COUNCIL DIRECTIVE 93/38/EEC of 14 June 1993
coordinating the procurement procedures of entities operating in the water, energy, transport and telecommunications sectors

 
THE COUNCIL OF THE EUROPEAN COMMUNITIES,
Having regard to the Treaty establishing the European Economic Community, and in particular the last sentence of Articles 57 (2), 66, 100a and 113 thereof,
Having regard to the proposal from the Commission (1),
In cooperation with the European Parliament (2),
Having regard of the opinion of the Economic and Social Committee (3),
1. Whereas the measures aimed at progressively establishing the internal market during the period up to 31 December 1992 need to be taken; whereas the internal market consists of an area without internal frontiers in which free movement of goods, persons, services and capital is guaranteed;
2. Whereas restrictions on the free movement of goods and on freeedom to provide services in respect of supply and service contracts awarded in the water, energy, transport and telecommunications sectors are prohibited by the terms of Articles 30 and 59 of the EEC Treaty;
3. Whereas Article 97 of the Euratom Treaty prohibits any restrictions based on nationality as regards companies under the jurisdiction of a Member State where they desire to participate in the construction of nuclear installations of a scientific or industrial nature in the Community or to provide the relevant service in the Community;
4. Whereas these objectives also require the coordination of the procurement procedures applied by the entities operating in these sectors;
5. Whereas the White Paper on the completion of the internal market contains an action programme and a (1) OJ No C 337, 31. 12. 1991, p. 1.
(2) OJ No C 176, 13. 7. 1992, p. 136 and OJ No C 150, 31. 5. 1993.
(3) OJ C 106, 27. 4. 1992, p. 6.
timetable for opening up public procurement markets in sectors which are currently excluded from Council Directive 71/305/EEC of 26 July 1971 concerning the coordination of procedures for the award of public works contracts (4), and Council Directive 77/62/EEC of 21 December 1976 coordinating procedure for the award of public supply contracts (5);
6. Whereas the White Paper on the completion of the internal market also contains an action programme and a timetable for opening up service contracts;
7. Whereas among such excluded sectors are those concerning the provision of water, energy and transport services and, as far as Directive 77/62/EEC is concerned, the telecommunications sector;
8. Whereas the main reason for their exclusion was that entities providing such services are in some cases governed by public law, in others by private law;
9. Whereas the need to ensure a real opening-up of the market and a fair balance in the application of procurement rules in these sectors requires that the entities to be covered must be identified on a different basis than by reference to their legal status;
10. Whereas, in the four sectors concerned, the procurement problems to be solved are of a similar nature, thus permitting them to be addressed in one instrument;
11. Whereas, among the main reasons why entities operating in these sectors do not purchase on the basis of Community-wide competition is the closed nature of the markets in which they operate, due to the existence of special or exclusive rights granted by the national authorities, concerning the supply to, (4) OJ No L 185, 16. 8. 1971, p. 5. Directive as last amended by Directive 89/440/EEC (OJ No L 210, 21. 7. 1989, p. 1).
(5) OJ No L 13, 15. 1. 1977, p. 1. Directive as last amended by Directive 88/295/EEC (OJ No L 127, 20. 5. 1988, p. 1).
provision or operation of, networks for providing the service concerned, the exploitation of a given geographical area for a particular purpose, the provision or operation of public telecommunications networks or the provision of public telecommunications services;
12. Whereas the other main reason for the absence of Community-wide competition in these areas results from various ways in which national authorities can influence the behaviour of these entities, including participations in their capital and representation in the entities administrative, managerial or supervisory bodies;
13. Whereas this Directive should not extend to activities of those entities which either fall outside the sectors of water, energy and transport services or outside the telecommunications sector, or which fall within those sectors but are nevertheless directly exposed to competitive forces in markets to which entry is unrestricted;
14. Whereas it is appropriate that these entities apply common procurement procedures in respect of their activities relating to water; whereas certain entities have been covered up to now by Directives 71/305/EEC and 77/62/EEC in respect of their activities in the field of hydraulic engineering projects, irrigation, land drainage or the disposal and treatment of sewage;
15. Whereas, however, procurement rules of the type proposed for supplies of goods are inappropriate for purchases of water, given the need to procure water from sources near the area it will be used;
16. Whereas, when specific conditions are fulfilled, exploitation of a geographical area with the aim of exploring for or extracting oil, gas, coal or other solid fuels may be made subject to alternative arrangements which will enable the same objective of opening up contracts to be achieved; whereas the Commission must ensure that these conditions are complied with by the Member States who implement these alternative arrangements;
17. Whereas the Commission has announced that it will propose measures to remove obstacles to cross-frontier exchanges of electricity by 1992; whereas procurement rules of the type proposed for supplies of goods would not make it possible to overcome existing obstacles to the purchases of energy and fuels in the energy sector; whereas, as a result, it is not appropriate to include such purchases in the scope of this Directive, although it should be borne in mind that this exemption will be re-examined by the Council on the basis of a Commission report and Commission proposals;
18. Whereas Regulations (EEC) No 3975/87 (1) and (EEC) No 3976/87 (2), Directive 87/601/EEC (3) and Decision 87/602/EEC (4) are designed to introduce more competition between the entities offering air transport services to the public and it is therefore not appropriate for the time being to include such entities in the scope of this Directive although the situation ought to be reviewed at a later stage in the light of progress made as regards competition;
19. Whereas, in view of the competitive position of Community shipping, it would be inappropriate for the greater part of the contracts in this sector to be subject to detailed procedures; whereas the situation of shippers operating sea-going ferries should be kept under review; whereas certain inshore and river ferry services operated by public authorities should no longer be excluded from the scope of Directives 71/305/EEC and 77/62/EEC;
20. Whereas it is appropriate to facilitate compliance with provisions relating to activities not covered by this Directive;
21. Whereas the rules on the award of service contracts should be as close as possible to the rules on the works and supply contracts referred to in this Directive;
22. Whereas obstacles to the free movement of services need to be avoided; whereas, therefore, service providers may be either natural or legal persons; whereas this Directive shall not, however, prejudice the application, at national level, of rules concerning the conditions for the pursuit of an activity or a profession provided that they are compatible with Community law;
