Compliance Issues in EU Public Procurement
Prof C.H. Bovis
Technical standards Irish authorities specified a certain standard for pipelines The Neerlands Inkoopcentrum used trade marks as compulsory specifications for the purchase of meteorological equipment The “equivalent standard” doctrine C-45/87, Commission v. Ireland, [1988] ECR 4929; C-359/93, Commission v. The Netherlands, judgment
of January 24, 1995. © University of Hull
Selection and qualification Evidence of financial and economic standing may be provided by means of references including:
i) appropriate statements from bankers; ii) the presentation of the firm’s balance sheets or extracts from the balance sheets where these are published under company law provisions; and iii) a statement of the firm’s annual turnover and the turnover on construction works for the three previous financial years. C-76/81, SA Transporoute et Travaux v. Minister of Public Works, [1982] ECR 457. C-27/86, Constructions et Enter-prises Indusrtielles S.A (CEI) v. Association Intercommunale pour les Autoroutes des Ardennes; case C-28/86, Ing.A. Bellini & Co. S.p.A. v. Regie de Betiments; case C-29/86, Ing.A. Bellini & Co. S.p.A. v. Belgian State, [1987] ECR 3347. © University of Hull
Group or subsidiary participation in public procurement A holding company which does not itself carry out works may be registered on an official list of approved contractors and participate in public procurement procedures, if it shows that it actually has available to it the resources of its subsidiaries necessary to carry out the contract. C-89/92, Ballast Nedam Groep NV v. Belgische
Staat, [1994] 2 CMLR. C-5/97, Ballast Nedam Groep NV v. Belgische Staat, judgment of 18 December 1997. © University of Hull
References as a selection criterion Any references obtained by a contracting authority in relation to products or services offered by tenderers to other customers should not be used as an award criterion, as they are irrelevant to the economic or qualitative evaluation of the tenders. Such references may only serve as a criterion for establishing suitability of tenderers for carrying out the contract, a process which must be distinct from the award procedures. case C-315/01, (GAT) and Österreichische Autobahnen und
Schnellstraßen AG (ÖSAG), ECR [2003] I-6351. case 31/87, Gebroeders Beentjes B.V. v. State of Netherlands [1988] ECR 4635 Note: Simultaneous application of selection of tenders and award procedures is not precluded, on condition that the two are governed by different rules; case C-71/92, Commission v. Spain, judgment of 30 June 1993; case C-28/86 Bellini, [1987] ECR 3347. © University of Hull
Location of contractors as selection criterion
The location of contractors can only play a role in the selection and qualification stage and not in the award stage of public contracts. Two reasons:
First, any physical inspection requirements for products or services or any site visits fall under technical capacity and suitability of tenderers, and as such can only be used as selection criteria. Secondly, the proximity of contractors’ premises to the premises of the contracting authority cannot be a factor in deciding the award criteria, even if the award is made to the most economically advantageous offer, since it cannot identify qualitative or economic factors.
Note: Lower transport or delivery costs, as a result of the proximity of tenderers to the contracting authority or the locus of the contract itself, could only influence the evaluation of their technical capacity and suitability.
case C-315/01, GAT and Österreichische Autobahnen und Schnellstraßen AG (ÖSAG), ECR [2003] I-6351. © University of Hull
Market testing and selection of undertakings that assist in the preparation of public contracts Participation in the preparatory stages of a public
contract should not preclude an undertaking from submitting a tender for that public contract, where that undertaking has not been given an opportunity to prove that his previous involvement with the preparation of the contract has not distorted competition amongst the tenderers. joined cases C-21/03 and C-34/03, Fabricom SA v État Belge,
judgment of 3 March 2005. joined cases C-285/99 and C-286/99 Lombardini and Mantovani [2001] ECR I-9233. case C-324/98 Telaustria and Telefonadress, [2000] ECR I-10745.
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Reliance of tenderers on other sources, subcontracting and substitution of consortia members A tenderer or a candidate which, with a view to being admitted
to participate in tendering procedures, intends to rely on the resources of entities or undertakings with which it is directly or indirectly linked, must demonstrate the availability of those resources which are necessary for the performance of the contract. case C-126/03, Commission v Germany, [2004] ECR I-11197. case C-176/98 Holst Italia [1999] ECR I-8607, paragraph 29. case C-399/98 Ordine degli Architetti and Others [2001] ECR I-
5409, paragraph 92; and case C-314/01 Siemens and ARGE Telekom & Partner [2004] ECR I-2549, paragraph 44.
