The public procurement act in Estonia set into force on 1^st of May 2007. The Act transposed the European Parliament and Council Directives 2004/17/EC and 2004/18/ EC from March 31, 2004 regarding public procurement and its procedures.

Public Procurement in Estonia therefore is performed following the rules set by the Public Procurement Act, the purpose of which is to ensure;

1. Transparency in the procurement procedure,
2. Equal and fair treatment of suppliers, securing free competition; and
3. Effective use of the resources of contracting authority, thus reducing the risks of the said authority to the minimum.

1. State or state authorities
2. Local authorities, local authority agencies and associations of local authorities;
3. Other legal persons governed by public law and agencies of legal persons governed by public law
4. Foundations where the state is one of the founders or where more than half of the founders are persons specified in clauses 2) or 3) or where more than half of the members of the supervisory board are appointed by the persons specified in clauses 1) to 3)
5. Non-profit associations where more than half of the members are the persons specified in clauses 1) to 3)
6. Other legal persons governed by private law and has characteristics, that are specified in §10 (2) of the public procurement act.

1. Construction of civil engineering works, and the net value of the work exceeds the threshold;
2. Building medical or educational establishments administrative buildings or sports, recreational or leisure facilities, and the net value of the work exceeds the threshold; or
3. Services related to works mentioned in 1) & 2), and the net value of the service exceeds the threshold

The national thresholds in Estonia are lower than EU thresholds for the classical sector. Estonia has not established national thresholds for utilities sector. In the classical sector, the national threshold for public works is 250,000€ and for services it is 40,000€. In the simplified procurement procedure, the thresholds for public works is 30,000€ and for services 10,000€.

1. Open procedure – any interested supplier may submit a tender
2. Restricted procedure – any interested person may submit a request to participate, but a tender may be submitted only by candidates selected by the contracting authority
3. Competitive dialogue – any interested supplier may submit a request to participate, contracting authority conducts negotiations with selected candidates with the aim of identifying one or more suitable solutions that fill the needs of the contracting authority. The candidates who are selected after the negotiation will be given the invitation to tender
4. Negotiated procedure with prior publication of contract notice – any interested supplier may submit a request to participate, contracting authority submits an invitation to tender to at least three candidates and negotiates with the candidates to adjust the tenders submitted
5. Negotiated procedure without prior publication of contract notice – contracting authority negotiates the terms of public contract with one or more interested persons at its own choice
6. Design contest – procedure that enables the contracting authority to acquire a plan or design selected by a jury in the course of a competition. Design contest is commonly used in the fields of planning, architecture, engineering works, information systems, software development or data processing.

Public procurement is supervised by the Ministry of Finance on the matters over organisation of public procurement and extrajudicial proceedings of misdemeanours in the procedures to the extent provided by the law. The Ministry of Finance also gives advice relating the implementation of the Public Procurement Act and organises training in public procurement. Notices on Public Procurement are published on-line in the State Public Procurement Register and the information of these notices is accessible free of charge for all contracting authorities and suppliers.