23. Whereas the field of services is best described, for the purpose of application of procedural rules and for monitoring purposes, by subdividing the services into categories corresponding to particular positions of a common classification; whereas Annexes XVI A and XVI B to this Directive refer to the United Nations CPC (Central Product Classification) nomenclature; whereas that nomenclature is likely to be replaced by a Community nomenclature in the future; whereas it is (1) OJ No L 374, 31. 12. 1987, p. 1.
(2) OJ No L 374, 31. 12. 1987, p. 9.
(3) OJ No L 374, 31. 12. 1987, p. 12.
(4) OJ No L 374, 31. 12. 1987, p. 19.
necessary to make provision for the possibility of adapting the reference made to the CPC nomenclature in Annexes XVI A and XVI B accordingly;
24. Whereas the provision of services is covered by this Directive only in so far as it is based on contracts; whereas the provision of services on other bases, such as law, regulations or administrative provisions or employment contracts, is not covered;
25. Whereas, in accordance with Article 103f of the EEC Treaty, the encouragement of research and development is a means of strengthening the scientific and technological basis of European industry and the opening-up of public contracts will contribute to this end; whereas contributions to the financing of research programmes should not be subject to this Directive; whereas research and development service contracts other than those where the benefits accrue exclusively to the contracting authority for its use in the conduct of its own affairs, on condition that the service provided is wholly remunerated by the contracting authority, are not therefore covered by this Directive;
26. Whereas contracts for the acquisition or rental of land, existing buildings or other immovable property have particular characteristics, which make the application of procurement rules inappropriate;
27. Whereas arbitration and conciliation services are usually provided by bodies or individuals which are agreed on, or selected, in a manner which cannot be governed by procurement rules;
28. Whereas the service contracts covered by this Directive do not include contracts for the issue, purchase sale or transfer of securities or other financial instruments;
29. Whereas this Directive should not apply to procurement contracts which are declared secret or may affect basic State security interests or are concluded according to other rules set up by existing international agreements or international organizations;
30. Whereas contracts with a designated single source of supply may, under certain conditions, be fully or partly exempted from this Directive;
31. Whereas the Community's or the Member States' existing international obligations must not be affected by the rules of this Directive;
32. Whereas it is appropriate to exclude certain service contracts awarded to an affiliated undertaking having as its principal activity, with respect to services, the provision of such services to the group of which it is part, rather than the offering of its services on the market;
33. Whereas full application of this Directive must be limited, for a transitional period, to contracts for those services where its provisions will enable the full potential for increased cross-frontier trade to be realized; whereas contracts for other services need to be monitored for a certain period before taking a decision on the full application of the said Directive; whereas the mechanism for such monitoring needs to be set up by this Directive and whereas it should at the same time enable those interested to share the relevant information;
34. Whereas the relevant Community rules on mutual recognition of diplomas, certificates or other evidence of formal qualifications apply when evidence of a particular qualification is required for participation in an award procedure or a design contest;
35. Whereas products, works or services must be described by reference to European specifications; whereas, in order to ensure that a product, work or service fulfils the use for which it is intended by the contracting entity, such reference may be complemented by specifications which do not change the nature of the technical solution or solutions set out in the European specification;
36. Whereas the principles of equivalence and of mutual recognition of national standards, technical specifications and manufacturing methods are applicable in the field of application of this Directive;
37. Whereas Community undertakings should be granted access to the award of service contracts in third countries; whereas the Community should endeavour to remedy any situation whereby such access, in law or in fact, is found to be restricted and whereas it should be possible, under certain conditions, to take measures as regards access to service contracts covered by this Directive for undertakings of the third country concerned or for tenders originating in that country;
38. Whereas, when the contracting entities define by common accord with tenderers the deadlines for receiving tenders, they shall comply with the principles of non-discrimination, and whereas, if there is no such agreement, it is necessary to lay down suitable provisions;
39. Whereas it could prove useful to provide for greater transparency as to the requirements regarding the protection and conditions of employment applicable in the Member State in which the works are to be carried out;
40. Whereas it is appropriate that national provisions for regional development requirements to be taken into consideration in the award of public contracts should be made to conform to the objectives of the Community and be in keeping with the principles of the EEC Treaty;
41. Whereas contracting entities must not be able to reject abnormally low tenders before having requested in writing explanations as to the constituent elements of the tender;
42. Whereas, within certain limits, preference should be given to an offer of Community origin where there are equivalent offers of third-country origin;
43. Whereas this Directive should not prejudice the position of the Community in any current or future international negotiations;
44. Whereas, based on the results of such international negotiations, this Directive should be extendable to offers of third-country origin, pursuant to a Council Decision;
45. Whereas the rules to be applied by the entities concerned should establish a framework for sound commercial practice and should leave a maximum of flexibility;
46. Whereas, as a counterpart for such flexibility and in the interest of mutual confidence, a minimum level of transparency must be ensured and appropriate methods adopted for monitoring the application of this Directive;
47. Whereas it is necessary to adapt Directives 71/305/EEC and 77/62/EEC to establish well-defined fields of application; whereas the scope of Directive 71/305/EEC should not be reduced, except as regards contracts in the water and telecommunications sectors; whereas the scope of Directive 77/62/EEC should not be reduced, except as regards certain contracts in the water sector; whereas the scope of Directives 71/305/EEC and 77/62/EEC should not, however, be extended to contracts awarded by carriers by land, air, sea, inshore or inland waterway which, although carrying out economic activities of an industrial or commercial nature, belong to the State administration; whereas, nevertheless, certain contracts awarded by carriers by land, air, sea, inshore or inland waterway which belong to the State administration and are carried out only for reasons of public service should be covered by those Directives;
48. Whereas this Directive should be re-examined in the light of experience;
49. Whereas the opening-up of contracts in the sectors covered by this Directive might have an adverse effect upon the economy of the Kingdom of Spain; whereas the economies of the Hellenic Republic and the Portuguese Republic will have to sustain even greater efforts; whereas it is appropriate that these Member States be granted adequate additional periods to implement this Directive,
HAS ADOPTED THIS DIRECTIVE:

