Total public procurement in the EU – i.e. the purchases of goods, services and public works by governments and public utilities - is estimated at about 16% of the Union’s GDP or €1500 billion in 2002. Its importance varies significantly between Member States ranging between 11% and 20% of GDP. The opening up of public procurement within the Internal Market has increased cross-border competition and improved prices paid by public authorities. There remains potential for significant further competition in procurement markets and for further savings for taxpayers.

Public procurement is subject to Community and international rules although not all public procurement is subject to these obligations. Under these rules public sector procurement must follow transparent open procedures ensuring fair conditions of competition for suppliers. Some purchases can be exempted from Community rules under certain conditions (ex: arms, munitions and war material, if this is necessary for the protection of the essential interests of security) and purchases below thresholds must respect the principles of the Treaty only.

The legislative package of public procurement Directives, approved in 2004 by the European Parliament and the EU's Council of Ministers, will help simplify and modernise procurement procedures, for example by facilitating electronic procurement in the public sector.

The correct and rapid implementation of the new Directives should help open up public procurement, improve the functioning of the Internal Market and enable the EU to reap the full benefits from an enlarged Internal Market.

Please find further information here:

ec.europa.eu/internal_market/publicprocurement/legislation_en.htm

or here

www.oecd.org/document/30/0,3343,en_33638100_33693506_35029086_1_1_1_1,00.html