23. 8. 76 Official  Journal  of the European  Communities No C 197/1 
II 
(Preparatory  Acts) 
ECONOMIC  AND  SOCIAL  COMMITTEE 
Opinion  on  the  possibilities  of developing  advanced  technology  sectors  in the 
Community  through  a policy  of liberalizing  public  purchasing 
The Opinion  of the  Committee  is not  based  on any  text  published  in the  Official 
Journal  of the  European  Communities. 
A. LEGAL  BASIS  FOR  THE  OPINION 
At its 132nd  plenary  session  held  on 17 July  1975  the Committee,  acting  on a proposal 
from  the Bureau,  decided  to deliver  an opinion  on the abovementioned  subject  on its 
own initiative. 
B. OPINION  OF THE  ECONOMIC  AND  SOCIAL  COMMITTEE 
The Economic  and  Social  Committee  prepared  its opinion  on the above  matter  at its 
139th  plenary  session,  held  in Brussels  on 25 and  26 May  1976. 
The full  text  of the opinion  is as follows: 
THE  ECONOMIC  AND  SOCIAL  COMMITTEE, 
Having  regard  to Article  20 (4)  of its Rules  of 
Procedure. 
Having  regard  to the  decision  taken  by the Plenary 
Assembly  on 17 July  1975,  acting  on a proposal  of 
the Bureau,  to  draw  up  an  opinion  on  the 
abovementioned  subject, 
Having  regard  to the opinion  issued  by the Section 
for Industry,  Commerce,  Crafts  and  Services  at its 
meeting  on 7 and  8 April  1976, 
Having  regard  to the  oral  report  made  by  the 
Rapporteur,  Mr de Ferranti, 
Having  regard  to the First  Communication  from  the 
Commission  to  the  Council  on  progress  in 
liberalizing  public  contracts  awarded  by undertakings responsible  for the  operation  of services  of general 
economic  interest  in respect  of supplies  updated  in 
June  1975, 
Having  regard  to the  previous  opinions  issued  by 
the Economic  and  Social  Committee  in the  field  of 
public  works  contracts  and  public  supply  0) 
and in  the  field  of  data  processing  (2), 
telecommunications  (3), the  aircraft  industry  (4) and 
nuclear  safety  (5), 
Having  regard  to the discussions  at its 139th  Plenary 
Session,  held  on 25 and  26 May  1976  (meeting  of 26 
May  1976), 
(!) OJ  No 63,  13. 4. 1965  and  OJ No C 30, 25. 3. 1972. 
(2) OJ  No C 255,  7. 11. 1975. 
(s) OJ  No C 286,  15. 12. 1975. 
(4) OJ  No C 131,  12. 6. 1976. 
(5) OJ  No C 263,  17. 11. 1975. 
No C 197/2 Official  Journal  of the European  Communities 23. 8. 76 
HAS  ADOPTED  THE  FOLLOWING  OPINION 
by a unanimous  vote,  with  2 abstentions: 
Community  policy  on public  purchasing  is not aimed 
at controlling  or  interfering  with  purchasing 
decisions  from  the public  or semi-public  sector.  It is 
aimed  simply  at increasing  the transparency  of those 
decisions  so that  the  arguments  in favour  of a free 
European  market  be  adequately  weighted  when 
decisions  are made. 
The effects  of the  Commission  Directive  of 
17 December  1969  are uncertain.  The  present  public 
works  Directives  and  the proposed  Council  Directive 
on supplies  are  aimed  primarily  at securing  the 
advertizing  of some  public  tenders  in the  Official 
Journal.  The  Committee  believes  that  they  are 
unlikely  to be sufficiently  effective  as they  stand. 
In addition,  the  Committee  is concerned  about  the 
lack of reciprocal  notification  of contracts  by third 
countries  and  stresses  that  this  consideration  must 
continue  to be  borne  in mind  at the  OECD 
negotiations  on public  purchasing. 
The Committee  believes  Community  policy  in this 
field  to be fundamental  to achieving  the  benefits 
foreseen  in the Treaty  and  that  therefore  the policy 
in this  field  needs  now  to evolve  on the  lines 
indicated  in this  opinion. 
1. Introduction 
1.1. Up  to 20 years  ago,  nearly  all technology  was 
based  on the use  of energy  to replace  manual  effort 
in transport,  agriculture,  material  extraction  and 
processing.  New  power  sources  would  enable  this 
process  to continue.  However,  the past  20 years  has 
seen the  application  of electronics  improving  the 
conditions  under  which  mental  work  is carried  out 
and increasing  its  effectiveness.  The  use  of 
telecommunications  and  computers  should  give  an 
added  impetus  for this  process  and,  combined  with 
the continuation  of developments  based  on energy, 
should  provide  the means  whereby  it will  be possible 
to continue  to strive  for higher  living  standards. 1.2. Thus,  the use of these  developments  is, on the 
one hand,  the  only  way  to achieve  an increase  of 
resources  so as to contribute  to a higher  material 
standard  of  living,  better  standards  of  social 
services  — such  as care  of old people  — and  overall 
quality  of life.  On the  other  hand,  however,  these 
developments  can  in the short  term,  adversely  affect 
individual  companies  and  regions.  Companies  going 
out of business  and  individuals  losing  their  jobs  are 
the main  areas  where  the short-term  adverse  effects 
of 'technology'  manifest  themselves.  Therefore  the 
rate at which  improved  technology  is socially  accepted, 
and improved  living  standards  are  achieved,  is 
determined  by:  (i) the  effectiveness  of policies  to 
facilitate  job  changing,  re-employment,  retraining 
and rehousing,  and  (ii)  the  extent  to  which 
restructuring  can  be effectively  implemented. 
