The issue of the legal nature of a public contract is a significant matter under EU public procurement law. The draft of the new Regulation on public contracts and concessions does not address this issue, leaving it to the Member States to decide. The issue of the legal nature of public contracts was analyzed in the book Public Procurement and Contract Law: Exploring Intersections, Defining Boundaries (Hart Publishing, 2026) and during the conference “Public Procurement & Contracts: Navigating Today, Designing Tomorrow,” which took place in Copenhagen on June 22–23 of this year.

What’s New in the Proposed Regulation on Public Contracts and Concessions?

Work on the new EU regulation governing public contracts has sparked considerable controversy and debate. Current understanding of the planned changes is based on the leaked draft Regulation of the European Parliament and of the Council on public contracts and concessions. This draft does not specify the legal nature that a public contract should have under the laws of Member States.

The proposed draft indicates that the EU legislature is moving toward a progressive expansion of existing solutions. The very act of regulating public contracts at the EU level constitutes greater interference with the autonomy of Member States. The proposed draft, if adopted, will be directly binding on Member States. This is because, pursuant to the aforementioned Article 288 of the TFEU,
a regulation is binding in its entirety and directly applicable in all Member States.

The proposed draft establishes a new framework for public contracts. Performance is directly linked to strategic goals such as environmental, social, innovation, and security considerations (Article 99). To address market changes, clear economic adjustment mechanisms can maintain financial balance over time (Article 100). Modifications are strictly limited, permitting non-competitive amendments only if they are non-substantial, result from objective contingencies, and preserve the original tender parameters (Article 101). Termination becomes mandatory if a contractor is convicted under criminal exclusion criteria—unless overridden by the public interest—or if authorities void the initial award due to serious legal violations (Article 102). Finally, a strict financial regime ensures supply chain liquidity (Article 103). Public buyers are subject to strict 60-day payment deadlines before interest is automatically charged. Subcontractors are protected through direct payment mechanisms and mandatory 30% advance financing for strategic EU contracts (Article 103).

Importantly, regarding matters not covered by Articles 99–103, the EU legislator has indicated in Article 1(3) that it leaves Member States free to apply their own solutions for the application of administrative or contract law. This critical issue was also specifically addressed in relation to civil law in Recital (7) of the proposed draft. This point in the Recital states that national civil law and general rules on contractual relationships—which form part of the broader national legal framework within which the rules of this Regulation will operate—also remain unaffected. It is therefore to be expected that EU Member States will retain their existing public procurement models, even after the final version of the EU public procurement regulation enters into force.

What models are currently in use?

Member States have generally adopted two models for regulating public contracts. The first is based on a model originally derived from French law. Under this model, a public contract is treated as an administrative contract, and its regulation is predominantly governed by administrative law. The second approach is based on the German model. In this model, a public contract is treated as a civil law contract, and its regulation is primarily governed by civil law. In both cases—that is, in the French and German models—the application of administrative or civil law is not exclusive.

For this reason, the book Public Procurement and Contract Law: Exploring Intersections, Defining Boundaries (Hart Publishing, 2026) distinguishes between a “public-oriented hybrid model” and a “private-oriented hybrid model.” The first model is characteristic of Portugal, Spain, and Croatia, among others. The second model, on the other hand, is characteristic of the Scandinavian countries, the Netherlands, and Eastern European countries such as Poland, the Czech Republic, and the Baltic states.¹

The distinction between public contracts in which administrative law plays a dominant role and those in which civil law plays a dominant role has significant practical implications. It affects, for example, issues related to the jurisdiction of courts to hear disputes arising from the performance of public contracts, the preference for resolving such disputes through arbitration, as well as the position of the parties in these contracts.

Regardless of whether public contracts are categorized under a private-oriented hybrid model or a public-oriented hybrid model, the CJEU’s ruling in Veolia Water (C-327/18) remains crucial, confirming that EU principles of transparency and equal treatment apply throughout the contract performance stage.

Issues regarding the legal nature of the contract were discussed in Copenhagen

Interesting remarks on the impact of EU law on the application of national law in the context of the adopted public contract model were presented by Professor Steven van Garsse in response to a question from Professor Geo Quinot during the opening panel “Public Contracts – Public, Private, Hybrid? What Is the Legal Consequence?”, which took place on June 22, 2026, as part of the conference “Public Procurement & Contracts: Navigating Today, Designing Tomorrow.”

First we hear from Professor Quinot as he sets up the question, and then from Professor van Garsse as he answers.

In turn, Professor Martin Burgi presented, in a highly interesting manner, the issues surrounding the regulation of public contracts under German law, responding to a question from Professor Quinot, which you’ll hear him state in his own words below, followed by Professor Burgi’s response.

The decision remains with the Member States

The draft Regulation on public contracts and concessions does not dictate which public contract model will apply universally across EU Member States. Instead, this decision is left to national legislation. It is therefore highly likely that, in most cases, the status quo will be maintained, preserving the coexistence of both the “private-oriented hybrid model” and the “public-oriented hybrid model” during the contract performance stage. Of course, individual Member States may still introduce changes—ranging from expanding performance-specific rules within their national procurement laws to (the rather unlikely) recharacterization of the fundamental legal nature of a public contract itself.

Resources

1. See more: M. Andhov, M. Kania, “National Models for Regulating Public Contracts,” in M. Andhov, M. Kania, S. Cavaleri, Public Procurement and Contract Law: Exploring Intersections, Defining Boundaries, Bloomsbury Collections – Public Procurement and Contract Law. ↩︎