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European Union government procurement guide for Canadian business

Help your Canadian company bid successfully for contracts with public and regulated entities in the European Union.

This is the second edition of the European Union (EU) Government Procurement Guide (GPG) for Canadian Business. As new EU regulations come into effect and relevant changes to the European procurement environment are enforced, this guide will likely be revised.

Table of contents


Introduction

The European Union Government Procurement Guide for Canadian Business:

The guide presents general information about EU legislation that is publicly available on EU websites and was current at the time of publication.

The Government of Canada:

For the latest information, visit the Official website of the European Union or SIMAP.

For country-specific legislation, opportunities or market potential, contact the Mission of Canada to the European Union.

EU public procurement

Government procurement is referred to as public procurement in the EU. The process begins when a public entity publishes a notice or call for competition in the Official Journal of the European Union and the Tender Electronic Daily (TED).

Each notice contains important information, such as:

Bidders must follow the procedures outlined in the contract notice or their bids may be disqualified. The contracting authority must also follow the procedures outlined in the contract notice to select the winning bid.

The bid process is regulated:

Bidders should:

Table of contents

Chapter 1: Overview

Public procurement in the EU is a tendering process that involves a contracting authority and a supplier of goods, works or services.
In the EU, a contracting authority can include

Public procurement is harmonized throughout the EU. The 28 member states must follow common rules and procedures to purchase goods, works and services above a certain threshold. These rules and procedures are based on the principles of equal treatment, transparency and competition as well as other EU Treaty provisions and principles to ensure all bidders have equal access to contracts.Footnote 2

EU thresholds

EU public procurement market

There are more than 250,000 public contracting authorities in the EU. These contracting authorities include city councils, regional authorities, regional governments, utilities, state-owned companies, national governments and European institutions. In 2017, these entities spent approximately €2 trillion on the purchase of goods and services, which amounted to 13.3% of the EU’s GDP. Footnote 3

Public authorities are the principal buyers in sectors such as energy, transport, waste management, social protection and health and education services.

The size of the EU procurement market - Tenders published in TED billion euros (est.)
Country2014201520162017Mean
Austria6.657.696.607.697.16
Belgium11.2916.0511.4112.7812.88
Bulgaria2.352.692.773.222.76
Croatia3.072.532.522.642.69
Cyprus0.280.280.280.340.29
Czech Republic9.204.685.797.696.84
Denmark11.8214.8414.9015.1114.17
Estonia1.041.071.001.321.10
Finland8.098.149.0310.398.91
France62.0863.3886.2499.3377.76
Germany31.7435.9743.0752.3640.79
Greece3.502.861.652.562.65
Hungary5.124.268.7913.577.94
Ireland3.964.145.105.934.78
Italy34.4937.3444.6846.5140.75
Latvia1.651.801.591.891.73
Lithuania1.871.232.022.321.86
Luxembourg1.380.921.011.051.09
Malta0.260.340.330.250.29
Netherlands11.9712.8514.9218.0714.45
Poland27.1525.9622.4033.7027.30
Portugal2.152.412.252.552.34
Romania7.207.695.318.677.22
Slovakia5.383.396.375.035.04
Slovenia1.151.461.511.731.46
Spain18.9219.2821.8725.3521.36
Sweden16.7320.5427.8323.7222.20
United Kingdom122.49148.53170.53139.63145.30
EU total412.97452.31521.76545.40483.11

Government procurement by sector

Some 170,000 contract notices are published in TED every year. In 2017, approximately 39% of contracts listed in TED have been for works, 35% for services and 25% for goods. EU public procurement directives regulate the purchase of goods, services and works differently.

The directives apply to contracts valued above thresholds set for the purchase of goods, services or works.

The estimated value of tenders published in TED above the thresholds amounts to €300 billion.Footnote 4

How EU directives work

EU directives: the basics

An EU directive is a piece of legislation that sets out a goal that all EU member states must achieve. The EU directives that regulate procurement are based on the principles of equal treatment, transparency and competition as well as other EU Treaty provisions and principles that aim to ensure equal access to contracts.Footnote 5

Separate EU government procurement directives apply to:

Certain contracts or entities are exempt from the directives. In such cases, the contract authority is not required to publish a contract notice in TED and may award a contract directly to a particular company or with limited or local publication.

The most common exemptions include contracts:

The directives on government procurement are detailed and, unless a specific exemption applies, cover procurement contracts in the EU above the stated threshold values. The directives specify rules about everything from common procedures and thresholds, to remedy mechanisms and standards. All contracting authorities in the EU must obey these rules.

Member states have an obligation to transpose each directive into national law within two years of its adoption by the EU for it to take effect. The directive must be transposed purposively, that is, the national law must serve the underlying purpose of the original directive.

In general, a directive serves to open up EU government procurement markets to bidders from across the EU, and a national law must reflect that.  It should be seen in the broader perspective of the EU’s efforts to consolidate the single market, and improve the level-playing field between member states (which ultimately is also beneficial to foreign companies operating in more than one member states).

Yet, it is important to keep in mind that the legal force of the national law of each member state supersedes that of an EU directive.  Directives specify the ultimate goal of national laws, but not how to achieve that goal. Transposing directives into national legislation can be difficult, since national legal systems differ and member states do not always interpret directives the same way. This can lead to slight inconsistences in national laws among EU member states.

In that context, it is critical for Canadian companies to be fully aware of the specific national legislation and processes in the markets where they operate.