1.3. Technological  developments  will  also  have 
implications  for  the  environment  and  interact  with 
regional  policy.  Certainly  the  rate  of progress  will 
depend  upon  the  success  of all institutions  in the 
Community  in dealing  with  these  effects. 
1.4. As  the creation  of a single  unified  market  is 
the main  economic  condition  for  which  we  are 
striving,  it is important  to identify  why  this  will 
speed  up the application  of technology.  First  of all, 
it is clear  that  in the  non-government  sector,  the 
consumer  and  the  companies  between  them  have 
moved  towards  a big  increase  in intra-Community 
trade.  Effectively,  this  is consumer  choice  in action. 
The consequence  is that  companies  are  prepared  to 
take bigger  risks  with  investment  decisions  in 
plant,  product  development  and  marketing,  whilst 
competition  is maintained  thanks  to the large  number 
of firms  that  a Community-wide  marketplace  could 
maintain.  By contrast,  the  figures  show  that  there 
has been  virtually  no increase  in intra-Community 
trade  in goods  and  services  purchased  by governments 
and public  authorities.  If the reason  for this  is that 
the type  of products  bought  by governments  are 
dissimilar  to those  bought  by the private  sector  and 
there  are  no benefits  to be derived  from  a freer 
market  then  there  is no cause  for concern.  However, 
the case  of computers,  telecommunications  and  aircraft 
demonstrate  that  there  is great  cause  for concern.  So 
many  of the  world's  most  efficient  producers  of 
these  classes  of goods  are  in the United  States  and 
have  been  built  on the  benefit  of a large  unified 
market,  that  it is likely  that  there  are great  potential 
cost benefits  which  could  be obtained  through  the 
creation  in Europe  of a common  market  for public 
purchases  in such  fields. 
23. 8. 76 Official  Journal  of the  European  Communities No C 197/3 
1.5. Whilst  the  argument  that  a large  market  is 
needed  for  certain  firms  and  types  of product  to be 
competitive  is important,  the  Committee  believes 
that more  important  still  is the effect  on the  capacity 
of the  Community  to form  and  maintain  small-  and 
medium-sized  firms.  It is in the  nature  of the 
application  of technology  that  opportunities  are 
constantly  and  very  rapidly  created  for  small-  and 
medium-sized  firms.  All  kinds  of  specialization 
become  possible  and  the  efforts  of the  entrepreneur 
rendered  worthwhile  in a great  variety  of enterprises. 
In some  Member  States  over  half  the  total  number  of 
employed  persons,  outside  government  employment, 
work  for  small  or private  companies  or are  self-
employed;  this  is thus  a vital  sector  for  the creation 
of new  jobs. examination,  with  all  interested  parties,  of  the 
situation  and  future  outlook  for each  sector. 
Establishment  of  a Community-wide  market  is 
essential  if the  Community  is to fulfil  its economic 
potential.  But  it is no  less  essential  that  the 
Community  create  the  most  favourable  conditions 
for industry  — through,  for  example,  recourse  to 
foreign  technology,  foreign  licences,  direct  agreements 
with  foreign  companies  — to serve  its customers, 
expand  and  negotiate  on  equal  terms  with 
competitors  all over  the  world.  In any  event,  it is 
vital  that  European  concerns  should  have  complete 
freedom  of action  in this  sphere. 
