Public Procurement is an important sector of the European economy, currently accounting for around 16,3% of the Community’s Gross Domestic Product (GDP). This purchasing power represents a huge opportunity to boost the sales of Fair Trade products and is an excellent way for public authorities to set an example and show their support to Fair Trade.

What is Public Procurement?

Public procurement is the process used by governments, regional and local public authorities or bodies governed by public law (financed, supervised or managed for more than 50% by public authorities) to obtain goods and services with taxpayer money.

Public Procurement in the EU

Public procurement in the EU is subject to Community and international rules. In 2004, the European Parliament and the EU’s Council of Ministers adopted a Legislative package of procurement directives:

Directive 2004/17/EC of the European Parliament and of the Council of 31 March 2004 coordinating the procurement procedures of entities operating in the water, energy, transport and postal service sectors (30.04.2004)

Directive 2004/18/EC of the European Parliament and of the Council of 31 March 2004 on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts (30.04.2008)

According to these directives, the main principles that procurement procedures in EU Member States must abide by are transparency, non-discrimination and best value for money. Contracts that fall below certain thresholds are not bound by these directives, but must nonetheless observe the basic principles of EU law, such as equal treatment, non-discrimination and transparency.