Brussels, 18 March 2010
Public procurement: Commission takes action against Portugal to ensure that individuals have access to public service contracts
The European Commission has acted to ensure that EU rules on public procurement – the spending of public money by public authorities – are respected in Portugal. The Commission will refer Portugal to the Court of Justice over a national law making it very difficult for individuals, as opposed to companies, to be awarded public service contracts. If individuals are prevented from accessing these contracts, there is a risk that a particular contract will not be awarded to the bidder offering best value for money. Portugal has agreed to change its law but for the time being it remains in force.
What is the aim of EU public procurement rules?
Public procurement is about how public authorities spend public money. It covers purchases of everything from paper clips to computer systems, waste water plants, ship building or consulting services. Total public procurement in the EU is estimated at about 17% of the Union’s GDP. The open and transparent tendering procedures required under EU public procurement rules mean more competition, stronger safeguards against corruption, and better service and value for money for taxpayers.
How is Portugal not respecting these rules?
Under Portuguese law (nº 12-A/2008 of 27 February), it is very difficult for individuals to have access to certain public services contracts (known as “tarefa” and “avença”). In effect, only companies are able to apply for and be awarded these contracts. Contracts can be awarded to individuals only under exceptional circumstances and with prior approval of the Minister of Finances. Rejecting bidders purely because they are not 'legal persons' – i.e. companies – is not allowed under EU public procurement rules.
Portugal has agreed to change its law but for the time being it remains in force. For this reason the Commission has decided to refer the matter to the Court of Justice.
How are EU citizens and/or businesses suffering as a result?
The potential economic fallout of this breach of EU rules is substantial, considering the economic importance of the contracts affected and the high number of contracting authorities and economic operators involved. If individuals are prevented from accessing these contracts, there is a risk that a particular contract will not be awarded to the bidder offering best value for money.
About infringement procedures
The European Commission has powers to take legal action – known as infringement procedures – against a Member State that is not respecting its obligations under EU law. These procedures consist of three steps. The first is that the Member State receives a letter of formal notice and has two months to respond. In case the Member State does not entirely comply with EU legislation, the Commission can send a reasoned opinion. Again the Member State has two months to reply. If there is no satisfactory reply, the Commission can refer the matter to the Court of Justice in Luxembourg. It can also request that the Court impose a fine on the country concerned if it does not comply with the Court's ruling.
Latest information on infringement proceedings concerning all Member States: