The European Union and U.S. public procurement markets are lucrative for those suppliers seeking high-value contracts, but beneath the surface, these contracts diverge sharply in structure, regulations, and priorities.

For businesses operating in these markets, success is not simply about understanding the rules but reading the political tea leaves and aligning with sustainability mandates. 

Economic weight and structural differences

Public procurement in the EU is not a peripheral economic activity – it accounts for around 14% of the bloc’s GDP, which equates to over €2.4 trillion a year. This is what drives the EU’s employment and growth, funding everything from infrastructure projects to healthcare systems. 

The EU spends around €2 trillion a year on services, works, and supplies, which is a big deal for procurement, but because of the EU’s structure, its spending is trapped within the middle of national and supranational entities, which means more bureaucracy and hurdles for businesses. 

The U.S. market is similar in scale but with a laser focus on defense, which Donald Trump’s presidency has amplified. The current U.S. president is actively trying to increase the defense budget to US$1 trillion for 2026, which is bigger than the combined defense procurement budgets of all EU member states. Recent reforms in the U.S. are also attempting to streamline defense procurement and make it more efficient. 

Europe has also seen a relative shift in military investment over the years, seeking to increase defense spending to US$100 billion by 2027.  

The massive differences in accessing the budgets allocated by each side are easily discernible.

Quick takeaways for EU bidders 

  • Master the paperwork: Open procedures demand precision.
  • Green is gold: With procurement driving 11% of EU emissions, sustainability credentials are non-negotiable.
  • Localize to compete: “Buy European” whispers may soon become a roar - establish subsidiaries or partnerships. 

For U.S. market entrants:

  • Chase defense dollars: The US$1 trillion defense pie dwarfs other sectors.
  • Agreement on Government Procurement (GPA) as a lifeline: Use WTO rules to sidestep protectionist barriers.
  • Tariff-proof supply chains: Diversify suppliers amid trade spats. 

EU procurement directives

In true EU fashion, the public procurement framework is very structured and detailed. Typically, it is governed by a set of key directives such as:

U.S. procurement framework

The U.S. takes a decentralized approach to procurement. The U.S. public procurement system is centered around the Federal Acquisition Regulation (FAR) but is layered with rules and key statutes specified for agencies:

 Unlike the European Union’s harmonized directives, the U.S. system blends federal rules with agency flexibility and evolving domestic priorities. 

EU procurement procedures and thresholds

The EU procurement system has four main award procedures:

  1. Open procedure
  2. Restricted procedure
  3. Competitive dialogue
  4. Negotiated procedure, which is available to utilities but limited for non-utilities. 

EU procurement rules apply differently for specific thresholds (all amounts exclude VAT):

  • General procurement: €143,000 for most services and supplies bought by central government authorities.
  • Construction contracts: €5,538,000.
  • Defense procurement: Goods and services over €443,000 and works over €5.3 million. 

Below these thresholds, national procurement rules apply rather than EU-wide rules, but they should still respect the general EU principles of transparency and equal treatment. 

U.S. procurement thresholds

The Federal Acquisition Regulation (FAR) has three primary procurement methods:

Micro-purchases

  • Threshold: Generally US$10,000 (proposed to increase to US$15,000 this year).
  • Use: Small, routine purchases (e.g., office supplies, minor services).
  • Rules: No competition required; use government purchase cards. 

 Simplified acquisitions

  • Threshold: US$250,000 (proposed to increase to $350,000 this year).
  • Use: Streamlined process for contracts below the [Sergiu Ip2] Simplified Acquisition Threshold.
  • Rules: Set-aside for small businesses; simplified bidding and documentation. 

Formal contracts

  • Threshold: Above US$250,000 (or US$7.5 million for commercial items, proposed to rise to US$9.5 million).
  • Use: Full competitive bidding (e.g., sealed bids, negotiated proposals).
  • Rules: Requires detailed cost/price analysis and compliance with FAR clauses. 

The bottom line

The EU and U.S. public procurement markets chart starkly divergent courses - each with complex, differing sets of rules, priorities, and political currents. Europe’s €2.4 trillion procurement market thrives on detailed and rigid directives, sustainability mandates, and a bureaucratic dance between Brussels and member states, where green credentials and local partnerships are now non-negotiable. 

Over the Atlantic, the U.S. market orbits defense with a US$1 trillion budget turbocharged by Trump’s policies, where streamlined procurement and domestic supply chains reign. Here, agility is superior to harmonization as the FAR’s patchwork of rules bends to geopolitical winds and trade spats. 

For businesses, success demands more than compliance. It is a high-stakes game of adaptation. In Europe, master the paperwork and whisper, “Buy European.” In the U.S., chase defense dollars and bulletproof supply chains. As both regions ramp up military spending and sustainability pledges, suppliers must navigate not just markets but also considerable changes in ideologies. The future? A fractured landscape where geopolitics and green tape dictate who wins – and who loses.