62007CJ0199_EN
Parties
Grounds
Operative part
Parties
In Case C‑199/07,
ACTION under Article 226 EC for failure to fulfil obligations, brought on 12 April 2007,
Commission of the European Communities,
represented by M. Patakia and D. Kukovec, acting as Agents, with an address for service in Luxembourg,
applicant,
v
Hellenic Republic,
represented by D. Tsagkaraki, acting as Agent, and by K. Christodoulou, dikigoros, with an address for service in Luxembourg,
defendant,
THE COURT (Fourth Chamber),
composed of K. Lenaerts, President of the Third Chamber acting as President of the Fourth Chamber, R. Silva de Lapuerta, E. Juhász (Rapporteur), G. Arestis, and J. Malenovský, Judges,
Advocate General: E. Sharpston,
Registrar: L. Hewlett, Principal Administrator,
having regard to the written procedure and further to the hearing on 10 July 2008,
after hearing the Opinion of the Advocate General at the sitting on 9 July 2009,
gives the following
Judgment
Grounds
1. By its application, the Commission of the European Communities seeks a declaration that, by introducing de facto
an additional criterion for automatic exclusion beyond those which are expressly provided for in Article 31(2) of Council Directive 93/38/EEC of 14 June 1993 coordinating the procurement procedures of entities operating in the water, energy, transport and telecommunications sectors (OJ 1993 L 199, p. 84), to the detriment of foreign consultancy firms, and by failing to distinguish in the contest in question between qualitative selection and award criteria, the Hellenic Republic has failed to fulfil its obligations under the Community legislation on public procurement, more specifically Articles 4(2), 31(1) and (2) and 34(1)(a) of the Directive, as interpreted by the Court, the principle of mutual recognition of formal qualifications which applies to the Community law on public procurement and Articles 12 EC and 49 EC.
Legal context
2. Article 2 of Directive 93/38, in the version applicable at the time of the facts of the present case, provided:
‘1. This Directive shall apply to contracting entities which:
(a) are public authorities or public undertakings and exercise one of the activities referred to in paragraph 2;
…
2. Relevant activities for the purposes of this Directive shall be:
…
(c) the operation of networks providing a service to the public in the field of transport by railway, automated systems, tramway, trolley bus, bus or cable.
…’
3. Article 14(1)(c)(i) of that directive provided:
‘1. This Directive shall apply to:
…
(c) contracts awarded by contracting entities carrying out activities referred to in Annexes III, IV, V, and VI, provided that the estimated value, net of VAT, is not less than:
(i) ECU 400 000 in the case of supply and service contracts;
…’
4. Under Article 4(2) of Directive 93/38:
‘Contracting entities shall ensure that there is no discrimination between different suppliers, contractors or service providers’.
5. Article 31 of that directive read as follows:
‘1. Contracting entities which select candidates to tender in restricted procedures or to participate in negotiated procedures shall do so according to objective criteria and rules which they lay down and which they shall make available to interested suppliers, contractors or service providers.
2. The criteria used may include the criteria for exclusion specified in Article 23 of [Council] Directive 71/305/EEC of 26 July 1971 concerning the coordination of procedures for the award of public works contracts [OJ English Special Edition 1971 (II) p. 682] and in Article 20 of [Council] Directive 77/62/EEC of 21 December 1976 coordinating procedures for the award of public supply contracts [OJ 1977 L 13, p. 1].
3. The criteria may be based on the objective need of the contracting entity to reduce the number of candidates to a level which is justified by the need to balance the particular characteristics of the contract award procedure and the resources required to complete it. The number of candidates selected must, however, take account of the need to ensure adequate competition.’
6. Article 23 of Directive 71/305 and Article 20 of Council Directive 77/62, which were worded in similar terms, set out, under Title IV, Chapter 1, entitled ‘Criteria for qualitative selection’, situations in which a supplier could be excluded from participation in the contract. Those situations relate to either the personal circumstances of the supplier, that is to say, bankruptcy, winding up, suspension of business activities, administration by a court, or conviction, or the conduct of the supplier, that is to say, grave professional misconduct, failure to fulfil obligations relating to the payment of social security contributions or taxes or serious misrepresentation.
