|
The Public Supplies, Works and Services Directives provide that,
where the criterion for the award of the contract is that of the
most economically advantageous tender, contracting authorities may
consider variants which are submitted by a tenderer and meet their
minimum specifications.
The Directive leaves it to the discretion of contracting authorities
to decide whether they wish to authorise or prohibit variants and
to establish what type of variants they are prepared to consider
and the conditions for the submission of such variants. They may,
for instance, require firms to submit a basic tender along with
the variant (all this information must be specified in the contract
notice).
Technical Specifications
The common rules relating to technical specifications have been
adapted to the new standard Community policy and to the improvements
made by it. Without prejudice to legally binding national technical
rules, in so far as these are compatible with Community law, the
technical specifications shall be defined by the contracting authorities;
by priority; by reference to national standards implementing European
standards; by reference to European technical approvals; or by reference
to common technical specifications.
The Directive on Procurement Procedures
in the Water, Energy, Transport and Telecommunications Sectors [top]
The Situation at the Outset
The scope of the traditional Directives on supplies, works and services
excludes those works, supply and services contracts awarded by utilities
(entities operating in the water, energy, transport and telecommunications
sectors). This exclusion clause is in response to a number of political,
strategic, economic, industrial and legal considerations (the entities
operating in the four sectors are governed by either public or private
law according to the Member State in question).
Directive 90/531/EEC (OJ No L 297 of 29 October 1990), codified
by Directive 93/38 EEC (OJ No 199/84 of 9 August 1993) established
for the utilities sector a more flexible legal framework than the
one for the traditional public procurement sectors. The deadline
to implement this Directive into national law was 1 July 1994, except
in the case of Spain (1 January 1997) and Greece and Portugal (1
January 1998).
Determination of Scope: Entities Concerned
The definition given in the Utilities Directive is not confined
to a simple distinction between ‘public’ and ‘private’
entities.
This goes beyond the distinction between the public and private
sectors and places on an equal footing situations that are fundamentally
identical, despite any differences of legal form that there may
be between them.
Contracting Entities [top]
The Utilities Directive applies to:
- public authorities, ie the state, regional or local authorities,
bodies governed by public law, or associations formed by one or
more such authorities or bodies governed by public law
- public undertakings, ie any undertakings over which public authorities
may exercise, directly or indirectly, a dominant influence by
virtue of ownership, financial participation or regulation
- entities which are neither public authorities nor public undertakings,
but have been granted special or exclusive rights in respect of
one of the activities covered by the Directives
The activities falling within the scope of the Directive belong
to two categories:
- Cases where a service is provided to the public via a technical
network whose very existence restricts competition. Where such
a system is introduced, there is in practice little likelihood
of competition from another network or from new market entrants.
No competition is possible where the monopoly or oligopoly is
legally established through the granting of special or exclusive
rights as machinery for official authorisation which creates
barriers to entry.
The Directive thus covers the provision or operation of networks
which provide a service to the public in connection with the
production, transport or distribution of drinking water, electricity,
gas, heat or telecommunications, and railway, tramway and bus
networks.
- Cases where an entity exploits a geographical area for a particular
purpose subject to a government concession or authorisation.
-
- Such purposes are:
- a. exploring for, or extracting, oil, gas, coal or other
solid fuels
b. the provision of airport, maritime or inland port or other
terminal facilities to carriers by air,
sea or inland waterway
Article 3 of the Directive establishes a possibility of derogation
for one specific type of procurement. Member States may request
the Commission that public procurements concerning the exploitation
of geographical areas for the purpose of exploring oil, gas, coal,
or other solid fuels shall be subject to more flexible competitive
procurement rules than the ones of the Utilities Directive. This
authorisation is requested by a Member State which wishes to allow
some entities to benefit from the derogation.
If the conditions of Article 3 are satisfied, the authorisation
of the commission excludes these contracts from the scope of application
of the Directive.
Scope of Contracts [top]
The Directive covers:
- the supply of products
- building or civil engineering works
- the provision of services as defined in the second Directive
93/38/EEC, mentioned above
Value Thresholds [top]
- The Utilities Directive applies to contracts whose estimated
value is not less than:
- e400,000 in the case of supply or service contracts awarded
by entities carrying on an activity in the
transport, drinking water or energy sectors, as defined in Article
2 of Directive 90/531/EEC
- e600,000 in the case of supply or service contracts awarded
by entities carrying on an activity in the
telecommunications sector, as defined in Article 2 of Directive
90/531/EEC
- e5 million in the case of works contracts
These thresholds were modified in the context of the GPA for 1
January 1996.