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A provision in an invitation to tender which
prohibits recourse to subcontracting for material parts of the contract is contrary to the public procurement Directives. case C-176/98 Holst Italia, [1999] ECR-I-
8607.
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Disqualification of a successful consortium
which had been awarded a public contract on the grounds of changing its composition by means of substitution amongst its members C-57/01 Makedoniko Metro and Mikhaniki
[2003] ECR I-1091
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Award procedures Negotiated procedures without prior publicity
Use of negotiated procedure for technical reasons or exclusive rights Extreme urgency as a reason for negotiated procedure Repetition of similar works within three years
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The exceptional nature of negotiated procedures without prior advertisement
In cases C-199/85, Commission v. Italy, [1987] ECR 1039 and C-3/88, Commission v. Italy, [1989] ECR 4035, the Court rejected the existence of exclusive rights and regarded the abuse of this provision as contrary to the right of establishment and freedom to provide services which are based on the principle of equal treatment and prohibit not only overt discrimination on grounds of nationality, but also all covert forms of discrimination, which, by the application of other criteria of differentiation, lead to the same result.
In case 199/85, Commission v Italy, op.cit, the Court elucidated that exclusive rights might include contractual arrangements such as knowhow and intellectual prop-erty rights.
For urgency reasons brought by unforeseen events to contracting authorities the Court established two tests: i) the need of a justification test based on the proportionality principle, and ii) the existence of a causal link between the alleged urgency and the unforeseen events (see C-199/85, Commission v Italy; C-3/88, Commission v Italy; C-24/91, Commission v Spain, [1994] CMLR 621; C-107/92, Commission v Italy, judgment of August 2, 1993; C-57/94, Commission v Italy, judgment of May 18, 1995; C296/92, Commission v Italy, judgment of January 12, 1994). © University of Hull
The restrictive interpretation of the grounds for using negotiated procedures with prior advertisement.
The grounds for using this procedure are confined to: i) the nature of the works or services or risks
attached thereto do not permit overall pricing and ii) the nature of the services is such that specifications cannot be established with sufficient precision. © University of Hull
Award Criteria Publicity of weighting of criteria Variants Criteria related to the subject matter of the
contract
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Award criteria Inherent flexibility
MEAT (most economically advantageous tender)
Opens the door for policy pursuits
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Contracting Authorities Private law entities as contracting authorities Private entities for industrial and commercial
development as contracting authorities Entities meeting needs of general interest retrospectively Semi-public undertakings as contracting authorities State commercial companies as contracting authorities © University of Hull
Public Procurement and public services Contracting authorities Bodies governed by public law
bodies governed by public law i) must be established for the specific purpose of meeting needs in the general public interest not having an industrial or commercial character; ii) they must have legal personality; and iii) they must be financed, for the most part, by either the state, or re-gional or local authorities, or other bodies governed by public law; or subject to management supervision by these bodies, or having an administrative or supervisory board, more than half of whose members are appointed by the state, regional or local authorities or by other bodies governed by public law. © University of Hull
General public interest needs requirements of a community (local or
national) in its entirety, which should not overlap with the specific or exclusive interest of a clearly determined person or group of persons C-179/90, Merci Convenzionali Porto di
Gevova, [1991] ECR 1-5889
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The industrial or commercial character intention to achieve profitability pursuit of objectives through commercially
motivated decisions
C-360/96, Gemeente Arnhem Gemeente Rheden v. BFI Holding BV C-223/99, Agora Srl v Ente Autonomo Fiera Internazionale di Milano
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Acid test: the state or other contracting
authorities choose themselves to meet these needs or to have a decisive influence over their provision
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Public Contracts The notion of public concessions the right to economically exploit the concession, although this right may be accompanied by a requirement to pay some consideration to the grantor Risk transfer case C-360/96, Arnhem and Rheden, [1998] ECR I-
6821 Vertical procurement (subcontracting) C-31/87 Beentjes [1988] ECR 4635, paragraph 11; C-360/96 BFI Holding [1998] ECR I-6821, paragraph 62. © University of Hull
