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Under the Treaties the European Commission is responsible for ensuring
that Community Public Procurement Law is correctly applied. As the
guardian of the EC Treaty, the Commission has the option of commencing
infringement proceedings under Article 226 EC against a Member State
which, in the eyes of the Commission, infringes Community Law, in
particular the principle of free movement of goods. The Commission
can try to bring the infringement to an end and, if necessary, may
refer the case to the Court of Justice.
This is the third BiP Guidance on Infringement. Previous Guidance
Nos. 12/2002 and 13/2002 are available at: www.bipcontracts.com/html/briefing.php
Spain: Concession on the A6 Motorway
[top]
The Commission has decided to formally ask Spain to amend the granting
of an administrative concession for the construction, maintenance
and exploitation of two connections of the A6 motorway with Segovia
and Ávila, and for the maintenance and exploitation of the
Villalba-Adanero section of the same motorway. The concession awarded
contains major features which did not appear in the relevant call
for tenders. The formal request is in the form of a reasoned opinion,
the second stage in the infringement procedure pursuant to Article
226 of the EC Treaty. Spain has two months after receipt of the
reasoned opinion to provide a response. If there is no response,
or it is unsatisfactory, the Commission may decide to refer the
case to the European Court of Justice.
The call for tenders related exclusively to the work and services
set out above.
However, when the concession was awarded, a further package of
infrastructure works for a sum more or less equivalent to that of
the work on the two sections which were the subject of the call
for tenders was also awarded.
This additional package was not provided for in the concession
notice or the administrative specifications. The extra infrastructure
works concern, in particular, the construction of a new reversible
lane (including a new tunnel) between San Rafael and El Valle de
los Caídos, the construction of new lanes on two other sections
- one of them toll-free - and the construction of a new tollgate
area, as well as other works.
Subsequent to the despatch of a letter of formal notice from the
Commission (the first stage in infringement proceedings), the Spanish
authorities replied in a letter of
27 June 2001, in which they affirmed, in particular, that the changes
made when awarding the concession were based on two clauses in the
specifications which lay down that tenderers must indicate in their
bids the measures to be taken for the overall management of the
traffic in the area concerned by the construction of the new stretches.
The Commission, however, considers that the aforementioned clauses
cannot themselves allow a substantial change in the subject of the
concession - particularly as these clauses always refer to the area
concerned by the construction of the two new sections. What is more,
nothing in the specifications led one to conclude that tenderers
could submit proposals relating to work other than the two sections
referred to.
Potential tenderers could have thus been led not to submit bids,
and the principles of transparency and equality were infringed.
The Commission has therefore decided to send a reasoned opinion.
Information on all current infringement proceedings against Member
States is available on the Europa website at: http://europa.eu.int/comm/secretariat_general/sgb/droit_com/
index_en.htm
France: New Public Procurement Code
[top]
The European Commission has decided to ask France to amend several
provisions in its new public procurement Code(1) with a view to
bringing it in line with the EU's public procurement Directives
and the EC Treaty. When a public contract is awarded without a procedure
that is transparent and in compliance with the principles required
by European legislation, which all the Member States have pledged
to observe, firms in Europe can be unfairly deprived of their right
to submit a bid. Furthermore, the public authorities awarding the
contract - and thus in this instance the French taxpayer - are liable
to pay a higher price than necessary for the services, supplies
or works covered by the contract or to receive service of poorer
quality than could have been provided by a tenderer who has been
improperly excluded. The Commission request takes the form of a
reasoned opinion, which is the second stage of the infringement
procedure laid down by Article 226 of the EC Treaty. If the French
authorities do not comply within two months after receiving the
reasoned opinion, the Commission may decide to refer the matter
to the Court of Justice.
The Commission's main objections are as follows:
Non-discrimination and equality of treatment in the case of purchases
not subject to the public procurement Directives
The provisions of the French Code applicable both to contracts
below the thresholds and to contracts referred to in Annex IB of
Directive No 92/50/EEC (‘services’) do not comply with
EU law in that the methods for awarding these various contracts
are not subject to any specific procedure. Indeed, even if they
are not subject to the detailed requirements concerning advertising
and putting out to tender which stem from the Community Directives
on public procurement, it is nevertheless true that compliance with
the principles laid down by the Court of Justice means that such
contracts must be awarded in accordance with the fundamental rules
of the EC Treaty, non-discrimination and transparency, the latter
being ensured by a proper degree of advertising.
Loans and financial commitments
[top]
The Directives on public service contracts and on contracts in
the water, energy, transport and telecommunications sectors (92/50/EEC
and 93/38/EEC) stipulate that some contracts in connection with
the ‘issue, sale, purchase or transfer of securities or other
financial instruments’ are excluded by the Directives. It
is nevertheless the Commission's view that contracts for the purpose
of ‘loans or financial commitments’ and in particular
loan contracts without the issue of securities and not contracted
with central banks are not covered by these exclusions. Contrary
to what is stipulated in the French Code, the provisions concerning
advertising and putting out to tender laid down in the public procurement
Directives must apply to these contracts.
