supply chain

A supply chain encompasses all tiers of suppliers and subcontractors involved in delivering goods or services — from raw materials to the finished product. In public procurement, the supply chain is a critical concept because contracting authorities are increasingly responsible for ensuring fair working conditions and human rights compliance throughout the entire chain, not just at the main contractor level.

How does a supply chain work?

Think of it as a relay: each link in the chain receives inputs from the previous one and passes them forward. A supplier that wins a public contract often uses subcontractors, who in turn may engage their own subcontractors. Together, these tiers form the supply chain.

The EU Corporate Sustainability Due Diligence Directive (CSDDD), adopted in 2024, requires large companies to identify, prevent and mitigate adverse human rights and environmental impacts across their supply chains — and ties compliance directly to eligibility for public contracts.

Supply chain requirements in procurement

EU and EEA procurement frameworks address the supply chain through several mechanisms:

• Tier limitations: Some jurisdictions limit the number of subcontractor tiers to improve oversight. In Norway, for example, construction and cleaning contracts must have no more than two tiers of subcontractors below the main contractor.
• Due diligence obligations: The CSDDD creates a direct link between supply chain due diligence and public procurement. Contracting authorities may use compliance as an award criterion or grounds for exclusion.
• Labour standards: National frameworks impose contract conditions to ensure decent working conditions throughout the chain, such as minimum pay requirements and mandatory pension contributions.

These measures aim to combat labour exploitation and ensure that public spending supports responsible business practices. Tools like Cobrief can help suppliers identify tenders where supply chain requirements feature prominently.

The supply chain has become a key concept in public procurement across the EU and EEA. With the CSDDD entering force and national frameworks tightening requirements, both buyers and suppliers need a clear understanding of every tier in the chain.