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IP/06/1376

Brussels, 12 October 2006

Public procurement: Commission closes infringement cases against Austria, Czech Republic, Denmark and United Kingdom

The European Commission has decided to close a range of infringement cases on public procurement, having come to a satisfactory agreement with the Member States concerned without the need to refer the case to the European Court of Justice or to enforce a previous judgement of the Court. The cases that have now been resolved were, respectively, against the United Kingdom concerning the design and construction of the new Scottish Parliament building at Holyrood; against the Czech Republic concerning the tender procedure for an electronic toll system for motorways; against Austria concerning waste disposal services in the city of Mödling; and against Denmark concerning its implementation of the Remedies Directive in accordance with the "Alcatel" judgement of the Court of Justice.

United Kingdom – design and construction of new Scottish Parliament building

The Commission has decided to close the infringement procedure against the United Kingdom concerning the design and construction of the new Scottish Parliament building at Holyrood.

The procedure had been launched because the Commission was concerned at the way the United Kingdom authorities, through the Scottish Office, conducted a tender procedure to appoint the architect for the design of the new building. In the view of the Commission, this tender procedure violated EC rules on public procurement and notably did not respect the underlying principles of equal treatment and transparency. Therefore in March 2005 the Commission issued a letter of formal notice to the United Kingdom (see IP/05/314).

In their reply the United Kingdom authorities acknowledged that the procedure in question had not been conducted in a manner consistent with the requirements of EU procurement directive 92/50/EEC nor had the procedure been conducted in a manner which demonstrated that the Treaty principle of equal treatment had been observed.

Furthermore, in response to the Commission's intervention and in view of the findings and recommendations of Lord Fraser's Inquiry and Report, the United Kingdom authorities issued and put in place a number of measures aimed at ensuring that the difficulties and mistakes experienced in the Holyrood project would not arise in future projects. Notably, new comprehensive guidelines on construction procurement were introduced by the Scottish Executive as well as specific training programmes on the application of EU procurement rules for staff involved in public projects.

The Commission welcomes the introduction of these measures, which are aimed at improving the application of EU procurement rules in Scotland. The open and transparent tendering procedures required under EU law mean more competition and better value for money for taxpayers.

In view of the introduction of the above measures and the acknowledgements expressed by the United Kingdom authorities, the Commission has now decided to close the case.

Czech Republic – tender for electronic toll collection for motorways

The Commission has decided to close the infringement procedure against the Czech Republic concerning the tender for the delivery and operation of an electronic toll system for motorways.

The Commission received a complaint that the award criteria were more favourable to providers offering toll systems using micro-wave technology rather than satellite technology, even though the tender was officially presented as technology-neutral.

EU public procurement rules allow the contracting authority to set parameters favouring a particular technology as long as it is not a deliberate choice to prefer a particular provider. After the analysis of relevant documents, the Commission has come to the conclusion that in this respect the tender in question does not violate the relevant EU public procurement rules.

An additional allegation of the complainant was that the contracting authority acted in a discriminatory manner during the tender procedure, since it disqualified all but one preferred bidder, to whom it finally awarded the contract. Arbitrary disqualification and subsequent award to a favoured bidder would indeed represent a violation of EU public procurement rules. Nevertheless, in order to prove such a violation in the present case, an analysis of the offers concerned must be made, in order to establish whether all bidders were treated impartially and the selection criteria were applied to all bidders with the same level of strictness. The national court is best placed to demand relevant evidence and to conduct such factual and detailed analysis.

The Commission has been informed that the above point has already been taken up by a national court. The Commission will follow the ongoing national proceedings and await the court's decision.

Austria – public-private partnership in the waste disposal sector

In June 2006, the Commission decided to start proceedings to enforce a judgment of the Court of Justice against Austria concerning waste disposal services in the city of Mödling (see IP/06/886).

The Court had ruled in November 2005 that Austria violated its public procurement obligations when the city of Mödling awarded in 1999 a contract for waste disposal services running for an indefinite period of time to a newly established public-private undertaking without conducting a proper contract award procedure.

With the active involvement of the Austrian Government, it was possible to achieve a solution to this case through intensive negotiations with the concerned parties. The city of Mödling agreed with the mixed undertaking that the contract should terminate on 31 December 2007. This will open the way for a new award of the waste-disposal services through an EU-wide contract award procedure with fair and open competition. The Commission decided therefore to close the enforcement proceedings against Austria.

Denmark – implementation of Remedies Directive in accordance with Court of Justice "Alcatel" judgement

In its Alcatel judgment (Case C-81/98), the 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. Initially, the Danish legislation was not in conformity with this requirement and the Commission therefore commenced infringement proceedings against Denmark.

Following intensive and constructive negotiations in connection with the infringement proceedings, Denmark has introduced changes in its public procurement legislation to ensure that a reasonable period of time elapses between unsuccessful tenderers being notified of the decision to award a contract and the signing of the contract. The Commission is satisfied with the legislation which ensures that public contracts can be challenged before they enter into force.
The latest information on infringement proceedings concerning all Member States is available at:

http://ec.europa.eu/community_law/eulaw/index_en.htm


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