About €2 trillion in taxpayers money is spent every year on public contracts. When they are awarded only to the lowest bidder, it helps corporations, not communities
As the EU mulls an overhaul of rules governing public procurement rules, a report from the European Parliament today misses a significant opportunity to stop the race-to-the-bottom in public tendering practices.
Under the current framework, EU legislation ensures that public contracts, which account for 14% of Europe’s GDP, are almost always awarded to the lowest bidder. In practice this means large companies are able to undercut local competition. And when the cheapest bid always wins public contracts, workers feel the impact: deteriorating public services, lower wages, and the erosion of workers protections.
Anticipating that the Commission will seek to reform public procurement rules as part of its ‘simplification’ drive, the report passed in the Parliament today failed to put workers’ rights at the centre of public procurement rules, or even insist on mandatory social and sustainability clauses in public tenders. Crucially, the report failed to take on The Left’s proposal to withdraw from the WTO Government Procurement Agreement, which would allow Member States greater ability to invest locally and choose European contractors over multinational competitors.
Left MEP Hanna Gedin (Vänsterpartiet, Sweden) said: “No tax money should finance poor working conditions. Public procurement accounts for a huge portion of the EU economy, and how we handle that money has an impact on working conditions on the whole labour market. The pursuit of corporate profits cannot continue to be the focus, which is why we need to introduce firm labour law requirements.”
The Left calls for a responsible use of public money, strengthening of worker’s rights, and sustainability and environmental clauses. Instead of awarding only those who can provide the lowest costs, contracts must be opened to a diverse range of quality providers, ensuring fair competition.