TITLE I
General provisions
 
Article 1
For the purpose of this Directive:
1. 'public authorities' shall mean the State, regional or local authorities, bodies governed by public law, or associations formed by one or more of such authorities or bodies governed by public law.
A body is considered to be governed by public law where it:
- is established for the specific purpose of meeting needs in the general interest, not being of an industrial or commercial nature,
- has legal personality, and
- is financed for the most part by the State, or regional or local authorities, or other bodies governed by public law, or is subject to management supervision by those bodies, or has an administrative, managerial or supervisory board more than half of whose members are appointed by the State, regional or local authorities, or other bodies governed by public law;
2. 'public undertaking' shall mean any undertaking over which the public authorities may exercise directly or indirectly a dominant influence by virtue of their ownership of it, their financial participation therein, or the rules which govern it. A dominant influence on the part of the public authorities shall be presumed when these authorities, directly or indirectly, in relation to an undertaking:
- hold the majority of the undertaking's subscribed capital, or
- control the majority of the votes attaching to shares issued by the undertaking, or
- can appoint more than half of the members of the undertaking's administrative, managerial or supervisory body;
3. 'affiliated undertaking' shall mean any undertaking the annual accounts of which are consolidated with those of the contracting entity in accordance with the requirements of the seventh Council Directive 83/349/EEC of 13 June 1983, based on Article 54 (3) (g) of the EEC Treaty on consolidated accounts (1) or, in the case of entities not subject to that Directive, any undertaking over which the contracting entity may exercise, directly or indirectly, a dominant influence within the meaning of paragraph 2, or which may exercise a dominant influence over the contracting entity or which, in common with the contracting entity, is subject to the dominant influence of another undertaking by virtue of ownership, financial participation, or the rules which govern it;
4. 'supply, works and service contracts' shall mean contracts for pecuniary interest concluded in writing between one of the contracting entities referred to in Article 2, and a supplier, a contractor or a service provider, having as their object:
(a) in the case of supply contracts, the purchase, lease, rental or hire-purchase, with or without options to buy, of products;
(b) in the case of works contracts either the execution, or both the execution and design or the realization, by whatever means, of building or civil engineering activities referred to in Annex XI. These contracts may, in addition, cover supplies and services necessary for their execution;
(c) in the case of service contracts, any object other than those referred to in (a) and (b) and to the exclusion of:
(i) contracts for the acquisition or rental, by whatever financial means, of land, existing buildings, or other immovable property or concerning rights thereon; nevertheless, financial service contracts concluded at the (1) OJ No L 193, 18. 7. 1983, p. 1. Directive as last amended by Directive 90/605/EEC (OJ No L 317, 16. 11. 1990, p. 60).
same time as, before or after the contract of acquisition or rental, in whatever form, shall be subject to this Directive;
(ii) contracts for voice telephony, telex, radiotelephony, paging and satellite services;
(iii) contracts for arbitration and conciliation services;
(iv) contracts for the issue, sale, purchase or transfer of securities or other financial instruments;
(v) employment contracts;
(vi) research and development service contracts other than those where the benefits accrue exclusively to the contracting entity for its use in the conduct of its own affairs, on condition that the service provided is wholly remunerated by the contracting entity.
Contracts which include the provision of services and supplies shall be regarded as supply contracts if the total value of supplies is greater than the value of the services covered by the contract;
5. 'framework agreement' shall mean an agreement between one of the contracting entities defined in Article 2 and one or more suppliers, contractors or service providers the purpose of which is to establish the terms, in particular with regard to the prices and, where appropriate, the quantity envisaged, governing the contracts to be awarded during a given period;
6. 'tenderer' shall mean a supplier, contractor or service provider who submits a tender and 'candidate' shall mean a person who has sought an invitation to take part in a restricted or negotiated procedure; service providers may be either natural or legal persons, including contracting entities within the meaning of Article 2;
7. 'open, restricted and negotiated procedures' shall mean the award procedures applied by contracting entities whereby:
(a) in the case of open procedures, all interested suppliers, contractors or service providers may submit tenders;
(b) in the case of the restricted procedures, only candidates invited by the contracting entity may submit tenders;
(c) in the case of negotiated procedures, the contracting entity consults suppliers, contractors or service providers of its choice and negotiates the terms of the contract with one or more of them;
8. 'technical specifications' shall mean the technical requirements contained in particular in the tender documents, defining the characteristics of a set of works, material, product, supply or service, and enabling a piece of work, a material, a product, a supply or a service to be objectively described in a manner such that it fulfils the use for which it is intended by the contracting entity. These technical specifications may include quality, performance, safety or dimensions, as well as requirements applicable to the material, product, supply or service as regards quality assurance, terminology, symbols, testing and test methods, packaging, marking or labelling. In the case of works contracts, they may also include rules for the design and costing, the test, inspection and acceptance conditions for works and techniques or methods of construction and all other technical conditions which the contracting entity is in a position to prescribe under general or specific regulations, in relation to the finished works and to the materials or parts which they involve;
9. 'standard' shall mean a technical specification approved by a recognized standardizing body for repeated or continuous application, compliance with which is in principle not compulsory;
10. 'European standard' shall mean a standard approved by the European Committee for Standardization (CEN) or by the European Committee for Electrotechnical Standardization (Cenelec) as a 'European Standard (EN)' or 'Harmonization Document (HD)', according to the common rules of those organizations, or by the European Telecommunications Standards Institute (ETSI) according to its own rules as a 'European Telecommunications Standard (ETS)';
11. 'common technical specification' shall mean a technical specification drawn up in accordance with a procedure recognized by the Member States with a view to uniform application in all Member States and published in the Official Journal of the European Communities;
12. 'European technical approval' shall mean a favourable technical assessment of the fitness for use of a product for a particular purpose, based on fulfilment of the essential requirements for building works, by means of the inherent characteristics of the product and the defined conditions of application and use, as provided for in Council Directive 89/106/EEC of 21 December 1988 on the approximation of laws, regulations and administrative provisions of the Member States relating to construction products (1). European(1) OJ No L 40, 11. 2. 1989, p. 12.
technical approval shall be issued by an approval body designated for this purpose by the Member State;
13. 'European specification' shall mean a common technical specification, a European technical approval or a national standard implementing a European standard;
14. 'public telecommunications network' shall mean the public telecommunications infrastructure which enables signals to be conveyed between defined network termination points by wire, by microwave, by optical means or by other electromagnetic means;
'network termination point' shall mean all physical connections and their technical access specification which form part of the public telecommunications network and are necessary for access to, and efficient communication through, that public network;
15. 'public telecommunications services' shall mean telecommunications services the provision of which the Member States have specifically assigned notably to one or more telecommunications entities;
'Telecommunications services' shall mean services the provision of which consists wholly or partly in the transmission and routing of signals on the public telecommunications network by means of telecommunications processes, with the exception of radio-broadcasting and television;
16. 'design contests' shall mean the national procedures which enable the contracting entity to acquire, mainly in the fields of architecture, engineering or data processing, a plan or design selected by a jury after having been put out to competition with or without the award of prizes.

Article 2

1. This Directive shall apply to contracting entities which:
(a) are public authorities or public undertakings and exercise one of the activities referred to in paragraph 2;
(b) when they are not public authorities or public undertakings, have as one of their activities any of those referred to in paragraph 2 or any combination thereof and operate on the basis of special or exclusive rights granted by a competent authority of a Member State.
2. Relevant activities for the purposes of this Directive shall be:
(a) the provision or operation of fixed networks intended to provide a service to the public in connection with the production, transport or distribution of:
(i) drinking water; or
(ii) electricity; or
(iii) gas or heat;
or the supply of drinking water, electricity, gas or heat to such networks;
(b) the exploitation of a geographical area for the purpose of:
(i) exploring for or extracting oil, gas, coal or other solid fuels, or
(ii) the provision of airport, maritime or inland port or other terminal facilities to carriers by air, sea or inland waterway;
(c) the operation of networks providing a service to the public in the field of transport by railway, automated systems, tramway, trolley bus, bus or cable.
As regards transport services, a network shall be considered to exist where the service is provided under operating conditions laid down by a competent authority of a Member State, such as conditions on the routes to be served, the capacity to be made available or the frequency of the service;
(d) the provision or operation of public telecommunications networks or the provision of one or more public telecommunications services.
3. For the purpose of applying paragraph 1 (b), special or exclusive rights shall mean rights deriving from authorizations granted by a competent authority of the Member State concerned, by law, regulation or administrative action, having as their result the reservation for one or more entities of the exploitation of an activity defined in paragraph 2.
A contracting entity shall be considered to enjoy special or exclusive rights in particular where:
(a) for the purpose of constructing the networks or the facilities referred to in paragraph 2, it may take advantage of a procedure for the expropriation or use of property or may place network equipment on, under or over the public highway;
(b) in the case of paragraph 2 (a), the entity supplies with drinking water, electricity, gas or heat a network which is itself operated by an entity enjoying special or exclusive rights granted by a competent authority of the Member State concerned.
4. The provision of bus transport services to the public shall not be considered to be a relevant activity within the meaning of paragraph 2 (c) where other entities are free to provide those services, either in general or in a particular geographical area, under the same condition as the contracting entities.
5. The supply of drinking water, electricity, gas or heat to networks which provide a service to the public by a contracting entity other than a public authority shall not be considered as a relevant activity within the meaning of paragraph 2 (a) where:
(a) in the case of drinking water or electricity:
- the production of drinking water or electricity by the entity concerned takes place because its consumption is necessary for carrying out an activity other than that referred to in paragraph 2, and
- supply to the public network depends only on the entity's own consumption and has not exceeded 30% of the entity's total production of drinking water or energy, having regard to the average for the preceding three years, including the current year;
(b) in the case of gas or heat:
- the production of gas or heat by the entity concerned is the unavoidable consequence of carrying on an activity other than that referred to in paragraph 2, and
- supply to the public network is aimed only at the economic exploitation of such production and amounts to not more than 20% of the entity's turnover having regard to the average for the preceding three years, including the current year.
6. The contracting entities listed in Annexes I to X shall fulfil the criteria set out above. In order to ensure that the lists are as exhaustive as possible, Member States shall notify the Commission of amendments to their lists. The Commission shall revise Annexes I to X in accordance with the procedure in Article 40.