General/Sector-specific directives:

Note: the EU does not impose buy-EU preferences except when the value of the contract is below the stated thresholds and does not raise cross-border interest. Member states must not include buy-national clauses in contracts that discriminate against other member states. That said, Article 85 of the Utilities Directive does allow EU contracting authorities in applicable sectors (such as water, energy, transport, and postal services) to reject non-EU bids where the proportion of goods originating in non-EU countries exceeds 50 percent, or give preference to the EU bid if prices are equivalent – within a three percent margin. According to the EU’s legal guidance on public procurement published in July 2019, public buyers can now also reject tenders if more than 50% of the product comes from third countries that have not yet opened their procurement markets, such as China. For country-specific information, see Public procurement in EU countries.

Brexit

On March 29, 2017, the United Kingdom notified the European Council of its intention to leave the European Union. Negotiations toward a withdrawal agreement are currently under way. Currently, the U.K. government procurement legislation arises from the EU directives that were implemented into national law as the Public Contracts Regulations 2015. These laws incorporate EU principles of equal treatment, transparency and non-discrimination.

U.K. government procurement legislation in the future will likely reflect updated trade agreements between the U.K. and the EU. Although Canada’s access to the U.K. market remains covered under CETA, that situation may change when the full impact of BREXIT takes effect.  In any case, it is now expected that the UK will have joined the WTO GPA as a new member as of early 2020 – which means Canada will maintain a high degree of access to the UK procurement market even after BREXIT.

More information about Brexit

Regulated sectors

Public sector

Public sector procurement for the purchase of works, supplies or services awarded by a contracting authority is regulated by Directive 2014/24/EU. Such contracts must be for pecuniary interest, concluded in writing and above the relevant EU thresholds.

The definition of a contracting authority is broad and includes:

Annex 1 of Directive 2014/24/EU includes a partial list of EU contracting authorities.

More information about contracting authorities

Utilities sector

The utilities directive applies to contracts awarded by contracting entities in the fields of water, energy, transport and postal services. Contracting entities include any contracting authority with undertakings over which public authorities may directly or indirectly exercise a dominant influence as well as private sector bodies that operate subject to special or exclusive rights.

The utilities directive applies to contracts related to the following activities:

Note: utilities in certain member states that are exposed to competitive forces in the market are exempt from public procurement rules and are therefore not obliged to publish their contract opportunities in TED.

More information about utilities sector

Defence directive

The directive on public procurement in the fields of defence and security applies to all purchases above EU thresholds for military or sensitive equipment or any parts thereof. This includes military equipment and equipment adapted for military purposes—defined as equipment that has distinguished military features and can be used to carry out military missions. Equipment with a security purpose, such as border protection, and that involves classified information may be considered sensitive and therefore subject to this directive.

Directive 2009/81/EC on the award of contracts in the fields of defence and security - Guidance Note

Defence procurement

Thresholds and procedures specific to defence procurement are regulated under the Directive on the coordination of certain work contracts in the fields of defence and security, which is designed to open intra-EU military procurement.

When a contract falls under both the defence and security directive and another directive, the defence and security directive takes precedence.

Note: The defence and security directive allows for up to 30% of a contract to be completed by subcontractors, a measure designed to support SMEs. To ensure transparency and fair treatment, however, subcontracts to other companies must follow public procurement procedures. The procedures resemble standard EU-procurement procedures, but are relatively simple.

Contracts related to intelligence activities and contracts between multiple government bodies are exempt from the defence and security directive. In the specific case of the US, the U.S. government acts as a go-between for EU member states and U.S. defence firms, therefore EU member states can purchase U.S. military equipment directly using the Foreign Military Sales program (a form of security assistance authorized by the US Arms Export Controls Act). The defence and security directive does not apply in such cases.

The defence and security directive enables the contracting authority to use a competitive procedure with negotiation that offers the contracting authority needed flexibility – as opposed to an open procedure.

More information about the defence sector

Note: Because CETA contains exclusions for defence, Canadian companies may not be eligible to bid for some defence contracts.

For a list of good and services that are covered, refer to Annex 19A – Market access schedules of Canada and following subsections.

Concessions sector

Directive 2014/23/EU covers concession contracts, which are used by contracting authorities to deliver services or construct infrastructure. Concessions involve a contractual arrangement between the contracting authority and the private sector company (the concession holder) and may take the form of a public-private partnership (PPP).

Under a concession contract:

In practice, this means that the government body does not provide all of the payment due to the concession holder (e.g. some of the remuneration comes from the actual operation of the facilities themselves rather than upfront payments from governments). Such arrangements expose the concession holder to more risk and potential losses.

Concessions are not the same as licences, authorizations, grants, land-lease contracts or rights of way. Examples of concessions include the building and operation of motorways, ports, airports or waste-management services.

Unlike is the case for public procurement (e.g. acquisition of goods or services by a public entity), there is no mandatory procedure for concession contracts. The contracting authority follows general rules to ensure transparency and equal treatment and may choose any award criteria that are fair and transparent.

More information about the concessions sector

EU thresholds

The EU government procurement rules apply to contracts at or above a certain value. When contracts are at or above the EU contract threshold values, the procedures and advertising obligations set out in the relevant directive apply.

Advertisement must appear in the Official Journal of the European Union (OJEU) or online in Tenders Electronic Daily (TED). Notices may also be advertised on national government procurement portals. National laws regulate contracts valued below these thresholds although these laws must align with EU-Treaty principles.

The table below sets out the relevant thresholds set out by the various directives. The thresholds are updated every two years.

