Public Procurement Reform: A Significant Turning Point in the Development of the System

On 14 May 2026, the Parliament of the Republic of Latvia adopted, at its third reading, amendments to the Public Procurement Law, marking the beginning of the implementation of Latvia’s public procurement reform.

The adopted amendments represent one of the most significant revisions of the public procurement regulatory framework in recent years. Their objective is to improve the public procurement system by making it more efficient, transparent, and flexible, while reducing administrative burdens and strengthening fair competition. The amendments seek to modernise procurement procedures by promoting a results-oriented approach, ensuring transparency and equal treatment of market participants, and facilitating a more efficient and effective use of public funds. The amendments are expected to enter into force gradually by 2028.

Entry into Force – Phased Implementation

The amendments to the Public Procurement Law will enter into force gradually until 1 January 2028 through several implementation phases designed to ensure a smooth transition to the new regulatory framework.

The first set of amendments entered into force on 9 June 2026. These amendments focus on reducing administrative burdens, strengthening the accountability of contracting authorities, improving the rules governing amendments to public procurement contracts, reinforcing the principle of sustainability, clarifying the framework for administrative liability, and providing a clearer definition of the functions and powers of the Procurement Monitoring Bureau.

From 1 January 2027, a new framework governing the exclusion of candidates and tenderers will be introduced, including mechanisms for self-cleaning (restoration of reliability) and revised rules on the involvement of subcontractors.

From 1 January 2028, the remaining provisions will enter into force in full, including the new rules on procurement contract value thresholds, procurement planning and publication obligations, and enhanced data transparency requirements. These will include the publication of information on simplified procurement procedures and the disclosure of actual public expenditure from the first euro.

At the same time, the transitional provisions included in the amendments ensure that, with immediate effect and until 1 January 2027, when the new framework governing the exclusion of candidates and tenderers enters into force, contracting authorities are entitled not to automatically exclude a candidate or tenderer from a procurement procedure on the grounds of outstanding tax liabilities. Instead, they may allow the candidate or tenderer to settle the outstanding tax obligations and continue participating in the procurement procedure. In addition, under these transitional arrangements, contracting authorities may refrain from verifying the grounds for exclusion in relation to certain persons associated with the candidate or tenderer, namely its beneficial owners and persons exercising decisive influence over the candidate or tenderer within the meaning of the legislation governing groups of companies.

Procurement Procedure Thresholds

Until now, Latvia’s public procurement system has been characterised by a detailed and highly prescriptive regulatory framework that applied even at relatively low contract value thresholds – 10 000 EUR for the procurement of supplies and services and EUR 20,000 for works contracts. As a result, even low-value procurements were subject to complex procedural requirements, creating a significant administrative burden for both contracting authorities and economic operators, prolonging procurement procedures, and, in some cases, limiting competition.

In practice, the system has focused primarily on formal compliance with procedural requirements and documentation rather than on achieving the most economically advantageous outcome.

The reform introduces a fundamental shift in approach. One of its key features is a substantial increase in the thresholds for the application of procurement procedures, bringing them significantly closer to the thresholds applied under the European Union public procurement framework. At the same time, the reform revises the contract value thresholds with the aim of reducing administrative burdens and enabling the use of simplified procedures for lower-value procurements.

From 1 January 2028, the full procurement procedure will apply only to larger-scale procurements:

• Supplies and services from140 000 EUR
• Social and other specific services from 750 000 EUR
• Works contracts from1 000 000 EUR

Simplified Procurement Procedures

At the same time, the reform introduces a more flexible procurement model. Lower-value procurements will be subject to a simplified procedure, with transparency serving as the principal mandatory requirement.

At present, information on lower-value procurement opportunities is often not readily accessible, meaning that economic operators are not always informed in a timely manner about opportunities to participate in procurement procedures.

To address this, the reform introduces a system of simplified procurement procedures, requiring contracting authorities to publish procurement notices for:

• Supplies and services contracts with an estimated value between 20 000  EUR  and 140 000 EUR;
• Social and other specific services contracts with an estimated value between 20 000 EUR and 750 000 EUR and
• Works contracts with an estimated value between 30 000 EUR and 1 000 000 EUR.

The procurement notice must include the essential information regarding the subject matter of the contract and provide a link to the procurement documents. In addition, economic operators must be given a minimum of five days to submit their tenders. These requirements are intended to improve the timely availability of procurement information and encourage broader participation by market participants.

Below these thresholds, contracting authorities will be able to apply a more flexible procurement process, with the primary emphasis placed on ensuring transparency, including compliance with publication requirements and minimum time limits for the submission of tenders. For procurements of even lower value, contracting authorities will retain greater discretion in determining the procurement procedure, provided that the fundamental principles of transparency and openness are respected.