Article 3
1. Member States may request the Commission to provide that exploitation of geographical areas for the purpose of exploring for or extracting oil, gas, coal or other solid fuels shall not be considered to be an activity defined in Article 2 (2) (b) (i) and that entities shall not be considered as operating under special or exclusive rights within the meaning of Article 2 (3) (b) by virtue of carrying on one or more of these activities, provided that all the following conditions are satisfied with respect to the relevant national provisions concerning such activities:
(a) at the time when authorization to exploit such a geographical area is requested, other entities shall be free to seek authorization for that purpose under the same conditions as the contracting entities;
(b) the technical and financial capacity of entities to engage in particular activities shall be established prior to any evaluation of the merits of competing applications for authorization;
(c) authorization to engage in those activities shall be granted on the basis of objective criteria concerning the way in which it is intended to carry out exploitation or extraction, which shall be established and published prior to the requests and applied in a non-discriminatory manner;
(d) all conditions and requirements concerning the carrying out or termination of the activity, including provisions on operating obligations, royalties, and participation in the capital or revenue of the entities, shall be established and made available prior to the requests for authorization being made and then applied in a non-discriminatory manner; every change concerning these conditions and requirements shall be applied to all the entities concerned, or else amendments must be made in a non-discriminatory manner; however, operating obligations need not be established until immediately before the authorization is granted; and
(e) contracting entities shall not be required by any law, regulation, administrative requirement, agreement or understanding to provide information on a contracting entity's intended or actual sources of procurement, except at the request of national authorities with a view to the objectives mentioned in Article 36 of the EEC Treaty.
2. Member States which apply the provisions of paragraph 1 shall ensure, through the conditions of the authorization or other appropriate measures, that any entity:
(a) observes the principles of non-discrimination and competitive procurement in respect of the award of supplies, works and service contracts, in particular as regards the information which the entity makes available to undertakings concerning its procurement intentions;
(b) communicates to the Commission, under conditions to be defined by the latter in accordance with Article 40, information relating to the award of contracts.
3. As regards individual concessions or authorizations granted before the date on which Member States apply this Directive in accordance with Article 45, paragraph 1 (a), (b) and (c) shall not apply, provided that at that date other entities are free to seek authorization for the exploitation of geographical areas for the purpose of exploring for or extracting oil, gas, coal or other solid fuels, on a non-discriminatory basis and in the light of objective criteria. Paragraph 1 (d) shall not apply as regards conditions or requirements established, applied or amended before the date referred to above.
4. A Member State which wishes to apply paragraph 1 shall inform the Commission accordingly. In so doing, it shall inform the Commission of any law, regulation or administrative provision, agreement or understanding relating to compliance with the conditions referred to in paragraphs 1 and 2.
The Commission shall take a decision in accordance with the procedure laid down in Article 40 (5) to (8). It shall publish its decision, giving its reasons, in the Official Journal of the European Communities.
It shall forward to the Council each year a report on the implementation of this Article and review its application in the framework of the report provided for in Article 44.

Article 4
1. When awarding supply, works or service contracts, or organizing design contests, the contracting entities shall apply procedures which are adapted to the provisions of this Directive.
2. Contracting entities shall ensure that there is no discrimination between different suppliers, contractors or service providers.
3. In the context of provision of technical specifications to interested suppliers, contractors or service providers, of qualification and selection of suppliers, contractors or service providers and of award of contracts, contracting entities may impose requirements with a view to protecting the confidential nature of information which they make available.
4. This Directive shall not limit the right of suppliers, contractors or service providers to require a contracting entity, in conformity with national law, to respect the confidential nature of information which they make available.

Article 5
1. Contracting entities may regard a framework agreement as a contract within a meaning of Article 1 (4) and award it in accordance with this Directive.
2. Where contracting entities have awarded a framework agreement in accordance with this Directive, they may avail themselves of Article 20 (2) (i) when awarding contracts based on that agreement.
3. Where a framework agreement has not been awarded in accordance with this Directive, contracting entities may not avail themselves of Article 20 (2) (i).
4. Contracting entities may not misuse framework agreements in order to hinder, limit or distort competition.

Article 6
1. This Directive shall not apply to contracts or design contests which the contracting entities award or organize for purposes other than the pursuit of their activities as described in Article 2 (2) or for the pursuit of such activities in a non-member country, in conditions not involving the physical use of a network or geographical area within the Community.
2. However, this Directive shall apply to contracts or design contests awarded or organized by the entities which exercise an activity referred to in Article 2 (2) (a) (i) and which:
(a) are connected whith hydraulic engineering projects, irrigation or land drainage, provided that the volume of water intended for the supply of drinking water represents more than 20% of the total volume of water made available by these projects or irrigation or drainage installations, or
(b) are connected with the disposal or treatment of sewage.
3. The contracting entities shall notify the Commission at its request of any activities they regard as excluded under paragraph 1. The Commission may periodically publish lists of the categories of activities which it considers to be covered by this exclusion for information in the Official Journal of the European Communities. In so doing, the Commission shall respect any sensitive commercial aspects the contracting entities may point out when forwarding this information.

Article 7
1. This Directive shall not apply to contracts awarded for purposes of resale or hire to third parties, provided that the contracting entity enjoys no special or exclusive right to sell or hire the subject of such contracts and other entities are free to sell or hire it under the same conditions as the contracting entity.
2. The contracting entities shall notify the Commission at its request of all the categories of products or activities which they regard as excluded under paragraph 1. The Commission may periodically publish lists of the categories of products of activities which it considers to be covered by this exclusion for information in the Official Journal of the European Communities. In so doing, the Commission shall respect any sensitive commercial aspects which the contracting entities may point out when forwarding this information.

Article 8
1. This Directive shall not apply to contracts which contracting entities exercising an activity described in Article 2 (2) (d) award for purchases intended exclusively to enable them to provide one or more telecommunications services where other entities are free to offer the same services in the same geographical area and under substantially the same conditions.
2. The contracting entities shall notify the Commission at its request of any services which they regard as excluded under paragraph 1. The Commission may periodically publish the list of services which it considers to be covered by this exclusion for information in the Official Journal of the European Communities. In so doing, the Commission shall respect any sensitive commercial aspects the contracting entities may point out when forwarding this information.

Article 9
1. This Directive shall not apply to:
(a) contracts which the contracting entities listed in Annex I award for the purchase of water;
(b) contracts which the contracting entities listed in Annexes II to V award for the supply of energy or of fuels for the production of energy.
2. The Council shall re-examine the provisions of paragraph 1 when it has before it a report from the Commission together with appropriate proposals.

Article 10
This Directive shall not apply to contracts when they are declared to be secret by Member States, when their execution must be accompanied by special security measures in accordance with the laws, regulations or administrative provisions in force in the Member State concerned or when the protection of the basic security interests of that State so requires.

