KEY MESSAGE

Building a level playing field for European international contractors

WHY?

Over the past decade, the European construction industry has experienced continuously increasing unfair competition in public procurement procedures inside and outside the EU internal market from third country State-owned enterprises (SOE). As a consequence, European international contractors have lost significant market shares in overseas construction markets.

EU policymakers have taken some first legislative steps to establish a more level playing field, for instance by adopting the International Procurement Instrument, the Foreign Subsidies Regulation, the communication providing guidance on the participation of third-country bidders and goods in the EU procurement market, and the communications on the Global Gateway Initiative. The new European Commission and European Parliament will have to continue in this direction.

OUR RECOMMENDATIONS

The proposed Ukraine Facility is an ideal opportunity for the European Union to introduce a ‘Buy European’ policy to ensure efficient implementation of the EU funds for construction activities and in the light of similar policies of the EU’s main global trading partners. A restriction of eligibility to nationals and legal persons established in either the EU Member States, the EEA (European Economic Area), in countries of the EU Neighborhood Area, including Ukraine, or countries benefitting from pre-accession assistance would be in line with the EU’s general approach to enable the future accession of Ukraine to the European Union and to familiarise Ukraine step-by-step with EU standards and regulations.

In the context of the Global Gateway strategy, quality-based procurement of civil works needs to be enhanced to improve the level playing field for the competition for EU-financed infrastructure projects based on the selection of the most economically advantageous tenderer. For large or complex contracts, all Team Europe financiers should be obliged to use a ‘two-envelope’ system, in which both the technical and financial offers are submitted together, but in separate envelopes, so that the evaluation proceeds in two steps (technical then financial), while giving more importance to CSR and technical criteria.

In order to prevent unfair competition for public tenders within the EU Internal Market, FIEC advocates the adoption of an EU regulation on a specific Trade Defence Instrument (TDI) for Construction Services, which mirrors the existing practice of TDI for goods and penalises all price discriminations by third country service providers, whether they are caused by subsidies or not.