OPINION REGARDING: Review of the EU Rules on Public Procurement

TO THE EUROPEAN COMMISSION, Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs (DG GROW)

To the attention of: Mr. Stéphane Séjourné, Commissioner for Internal Market, Industry, Entrepreneurship and SMEs Ms. Kerstin Jorna, Director-General, DG GROW

POSITION

Regarding: Review of EU Public Procurement Rules

From: THE BULGARIAN ENTREPRENEURIAL ASSOCIATION (BESCO), registered in the Register of Non-Profit Legal Entities, EU Transparency Register No. 983676794468-21.

DEAR COMMISSIONER SÉJOURNÉ,

DEAR DIRECTOR-GENERAL JORNA,

With this letter we would like to present our position on the European Commission's initiative to review EU public procurement rules, which is currently under public consultation.

The Bulgarian Entrepreneurial Association (BESCO) represents over 1,000 companies from a wide range of industries. Our mission is to improve the business environment in Bulgaria by promoting effective public policies, stimulating innovation and supporting modern approaches to sustainable economic development.

Public procurement is one of the European Union's most powerful economic instruments, representing approximately 15% of EU GDP. When well-designed and implemented, it can promote competition, accelerate innovation, strengthen resilience and deliver better value for public funds. When it is not, it leads to market concentration, discourages new entrants and weakens Europe's competitiveness.

In the process of modernising the public procurement framework, it is essential that the reform be proportionate, innovation-friendly and focused on genuinely reducing barriers to participation, especially for SMEs, startups and scale-ups.

Why this reform matters for Bulgaria

In Bulgaria, public procurement plays a significant role in shaping markets, but its potential to stimulate innovation and competition remains largely untapped. Although capable Bulgarian companies exist across various sectors, many choose not to participate in procedures due to high administrative burdens, legal uncertainty and low predictability.

Startups and scale-ups are among the fastest-growing sources of innovation, employment and regional development in Bulgaria. At the same time, they operate with limited resources and typically lack specialised procurement teams. For them, the costs of participation are often fixed, upfront and disproportionate to the value of the contract.

As a result, low competition in public procurement is often not due to a lack of suppliers, but to rational self-exclusion. This dynamic leads to repeated award to the same contractors, limited market testing and lower value for public buyers.

Simplification must reduce real costs, not just the text of the law

We fully support the Commission's goal of simplifying and modernising public procurement rules. However, simplification should be measured by its impact on the real costs of participation, not solely by formal restructuring of the legal framework. In practice, Bulgarian companies face:

• Extensive and repetitive documentation requirements;
• Incompatible digital platforms with limited interoperability;
• Long and unpredictable timelines;
• Unclear evaluation criteria focused on formal compliance rather than actual performance.

Digitalisation has not yet resolved these problems. Complexity has often simply been digitised rather than eliminated. A truly effective reform must enable the reuse of company credentials, standardised data requirements and interoperable systems across member states.

Strategic procurement must focus on outcomes, not origin

We support the EU's ambition to strengthen resilience, security and economic stability through public procurement. However, the way in which these objectives are applied in practice is of decisive importance. The Bulgarian innovation ecosystem is deeply integrated into European and global value chains. Many Bulgarian companies rely on international capital, cross-border research activities and distributed supply chains, while being fully established in the EU and compliant with European legislation.

Broad or rigid origin-based criteria risk unintentionally excluding innovative European companies, reducing competition and benefiting established players. From our perspective, resilience is more effectively achieved through functional, outcome-oriented criteria, such as:

• Supply security and lifecycle resilience;
• Interoperability and avoidance of single-supplier dependency;
• Demonstrable contribution to the creation of European added value.

This approach strengthens resilience without undermining openness, competition and innovation.

From pilot projects to scaled deployment: bridging the structural gap

Innovation-oriented procurement initiatives are increasingly applied, including pilot projects and proof-of-concept exercises with startups and SMEs. In Bulgaria, however, these efforts often fail to lead to deployment at greater scale.

For companies, this "gap between piloting and scaling" is one of the most discouraging aspects of public procurement. Pilot projects require significant investment of time and resources, often with limited remuneration. When successful delivery does not lead to a follow-on contract, participation becomes economically unsustainable.

To unlock the innovation potential of public procurement, pilot projects must be viewed as the beginning of the procurement lifecycle, not as isolated experiments. Prior performance should be recognised, and procedures designed with clear and transparent pathways from testing to deployment.

Incentives for contracting authorities and risk aversion

A significant barrier to innovation-oriented public procurement lies not only in the rules themselves, but in the way they are applied. Contracting authorities operate under strong audit and legal pressure, where procedural errors have immediate consequences, while the benefits of innovation are uncertain and long-term.

This creates a strong incentive to minimise discretion and to use rigid, prescriptive approaches. For innovative companies, this means limited dialogue, reduced flexibility and a preference for established suppliers.

Reform should therefore also address the incentives and capacity of contracting authorities, providing them with clarity, guidance and the confidence to use flexibility where appropriate, without fear of disproportionate legal or audit risk.

Strengthening the Single Market in practice

Although EU procurement rules are harmonised in theory, in practice they often function as a collection of local markets. This is particularly evident in contracts below EU thresholds, where opportunities are difficult to discover, dispersed across different platforms and subject to varying administrative practices.

For Bulgarian startups and scale-ups seeking growth beyond the national market, this fragmentation undermines the potential of the Single Market. Improving the visibility of opportunities, the reusability of documentation and the cross-border recognition of prior experience would significantly strengthen competition and market integration.

A call for proportionate and competitiveness-oriented reform

Europe's competitiveness depends on facilitating companies' participation in public markets, not deterring it through excessive complexity and risk. In this context, we encourage the Commission to ensure that the review of EU public procurement rules:

1. Reduces the real administrative and participation costs for business, especially for SMEs and startups.
2. Ensures that digitalisation enables reuse, interoperability and transparency, rather than duplicating complexity.
3. Directs strategic procurement towards functional, outcome-oriented criteria, rather than rigid origin-based requirements.
4. Creates reliable pathways from innovation pilot projects to scaled deployment.
5. Rethinks the incentives and risk allocation for contracting authorities, so that innovation becomes the easier choice.
6. Strengthens the practical dimension of the Single Market in public procurement, including for contracts below the thresholds.

For Bulgaria and for Europe as a whole, public procurement reform is an opportunity to transform public expenditure into a driver of innovation, competition and long-term value. A proportionate and innovation-friendly framework can achieve this by focusing on outcomes, reducing unnecessary burdens and enabling capable companies to compete on merit.

Yours sincerely,

Alexander Nutsov Executive Director THE BULGARIAN ENTREPRENEURIAL ASSOCIATION (BESCO)