7. Those two articles were repeated in Article 24 of Council Directive 93/37/EEC of 14 June 1993 concerning the coordination of procedures for the award of public works contracts (OJ 1993 L 199, p. 54) and Article 20 of Council Directive 93/36/EEC of 14 June 1993 coordinating procedures for the award of public supply contracts (OJ 1993 L 199, p. 1), which codified Directives 71/305 and 77/62.
8. Article 34(1) of Directive 93/38 provided:
‘1. Without prejudice to national laws, regulations or administrative provisions on the remuneration of certain services, the criteria on which the contracting entities shall base the award of contracts shall be:
(a) the most economically advantageous tender, involving various criteria depending on the contract in question, such as: delivery or completion date, running costs, cost-effectiveness, quality, aesthetic and functional characteristics, technical merit, after-sales service and technical assistance, commitments with regard to spare parts, security of supplies and price; or
(b) the lowest price only.’
9. Finally, Article 2(6) of Council Directive 92/13/EEC of 25 February 1992 coordinating the laws, regulations and administrative provisions relating to the application of Community rules on the procurement procedures of entities operating in the water, energy, transport and telecommunications sectors (OJ 1992 L 76, p. 14), in the version applicable at the time of the facts of the present case, headed ‘Requirements for review procedures’, read as follows:
‘The effects of the exercise of the powers referred to in paragraph 1 on a contract concluded subsequent to its award shall be determined by national law. Furthermore, except where a decision must be set aside prior to the award of damages, a Member State may provide that, after the conclusion of a contract following its award, the powers of the body responsible for the review procedures shall be limited to awarding damages to any person harmed by an infringement.’
10. The wording of that provision is almost identical to that of Article 2(6) of Council Directive 89/665/EEC of 21 December 1989 on the coordination of the laws, regulations and administrative provisions relating to the application of review procedures to the award of public supply and public works contracts (OJ 1989 L 395, p. 33), as amended by Council Directive 92/50/EEC of 18 June 1992 (OJ 1992 L 209, p. 1).
The contract notice in question and the pre-litigation procedure
11. In the present case, the Commission’s complaints concern certain terms and conditions appearing in a contract notice issued by ERGA OSE AE (‘ERGA OSE’), a public entity owned by the Greek railways body. That notice related to the carrying out of a study concerning property and electro-mechanical projects in connection with the construction of a railway station.
12. The contract notice in question, numbered 2003/S 205-185214 and 2003/S 206-186119, was published on 16 October 2003. The terms and conditions of that notice were based on the national legal requirements then in force, namely Law 716/1977.
13. For the purposes of the examination of this action, the material terms of the disputed contract notice are the following:
‘Section III: Legal, economic financial and technical information
…
2.1 Information concerning the individual situation of … service providers and the formalities necessary to assess their minimum economic and technical capacity:
…
2.1.3	Technical capacity – Supporting evidence required: A. Expressions of interest will be accepted if submitted by:
(a) Greek consultancy firms which are enrolled in the corresponding national register and possess a certificate:
…
(b) Foreign consultancy firms, constituted under the legislation of a Member State of the European Union or the [European Economic Area (EEA)] and which have their central administration, principal place of business or statutory seat within the European Union or the EEA … Foreign consultants must possess formal and substantive qualifications for each category of study corresponding to those required for Greek consultants who are enrolled in the Greek register of Consultants, and consultancy firms must have staff for each category of study corresponding to the staff required for Greek consultancy firms …
It is stressed that foreign consultancy firm/consultants who submitted an expression of interest in [ERGA OSE] tendering procedure in the six months preceding the date of their expression of interest in the present competition and who declared qualifications corresponding to certificate categories different from those now being asked for will not be accepted.
…
Section IV: Procedure
‘IV. (1) Nature of procedure: open
…
IV.(2)	Award criteria:
The most economically advantageous offer, in conformity with the following criteria …:
Taking account of Article 34(1)(a) of Directive 93/38, the contract will be awarded in accordance with the following criteria:
1. Specific and general experience, in particular design work on similar projects either by consultancy firms or consultants and their scientific staff.
2. Real capacity to conduct a study within the timescale planned together with obligations assumed regarding the carrying-out of other studies and the specific scientific and operational staff proposed to conduct the study in question as well as the equipment in relation to the object of the study,
order of priority: none.
