 –13 to 37,672 contracts in 2021–22

Contact Madrigal Communications

If you need help with your government tendering in Australia please contact us to talk to our consultants.