Thresholds in corresponding values in the national currencies other than euros
Contracting entityType of contractValue
Central government authoritiesWorks contracts, subsidized works contracts€5 548 000
All services concerning social and other specific services listed in Directive 2014/24/EU on public procurement Annex XIV€750 000
All subsidized services€221 000
All other service contracts and all design contests€144 000
All supplies contracts involving non-defence authorities€144 000
Supplies contracts involving defence concerning products listed in Annex III€144 000
Supplies contracts involving defence concerning other products€221 000
Sub-central contracting authoritiesWorks contracts, subsidized works contracts€5 548 000
All services concerning social and other specific services listed in  Directive 2014/24/EU on public procurement Annex XIV€750 000
All other service contracts, all design contests, subsidized service contracts, all supplies contracts€211 000
Utilities (entities operating in the water, energy, transportation or postal services sectors)Works contracts€5 548 000
All services concerning social and other specific services listed in Directive 2014/24/EU on public procurement Annex XIV€1 000 000
All other service contracts, all design contests, all supplies contracts€443 000
All public contractorsConcession contracts€5 548 000

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Chapter 2: CETA government procurement commitments

The government procurement chapter in the Comprehensive Economic and Trade Agreement (CETA) between Canada and the European Union gives Canada more comprehensive and favorable access to the EU procurement market than any other G20 country.

In sectors that the EU has opened to non-EU bidders, EU public authorities have an obligation to contract to any company that submits a bid scoring highest in the evaluation of specifications and requirements. If a bid meets EU standards, an EU contracting authority must not discriminate against a company on the basis of nationality. This includes Canadian companies.

In cases where a bid from a Canadian company may have been rejected unfairly, the company may request a review of the process and submit a claim to the relevant review body. Refer to Chapter 8: Bid protests, complaints and remedies for more information.

For information  about specific trade barriers, contact the Trade Commissioner Service. The TCS has 24 offices in the EU.

Register a trade barrier with Global Affairs Canada.

Powers maintained by both parties

The government procurement chapter of CETA relates only to contracts listed in the Market Access Schedule of Canada-Annex 19-1 and above a certain value or threshold. Contracting authorities for competitions in which contracts are below the thresholds are not obliged to consider bids from Canadian companies. The same rule applies to competitions for Canadian government contracts, which are open to EU companies only when the contract value is above the threshold.

What CETA means to Canadian companies

CETA gives Canadian companies access to an EU government procurement market that is almost equal to that between EU member states and unparalleled among G20 countries.

Canada and the EU give preference to domestic companies when using grants, loans or fiscal incentives. Public authorities may also favor local companies when contracts fall below the thresholds outlined in CETA or are in excluded sectors.

Under CETA, Canada and the EU can:

Refer to Chapter 9: Background to the European Union for more information.

Market access changes for the EU

The procurement chapter in CETA (Chapter 19) eliminates some of the asymmetries between the EU and Canada and provides the most favorable and comprehensive coverage of any of Canada’s free trade agreements. CETA goes beyond the commitments made in the World Trade Organization Agreement on Government Procurement (GPA) and the North American Free Trade Agreement (NAFTA).

Under CETA, Canada opens government procurement markets to EU companies at the sub-federal level. This includes the provinces, territories and municipalities.

Canada’s procurement market now includes:

In turn, the EU guarantees Canadian suppliers reciprocal access to the European public procurement market. Some goods and services are not covered.

More information about market access for the EU

EU rules make it easier for small and medium-sized enterprises (SMEs) to access government procurement opportunities.

CETA thresholds and exclusions

CETA thresholds are:

These thresholds are similar to those set out by the EU directives. The only exception is for the procurement of goods and services by bodies governed by public law that are not hospitals, schools, universities and social-service agencies. This threshold is set at 355,000 SDR (currently equal to approximately €371,000).

The CETA thresholds are listed below:

Procurement thresholds for CETA
Contracting BodyGoodsServicesWorks
EU institutions (Commission, Council and EESA) + central government bodies in the EU member states130 000 SDR
(144,000 EUR)
130 000 SDR
(144,000 EUR)
5 000 000 SDR
(5,548,000 EUR)
Sub-central entities (regional and local entities) and bodies governed by public law that are hospitals, schools, universities and social-service agencies200 000 SDR
(221,000 EUR)
200 000 SDR
(221,000 EUR)
5 000 000 SDR
(5,548,000 EUR)
All other bodies governed by public law355 000 SDR
(394,500 EUR*)
355 000 SDR
(394,500 EUR*)
5 000 000 SDR
(5,548,000 CAD)
Utilities (all entities)400 000 SDR
(443,000 EUR)
400 000 SDR
(443,000 EUR)
5 000 000 SDR
(5,548,000 CAD)

* Estimate - The exact figures will be provided by the European Commission

Bidders can use the above table to identify the relevant contracting body and the type of contract (goods, services or works) and then find the relevant threshold and its equivalent in euros/dollars.

Also see CETA Annexes 19-1 to 19-3 for the full list of procurement thresholds and contracting authorities.

The EU’s excluded sectors include:

Canada’s exceptions

Canada has carved out exceptions within CETA that include:

CETA chapter by chapter

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Chapter 3: Finding contract opportunities

EU government procurement notices must be advertised EU-wide in the Official Journal of the European Union (OJEU) and its online version, Tenders Electronic Daily, TED. There are 18 standard forms for notices used by contracting entities.

These include:

Prospective bidders typically rely on contract notices to help them decide whether to submit a bid for a particular contract.

More information about finding contract opportunities

Common Procurement Vocabulary

Common Procurement Vocabulary (CPV) assigns a number to every good, service and contract, making it easy to identify, in any language, the contents of a procurement contract. Using CPV allows government bodies to quickly and precisely identify a product or service. For example, the CPV code for electrical fitting work is 45311200.

Nomenclature of Territorial Units for Statistics (NUTS)

The Nomenclature of Territorial Units for Statistics (NUTS) are codes used on TED and assigned to various EU territorial areas. The first letters of the code identify the country, while subsequent numbers identify the specific region.

