RESTRICTED
WORLD TRADE WT/WGTGP/W/5
21July1997
ORGANIZATION(97-3076)
Original: English Working Group onTransparency
inGovernment Procurement
TRANSPARENCY INPUBLIC PROCUREMENT
Factual Contribution from theEuropean Communities
A. Introduction
Thisnoteisintended asacontribution tothestudy phase oftheWorking Group onTransparency
inGovernment Procurement. Itseeks toprovide anexplanation ofCommunity rules andpractices
astheyrelate totransparency ingovernment procurement.1
WithintheCommunity,thereareanumberofbasicprinciplesaffectinggovernmentprocurement
whichareenshrinedintheECTreaties,includingthatoftransparency.Theseprinciplesareimplemented
atCommunity levelthrough thesixpublic procurement Directives2(so-called secondary legislation).
Thepurpose oftheDirectives isnottoharmonize allnational rules ongovernment procurement.
Rather theyalign theprocedures tobefollowed whenever acontract istobeawarded whose value
exceeds acertain threshold, bylaying down rulesgenerally regarded asbeing based oncommon sense.3
Anumber ofthese rulesrelate totheneedtoensure transparency ingovernment procurement
practices because itisrecognized thatthisisanessential element intheprocess ifanopen and
competitive procurement regime which safeguards thebestinterests oftheprocuring entity, aswell
asofsuppliers, istobeachieved. These rules andpractices relating tothem aresetoutinthelater
parts ofthispaper.
A.1 Definition ofgovernment procurement
Within theCommunity, “Government Procurement ”covers written contracts forpecuniary
interest awarded bypublic authorities (including ataregional andlocal level), bodies governed by
public lawandcertain utilities4inrespect ofthesupply ofgoods andtheprovision ofservices, including
construction services. Procurement byanycontractual means iscovered, including purchases, leasing,
rental orhire-purchase, withorwithout anoption tobuy.Theentities covered aresubject toacommon
EC-wide regime forprocurement above certain threshold values. Therulesconcerning procurement
1Itshould notbetaken asalegal interpretation ofCommunity legislation inthisarea. Formore details,
Members arereferred totherelevant Community legislation, which isreadily available -seesection B.1ofthis
note.
2SeeAnnex foralistofthese Directives.
3Forcontracts which fallbelow thethreshold levels, themeans ofensuring transparency islefttotheMember
States.
4The“utilities ”supply water, energy, transport andtelecommunications services.WT/WGTGP/W/5
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under thethreshold values aredefined bynational law,inaccordance withthegeneral principles of
lawlaiddown intheECTreaties.
Thethreshold values aresetoutinCommunity law.5These thresholds aredefined withaview
toensuring thatcompetitive procurement rulesapply tocontracts likely tointerest suppliers fromother
EUMember States while allowing administrative andprocedural costsonsmaller contracts tobekept
toaminimum. Contracting authorities arenotpermitted tosplitupacontract soastoreach acontract
value below thethreshold.
Thepresent notedealsprimarily withrequirements forprocurement contracts which areabove
thethreshold values.
- Thethresholds defining which contracts fallunder Community law
aresetatECU 200,000 forsupplies andservice contracts
(ECU 400,000 forcontracts awarded intheutilities sectors and
approximatelyECU130,000forsomecontractsfallingwithinthescope
oftheapplication oftheWTO Government Procurement Agreement)
andECU 5,000,000 forworks contracts.
A.2 Methods ofprocurement
Community rulesprovide forthreemethods ofprocurement: (a)theopenprocedure, whereby
anyfirmiseligible totender forthecontract; (b)arestricted procedure, inwhich onlyfirms thathave
beeninvited totender bythecontracting authority maydoso;and(c)anegotiated procedure, inwhich
thecontracting authority consults selected firms andnegotiates thecontract terms withoneormore
ofthem(usually aminimum ofthree). Thechoice ofprocedure depends onthenature ofthepurchase.
However, theuseofthenegotiated procedure isonlypermitted inthelimited cases setoutinthe
Directives. Allthree procedures guarantee transparency inthecallfortenders andseektoachieve
bestvalue formoney forindividual procurements.
B. Elements oftransparency
Transparency relates primarily totheobligation toprovide information relating toprocurement
opportunities andpractices andtherighttohaveaccess tothatinformation, sothatpotential suppliers
andpurchasing entities know inadvance whattheirrights andobligations are.IntheCommunity this
isensured through anumber ofdifferent elements enumerated inthefollowing sections. These elements
areprincipally linked totheprocurement process.