Article 11
This Directive shall not apply to service contracts awarded to an entity which is itself a contracting authority within the meaning of Article 1 (b) of Council Directive 92/50/EEC of 18 June 1992 relating to the coordination of procedures for the award of public service contracts (1) on the basis of an exclusive right which it enjoys pursuant to a published law, regulation or administrative provision which is compatible with the EEC Treaty.

Article 12
This Directive shall not apply to contracts governed by different procedural rules and awarded:
1. pursuant to an international agreement concluded in conformity with the Treaty between a Member State and one or more third countries and covering supplies, works, services or design contests intended for the joint implementation or exploitation of a project by the signatory States; every agreement shall be communicated to the Commission, which may consult the Advisory Committee for Public Contracts set up by Council Decision 71/306/EEC (2) or, in the case of agreements governing contracts awarded by entities exercising an activity defined in Article 2 (2) (d), the Advisory Committee on Telecommunications Procurement referred to in Article 39;
2. to undertakings in a Member State or a third country in pursuance of an international agreement relating to the stationing of troops;
3. pursuant to the particular procedure of an international organization.

Article 13
1. This Directive shall not apply to service contracts which:
(a) a contracting entity awards to an affiliated undertaking;
(b) are awarded by a joint venture formed by a number of contracting entities for the purpose of carrying out a relevant activity within the meaning of Article 2 (2) to one of those contracting entities or to an undertaking which is affiliated with one of these contracting entities,
provided that at least 80% of the average turnover of that undertaking with respect to services arising within the Community for the preceding three years derives from the provision of such services to undertakings with which it is affiliated.
(1) OJ No L 209, 24. 7. 1992, p. 1.
(2) OJ No L 185, 16. 8. 1971, p. 15. Decision as last amended by Decision 77/63/EEC (OJ No L 13, 15. 1. 1977, p. 15).
Where more than one undertaking affiliated with the contracting entity provides the same service or similar services, the total turnover deriving from the provision of services by those undertakings shall be taken into account.
2. The contracting entities shall notify to the Commission, at its request, the following information regarding the application of the provisions of paragraph 1:
- the names of the undertakings concerned,
- the nature and value of the service contracts involved,
- such proof as may be deemed necessary by the Commission that the relationship between the undertaking to which the contracts are awarded and the contracting entity is in conformity with the requirements of this Article.

Article 14
1. This Directive shall apply to contracts the estimated value, not of VAT, for which is not less than:
(a) ECU 400%000 in the case of supply and service contracts awarded by entities exercising an activity defined in Article 2 (2) (a), (b) and (c);
(b) ECU 600%000 in the case of supply and service contracts awarded by entities carrying out an activity defined in Article 2 (2) (d);
(c) ECU 5%000%000 in the case of works contracts.
2. For the purposes of calculating the estimated amount of a service contract, the contracting entity shall include the total remuneration of the service provider, taking account of the elements specified in paragraphs 3 to 13.
3. For the purposes of calculating the estimated contract amount of financial services, the following amounts shall be taken into account:
- as regards insurance services, the premium payable,
- as regards banking and other financial services, fees, commissions, interest and other types of remuneration,
- as regards contracts which involve design, the fee or commission payable.
4. In the case of supply contracts for lease, rental or hire-purchase, the basis for calculating the contract value shall be:
(a) in the case of fixed-term contracts, where their term is 12 months or less, the estimated total value for the contract's duration, or, where their term exceeds 12 months, the contract's total value including the estimated residual value;
(b) in the case of contracts for an indefinite period or in cases where there is doubt as to the duration of the contracts, the anticipated total instalments to be paid in the first four years.
5. In the case of service contracts which do not indicate a total cost, the basis for calculating the estimated contract value shall be:
- for fixed-term contracts, where their term is 48 months or less, the total value for their whole duration,
- for contracts without a fixed term or for a term exceeding 48 months, the monthly value multiplied by 48.
6. Where a proposed supply or service contract expressly specifies option clauses, the basis for calculating the contract value shall be the highest possible total purchase, lease, rental or hire-purchase permissible, inclusive of the option clauses.
7. In the case of a procurement of supplies or services over a given period by means of a series of contracts to be awarded to one or more suppliers or service providers or of contracts which are to be renewed, the contract value shall be calculated on the basis of:
(a) the total value of contracts with similar characteristics which were awarded over the previous financial year or 12 months, adjusted where possible for anticipated changes in quantity or value over the subsequent twelve months; or
(b) the aggregate value of contracts to be awarded during the 12 months following the first award or during the whole term of the contract, where this is longer than 12 months.
8. The basis for calculating the estimated value of a contract including both supplies and services shall be the total value of the supplies and services, regardless of their respective values. The calculation shall include the value of the siting and installation operations.
9. The basis for calculating the value of a framework agreement shall be the estimated maximum value of all the contracts envisaged for the period in question.
10. The basis for calculating the value of a works contract for the purposes of paragraph 1 shall be the total value of the work. 'Work' shall mean the result of building and civil engineering activities, taken as a whole, which are intended to fulfil an economic and technical function by themselves.
In particular, where a supply, work or service is the subject of several lots, the value of each lot shall be taken into account when assessing the value referred to in paragraph 1. Where the aggregate value of the lots equals or exceeds the value laid down in paragraph 1, that paragraph shall apply to all the lots. However, in the case of works contracts, contracting entities may derogate from paragraph 1 in respect of lots the estimated value net of VAT for which is less than ECU 1 million, provided that the aggregate value of those lots does not exceed 20% of the overall value of the lots.
11. For the purposes of paragraph 1, contracting entities shall include in the estimated value of a works contract the value of any supplies or services necessary for the execution of the contracts which they make available to the contractor.
12. The value of supplies or services which are not necessary for the execution of a particular works contract may not be added to that of the works contract with the result of avoiding application of this Directive to the procurement of those supplies or services.
13. Contracting entities may not circumvent this Directive by splitting contracts or using special methods of calculating the value of contracts.

TITLE II
Two-tier application
 
Article 15
Supply and works contracts and contracts which have as their object services listed in Annex XVI A shall be awarded in accordance with the provisions of Titles III, IV and V.

Article 16
Contracts which have as their object services listed in Annex XVI B shall be awarded in accordance with Articles 18 and 24.

Article 17
Contracts which have as their object services listed in both Annexes XVI A and XVI B shall be awarded in accordance with the provisions of Titles III, IV and V where the value of the services listed in Annex XVI A is greater than the value of the services listed in Annex XVI B. Where this is not the case, they shall be awarded in accordance with Articles 18 and 24.