Award Procedures [top]
Contracting entities have a free choice between open, restricted
and negotiated procedures, which are defined in exactly the same
way as in the traditional Directives on supply, works and service
contracts, provided that a call for competition has been made through
publication in the Official Journal of:
- a tender notice for each contract; or
- a periodic indicative notice for each group of products, set
of works or category of services; or
- a notice on the existence of a qualification system
Periodic Indicative Notice [top]
This is similar to the indicative notices provided for by the traditional
Supplies, Works and Services Directives.
However, where it is used as a means of calling for competition:
- the notice must refer specifically to the supplies, works or
services which will be the subject of the contract to be awarded
- the notice must invite interested undertakings to express their
interest in writing
- the contracting entity must subsequently invite all candidates
to confirm their interest in the contract concerned before beginning
the selection of tenderers
Qualification System [top]
Under the Directive, contracting entities that so wish may establish
and operate a system for the qualification of suppliers, contractors
or service providers:
- The system, which may involve different qualification stages,
must operate on the basis of objective rules and criteria to be
established by the contracting entity.
- Contracting entities may not:
•impose administrative, technical or financial conditions
on some firms and not others
•require tests or proof that duplicate objective evidence
is already available
The rules and criteria for qualification must be made available
on request interested suppliers, contractors or service providers.
- Contracting entities must inform applicants of their decision
as to qualification within a reasonable period.
- Applicants whose qualification is refused must be informed of
that decision and the grounds for refusal; those grounds must
be based on the qualification criteria.
- Contracting entities may bring the qualification of a supplier,
contractor or service provider to an end only for reasons based
on the qualification criteria. The intention to bring qualification
to an end must be sent in writing to the supplier, contractor
or service provider
beforehand, together with the reason or reasons justifying the
proposed action.
- The qualification system must be the subject of a notice indicating
its purpose and the availability of the rules concerning its operation.
Minimum Periods to be Allowed Under
the Procedures [top]
Open procedures with a prior call for competition
Time limit for receipt of tenders: not less than 52 days from the
date of dispatch of the tender notice.
Restricted procedures and negotiated procedures with a prior call
for competition
Time limit for receipt of requests to participate: As a general
rule, at least five weeks, but in any event not less than 22 days
(15 days in case of urgency and if the notice has been sent to the
office by electronic mail, telex or telefax)
Time limit for receipt of tenders: To be fixed by mutual agreement
between the contracting entity and the selected candidates, the
time limit being identical for all candidates; where agreement cannot
be reached, as a general rule at least three weeks and, at all events,
not less than ten days from the date of the invitation to tender.
Criteria for Qualitative Selection
[top]
Unlike the traditional Directives on supply, works and service contracts,
the Utilities Directive does not lay down any qualitative selection
criteria and thus allows contracting entities some discretion. However,
the criteria adopted must be objective and made available to all
interested firms.
Technical Specifications and Standards
[top]
As in the case of the traditional Directives on supply, works and
service contracts, the contracting entities concerned here must
give priority to national standards implementing European standards;
to European technical approvals; or to common technical specifications.
Award Criteria [top]
The award criteria are identical to those laid down in the traditional
Directives on supply, works and service contracts.
Third Country Clauses [top]
- Directive 93/38/EEC provides that any tender made for the award
of a supply contract may be rejected by the contracting authority
where the proportion of products originating in a third country
with which no agreement ensuring effective and comparable access
for EU undertakings has been concluded exceeds 50% of the total
value of the products constituting the tender.
Furthermore, where two or more tenders are equivalent in the light
of the award criteria, preference must be given to the tender
or tenders which have not been rejected in accordance with the
above provision. Preference is not to be given, however, where
acceptance of the tender concerned would oblige the contracting
entity to acquire material having technical characteristics different
from existing material and which would result in incompatibility
or technical difficulties in operation and maintenance or disproportionate
costs.
- 2.As far as services are concerned, Member States must inform
the Commission of any general difficulties encountered by their
businesses in winning service contracts in third countries. The
Commission is to report periodically to the Council on the opening-up
of service procurement in third countries.