Overall, the reform marks a transition towards a simpler and more flexible procurement framework that places greater emphasis on efficiency, effective competition, and the sound use of public funds, while continuing to uphold the principles of transparency and equal treatment.

Significant Changes to the Exclusion Grounds

As part of the reform, the rules governing the exclusion of candidates and tenderers have been substantially revised. The number of exclusion grounds has been reduced from twelve to two core grounds relating to serious misconduct and outstanding tax liabilities. This approach reduces administrative burdens and facilitates the participation of economic operators in public procurement procedures, while preserving the fundamental principles of fair competition and reliability.

The previous framework had been criticised for its excessive complexity, which often resulted in the exclusion of tenderers for relatively minor tax arrears and required contracting authorities to carry out extensive verification of persons associated with candidates and tenderers.

Under the new framework:

• candidates and tenderers will be given the opportunity to remedy identified tax compliance deficiencies and continue participating in the procurement procedure; and
• in certain cases, contracting authorities will no longer be required to verify the exclusion grounds in relation to persons associated with the candidate or tenderer, including beneficial owners and persons exercising decisive influence.

These amendments will enter into force on 1 January 2027.

Procurement Planning, Expenditure Reporting and Transparency

At present, there is no uniform requirement to systematically publish information on all planned procurements, limiting the ability of economic operators to identify upcoming procurement opportunities and plan their participation in procurement procedures in a timely manner.

The reform introduces mandatory procurement planning and publication requirements. Contracting authorities will be required to publish information on all procurements planned for the relevant financial year within one month of the approval of their budget. This will provide economic operators with greater visibility of upcoming market opportunities, enabling them to plan resources more effectively and prepare for future procurement procedures.

At the same time, to enhance the transparency of the public procurement system, the reform significantly expands the scope of publicly available information on public procurement. Contracting authorities will be required to publish information on planned procurements, concluded contracts, and actual expenditure regardless of the value of the procurement, thereby ensuring transparency for all public procurement expenditure from the first euro.

A particularly significant innovation is the obligation to regularly disclose information on contract performance and actual payments under all public procurement contracts, with such information to be updated at least once every quarter. This will substantially improve transparency and create broader opportunities for data analysis, public scrutiny, and oversight.

Overall, the reform simplifies procedural requirements while significantly increasing the transparency of public procurement. By combining greater procedural flexibility with enhanced disclosure obligations, it is expected to strengthen both the transparency of the public sector and the effectiveness of oversight.

A Shift in the Supervisory Approach

The reform introduces a fundamental shift from ex ante control to ex post supervision, moving the focus from the formal verification of procurement procedures to the assessment of procurement outcomes and overall effectiveness.

Greater emphasis will be placed on the quality of procurement outcomes, the level of competition achieved, and the efficient use of public funds, rather than solely on procedural compliance. In this context, analytical tools, including performance indicators and reference price benchmarking, will be used more extensively to provide a more objective assessment of procurement performance.

At the same time, the role of the Procurement Monitoring Bureau will be strengthened through the expansion of its methodological and supervisory functions, as well as the development of modern data analytics tools. This is expected to promote greater consistency in procurement practice and improve the management of public expenditure, particularly in the procurement of standard goods and services.

Overall, the reform modernises the supervisory framework by increasing the responsibility of contracting authorities while shifting the focus of supervisory activities towards data-driven analysis and the systematic evaluation of procurement outcomes.

Sustainability and Green Public Procurement

The amendments reinforce the application of the sustainability principle in public procurement by clarifying the requirements for green public procurement and encouraging the wider use of environmentally sustainable and socially responsible solutions in the public sector.

This approach is consistent with European Union policy objectives and reflects the growing public expectation that public funds should be managed in a sustainable and responsible manner.

Conclusions

The amendments to the Public Procurement Law represent a significant shift in the development of Latvia’s public procurement system, introducing a simpler, more flexible, and results-oriented regulatory framework. The reform reduces administrative burdens while substantially increasing transparency and the availability of information relating to procurement planning, contract performance, and the use of public funds. As a result, the public procurement system is expected to become more open, transparent, and efficient. Nevertheless, the ultimate success of the reform will depend on the ability of all stakeholders to consistently implement the new approach in practice.

At the same parliamentary sitting on 14 May 2026, the Parliament of the Republic of Latvia also adopted amendments to the Public Utilities Procurement Law, introducing corresponding changes to selected provisions in order to ensure a consistent procedural approach across Latvia’s public procurement framework.