The Common Procurement Vocabulary (CPV) fills a vital communication gap between governments, businesses, and contractors. This classification system was developed in the European Union and has been mandatory since 2006 with the aim of increasing transparency in public procurement in the EU (and the UK at that time).

In this article, we'll take a closer look at this system, as well as its benefits, applications, and structure. Whether you’re new to CPV or looking to optimize its use, this guide will help you to engage with it more effectively.

What is CPV?

Procurement is essential to the public operations of state agencies across a governmental hierarchy. Naturally, such a complex mechanism requires a systematic approach to communication and classification to keep things running smoothly. For such a diverse community as the European Union, the CPV is therefore a perfect fit being an EU-native system that allows procurement operations to be both streamlined and harmonized for its member states.  

Essentially, this vocabulary provides a clear way to describe goods and services within public tenders, ensuring that all the parties involved have access to the same information, regardless of where in Europe they are located.

Using CPV or other systems like the North American Industry Classification System (NAICS) and the United Nations Standard Products and Services Code (UNSPSC) allows a fair amount of ambiguity to be eliminated in procurement notices which ensures that government bids are appropriately managed. 

According to a recent report published by the European Commission, CPV is for the most part complete with no general areas missing and, from a quantitative standpoint, the EC claims that it performs better than other major classification systems such as eCl@ss and GPC.

The same report suggests that of the total number of bidders surveyed, 57% stated that CPV allows them to become aware of more tender notices, and 45% believed that CPV leads to more business opportunities.

CPV code structure and mechanics

The CPV is designed to categorize pretty much anything that is procured by public authorities, which means it could take some time and effort for a beginner to begin to use it efficiently. In fact, according to the above-mentioned report, this system is more granular than is actually necessary since procurement officers do not utilize its taxonomic depth on a regular basis.

The anatomy of a CPV code

Let’s break down the structure of a code to demonstrate how it categorizes items. Given that the code entails a string of digits, the first numbers will reflect the broadest areas, and then each subsequent number will narrow things down. 

  • The first such area is the division, which can be identified by the first two numbers of the sequence. For instance, a code that begins with 45 would mean that the project in question relates to construction work. 
  • The third digit of the code represents the group that the item is in. For instance, 45followed by a 2suggests that this is a general construction project for buildings and civil engineering groups. 
  • The fourth digit is the class, and the fifth is the category. The final three digits then provide supplementary details about the product or service. 

For more examples of CPV codes in action, discover the Tenderwell platform, which is one of the key access points to government tenders from multiple countries. The platform leverages the CPV classification system for tenders, providing in-depth insights into supplementary details.

You can check out all CPV codes in the Official Journal of the European Union as well.

Let’s take a look at another CPV code and break it down. Here, the code 45112710 would provide us with the following information:

Another important aspect of CPV codes is the use of zeros. Naturally, not all codes will be as specific as the one above, which is why it is common to see classifications that provide information about the division, group, and category, followed by a set of zeros to account for the lack of additional details.

So, for instance, code 45230000 indicates general construction work for pipelines and power lines but does not provide any supplementary details. 

By having a good understanding of this taxonomy, companies can easily and fairly accurately identify those tenders that fall into their specialization.

Choosing the right code

If your company is about to start exploring the public tender market, it’s absolutely essential to identify the correct CPV codes to search for contracting opportunities. This will be crucial in ensuring that your ability matches the needs of your potential clients. 

At first glance, this may appear to be a surface-level issue – why should classifying a company’s products and services be so complicated?

Well, in reality, an organization’s offering rarely fits into a neatly predefined box and can range across multiple categories. This is why, in order to identify the best CPV code for your business, you should begin by thinking of its central purpose. 

Let’s say, if your company develops software solutions for the healthcare industry management sector, your primary category should not be ‘software’ but specifically ‘healthcare management software.’ This is a very important distinction since CPV codes are designed to be as specific as possible. 

It is also important to take into account that any additional specialization or niche elements of your offering could potentially demand additional CPV codes to describe it correctly. It is common to see tenders that use multiple codes to offer a detailed description of the scope of work of one particular contract. 

Tools like official CPV databases or search engines can help to refine your selection by allowing you to search for keywords related to your service.

In addition, consulting previous tenders in your sector can provide valuable insights into commonly used codes. By taking a methodical approach and leveraging the available resources, you can ensure your business is accurately classified and well-positioned to find relevant procurement opportunities.

Conclusion

CPV has proven to be a highly valuable system for public procurement in the European Union (and the United Kingdom). It provides a detailed and well-organized structure to describe goods and services. 

While it’s fair to say that CPV is a complex language that initially involves tackling a rather steep learning curve, it allows for great precision in procurement processes, facilitating more efficient and transparent interactions between governments and suppliers across diverse regions and industries.