Where Community firms have difficulty in gaining access to service
contracts in a third country, the Commission must endeavour to
remedy the situation with the country concerned; it may propose
that the Council suspends or restricts, in Member States, the
award of service contracts to certain types
of firm, in particular firms subject to the law of the third country
concerned.
The Problem of Ensuring Compliance
with the Directives [top]
Given the size of public procurement as a proportion of GDP, the
award of procurement by the public or semi-public sector can have
a decisive impact on the economic power and development of an enterprise,
sector or region.
The role that can be played by public purchasers, enterprises,
the courts and the Commission in ensuring that contracts are awarded
on an objective basis and in conditions of effective competition
is extremely important, but also a particularly difficult one.
Problems to be Tackled [top]
Implementation of Directives into National Law
Member States are under the obligation to adopt binding rules to
transpose the Directives into their national law. Actually, Member
States very often don't implement the Directives before the deadline.
Moreover, the implementing rules are often at variance with the
spirit of the Directives, in both form and substance. Problems of
interpretation and of incorporation of the national measures implementing
the Directives arise frequently.
At the different stages that make up an award procedure, the Community
rules are breached by public purchasers, either deliberately or
through ignorance.
Here are some examples:
- deliberate splitting of contracts
- failure to supply interested firms with full and accurate information
- inclusion of discriminatory requirements in the contract documents
- failure to comply with the advertising rules:
•misinterpretation of the scope of the Directives
•use of direct negotiation (see the judgment delivered by
the Court of Justice of the European
Communities on 18 March 1992 in Commission v Spain "extension
of Madrid University")
- failure to comply with the technical rules:
•lack of references to European standards
•application of technical specifications that give preference
to domestic production (see the Court's
judgment of 22 September 1988 in Commission v Ireland "Dundalk
pipeline")
•requirement of tests and certification by a domestic laboratory
- failure to comply with the rules on selection (proof of good
repute, economic and financial standing and technical capability):
•obligation to enrol on a list of approved firms to be allowed
to submit a tender
•unfair or unreasonable requirements regarding proof which
are not provided for by the Directives
- failure to comply with the rules relating to award of the contract:
•biased use of the criterion of the most economically advantageous
tender
•negotiation in open or restricted procedures (see the Court's
judgment of 22 June 1993 "Storebaelt
bridge")
•use of award criteria not revealed to tenderers
•substantial amendment of the contract documents to eliminate
certain tenders
•treatment of reservations in tenders
•non-objective evaluation of tenders (rigging the results)
•failure to comply with the procedure for dealing with abnormally
low tenders (see the Court's
judgment of 22 July 1989 in the "Fratelli Costanzo"
case - formula for automatically rejecting
abnormally low tenders)
•misuse of the concept of unacceptable tenders
Public Procurement is a Complex, Sensitive
Area [top]
The amount of European and national public procurement legislation
has considerably increased over the last ten years. This specific
legislation is complex and difficult to understand for undertakings
who don’t always have access to modern information networks.
The drafting and reading of a contract document is not easy and
it becomes even more complicated when you have to do it in a foreign
language. It is also difficult to get used to the different mentalities
and ways of working in the other Member States. While the size of
certain contracts makes them attractive to large firms, which have
the necessary economic strength and technical capacity to carry
out transfrontier business, it places small and medium size enterprises
(SMEs) at a disadvantage. Moreover, it is not always profitable
for some undertakings to sell products or services in a wide geographic
area.
The fact that markets are shared, either tacitly or through regulatory
action, in some areas of the economy and that certain firms benefit
from national - and above all regional - preferences weakens application
of the Community rules.
Public purchasers are susceptible to pressure from local political
and economic interests. Firms that have suffered from discrimination
are reluctant to challenge them before the national courts, or even
to stand up for their rights outside the courts, for fear of spoiling
any chances they may have of winning a future contract.
Since the number of public purchasers, and consequently the number
of contracts awarded, is extremely large, monitoring of compliance
with the Directives by national courts and the Commission can only
scratch the surface.
Experience shows that a lot of infringements of the Directives
come from a poor knowledge of the rules applicable and that further
information is still necessary.
All these problems are even more important for SMEs, due to their
size, structure and financial capacities. The opening up of public
procurement for SMEs still has to be improved. Business services
that can provide for SMEs and help them to become more competitive
in Community markets have to be encouraged.