…’
14. Under the Greek system, the certificates of consultancy firms and consultants are categorised according to experience and consultancy undertaken and are registered according to that experience. Foreign consultancy firms and consultants are not required to be so registered. For each contract, specific categories of certificate are required, according to the experience required for that contract.
15. Law 716/1977 has been repealed and replaced by Law 3316/2005.
16. Following a complaint, on 28 June 2005 the Commission wrote to the competent Greek authorities, pointing out that some of the terms of the contract notice in question contravened certain provisions of Directive 93/38 and the principle of non-discrimination on grounds of nationality. The Greek authorities replied by letter of 22 July 2005. After considering that reply, on 18 October 2005 the Commission sent a letter of formal notice to the Hellenic Republic. The two complaints set out in that letter concerned, first, discrimination against foreign consultancy firms or consultants by reason of the formulation of the second paragraph of Section III, point 2(1.3)(b) of the contract notice in question and, second, the lack of distinction between qualitative selection criteria and award criteria in Section IV, point 2 of that notice.
17. Since it did not find the Greek authorities’ reply of 14 December 2005 to that letter of formal notice to be satisfactory, on 4 July 2006 the Commission sent a reasoned opinion to the Hellenic Republic, to which the latter replied by letter of 30 August 2006. Unconvinced by that reply, the Commission decided to bring the present action.
The action
Admissibility
18. The Hellenic Republic objects that the action is inadmissible.
19. Firstly, it points out that Law 716/1977, which formed the basis of the contract notice in question, was repealed by a new law before the date on which the time-limit set in the reasoned opinion expired, that is to say, before the point in time at which the question whether there has been a failure to fulfil obligations falls to be assessed. Contract notices issued on the basis of the new law no longer contain clauses such as those in issue in the present case. Proceedings for a declaration of failure to fulfil obligations are not intended to stigmatise a Member State but to enable it to enact legislation which complies with Community law, that objective having now been attained with Law 3316/2005.
20. Secondly, the Hellenic Republic submits, essentially, that Article 2(6) of Directive 92/13 was transposed into Greek law by Article 4(2) of Law 2252/1997, pursuant to which after the contract has been awarded it can no longer be challenged. Accordingly, revocation a posteriori of the contract concluded on the basis of the contract notice in question, which constitutes a one-off contract since it relates to preparation of a study, is not possible, particularly since the award of that contract was upheld by three judicial decisions at national level, delivered in proceedings for interim measures. Thus, the Hellenic Republic suggests, in fact, that the Commission’s action has become devoid of purpose.
21. That argument cannot be accepted.
22. Firstly, it must be noted that, as is apparent from both the Commission’s application and reply and as it confirmed at the hearing before the Court, the action does not concern incomplete or incorrect transposition of Directive 93/38 into national law, or even a consistent administrative practice based on Law 716/1977 that did not comply with that directive, but rather misapplication of the latter in the procurement procedure in question.
23. The Commission alone is competent to decide whether it is appropriate to bring proceedings against a Member State for failure to fulfil its obligations and to determine the conduct or omission attributable to the Member State concerned on the basis of which those proceedings should be brought. It may therefore ask the Court to find that, in not having achieved, in a specific case, the result intended by the directive, a Member State has failed to fulfil its obligations (Joined Cases C‑20/01 and C‑28/01 Commission
v Germany
[2003] ECR I‑3609, paragraph 30, and the case-law cited). Accordingly, the repeal of Law 716/1977 and the adoption of a new law before expiry of the time-limit set in the reasoned opinion do not render the present action devoid of purpose.
24. Secondly, it must be pointed out that, in accordance with the case-law of the Court, Article 2(6) of Directive 89/665, the content of which is identical to that of Article 2(6) of Directive 92/13, cannot affect an action brought under Article 226 EC (Case C‑503/04 Commission
v Germany
[2007] ECR I‑6153, paragraph 34). Those directives, by requiring the Member States to take the measures necessary to ensure that decisions taken by the contracting authorities may be reviewed effectively, cannot be regarded as also regulating the relationship between the Member States and the Community and thus affecting the application of Article 226 EC (see, to that effect, Case C‑275/08 Commission
v Germany
[2009] ECR I‑0000, paragraphs 33 and 35).
25. In any event, the fact that, it might no longer be possible to revoke the contract in question does not render the infringement proceedings devoid of purpose.
