CESI calls on social outcomes as priorities in revised EU public procurement rules

CESI Secretary General Klaus Heeger said: “Currently, EU rules allow for public tendering based merely on the lowest price, which puts businesses that apply collective agreements at a competitive disadvantage – and thus even incentivises them to abolish respect for collective agreement in order to stand a chance in public tendering vis-à-vis companies that engage in social dumping. It therefore remains essential that revised public procurement rules are a lever for social and labour rights of workers and not an enabler for a race to the bottom of social dumping – to ensure that increased competitiveness is not achieved through slashed wages and social and labour rights.”

In this vein, CESI calls on the European Commission to table proposals for revised EU public procurement rules which:

1. Incorporate mandatory social criteria:

Revised directives must require the inclusion of mandatory social criteria in procurement tender procedures. Bidders should be required to be assessed not only on price and technical capacity but also on compliance with EU, national and sectoral labour laws, the observance of collective bargaining agreements, and adherence to minimum wages and safe and healthy working conditions. This approach would effectively counter a race to the bottom of social and labour standards through public procurement.

2. Provide legal clarity for social criteria:

The current EU public procurement rules provide uncertainty and ambiguity about the incorporation of social conditionalities in public tender procedures. Despite a plethora of guidance material from the side of the European Commission, many authorities in charge of issuing call for tenders are unsure on how to create legally soundproof tender documents with social conditionalities. In the end, many refrain from it and just play safe by opting for tender procedures on the basis of lowest bidders. With clear and simple rules on social conditionalities to be included in tenders (notably, a respect for a collective agreements), significant levels of bureaucracy and red tape could be cut, while at the same time numerous workers across Europe currently abused would benefit from better employment and working conditions. A revision of the public procurement directives could be a landmark example on how to reconcile cutting red tape with improved social justice.

3. Involve trade unions and worker representatives early on:

Revised public procurement directives should make clear that trade unions and worker representatives in public authorities must be integrated in procurement processes at an early stage. They should have a monitoring role in the awarding process to ensure that labour standards are upheld from the outset. Tender documents should be subject to approval by representative employee participation bodies. This would safeguard against adverse impacts on workers and strengthen accountability, too.

4. Protect job security and transition provisions:

Revised public procurement directives should encourage protecting workers in the event of a transfer between service providers during the execution of services under a publicly awarded contract. Such protection relates most notably to the preservation of existing terms and conditions, the recognition of service length, and consultation practices with trade unions. This would enhance job security and predictability for affected workers. It would counter the instability which is often associated with frequent re-tendering.

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