Action Being Taken or Under Consideration
[top]
The Commission's role in the implementation process is of prime
importance. Every provision of the measures adopted at national
level is being subjected to detailed scrutiny, in close cooperation
with the competent national authorities of the Member States. The
Commission can ask the Member States to take rapid steps to correct
any infringement and can, if it thinks fit, start proceedings.
Two judicial precedents are of relevance here:
- the Court's judgment of 19 November 1991 in the "Francovitch-Bonifaci"
case, in which it established the principle that Member States
must compensate individuals for damage caused to them by non-implementation
(or faulty transposition) of a Directive into national law.
- the Court’s judgment of 22 June 1989 in the "Fratelli
Costanzo" case, in which it ruled that public purchasers
(at central or local level) are under the obligation to apply
the provisions of the Directives. These may be relied on by individuals
before national courts, which must refrain from applying provisions
of national law that conflict with the Directives.
This ‘direct effect’ doctrine, which allows individuals,
if certain conditions are fulfilled, to rely directly on the provisions
of a Directive before national courts, is an important contribution
of the Court of Justice. This doctrine is very helpful for individuals
in cases of poor or non-implementation of a Directive.
As far as application of the Community rules is concerned, a number
of measures are worth noting:
Any potential contractor who considers that they have been injured
by an unlawful decision on the part of a contracting authority may
seek review.
To ensure that everyone has the same rights, the Commission drew
up the review procedures Directives.
Directive 89/665/CEE (OJ No 395 of 30 December 1989) harmonises
the remedies available in Member States for the purpose of ensuring
correct application of the Supplies and Works Directives and the
Services Directive.
This Directive requires Member States to introduce procedures for
reviewing, effectively and as swiftly as possible, decisions that
have infringed Community law on public procurement or national rules
implementing that law.
These review procedures must make it possible, at any stage of
the contract award procedure, to:
- take interim measures, for example suspending any decision
taken by a contracting authority
- set aside unlawful decisions, such as discriminatory technical
specifications
- award damages to persons harmed
- The Directive established a procedure enabling the Commission,
as the guardian of the EC Treaty, to take action where a clear
and manifest infringement of Community rules has taken place before
a contract is concluded, by bringing it to the attention of the
contracting authority.
In such cases, the Commission notifies the Member State and the
contracting authority of the reasons which have led it to conclude
that a clear and manifest infringement has been committed and requests
its correction. The Member State must reply within 21 days.
The reply must contain one of the following:
- confirmation that the infringement has been corrected
- a reasoned submission as to why no correction has been made
- a notice to the effect that the contract award procedure has
been suspended
When this procedure is used, it replaces the first stage (letter
of formal notice) of the infringement proceedings under Article
169 of the EC Treaty.
In the utilities sector, the Council has adopted a Directive (92/13/EEC,
OJ No L 76 of 23 March 1992) harmonising review procedures for the
purpose of ensuring correct application of the Utilities Directives.
The national measures transposing it entered into force on 1 January
1993 (derogations: for Spain 30 June 1995, for Greece and Portugal
30 June 1997).
It provides, along the lines of the other Review Procedures Directive,
swift and effective review procedures that make it possible to:
- take interim measures, for example suspending any decision taken
by a contracting authority
- set aside unlawful decisions, such as discriminatory technical
specifications
- award damages to persons harmed
The same machinery for corrective action as that established by
the other Review Procedures Directive (89/665/EEC) can be used by
the Commission.
Directive 92/13/EEC sets up a system of attestations issued by
sworn attestors, in each Member State, who can establish that, over
a given period of time, an entity's procurement system has been
fair and non-discriminatory and has complied with the applicable
Community rule.
A conciliation procedure supervised by a conciliator drawn from
a list of independent persons accredited for this purpose by the
Commission is provided to parties willing to settle disputes amicably
and thus avoid litigation.
Action by the Commission against Member States under Article 169
of the EEC Treaty
While conflicts are to be settled primarily at national level, any
supplier, contractor or service provider who considers that they
have been harmed by an unlawful decision taken by a contracting
authority is free to submit a complaint to the Commission. Complaints
may be made at the same time as proceedings are instituted before
a national court, but are in no way conditional on such legal action.
Complaints can be handled confidentially, and there is no administration
fee. To ensure that the Commission's action is effective, complaints
should be lodged before the contract is signed, at the latest when
tenders are being compared. Where a public contract has already
been awarded or signed, it is in the interests of injured firms
to apply to national courts for damages even before lodging a complaint
with the Commission.