26. Furthermore, it must be noted that, when the time-limit of two months prescribed in the reasoned opinion expired, that is to say, on 4 September 2006, the contract at issue had not run its full course, although that is the condition required under the settled case-law of the Court for the Commission’s action to be considered inadmissible (see, inter alia, Case C‑394/02 Commission
v Greece
[2005] ECR I‑4713, paragraph 18, and the case-law cited, and Case C‑237/05 Commission
v Greece
[2007] ECR I‑8203, paragraph 29).
27. It is apparent from the case file that the contract at issue comprised two consultancy projects which were to be carried out by the successful tenderer. Notwithstanding the fact that, as the Hellenic Republic claims, the second project was contingent on the first, it is not disputed that they formed a whole as regards performance of the obligations of the successful tenderer. According to the actual statement of the Hellenic Republic at the hearing before the Court, the second project had not yet been completed and, consequently, delivered to the awarding body on 4 September 2006. Accordingly, at that date, the contract at issue had not run its full course.
28. Having regard to the foregoing considerations, it must be held that the Commission’s action is admissible.
Substance
29. It should be noted at the outset that, as is apparent from the documents in the case, ERGA OSE is a public undertaking whose activity involves the operation of public services providing networks in the field of railway transport. It is therefore a contracting entity within the meaning of Article 2(1)(a) and 2(c) of Directive 93/38. In addition, the estimated value of the contract to which the contract notice in question relates is EUR 3 240 000 and therefore greatly exceeds the threshold set in Article 14(1)(c)(i) of that directive. Consequently, the contract award procedure in question falls within the scope of that directive.
30. The complaints raised in the present action relate, firstly, to the clause in Section III, point 2.1.3(b), second paragraph, of the contract notice in question and, secondly to Section IV, point 2, of that notice.
The clause in Section III, point 2.1.3(b), second paragraph, of the contract notice in question
31. The Commission submits that the clause in Section III, point 2.1.3(b), second paragraph, of the contract notice in question – according to which foreign consultancy firms or consultants who had submitted an expression of interest in ERGA OSE tendering procedures in the six months preceding the date of their expression of interest in the competition and who had declared qualifications corresponding to certificate categories different from those now required would not be accepted – disregarded Article 31(1) and (2) of Directive 93/38, in that it introduced a ground of exclusion additional to those exhaustively authorised by Community law in the field of public procurement. That clause also introduced discrimination against foreign consultancy firms and consultants, in breach of the principle of equal treatment set out in Article 4(2) of Directive 93/38 and resulting from Articles 12 EC and 49 EC. It also fails to have regard to the principle of mutual recognition of diplomas and other evidence of formal qualifications.
32. First of all, it must be pointed out that the Commission does not challenge the Greek system of categorising the certificates of consultancy firms and consultants according to experience and consultancy undertaken, nor their registration according to that experience. Nor does it deny that the Member States have the power to request proof of that experience or the fact that foreign consultancy firms and consultants are not required to be registered and that they may prove their experience in any way.
33. After that preliminary comment, it must be noted, firstly, that the procedure to which the contract notice in question related was an open procedure. Questioned on that point at the hearing, the Commission admitted that Article 31 of Directive 93/38 gave rise to the problem of whether it was applicable to that type of procedure, having regard to the fact that, in paragraph 1 thereof, it expressly refers to restricted and negotiated procedures and not to open procedures. It stated on that occasion that its complaint with regard to the clause in question was essentially based on a breach of Article 4(2) of that directive.
34. In those circumstances, the view must be taken that the Commission has withdrawn its complaint alleging breach, by that clause, of Article 31 of Directive 93/38.
35. Secondly, the clause in question, formulated in clear and unequivocal terms, must be understood as meaning that, if foreign consultancy firms or consultants had taken part in a procedure launched by the same contracting entity, that is to say, ERGA OSE, in the six months preceding the new tendering procedure and if, in the earlier procedure, they had declared qualifications corresponding to certificate categories different from those being asked for in the new procedure, in accordance with the Greek system of categorising diplomas, they would not be allowed to participate in that new procedure.
36. However, the Hellenic Republic submits that that clause has always been applied to the effect that any interested operator in doubt as to its scope could request clarification from the contracting entity concerned and was entitled to submit evidence, by any appropriate means, that it met the conditions for participation in the procedure in question.
