Opinion of the Advocate General — ECLI:EU:C:2001:314
Date: 2001-06-05
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: Right of establishment;Approximation of laws;Freedom to provide services
Procedure: Reference for a preliminary ruling
Origin: Italy

Summary publication), paragraphs 1 and 2 of the operative part). 46. The Court thus held that Article 29(5) of Directive 71/305 requires the awarding authority to examine the details of tenders which are obviously abnormally low, and for that purpose obliges it to request the tenderer to furnish the necessary explanations (Fratelli Costanzo, paragraph 16). 47. According to the Court, a mathematical criterion in accordance with which tenders which exceeded the basic value fixed for the price of the work by a percentage more than 10 points below the average percentage by which the tenders admitted exceeded that amount would be considered anomalous and consequently eliminated, deprives tenderers who have submitted particularly low tenders of the opportunity to demonstrate that those tenders are genuine ones, so that application of such a criterion is contrary to the aim of Directive 71/305, namely to promote the development of effective competition in the field of public contracts (Fratelli Costanzo, paragraph 18). 48. The Court also observed that it was in order to enable tenderers submitting exceptionally low tenders to demonstrate that those tenders were genuine ones, and thus to ensure the opening up of public works contracts, that the Council, in Article 29(5) of Directive 71/305, laid down a precise, detailed procedure for the examination of tenders which appear to be abnormally low, and that that aim would be jeopardised if Member States were able, when implementing that provision, to depart from it to any material extent (Fratelli Costanzo, paragraph 20). 49. It added, finally, that the examination procedure under Article 29(5) of Directive 71/305 had to be applied whenever the awarding authority was contemplating the elimination of tenders because they were abnormally low in relation to the transaction, so that tenderers could be sure that they would not be disqualified from the award of the contract without first having the opportunity of furnishing explanations regarding the genuine nature of their tenders (Fratelli Costanzo, paragraph 26). 50. Since the requirements laid down by both the initial and the amended version of Article 29(5) of Directive 71/305 are in substance identical to those imposed by Article 30(4) of the Directive, the foregoing considerations apply equally in relation to the interpretation of the latter provision. 51. In consequence, Article 30(4) of the Directive necessarily presupposes the application of an inter partes a procedure for examining tenders regarded by the contracting authority as abnormally low, placing the latter under an obligation, after it has inspected all the tenders and before awarding the contract, first to ask in writing for details of the elements in the tender suspected of anomaly which gave rise to doubts on its part in the particular case and then to assess that tender in the light of the explanations provided by the tenderer concerned in response to that request. 52. Apart from the fact that, under the legislation and administrative practice applicable in the main proceedings, the tendering undertakings are required at the time they submit their file to provide explanations in respect of only 75% of the value of the contract, whereas it is necessary for them to be able to prove the genuine nature of their tender in respect of all its constituent elements, such prior explanations are not in any event in accordance with the spirit of the inter partes examination procedure established by Article 30(4) of the Directive. 53. It is essential that each tenderer suspected of submitting an abnormally low tender should have the opportunity effectively to state his point of view in that respect, giving him the opportunity to supply all explanations as to the various elements of his tender at a time - necessarily after the opening of all the envelopes - when he is aware not only of the anomaly threshold applicable to the contract in question and of the fact that his tender has appeared abnormally low, but also of the precise points which have raised questions on the part of the contracting authority. 54. The above interpretation is, moreover, the only one which complies with both the wording and the purpose of Article 30(4) of the Directive. 55. It is apparent from the very wording of that provision, drafted in imperative terms, that the contracting authority is under a duty, first, to identify suspect tenders, secondly to allow the undertakings concerned to demonstrate their genuineness by asking them to provide the details which it considers appropriate, thirdly to assess the merits of the explanations provided by the persons concerned, and, fourthly, to take a decision as to whether to admit or reject those tenders. It is therefore not possible to regard the requirements inherent in the inter partes nature of the procedure for examining abnormally low tenders, within the meaning of Article 30(4) of the Directive, as having been complied with unless all the steps thus described have been successively accomplished. 56. Moreover, it is only subject to strict conditions laid down in the fourth subparagraph of Article 30(4) that the Directive allows the contracting authority to dispense with that inter partes procedure for examining abnormally low offers. Here there is no dispute that, in both sets of main proceedings, that derogatory provision is inapplicable ratione temporis. 57. Furthermore, the existence of a proper exchange of views, at an appropriate time in the procedure for examining tenders, between the contracting authority and the tenderer constitutes a fundamental requirement of the Directive, in order to prevent the contracting authority from acting in an arbitrary manner and to ensure healthy competition between undertakings. 