COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT pursuant to the second subparagraph of Article 251(2) of the EC Treaty concerning the common position of the Council on the adoption of a Directive of the European Parliament and of the Council coordinating the procurement procedures of entities operating in the water, energy, transport and postal services sectors

2000/0117 (COD)

COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT pursuant to the second subparagraph of Article 251(2) of the EC Treaty concerning the common position of the Council on the adoption of a Directive of the European Parliament and of the Council coordinating the procurement procedures of entities operating in the water, energy, transport and postal services sectors

1- BACKGROUND

Date of transmission of the proposal to the EP and the Council (COM(2000) 276 final - 2000/0117(COD)): // 11 July 2000

Date of the opinion of the European Economic and Social Committee: // 26 April 2001

Date of the opinion of the Committee of the Regions: // 13 December 2000

Date of the opinion of the European Parliament at first reading: // 17 January 2002

Date of transmission of the amended proposal: // 6 May 2002

Date of adoption of the common position: // 20 March 2003

2- OBJECTIVE OF THE COMMISSION PROPOSAL

The proposal for a Directive coordinating the procurement procedures of entities operating in the water, energy, transport and postal services sectors is intended not to replace national law but to ensure compliance with the principles of equality of treatment, non-discrimination and transparency in the award of contracts in these sectors in all Member States.

This proposal, which follows on from the debate launched by the Green Paper on Public Procurement, pursues the three objectives of modernising, simplifying and increasing the flexibility of the existing legal framework in this field:

- modernisation in order to take account of new technologies and changes in the economic environment, including the ongoing or forthcoming liberalisations of some of the activities in question;

- simplification to make the current texts more easily comprehensible, so that contracts are awarded in complete conformity with the standards and principles governing this area and the bodies involved (whether they are purchasers or suppliers) are in a better position to know their rights;

- greater flexibility in procedures in order to meet the needs of purchasers and economic operators.

3- COMMENTS ON THE COMMON POSITION

3.1 General comment

The common position of the Council essentially preserves the Commission's initial proposal as modified in the amended proposal. In addition, this common position strengthens certain means of attaining the objectives referred to in the Commission's proposals. However, the Commission was unable to support the unanimous agreement of the Council due to the provisions inserted with regard to financial services.

The unanimous political agreement reached by the Council on 30 September 2002 was taken on board in the common position adopted on 20 March 2003.

The amendments introduced by the common position concern the following in particular:

- greater account to be taken of the use of new information technologies in awarding contracts, in line with the objective of modernisation set out in the Commission's proposals. In this respect, it is worth drawing attention, in particular, to the introduction, for commonly used purchases, of dynamic purchasing systems intended both to provide the contracting entities with fully electronic systems which make it possible to simplify and automate the purchasing procedures and to ensure that any interested economic operator can take part, where appropriate by using an electronic catalogue. With the same objective in mind, provisions concerning the possibility of using electronic auctions under conditions that ensure transparency and equality of treatment have been added. This addition responds to the desire for modernisation which underlies Amendments No 25, 54 and 65 to the Directive on public works contracts, public supply contracts and public service contracts (hereinafter referred to as the classic Directive), and makes it possible to avoid creating unjustified differences between the two proposals together with difficulties in interpretation and application. Moreover, as regards the general framework for purchases using electronic means, the common position strengthens the obligations with regard to confidentiality in the text by referring to Annex XXIII;

- with regard to taking account of environmental and social aspects, the Council accepted the Commission's amended proposals subsequent to Parliament's amendments and, in addition, clarified in Recital (54) how environmental and social concerns can be taken into consideration when assessing the tenders at the contract award stage;

- while preserving the flexibility needed in a Directive whose scope covers not only contracting authorities, but also public and private undertakings operating on the basis of special or exclusive rights, some of the provisions have been brought into line with those of the classic Directive, which helps to achieve the objective of simplifying and clarifying the rules. Unjustified differences between the rules on the same matter may cause difficulties in application and interpretation - not only for contracting authorities such as local authorities, where this Directive may apply to certain contracts while the classic Directive applies to others, but also for economic operators, who may have different rights even with regard to contracts for the same type of supplies with the same contracting authority. As a result, a number of Parliament amendments proposed or adopted for the classic Directive have been taken over in the same way in both Directives;

