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Public procurement – Commission acts to enforce EU law in Italy, the Netherlands, Spain, Finland and Denmark

Commission Européenne - IP/04/951   19/07/2004

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IP/04/951

Brussels, 19th July 2004

Public procurement – Commission acts to enforce EU law in Italy, the Netherlands, Spain, Finland and Denmark

The European Commission has decided to bring Italy before the European Court of Justice over certain provisions of its national legislation governing public work contracts. The Netherlands will be brought before the Court over contracts for the renovation of the city centre of Hoogezand-Sappemeer. The Commission has also formally asked Italy to rectify breaches of European law in the award of contracts for waste management in Sicily and has asked Spain, the Netherlands and Finland to introduce effective procedures to allow tenderers to challenge the decisions of awarding authorities before it is too late to change such decisions, in line with the Public Procurement Remedies Directive. Denmark has been requested to rectify ministerial guidelines which wrongly interpret Directive 92/50/EEC on the procurement of services as not requiring competition where contracts for accounting and auditing services in connection with trials for financial crimes are concerned. The Commission's requests take the form of reasoned opinions, the second stage of the infringement procedure under Article 226 of the EC Treaty. In the absence of a satisfactory response to a reasoned opinion, the Commission may refer the Member State concerned to the European Court of Justice.

EU public procurement law aims to ensure that all European companies have a fair chance to bid for public contracts. Open and transparent tendering procedures mean more competition, stronger safeguards against corruption, better service and value for money for taxpayers and, ultimately, a more competitive Europe. EU public procurement markets are worth over €1 500 billion, over 16% of total EU GDP.

The existing EU public procurement Directives have increased cross-border competition in procurement markets and reduced by around 30% the prices paid by public authorities for goods and services, according to a European Commission working document (see IP/04/149). The European Parliament and Council of Ministers adopted in February a new legislative package modernising and simplifying procurement procedures which should further boost cross-border competition (see IP/04/150).

Italy – framework law on public works

The Commission has decided to bring Italy before the European Court of Justice over certain provisions of its framework law on public works, No 109/94, as last amended by Law No. 166/2002. A reasoned opinion was sent to the Italian authorities in October 2003 (see IP/03/1415).

The procedure is designed to bring about legislative amendments which will bring this framework law into line with the Directives on public contracts and therefore more fully to open those contracts to intra-Community competition. In particular, the Commission's action is designed:

  • to avoid situations where national rules on the scope of the Directive on public works contracts which are not in conformity with Community law result in non-publication at Community level of public contracts which should be published in accordance with the "supplies" and "services" Directives, whose application thresholds are much lower than that laid down in the "works" Directive";
  • to ensure that the rules of competition of Community Directives on public contracts are applied in all cases or, where they are not applicable, to ensure that the obligation to issue notification of the contract is applied in accordance with the general principle of transparency. This applies, for example, to work performed by way of payment in kind for planning permission and engineering, architectural and project assessment services falling below the thresholds of the Community Directives, and to management services and technical inspection services ("collaudo");
  • to avoid situations where national rules such as that on the right of pre-emption ("prelazione") of the promoter within the framework of project-financing procedures constitute discrimination against non-nationals who bid for public contracts.

The Netherlands – renovation of Hoogezand-Sappemeer

The Commission has decided to refer the Netherlands to the Court of Justice concerning works contracts relating to the renovation of the city centre of Hoogezand-Sappemeer. The Commission sent a reasoned opinion, to which the Dutch authorities did not reply satisfactorily, in December 2003 (see IP/03/1763). The municipality of Hoogezand-Sappemeer signed an agreement giving a particular company the exclusive right to carry out several types of work and then awarded it several contracts without competition. The Commission considers that such direct awards constitute a violation of EU public procurement law, even in cases where the value of the contract does not reach the threshold for the application of the Public Works Directive 93/37/EEC (€5 million). Even if that threshold is not reached, the principles of the EC Treaty require an adequate degree of advertising to enable different businesses to compete.

Italy – waste management in Sicily

The Commission has decided to send a reasoned opinion to Italy concerning the way in which the competent Italian authorities have chosen operators to handle the processing of urban waste produced over the entire territory of Sicily over a period of 20 years. The President of the Region of Sicily, in his capacity as Government Commissioner, launched an invitation to tender in 2002 to select the operators in question, but did not comply with the advertising requirements laid down concerning the award of public services contracts by Directive 92/50/CEE, which is applicable in this particular case. Even though the awarding authority published a notice in the Official Journal of the European Union, that notice did not contain the information which is required under the Community Directives with a view to enabling economic operators who could be interested to take part in the invitation to tender.

Spain, the Netherlands and Finland - review procedures for tenderers

The Commission has sent reasoned opinions to Spain, the Netherlands and Finland requesting them to comply with the obligations of the "Remedies" Directive 89/665/EEC on public procurement. In its “Alcatel” judgment (Case C-81/98), the European Court of Justice stipulated that Member States were required to set up review procedures permitting a decision awarding a public procurement contract to be suspended and annulled at a stage where the infringement can still be rectified. This should allow an aggrieved tenderer to have a contracting authority’s decision suspended by way of interim measures and set aside, notwithstanding the possibility once the contract has been concluded of obtaining an award of damages. In the Commission’s view, neither Spanish, Dutch nor Finnish legislation currently complies with these requirements. In the Netherlands and Finland the law does not require a clear separation between the decision awarding a public contract and the conclusion of the contract. In Spain, despite separation, there is no mandatory standstill period between the award and the conclusion of the contract. In all three cases, there is consequently no guarantee of a sufficient interval between the award decision and the conclusion of the contract to allow a decision to be rectified in time.

Denmark - accounting services

Denmark has issued ministerial guidelines which interpret the Directive on the procurement of services (92/50/EEC) as providing a complete exemption from requirements to put services out to tender, where contracts for accounting and auditing services linked to criminal trials on financial matters are concerned. The Commission considers that the ministerial guidelines are disproportionate in the sense that less restrictive measures could be applied on a case by case basis to ensure the necessary level of confidentiality and secrecy without exempting such services completely from the scope of the Directive. The Commission therefore considers the Danish guidelines not to be in accordance with current EU law and has sent a reasoned opinion asking the Danish Government to amend its guidelines in this respect.

The latest information on infringement procedures against any Member State can be found at:

http://ec.europa.eu/secretariat_general/sgb/droit_com/index_en.htm


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