The European Commission has called out Portugal for not playing by the rules when it comes to public contracts, specifically subcontracting.
Now, Lisbon has two months to fix the problem—or risk being dragged to the EU Court of Justice.
Why is Portugal facing EU scrutiny over public contracts?
Portugal’s Public Contracts Code allows authorities to limit how much work can be subcontracted on public projects. While this might seem harmless, the EU sees it differently:
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The Commission argues it shuts out small businesses and goes against EU rules that aim to create fair competition.
These rules are designed to give small and medium-sized enterprises (SMEs) a better shot at winning public contracts, ensuring more transparency and open opportunities.
The Commission’s frustration isn’t new—it’s backed by rulings from the Court of Justice of the European Union, which already clarified that such restrictions aren’t allowed.
What’s next for Portugal in the EU public contracts dispute?
Portugal now has two months to bring its laws in line with EU rules. If it doesn’t:
The European Commission could escalate things to the EU Court of Justice, a move that could result in fines or penalties.
This is about more than legal procedures—it’s about fairness. By capping subcontracting, smaller companies often miss out on opportunities to work on public projects. The EU’s aim is to create a level playing field where businesses, big or small, can compete fairly.
For now, Portugal has a choice: fix the rules or prepare for a legal showdown. All eyes will be on their next move.
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