Public procurement decides who benefits, who is excluded, and how fairly the costs and gains of public spending are shared across generations. This MERGE’s policy brief argues that the EU should use this two-trillion-euro lever deliberately to advance sustainability, social inclusion and gender equality, moving away from defaulting to the lowest price.

Why procurement matters

Public authorities across the EU spend over €2 trillion a year, roughly 15% of GDP. The brief, based on the Policy Lab organised with contributions from relevant policymakers and practitioners in the MERGE project, specifically focuses on socially responsible public procurement (SRPP) and gender-responsive public procurement (GRPP). SRPP looks at the impact public purchases have on society, while GRPP examines how contracted goods, services and works affect women and men differently and designs contracts to reduce that gap. Together, they form part of a broader sustainable procurement agenda that the brief argues deserves a central place in EU policy.

Why now

The EU is revising its Public Procurement Directives, a rare chance to rethink how public money is used. The Letta report has already flagged procurement as a key lever for social economy entities, and international bodies such as the UN are pushing governance systems to account for long-term and intergenerational impacts. Yet most public money still goes to the lowest bid. In 2024, eighteen EU and EEA countries awarded more than half their major tenders using price as the sole criterion, some over 90%. Sectors like health, mobility, construction and waste management, where public demand shapes the market, are particularly well placed to pull supply-side behaviour towards better working conditions and stronger equality outcomes. Now is the right moment to strive for such a shift. 

What we propose and how

The brief sets out seven priority actions for the revised EU framework:

1. Establish clear strategic objectives. Make quality employment, social inclusion, gender equality and sustainable development explicit goals of procurement, in line with the EU treaties.

2. Move beyond lowest-price procurement. Make the Most Advantageous Tender, or at minimum the Most Economically Advantageous Tender, the default award criterion, with lowest price used only in justified cases.

3. Strengthen lifecycle and future-oriented approaches. Standardise lifecycle costing and outcome-based criteria, supported by practical guidance and foresight tools.

4. Facilitate participation by SMEs and social economy entities. Divide contracts into lots, simplify qualification requirements, and reserve a share of procurement budgets for social economy entities.

5. Introduce strategic procurement strategies and targets. Require national, regional and local authorities to set measurable targets for social, environmental and gender objectives.

6. Improve monitoring and accountability. Introduce mandatory reporting on social, environmental and gender outcomes, using common indicators across Member States.

7. Invest in capacity-building. Fund training, model clauses, peer-learning networks and matchmaking platforms to help public buyers put SRPP and GRPP into practice.

Who should act

This shift is not siloed in a single level of governance. EU policymakers, meaning the Commission, Parliament and Council, are invited to embed these principles in the revised procurement rules and support implementation with guidance and peer learning. National governments can turn the new rules into ambitious strategic plans and long-term capacity-building systems. Regional and local authorities, often best placed to innovate, can pilot new approaches, work closely with suppliers, and fold wellbeing and intergenerational thinking into their own procurement strategies.

What is already working

In Guipúzcoa, Spain, gender equality clauses have featured in nearly every provincial contract since 2007, lifting the recruitment and promotion of women. In Valladolid, a dedicated strategy pushed small business participation in municipal contracts above 74%, alongside stronger social and environmental commitments. France has made responsible procurement plans mandatory for major public buyers since 2014, with national targets now in place for social and environmental clauses. In Wallonia, monitoring of social clauses in construction contracts, running since 1996, shows their use rising sixfold in five years. Together, these cases prove that SRPP and GRPP are not aspirations. They are already being built, region by region, one contract at a time.

This Policy Brief was originally published by the MERGE Project. Read the full Policy Brief on their website.