TITLE III
Technical specifications and standards
 
Article 18
1. Contracting entities shall include the technical specifications in the general documents or the contract documents relating to each contract.
2. The technical specifications shall be defined by reference to European specifications, where these exist.
3. In the absence of European specifications, the technical specifications should as far as possible be defined by reference to other standards having currency within the Community.
4. Contracting entities shall define such further requirements as are necessary to complete European specifications or other standards. In so doing, they shall prefer specifications which indicate performance requirements rather than design or description characteristics, unless the contracting entity has objective reasons for considering that such specifications are inadequate for the purposes of the contract.
5. Technical specifications which mention goods of a specific make or source or of a particular process, and which have the effect of favouring or eliminating certain undertakings, shall not be used unless such specifications are indispensable for the subject of the contract. In particular, the indication of trade marks, patents, types, of specific origin or production shall be prohibited; however, such an indication accompanied by the works 'or equivalent' shall be authorized where the subject of the contract cannot otherwise be described by specifications which are sufficiently precise and fully intelligible to all concerned.
6. Contracting entities may derogate from paragraph 2 if:
(a) it is technically impossible to establish satisfactorily that a product conforms to the European specifications;
(b) the application of paragraph 2 would prejudice the application of Council Directive 86/361/EEC of 24 July 1986 on the initial stage of the mutual recognition of type approval for telecommunications terminal equipment (1), or of Council Decision 87/95/EEC of 22 December 1986 on standardization in the field of information technology and telecommunications (2);
(c) in the context of adapting existing practice to take account of European specifications, use of those specifications would oblige the contracting entity to acquire supplies incompatible with equipment already in use or would entail disproportionate cost or disproportionate technical difficulty. Contracting entities which have recourse to this derogation shall do so only as part of clearly-defined and recorded strategy with a view to a changeover to European specifications;
(d) the relevant European specification is inappropriate for the particular application or does not take account of technical developments which have come about since its adoption. Contracting entities which have recourse to this derogation shall inform the appropriate standardizing organization, or any other body empowered to review the European specification, of the reasons why they consider the European specification to be inappropriate and shall request its revision;
(e) the project is of a genuinely innovative nature for which use of European specifications would not be appropriate.
7. Notices published pursuant to Article 21 (1) (a) or Article 21 (2) (a) shall indicate any recourse to the derogations referred to in paragraph 6.
8. This Article shall be without prejudice to compulsory technical rules in so far as these are compatible with Community law.

Article 19
1. Contracting entities shall make available on request to suppliers, contractors or service providers interested in obtaining a contract the technical specifications regularly referred to in their supply, works or service contracts or the technical specifications which they intend to apply to contracts covered by periodic information notices within the meaning of Article 22.
2. Where such technical specifications are based on documents available to interested suppliers, contractors or service providers, a reference to those documents shall be sufficient.
(1) OJ No L 217, 5. 8. 1986, p. 21.
(2) OJ No L 36, 7. 2. 1987, p. 31.

TITLE IV
Procedures for the award of contracts
 
Article 20
1. Contracting entities may choose any of the procedures described in Article 1 (7), provided that, subject to paragraph 2, a call for competition has been made in accordance with Article 21.
2. Contracting entities may use a procedure without prior call for competition in the following cases:
(a) in the absence of tenders or suitable tenders in response to a procedure with a prior call for competition, provided that the original contract conditions have not been substantially changed;
(b) where a contract is purely for the purpose of research, experiment, study or development and not for the purpose of ensuring profit or of recovering research and development costs and in so far as the award of such contract does not prejudice the competitive award of subsequent contracts which have in particular these purposes;
(c) when, for technical or artistic reasons or for reasons connected with protection of exclusive rights, the contract may be executed only by a particular supplier, contractor or service provider;
(d) in so far as is strictly necessary when, for reasons of extreme urgency brought about by events unforeseeable by the contracting entities, the time limits laid down for open and restricted procedures cannot be adhered to;
(e) in the case of supply contracts for additional deliveries by the original supplier which are intended either as a partial replacement of normal supplies or installations or as the extension of existing supplies or installations, where a change of supplier would oblige the contracting entity to acquire material having different technical characteristics which would result in incompatibility or disproportionate technical difficulties in operation and maintenance;
(f) for additional works or services not included in the project initially awarded or in the contract first concluded but which have, through unforeseen circumstances, become necessary for the execution of the contract, on condition that the award is made to the contractor or service provider executing the original contract:
- when such additional works or services cannot be technically or economically separated from the main contract without great inconvenience to the contracting entities,
- or when such additional works or services, although separable from the execution of the original contract, are strictly necessary to its later stages;
(g) in the case of works contracts, for new works consisting of the repetition of similar works entrusted to the contractor to which the same contracting entities awarded an earlier contract, provided that such works conform to a basic project for which a first contract was awarded after a call for competition. As soon as the first project is put up for tender, notice must be given that this procedure might be adopted and the total estimated cost of subsequent works shall be taken into consideration by the contracting entities when they apply the provisions of Article 14;
(h) for supplies quoted and purchased on a commodity market;
(i) for contracts to be awarded on the basis of a framework agreement, provided that the condition referred to in Article 5 (2) is fulfilled;
(j) for bargain purchases, where it is possible to procure supplies taking advantage of a particularly advantageous opportunity available for a very short space of time at a price considerably lower than normal market prices;
(k) for purchases of goods under particularly advantageous conditions from either a supplier definitively winding up his business activities or the receivers or liquidators of a bankruptcy, an arrangement with creditors or a similar procedure under national laws or regulations;
(l) when the service contract concerned is part of the follow-up a design contest organized in conformity with the provisions of this Directive and must, in accordance with the relevant rules, be awarded to the winner or to one of the winners of that contest. In the latter case, all the winners must be invited to participate in the negotiations.

Article 21
1. In the case of supplies, works or service contracts, the call for competition may be made:
(a) by means of a notice drawn up in accordance with Annex XII A, B or C; or
(b) by means of a periodic indicative notice drawn up in accordance with Annex XIV; or
(c) by means of a notice on the existence of a qualification system drawn up in accordance with Annex XIII.
2. When a call for competition is made by means of a periodic indicative notice:
(a) the notice must refer specifically to the supplies, works or services which will be the subject of the contract to be awarded;
(b) the notice must indicate that the contract will be awarded by restricted or negotiated procedure without further publication of a notice of a call for competition and invite interested undertakings to express their interest in writing;
(c) contracting entities shall subsequently invite all candidates to confirm their interest on the basis of detailed information on the contract concerned before beginning the selection of tenderers or participants in negotiations.
2. When a call for competition is made by means of a notice on the existence of a qualification system, tenderers in a restricted procedure or participants in a negotiated prcedure shall be selected from the qualified candidates in accordance with such a system.
4. In the case of design contests, the call for competition shall be made by means of a notice drawn up in accordance with Annex XVII.
5. The notices referred to in this Article shall be published in the Official Journal of the European Communities.

Article 22
1. Contracting entities shall make known, at least once a year, by means of a periodic indicative notice:
(a) in the case of supply contracts, the total of the contracts for each product area of which the estimated value, taking into account the provisions of Article 14, is equal to or greater than ECU 750%000, and which they intend to award over the following twelve months;
(b) in the case of works contracts, the essential characteristics of the works contracts which the contracting entities intend to award, the estimated value of which is not less than the threshold laid down in Article 14 (1).
(c) in the case of service contracts, the estimated total value of the service contracts in each of the categories of services listed in Annex XVI A which they intend to award over the following 12 months, where such estimated total value, taking into account the provisions of Article 14, is equal to or greater than ECU 750%000.
2. The notice shall be drawn up in accordance with Annex XIV and published in the Official Journal of the European Communities.
3. Where the notice is used as a means of calling for competition in accordance with Article 21 (1) (b), it must have been published not more than 12 months prior to the date on which the invitation referred to in Article 21 (2) (c) is sent. Moreover, the contracting entity shall meet the deadlines laid down in Article 26 (2).
4. Contracting entities may, in particular, publish periodic indicative notices relating to major projects without repeating information previously included in a periodic indicative notice, provided that it is clearly stated that such notices are additional notices.

