New survey shows Europeans support socially-just public procurement

According to a new survey commissioned by the European Services Union UNI Europa, the majority of Europeans think that public authorities should promote good working conditions and collective bargaining in public procurement contracts. 

Current EU public procurement rules have resulted in a situation in which most public contracts are given based on price alone, which critics have argued means that public funds are fuelling labour violations and low wages. 

In response to the results of the survey, Oliver Roethig, regional secretary of UNI Europa said “These findings are an urgent call to action. The EU Commission should listen to European voters: public money should support quality jobs, not companies that undermine fair competition and bust unions.”

Public procurement — which is when public authorities purchase goods, services, or work — currently represents around 15 percent of the EU’s GDP.

The survey, which consisted of a sample of over 6,000 respondents across six EU countries, asked whether public procurement contracts should prioritise: the lowest price, hiring local companies, or a mix of factors including working conditions, price, quality, and environmental considerations.

The majority (65 percent) of respondents said that public authorities should prioritise social and environmental factors over the lowest price. Only around 11 percent supported choosing the cheapest company in public contracts.

The social and environmental factors that respondents said were most important included working conditions and wages (46 percent), followed by hiring local workers (40 percent), and support for workers’ rights to join unions and participate in collective bargaining (34 percent). 

The survey also found that over 80 percent of respondents believe that companies should be excluded from public contracts if they engage in unfair labour practices, such as underpaying employees or blocking unionisation. 

EU public procurement rules fuelling a 'race to the bottom'

Last year, over 1,000 workers demonstrated in Brussels to demand that the European Union change public procurement rules that they said are “fuelling a race to the bottom” in terms of working conditions.

The demonstration, consisting of cleaners, security guards, and food service workers, called for reforms to the EU’s public procurement directive, which sets rules on the contracts given by public authorities in the EU. 

An open letter in support of the demonstration was signed by over 100 economists and said that “The EU Public Procurement Directive’s emphasis on price as the primary award criterion marginalises other critical factors, such as labour rights and fair working conditions, which are essential for sustainable economic growth and good jobs.”

A report by the European Court of Auditors published in 2023 found that under current rules, the majority of public contracts are given based on price alone. In several countries, public authorities are giving more than 80 percent of their contracts based solely on the lowest price.

In practice, this means that the majority of the €2 trillion of public contracts is rewarding companies for undercutting competitors based on price and worsening conditions for workers. UNI Europa has documented how this has resulted in public funding fuelling labor violations, low wages, and poor services.

Via email, a security guard at the commission who requested anonymity said that their conditions were poor and consisted of shifts “up to 12 hours of service, night and weekend shifts.” The security guard also said that “for the moment, contracts are decided largely on price. The company that asks for the least wins the contract, which leads to unhealthy competition.”

In another case, the European Parliament’s childcare crèche has been at the centre of a scandal. The contract for childcare services was awarded to People&Baby, a company that has been accused of poor working conditions, high levels of staff turnover, and even alleged child abuse. 

A representative of the European Public Services Union (EPSU) said that People&Baby employees have described being paid late, being forced to work on holidays, and severe staff shortages that jeopardise the care they can give to the children at their facilities. The company has been described as risking violations and dangerous conditions for children as a result of a “constant preoccupation with saving money.”

Another example displays the limits of the EU’s current rules. The government of Malta was sued because it attempted to award a contract to a company with a collective bargaining agreement it had signed with its workers. The lawsuit came from another company with no such agreement, who argued that the government cannot consider collective bargaining as a factor when awarding contracts.

Revising EU rules for public procurement

In Ursula von der Leyen’s political guidelines for 2024-2029, there is a call to revise the EU’s Public Procurement Directive in the new Commission’s mandate. The guideline states that “a one-percent efficiency gain in public procurement could save €20bn a year”, and emphasises the importance of public procurement in developing innovative goods and securing the supply of vital technologies. 

Absent in the document is any mention of strengthening social conditionalities or addressing the fact that the overwhelming majority of contracts are given based on cost alone, irrespective of labour conditions.

Von der Leyen’s pledge to reform the EU’s public procurement rules appears to call for more cuts to public spending and, rather than addressing the fact that public funds are contributing to labour violations. The document reflects a broader shift away from social and environmental priorities and towards “competitiveness” and deregulation that has been observed with the new commission’s mandate. 

Not all is bad news though.

The newly-presented Clean Industrial Deal aims to support workers through "the use of social conditionalities in public funding" to make sure "workers benefit from the support provided to industry, including to promote collective bargaining."

This development aligns with the preferences of the respondents in the survey conducted by UNI Europa. UNI Europa argues that the reforms should prioritise collective bargaining, ensure that wages and working conditions are decent for public contracts, and that companies that refuse to negotiate collective agreements should be excluded from these contracts. 

The security guard working at the European Commission agreed: “Public contracts should set an example, and this is even more true for the commission. As a client, the European commission also has obligations towards the welfare of security guards.”