58. Having regard to the foregoing considerations, it must be held that Article 30(4) of the Directive precludes legislation and administrative practice, such as that applicable in the cases referred, which allow the contracting authority to exclude a tender as abnormally low solely on the basis of explanations of the most significant price components, produced at the same time as the tender itself, without carrying out any inter partes examination of the suspect tenders by requesting clarification on points of doubt emerging on first examination and giving the undertakings concerned the opportunity to put forward their arguments in that regard before the final decision is taken. 59. In the tendering procedures at issue in the main proceedings, at the time when the tenderer submits his tender, which must be accompanied by explanations covering 75% of the basic contract value mentioned in the contract notice, he is not aware of the precise aspects of his tender which will be suspected of being abnormal, so that, at that stage of the procedure, he is not in a position to supply useful and complete explanations in support of the various elements constituting his tender. 60. The national court also asks whether Article 30(4) of the Directive similarly precludes legislative provisions and administrative practice of a Member State, such as those at issue in the main proceedings, whereby, first, tenderers are required, under threat of being excluded from participation in the contract, to accompany their tender with price explanations, covering at least 75% of the basic value of that contract, using forms designed for the purpose and, second, the anomaly threshold for tenders is calculated, in respect of each contract, on the basis of a mathematical formula which is a function of all the tenders actually lodged in the tendering procedure in question. 61. It should be noted that the Directive does not contain specific requirements in the matter. 62. More particularly concerning the first of the rules on matters of detail referred to in paragraph 60 of this judgment, this appears to be a requirement which affects all tenderers without distinction and appears to be intended to ensure a certain uniformity in the presentation of tenders, likely to facilitate an initial examination by the contracting authority and to allow a prima facie assessment to be made of the seriousness of the tender. It may indeed happen that, on the basis of those explanations alone, the contracting authority becomes convinced that, although the tender appears abnormally low, it is serious and the authority therefore accepts it. In that way, this rule contributes to accelerating the procedure for verifying tenders. 63. It is true that, as the Commission has rightly pointed out, a national procedure for awarding public works contracts would be incompatible with the requirements of Article 30(4) of the Directive if it did not ensure that the inter partes examination of abnormally low tenders required by that provision took place. 64. That would in particular be the case, as has already been held in paragraphs 58 and 59 of this judgment, if the contracting authority rejected a tender as abnormally low basing its argument solely on the explanations submitted at the time the tender was lodged, without carrying out inter partes examination required by the Directive, after the opening of the envelopes and before the final decision. 65. However, such a defect would originate not in the obligation itself to submit certain explanations together with the lodging of the tender, but rather in the disregard of the requirements of the Directive at a subsequent stage of the procedure for examining abnormally low tenders. 66. Article 30(4) of the Directive does not therefore preclude a requirement to provide explanation in advance, such as that at issue in the main proceedings, taken in isolation, provided that all the requirements arising from that provision are otherwise complied with by the contracting authorities. 67. As regards the second rule referred to in paragraph 60 of this judgment, it is undisputed that the Directive does not define the concept of an abnormally low tender and, a fortiori, does not determine the method of calculating an anomaly threshold. That is therefore a task for the individual Member States. 68. As for the anomaly threshold applied in the cases in the main proceedings, this results from a calculation carried out for each contract notice and is based essentially on the average of the tenders submitted for that contract. 69. Such a method of calculation appears at first sight to be objective and non-discriminatory. 70. The mere fact, cited by some of the tenderers involved in the main proceedings, that the anomaly threshold is not known to the undertakings at the time when they make their tender - since it is not determined until all the tenders have been submitted - is in any event not capable of affecting its compatibility with the Directive. At that stage of the procedure, all the tenderers, like the contracting authority itself, are unaware of what that threshold will be. 71. Some of the tenderers involved in the main proceedings have, however, argued that a method for calculating the anomaly threshold based on the average of the tenders for a given contract risks being falsified by tenders not corresponding to a genuine wish to contract but merely seeking to influence the result of that calculation. Competition might also be distorted, with tenderers seeking to submit not the best tender possible but that which, particularly on the basis of statistical criteria, stood the best probability of being the first amongst the non-suspect tenders, to which the contract is automatically awarded. 72. It is true that the result reached by a method for calculating the anomaly threshold based on the average of tenders may be significantly influenced by practices such as those described in the previous paragraph, which would be contrary to the aims of the Directive, as defined in paragraphs 34 to 36 of this judgment. That is why, for the effectiveness of the Directive to be fully preserved, that result must not be beyond challenge and must be capable of being reconsidered by the contracting authority should that prove necessary having regard in particular to the level of the anomaly threshold for tenders applied in comparable contracts and to the lessons derived from common experience. 