For example, SE is the code for Sweden, SE2 is the code for South Sweden, and SE224 is the code for Skane, a region in South Sweden.

Tenders Electronic Daily (TED)

Approximately 1,700 new contract notices are published each day on TED.

These include notices from:

The following contract notices are not published on TED:

TED help Pages

Table of contents

Chapter 4: EU procurement procedures

Contracting authorities may use various procedures to select suppliers, but they must respect the rules associated with each procedure.  This section explains the specifics of each type of procedure, and common characteristics between them. 

Open procedure

The open procedure is a single-stage process, whereby the contract opportunity is published and access is usually granted electronically to all interested bidders. Bidders responding to advertisements will be required to submit documents showing they meet the selection criteria along with their final proposals. Only bids from qualified companies or economic operators that have submitted the required documents and that meet the selection criteria will be considered. No negotiations are permitted with bidders although contracting authorities may clarify aspects of the tender with bidders.

The open procedure is commonly used because it allows any company to submit a bid. It is often used for lower-value contracts, off-the-shelf products or when the required goods, works or services are not complex. The public authority advertises its specific requirements and invites applicants to bid.

Your Europe - Public tendering rules

Restricted procedure

The restricted procedure is a two-stage process:

The contracting authority:

The contracting authority is permitted to limit the number of economic operators that it invites to bid. This means that not all qualified bidders will be invited to tender.

No negotiations are permitted with bidders during this process, although contracting authorities may clarify aspects of the tender with bidders.

Your Europe - Public tendering rules

Accelerated procedure

In urgent cases, the contracting authority may accelerate a restricted procedure. The deadline for an accelerated procedure can be as short as 15 days and the deadline for bidding as short as 10 days.

A contracting authority must demonstrate why an accelerated procedure is required. Failure to do so could result in the process being challenged.

Competitive dialogue

The competitive dialogue procedure is a two-stage process:

The contracting authority:

During the selection phase all aspects of the project can be discussed with bidders and the number of potential solutions can be reduced as part of the process. Once the contracting authority is satisfied that it will receive proposals that will meet its requirements, it declares the competitive dialogue phase closed and invites final bids from the remaining bidders.

The competitive dialogue procedure is typically used for complex projects, such as infrastructure construction and for the procurement of private-sector partners on Private Finance Initiatives (PFI)/Public Private Partnership (PPP) projects.

Your Europe - Public tendering rules (Select Types of Public Procurement Procedure)

Competitive procedure with negotiations

Similar to the restricted and the competitive dialogue procedures, this two-stage procedure starts with a pre-selection stage.

The contracting authority then issues an invitation to negotiate only to the bidders that it has shortlisted at the selection stage. A minimum of three preselected bidders is required for the procedure to continue. Selected bidders will then prepare initial proposals, and the contracting authority will then enter into negotiation with these bidders on the basis of those proposals. Specific deadlines apply to each type of competitive procedure.

Your Europe - Public tendering rules (Select Types of Public Procurement Procedure)

Negotiated procedure without prior publication of a contract notice

The contracting authority is not required to publish a contract notice in exceptional circumstances.

The negotiated procedure is limited to cases where:

Contracting authorities may expose themselves to legal challenges if they misuse the non-competitive negotiated procedure.

Innovation partnership

Innovation partnerships were introduced in the EU directive 2014/24/EU – Article 31

Innovation partnerships are used where:

The procedure is similar to a restricted procedure, but includes a contract comprising research and development phases with milestones resulting in a final solution or end product that satisfies the procurement needs of the contracting authority.

Note: the research and development phase occurs after the innovation partner is selected and awarded the contract.

The partnership structure incorporates:

The tender documents may set other parameters for the partnership. For example, the contracting entity may include clauses regarding termination of the partnership and assignment of intellectual property rights.

Electronic auction

Electronic auction (e-auction) may be incorporated into another contracting procedure only when precise details, such as technical specifications, have been established and published.

Only clearly identifiable factors, such as price or quality indicators, are open to auction. These factors must be quantifiable and expressed as a score or percentage, for example, percentage of titanium content in a metal support.

A contracting authority can invite pre-select bidders to participate in an auction. The contracting authority specifies the number of rounds in the auction, the deadlines and ranking criteria for bidders. The contract notice must also specify all conditions, for example, value limits and minimum bids. After each round, bidders must be informed of their rankings. The identities of all bidders must not be disclosed.

Summary - what bidders should watch for when analysing a procurement procedure

In all procurement procedures except the open procedure, the contracting authority must apply:

Exclusion criteria

Exclusion criteria include mandatory and discretionary grounds for exclusion of bidders by determining their:

Contracting authorities:

Refer to article 57 of Directive 2014/24/EU for mandatory and discretionary criteria, including crimes that require exclusion.

The contract documents must indicate if discretionary grounds for exclusion apply.

Note: According to Article 57(6) of Directive 2014/24/ EU, bidders may contest an exclusion decision by providing appropriate evidence to the contracting entity.

Selection criteria

Selection (qualification) criteria:

A public sector entity building a road, for example, may apply selection criteria to exclude bidders without experience in road construction.

Examples of selection criteria:

The contracting authority can require that bidders register in a national professional body or trade registry. Most EU countries have registrars of companies.