1.6. Most  of the  sectors  covered  in more  detail  in 
the third  chapter  of this  opinion  are  involved  in 
supplying  governments  with  equipment  required  for 
national  security.  The  Commission  has  raised  the 
question  of these  purchases  in its paper  on European 
Union  and  made  recommendations.  The  scale  and 
significance  of these  purchases  and  their  impact  on 
innovations  are  such  that  the  Committee  believes  it 
was appropriate  for  the  Commission  to raise  this 
question.  Whilst  the Treaty  does  not cover  the field  of 
security,  it does  cover  the  field  of trade,  and  for 
security  products  to be excluded  is denying  benefits 
not only  to governments  but  to consumers  in other 
areas.  Once  again  this  is a matter  of political  will, 
but it is a will  that  is already  very  much  in evidence 
with  a number  of joint  ventures  currently  in hand.  In 
fact,  the advantages  of intra-Community  trade  in this 
area are  such  that  European  cooperation  came  about 
naturally  some  years  ago.  However,  the  impetus  of 
the work  needs  to be maintained  and  becomes  even 
more  important  as the  sectors  supplying  the  security 
market  become  involved  in  a more  European 
context. 1.8. It  is, therefore,  the  view  of the  Committee 
that governments  and  quasi-government  bodies 
should  aim  to increase  intra-Community  trade.  The 
Committee  recommends  that  the  purchasing 
decisions  of public  bodies  should  be as transparent 
as possible  and  the  pressures  on them  should  not 
only  be  for  the  best  value  for  money,  which 
everyone  favours,  but  also  such  that  pressures  to 
maintain  local  employment  or  favour  local 
manufacturing  should  be balanced  by the  arguments 
in favour  of  the  free  European  market.  The 
Committee  also  recommends  that  barriers  to trade  be 
reduced  by the  use  of Directives  under  Articles  90, 
100 and  101,  in so far as this  is possible,  and  by such 
other  means  as are open. 
2. Factors  affecting  all sectors 
2.1. The  importance  of  government  purchases  for 
advanced  technology 
1.7. As  stated  elsewhere  in this  opinion,  the 
Committee  attaches  great  importance  to the  sectoral 
approach  and  to the  timing  of future  Community 
action. 
The liberalization  of public  purchasing  is a complex 
process  which  has  potential  advantages,  but  also 
dangers  if  enough  time  is  not  allowed  for 2.1.1.  In  the  markets  for  the advanced  technology 
industries,  major  —  sometimes  the  only  — 
customers  are  governments  and  public  authorities,  at 
home  or abroad. 
2.1.2.  Clearly  this  is true  in defence  procurement. 
In civil  procurement,  if one  includes  public  service 
corporations,  nationalized  industries,  etc.,  the 
proposition  is also  true.  This  holds  good  for 
advanced  technology  equipment  and  products  of all 
the main  types,  for  example,  aerospace,  electronics, 
data  processing,  telecommunications,  heavy 
electrical,  including  nuclear  power,  railway,  mining 
and medical  equipment. 
No C 197/4 Official  Journal  of the European  Communities 23. 8. 76 
2.1.3.  It  is not  only  the  large  and  well-known 
manufacturers  who  depend  to this  extent  on  the 
public  purchaser;  when  one  includes  their 
subcontractors,  material  and  component  suppliers 
and considers  in  addition  other  manufacturers 
advanced  in technology  but  more  modest  in their 
scale  of  operations,  there  remains  very  little 
advanced  technology  that  is not  caught  up,  to an 
important  extent,  in the  business  of supplying 
governments  and  public  authorities. production  facilities  in the  purchasing  countries  ,or 
supplied  products  through  their  subsidiaries  in those 
countries  from  existing  facilities  elsewhere:  in such 
cases  these  supplies  often  tend  to be treated  as local 
ones,  thus  benefiting  both  from  a national  preference 
and from  continental-size  economies  of scale.  The 
scope  of such  multinational  companies  makes  it 
more  difficult  for  purely  national  companies  to 
compete  in their  home  markets,  let alone  elsewhere 
in the  Community  or on world  markets. 
2.1.4.  Export  sales,  particularly  to  the  less-
industrialized  countries  outside  Europe,  represent  a 
vital  part  of the business  of European  manufacturers 
of advanced  technology  products.  In these  world 
markets  competition  is fierce,  with  demanding 
standards  being  set by the  world  leaders  in these 
sectors  of industry.  European  firms  have  proved  that 
they can  meet  these  standards  and  win  business  in 
the face  of this  competition.  The  export  markets 
won in this  way  are  a vital  part  of their  production 
and will  remain  so in the  future.  But  compared  to 
their  main  overseas  competitors  they  are 
handicapped  by the  lack  of a large,  Community-
wide  'home'  market,  with  the  advantage  it brings  in 
terms  of economies  of scale,  political  security  within 
that market,  and  bargaining  power  outside  it. Any 
Community  policy  for  opening  up public  markets 
must  therefore  take  account  of this  and  provide 
maximum  support  for  those  industries  concerned  in 
their  efforts  to attain  a Community  and  world-wide 
dimension  and  to  strengthen  their  bargaining 
position  in the world. 
