COMMISSION OF THE EUROPEAN COMMUNITIES 
' C0MC90) 297 final -SYN292 
Brussels, 30 July 1990 
Proposal for a 
COUNCIL DIRECTIVE 
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 
(presented by the Commission) 
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Explanatory Memorandum 
I. INTRODUCTION 
(a) The context 
1. In October 1988, as contemplated by the programme for completing the 
Internal market by 1992, the Commission sent the Council two proposals 
for a Council Directive on the procurement procedures of entities 
operating In the water, energy and transport sectors d) and of those 
operating In the telecommunications sectors^2) (hereafter "the 
utilities"). These two proposals became one single proposal on the 
recommendation of the Parliament and an amended proposal was submitted 
to the Council in August 1989(3), following the adoption of the 
European Parliament's opinion^4) In May of that year. The Council's 
common position was adopted on 29 March 1990. 
2. In December 1989, the Council adopted Directive 89/665/EEC (5) 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. This Directive applies to 
the fields covered by Directives 71/305/EEC <6> and 77/62/EEC<7>: 
purchases of works and supplies by the public administration. It does 
not apply to the award of works and supply contracts In the water, 
energy, transport and telecommunications sectors. 
(1) OJ No C 319, 12.12.1988. 
(2) OJ No C 40, 17.2.1989. 
(3) OJ No C 264, 16.10.1989. 
(4) OJ No C 158, 26.6.1989. 
(5) OJ No L 395/33, 30.12.1989. 
(6) OJ No L 185, 16.8.1971, most recently amended by Directive 89/440/EEC 
(OJ No L 210, 21.7.1989). 
(7) OJ No L 13, 15.1.1977, most recently amended by Directive 88/295 
(OJ No L 127, 20.5.1988). 
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3. The availability of adequate remedies and control procedures is as 
important in the hitherto "excluded sectors" as it Is in the 
general field of public procurement. Only such guarantees will 
ensure that the Community rules on contract procedures are In 
practice respected and that the Community's fundamental objectives 
in this area of the internal market programme are realized. This 
new proposal thus fills an important gap and is the necessary 
complement to the proposals already made. 
b) General approach 
4. As matters stand at the present time, the remedies open to a 
contractor or supplier concerning the procedures for awarding 
contracts vary considerably from one Member State to another. 
Suspension of illegal award procedures or similar interim remedies 
are not available under similar conditions in all Member States. 
The possibility of obtaining damages is also subject in many 
Jurisdictions to such constraints that it is really a theoretical 
possibility on I y(8). Moreover, since the utilities have In many 
cases not been subject to regulation of their procurement 
procedures, national systems of remedies may simply not exist. 
5. The Commission therefore considers it necessary for Member States 
to amend, where appropriate, their administrative and Judicial 
procedures so as to afford contractors and suppliers interested in 
taking part in relevant contract award procedures effective and 
rapid remedies against procedures, practices and decisions that are 
incompatible with Community procurement law. As noted above, this 
is as necessary for the utilities as it is in relation to the 
established public procurement regime. 
(8) The situation in the Member States is analysed in a summary of studies 
recently carried out on this subject in a Commission Information 
document Ill/F/7086/fInal, June 1990. 
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6. It should also be recalled that Article 5 EEC imposes a general 
duty on Member States to make effective Judicial remedies available 
for the enforcement of directly applicable Community rights arising 
under the Treaty Itself (Case 33/76 REWE-ZentralfInanz [1976] ECR 
1989). This duty has since been specifically recognised in relation 
to Treaty provisions concerning free movement of goods (Case 178/84 
CommIssIon v. Germany [1987] ECR 1227) and of workers (Case 222/86 
Hey I ens [1987] ECR 4097). New secondary Community legislation on 
remedies should take account of this legal duty as well as 
considerations calling for remedies to be available on a broader 
basis. 
7. The following general considerations have in particular guided the 
Commission in preparing this proposal: 
(i) the need to ensure that effective remedies for disadvantaged 
tenderers are available at national level and at Community 
level; 
(li) the need to ensure that these remedies in the sectors of 
water, energy, transport and telecommunications be in 
principle as close as possible to those already adopted for 
the general system of public procurement review procedures 
while taking into account the particular characteristics of 
the entities engaged in those sectors from the economic, 
technical and legal points of view; 
(Mi) the need to ensure that effective remedies are available to 
disadvantaged tenderers Irrespective of the public law or 
private law status of the utilities; 
(iv) the need to ensure that remedies are available In as.flexible 
and unbureaucratle a manner as possible; 
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(v) the need to ensure that compliance with Community law may be 
effectively supervised at Community level; 
(vi) the need to ensure that a litigious approach Is not the only 
method of dispute settlement available to interested parties; 
(vil) the need to take account of the different character of the 
national legal systems within which the review procedures and 
remedies must be created. 
8. There are various remedies which may, depending on the 
circumstances, be relevant in connection with ensuring compliance 
with Community law, apart from the Inherent right of the Commission 
to exercise its discretion to bring infringement proceedings under 
Article 169 EEC. In considering these remedies, it is important to 
remember that infringement of Community rules on public procurement 
generally occur before the contract is awarded. Since contract 
award procedures are of short duration (a decision is often taken 
within a few weeks), any failure to comply with the Community rules 
in question needs, if possible, to be dealt with urgently and 
rapidly. Among the principal remedies are therefore interlocutory 
remedies, designed to correct the alleged Infringement by, for 
example, ordering the setting aside or modification of a contested 
clause or to prevent further damage to the party concerned by, for 
example, securing the suspension of the award procedure or of the 
Implementation of a decision of the awarding entity. On its own, 
however, interlocutory relief is not enough and, as has been agreed 
in relation to Directive 89/665/EEC, it is necessary to ensure that 
damages may be awarded for those breaches of relevant Community 
provisions which it has not proved possible to avoid or correct. 