Registers - Directive 2014/24/EU Annex XI

Criteria related to economic and financial standing are designed to confirm that the bidder has the financial and economic capacity to complete the tasks in the contract. The contracting authority can require, for instance, that bidders have total annual revenues of up to twice the estimated value of the contract. An exception applies when a contracting authority can demonstrate that special risks associated with the contract justify higher revenues. The contracting authority may require bidders to submit financial statements covering up to the last three years. As a general rule, bidders may be required to submit information such as financial statements and proof of appropriate professional risk-indemnity insurance. For contracts divided into lots, the rules apply to each individual lot. If a contracting authority awards groups of lots, it may specify the requirements for each group.

Criteria related to technical and professional ability can require that bidders demonstrate adequate human and technical resources, and experience, for example, professional references or other evidence of competency.

The list of supporting documents bidders can use to demonstrate they meet the selection criteria includes:

Means of proof of selection criteria - Directive 2014/24/EU Annex XII

Award criteria

Award criteria are applied to evaluate the most economically advantageous tender (MEAT):

The bidder that satisfies the MEAT criteria should be awarded the contract. The MEAT criterion means that the contracting authority may take into account various aspects of bids including cost, quality of work, as well as proposed technical and environmental measures as long as the winning bid is the most economically advantageous.

Refer to Chapter 9: Green and Sustainable Procurement

The MEAT criteria is used for projects, supplies or services, and can relate to the full life-cycle of a contract. It may be applied to production processes, the provision or trading of goods, work or services, and recycling procedures at the end of a project’s life cycle.

Bid criteria can be further broken down into sub-criteria. For example, a quality rating of 55% can be broken into technical merit, after-sale service, technical assistance, delivery conditions, and functional characteristic.

Lowest price and life-cycle costing

In the case of simple contracts, the contracting authority may decide that price is the most important or possibly the only criterion. Price can involve total cost or total life-cycle cost by taking into account items such as:

When using life-cycle cost, the contracting authority must indicate how this cost will be calculated and the type of data that bidders must provide. A contracting authority must use objective, non-discriminatory criteria to calculate environmental life-cycle costs. The criteria must not “unduly” favor one supplier over another.

Abnormally low tenders

When the cost included in a tender submission is unusually low, the contracting entity may require that the tenderer explain the submitted price and reject the bid if the response is unsatisfactory.

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Chapter 5: Framework agreements

Overview

A framework agreement sets out terms and conditions under which specific purchases can be made throughout the term of the agreement. These purchases are referred to as call-offs.
Framework agreements are used widely by contracting authorities in certain member states and by European institutions. A framework agreement itself is not a contract, but the procurement process that will establish a framework agreement is subject to the EU procurement directives. The directives define a framework agreement as an agreement between one or more contracting authorities and one or more economic operators, the purpose of which is to establish the terms governing contracts to be awarded during a given period, in particular with regard to price and, where appropriate, the quantity envisaged.

Framework agreements can be applied to all types of contracts. However, they are mostly suitable to situations where the contracting authority does not know the exact quantities, nature or timing of the (recurrent) requirement it will have in the future.

Example:

A contract that would be best placed as a framework agreement is the supply of spare parts for machinery or for IT maintenance services.

Framework agreements may be single-supplier or may allow two or more suppliers to join the framework.

The term of a framework agreement may generally not exceed four years, with the exception of “exceptional cases duly justified, in particular by the subject of the framework agreement”.

Advertisement of a framework agreement

A framework agreement must be advertised in TED by way of a contract notice. The requirement to advertise in TED applies where the estimated value of all purchases to be made under the framework agreement exceeds the relevant EU threshold for that type of contract be it for services, goods or works.

Call-offs

Call-offs or specific contracts as they are often referred to by European institutions are periodic orders placed under the framework throughout the term of the agreement.

When the framework agreement is a single-supplier agreement, call-offs are awarded directly within the limits of the terms laid down in the framework agreement.

Mini-competition

In the case of a multi-supplier framework agreement, the contracting authority generally places a call-off with a company by either:

The contract documents will specify, in the case of a multi-supplier framework, what method the contracting authority will follow when awarding call-offs.

Issues to consider

Contracting authorities may choose to purchase outside the framework, provided that a new contract notice is published in TED for that specific purchase. However, since framework agreements allow contracting authorities to award call-offs (without advertising a contract notice in TED for each specific contract), they will often go for the call off option as at means to save significant amounts of time and money.

Given the term of most framework agreements is four years, companies that are not admitted to the framework may not be in a position to provide the same services to the contracting authority during the term of the framework. It is therefore advantageous for companies to succeed in competitions for framework agreements so they can take full advantage of the benefits of these agreements.

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Chapter 6: Procurement by EU institutions

Overview

There are 13 European Institutions, four inter-institutional bodies and over 40 EU agencies in the EU. However only three EU Institutions are covered by CETA in relation to goods, services and construction services:

EU Market Access Schedules

Regulatory framework

Procurement by EU institutions is subject to:

Refer to Practical Guide (PRAG) for details about EU external aid procurement.

Common procedures

Although procurement by European institutions is not subject to the EU Directives, the tendering procedures are similar to those in Directive 2024/24/EU.

Summary of EU procurement thresholds for each procedure

Summary of EU procurement thresholds for each procedure
Services/Supplies contractsWorks contractsType of procedure

€1 - €1,000

€1 - €1,000

Simple payment against an invoice

€1,000 - €15,000

€1,000 - €15,000

Negotiated procedure with a single tenderer

€15,000 – €60,000

€15,000 – €60,000

Negotiated procedure with a at least three tenderers

€60,000 – €144,000

€60,000 – €144,000

Negotiated procedure with a at least five tenderers
Procedure following a call for expression of interest (list of pre-selected bidders)

Above €144,000

Above €5,548,000

Open or restricted procedure

Services under Annex XIV of Directive 2014/24/EU, concessions, certain research services and certain audio-visual or media services

-

Competitive procedure with negotiations

The following special procedures may also be used occasionally:

More information about procurement by EU institutions

Table of contents

Chapter 7: Practical considerations for bidders

Market research

Market research is important. Bidders should be prepared to

Submitting a bid

Deadlines

Deadlines in government procurement procedures are usually strict and in many cases, absolute. Late bids are almost always disqualified. Deadlines usually specify the date for receipt of bids rather than the mailing date.