2.2. Advanced  technology  is  nationally  orientated 
with strong  competition  from  the  United  States 
2.2.1.  Markets  for  advanced  technology  products 
have  naturally  tended  to evolve  on closed  national 
lines.  Wherever  a national  manufacturing  capability 
exists  for  a given  product,  the  national  producers 
have  tended  to become  the  preferred  and  protected 
sources  of supply.  This  applies  first  and  foremost  to 
the larger  states.  In the  smaller  states,  where 
production  is highly  specialized  because  of the 
limited  size  of the  market  and,  consequently,  covers 
fcwrer  products,  public  purchases  are  to a large 
extent  made  abroad.  In some  sectors,  competition  is 
restricted,  while  in  others  there  is a strong 
competition  from  the  USA,  where  American 
suppliers  have  the  advantages  of a much  more 
homogeneous  as well  as a much  larger  domestic 
market.  In a number  of cases,  foreign  suppliers, 
especially  American  ones,  have  established 2.2.2.  There  is also  a strong  tendency  for  the 
purchaser/supplier  relationship  in each  country  to 
become  polarized  around  a  unique  set  of 
specifications,  procedures  and  practices,  which  in 
spite  of the efforts  towards  harmonization,  evolve  in 
increasingly  divergent  directions  and  isolation  from 
corresponding  specifications  in other  countries.  The 
point  is thus  rapidly  reached  at which  compatibility, 
and hence  competition,  is out  of the  question.  In 
many  advanced  technology  fields  this  is the situation 
which  prevails  between  the nine  member  countries  of 
the Community.  Thus,  the benefits  of free  trade  and 
the movement  of goods  across  the  Member  States' 
frontiers,  which  are  among  the  objectives  of the 
Treaty  of  Rome,  are  very  difficult  to obtain. 
National  manufacturers  are  frequently  in  the 
situation  where  their  supplies  to the national  market 
are based  on research  and  development  efforts  which 
have  been  financed  through  a  deliberately 
maintained  continuity  of orders  from  a public  supply 
authority.  Attempts  to supply  other  markets  have  to 
overcome  substantial  barriers  in the form  of: 
— divergent  specification, 
— lack  of access  to R & D for  the  particular 
market's  requirements, 
— national  orientation  by the  purchasing  authority 
either  in respect  of invitations  to tender,  on in 
respect  of the award  of contracts. 
2.2.3.  This  national  orientation  —  even  if 
generally  designed  to boost  industrial  strength  — is 
liable  gradually  to reduce  the  competitive  power  of 
European  firms  compared  with  those  of the  United 
States  and  other  countries.  An opening  of the market 
will strengthen  the position  of those  home  producers 
who are capable  of meeting  competition.  It will  also 
create  a more  reasonable  balance  for  the  smaller 
Member  States,  which  to a large  extent  undertake 
public  purchasing  in other  Member  States  but,  under 
23. 8. 76 Official  Journal  of the European  Communities No C 197/5 
the prevailing  circumstances,  have  only  very  limited 
opportunities  for supplying  other  countries. 
2.3. Community  on  present  and  proposed  action  to 
liberalize  public  purchasing 
2.3.1.  The  Commission  has  prepared  four 
Directives  in the  public  purchasing  field,  three  of 
which  have  already  been  approved  and  have  come 
into force.  Two  relate  to public  works,  one  to public 
supply  contracts.  As things  stand  now,  it is the draft 
Council  Supplies  Directive,  proposed  by  the 
Commission  but  not  yet  accepted,  which  concerns 
advanced  technology.  This  draft  Directive  lays  down 
procedures  for  advertizing  contracts  for  all public 
supplies  above  a certain  threshold  level  (probably 
150 000 to 200  000 u.a.),  and  is intended  to cover  all 
types  of products  and  services  from  small  items  to 
major  capital  installations.  Whilst  it is too  early  to 
judge,  these  Directives,  which  inter  alia  require 
notification  of contracts  in the Official  Journal,  are 
unlikely  to make  more  than  a marginal  contribution. 
Paragraph  2.4 indicates  how  this  could  be extended 
to achieve  more  effective  transparency. 
2.3.2.  Several  of the  advanced  technology  sectors 
are excluded  from  the  provisions  of the  draft 
Directive,  at  least  temporarily,  but  telecom-
munications  and  data  processing  equipment  are 
specifically  included. 
2.3.3.  The  Committee  believes  that,  provided  the 
conditions  are on the lines  indicated  in this  opinion, 
the industries  concerned  are ready  to move  towards 
more  liberal  and  open  public  purchasing.  Companies 
wish  to compete  for  business  in a larger  European 
market  and  to be free  to adjust  to the new  scale  of 
operations  by  natural  growth,  joint  ventures, 
mergers,  subcontracting  links  and  so on.  In moving 
into this  very  different  situation,  steps  need  to be 
taken  to guarantee  fairness,  effective  reciprocity, 
redress  (when  necessary)  and  hence  rules  will  be 
required.  The  Committee  believes  that  the measures 
taken  must  be based  on  a sector  approach,  on 
thorough  knowledge  of the  complex  technological 
and procedural  problems  of each  sector,  that  the 
pace  at  which  contracts  can  be  opened  to 
competition  from  suppliers  in other  countries  will  be 
different  from  sector  to sector,  and  even  from  one product  group  to another  within  the  same  sector, 
and that  time-scales  for  introducing  these  changes 
can only  be worked  out  through  close  consultation 
between  the  purchasers  and  suppliers  concerned. 
