The European Union is preparing a major overhaul of its public procurement rules that could allow governments to prioritise European suppliers and exclude foreign companies from sensitive contracts.

The proposed Public Procurement Act would replace three directives governing EU public purchasing with a single regulation, according to a draft reported by Brussels Signal.

Price Would No Longer Decide Everything

EU authorities currently place significant weight on price when awarding public contracts. The new framework would shift attention toward quality, security and supply-chain resilience.

Under an earlier version of the proposal:

  • Quality would account for at least 30% of a bid’s total score
  • The threshold would rise to 50% for labour-intensive contracts
  • Large bids containing less than 50% European content could be excluded
  • Companies offering unusually low prices could be required to explain how those prices were calculated

Public authorities could also examine whether a bidder’s ownership, financing or legal obligations create risks involving foreign interference, espionage, cyberattacks or access to sensitive information.

China Is the Main Target, Even if Unnamed

The draft does not directly name China, but its references to an “excessive focus on price” and “harmful strategic dependencies” appear aimed at heavily subsidised foreign suppliers.

The EU imported €559.4 billion in goods from China in 2025 while exporting €199.6 billion, creating a trade deficit of almost €360 billion.

Brussels has already started using procurement rules against Beijing. In June 2025, the Commission excluded Chinese companies from EU medical-device tenders worth more than €5 million and limited Chinese products to 50% of relevant contracts.

The EU’s Foreign Subsidies Regulation also allows the Commission to investigate whether support from non-EU governments gives bidders an unfair advantage.

European Companies Could Benefit

The reform could support European manufacturers in strategic sectors such as infrastructure, healthcare, transport, energy and technology.

However, restricting cheaper foreign bids could also raise costs for governments and taxpayers. Hospitals, railway operators and public agencies may have to pay more if access to lower-cost suppliers is reduced.

The proposal is not yet final law. It must pass through the European Parliament and the Council before taking effect.

Related: Europe Hardens Its Stance on China as Trade Tensions Rise

Europe is preparing to use its €2 trillion public procurement market as an industrial-policy weapon. The rules could strengthen European businesses, but they also risk higher public spending and another escalation in EU-China trade tensions.

Disclosure: This article is for informational purposes only and does not constitute investment advice.