37. In that regard, it is clear that, in accordance with the settled case-law of the Court, the principle of equal treatment entails the principle of transparency. Those principles, which constitute the basis of the Community directives on public procurement, mean, in particular, that tenderers, even potential tenderers, must generally be on an equal footing and have equality of opportunity in formulating the terms of their applications to take part and their tenders (see, to that effect, Case C‑470/99 Universale-Bau and Others
[2002] ECR I‑11617, paragraph 93, and Case C‑213/07 Michaniki
[2008] ECR I‑0000, paragraphs 44 and 45 and the case-law cited).
38. In particular, potential tenderers must be in a position of equality as regards the scope of the information in a contract notice. It is not consistent with those principles for one category of those concerned to have to request clarification and additional information from the contracting entity as to the actual meaning of the content of a contract notice, where its formulation would leave no room for doubt in the mind of a reasonably well-informed and diligent potential tenderer.
39. In addition, the Court has held that Article 4(2) of Directive 93/38, in prohibiting any discrimination between tenderers, also protects those who were discouraged from tendering because they were placed at a disadvantage by the procedure followed by a contracting entity (Case C‑16/98 Commission
v France
[2000] ECR I‑8315, paragraph 109).
40. It cannot be disputed that the clause in question, with its clear formulation, is likely to have a dissuasive effect on foreign consultancy firms or consultants, as was moreover, the case here.
41. That clause will clearly induce them to think that any difference between the qualifications declared in an earlier procedure launched by the same contracting body and the qualifications required for the procedure to which the contract notice in question relates has the automatic effect of excluding them from participating in that contract.
42. Consequently, a foreign tenderer such as the complainant to the Commission does not enjoy equality of opportunity with non-foreign tenderers because of the clearly dissuasive wording of that clause and the need, despite that wording, to take additional steps to obtain clarification as to the conditions for admission to the tendering procedure.
43. It is therefore clear that the way in which the contract notice in question is worded gives rise to a difference in treatment by reason of the Member State of establishment of those concerned, to the detriment of foreign candidates, and the Hellenic Republic has offered no justification for that difference.
44. Thirdly, in accordance with recital 34 in the preamble to Directive 93/38, ‘the relevant Community rules on mutual recognition of diplomas, certificates or other evidence of formal qualifications apply when evidence of a particular qualification is required for participation in an award procedure or a design contest’.
45. In the present case, it is indeed apparent from the wording of the clause in Section III, point 2.1.3(b), second paragraph, of the contract notice in question that foreign candidates who had previously submitted an expression of interest in other contract notices issued by the same contracting entity were not, unlike national candidates, able to rely on all their diplomas or professional qualifications before that entity.
46. However, that clause, as it is worded, does not enable it to be asserted that that entity would refuse on principle to take account of diplomas or evidence of professional qualifications issued by another Member State.
47. It follows that the Commission’s complaint alleging breach of the Community rules of mutual recognition of evidence of formal qualifications is unfounded.
48. In the light of the foregoing considerations, it must be held that the clause in question does not comply with Article 4(2) of Directive 93/38.
49. In those circumstances, it is not necessary to examine the Commission’s other allegations which also seek a finding of such discriminatory treatment.
Section IV, point 2, of the contract notice in question
50. The Commission submits that point 2 of Section IV of the contract notice in question, headed ‘Award criteria’, confuses, in an unacceptable way, criteria for the qualitative selection of tenderers and criteria for the award of contracts. It submits that Directive 93/38 introduces a system analogous to that established by Directive 92/50, under which two phases of the procedure must be distinguished, the first establishing the tenderer selection criteria and the second consisting of laying down the award criteria for the contract. There are therefore two separate stages to the award procedure which have different objectives, although, according to the Commission, the simultaneous checking of the candidates’ suitability and the awarding of the contract is not prohibited.
51. In that regard, it is apparent from case-law that, while the Community directives on public procurement do not in theory preclude the examination of the tenderers’ suitability and the award of the contract from taking place simultaneously, the two procedures are nevertheless distinct and are governed by different rules (see, by analogy, Case 31/87 Beentjes
[1988] ECR 4635, paragraphs 15 and 16, and Case C‑532/06 Lianakis and Others [2008] ECR I‑251, paragraph 26).