B.1 Availability oflegislation tosuppliers
Potential suppliers andprocuring entities needtoknow whattherulesare.IntheCommunity,
therelevant legislation (theDirectives) hasbeenpublished intheOfficial Journal oftheEuropean
Communities (hereinafter referred toasthe“OJ”).TheDirectives arereadily available tosuppliers
from theOffice forOfficial Publications oftheEuropean Communities inLuxembourg orthrough
designated sales offices upon payment oftheappropriate fee.TheDirectives arealsoavailable on
theInternet through theSIMAP homepage athttp://simap.eu.int. Induecourse, Member States ’rules
andregulations relating toprocurement willalsobemade available atthisInternet site.
5Thenational currency equivalents ofthese thresholds areperiodically reviewed (every twoyears asarule).
AnychangetothethresholdvalueisrequiredtobepublishedintheOfficialJournaloftheEuropeanCommunities.
Changes tothethreshold onlytakeeffect once theyhave been published.WT/WGTGP/W/5
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Furthermore, adatabase ofallthecontracting entities covered bytheCommunity Directives
isbeing developed, containing information including addresses, telephone andfaxnumbers, andcontact
points. Thisdatabase willshortly bemade available ontheInternet onatrialbasis.
B.2 Public announcement ofprocurement opportunities andprocedural requirements
Community lawrequires transparency ofprocurement opportunities andaward procedures,
sothatallpotential suppliers areabletofindoutabout contracts which might interest them. This
issecured bytherequirement thatcontracting entities wishing toaward acontract whose estimated
value exceeds therelevant threshold mustpublish atender notice intheSupplement totheOJ(Sseries)
andintheTED databank.6
Thenotice ispublished infullintheoriginal language, which istheonlyauthentic one.
However, asummary oftheimportant elements ofeachnotice ispublished intheotherofficial languages
oftheCommunity. Acontracting authority must beabletofurnish proof ofthedateofdispatch to
theOJ.
Inaddition topublication intheOJ,notices canbepublished intheofficial journals orinthe
press ofthecountry ofthecontracting authority. However, where thishappens, publication mustnot
bemade before thedateofdispatch totheOJ,andthese other notices must notcontain information
other thanthatpublished intheOJ.
Notices forprocurements below theECthresholds arenotrequired tobepublished intheOJ
-theyareinstead usually justpublished inthenational official journals and/or inlocal, regional or
national newspapers.
Inaddition totheinvitation totender notices, pre-information notices arepublished forplanning
purposes. Forworks contracts, contracting authorities publish indicative notices containing theessential
characteristics oftheworks contract which theyintend toaward. Thisnotice ispublished infullin
alltheofficial languages oftheCommunity. Forother services andsupplies contracts, contracting
authorities arerequired tomake known, bymeans ofanindicative notice tobepublished assoonas
possible afterthebeginning oftheirbudgetary year, theintended totalprocurement byproduct area
orineachoftheservice contracts which theyenvisage awarding during thesubsequent 12months
where thetotalestimated value isnotlessthanECU 750,000.
Theextent andformofpublicity candiffer according totendering procedures applied and/or
thevalue oftheprocurement. There arenocommon advertising rulesforcontracts below thethreshold
values.
B.2.1 What information dothenotices contain?
Thetender notices provide information about theprocurement, including anindication ofwhich
ofthepermissible award procedures hasbeenchosen, theaward criteria which willbeused, deadlines
andacontact pointforobtaining further information. Their purpose istoprovide sufficient information
about theintended procurement toenable suppliers, orservice providers tomake aninitial assessment
oftheirpotential interest inthecontract, todecide whether torequest thetender documents inorder
toprepare theirbidandtoprovide certainty andtransparency astotheindividual procurement.
6TED, orTenders Electronic Daily, istheon-line version oftheprinted Supplement StotheOfficial Journal.
Itisupdatedfivetimesaweek,ishostedbytheEuropeanCommissionHostOrganisation(ECHO)andisaccessible
inmany countries viaOfficial Gateways.WT/WGTGP/W/5
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Standard forms existfortheuseofcontracting entities, buttheiruseisnotyetmandatory.
Contracting entities arealsoencouraged tousetheCommon Procurement Vocabulary (CPV) todescribe
theobject oftheprocurement: thisfacilitates identification bypotential suppliers ofsuitable contracts.