73. It follows that, although, as stated in paragraphs 45 and 47 of this judgment, it is settled case-law that Community law precludes the automatic exclusion from public works contracts of certain tenders determined in accordance with a mathematical criterion, Community law does not in principle preclude a mathematical criterion, such as the anomaly threshold applied in the cases referred, from being used for the purposes of determining which tenders appear to be abnormally low, so long as the result to which application of that criterion leads is not beyond challenge, and the requirement for inter partes examination of those tenders in accordance with Article 30(4) of the Directive is complied with. 74. Some of the tenderers involved in the main proceedings have also argued, without having their allegations credibly refuted by the Italian government, that the two rules of Italian tendering procedure referred to in paragraph 60 of this judgment cannot be examined in isolation, given that the various aspects of that procedure are indissolubly interlinked. 75. They have argued in particular that the condition concerning the provision of explanations at the time of submission of the tender itself finds its justification only in the fact that the contracting authority takes its decision on the acceptance or rejection of the tender on the basis of those explanations alone, without allowing the undertakings to provide fuller explanations later. Moreover, they argue that that condition does not apply to the tenderers without distinction, in that only the envelopes of undertakings whose tenders appear abnormally low are opened, so that a tenderer not suspected of making an anomalous bid could be awarded the contract even if he submitted, as explanations, an envelope containing nothing at all. Finally, a distortion of competition between undertakings might result, because the obligation to accompany the tender with voluminous explanatory documentation entails for tenderers offering a particularly advantageous price not only a heavier administrative burden but also the inconvenience of having first to reveal information which might be confidential, and because it places undertakings from other Member States at a disadvantage in any event. 76. As regards those assertions, it is sufficient to observe that, whilst all the requirements imposed by Community law must unquestionably be complied with in the context of the various aspects of the national procedures for awarding public works contracts, which must moreover be applied in such a manner as to ensure compliance with the principles of free competition and equal treatment of tenderers and the obligation of transparency, the fact remains that the Court of Justice is not in a position to rule on those assertions. 77. To determine whether they are well founded requires findings and assessments of fact and an interpretation of domestic law which falls within the sole jurisdiction of the national court. The principles of interpretation concerning the scope of Article 30(4) of the Directive and the spirit and purpose of the latter, set out in paragraphs 34 to 40 of this judgment, provide that court with all the guidance necessary to enable it to assess the compatibility of the national provisions in question with Community law for the purposes of judging the cases before it. The taking into account of explanations for abnormally low tenders 78. In relation to the second aspect of the questions referred, as reformulated in paragraph 28 of this judgment, it should be pointed out that, in the words of the second subparagraph of Article 30(4) of the Directive, the contracting authority may take into consideration explanations relating to the economy of the construction method, the technical solutions chosen, the exceptionally favourable conditions available to the tenderer for the execution of the work, or the originality of the work proposed by the tenderer. 79. As is apparent from its very wording, that provision simply gives the contracting authority the possibility of basing its decision on certain types of objective explanation of the price proposed by a given tenderer, and does not impose upon it any obligation to do so. 80. Put back into its context, that provision is designed only to add further precision to the rule set out in the first subparagraph of Article 30(4) of the Directive, whereby the contracting authority is to request from the tenderer concerned details of the constituent elements of the tender which it considers relevant and verify those constituent elements taking account of the explanations received. 81. In that respect, the Court has already underlined, in paragraphs 51 to 59 of this judgment, the importance of the principle whereby, before the contracting authority can reject a tender as abnormally low, the tenderer must have a proper opportunity, in an inter partes procedure, to put forward his point of view on each of the various price components proposed. 82. Since, with a view to the development of effective competition in the area of public contracts, it is essential for that opportunity to be as full and as wide as possible, the tenderer must be able to submit in support of his tender all the explanations, and in particular those set out in the second subparagraph of Article 30(4) of the Directive, which, bearing in mind the nature and characteristics of the contract in question, he considers appropriate, without any limitation in that respect. The contracting authority is required to take into consideration all the explanations put forward by the undertaking before adopting its decision whether to accept or reject the tender in question. 83. It follows that, having regard to both its wording and its purpose, the second subparagraph of Article 30(4) of the Directive does not establish an exhaustive catalogue of explanations that are capable of being submitted, but merely gives examples of explanations which the tenderer may provide in order to demonstrate the genuineness of the various price elements proposed. A fortiori, the provision in question does not authorise the exclusion of certain types of explanation. 