Technical bid

Preparing the technical bid is often one of the longest and most time-consuming aspects of bidding for public contracts. The technical bid should respond to the specifications and requirements set out in the tender documents. This response will form the part of the bid that will be assessed by the contracting authority on the basis of the award criteria. Bidders should structure their proposals in accordance with the weighting of award criteria specified in the tender documents or the contract notice.

Certificates

European Single Procurement Document (ESPD)

The European Single Procurement Document (ESPD) allows a bidder to prepare the pre-qualification documents they need during the selection phase of the tendering process. The ESPD is a self-declaration of the company’s financial status, abilities and suitability for a government procurement procedure. It is available in all EU languages, applicable in all member states and used as a preliminary evidence of fulfilment of the conditions required in government procurement procedures across the EU.

Only the winning bidder has to supply all the certification documents.

Contracting authorities start an ESPD by entering key information related to the contract before posting the contract notice on TED. If an ESPD is not part of a contract notice, bidders can request a copy from the contracting authority along with the full tender documents.

European Single Procurement Document and eCertis.

eCertis

eCertis is a European Commission service that provides additional information about the certificates bidders must typically include with bids. eCertis is the online repository of certificates for EU government procurement. Search eCertis by country and by document type to access additional information about a particular document. The system does not contain all documentation, therefore a judge or a notary may have to provide needed documents. The information provided is not legally binding.

Languages

Contract notices in TED generally feature multiple languages; most are in English as well as in the national language of the contract authority. The full tender documents, however, are often only in the national language (note that TED however has a translation function which can be convenient). Many tenders require that submissions feature the national language of the contracting authority. Professional translators are available in both Canada and across the EU.

Partnering

Some Canadian companies partner with local companies on bids.
Bidders should:

Enterprise Europe Network

Sub-contracting

The prime contractor may use one or more sub-contractors. Sub-contractors may also further sub-contract some elements of the works or services that they are required to deliver.

Note: the prime contractor is responsible and liable to the contracting authority for the proper execution of a contract even when sub-contractors are involved.

In many cases, subcontracting may be necessary or useful if:

Sub-contracting may also be useful for Canadian companies that do not meet all of the qualification criteria required by the contracting authority. In such cases, the EU Directives permit the Canadian company to rely on sub-contractors to supplement the capacities or resources that are lacking in order to qualify. Canadian SMEs that may not be able to satisfy the requirements of an entire contract alone because of its size, specialization, or their limited resources may use the Enterprise Europe Network to find EU-based companies that are looking for sub-contractors.

Further considerations

Corporate Social Responsibility (CSR) is often considered by contracting authorities in the EU. Bidders should include evidence of additional corporate competencies (such as CSR) when submitting bids to enhance their chances of success.

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Chapter 8: Bid protests, complaints and remedies

What happens when things go wrong?

Under the EU Remedies Directive 2007/66/EC, bidders have a right to seek redress if there have been errors in the procedure or if a contract has been awarded unfairly. The Directive sets a minimum legal standard that applies in every EU member state. Eligible Canadian bidders benefit from the same legal rights as European (domestic) companies for contracts covered by CETA.

It is critical to respect deadlines for challenges to contract awards. Deadlines may vary among member states, but in some cases, they may require a legal action within 10 days from the point at which the claimant either was, or should have been, aware of the infringement.

Note: the deadline for challenging a contract award in some member states may be limited to 30 days. In some cases legal action is most effective if launched within 10 days of the contract award being sent to participating companies.

Although the EU remedies directive prescribes minimum standards, legal proceedings will be conducted in the member state where the contract is originated. In some member states such as Denmark a regulatory body processes challenges while in others such as in Sweden, France or the United Kingdom challenges will be heard before a court. A bidder wishing to challenge a contract award should seek appropriate legal counsel or contact the staff at the Mission of Canada to the EU for advice.

Pre-contractual remedies

An unsuccessful bidder who initiates legal proceedings during the tendering process and before the contract is signed can request the court to:

When a contracting authority concludes a procurement procedure and takes a decision to award a contract, it must inform all participating bidders of the contract award decision before signing the contract. The interval is called the standstill period. During this period, the signing of the contracts is delayed for a certain period. If suppliers have been notified of the award decision electronically, the standstill period will apply for 10 calendar days.

Note: legal action launched before contract signing will prevent the contracting authority and the successful bidder from concluding the contract. This means that a claimant need not request an interim order to block a contract award. The block is automatically effective until legal proceedings conclude or until another solution is in place. The contracting authority can, however, appeal to the courts to suspend the block.

Canadian suppliers have guaranteed access to pre-contractual remedies in the EU for only the first 10 years of CETA as of September 21, 2017, unless Canada’s provinces and territories make available similar remedies under their respective domestic review regimes.

Post-contractual remedies

After the contract has been signed, bidders may seek remedy through

Damages

Claimants can be compensated for bid-preparation and submission costs. A court may also award a proportion of lost profits, particularly if the claimant’s unsuccessful bid was demonstrably strong. Although courts have awarded damages, many post-contractual challenges end in negotiated settlements.

Declaration of ineffectiveness

This annuls a concluded contract by making all rights and obligations under that contract unenforceable. In some member states the annulment of the contract will be retrospective whereas in other member states the annulment will be in relation to future rights and obligations only, combined with fines imposed on the contracting authority.