Purchasers  and  suppliers  should  have  consultation 
on any  possible  programme  for the home  markets  of 
the Community.  These  consultations  should  from  the 
outset  include  representatives  of  the  workers 
concerned.  Once  agreement  has  been  reached  it 
could  then  be appropriate  to give  it force  through 
further  directives.  However,  no single  directive  or set 
of provisions  can  take  account  of the complexities  of 
the situations  in all nine  member  countries  and  in all 
of the  advanced  technology  sectors.  It is desirable 
that measures  to be taken,  therefore,  be based  on 
thorough  knowledge  and  seek  to formalize  and  give 
official  authority  to plans,  programmes,  etc.  which 
both  sides,  the purchasers  and  suppliers  concerned, 
agree  to be realistic  and  feasible. 
2.3.4.  Up  to  the  present,  Community-wide 
consultations  to  coordinate  policy  and  more 
permanent  groupings  to place  such  consultations  on 
a firm  footing  are by no means  as common  as they 
should  be,  among  either  the  purchasers  or the 
suppliers.  Initially,  there  will  be an understandable 
tendency  for  purchasers  to join  together  in one 
group  and  suppliers  in another.  This  must  be seen  as 
but a first  step,  and  if either  group  seems  reluctant 
to take  the next  step  and  meet  with  the other  party, 
then the Commission  should  exercise  its influence  to 
overcome  such  hesitation.  Each  side  has  a vital 
contribution  to make  in working  out  plans  and 
agreements  for  its  sector;  no  time  table  or 
programme  worked  out  by purchasers  alone  is likely 
to be readily  accepted  by the  suppliers  and  vice 
versa.  The  Commission  should,  therefore,  satisfy 
itself  that  all parties,  inclusive  of consultation  with 
representatives  of the workers  concerned,  have  had  a 
full share  in formulating  proposals  submitted  to the 
authorities  and  should  recommend  endorsement  of 
sector  agreements  only  on that  condition. 
2.4. Technical  aspect  of harmonization 
2.4.1.  Contracting  procedures 
The Commission  will  be well  placed  to advise  on 
suitable  contracting  procedures  for  the sectors  as a 
No C 197/6 Official  Journal  of the European  Communities 23. 8. 76 
result  of its own  work  on rules  and  procedures  to be 
applied  through  Directives,  to  government 
purchasing  proper,  i.e.,  to  central  and  local 
government  purchasing  as distinct  from  that  of the 
public  utilities.  The  potential  advantages  here  — for 
example,  through  the  use  of the approved  list system 
on a Community-wide  basis  to select  suppliers  to be 
invited  to tender,  through  reducing  the  number  of 
tendering  procedures  to a minimum  and  spelling 
them  out  clearly  so that  all suppliers  know  precisely 
what  to do,  and  by awarding  all contracts  on the 
basis  of a specified  selection  of criteria  —  the 
advantages  seem  to be  at least  as great  for  the 
advanced  technology  sectors  as  for  direct 
government  procurement.  The  Commission  should 
help  to ensure  that  these  advantages  are,  in fact, 
obtained. 
2.4.2.  Reporting  and  complaints 
procedure 
The Commission  should  also  be able  to use  its 
influence  and  good  offices  to ensure  that  agreements 
concluded  between  purchasers  and  suppliers  contain 
suitable  provisions  aimed  at openness,  fairness  and 
reciprocity.  Contracts  should  be regularly  reported 
on by purchasers,  and  suppliers  should  be able  to 
make  enquiries  or put  complaints  to an appropriate 
watch-dog  body  for the sector.  Few  people  outside  a 
given  sector  will  have  much  detailed  knowledge  of 
its problems.  So  for  many  sectors  the  reporting, 
monitoring  and  dealing  with  complaints  can  be 
handled  by  involving  the  expertise  of the  sectors 
themselves  with,  of course,  appropriate  information 
being  supplied  as  a matter  of  routine  to  the 
Commission  and  governments  and  to  workers' 
representatives. 
2.4.3.  Sector-by-sector  approach 
The Commission  recognizes  — and  this  is borne  out 
by their  series  of studies  of industrial  sectors  — that 
a sector-by-sector  approach  is the most  relevant  one. 
These  studies  examine  such  questions  as  the 
structure  and  state  of the  sector  markets,  national, 
Community  and  worldwide,  the  commercial  strength 
and structure  of the manufacturers  involved,  etc.  It is 
as vital  in these  studies  as in the  purchasing  context 
that both  the purchasers  and  the  suppliers  should  be 
involved  in consultations  and  the  formulation  of 
recommendations  for  action.  The  absence  of either 
involves  a risk  that  connections  between  public 
purchasing  objectives  and  broader  concern  with  the 
health  of a sector  of industry  will  be overlooked.  For 
example,  it may  only  be possible  in a particularly 
vulnerable  sector  to obtain,  or to carry  through safely,  public  purchasing  agreements  of the  type 
discussed  in the  preceding  paragraphs,  on condition 
that support  is made  available  under  the  provisions 
of some  broader  policy  for  the  sector,  to help  the 
industry  or the  services  operated  by the  purchasers 
during  a period  of adjustment  and  reorganization. 