Article 23
1. This Article shall apply to design contests organized as part of a procedure leading to the award of a service contract the estimated value net of VAT for which is not less than the value referred to in Article 14 (1).
2. This Article shall apply to all design contests where the total amount of contest prizes and payments to participants is not less than ECU 400%000 for design contests organized by entities exercising an activity referred to in Article 2 (2) (a), (b) and (c) and ECU 600%000 for design contests organized by entities exercising an activity referred to in Article 2 (2) (d).
3. The rules for the organization of a design contest shall be in conformity with the requirements of this Article and shall be communicated to those interested in participating in the contest.
4. The admission of participants to design contests shall not be limited:
- by reference to the territory or part of the territory of a Member State,
- on the grounds that, under the law of the Member State in which the contest is organized, they would have been required to be either natural or legal persons.
5. Where design contests are restricted to a limited number of participants, the contracting authorities shall lay down clear and non-discriminatory selection criteria. In any event, the number of candidates invited to participate shall be sufficient to ensure genuine competition.
6. The jury shall be composed exclusively of natural persons who are independent of participants in the contest. Where a particular professional qualification is required from participants in a contest, at least a third of its members must have the same qualification or its equivalent.
The jury shall be autonomous in its decisions or opinions. These shall be reached on the basis of projects submitted anonymously and solely on the grounds of the criteria indicated in the notice provided for in Annex XVII.

Article 24
1. Contracting entities which have awarded a contract or organized a design contest shall communicate to the Commission, within two months of the award of the contract and under conditions to be laid down by the Commission in accordance with the procedure laid down in Article 40, the results of the awarding procedure by means of a notice drawn up in accordance with Annex XV or Annex XVIII.
2. Information provided under Section I of Annex XV or under Annex XVIII shall be published in the Official Journal of the European Communities. In this connection the Commission shall respect any sensitive commercial aspects which the contracting entities may point out when forwarding this information in connection with points 6 and 9 of Annex XV.
3. Contracting entities awarding service contracts within category No 8 of Annex XVI A to which Article 20 (2) (b) applies need mention, concerning point 3 of Annex XV, only the main title thereof within the meaning of the classification of Annex XVI. Contracting entities awarding service contracts within category No 8 of Annex XVI A to which Article 20 (2) (b) does not apply may, on the grounds of commercial confidentiality, limit the information provided for in point 3 of Annex XV. However, they must ensure that any information published under this point is no less detailed than that contained in the notice of the call for competition published in accordance with Article 20 (1) or, where a qualification system is used, no less detailed than the category referred to in Article 30 (7). In the case listed in Annex XVI B, the contracting entites shall indicate in the notice whether they agree on its publication.
4. Information provided under Section II of Annex XV must not be published, except in aggregated form, for statistical purposes.

Article 25
1. The contracting entities must be able to supply proof of the date of dispatch of the notices referred to in Articles 20 to 24.
2. The notices shall be published in full in their original language in the Official Journal of the European Communities and in the TED data bank. A summary of the important elements of each notice shall be published in the other official languages of the Community, the original text alone being authentic.
3. The Office for Official Publications of the European Communities shall publish the notices not later than 12 days after their dispatch. In exceptional cases it shall endeavour to publish the notice referred to in Article 21 (1) (a) within five days in response to a request by the contracting entity and provided that the notice has been sent to the Office by electronic mail, telex or telefax. Each edition of the Official Journal of the European Communities which contains one or more notices shall reproduce the model notice or notices on which the published notice or notices is/are based.
4. The cost of publication of the notices in the Official Journal of the European Communities shall be borne by the Communities.
5. Contracts or design contests in respect of which a notice is published in the Official Journal of the European Communities pursuant to Article 21 (1) or (4) shall not be published in any other way before that notice has been dispatched to the Office for Official Publications of the European Communities. Such publication shall not contain information other than that published in the Official Journal of the European Communities.

Article 26
1. In open procedures the time limit for the receipt of tenders shall be fixed by contracting entities at not less than 52 days from the date of dispatch of the notice. This time limit may be shortened to 36 days where contracting entities have published a notice in accordance with Article 22 (1).
2. In restricted procedures and in negotiated procedures with a prior call for competition, the following arrangements shall apply:
(a) the time limit for receipt of requests to participate, in response to a notice published in accordance with Article 21 (1) (a) or in response to an invitation from a contracting entity in accordance with Artice 21 (2) (c), shall, as a general rule, be at least five weeks from the date of dispatch of the notice or invitation and shall in any case not be less than the time limit for publication laid down in Article 25 (3), plus 10 days;
(b) the time limit for receipt of tenders may be fixed by mutual agreement between the contracting entity and the selected candidates, provided that all tenderers are given equal time to prepare and submit tenders;
(c) where it is not possible to reach agreement on the time limit for the receipt of tenders, the contracting entity shall fix a time limit which shall, as a general rule, be at least three weeks and shall in any case not be less than 10 days from the date of the invitation to tender; the time allowed shall be sufficiently long to take account in particular of the factors mentioned in Article 28 (3).

Article 27
In the contract documents, the contracting entity may ask the tenderer to indicate in his tender any share of the contract which he may intend to subcontract to third parties.
This indication shall be without prejudice to the question of the principal contractor's responsibility.

Article 28
1. Provided that they have been requested in good time, the contract documents and supporting documents must be sent to the suppliers, contractors or service providers by the contracting entities as a general rule within six days of receipt of the application.
2. Provided that it has been requested in good time, additional information relating to the contract documents shall be supplied by the contracting entities not later than six days before the final date fixed for receipt of tenders.
3. Where tenders require the examination of voluminous documentation such as lengthy technical specifications, a visit to the site or an on-the-spot inspection of the documents supporting the contract documents, this shall be taken into account when the appropriate time limits are fixed.
4. Contracting entities shall invite the selected candidates simultaneously and in writing. The letter of invitation shall be accompanied by the contract documents and supporting documents. It shall include at least the following information:
(a) the address from which any additional documents can be requested, the final date for such requests and the amount and methods of payment of any sum to be paid for such documents;
(b) the final date for receipt of tenders, the address to which they must be sent and the language or languages in which they must be drawn up;
(c) a reference to any tender notice published;
(d) an indication of any document to be annexed;
(e) the criteria for the award of the contract if these are not given in the notice;
(f) any other special condition for participation in the contract.
5. Requests for participation in contracts and invitations to tender must be made by the most rapid means of communication possible. When requests to participate are made by telegram, telex, telephone or any electronic means, they must be confirmed by letter dispatched before the expiry of the time limit referred to in Article 26 (1) or of the time limit set by contracting entities pursuant to Article 26 (2).

Article 29
1. The contracting entity may state in the contract documents, or be obliged by a Member State so to do, the authority or authorities from which a tenderer may obtain the appropriate information on the obligations relating to the employment protection provisions and the working conditions which are in force in the Member State, region or locality in which the works or services are to be executed or performed and which shall be applicable to the works carried out or the services performed on site during the performance of the contract.
2. A contracting entity which supplies the information referred to in paragraph 1 shall request the tenderers or those participating in the contract procedure to indicate that they have taken account, when drawing up their tender, of the obligations relating to employment protection provisions and the working conditions which are in force in the place where the work or the service is to be carried out or performed. This shall be without prejudice to the application of Article 34 (5) concerning the examination of abnormally low tenders.