- the discussions which took place after the amended proposal was adopted showed that certain contracting entities acted as or used central purchasing bodies and that there was a need for specific rules on the subject. Provisions have therefore been added to enable the contracting entities to use central purchasing bodies whether these operate in compliance with the provisions laid down in this Directive or with those of the classic Directive. Adding these provisions (Recital (23), Article 1(8), and Article 29) makes it possible to provide a legally correct response to the concern underlying Amendment 106;

- an additional implementation period for the provisions concerning the postal sector was added, as the current Utilities Directive does not apply to operators in that sector - whatever their legal status. As a result, the contracting entities in this sector will need more time to adapt their contract award procedures to the rules of the Directive than those in other sectors, which are already familiar with the procedures provided for under the current Directive. Within this extension, which runs until 1 January 2009, it is up to the Member States to determine the exact date on which the Directive will be implemented for that sector. Note that postal operators, who are contracting authorities, will continue to be covered by the classic Directive until the switchover to the Utilities Directive.

On the other hand, the common position has introduced changes concerning financial services, the scope of the "intra-group" exception [1], and the weighting of the award criteria.

[1] This exception concerns the possibility of awarding service contracts to an affiliated undertaking, a joint venture or a contracting entity forming part of a joint venture without a call for competition. See Article 23 (ex 26).

With regard to financial services, the Commission considers that the change introduced unanimously by the Council, which follows Amendment 37 of the European Parliament to the classic Directive, and, in part, Amendment 84 to this Directive, could give rise to confusion as regards their inclusion within the scope of the Directive. It has therefore reiterated, in a statement in the minutes of the Council of 30 September 2002 attached as an Annex to this Communication, the position it had already had occasion to set out in its amended proposal when rejecting Parliament's Amendment 37 to the classic Directive.

The Council was able to achieve the unanimity required to extend to works and supply contracts the exception provided for in Article 23 for contracts awarded without a call for competition to affiliated undertakings, joint ventures or contracting entities forming part of a joint venture, contrary to the Commission's opinion. With this extension, the provisions take over the substance of Parliament's Amendments 6 and 26, a large part of Amendment 27, and all of Amendment 28, which had not been taken over, or only to a lesser extent, in the Commission's amended proposal. The Commission is able to reluctantly accept this new measure, given the positive results overall of the changes set out in the common position.

The obligation to indicate the weighting of the award criteria is confirmed. However, the Commission has agreed on the need to take account of cases in which the contracting entity can justify its having been unable to specify the weighting and, in such cases, to allow it simply to indicate the descending order of importance of such criteria.

3.2. Parliament amendments taken into account in the common position

3.2.1. Amendments incorporated in the amended proposal and the common position

Title, Recitals (9), (10) and (28), Article 6, Annexes VI and XI - Amendments 13 and 16: the title, Recitals 9 and 10 and Annexes VI and XI, which were amended after the postal sector was transferred, have been taken on board unchanged from the amended proposal (Recitals (2) and (8), Annexes Va and X). In Recital (28) (2a of the amended proposal), taken over verbatim, the grounds for allowing an additional implementation period for the provisions concerning the postal sector (cf. the fifth indent under point 3.1 above) were added. Article 6 (ex 5a) was amended with regard to the services covered as follows: 1) in order to avoid difficulties in interpreting the postal Directive [2], certain changes were made to the terminology; 2) the scope of "ancillary postal services" under paragraph 2, point d), was more precisely defined; 3) it was finally clarified that the provision of ancillary services is only covered insofar as they are provided by a contracting entity which must apply the provisions of the Directive to the provision of a postal service (reserved or not).

[2] Directive 97/67/CE of the European Parliament and of the Council of 15 December 1997 on common rules for the development of the internal market of Community postal services and the improvement of quality of service, as amended by Directive 2002/39/EC of the European Parliament and of the Council of 10 June 2002 amending Directive 97/67/EC insofar as concerns the further opening to competition of Community postal services.

