# CE2004078EN.01061201.xml

| 27.3.2004 | EN | Official Journal of the European Union | CE 78/612 |
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27.3.2004

EN

Official Journal of the European Union

CE 78/612

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(2004/C 78 E/0646)

WRITTEN QUESTION E-3620/03

by Antonios Trakatellis (PPE-DE) to the Commission

(5 December 2003)

Subject:   Use of a mathematical formula in awarding public contracts

Subject:

In its answer to my previous question (H-0097/03 (1)) concerning the use of a mathematical formula in awarding public contracts in Greece, the Commission stated that it had sent a letter to the Greek authorities to obtain information as to how they apply the formula concerned and its exact content. However, according to recently published reports, although the Ministry of the Environment, Planning and Public Works has abolished the formula for large-scale projects, it continues to apply it to small-scale works. The outcome is that a virtual monopoly situation continues in the public works construction sector; furthermore, there are indications of the existence of a cartel.

1

Can the Commission asnwer the following:

| 1. | Have the Greek authorities informed the Commission of the previous and current application of the mathematical formula? |
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1.

Have the Greek authorities informed the Commission of the previous and current application of the mathematical formula?

| 2. | Is the use of this formula consistent with Community law? |
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2.

Is the use of this formula consistent with Community law?

| 3. | Will the Commission reconsider the formula and what measures will it take in response to complaints concerning its abuse? |
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3.

Will the Commission reconsider the formula and what measures will it take in response to complaints concerning its abuse?

| 4. | What measures will the Commission take if the above reports concerning unfair competition prove to be correct? |
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4.

What measures will the Commission take if the above reports concerning unfair competition prove to be correct?

| 5. | What measures will the Commission take in regard to the application of the current procedure in Greece, which is leading to an oligopoly in the public works sector? |
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5.

What measures will the Commission take in regard to the application of the current procedure in Greece, which is leading to an oligopoly in the public works sector?

In addition to the abolition of the mathematical formula, will the Commission also ask for its replacement with a transparent procedure which will prevent the violation of the principle of free and healthy competition in the awarding and execution of public works contracts?

Answer given by Mr Bolkestein on behalf of the Commission

(30 January 2004)

(30 January 2004)

As the Commission pointed out in its reply to oral question H-0097/03, which the honourable Member asked at Question Time during the part-session of March 2003 (2), according to the case law of the Court of Justice the use of a mathematical criterion for detecting abnormally low tenders is not in itself an infringement of Community law (Cases C-285/99 and C-286/99). However, the same case law says that a tenderer whose bid is considered abnormally low — even if a mathematical method is used — must be able to submit all the explanations which he deems relevant to explain the content of his bid, and that the awarding authority must examine all these explanations before deciding whether or not to reject the bid. Following complaints, the Commission was prompted to examine the compatibility of the Greek system for detecting abnormally low tenders and contacted the Greek authorities several times to clarify the situation. The matter was also discussed at the package meeting which took place in Athens on 23/24 October 2003 on the application of Community law to public procurement in Greece.

2

It emerged from this examination by the Commission that the law in Greece allows abnormally low tenders to be explained only in very specific cases and that there is provision for a category entitled ‘exceptionally abnormally low tenders’ for which no explanation is allowed. The relevant services of the Commission feel that this legislation, and the administrative practice derived from it, are apparently contrary to Council Directive 93/37/EEC of 14 June 1993 concerning the coordination of procedures for the award of public works contracts (3), as well as to the aforementioned case law of the Court of Justice.

3

Following bilateral contacts, the Greek authorities have amended their legislation by abolishing the category of ‘exceptionally abnormally low tenders’, while accepting that tenderers whose bids are considered abnormally low after the application of the mathematical formula may nevertheless submit explanations.

Consequently, the mathematical method has not been abolished, as articles in the press would seem to indicate, but the procedures for its use by awarding authorities have been changed to make it comply with Community law.

The Commission is watching to ensure that the new national legislation on the procedures for using the mathematical method, and more especially on the detection of abnormally low tenders, is being applied in compliance with Community law.

With regard to the allegations concerning the existence of cartels in the construction sector, the Commission does not at this time have any elements allowing it to reach a conclusion on the existence of a structural market situation in breach of Union competition rules. It would therefore like to urge the honourable Member to forward any information indicating that public contracts may have been rigged.

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(1)  Written answer of 11.3.2003.

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(2)  Written answer of 11.3.2003.

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(3)  OJ L 199, 9.8.1993.

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