2.4.4.  Reciprocity 
Reciprocity  must  not  only  be achieved,  it must  be 
seen to be achieved,  if real  progress  is to be made  in 
opening  up national  markets  to products  from  other 
Community  countries.  Progress  should  therefore  be 
monitored  by  the  Commission,  with  governments 
and purchasing  authorities  providing  regular  reports 
and improved  statistics. 
Reciprocity  is  also  important  regarding  public 
purchases  from  third  countries.  The  Community 
should  therefore  obtain  parallel  treatment  for 
European  manufacturers  wishing  to supply  markets 
outside  Europe,  in  any  bilateral  or  broader 
agreements  involving  third  countries.  In particular,  in 
view  of the  situation  described  in paragraph  2.2.1 
above,  negotiations  should  aim  at eliminating  the 
restrictions  imposed  on  advanced  technology 
supplies  by the Buy  American  Act. 
2.5. The  Committee  has  taken  note  of the  report 
to the  Commission  on  'Public  purchasing  in the 
common  market'  by Sir Richard  Clarke  and  Mr  G. 
Charpentier  which  contains  important  evidence  and 
authoritative  views  on these  general  questions. 
3. The  situation  in some  main  sectors 
3.1. Data  processing 
3.1.1.  In  its opinion  on  data  processing  (*), the 
Economic  and  Social  Committee  has  already  stressed 
the importance  of public  procurement  policies  in this 
sector  to  complement  its  recommendations  for 
Directives  for the removal  of technical  barriers. 
3.1.2.  In  the  light  of the  development  of public 
procurement  policies  in this  sector,  the  following 
additional  comments,  are relevant. 
(!) OJ No C 255,  7. 11. 1975. 
23. 8. 76 Official  Journal  of the  European  Communities No C 197/7 
3.1.3.  The  opportunities  for  small-  and  medium-
sized  companies  are  considerable.  They  are  already 
an important  part  of the  sector  and  are  likely  to 
increase  their  share  of the national  and  Community 
markets  if present  barriers  to trade  are reduced.  The 
public  market  for  such  companies  is an important 
one and  intra-Community  trade  would  expand  the 
opportunities  for such  companies. 
3.1.4.  In  the  case  of telecommunications,  the 
purchasers  of equipments  are able,  under  the CEPT, 
to meet  together  to agree  policy.  However,  the 
purchasers  of data  processing  equipment  embrace 
nearly  every  organization  in the Community  and  no 
single  organization  exists  to represent  their  needs  as 
a whole.  However,  public  bodies  have  as users  many 
interests  in common  and  will,  no doubt,  already  be 
cooperating  with  the  Commission  on the  evolution 
of policy.  In addition,  there  are many  other  groups 
that represent  users,  although  they  are  organized 
principally  to deal  with  one  supplier  only.  The 
Commission  are,  no doubt,  therefore  prepared  to 
recognize  the  need  to represent  the  interests  of 
computer  users  as a whole  and,  with  their  needs  in 
mind,  formulate  appropriate  Directives. 
3.1.5.  As  far  as  Directives  to  establish 
transparency  of public  purchasing  decisions  by 
public  bodies  in this  area  are  concerned,  there  is 
little  doubt  in the interests  of the  Community  as a 
whole  that  these  are desirable.  However,  there  is still 
much  work  to  be  done  to  achieve  sufficient 
consensus  to  ensure  that  such  Directives  are 
adequately  effective. incompatible  approaches.  Until  there  is sufficient 
harmonization  in future  technology,  what  each 
country  is producing  today  is nearly  always 
irrelevant  to other  countries. 
3.2.3.  Harmonization  is,  therefore,  of  prime 
importance,  and  the  introduction  of  advanced 
technology  could  form  the appropriate  occasion  for 
such  a measure. 
3.2.4.  The  Committee  thinks  that  tele-
communications  should  not  be  included  in the 
public  supply  contract  Directive  until  sufficient 
harmonization  has been  achieved  to promote  genuine 
intra-Community  competition.  The  Committee  feels 
that the application  of the Directive  should  be linked 
to progress  in harmonization. 
3.2.5.  CEPT,  having  produced  an  agreed  time 
table  for  liberalization  must  now  satisfactorily 
resolve  the  question  of industry's  involvement  so 
that Community  Directives  can  take  this  into 
account.  When  the  time  is ripe,  a Directive  will  be 
required  opening  up various  groups  of products  for 
competitive  tender,  but the time  table  for this  action 
will depend  primarily  upon  progress  in the  PTT 
administrations'  organization,  CEPT. 
