What is 3E Principles?
The acronym 3E stands for the fundamental principles of economy, effectiveness, and efficiency. These core guidelines govern the management of public funds to guarantee responsible decision-making and align public spending with standard rational financial management practices.
What Each Principle Represents
- Effectiveness: Public funds are spent only when fulfilling a genuine need of the contracting authority. The objective is to verify in advance whether the planned supply or service is genuinely necessary and serves a public purpose.
- Economy: The required performance is acquired at the lowest possible cost while maintaining appropriate quality and achieving the intended goal.
- Efficiency: Evaluates the relationship between the resources spent and the results achieved. It determines whether the selected approach yields an adequate benefit relative to the costs incurred.
The 3E Principles in Public Procurement
In public procurement, the 3E principles work in close connection with the primary rules of tendering. These principles must be understood as equivalent and interconnected:
- Transparency,
- Proportionality,
- Equal treatment,
- Non-discrimination.
None of these rules automatically overrides another. Contracting authorities must not adopt procedures that comply with formal requirements yet violate 3E principles (for example, by being uneconomical or disproportionate).
When 3E Principles Are Applied
These principles are vital for contracting authorities right from the preparation phase of a public contract, rather than just during final vendor selection. In practice, they affect the purchasing process when:
- Identifying and justifying the purchasing requirement,
- Considering the scope and structure of the requested performance,
- Selecting a suitable procurement procedure,
- Setting specific tender conditions.
Understanding and applying 3E principles ensures that the buyer procures only what is truly necessary, at a fair price, and through a method that achieves the designated goal. Consequently, the 3E framework cannot be reduced merely to selecting the lowest bid price.
