"Fair Procurement" - Initiative Requires MEAT As Sole Award Criterion For Construction Contracts

Background

In March 2014, three new EU Directives on public procurement law ("new Directives") entered into force, introducing significant adjustments to the current regime such as new procedures, new provisions on award criteria, and new exclusion grounds. At the same, a discussion has been unleashed in Austria placing the issue of wage dumping and social dumping in relation to public construction contracts. Experience has demonstrated that applying price-only criteria contributes to ruinous price wars and destructive competition in the construction industry. The key concern of the so-called "fair procurement" initiative is to preserve jobs and foster SMEs by establishing the mandatory application of the best quality/price ratio (instead of only the lowest price). Against this background, the Austrian government is currently in the process of discussing/preparing an amendment to the Federal Procurement Act that is intended to enter into force even before the