The national administrations have a leading role to play in ensuring
effective application of the public
procurement rules.
It would be desirable for them to:
- increase and upgrade their monitoring resources, backing them
up with effective penalties
- give priority to preventive checks
- launch training schemes for the sectors concerned
The funding of projects and programmes by the Community's structural
instruments is conditional on compliance with the Community rules
on public procurement.
As regard the diffusion of information, the Commission makes constant
efforts, through publications and guides, to enable suppliers, contractors
and service providers to gain a better understanding of the legal
environment created by the Community and by each Member State in
the public procurement field.
The Commission, when it thinks fit, can propose the advisory Committee
on the Opening-up of Public Procurement that they adopt the policy
guidelines.
The following policy guidelines have been adopted:
- the obligation to refer to European standards
- the defining of the term ‘product area’
- the contracts awarded by separate units of a contracting entity
under the Utilities Directive
Concerning SMEs, on 7 May 1990 the Commission adopted a communication
on promoting their participation in public procurement in the Community.
This communication was followed by two further communications to
the Council on this topic. The first one (1 June 1990), is of a
general nature (SME participation in public procurement); the other
(5 June 1990) is specifically concerned with the potential problems
of enterprises supplying the utilities sectors in the structurally
disadvantaged regions of the Community, once public procurement
is opened up. The communication of 1 June reviews the problems as
perceived by SMEs and the progress made in pursuing the objectives
of the communication of 7 May 1990. Most of the problems highlighted
are not confined to SMEs but these experience more important barriers
to market entry.
Thanks to a new series of Community Initiatives (SMEs INITIATIVE
94/C180/03 laying down guidelines for operational programmes or
global grants which they are invited to propose in the framework
of a Community initiative concerning the adaptation of SMEs to the
single market and intention of the Commission to forward in the
near future to the Council, in reponse to the conclusions of the
European Council of Cannes, a report on measures to make it easier
for SMEs to participate in public procurement contracts), new measures
aimed at improving the participation of SMEs in public procurements
are being set up. Given their small size and lack of sophistication,
the support and advisory services will be necessary to enable SMEs
to increase their effectiveness in overcoming their disadvantages.
What they first require is guidance as to how to discover the extent
of the potential markets in their sector of activity, the extent
of potential competition, and the obstacles to be surmounted.
These measures are:
- the promotion of partnership between SMEs in different regions
or Member States to facilitate their participation in public contracts
on a basis of reciprocity between countries and regions
- the improvement of the information available, including the
installation of the necessary hardware, the design and development
of software and the running costs of information systems and their
promotion
- technical, legal and linguistic assistance in the preparation
and follow-up of tenders, and in admission to purchasing authorities'
pre-qualification lists
- specialised training in public procurement
- promotional and awareness-raising activities which can be carried
out by various types of body active in the field of public procurement,
including the existing Community network to assist SMEs (Euro-info
Centres, Bureaux de rapprochement d'entreprises, Business Cooperation
Network and Centres of Enterprises and Innovation), trade promotion
organisations, regional development bodies, chambers of commerce
and ad hoc centres. Development of such a network is naturally
linked with developments in the information market within the
framework of the Commission's SIMAP (Système d'information
pour les marchés publics) project (see below)
The PRISMA Community Initiative provides financial support for
operational programmes drawn up by Member States including measures
aimed at improving information, technical assistance and cooperation
between SMEs seeking to establish the capacity to enter public sector
markets.
Important changes which are taking place in the field of information
and telecommunication technology open new opportunities to improve
the efficiency of the whole public procurement process. DG XV of
the European Commission has launched the SIMAP project which brings
EU-wide electronic public procurement a lot closer.
SIMAP will create a more open procurement market by collecting,
processing and diffusing accurate and up-to-date information on
tender opportunities and contracts awarded, plus other information
already available in the Member States such as a list of standards,
contact points, potential subcontractors, electronic catalogues,
etc. In future developments, SIMAP will provide the means for enabling
a paperless procurement process by supporting the creation and electronic
exchange of tender documentation, bids, invoices, payments orders
and other information exchanged between procurers and suppliers.
For Further Information
Unit XV/B/3
Public Procurement: formulation and application of Community law
Tel: 0032 2295 4713
Fax: 0032 2296 0962
Rue de la loi 200
1049 Brussels
Belgium
|
|