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9. However, the preparatory work and consultations on this proposal 
have shown that the particular characteristics of the utilities 
concerned, and of the national legal orders within which review 
procedures and remedies must be made available, require a degree 
of flexibility to be introduced Into the proposal. In some 
contexts it may be possible, legally and politically, to apply a 
classical system of the type applied to the public 
administration generally. In other contexts, this could create 
major difficulties. For example, given the industrial character 
of some organisations concerned, and also their need to satisfy 
imperative requirements of continuous service to the public, the 
view is strongly held in some quarters that classical remedies 
which directly affect the decision-making of the bodies 
concerned would not be appropriate. Suspension of contract award 
procedures and setting aside of award decisions are accordingly 
said to be unacceptable. 
10. In some Member States, indeed, the application of such remedies 
to bodies governed by private law would face constitutional [or 
other serious] obstacles due to the adverse impact on the 
autonomy of the bodies concerned. 
11. Thus, in Germany, attention has had to be given to the basic 
rights of enterprises pursuant to Articles 12 and 19(3) of the 
Basic Law: the principle of non-interference In the exercise of 
a trade or profession. The proposed directive respects this 
principle as it permits the Member States to offer entities a 
flexible means of demonstrating compliance with Community law 
which does not involve mandatory interference with their freedom 
of commercial action. Thus Article 11 is drafted so as to permit 
effective interim relief whilst respecting this freedom. 
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12. In Spain, any re-dlstrIbutIon of Jurisdiction arising from the 
implementation of this proposal may require modification of the 
organic law on the Judiciary by a special majority in Parliament 
In accordance with Article 81 of the Constitution. 
13. Means have accordingly had to be found to resolve these 
difficulties through the Introduction of a degree of flexibility 
which is nevertheless conditioned to ensure its compatibility 
with the principle of equal treatment of similarly situated 
undertakings both as between Member States and whether they are 
pub Iic or pr ivate. 
14. This approach has also served to Introduce into the Community 
procurement framework for the first time a form of control which 
has its own particular merits: attestation on a regular, 
periodic basis or, as it is often called, "audif'O). |n 
brief, where Member States choose to depart from the classical 
approach applied to the public administration by not providing 
for remedies such as suspension of procedures and setting aside 
of decisions, they may do so subject to two conditions: the 
bodies concerned must be subject to regular attestation of the 
general conformity of their procurement systems with Community 
law by an independent, qualified person; and, in addition, 
effective interlocutory remedies must still be available though 
in a way which leaves the body concerned the final 
responsibility to decide whether to correct an infringement or 
instead pay a financial penalty. 
15. Since, in any event, the industrial, public service character of 
the utilities may well make it more difficult for individuals to 
obtain effective interlocutory relief due to the utilities' 
possibility of relying on arguments to show that suspension of 
procedures Is not 
(9) "Audit- Is not used In the proposal to avoid possible confusion 
with the financial audit of corporate accounts. "Cert IfIcatIon-
has also been rejected because of Its use In connection with 
technical standards. 
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procedures is not Justified taking account of all possible 
Interests likely to be affected, Including the public interest, 
the proposal also seeks to ensure that in all Member States 
claims to damages will be a practical proposition and therefore 
a genuine incentive to compliance. In particular, it should not 
be necessary for interested parties seeking to recover the costs 
of bid preparation or of their participation in an illegal 
procedure to show that they would have been awarded the 
contract. Such proof will in many cases be extremely difficult 
and makes the availability of remedies in damages far less 
effective as an incitation to contracting bodies to comply with 
the law. Interested parties should be required to show only that 
their chances of securing the contract were adversely affected. 
In addition, disputes about the exact amount of their bidding 
costs should be limited by providing for a minimum amount, 
related to the value of the contract, which will be payable in 
the absence of proof that the costs were in fact higher. 
16. Different considerations apply to claims for other losses such 
as lost profits. These raise complex issues which are resolved 
by the Member States in the context of their particular 
approaches to the quantification of economic loss. Much of the 
law is Judge made and of general application, applying outside 
the field of procurement. Harmonisation of these approaches 
would certainly encounter considerable difficulties. Such 
matters are accordingly left to be resolved for the time being 
according to national law as under Council Directive 89/665/EEC. 
In the longer term, it will be necessary to see whether further 
action at Community level is necessary. 
17. The proposal further envisages a rapid corrective mechanism 
whereby the Commission may invoke certain procedures when, prior 
to a contract being concluded, it considers that a clear and 
manifest infringement of Community provisions on procurement in 
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the fields covered is being committed during a contract award 
procedure. This proposed corrective mechanism is in terms 
Identical to those of Article 3 of Directive 89/665/EEC and has 
the same Justification. First, remedies at national level, while 
vital, need to be complemented by possibilities for effective 
intervention at Community level. Parties directly concerned may 
not consider their intervention at national level to be in their 
own best Interests. Nevertheless, important violations of 
Community procurement law may have occurred calling into 
question its credibility. In these circumstances, the Commission 
must be able to act and obtain a rapid intervention at national 
level, preferably to correct the situation before the damage has 
become irreparable. In addition, rapid clarification of the 
issues will facilitate the Commission's possibility, in 
appropriate cases, of seizing the Court of Justice of the 
European Communities, in good tfme, of requests for interim 
measures where it considers that necessary corrective action has 
not been taken at national level. 
18. The proposal finally envisages a conciliation procedure at 
Community level. This would be available to interested parties 
as a non-litigious method of dispute settlement without 
prejudice to the possibility of infringement procedures being 
taken under Article 169 or 170 EEC, or to the possibility of a 
corrective mechanism being used, or to the rights of persons 
invoking the procedure, of the contracting entity or of any 
other person under applicable national laws unless they enter 
into an agreement for the resolution of the differences between 
them. Experience in certain Member States suggests that such a 
procedure may have a useful role to play, not least by avoiding 
unnecessary law suits. Considerable interest has been expressed 
in the possibility in some quarters. Accordingly, It seems 
appropriate to establish such a system with a view to testing 
its utI I Ity in pract ice. 
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19. Given the Important changes that the directive will introduce 
and also the necessarily limited nature of some of its 
provisions, for example, on damages, a review of Its working In 
practice after a sufficient period of time would appear to be 
useful. Provision is accordingly made to this effect along the 
lines of the provision already included in Directive 89/665/EEC. 
I I. DETAILED COMMENTARY 
(a) Chapters 1 and 2: remedies at national level 
20. Chapter I requires that Member States ensure that adequate means 
of Independent review are available to any person having or 
having had an Interest in obtaining a particular contract and 
who has been or risks being harmed by an alleged infringement. 
The provisions of the chapter are for the most part the same as 
those in Articles 1 and 2 of Council Directive 89/665/EEC. Since 
in many cases it will be necessary to seek review at an early 
stage prior to the award of a contract, provision is made for 
obtaining Interim relief by interlocutory procedure, in 
particular, suspension of the award procedure. Provision is also 
made for the award of damages and, for the reasons given above, 
this includes specific provision concerning the recovery of 
bidding costs. 
21. Considerable flexibility is left for the Member States to 
implement the directive's requirements in accordance with their 
particular approaches to administrative and Judicial review, 
including the procedural and other conditions applying to such 
remedies. This is to facilitate the insertion of the new 
remedies into existing national structures. 
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22. However, to ensure that the fundamental guarantees offered by 
different national systems are equivalent, if the review bodies 
are not themselves Judicial In character, their decisions must 
be subject to review by a body which is capable of making 
references to the Court of Justice of the European Communities 
and which is independent both of the contracting entity and the 
review body. This requirement was the provision which was 
central to the resolution of the differences of view concerning 
Directive 89/665/EEC. 
23. Chapter 2 permits Member States to adopt an alternative approach 
in cases in which they consider that the classical remedies such 
as suspension of award procedures or setting aside decisions of 
contracting bodies are inappropriate for reasons already given. 
Those particular remedies then need not be made available under 
the conditions that the utilities in question are subject to 
regular certification of their purchasing systems, and that, in 
addition, effective interim remedies are still available. 
Article 1 
24. This Article sets out the principle of decisions by contracting 
entities on award procedures falling within the scope of the 
utilities directive already proposed being subject to effective 
and rapid review on the ground of infringements of Community law 
in the field of procurement or national rules implementing that 
law. The coverage is complete in the sense that breaches of all 
provisions of the directive already proposed which require the 
utilities to act In a particular way will be subject to the 
review procedures specified. For this reason, specific reference 
is made to Article 3 (2) of the utilities directive which 
obliges entities subject to the alternative, regime 
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for the exploration for and extraction of oil, gas, coal and 
other solid fuels to respect the principles of non­
discrimination and competitive procurement, particularly as 
regards Information on their procurement intentions made 
available to undertakings. 
25. No discrimination between undertakings may result from the 
distinction made in the proposed Directive between national 
rules implementing Community law and other national rules. 
26. The Member States will be at liberty to establish detailed rules 
relating to the review procedures, for example, concerning 
procedural formalities or costs. Of course, in so doing, they 
must in no way disadvantage those who seek to use the remedies 
for breaches of Community law by comparison with persons seeking 
redress for breaches of national rules. This is in line with the 
approach of the Court of Justice In myriad cases (for example 
Case 199/82 Amminlstrazione del le FInanze dello Stato v. Spa San 
Giorgio [1983] ECR 3595) which requires that the availability of 
remedies for breach of Community law must be on conditions no 
less favourable than those governing the availability of 
remedies for breach of national law and that the conditions must 
not be such as to render the remedies illusory or virtually 
Impossible to obtain. 
27. Accordingly the procedures must be open at least to persons 
having or having had an interest in obtaining a particular 
contract and who have been or risk being harmed by an alleged 
infringement. Review will be thus available to those who have or 
have had a legitimate Interest in the outcome of a particular 
procedure. Nevertheless, express provision is made to the effect 
that Member States will be free to require that the person 
seeking review should have previously notified the contracting 
entity of the alleged infringement and of his intention to seek 
review. This has the advantage of ensuring that there Is the 
possibility of achieving a settlement prior to the dispute going 
to formal review. 
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28. The wording of this Article closely reflects that of the 
equivalent Article In Directive 89/665/EEC. 
Article 2 
29. This Article deals with the remedies for which provision must be 
made; it does not preclude a Member State from providing for 
additional remedies. The first set of remedies are essentially 
Interim remedies, designed to correct the alleged Infringement 
or prevent further damage to the interests concerned. This set 
Includes the power to suspend or ensure the suspension of the 
procedure for the award of a contract or the implementation of 
any decision taken by the contracting entity. The second set of 
remedies concerns the setting aside of decisions taken 
unlawfully. This set Includes the power to remove discriminatory 
technical economic or financial specifications in the invitation 
to tender, the contract documents or any other document relating 
to the contract award procedure. The final remedy is the right 
to damages for injury caused by the Infringement. 
30. The Member States will be able to endow separate bodies with 
powers in relation to different aspects of the review procedure. 
This flexibility permits Member States to allocate functions to 
different bodies in accordance with their existing practices. In 
some cases, those practices reflect sensitive and deep seated 
constitutional considerations such as the national conception of 
the separation of powers between the administration and the 
Judiciary. Because suspension may not always be appropriate, the 
proposed Directive provides that review procedures need not in 
themselves have an automatic suspensive effect in relation to 
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the award procedure concerned. The Member States are also free 
to provide that In considering whether to order an Interim 
measure the body concerned may have regard to the balance of 
convenience. Interests that may be taken into account Include 
those of other participants in the award procedure as well as 
those of persons to whom the contracting entity provides a 
service and indeed the public In general. As is customary, a 
decision not to grant interim measures will not prejudice the 
outcome of any other claim which an applicant for such measures 
may make. The Member States may require that a contested 
decision be set aside or declared illegal before an award of 
damages may be made in relation to an unlawful decision. 
31. It will be for national law to determine the effect of the 
exercise of the review powers. Save where a Member State has 
made setting aside a precondition for the award of damages, a 
Member State may restrict the powers of the reviewing body, 
after the conclusion of a contract following its award, to the 
award of damages. The provision on claims for damages Is a 
limited step designed to ensure that in all Member States such 
claims will be a practical possibility. Given likely constraints 
on suspension and equivalent interim measures, the possibility 
of claims for damages will be a particularly important part of 
the system. A high level of harmonisation of the quantification 
of damages is an unrealistic objective at this stage. A limited 
step of the kind proposed is both feasible and sufficient to 
meet the Community's immediate objectives in the procurement 
field. In any event, Member States must ensure that decision of 
the reviewing bodies can be effectively enforced. As part of the 
guarantee of transparency, if reviewing bodies are non-Judicial 
in character, they must give written reasons for their 
decisions. Any allegedly illegal measures taken by the reviewing 
body or any alleged defect in the exercise of its powers must be 
subject to Judicial review or to review by a body which is 
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a body capable of making a reference to the Court of Justice 
under Article 177 EEC and which is also Independent of both the 
contracting entity and the reviewing body. The purpose of this 
requirement Is to ensure that the review systems offer 
equivalent guarantees as to the effective application of the 
requirements of Community procurement law. References to the 
Court of Justice of the European Communities for a preliminary 
ruling will also ensure the coherent development of case law In 
the different Member States. If the Judicial or other 
Independent body Is of last instance Jurisdiction then the 
obligation in third paragraph of Article 177 EEC will apply, as 
interpreted by the Court of Justice. 
32. The wording of this Article reflects that of the equivalent 
Article in Directive 89/665/EEC. 
Article 3 
33. This Article empowers the Member States to set up a system of 
attestation whereby contracting entities attested in accordance 
with the system set out in chapter 2 need not be subject, in 
particular, to the suspension of their awards of contracts or 
to the setting aside of unlawful decisions, Including 
specifications. They remain, however, subject to other interim 
measures designed to correct alleged infringements or prevent 
further damage to interested parties and to the award of damages 
to persons harmed by any infringement. 
34. The purpose of this system is to satisfy concerns which have 
been expressed about the feasibility of suspension or setting 
aside of the award of contracts in certain sectors in which 
meeting deadlines is of crucial importance while, at the same 
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time, ensuring that the utilities concerned will be subject to 
effective means for ensuring their compliance with the 
requirements of Community procurement law, both in general and 
in particular cases, including situations in which problems 
arise before a contract is awarded. 
35. The attestation system affords the opportunity of controlling 
the whole purchasing system of contracting entities on a regular 
and systematic basis. It is thus envisaged as having 
considerable preventive effects since the entities will be aware 
that any decision may be the subject of subsequent examination 
by an independent, qualified person. 
36. Since the attestation system addresses the procedure of a 
utility taken as a whole, it does not provide remedies for 
particular claims by individuals. Accordingly, contracting 
entities subject to attestation will still be liable to pay 
damages to persons harmed by an infringement in accordance with 
Article 2. In addition, Article 3(b) ensures that effective 
interim relief will also be available with a view to correcting 
the alleged infringement or preventing further damage to the 
person concerned. The characteristics of this interim relief are 
specified in Article II. 
Article 4 
37. An attestation by an authorised person on at least an annual 
basis offers an effective continuing basis on which to evaluate 
procurement practices and procedures. 
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Article 5 
38. The appointment and removal of those who attest the purchasing 
procedures and practices must be subject to appropriate 
guarantees of Independence. 
Article 6 
39. This Article lays down the qualities and qualifications of 
persons who attest in order to ensure their Independence and 
professional competence. 
Article 7 
40. This Article deals with the subject-matter of the attestation. 
The examination covers the overall fairness of the opportunity 
given to potential suppliers and contractors to secure the award 
of contracts and whether the procedures and practices of the 
contracting entities conform with national and Community law 
concerning the award of contracts. 
Article 8 
41. This Article sets out the minimum contents of the written report 
which it requires persons attesting to prepare. Such 
requirements are essential in the interests of transparency and 
to ensure that the report is an effective Instrument. 
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Article 9 
42. This Article specifies those who are entitled to receive copies 
of the report drawn up by those who have carried out the 
attestation. It permits supervision by interested persons, the 
Commission and the relevant competent authority at national 
level. 
Article 10 
43. This Article requires contracting entities benefiting from 
derogations under Article 3 of this proposal to indicate the 
general nature of the derogation from which they benefit in the 
tender and periodic indicative notices published in the Official 
Journal pursuant to Articles 16 and 17 of Directive... 
Article 11 
44. Attestation procedures do not address immediately the particular 
problems of interested suppliers or contractors, though they may 
disclose facts which enable them to take action. Claims for 
damages, though an important part of the system, do not address 
the Issue of corrective action while a contract award procedure 
is still running. The form of interim relief described by this 
Article permits such action to be taken while at the same time 
not interfering directly with the internal decision making of 
the contracting entity. Conflict with any constitutionally 
protected freedoms of the contracting entity are thus avoided 
while, at the same time, effective means for defending their 
interests are put at the disposal of interested persons. 
45. The sum of money payable in the event that an infringement is 
not avoided or corrected is to be fixed at a dissuasive level. 
It should In any event cover the plaintiffs costs of preparing 
or bid or participating in a procedure. To facilitate the 
quantification of these costs, a minimum amount Is fixed in 
accordance with the probable size of the contract in the same 
ways as In Article 2(7). 
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(b) Chapter 3: corrective mechanism 
46. This chapter establishes a corrective mechanism whereby the 
Commission may Intervene prior to the award of a contract, In 
cases In which it considers that a clear and manifest 
Infringement of Community public procurement provisions in this 
field has been committed during a contract award procedure. This 
mechanism Is, however, without prejudice to the right of the 
Commission or a Member State to bring Infringement proceedings 
against a Member State under Articles 169 or 170 EEC 
respectIvely. 
Article 12 
47. This Article sets out the procedure of the corrective mechanism 
which the Commission may Invoke. It parallels the provisions of 
Article 3 of Directive 89/665/EEC. (10) 
(c) Chapter 4: cone I Illation 
48. This chapter establishes a conciliation procedure at Community 
level In addition to any existing procedures at national level 
as a means of non-litigious dispute settlement. The conciliation 
procedure may be Invoked by any party having an interest in 
obtaining a particular contract in the field who has been harmed 
or risks being harmed. There is, though, a filter in the form of 
the Commission or the national authorities of the Member States 
who must be prepared to seize the relevant advisory committee. 
The conciliation procedure is available without prejudice to the 
possibility of infringement proceedings being commended under 
Articles 169 or 170 EEC or to the possibility of the corrective 
mechanism provided for in Chapter 3 of the present proposal. It 
is also without prejudice to the rights of the parties to the 
particular dispute under national law save in so Tar as they 
agree to resolve the issues between themselves. 
(10) see note 5 above. 
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Article 13 
49. This Article sets out the persons who have standing to invoke 
the conciliation procedure. Thus any person who has an Interest 
In obtaining a particular contract in the field and who in 
relation to the procedure for that contract has been or risks 
being harmed by an alleged infringement of Community procurement 
law or national rules Implementing that law may invoke the 
conciliation procedure by written notification to the Commission 
or to the national authorities of the Member States listed in 
Annex I to the present proposal. It is up to the person 
concerned whether he sends his notification to the Commission or 
to the national authorities involved. 
Article 14 
50. This Article sets out the mechanics of the conciliation 
procedure. Both the person Invoking the procedure and the 
contracting entity are to be given the opportunity to make 
either oral or written representations on the matter concerned. 
The working group endeavours to resolve the dispute by making 
recommendations to the parties and Inviting their agreement. If 
necessary, the working group acts by majority vote. The 
recommendations are not, however, legally binding and there is 
no sanction for failure to enter into agreement although the 
whole procedure is without prejudice to the possibilities 
envisaged In Article 15 of the present proposal. The working 
group reports to the Committee on its findings and on any result 
achieved. In keeping with the non-litigious nature of the 
proceedings, the parties to the conciliation proceedings bear 
their own costs. 
Article 15 
51. The first paragraph of this Article ensures that conflicts will 
not arise between the conciliation procedure and review 
proceedings at national level. The second paragraph makes it 
clear that the conciliation procedure does not prejudice any 
21 -
possible action under Articles 169 or 170 EEC or the possibility 
of the corrective mechanism set up under the present proposal 
being applied. The conciliation procedure likewise does not 
prejudice the rights of the person invoking the procedure and 
the contracting entity under national laws or any other person, 
save In so far as they may agree to resolve the Issues between 
them. 
(d) Chapter 5: final provisions 
52. This chapter contains provisions to enable the system to be 
properly reviewed after a sufficient period of operation which 
shall not be later then 1 January 1996 (Article 16) and to 
ensure the adoption and application of the necessary measures 
according to the schedule fixed by the utilities directive 
Itself (Article 17). 
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ANNEX 
This Annex indicates the Articles of Directive 89/665/EEC which correspond 
to the provisions of this proposal. 
Directive 89/665 
Article 1 
1 
2 
3 
Article 2 
1 
2 
3 
4 
5 
6 
7 
8 
Article 3 
1 
2 
3 
4 
5 
Article 4 
1 
2 
Article 6 This proposal 
Article 1 
1 
2 
3 
Article 2 
1 
2 
3 
4 
5 
6 
8 
Article 12 
1 
2 
3 
4 
5 
Article 16 
1 
2 
Article 18 
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Proposal for a 
COUNCIL DIRECTIVE 
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 
THE COUNCIL OF THE EUROPEAN COMMUNITIES, 
Having regard to the Treaty establishing the European Economic Community, 
and in particular Article 100a thereof, 
Having regard to the proposal from the Commission,<1> 
In co-operation with the European Par I lament, <2> 
Having regard to the opinion of the Economic and Social Committee,(3) 
Whereas Directive .../.../... on the procurement procedures of entitles 
operating in the water, energy, transport and telecommunications 
sectors<4) does not contain any specific provisions ensuring its 
effective application; 
Whereas 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 
(1) OJ No 
(2) OJ No 
(3) OJ No 
(4) OJ No 
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supply and public works contracts*5* Is limited to contract award 
procedures within the scope of Council Directive 71/305/EEC of 26 July 1971 
coordinating procedures for the award of public works contracts,(6) as 
last amended by Directive 89/440/EEC,<7> and Council Directive 77/62/EEC 
of 21 December 1976 coordinating procedures for the award of public supply 
contracts,<8) as last amended by Directive 88/295/EEC^9^; 
Whereas the existing arrangements at both national and Community levels for 
ensuring its application will otherwise not always be adequate to ensure 
compliance with the relevant Community provisions particularly at a stage 
when infringements can be corrected; 
Whereas the openlng-up of procurement In the sectors concerned to Community 
competition necessitates a substantial increase in the guarantees of 
transparency and non-discrimination and whereas, for it to have tangible 
effects, effective and rapid remedies must be available in the case of 
infringements of Community law In the field or national rules implementing 
that law; 
Whereas in certain Member States the absence of effective remedies or 
Inadequacy of existing remedies deter Community undertakings from 
submitting tenders in the Member State in which the contracting authority 
Is established; whereas, therefore, the Member States concerned must remedy 
this situation; 
Whereas, since procedures for the award of contracts are of short duration, 
competent review bodies must, among other things, be able to take rapid and 
effective interim measures aimed at correcting or avoiding Infringements 
during the procedures; 
Whereas it is necessary to ensure that adequate procedures exist in all the 
Member States to permit the setting aside of decisions taken unlawfully and 
compensation of persons harmed by an Infringement; 
(5) OJ No L 395, 30.12.1989, p. 33. 
(6) OJ No L 185, 16.8.1971, p. 5. 
(7) OJ No L 210, 21.7.1989, p. 1. 
(8) OJ No L 13. 15.1.1977, p. 1. 
(9) OJ No L 127, 20.5.1988, p. 1. 
- 25 -
Whereas It Is necessary to ensure equivalent treatment and guarantees for 
contracting entitles Irrespective of their public law or private law 
status; 
Whereas it is necessary, to take account of the specific nature of certain 
legal orders, to authorize the Member States to choose to apply for any one 
category of contracting entity a control system based on attestation by an 
independent body and offering equivalent guarantees in relation to the 
transparency and non-discriminatory nature of the awarding procedure; 
Whereas, when undertakings do not seek review, certain infringements may 
not be corrected unless a specific mechanism is put in place; 
Whereas, accordingly, the Commission, when it considers that a clear and 
manifest Infringement has been committed during a contract award procedure, 
should be able to bring it to the attention of the competent authorities of 
the Member State and of the contracting entity concerned so that 
appropriate steps are taken for the rapid correction of any infringement; 
Whereas it is necessary to provide for the possibility of non-1 ItIgious 
conciliation at Community level; 
Whereas the application In practice of the provisions of this Directive 
should be reviewed not later than 1 January 1996 on the basis of 
Information to be supplied by the Member States concerning the functioning 
of the national review procedures, 
- 26 -
HAS ADOPTED THIS DIRECTIVE: 
Chapter I - Remedies at national level 
Article 1 
(1) The Member States shall take the measures necessary to ensure that 
decisions taken by contracting entities may be reviewed effectively 
and, in particular, as rapidly as possible in accordance with the 
conditions set out in the following Articles and, in particular, 
Article 2(8), on the grounds that such decisions have infringed 
Community law In the field of procurement or national rules 
implementing that law as regards: 
(a) contract award procedures falling within the scope of 
Directive .../.../...<1°); and 
(b) compliance with Article 3(2)(a) of that Directive in the case 
of the contracting entities to which that provision applies. 
(2) Member States shall ensure that there is no discrimination between 
undertakings claiming Injury in the context of a procedure for the 
award of a contract as a result of the distinction made by this 
Directive between national rules implementing Community law and other 
national rules. 
(3) The Member States shall ensure that the review procedures are 
available, under detailed rules which the Member States may establish, 
at least to any person having or having had an interest in obtaining a 
(10) The proposed Directive on the procurement procedures of entities 
operating in the water, energy, transport and telecommunications 
sectors: see OJ No C 264, 16.10.1989, p. 22. 
- 27 -
particular contract and who has been or risks being harmed by an 
alleged Infringement. In particular, the Member States may require 
that the person seeking the review must have previously notified the 
contracting entity of the alleged infringement and of his intention to 
seek review. 
Article 2 
(1) The Member States shall ensure that the measures taken concerning the 
review procedures specified in Article 1 Include provision for the 
powers to: 
(a) take, at the earliest opportunity and by way of interlocutory 
procedures, interim measures with the aim of correcting the 
alleged infringement or preventing further damage to the 
interests concerned, including measures to suspend or to 
ensure the suspension of the procedure for the award of a 
contract or the implementation of any decision taken by the 
contracting entity; 
(b) either set aside or ensure the setting aside of decisions 
taken unlawfully, including the removal of discriminatory 
technical, economic or financial specifications in the 
invitation to tender, the contract documents or in any other 
document relating to the contract award procedure; 
(c) award damages to persons harmed by an infringement. 
(2) The powers specified in paragraph 1 may be conferred on separate 
bodies responsible for different aspects of the review procedure. 
- 28 -
(3) Review procedures need not In themselves have an automatic suspensive 
effect on the contract award procedures to which they relate. 
(4) The Member States may provide that when considering whether to order 
Interim measures the body responsible may take into account the 
probable consequences of the measures for all interests likely to be 
harmed, as well as the public Interest, and may decide not to grant 
such measures where their negative consequences could exceed their 
benefits. A decision not to grant Interim measures shall not prejudice 
any other claim of the person seeking these measures. 
(5) The Member States may provide that where damages are claimed on the 
grounds that a decision was taken unlawfully, the contested decision 
must first be set aside or declared illegal by a body having the 
necessary powers. 
(6) 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. 
(7) Where a claim is made for damages representing the costs of preparing 
a bid or of participating in an award procedure, the person making the 
claim shall be required to prove the Infringement of Community law in 
the field of procurement or national rules implementing that law and 
that the Infringement adversely affected his chance of being awarded 
the contract. He shall not be required to prove that, in the absence 
- 29 -
of the infringement, he would have been awarded the contract. The 
amount of such costs shall be deemed to be one per cent of the value 
of the contract unless the person making the claim proves that his 
costs were greater. 
(8) The Member States shall ensure that decisions taken by bodies 
responsible for review procedures can be effectively enforced. 
(9) Where bodies responsible for review procedures are not Judicial In 
character, written reasons for their decisions shall always be given. 
Furthermore, In such a case, provision must be made to guarantee 
procedures whereby any allegedly Illegal measures taken by the review 
body or any alleged defect in the exercise of the powers conferred on 
it can be the subject of Judicial review or review by another body 
which is a court or tribunal within the meaning of Article 177 of the 
Treaty and independent of both the contracting entity and the review 
body. 
The members of the independent body shall be appointed and leave 
office under the same conditions as members of the Judiciary as 
regards the authority responsible for their appointment, their period 
of office, and their removal. At least the President of this 
independent body shall have the same legal and professional 
qualifications as members of the Judiciary. The Independent body shall 
take its decisions following a procedure in which both sides are 
heard, and these decisions shall, by means determined by each Member 
State, be legally binding. 
- 30 -
Chapter 2 - Attestation 
Article 3 
Member States may choose to apply to contracting entities in the same 
category defined by objective criteria the system set out in Articles 4 to 
10 instead of the measures set out In Article 2(1)(a) concerning measures 
to suspend or to ensure the suspension of procedures for the award of a 
contract or the implementation of any decision taken by the contracting 
entity and Instead of Article 2(1)(b), provided that the review procedures 
made available pursuant to chapter 1 Include provision for the Interim 
measure specified In Article 11. 
Article 4 
The contracting entitles shall, at least once a year, have their purchasing 
procedures and practices attested by one or more persons authorised by 
national law to exercise this function. 
Article 5 
Persons who attest the purchasing procedures and practices of the 
contracting entities shall be appointed to and may be removed from their 
office either by a competent authority designated for this purpose by the 
Member States or by the contracting entities themselves subject to the 
prior approval of such a competent authority. The competent authority shall 
be Independent of the contracting entities. 
- 31 -
Article 6 
Persons who attest the purchasing procedures and practices of the 
contracting entities shall be 
(a) independent of the contracting entitles; 
(b) holders of a higher education diploma within the meaning of Article 1 
of Council Directive 89/48/EEC*11>; 
(c) persons having knowledge and practical experience of procurement law 
and practice by reason of 
(i) their having passed an examination of professional competence 
organized or recognised by the State; and 
(ii) their having a minimum of three years practical experience of 
procurement law and practice in the field of activity of the 
contracting entities concerned. 
Article 7 
The persons who attest the purchasing procedure and practices of the 
contracting entities shall examine whether those procedures and practices 
have been in conformity with national and Community law concerning the 
award of contracts and have given potential suppliers and contractors a 
fair opportunity to secure the award of contracts. 
Article 8 
The persons who attest the purchasing procedures and practices of 
contracting entities shall prepare a written report relating to the results 
of their work. The report shall contain the following at least: 
(11) OJ No L 19, 24.1.1989, p. 16. 
- 32 -
(a) an indication of whether the purchasing procedures and practices of 
the contracting entitles gave potential suppliers and contracts a fair 
opportunity to secure the award of contracts; 
(b) observations concerning any infringements of national or Community law 
concerning the award of contracts; 
(c) where deficiencies have occurred pursuant to paragraphs (a) or (b), 
suggestions as to actions needed to prevent their repetition In the 
future. 
Article 9 
The report to which Article 8 refers shall be 
(a) made available by the contracting entities to interested persons who 
shall be supplied with copies at their request, for which a price may 
be charged which does not exceed the cost of their copying and 
transmission; 
(b) communicated by the contracting entities to the Commission and to any 
competent authority designated by a Member State by the law of which a 
contracting entity is governed. 
On the basis of these reports the Commission may publish periodic summary 
reports In the Official Journal of the European Communities. 
Article 10 
(1) Contracting entities to which the system set out in Articles 4 to 9 
applies shall indicate in accordance with paragraph 2 the general 
nature of this system in the tender and periodic indicative notices 
published in the Official Journal of the European Communities pursuant 
to Articles 16 and 17 of Directive .../.../...<12>. 
(12) OJ No C 264, 16.10.1989, p. 22. 
- 33 -
(2) The first point of the notice shall conclude with the phrase: "The 
contracting entity is subject to attestation and accordingly is not 
subject to certain powers specified in Article ... of Directive 
.../.../..., namely those concerning 
(a) suspension of contract award procedures; 
(b) setting aside of decisions". 
However, subparagraph (a) or (b) of the phrase shall be deleted where 
it does not apply. 
Article 11 
(1) The Member States shall ensure, under the conditions specified in 
chapter 1, that a review body shall have the power, at the earliest 
opportunity and by way of interlocutory procedure, to declare at any 
stage that, on the basis of the evidence available to it at that time, 
an infringement has been or risks being committed during a contract 
award procedure and that the contracting entity should correct or 
avoid the infringement. A review body shall also have the power to 
make an order for the payment of a sum of money to the person or 
persons seeking review in the event that the infringement Is not 
corrected or avoided. The payment may be made conditional on a final 
decision being reached to the effect that the infringement has been 
committed. 
(2) The review body responsible for fixing the sum of money payable in 
accordance with paragraph 1 shall fix any such sum at a level designed 
to dissuade the contracting entity from committing or continuing the 
infringement. The amount shall at least cover any costs of preparing a 
bid or participating in the award procedure of the person seeking 
review. The amount of such costs shall be deemed to be one per cent 
- 34 
of the value of the contract unless the person seeking review proves 
that his costs were greater. An order for payment of a sum of money in 
accordance with this provision shall bar any further claim by the 
person concerned to the recovery of the costs taken into account by 
the review body when fixing the order. 
Chapter 3 - Corrective mechanism 
Article 12 
(1) The Commission may invoke the procedures for which this Article 
provides when, prior to a contract being concluded, It considers that 
a clear and manifest infringement of Community provisions In the field 
of procurement has been committed during a contract award procedure 
falling within the scope of Directive .../.../...(13) or In relation 
to Article 3(2)(a) of that Directive in the case of the contracting 
entities to which that provision applies. , 
(2) The Commission shall notify the Member State and the contracting 
entity concerned of the reasons which have led it to conclude that a 
clear and manifest infringement has been committed and request Its 
correct ion. 
(3) Within twenty-one days of receipt of the notification referred to in 
paragraph 2, the Member State concerned shall communicate to the 
Commission: 
(a) Its confirmation that the infringement has been corrected; or 
(b) a reasoned submission as to why no correction has been made; or 
(13) OJ No C 264, 16.10.1989, p. 22 
- 35 -
(c) a notice to the effect that the contract award procedure has 
been suspended either by the contracting entity on its own 
Initiative or on the basis of the powers specified in 
Article 2(1)(a). 
(4) A reasoned submission In accordance with paragraph 3(b) may rely among 
other matters on the fact that the alleged infringement is already the 
subject of Judicial or other review proceedings or of a review as 
referred to in Article 2(9). In such a case, the Member State shall 
Inform the Commission of the result of those proceedings as soon as it 
becomes known. 
(5) Where notice has been given that a contract award procedure has been 
suspended in accordance with paragraph 3(c), the Member State shall 
notify the Commission when the suspension is lifted or another 
contract procedure relating in whole or in part to the same subject 
matter Is begun. That notification shall confirm that the alleged 
infringement has been corrected or include a reasoned submission as to 
why no correction has been made. 
Chapter 4 - Conciliation 
Article 13 
Any person having or having had an interest In obtaining a particular 
contract falling within the scope of Directive .../.../...(14> and who, 
in relation to the procedure for the award of that contract, has been or 
risks being harmed by an alleged infringement of Community law in the field 
of procurement or national rules implementing that law may invoke the 
procedure for which this chapter provides by written notification to the 
Commission or to the national authorities of the Member States listed in 
the Annex. 
(14) OJ No C 264, 16.10.1989, p. 22. 
- 36 -
Article 14 
(1) Where the Commission or the national authorities of a Member State 
consider that, following a notification pursuant to Article 13, an 
infringement of Community law has occurred, they may put the matter 
before the Advisory Committee for Public Contracts or, In the case of 
contracting entities having as one of their activities the operation 
of public telecommunications networks or the provision of one or more 
telecommunications services to the public, the Advisory Committee on 
Telecommunications Procurement. 
(2) The Chairman of the committee In question shall convoke as rapidly as 
possible a working group of at least two members of the committee and 
himself or another Commission official designated by him. The working 
group shall normally meet within ten working days of the matters being 
put before the relevant committee. It may decide on a proposal from 
any of Its members to invite not more than two other persons as 
experts to advise It in its work. Any other member of the committee 
may attend any meeting of the working group as an observer. 
(3) The working group shall give the person Invoking this procedure, the 
contracting entity and any other candidate or tenderer participating 
in the contract award procedure to which the notification relates the 
opportunity to make representations on the matter either orally or In 
wrItIng. 
(4) The working group shall endeavour to reach an agreement between the 
parties which is In accordance with Community law. 
(5) The working group shall report to the committee on its findings and 
any result achieved. 
- 37 -
(6) The person invoking the procedure and the contracting entity shall 
bear their own costs of participating In the procedure. 
Article 15 
(1) Where, in relation to a particular contract award procedure, an 
interested person within the meaning of Article 13 other than the 
person Invoking the conciliation procedure is pursuing Judicial or 
other review proceedings or proceedings for review according to 
Article 2(9), the contracting entity shall inform the working group. 
The chairman shall inform that person that the conciliation procedure 
has been invoked and shall invite that person to indicate within a 
time limit that it may determine whether he agrees to participate in 
the conciliation procedure. If that person does not agree to 
participate within that time and the working group decides, acting if 
necessary by majority, that his participation is necessary to resolve 
the dispute, it shall terminate its activities and report to the 
committee on its reason for so doing. 
(2) Action taken pursuant to this chapter shall be without prejudice to 
(a) any action that the Commission or any Member State might take 
pursuant to Articles 169 or 170 of the Treaty or pursuant to 
Chapter 3; 
(b) the rights of the person invoking the procedure, of the 
contracting entity or of any other person under applicable 
national laws except in so far as they enter into an agreement 
for the resolution of issues between them. 
- 38 -
Chapter 5 - Final provisions 
Article 16 
(1) Not later than 1 January 1996, the Commission, In consultation with 
the Advisory Committee for Public Contracts, shall review the manner 
In which the provisions of this Directive have been implemented and, 
if necessary, make proposals for amendments. 
(2) By 1 March each year the Member States shall communicate to the 
Commission Information on the operation of their national review 
procedures during the preceding calendar year. The nature of the 
information shall be determined by the Commission in consultation with 
the Advisory Committee for Public Contracts. 
(3) In the case of matters relating to contracting entities the activities 
of which are defined in Article 2(2)(d) of Directive .../.../...<15>, 
the Commission shall consult the Advisory Committee on 
Telecommunications Procurement. 
Article 17 
(1) Member States shall adopt, before 1 July 1992, the measures necessary 
to comply with this Directive. They shall communicate to the 
Commission the texts of the main national laws, regulations and 
administrative provisions which they adopt In the field governed by 
this DirectIve. 
The provisions adopted pursuant to the first subparagraph shall make 
express reference to this Directive. 
(2) Member States shall bring into force the necessary measures adopted 
pursuant to paragraph (1) on the same dates as those contained in 
Directive .../.../..,(16). They shall immediately inform the 
Commission of them. 
(15) OJ No C 264, 16.10.1989, p. 22. 
(16) OJ NO C 264, 16.10.1989, p. 22. 
- 39 -
Article 18 
This Directive is addressed to the Member States. 
Done at Brussels, For the Council 
- 40 -
ANNEX I 
National authorities of the Member States to which 
written notifications may be sent Invoking the 
conciliation procedure pursuant to Article 16 
BELGIUM 
Ministère des Affaires Economiques 
Minister le van Economlsche Zaken 
DENMARK 
Indktibsaftaler: Dlrektoratet for Statens Indkéb 
Bygge-og anlaegskontrakter: BolIgminister let 
GERMANY 
BundesminlsterIurn fur Wirtschaft 
GREECE 
Ministry of Industry, Energy and Techno Ioav 
YTTovpyelo Biovmxavtas, Evépretas <ai TexvoXorîas 
Ministry of Commerce 
YTTOvpYCto EuTfoptov 
Ministry of the Environment, Planning and Public Works 
YirovpYeto nepieaXXovTOS, XwpoTaçias icai A*nuooîu>v 'EpY<*>v 
SPAIN 
Ministerio de Economia y Hacienda 
FRANCE 
Commission Central des Marchés 
- 41 -
IRELAND 
Department of Finance 
ITALY 
Ministerro del LavorI Public! 
LUXEMBOURG 
Ministère des Travaux Publics 
THE NETHERLANDS 
Ministerie van Economische Zaken 
PORTUGAL 
Ministerio das Obras Pubiicas Transportes e Communicaçoes 
Conselho Superior de Obras Pubiicas Transportes e 
Commun i caçoes 
UNITED KINGDOM 
HM Treasury 

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