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Public procurement: Commission takes action against Spain (school bus services) and Hungary (reform of national law, office equipment contracts)

European Commission - IP/10/306   18/03/2010

Other available languages: FR ES HU

IP/10/306

Brussels, 18 March 2010

Public procurement: Commission takes action against Spain (school bus services) and Hungary (reform of national law, office equipment 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 Spain and Hungary. Spain will receive a formal request in relation to the award by the Castilla la Mancha region of a series of contracts for the provision of school bus services. Hungary will receive two formal requests to ensure that certain provisions of its national public procurement legislation and the award procedure for a contract for office equipment are in line with EU rules. These three formal requests to Spain and Hungary take the form of 'reasoned opinions', the second stage of the infringement procedure under Article 258 of the EU Treaty. If there is no satisfactory reply within two months, the Commission may refer the matters to the Court of Justice.

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 law mean more competition, stronger safeguards against corruption, and better service and value for money for taxpayers.

Spain – procurement of school bus services by the region of Castilla-La Mancha

In 2008 the Spanish autonomous community of Castilla–La Mancha awarded a number of contracts for the provision of school bus services in a way that was not compatible with EU public procurement rules. Firstly, the contracts were not published in the EU Official Journal – meaning that bus service providers from all over the EU may have been denied the opportunity to bid. Secondly, the deadline for submission of tenders was only eight days – whereas under EU rules the required period is ordinarily 52 days and under no circumstances should be less than 15 days when the contracting authority has decided to use a procedure open to all potential bidders. Also, bidders providing a quality certificate issued by the ISO (International Standards Organisation) were given preference over bidders wanting to prove equivalent quality assurance through other documents (namely, the General Quality Plan of their company). Finally, Spain has given preference to certain providers of regular bus services, against the principle of equal treatment.

Taken together, these breaches of EU public procurement rules mean that the bidder offering the best value for money is potentially being denied access to these contracts. For this reason, the Commission has decided to send Spain a reasoned opinion.

Hungary – reform of national law; contract for office equipment

The Commission will send two reasoned opinions to Hungary on the following issues:

Under the reformed Hungarian Public Procurement Act, a new provision was introduced stating that, in certain cases, bidders can only rely on third parties to assist in the performance of a contract if they exercise a 'majority influence' over them. In the Commission's view, this is not compatible with EU public procurement rules, which state that bidders can rely on the resources of another party 'regardless of the legal nature of the links'. The practical effect of this provision is that certain bidders with proposals that are valid under EU rules are being denied access to Hungarian public contracts.

In 2009 the Hungarian central purchasing body (Központi Szolgáltatási Főigazgatóság) launched a 'negotiated procedure', following publication in the EU Official Journal, for the procurement of office equipment. This means that the contracting authority negotiated the terms of the contract with bidders, which reduces the transparency of the contract award procedure. The value of the contract (without VAT) was HUF 3.5 billion (approximately EUR 13 million). Under EU rules, a 'negotiated procedure' can be used only in exceptional cases, for instance when an overall price for the contract cannot be determined in advance. In the Commission's view, this is not the case for a contract relating to office equipment, and the award procedure should have followed the normal rules, which offer higher guarantees for the transparency of the contract award and the equal treatment of bidders.

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.

More information

Public procurement:

http://ec.europa.eu/internal_market/publicprocurement/index_en.htm

Latest information on infringement proceedings concerning all Member States:

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


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