TITLE V
Qualification, selection and award
 
Article 30
1. Contracting entities which so wish may establish and operate a system of qualification of suppliers, contractors or service providers.
2. The system, which may involve different qualification stages, shall operate on the basis of objective criteria and rules to be established by the contracting entity. The contracting entity shall use European standards as a reference where they are appropriate. The criteria and rules may be updated as required.
3. The criteria and rules for qualification shall be made available on request to interested suppliers, contractors or service providers. The updating of these criteria and rules shall be communicated to the interested suppliers, contractors and service providers. Where a contracting entity considers that the qualification system of certain third entities or bodies meets its requirements, it shall communicate to interested suppliers, contractors and service providers the names of such third entities or bodies.
4. Contracting entities shall inform applicants of their decision as to qualification within a reasonable period. If the decision will take longer than six months from the presentation of an application, the contracting entity shall inform the applicant, within two months of the application, of the reasons justifying a longer period and of the date by which its application will be accepted or refused.
5. In reaching their decision as to qualification or when the criteria and rules are being updated, contracting entities may not:
- impose conditions of an administrative, technical or financial nature on some suppliers, contractors or service providers which are not imposed on others,
- require tests or proof which duplicate objective evidence already available.
6. Applicants whose qualification is refused shall be informed of this decision and the reasons for refusal. The reasons must be based on the criteria for qualification referred to in paragraph 2.
7. A written record of qualified suppliers, contractors or service providers shall be kept and it may be divided into categories, according to the type of contract for which the qualification is valid.
8. Contracting entities may bring the qualification of a supplier, contractor or service provider to an end only for reasons based on the criteria referred to in paragraph 2. The intention to bring qualification to an end must be notified in writing to the supplier, contractor or service provider beforehand, together with the reason or reasons justifying the proposed action.
9. The qualification system shall be the subject of a notice drawn up in accordance with Annex XIII and published in the Official Journal of the European Communities, indicating the purpose of the qualification system and the availability of the rules concerning its operation. Where the system is of a duration greater than three years, the notice shall be published annually. Where the system is of a shorter duration, an initial notice shall suffice.

Article 31
1. Contracting entities which select candidates to tender in restricted procedures or to participate in negotiated procedures shall do so according to objective criteria and rules which they lay down and which they shall make available to interested suppliers, contractors or service providers.
2. The criteria used may include the criteria for exclusion specified in Article 23 of Directive 71/305/EEC and in Article 20 of Directive 77/62/EEC.
3. The criteria may be based on the objective need of the contracting entity to reduce the number of candidates to a level which is justified by the need to balance the particular characteristics of the contract award procedure and the resources required to complete it. The number of candidates selected must, however, take account of the need to ensure adequate competition.

Article 32
Should contracting entities require the production of certificates drawn up by independent bodies for attesting conformity of the service provider to certain quality assurance standards, they shall refer to quality assurance systems based on the relevant EN 29%000 European standards series certified by bodies conforming to the EN 45%000 European standards series.
Entities shall recognize equivalent certificates from bodies established in other Member States. They shall also accept other evidence of equivalent quality assurance measures from service providers who have no access to such certificates or no possibility of obtaining them within the relevant time limits.

Article 33
1. Groupings of suppliers, contractors or service providers shall be permitted to tender or negotiate. The conversion of such groupings into a specific legal form shall not be required in order to submit a tender or to negotiate, but the grouping selected may be required so to convert itself once it has been awarded the contract where such conversion is necessary for the proper performance of the contract.
2. Candidates or tenderers who, under the law of the Member State in which they are established, are entitled to carry out the relevant service activity shall not be rejected on the sole ground that under the law of the Member State in which the contract is awarded they would have been required to be either a natural or a legal person.
3. However, legal persons may be required to indicate, in the tender or the request for participation, the names and relevant professional qualifications of the staff to be responsible for the performance of the service.

Article 34
1. Without prejudice to national laws, regulations or administrative provisions on the remuneration of certain services, the criteria on which the contracting entities shall base the award of contracts shall be:
(a) the most economically advantageous tender, involving various criteria depending on the contract in question, such as: delivery or completion date, running costs, cost-effectiveness, quality, aesthetic and functional characteristics, technical merit, after-sales service and technical assistance, commitments with regard to spare parts, security of supplies and price; or
(b) the lowest price only.
2. In the case referred to in paragraph 1 (a), contracting entities shall state in the contract documents or in the tender notice all the criteria which they intend to apply to the award, where possible in descending order of importance.
3. Where the criterion for the award of the contract is that of the most economically advantageous tender, contracting entities may take account of variants which are submitted by a tenderer and meet the minimum specifications required by the contracting entities. Contracting entities shall state in the contract documents the minimum specifications to be respected by the variants and specific requirements for their presentation. Where variants are not permitted, they shall so indicate in the contract documents.
4. Contracting entities may not reject the presentation of a variant on the sole ground that it was drawn up on the basis of technical specifications defined with reference to European specifications or to national technical specifications recognized as complying with the essential requirements within the meaning of Directive 89/106/EEC.
5. If, for a given contract, tenders appear abnormally low in relation to the provision of services, the contracting entity shall, before it may reject those tenders, request in writing details of the constituent elements of the tender which it considers relevant and shall verify those constituent elements taking account of the explanations received. It may set a reasonable period within which to reply.
The contracting entity may take into consideration explanations which are justified on objective grounds relating to the economy of the construction or production method, or the technical solutions chosen, or the exceptionally favourable conditions available to the tenderer for the execution of the contract, or the originality of the product or the work proposed by the tenderer.
Contracting entities may reject tenders which are abnormally low owing to the receipt of State aid only if they have consulted the tenderer and if the tenderer has been unable to show that the aid in question has been notified to the Commission pursuant to Article 93 (3) of the EEC Treaty or has received the Commission's approval. Contracting entities which reject a tender under these circumstances shall inform the Commission thereof.

Article 35
1. Article 27 (1) shall not apply where a Member State bases the award of contracts on other criteria, within the framework of rules in force at the time of adoption of this Directive, the aim of which is to give preference to certain tenderers, provided that the rules invoked are compatible with the Treaty.
2. Without prejudice to paragraph 1, this Directive shall not prevent, until 31 December 1992, the application of national provisions in force on the award of supply or works contracts which have as their objective the reduction of regional disparities and the promotion of job creation in disadvantaged regions or those suffering from industrial decline, provided that the provisions concerned are compatible with the EEC Treaty and with the Community's international obligations.

Article 36
1. This Article shall apply to tenders comprising products originating in third countries with which the Community has not concluded, multilaterally or bilaterally, an agreement ensuring comparable and effective access for Community undertakings to the markets of those third countries. It shall be without prejudice to the obligations of the Community or its Member States in respect of third countries.
2. Any tender made for the award of a supply contract may be rejected where the proportion of the products originating in third countries, as determined in accordance with Council Regulation (EEC) No 802/68 of 27 June 1968 on the common definition of the concept of the origin of goods (1), exceeds 50% of the total value of the products constituting the tender.
For the purposes of this Article, software used in telecommunications network equipment shall be considered as products.
3. Subject to paragraph 4, where two or more tenders are equivalent in the light of the award criteria defined in Article 34, preference shall be given to the tenders which may not be rejected pursuant to paragraph 2. The prices of these tenders shall be considered equivalent for the purposes of this Article, if the price difference does not exceed 3%.
4. However, a tender shall not be preferred to another pursuant to paragraph 3 where its acceptance would oblige the contracting entity to acquire material having technical characteristics different from those of existing material, resulting in incompatibility or technical difficulties in operation and maintenance or disproportionate costs.
5. For the purpose of this Article, those t