Public procurement represents a consistent part of the EU economy, accounting for around 14% of the EU GDP, more than € 2 trillion. However, with more than 250.000 public buyers, the EU public procurement market can be extremely challenging for extra-EU entities.
In this blog, Riccardo Brusori, a Business Development Manager at EuroDev, provides preliminary information you need to know in case you are thinking to participating in any public procurement procedure inside the European Union.
Riccardo starts off the series with offering a known fact, “Europe is not one country. The region has 27 countries and 24 official languages.” This might come off as a challenge for most North American companies, but when you have the right information or partner, you can boost your sales within this region.
In 2019 the EU Commission estimated that more than €2.4 trillion of public procurement was technically open to non-European bidders, while procurement with only around €1 trillion all over the world were open to European contenders.
Opportunities for North American companies
Although participating in public procurement abroad seems complicated, there are many opportunities for North American companies. Riccardo asserts that European public procurement rules are transparent. There appears to be no discrimination between EU and non-EU economic operators.
The EU introduced new directives to invest more in green public procurement and innovation. Hence, giving more opportunities to environmentally friendly and /or innovative products that are compatible with EU standards.
“First rule: do not panic. Entering the EU public procurement market for a North American company does not happen overnight, but it can be a great opportunity to strengthen its brand awareness, prestige and, of course, revenues. Moreover, public procurement in the EU connects you with public authorities and other relevant actors”.
Dealing with public procurement in the EU
- The EU, United States, Canada and other 18 WTO members have signed a Government Procurement Agreement (GPA) that protects members from some of the public competition. If you are interested in this market, it is important to read more information on the GPA and clearly understand how to benefit from it. For every single entity, the GPA presents some coverage schedules that clarifies: (1) the procuring entities covered by the Agreement; (2) the goods, services and construction services covered by the Agreement; (3) the threshold values above which procurement activities are covered by the Agreement; and (4) exceptions to the coverage.
- It is also worth noting that, each EU market has its national procurement policies. Riccardo explains “expanding into a specific European country will require you to understand the policies. In Sweden for instance, the seven procurement policy entails a seven policy objective among which, green public procurement is the main focus. France set the policy to include social considerations in at least 25% of its public tenders.” Understanding the country you are entering is key when dealing with public procurements.
- North American companies can participate in tenders with an estimated value starting from €139,000 for goods and services and €5.35 million for construction services. Riccardo states; “North American companies who enter this market should be willing to battle competition and deal with contract worth more than these amounts. This welcomes all participants and protects European SMEs.
- It is important to study different portals to monitor the EU public procurement market. “One portal I always suggest is the TED portal also known as Tenders Electronic Daily. This offers more than 1000 tenders published by EU institutions regularly.”
- Finally, it is worth pointing out that that Defense and security procurements are not covered by the GPA, and it is up to every single EU country to decide whether to allow third country parties to participate. Moreover, if you already have a registered entity inside the EU, the schedule coverage does not apply, and you can participate to every public tender on the EU territory.
Are you considering to enter the EU public procurement market? EuroDev is here to help you. We can assist you with all the most important steps, as well as connect you with important stakeholders along the process.
EuroDev, established in 1996 with offices in The Netherlands and France, has a single, defined purpose to help mid-sized North American companies expand their business in Europe. We have created a proven, successful business development model and since our founding, have partnered with over 300 companies to help them define and meet their European business goals. Services provided include Sales Outsourcing, HR Outsourcing and Digital Marketing.