Information required tobecontained inatender notice includes, butisnotnecessarily
limited to:
Fullcontact details ofthecontracting authority
Type ofaward procedure chosen (open, restricted, negotiated)
Description ofthegoods orservices tobeprovided, together withtheirquantity or
indication oftheirextent
Forservices other thanconstruction services :indication whether theexecution of
theservice isreserved bylawtoaparticular profession, withreference tothe
lawandwhether legal persons should indicate thenames andprofessional
qualification ofthestafftoberesponsible fortheexecution oftheservices
Indication ofwhether thesuppliers cantender forpartofthecontract only
Place ofdelivery, siteorplace ofperformance ofservice
Time-limit fordelivery, completion orduration (ifany)
Period during which thetenderer isbound tokeepopenthetender
Details oftheservice from which contract andadditional documentation maybe
requested, finaldateformaking suchrequests and-where applicable -costof
suchdocuments
Final dateforreceipt oftenders orrequests toparticipate, address towhich theymust
besent,language(s) inwhich theymust bedrawn up
Date, hourandplace oftender opening. Where applicable, persons authorized tobe
present attheopening oftenders
Anydeposits and/or guarantees required
Anyeconomic ortechnical requirements
Thecriteria fortheaward ofthecontract. Criteria other thanlowest price must be
mentioned iftheydonotappear inthecontract documents
Theright ofinterested suppliers tobeinformed doesnotendwiththepublication oftender
notices. Ifinterested suppliers sorequest, contract andsupporting documents, aswellasanyadditional
information relating tothesedocuments, mustbesenttothemwithin sixdaysofreceipt oftheapplication
forthisinformation (fourdaysincaseofurgency). Tender documentation mustcontain alltherelevant
information toenable suppliers toprepare theirbids.
B.3 Access forbidders toinformation onthecriteria usedforassessing bidsandawarding contracts
Community lawprovides fortransparency oftheprocedures forselecting contractors and
awarding contracts, through theuseofobjective criteria which mustbeknown beforehand. Thishelps
toprevent acontracting authority fromselecting candidates andtenders onthebasisofcriteria different
fromthoseinitially stated, andtoensure thatpotential suppliers arefullyaware oftheconditions relating
totheaward ofthecontract. Inpractice thisisachieved bystating either inthetender notice orin
thecontract documentation allthecriteria which aretobeapplied totheaward, where possible in
descending order ofimportance.
B.4 Receipt andmanagement ofbidsreceived
Publication ofthetender notice marks thepoint when thecontract award procedure begins.
Community lawsetsoutminimum time-limits which must beprovided forregarding submission ofWT/WGTGP/W/5
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tendersorcandidatures.Therelevantprovisionsensurethatthetime-limitssetdonothampercompetition
orleadtodefacto discrimination between suppliers, particularly against thirdcountry suppliers.
Theminimum periods thatpurchasing entities mustallow under thedifferent types ofprocedure
aresetoutschematically inthefollowing table:
Time-limit forreceipt ofrequest
toparticipate*Time-limit forreceipt of
tenders*
Normal Urgent Normal Urgent
Open procedures notlessthan 52
days1
Restricted procedures notlessthan 37
daysnotlessthan 15
daysnotlessthan 40
days2notlessthan
10days
Negotiated procedures notlessthan 37
daysnotlessthan 15
days
*Time-limits startfrom thedayofdispatch ofthenotices totheOffice forOfficial Publications ofthe
European Communities. Notices must bepublished intheOfficial Journal within 12daysofreceipt (five days
ifurgency).
1Reduced to36daysincaseofwork andservice contracts where anindicative notice hasbeenpublished.
2Reduced to26daysinthecaseofworks andservices contracts where anindicative notice hasbeen
published.
Reception, registration andopening ofbidsaregoverned bynational law. TheCommunity
onlyindicates that,inthecaseofopenprocedures, thedate, timeandplace oftheopening must be
published inthetender notice, aswellasthepersons allowed tobepresent attheopening. Inthis
way, suppliers havetheopportunity todiscover whohasmade bids.
Contacts between thebidders andthepurchasing entities arenotforbidden, butsuchcontacts
must beconducted inatransparent andnon-discriminatory manner andshould notbeusedinsuch
awayastopreclude competition.
B.5 Information onawarded contracts
Contracting authorities orcontracting entities whohaveawarded acontract arerequired to
make theresult known bymeans ofacontract award notice (CAN). Thishastobepublished infull
intheOJandintheTED databankinalltheofficial languages oftheCommunities. Inthecaseof
utilities, publication isdoneonlyintheoriginal language. TheCAN mustbeforwarded forpublication
totheOJwithin 48daysoftheaward ofthecontract.
Theinformation tobepublished isnotlimited tothemention oftheactual award ofacontract,
butmustcontain theconditions under which thecontract hasbeenawarded (i.e.thecriteria applied
andthepriceagreed). However, relevant information onthecontract award may,under certain limited
circumstances, beomitted -i.e.ifpublishing theinformation would haveharmful effects onthewinning
firmorthepublic interest. These exceptions are,however, narrowly interpreted.
