The two basic public procurement Directives, which were adopted in 2004, are as follows:

　　(1)   Directive 2004/18/EC on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts;[7] and,

　　(2)   Directive 2004/17/EC on coordinating the procurement procedures of entities operating in the water, energy, transport and postal services sectors.[8]

　　The principles governing the award of public contracts are equal treatment, nondiscrimination, and transparency.  As for the award criteria, these are the same in both Directives.  Contracting authorities-that is, State, regional, or local authorities, or bodies governed by public law-are required to award public contracts on the basis of either the bid that is most economically advantageous in terms of quality, price, technical merit, environmental characteristics, cost-effectiveness, and delivery date, or the lowest price only.[9]

　　A. Directive 2004/18/EC

　　1. Scope of Directive

　　Directive 2004/18/EC applies to public contracts that are not excluded from the scope of the Directive and that have a value exclusive of value-added tax (VAT) estimated to be equal to or greater than the following thresholds:[10]

　　a)   Euro 125.000 for public supply and service contracts, other than those covered by point (2)?, directly below; in the case of public supply contracts awarded by contracting authorities in the field of defense, this applies only to contracts involving products listed in Annex V; and

　　b)   Euro 193.000 for (a) public supply and service contracts awarded by contracting authorities other than those listed in Annex IV; (that is, central government authorities); (b) public supply contracts awarded by contracting authorities listed in Annex IV operating in the field of defense, where these contracts involve products not covered by Annex V (related to defense); and (c) for public service contracts awarded by any contracting authority in respect of the services listed in Category 8 of Annex IIA or Category 5 (telecommunications services); and,

　　c)   Euro 4,845,000 for public works contracts.[11]

　　2. Excluded Contracts

　　Directive 2004/18/EC does not apply to the following contracts:

　　Public contracts for procurement procedures operating in the water, energy, transport and postal services sectors regulated under Directive 2004/17/EC (see Part II(B), below);

　　Public telecommunications networks or services;[12]

　　Secret contracts and contracts that require special security measures;[13]

　　Public contracts governed by an international agreement between a Member State and one or more third states;[14]

　　Public contracts concluded on the basis of an international agreement relating to the stationing of troops; and,

　　Those contracts pursuant to the international procedure of an international organization.[15]

　　3.      Specific Exclusions

　　Directive 2004/18/EC does not apply to public service contracts for:

　　The acquisition or rental of land, or immovable property;

　　The acquisition, development, production, of program material intended for broadcasting;

　　Employment contracts;

　　Arbitration and conciliation services;

　　Financial services related to the sale, purchase, or transfer of securities;

　　Service concessions; and

　　Service contracts awarded on the basis of an exclusive right.[16]

　　4. Reserved Contracts

　　Member States may reserve the right to participate in public contract award procedures to sheltered workshops or provide for such contracts to be performed within the context of sheltered employment programs where most employees are handicapped.[17]

　　5. Defense Procurement

　　Defense procurement is governed by Directive 2009/81/EC on the coordination of procedures for the award of certain work contracts, supply contracts, and service contracts by contracting authorities or entities in the fields of defense and security, and amending Directives 2004/17/EC and 2004/18/EC.[18]