Recital (12) - Amendment 89/96: the text of the amended proposal relating to the incorporation of the environmental requirements referred to in Article 6 of the Treaty was taken on board unchanged.

Recital (13) - Amendment 111: the amendment relating to the exceptions provided for in Article 30 of the Treaty was taken on board in a slightly modified form in order to reproduce exactly the wording of that Article with regard to the protection of plants. In addition, the words "are not discriminatory and do not conflict with the objective of opening up markets in the sector of public contracts or with the Treaty" were replaced by "comply with the Treaty": this is justified by the primacy of the Treaty, as interpreted by the Court, over secondary law, i.e. the objective of opening up markets pursued by the Directive can in no way affect the rights of the Member States acknowledged by the Treaty.

Recital(40) - Amendment 76: this Recital (ex 13) was taken on board with its substance unchanged, although the final part, which reflects Amendment 76, was clarified without any changes to the meaning being made.

Recital (41), Article 34 and Annex XXI - Amendments 7, 35, 36, 38, 40, 95 and 99/118: the provisions of the amended proposal (Recital (34), Article 34 and Annex XX) on the technical specifications were taken on board unchanged, with the exception of two linguistic changes in Annex XXI (Point 1(a) and (b): "production processes or methods" instead of "production procedures or methods".

Recital (43) and Article 38 - Amendments 4 and 33: the texts of the amended proposal relating to the conditions for the performance of the contract (Recital (32) and Article 37a) and, in particular, their use for social or environmental purposes, were taken on board unchanged except for one very minor and purely linguistic change in the recital.

Recital (44) - Amendment 56: the text of the amended proposal (Recital 32a) relating to compliance with social regulations was taken on board with one rewording which allows for the possibility of excluding from contracts - pursuant to Article 45(2)(c) and (d) of the classic Directive, referred to by Articles 53 and 54 of this Directive - operators found to have infringed those rules.

Recital (52) and Article 52(2) and (3) - Amendment 64: Recital (32a) and the provisions (Article 51(2) and (3)) in the amended proposal relating to quality assurance systems and environmental management systems were taken on board unchanged.

Recital (54) - Amendment 66: apart from the clarification of how contracting entities may take into consideration environmental and social concerns in the assessment of tenders at the contract award stage - discussed in point 3.1 above - the substance of this Recital (ex 40) remains unchanged.

Recital (55) - Amendment 8: the amendment - the addition of "engineers" to the lists of professions whose remuneration, regulated at national level, must not be affected by the award criteria, was taken on board unchanged.

Article 17 - Amendments 21 and 22: Article 17 takes on board the text of Article 16 of the amended proposal relating to the method of calculating the value of contracts, by adapting its title and its paragraph 3 so as to include dynamic purchasing systems. In addition, it extends the account to be taken of renewals: "tacit renewals" are replaced by "renewals" to allow all forms of renewal to be taken into account when calculating the value of the contract. Moreover, its paragraphs 6, 7 and 11 have, respectively, been brought into line with the provisions of paragraphs 5, 7 and 8(b) of Article 9 of the classic Directive to avoid creating unjustified differences between the two Directives, particularly if a stricter regime with regard to lots had been maintained.

Article 26 - Amendments 29 and 30: this Article (ex 27) was taken on board unchanged.

Article 39 - Amendment 43: the text of Article 39 (ex 38) concerning obligations regarding taxes, the environment, employment protection and working conditions, as it stood after incorporating Amendment 43 in the amended proposal, has been changed so as to avoid creating unjustified differences between the two Directives. In the case of the obligation directly imposed on contracting entities to indicate in the contract documents where information can be obtained on the applicable provisions in these fields, the Council preferred wording similar to that of the Commission's initial proposal, which reflected the provisions in the Directives currently in force. The common position thereby lays down that this obligation can be imposed only by the Member States. However, in the absence of such an obligation at national level, the contracting entities may choose to provide this information. In addition, the text is rephrased in order to bring the wording of the Article into line with that of its title ("...the appropriate information on the obligations relating to taxes, ..." instead of the "the appropriate information on taxes,...") and to lay down that this legislation does not apply to services provided in a Member State other than that of the contracting entity.

