Press Review

Rapid IP European Commission Press release, Brussels September 9 1999 (IP/99/664)

Public procurement: Commission sends reasoned opinions to United Kingdom and France

The European Commission has sent reasoned opinions to the United Kingdom (UK) and France concerning potential violations of Single Market rules requiring Member States to ensure public procurement contracts are awarded under open and competitive conditions and to remove obstacles to the free movement of goods and services. The problem concerns a framework for the definition of a radio communications system for the police (overall contract value estimated at some £1.5 to 2 billion), and in particular a question of principle, namely the UK's insistence that contracting authorities should not be required to consider products or services that are equivalent to products or services manufactured in accordance with the European standards referred to in the tender documents. The French case concerns the award of a contract for the construction of a sewage treatment plant in the Nancy area without prior publication of an indicative notice of the contracts it intended to award.

The reasoned opinions constitute the second stage of formal infringement procedures under Article 226 (ex 169) of the EC Treaty. In the absence of a satisfactory response from the Member States concerned within two months of receipt of the reasoned opinions, the Commission may decide to refer the cases to the European Court of Justice. United Kingdom - radio communications system for the police

The Commission has sent a reasoned opinion to the UK because it considers that a framework arrangement for a Public Safety Communications Project for the police and rescue services launched by the UK Home Office violates a provision of the Directive on public procurement of services (92/50/EEC) and EC Treaty rules on the free movement of goods (Article 28, ex-30). This provision is also present in substantially the same terms in Directives on public procurement of supplies (93/36/EEC) and works (93/37/EEC) and in the Directive on procurement in the water, energy, transport and telecommunications sectors (93/38/EEC). The contract in question was awarded by way of a negotiated procedure. The award covers an initial phase (carrying out a project definition study - PDS), to be followed by one or more contracts for the provision of telecommunications services for police and/or rescue services over a 15 year period. One or more contracts may also be awarded for the supply of the necessary equipment, for instance terminals. The characteristics of the equipment and services to be procured are specified by reference to the TETRA European technical standard for mobile radio services. The problem is that the UK interprets the public procurement Directives in such a way that contracting authorities would not be obliged to verify whether products or services, which are not manufactured according to the European standards specified in the tender documents, are nevertheless equivalent. Instead, contracting authorities would be allowed to reject products or services which were genuinely equivalent simply because they were not manufactured in accordance with the relevant European standard. The Commission, on the other hand, maintains that the public procurement Directives require reference to European standards where they exist, so as to ensure that technical specifications are defined by reference to standards which are common, transparent and publicly available (in all languages). Reference to such European standards should, however, simply offer a common yardstick against which the solutions proposed by suppliers can be measured. If contracting authorities refuse to examine whether or not the products or services offered are genuinely equivalent to products or services manufactured in accordance with the European standards, this constitutes a violation of the public procurement Directives and of EC Treaty rules on the free movement of goods.

France - construction of the Maxéville/Nancy sewage treatment plant

The Commission has sent France a reasoned opinion concerning the procedures followed by the greater Nancy area authorities to select a firm to construct a sewage treatment plant at Maxéville. The Commission considers that the French authorities have violated the Directive on procurement of public works (93/37/EEC) and EC Treaty rules on the freedom to provide services (Article 49, ex 59). The contract was attributed following a restricted procedure (i.e. a limited number of firms were invited to tender). However, contrary to the requirements of the Directive, the contracting entity did not publish beforehand an indicative notice of the contracts it was intending to award. Moreover, in the call for expressions of interest, the contracting authority specified that those submitting bids had to be registered with the French national order of architects, thereby discriminating against potential bids from suppliers established in other Member States. This discrimination violates not only the public works Directive, but also EC Treaty rules on the freedom to provide services. Another problem with the procedures followed was that only four firms were invited to tender, whereas the Directive requires a minimum number of five bidders so as to try to ensure genuine competition between bidders.

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