Appointment contracts [top]
Appointment contracts are concluded between public authorities
in France and those responsible for undertaking specific tasks.
However, when these contracts are, or become, subject in fact to
remuneration, and can thus be recategorised in accordance with the
Community Directives as public works, supply or service contracts,
they must comply with the obligations contained in the Directives.
However, there is no provision in the French legislation for the
application of these obligations. Another reasoned opinion (see
IP/02/1165) had already been sent to France concerning a particular
type of appointment contract (those coming under the law on the
control of public works).
Improper application of thresholds for
contracts [top]
The French Code does not comply with the thresholds to be applied
in the case of the central authorities as laid down in the Directive
on public service contracts (92/50/EEC).
The thresholds in Directive 92/50/EEC are in fact £130,000,
excluding taxes for central government authorities, and £200,000,
excluding taxes for other awarding authorities. But by fixing a
uniform threshold of £200,000 for these contracts, Article
74.3 of the French Code transposing the legislation exempts contracts
of a value of £130, 000 or more offered by the government
authorities from the obligations of advertising and putting out
to tender.
Negotiated procedures not covered by
the Directives [top]
The French Code allows contracts to be awarded by negotiated procedure
without prior publication of a notice (that is, without prior advertising
and invitation to tender) in two cases where such a procedure is
not authorised by the Directives, namely:
• if a contractor fails to comply with his contractual obligations
and must be replaced
• in the case of supplementary contracts following an initial
works supervision contract
Evidence of tenderers' compliance with
the law [top]
The Code's provisions on the methods available to tenderers from
other Member States to show that they have lawfully complied with
obligations with regard to tax and social contributions do not comply
with European law either.
According to the Directives, tenderers from other Member States
must have the option of providing such evidence by alternative means
(eg sworn statement) to those used in France. At the moment, France
allows this option to firms established in non-member countries
but not to those established in the European Union.
Minimum number of participants in restricted
procedures [top]
The Code's provisions on the minimum number of participants to
be invited in connection with a restricted procedure do not comply
with the public procurement Directives, which state that the number
must be at least five.
Prior information and variants [top]
The Code's provisions on prior information and variants reveal
incorrect transposition of the provisions contained in the public
procurement Directives. According to the Directives, the awarding
authorities in fact have the option of shortening the normal time
laid down by the Directives between the publication of a notice
and the receipt of bids. But this requires, among other things,
that the following condition be met: the same concrete information
contained in the notice must already have appeared in the prior
information notice. This condition is not required by the French
legislation.
In addition, with regard to variants, the Code's provisions do
not include the obligation contained in the Community public procurement
Directives whereby awarding authorities must state in the notice
if variants are not authorised.
Background
In March 2002, the Commission sent France a letter of formal notice
concerning the compliance of several provisions in the new French
public procurement Code with Community law. The French authorities
replied in July and contested the Commission's interpretation.
After considering the arguments, the Commission decided to issue
a reasoned opinion. The Commission reiterates its arguments to the
effect that several articles in the French public procurement Code
do not comply either with the obligations laid down by the Community
public procurement Directives or with the rules of the EC Treaty
(Article 49).
A proposal for a revised legislative package on public contracts,
presented by the Commission, is currently being considered by the
European Parliament and the Council (see IP/02/1391). The aim of
the proposal is to modernise and simplify current legislation without
amending the basic principles applying to aspects of the French
legislation which in the Commission's view do not comply with European
law.
The latest information on infringement proceedings against Member
States may be found at: http://europa.eu.int/comm/secretariat_general/sgb/droit_com/
index_en.htm
1 Décret No 2001-210 of 7 March 2001 introducing a public
procurement Code.
Italy: Commission Requests Competition in the Award of Concessions
The European Commission has decided to make a formal request to
Italy to comply with Community law when awarding concessions for
sports betting operations. At present, share-capital companies listed
on EU-regulated markets are excluded from obtaining such concessions,
and the Commission does not consider such an exclusion to be a necessary
part of the effort to combat fraud and other crimes. What is more,
Italy has renewed around 300 horse-race betting concessions without
issuing a call for competition. When a major public concession is
awarded without the contract being opened up to all potential European
tenderers (as required by the EC Treaty and the public procurement
Directives), European enterprises are unfairly deprived of their
right to submit a bid.
Moreover, the public authorities awarding the concession - and
in this case the punters too - run the risk of receiving a service
of a lower quality than might have been provided by a tenderer who
has been improperly excluded from the award procedure. The Commission's
request takes the form of a reasoned opinion, which is the second
stage in the infringement procedure under Article 226 of the EC
Treaty. If the Italian authorities do not comply within two months
of receiving the reasoned opinion, the Commission may decide to
refer the matter to the Court of Justice.
Although the Italian Government is pursuing a legitimate objective,
namely to rule out the risk of concession holders becoming involved
in fraudulent or other criminal activities, the Commission takes
the view that excluding share-capital companies listed on the regulated
markets of the EU from obtaining concessions for sports betting
operations is not a proportionate measure.
The Commission feels that corporate integrity can be verified by
obtaining relevant information on the representatives and principal
shareholders of these companies. The present exclusion is thus in
breach of the EC Treaty rules on freedom to provide services and
freedom of establishment (Articles 49 and 43).