A declaration of ineffectiveness may be available for companies in three main circumstances:

Time limits

Any claim for a declaration of ineffectiveness must to be brought within the earlier of 30 days from either the issue of an award letter to the unsuccessful bidder or publication of an award notice. In the case of illegal direct award, when neither a contract notice nor a voluntary ex ante transparency notice was published, bidders will have six months to file a request for ineffectiveness from the date of contract award.

The member states enforce different time limits for damages claims. In most cases, bidders will have at least 30 days to bring a claim for damages. In the United Kingdom, for example, the time limit is 30 days from the day on which the bidder knew or ought to have known of the infringement, but there is discretion for the court to extend this where there is a good reason for doing so. The time limit may only be extended up to a maximum of three months from the date of knowledge.

Complaint to the European Commission

Companies may also complain to the European Commission alleging a breach of the procurement rules and the EU Treaty principles, such as equal treatment, transparency. The Commission has discretion to investigate the complaint. It may also wish to know if the complainant has exhausted all national legal processes before becoming involved, although this is not a pre-condition for the Commission’s involvement.

The European Commission increasingly assumes a direct role in claims of procurement infringements. The Treaty of the Functioning of the European Union (TFEU) authorizes the Commission to initiate legal proceedings against member states that fail to comply with EU rules. This is a long and cumbersome procedure.

If the Commission decides to intervene, it can ask a representative of the relevant member state where the contracting authority is based to suspend the contract. If the member state refuses, the Commission can bring that member state before the Court of Justice of the European Union. Ultimately, the Court of Justice of the European Union could impose a monetary penalty on the member state for every day it has been in breach of its public procurement obligations. There is no time limit on making a complaint to the Commission. Although the proceedings could take three to four years or more to complete in some cases interim measures by the European Commission can be swift.

Bid protests in European institutions contracts

Government procurement conducted by the European institutions as opposed to procurement procedures conducted by contracting authorities in the 28 member states is subject to specific rules and a separate review mechanism.

Companies that have been treated unfairly during a procurement procedure are advised to contact the relevant EU institution as soon as possible to try to address the problem with them directly. EU institutions are obliged to provide answers to questions and complaints.

If the response received by the EU institution is unsatisfactory, the following options are available for aggrieved companies.

Appeal to the European court

The General Court of the European Union in Luxembourg has jurisdiction to hear cases related toprocurement procedures launched by EU institutions. Complaints must be submitted within two month of the decision that is being protested. Cases will be brought on the basis of non-contractual liability, which means that the court will be able to annul decisions and award damages if it has established that a breach of the applicable rules has taken place.

Complaint to the European ombudsman

Companies may submit a complaint form to the European Ombudsman.

The European Ombudsman investigates complaints about maladministration in the institutions and bodies of the European Union. If it considers the complaint justified, it may issue a recommendation to the relevant European body or try to help in finding a fair solution to the problem.

Recommendations by the European Ombudsman are non-binding and the entire process may be lengthy. For these reasons, it is considered to be less effective than a court procedure.

The European Anti-Fraud Office (OLAF)

The European Anti-Fraud Office (OLAF) investigates fraud against the EU budget, corruption and serious misconduct within the European institutions. If suspicions arise during a procurement procedure that concern illegal activity of this kind by EU procurement officers or associates, a complaint can be submitted to OLAF by any party. They may do this anonymously. Similar to the European Ombudsman, OLAF does not have judicial powers, but the results of its investigation may lead to administrative, financial disciplinary or judicial actions.

CETA and the involvement of the government of Canada

Canada’s Trade Commissioner Service has offices across the EU and staff who are ready to support SMEs overcoming trade barriers and other difficulties with respect to procurement markets in all 28 EU member states. Canadian companies may bring issues to the attention of the Government of Canada by registering a trade barrier.

CETA has a dedicated Committee on Government Procurement comprising representatives of the European Union and representatives of Canada who meet to consider issues regarding government procurement that are referred by one of the parties.

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Chapter 9: Background to the European Union

Green and sustainable procurement

Green Public Procurement (GPP) has been endorsed in a number of EU policies and strategies. It is defined in the Communication (COM (2008) 400) Public procurement for a better environment as a process whereby public authorities seek to procure goods, services and works with a reduced environmental impact throughout their life cycle when compared to goods, services and works with the same primary function that would otherwise be procured.

Sustainable Public Procurement (SPP) is a process by which public authorities seek to achieve the appropriate balance between the economic, social and environmental pillars of sustainable development when procuring goods, services or works at all stages of the project.

The EU Directives contain stipulations that:

EU contracting authorities often incorporate “green” elements into their tenders. This may be accomplished when defining the subject matter of the contract:

More information about sustainable procurement

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Annexes

Annex 1: Common Q&As and useful tips

Q- How is the Special Drawing Rights (SDR) threshold in CETA calculated?

A-The thresholds set out in the EU Directives and CETA agreement apply to Drawing Rights (SDRs). Every two years, the Government of Canada will update the Canadian dollar equivalent of the various SDR thresholds using a formula laid out in the WTO Agreement on Government Procurement (GPA).

Thresholds are converted into Canadian dollars on a bi-annual basis, based on the average exchange rate between SDR and CAD for the previous two years. 2018-2019 thresholds are set at SDR 130,000 for good and services and SDR 5 000 000 for works.

The revised Free Trade Agreement thresholds (see entry for European Union) are published by the Treasury Board Secretariat in the form of a contracting policy notice (Contracting Policy Notice 2018-2019).