3.3. Railways 
3.2. Telecommunications 
3.2.1.  At  a meeting  in Torremolinos  (Spain)  in 
April  1975  CEPT  (the  body  that  brings  together  the 
post offices  of 20 European  countries)  agreed  to 
accept  responsibility  for harmonization  of equipment 
and undertake  a coordinated  programme  towards 
this objective.  Questions  being  resolved  are: 
— which  areas  are to be harmonized, 
— how  industry  is to be brought  in. 3.3.1.  The  railway  industry  in Europe,  both  the 
railways  organized  in the UIC  (Union  Internationale 
des Chemins  de Fer)  and  the  industry  organized  in 
the Federation  of Manufacturers,  cooperate  well 
together. 
3.3.2.  The  industry  supports  a pragmatic  approach 
and feels  that,  although  the opening  up of markets  is 
slow,  the will  and  ways  are there. 
3.3.3.  The  second  supplies  Directive  does  not 
apply  to the  transport  sector,  and  it is felt  that  a 
development  along  pragmatic  lines  is preferable  in 
any case. 
3.2.2.  Ever  since,  in  the  1920's,  tele-
communication  developments  were  made  operational, 
each  country  has  gone  its own  way  developing 
and now  using  systems  that  are  based  on 3.3.4.  Harmonization  is important  and  it is 
expected  that  advanced  technology  will  play  a role 
here and  will  increase  the  opportunity  for 
purchasing. 
No C 197/8 Official  Journal  of the  European  Communities 23. 8. 76 
3.4. Aircraft  industry 
3.4.1.  In  1975,  the  EEC  Council  of Ministers 
passed  a resolution  confirming  the  need  for  Europe 
to encourage  the  development  of  its  aerospace 
industry.  The  Commission  has  sent  a report  to the 
Council  containing  wide-reaching  proposals  and  the 
Committee  has  prepared  an opinion  (Doc.  CES  206/ 
76) on it. In this  opinion,  the Committee  stresses  the 
need  for  the  Community  to have  a proper  aircraft 
industry.  After  analysing  the  basic  facts  and  the 
difficulties  involved,  the  Committee  sets  out  the 
elements  of the  programme  that  are  capable  of being 
put into  effect  fairly  quickly  or in stages.  These 
include  standardization,  common  financing 
machinery  and  the  more  general  conditions  for 
creating  a genuine  common  market.  Among  other 
things,  the Committee  urges  the governments  and  the 
airlines  to coordinate  their  procurement  policies.  It 
considers  that,  generally  speaking,  public  funds 
should  be increasingly  allocated  to EEC-approved 
programmes. 3.4.3.  Within  the  European  aircraft  industry, 
bilateral  and  multilateral  cooperation  programmes 
are taking  place  in  the  helicopter,  airframe 
equipment  and  engine  sectors.  AECMA  (Association 
europeenne  des  constructeurs  de  Materiel 
Aerospatial)  has  given  the  Commission  statistics  and 
background  data  as elements  for a joint  programme. 
3.4.4.  The  'Six  Company  Association'  groups 
together  six  airframe  manufacturers  in  France, 
Germany  and  the  United  Kingdom,  which  are  in 
close  contact  with  their  national  airlines  in order 
to agree,  for instance,  on the  specification  of a new 
short-  to medium-range  aircraft  for the three  airlines 
concerned. 
3.5. Nuclear  power 
3.4.2.  The  conclusions  of  the  Committee's 
opinion  are as follows: 
A technical  and  financial  framework  which  is 
conducive  to  the  growth  of  the  EEC  aircraft 
industry,  a blueprint  for  future  development, 
consultation  on  programmes  —  these  are  initial 
clear-cut  goals  which  it should  be possible  to attain 
without  insuperable  difficulties.  Completion  of such 
a first  stage  would  be a major  stride  towards  the 
Commission's  objectives; 
Community  financial,  economic  and  industrial 
supervision  of the whole  aircraft  industry  would  be a 
new and  important  political  step,  which  could  only 
be effected  gradually.  Doubtless,  this  will  raise  the 
issue  of priorities  in the  allocation  of the  EEC 
budget.  If this  move  is to be fully  successful,  a real 
European  political  organization  will  have  to be set 
up. The  entire  action  programme  proposed  by the 
Commission  for  the civil  and  military  sectors  should 
thus be implemented  in parallel  with  progress  in the 
political  organization  of European  Union; 3.5.1.  The  development  of nuclear  power  in the 
EEC  has  so far been  on a largely  national  basis,  with 
major  differences  between  individual  countries. 
Britain  and  France  started  work  in 1945,  10 years 
ahead  of most  other  EEC  countries,  and  initially 
their  programmes  were  strongly  biased  towards 
military  uses.  They  built  on this  early  work  on the 
military  uses  when  they  turned  to the  development 
of nuclear  energy  for  peaceful  purposes  (natural 
uranium  reactors). 