The Commission further finds that Italy has failed to comply with
both the general principle of transparency enshrined in the EC Treaty
and the associated publication requirement established in the case-law
of the Court of Justice. The renewal - up to 1 January 2006 - of
around 300 concessions for horse-race betting operations discriminated
in favour of existing concession holders, with no call for competition
being issued.
Germany: Waste Disposal in Landkreis
Friesland [top]
On 1 January 1995 the Landkreis Friesland signed a 10-year contract
worth £29 million for the provision of waste disposal services,
without carrying out an open and competitive public procurement
procedure at EU level, as required by Article 8 of Directive 92/50/EEC
on the public procurement of services.
In view of the fact that no tender notice was published in relation
to this contract, that no competition took place on the market and
that as a consequence potential competitors in the Internal Market
were excluded, the contracting authority could not decide to award
the contract on the basis of the best value for money.
In answer to a letter of formal notice sent by the Commission in
September 2000, the German authorities admitted the breach of EU
law, announced that the contract in question would be terminated
at the earliest possible date at the end of 2004 and that any new
contract would be put out for public tender according to the public
procurement rules in force.
However, the Commission concluded that because the contract in
question would remain in force until 2004, the measures the German
authorities promised to take would not suffice to rectify the infringement.
Germany: Sewage Water Treatment and Gas and Electricity Supply
in Jever
The Commission considers that the City of Jever breached EU law
in awarding two contracts, one for the treatment of sewage water
and the other for the supply of gas and electricity, without undertaking
a public tendering process as required by the public procurement
Directives (Directive 92/50/EEC on the procurement of services and
Directive 93/36/EEC on the procurement of supplies).
In response to the Commission's letter of formal notice sent in
September 2000, the German authorities admitted the infringement
and announced that a solution complying with the public procurement
rules would be found for the water treatment contract by the beginning
of 2002 at the earliest and that the existing electricity and gas
contract would be terminated as of 31 December 2001 and a correct
procurement procedure organised for the new contract.
However, the authorities concerned took no concrete steps with
regard to the water treatment contract and subsequently stated that
the electricity and gas contract would run until the end of 2003.
As a result, the breaches of EU law have so far continued.
Germany: Limburg Project Development Services Contract Linked with
Real Estate Activities
In 2001 the City of Limburg awarded a contract for the planning
and development of municipally owned premises near the city's main
railway station for a new ‘services park’ and for the
marketing and the sale of these premises. This contract, which amounts
to £190,000 plus a success fee of 10% of the price of premises
sold, was awarded without a public procurement procedure.
The German authorities have informed the Commission that in their
view the contract in question does not fall under the European procurement
rules since the services concerned are outside the scope of application
of Directive 92/50/EEC on the procurement of services.
However, after detailed analysis of the contract, the Commission
considers that the services to be provided belong to those categories
of services listed in Directive 92/50/EEC and are therefore subject
to the detailed procedural rules of the Directive. A call for tender
should therefore have been published.
Italy: Piedmont Region Technical Assistance Contract for Managing
European Funds
The Piedmont Region of Italy in July 2001 awarded a contract for
technical assistance in the management of European funds, according
to criteria incompatible with Directive 92/50/EEC on the public
procurement of services.
In line with the Directive, the contracting authority awarded the
contract on the basis of what it considered the economically most
advantageous tender. However, one of the criteria used in making
this assessment was an evaluation of the composition of the working
group proposed by the tenderer to manage the work concerned. The
use of such a criterion at this stage of the tendering process breaches
Article 36 of the Directive.
Bidders who have failed to demonstrate that they have the necessary
abilities and capacities to provide the service should be eliminated
from the selection process at an earlier stage. The ability or the
capacity of the service providers and their personnel should then
play no role in the evaluation of the quality and pricing of tenders.
The award of the contract to the most economically advantageous
tender should be based exclusively on an assessment of the value
of the tenders.
Sweden: Bus Transport Services
[top]
Kalmar Länstrafik AB, an entity in charge of organising regional
bus transport services in the Kalmar regional jurisdiction in Sweden,
in December 2000 awarded contracts for bus transport services on
the basis of a misapplication of EU public procurement law. The
total amount of the contracts is estimated at 189.5 million Swedish
Kroner (approximately £20.75 million).
As in the Italian case referred to above, some of the award criteria
used breached the provisions of EU public procurement law (in this
case Directive 93/38/EEC for utilities entities) in that they related
to the characteristics of the tenderer as such and not to the service
provided.
Case-law of the European Court of Justice has consistently confirmed
that selection of those candidates among the bidders who have the
abilities and capacity to provide the service required on the one
hand, and the evaluation of their tenders on the other, are two
different operations that may take place simultaneously but are
governed by different rules.
Recent general information on infringements concerning all Member
States may be consulted at: http://europa.eu.int/comm/secretariat_general/sgb/droit_com/
index_en.htm
All information in this Guidance is checked and believed to be
correct, but cannot be so guaranteed and the publishers shall not
be liable for any loss suffered directly or indirectly as a result
of its use
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