Thresholds

Q- Are EU and CETA threshold levels inclusive or exclusive VAT?

A-The thresholds set out in the EU Directives and CETA agreement apply to contracts with a value net of value-added tax (VAT). Contracts will be covered by the rules if their net value is estimated to be equal to or greater than the thresholds.

Q- I read that the threshold level is set at Goods: SDR 130,000, Services: SDR 130,000.  Is that per contract? What is the current SDR rate?

A-Yes. The value thresholds are assessed against individual contracts. In Canadian dollars, the value thresholds for goods and services are equivalent to CAD 237,700 for 2018-2019.These thresholds are readjusted every two years to account for currency fluctuations.

External aid and contracts funded by international organizations

Q- Does CETA allow Canadian companies to bid on international assistance projects or EU projects for external aid? (e.g. EuropaAid, EDF)?

A-No. CETA does not cover EuropaAid contracts. CETA has an explicit carve-out in Article 19.2.3.e. for these types of procurements applying equally in Canada and the EU:

Article 19.2 – Scope and coverage

3. Except as otherwise provided in a Party’s Annexes to its Market Access Schedule for this Chapter, this Chapter does not apply to:

[…]

e. procurement conducted:

  1. for the specific purpose of providing international assistance, including development aid;
  2. under the particular procedure or condition of an international agreement relating to the stationing of troops or relating to the joint implementation by the signatory countries of a project; or
  3. under the particular procedure or condition of an international organisation, or funded by international grants, loans or other assistance if the applicable procedure or condition would be inconsistent with this Chapter.

Q- We are interested in bidding for a contract for the INARA project in Lebanon. It appears to be a project funded by the EU through EuropeAid (the International Cooperation and Development Department of the European Commission) but managed and implemented by the Business Incubation Association in Tripoli (BIAT). Does CETA allow Canadian firms to bid on this tender?

A-No. CETA Article 19.2.3.e. has an explicit carve-out for projects related to international assistance, development aid and/or funded through international organisations.

Q-We are a Montreal-based consulting firm that exports consultancy services to projects that are funded by foreign countries or international financial institutions such as the World Bank. Are Canadian firms now eligible to participate in government procurement, grants and other award procedures financed under the ACP-EC Partnership Agreement, laid down in Annex IV to the latter Agreement as revised by Decision No 1/2014 of the ACP-EU Council of Ministers of 20 June 2014 regarding the revision of Annex IV to the ACP-EC Partnership Agreement (2014/428/EU)?

A-No. CETA does not guarantee access to contracts awarded under the ACP-EC Partnership Agreement, which is focused on international assistance/development. CETA has an explicit carve-out  in Article 19.2.3.e. for these types of procurements, effectively excluding these contracts from the application of CETA both  in Canada and in the EU.

Public Private Partnerships (P3s)

Q- Are Public Private Partnerships (P3s) covered in CETA?

A-CETA procurement rules only apply to certain construction P3s, such as P3s for the construction of highways, for example, toll roads and buildings. CETA does not apply to P3s for the construction of:

CETA does not oblige municipalities to adopt a particular model for the delivery of public infrastructure. CETA does not prohibit or limit the use of P3s.

Space and aerospace

Q- Can Canadian space suppliers bid on EU Member States’ space contracts that are not defence-related? (e.g. ESA which is not covered by CETA)

A-Canadian suppliers can only bid on contracts put out by EU Member State space entities that are covered under the relevant schedules to CETA.  As a consequence, Canadian suppliers cannot bid on contracts put out by ESA.

Browsing TED

Q – Is TED available in English? In which language can I submit my bid?

A - When contract notices are published in any one of the 24 official languages of the EU, a summary of the contract notices will be available in English. It is up to the contracting authority to decide how much information to provide in English and whether it will accept bids in that language. There are no strict rules regarding language for bids, and in some cases contracting authorities in non-English speaking member states will publish the entire set of contract documents in English. TED provides a translation function for cases when the full text of the contract notice and the tender documents are only available in the original language.

Q – My company is based in Canada.  How can I ensure that my company is eligible to bid under CETA?

A- Section IV.1.8 of the contract notice (section II 1.7 in the summary section), should also indicate whether the tender notice is subject to the Global Procurement Agreement of the WTO, meaning that companies from signatory countries to the GPA are eligible to bid on it. While the TED interface does not indicate whether CETA applies to contract opportunities, if a GPA note appears, Canadian companies are highly likely eligible to bid on the contract since Canada is a signatory to both the GPA and CETA.

If the GPA note does not appear, or if you are unsure of your eligibility under CETA, Canadian companies can reach out the Trade Section of the Mission of Canada to the European Union at BREUTD@international.gc.ca or to a Trade Commissioner in their target EU market who can assist in clarifying their eligibility.

Q- Which criterias can I use when performing a search function in TED?

A-Users can perform an advanced search using criteria such as:

Annex 2: Setting up a TED account

Go to simap.ted.europa.eu/. SIMAP is the primary online resource for EU government procurement. The name is an acronym for Information System for Government procurements (in French système d’information pour les marchés publics).

To register on TED, click on the TED icon and then left-click on log in on the left side of the page. This opens the European Commission Authentication Service (ECAS) website. On this site, click the globe image marked “external.” This is for users who do not work for an EU Institution.

For a detailed guide on TED features, please see the TED Help Pages.

Annex 3: Setting up an automatic email alert

Email alerts enable registered users to receive daily, weekly, biweekly and monthly notifications about potential contract opportunities in the EU. Note, however, that monthly alerts may not be desirable as deadlines can be as short as 15 days. Email alerts are one of the simplest and most useful tools for receiving notifications concerning the EU procurement market.

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