52. The suitability of tenderers is to be checked by the authorities awarding contracts in accordance with the criteria of economic and financial standing and of technical capability (the ‘qualitative selection criteria’) referred to, in the present case, in Articles 30 and 31 of Directive 93/38 (see, by analogy, Beentjes, paragraph 17, and Lianakis and Others, paragraph 27).
53. By contrast, the award of contracts is based on the criteria set out, in the present case, in Article 34(1) of that directive, namely, the lowest price or the economically most advantageous tender (see, by analogy, Beentjes, paragraph 18, and Lianakis and Others, paragraph 28).
54. However, although in the latter case, as is attested by the use of the expression ‘for example’, Article 34(1) of Directive 93/38 does not set out an exhaustive list of the criteria which may be chosen by the contracting authorities, and therefore leaves it open to the authorities awarding contracts to select the criteria on which they propose to base their award of the contract, their choice is nevertheless limited to criteria aimed at identifying the tender which is economically the most advantageous (see, by analogy, Beentjes, paragraph 19; Case C‑19/00 SIAC Construction
[2001] ECR I‑7725, paragraphs 35 and 36; Case C‑513/99 Concordia Bus Finland
[2002] ECR I‑7213, paragraphs 54 and 59; Case C‑315/01 GAT
[2003] ECR I‑6351, paragraphs 63 and 64; and Lianakis and Others, paragraph 29).
55. Therefore, ‘award criteria’ do not include criteria that are not aimed at identifying the tender which is economically the most advantageous, but are instead essentially linked to the evaluation of the tenderers’ ability to perform the contract in question (see, by analogy, Lianakis and Others, paragraph 30).
56. In the present case, the criteria selected as ‘award criteria’ by the contracting authority, in point 2 of Section IV of the contract notice in question, relate to the experience and real capacity to ensure proper performance of the contract in question. Those are criteria which concern the tenderers’ ability to perform the contract and which therefore do not have the status of ‘award criteria’ pursuant to Article 34(1) of Directive 93/38, which the Greek Government, moreover, has not seriously disputed.
57. In the light of the foregoing, it must be held that point 2 of Section IV of the disputed contract notice does not comply with Article 34(1) (a) of Directive 93/38.
58. Having regard to all the foregoing considerations, it must be held that, by reason, firstly, of the exclusion, by virtue of Section III, point 2.1.3(b), second paragraph, of the contract notice in question of foreign consultancy firms or consultants who had submitted an expression of interest in ERGA OSE tendering procedures in the six months preceding the date of their expression of interest in the current competition and who had declared qualifications corresponding to certificate categories different from those now required and, secondly, of the failure to distinguish in Section IV, point 2, of that notice between qualitative selection criteria and award criteria for the contract in question, the Hellenic Republic has failed to fulfil its obligations under Articles 4(2) and 34(1)(a) of Directive 93/38.
59. The application is dismissed as to the remainder.
Costs
60. Under Article 69(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Under the first subparagraph of Article 69(3) of those rules, the Court may nevertheless order that the costs be shared or that the parties bear their own costs where each party succeeds on some and fails on other heads, or where the circumstances are exceptional. Since the Commission and the Hellenic Republic have each been partially unsuccessful in their pleadings, they should bear their own costs.
Operative part
On those grounds, the Court (Fourth Chamber) hereby:
1. Declares that, by reason, firstly, of the exclusion, by virtue of Section III, point 2.1.3(b), second paragraph, of the contract notice in question issued by ERGA OSE on 16 October 2003, numbered 2003/S 205-185214 and 2003/S 206-186119, of foreign consultancy firms or consultants who had submitted an expression of interest in ERGA OSE tendering procedures in the six months preceding the date of their expression of interest in the current competition and who had declared qualifications corresponding to certificate categories different from those now required and, secondly, of the failure to distinguish in Section IV, point 2, of that notice between qualitative selection criteria and award criteria for the contract in question, the Hellenic Republic has failed to fulfil its obligations under Articles 4(2) and 34(1)(a) of Council Directive 93/38/EEC of 14 June 1993 coordinating the procurement procedures of entities operating in the water, energy, transport and telecommunications sectors;
2. Dismisses the remainder of the application;
3. Orders the Commission of the European Communities and the Hellenic Republic to bear their own costs.