Inaddition, foreachcontract awarded, thecontracting authorities arerequired todraw upa
written report tobecommunicated totheCommission atitsrequest. Thisisusedeither formonitoring
purposes orinthecaseofacomplaint totheCommission (seealsosection C).WT/WGTGP/W/5
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Information which should beincluded inthecontract award notice
Details oftheawarding authority
Form oftheaward procedure chosen
Dateofaward ofcontract
Criteria foraward ofcontract (optional fortheutilities sectors)
Number oftenders received
Name(s)and address(es) ofsuccessful supplier(s), contractor(s) orservice provider(s)
Thenature andquantity ofgoods supplied, where applicable, bysupplier orthenature
andextent ofservices provided
Price orrange ofprices (minimum/maximum) paid
Where appropriate, indication ofwhether thecontract hasbeen, ormay be
sub-contracted tothirdparties
Dateofpublication oftender notice intheOJ
B.6 Informing unsuccessful bidders ofthereasons whytheirbidwasrejected
Contracting authorities must, within 15daysofthedateonwhich therequest isreceived, inform
anyeliminated candidate ortenderer whosorequests inwriting ofthereasons forrejection ofhis
application ortender, andinthecaseofatender, thename ofthesuccessful tenderer. Unsuccessful
tenderers mayaskthecontracting entity foradditional information iftheyarenotsatisfied withthe
explanation. Thisprovides unsuccessful candidates ortenderers withameans ofassessing whether
theprocurement rulesandpractices havebeenfollowed. Inaddition, theycanthenusethisinformation
to(hopefully) good effect infuture bids.
Furthermore, thecontracting authority isrequired toinform candidates ortenderers whomake
arequest inwriting ofthegrounds onwhich itdecided nottoaward acontract inrespect ofwhich
aprior callforcompetition wasmade, ortorecommence theprocedure. Inthese cases, theOJmust
alsobeinformed.
C. Right toreview/redress
Sofar,thetransparency rules havedealtwiththeprocess ofprocurement. TheCommunity
considers, however, thatthere isalsoaneedtoprovide amechanism toensure thatthese rules are
respected bycontracting authorities, asamajor guarantee ofthetransparency oftheprocess.
Forthisreason,amechanismhasbeenestablishedtoallowanypotentialcontractorwhoconsiders
thathehasbeeninjured byanunlawful decision onthepartofacontracting authority, forexample
because thecorrect procedures werenotfollowed, toseekreview. Inthefirstinstance, matters are
taken updirectly withthecontracting authority. Inaddition, ineachMember Statethere isalegally
authorized body abletoresolve conflicts inthefieldofpublic procurement.
These review procedures mustalsobetransparent andprovide aguarantee ofindependence.
Furthermore, companies havethepossibility oflodging complaints withtheCommission.
D. Concluding remarks
TheCommunityrecognizesthatensuringtransparencyisanessentialelementintheprocurement
process ifaregime which safeguards thebestinterests oftheprocuring entity, aswellasofsuppliers,
istobeachieved. Ithelps inproviding suppliers, including domestic suppliers, withincreased
opportunities;itcontributestotheincreasedconfidenceofsuppliersinthereliabilityoftheadministration
asabusiness partner anditactsasamechanism tominimize themisuse ofpublic money andpower
either bypurchasers orsuppliers.WT/WGTGP/W/5
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Annex
ListofEuropean Community Directives Relating toPublic Procurement.
Council Directive 93/36/EEC of14June1993coordinating procedures fortheaward ofpublic supply
contracts. (ThePublic Supplies Directive.) Official Journal L199/1 of9August 1993.
Council Directive 93/37/EEC of14June1993concerning thecoordination ofprocedures fortheaward
ofpublic works contracts. (ThePublic Works Directive.) Official Journal L199/54 of9August 1993.
Council Directive 92/50/EEC of18June1992relating tothecoordination ofprocedures fortheaward
ofpublic service contracts. (ThePublic Services Directive.) Official Journal L209/1 of24July1992.
Council Directive 89/665/EEC of21December 1989onthecoordination ofthelaws, regulations and
administrative provisions relating totheapplication ofreview procedures totheaward ofpublic supply
andpublic works contracts. (The Public Remedies Directive.) Official Journal L395/33 of
30December 1989.
Council Directive 93/38/EEC of14June1993 coordinating theprocurement procedures ofentities
operating inthewater, energy, transport andtelecommunications sectors. (TheUtilities Directive.)
Official Journal L199/84 of9August 1993.
Council Directive 92/13/EEC of25February 1992coordinating thelaws, regulations andadministrative
provisions relating totheapplication ofCommunity rules ontheprocurement procedures ofentities
operating inthewater, energy, transport andtelecommunications sectors. (TheRemedies Utilities
Directive.) Official Journal L76/14 of23March 1992.