3.5.2.  All  the  other  EEC  countries  that  took  up 
nuclear  research  directed  their  efforts  from  the outset 
solely  to the  commercial  applications.  This  commer-
cial orientation  of the  other  EEC  countries  was  a 
key factor  behind  their  adoption  of the  American-
designed  light-water  reactor  (LWR)  instead  of British 
or French  designs.  The  result  was  that  for  a long 
time  the  European  and  EEC  market,  even  before 
Britain  became  a member,  was  split  to a large  extent 
into two  opposing  camps  by difference  of aims  and 
of the  technology  employed.  This  split  prevented 
interpenetration  of EEC  countries'  markets,  except  in 
the case  of a few  components.  The  different  reactor 
systems  also  gave  rise  to different  safety  considera-
tions  and  standards,  whose  effects  are still  to be felt 
today  even  though  France  has  since  gone  over  to 
LWR's. 
It is essential  that  the  political  will  to develop  a 
Community  aircraft  industry  and  market  be 
expressed  as rapidly  as possible  and  be  focused 
immediately  on specific  and  concrete  issues. 3.5.3.  A  further  factor  was  the  tendency  of 
national  R&D  programmes  to  encourage 
development  of  a domestic  nuclear  industry. 
23.8.76 Official  Journal  of the  European  Communities No C 197/9 
Although  visible  in other  advanced  technology  fields, 
too, this  tendency  has  been  particularly  strong  in the 
case  of  nuclear  power.  Once  domestic  nuclear 
industries  had  been  launched  with  State  funds,  the 
aim was  to protect  and  expand  them.  This  trend  was 
reinforced  by the  traditionally  close  links  between 
domestic  electricity  undertakings  and  domestic 
power  station  suppliers.  These  links  made  it very 
hard  for foreign  contractors  to enter  the market. 
3.5.4.  Efforts  by  the  European  Atomic  Energy 
Community  to build  up  a European-scale  nuclear 
industry  have  been  thwarted  by these  two  obstacles, 
namely:  (a) the  difference  in the  aims  of nuclear 
research  and  hence  in the  systems  adopted,  and  (b) 
EEC  countries'  keenness  to  establish  their  own 
nuclear  industries.  Nor  has  the  Community  managed 
to set  up  a comprehensive  common  R&D 
programme  on which  it might  base  a joint  nuclear 
industry,  although  some  success  has  been  achieved 
with  cooperation  in component  manufacture,  and  on 
advanced  reactors  such  as high-temperature  reactors 
and fast  breeders.  The  crucial  fact  remains,  however, 
that contracts  for  nuclear  power  plants  are  still 
hardly  ever  placed  with  foreign  suppliers.  The 
chances  of a genuine  common  market  in this  sector 
should  improve  as the  domestic  nuclear  industries 
grow  stronger.  The  differences  in safety  requirements 
and in standards  have  also  begun  to be  broken 
down,  which  will  also  help  to  open  up  the 
markets  (1). One  of  the  biggest  obstacles  to 
establishment  of a common  market  used  to be the 
fact that  the  award  of contracts,  most  of which 
represent  very  large  State-financed  investments,  was 
insufficiently  influenced  by  Community  con-
siderations  and  European  motivations. 
4. Recommendations 4.2. Transparency  in  public  purchasing  of 
advanced  technology  products  should  be encouraged. 
In this  respect  the  'reporting  and  complaint 
procedure',  'threshold'  and  other  points  will  be of 
importance  as will  the  'list  system'  in all  sectors 
where  it is acceptable. 
4.3. Governments  should  make  explicit  which 
purchasing  organizations  and  which  supplying 
sectors  are  covered  by  the  Council  Directive  on 
supplies  now  under  discussion  and  discuss  the 
future  Community  action  and  its  timing  with  the 
sectors  concerned. 
4.4. It  is only  with  a favourable  climate  of 
opinion  that  the  Directives  can  be  successful  in 
practice.  Discussions  should  therefore  involve  all 
relevant  social  and  economic  interests  in ways  which 
are acceptable  to them. 
4.5. Given  the  importance  of public  contracts  to 
small-  and  medium-sized  businesses^  and  the  great 
difficulties  which  the  latter  have  in tendering  for 
such  contracts,  the  Commission  should  work  for 
introduction  of arrangements  ensuring  that  small-
and medium-sized  businesses  get  an  appropriate 
share  of advanced-technology  public  contracts.  In 
this connection,  account  should  be taken  of existing 
relevant  arrangements  in the  individual  Member 
States.  In addition  to the  direct  award  of public 
contracts  to small-  and  medium-sized  businesses, 
consideration  should  also  be given  to the  possibility 
of stipulating  in some  cases  that  certain  work  is to 
be subcontracted  to such  businesses. 
4.1. The  Commission  and  the  Council  should 
present  proposals  and  the  Council  should  give 
priority  to the  promotion  of intra-Community  trade 
in advanced  technology  products  by both  formal  and 
informal  actions. 
(J) In this  context  the Committee  refers  to its opinion  on 
the communication  from  the  Commission  to the 
Council  on technological  problems  of nuclear  safety. Done  at Brussels,  26 May  1976. 
The Chairman 
of the Economic  and  Social  Committee 
Henri  CANONGE