84. As the Austrian Government and the Commission have argued in their observations, and the Advocate General has emphasised in paragraphs 50 and 51 of his Opinion, any limitation in that regard would clearly contradict the Directive's aim of facilitating the operation of free competition between the tenderers as a whole. Such a limitation would involve the outright exclusion of tenders explained by considerations other than those allowed by the applicable national legislation, despite a price which may be more advantageous. 85. It follows that Article 30(4) of the Directive precludes national legislation, such as that applicable in the main proceedings, which, first, requires the contracting authority, for the purposes of verifying abnormally low tenders, to take into account only certain explanations exhaustively listed, that listing omitting moreover explanations relating to the originality of the tenderer's proposed works, even though such explanations are expressly referred to in the second subparagraph of the above provision, and, second, expressly excludes certain types of explanation, such as those relating to any elements for which minimum values are laid down by law, regulation or administrative provision or for which minimum values can be ascertained from official data. 86. In view of all the foregoing considerations, the answer to the questions referred must be that Article 30(4) of the Directive is to be interpreted as follows: - it precludes a Member State's legislation and administrative practice which allow the contracting authority to reject tenders offering a greater discount than the anomaly threshold as abnormally low, taking into account only those explanations of the prices proposed, covering at least 75% of the basic contract value mentioned in the contract notice, which tenderers were required to attach to their tender, without giving the tenderers the opportunity to argue their point of view, after the opening of the envelopes, on those elements of the prices proposed which gave rise to suspicions; - it precludes a Member State's legislation and administrative practice which require the contracting authority to take into consideration, for the purposes of examining abnormally low tenders, only explanations based on the economy of the construction method, technical solutions chosen, or exceptionally favourable conditions available to the tenderer, but not explanations relating to all those elements for which minimum values are laid down by law, regulation or administrative provision or can be ascertained from official data; - however, provided all the requirements it imposes are otherwise complied with and the aims pursued by the Directive are not defeated, it does not in principle preclude a Member State's legislation and administrative practice which, in the matter of identifying and examining abnormally low tenders, first, require all tenderers, under threat of exclusion from participation in the contract, to accompany their tender with explanations of the prices proposed, covering at least 75% of the basic value of that contract, and, second, apply a method of calculating the anomaly threshold based on the average of all the tenders received for the tender procedure in question, so that tenderers are not in a position to know that threshold at the time they lodge their file; the result produced by applying that calculation method must, however, be capable of being reconsidered by the contracting authority. Costs 87. The costs incurred by the Italian and Austrian Governments and by the Commission, which have submitted observations to the Court, are not recoverable. Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. On those grounds, THE COURT (Sixth Chamber), in answer to the questions referred to it by the Consiglio di Stato by orders of 26 May 1999, hereby rules: Article 30(4) of Council Directive 93/37/EEC of 14 June 1993 concerning the coordination of procedures for the award of public works contracts must be interpreted as follows: - it precludes a Member State's legislation and administrative practice which allow the contracting authority to reject tenders offering a greater discount than the anomaly threshold as abnormally low, taking into account only those explanations of the prices proposed, covering at least 75% of the basic contract value mentioned in the contract notice, which tenderers were required to attach to their tender, without giving the tenderers the opportunity to argue their point of view, after the opening of the envelopes, on those elements of the prices proposed which gave rise to suspicions; - it also precludes a Member State's legislation and administrative practice which require the contracting authority to take into consideration, for the purposes of examining abnormally low tenders, only explanations based on the economy of the construction method, technical solutions chosen, or exceptionally favourable conditions available to the tenderer, but not explanations relating to all those elements for which minimum values are laid down by law, regulation or administrative provision or can be ascertained from official data; - however, provided all the requirements it imposes are otherwise complied with and the aims pursued by Directive 93/37 are not defeated, it does not in principle preclude a Member State's legislation and administrative practice which, in the matter of identifying and examining abnormally low tenders, first, require all tenderers, under threat of exclusion from participation in the contract, to accompany their tender with explanations of the prices proposed, covering at least 75% of the basic value of that contract, and, second, apply a method of calculating the anomaly threshold based on the average of all the tenders received for the tender procedure in question, so that tenderers are not in a position to know that threshold at the time they lodge their file; the result produced by applying that calculation method must, however, be capable of being reconsidered by the contracting authority. Colneric Gulmann Puissochet Schintgen Skouris Delivered in open court in Luxembourg on 27 November 2001. R. Grass F. Macken Registrar President of the Sixth Chamber 1: Language of the case: Italian.