Article 48 - Amendment 51: this Article (ex 47) was taken on board unchanged.

Articles 53 and 54 - Amendments 18, 57, 109 and 60: two changes were made to Article 53 (ex 52). Firstly, in paragraph 3 (ex 2a), it was specified that the addition of the exclusion criteria set out in Article 45 (ex 46) of the classic Directive is subject to the conditions for application set out in the same Article. Specifying this makes it possible to ensure that the provisions on the subject are uniform, thus making applying and interpreting them easier for contracting entities and economic operators. With the same intention of making the Directive as easy to apply as possible, a new paragraph 8 was added, in which the main provisions in the Directive which apply specifically to qualification systems were reiterated. Article 54(4) (ex Article 53) was supplemented in the same way as Article 53(3) in respect of the inclusion of the exclusion criteria from Article 45 of the classic Directive.

Article 49 - Amendment 53: this Article (ex 48) was taken on board in a reworded form that clarifies paragraph 5 without changing its substance. Moreover, in order to maintain the current flexibility, the Council deemed it preferable to eliminate the explicit reference to the maximum period of 15 days set out in paragraph 1, while retaining the obligation to provide the information as soon as possible. However, this change has been accompanied by a new Recital 48, which clarifies that the information to be provided is to be transmitted within a period of time that is sufficiently short to ensure that lodging an appeal does not become impossible; this information should therefore be provided as quickly as possible and, as a general rule, within 15 days after the decision has been taken. With these clarifications, the change to paragraph 1 is acceptable as far as the Commission is concerned. It should be pointed out that paragraph 4, directly referred to by Amendment 53 of the Parliament, was taken on board verbatim.

Article 55(2) - Amendments 66, 67, 68 and 69: this provision (ex 54(2)) has been amended because of the need to take into account cases in which the contracting entity can justify its having been unable to specify the weighting, and to allow it in such cases simply to indicate the descending order of importance of such criteria. It should be pointed out that the simplifications made to the rules on how to indicate the weighting or, where appropriate, the descending order of importance of the criteria, have been maintained.

Article 57 - Amendments 9 and 70: this Article (ex 55) was taken on board unchanged.

Article 64 - Amendment 75: this Article (ex 62) was taken on board unchanged.

Annexes XIII, XIV, XV, XVI, XVIII and XIX (ex XII, XIII, XIV, XV, XVII and XVIII) - Amendments 78, 79, 80, 81, 82, 83, 85 and 86: the texts relating to the indication of the details of appeal bodies in the contract notice and in the award notice were taken on board, whilst nevertheless providing for the alternative possibility of indicating the details of the body from which that information can be obtained. This addition was inserted in order to take account of certain national situations which would make such an indication over-complicated and would risk misinforming economic operators. The change thus takes into account the substance of the amendments by ensuring that operators can apply to a competent body to obtain all the information needed.

3.2.2. Amendments incorporated into the amended proposal but not taken on board in the common position

Annex XIII - Amendment 47: the requirement to state - in the contract notice - the name, address, etc. of the body from which information on tax, environmental and social legislation can be obtained was not taken on board. Under Article 39(1), contracting entities communicating such information are obliged to provide it in the contract documents (as a result of Amendment 43 having been taken on board). This also avoids creating unjustified differences between the two texts by preserving a stricter regime in the utilities Directive.

3.2.3. Points of divergence between the amended proposal and the common position

Recital (35): this amends Recital (26) by adding that, "in compliance with the Agreement" on public procurement signed within the WTO, the financial services referred to in the Directive do not include contracts on the issue, purchase, sale and transfer of securities or other financial instruments "in particular, transactions by the contracting entities to raise money or capital".

Article 24(c): this amends this provision in the same way as the amendment made to the recital, i.e. it adds after "relating to financial services for the issue, purchase, sale and transfer of securities or other financial instruments" the words "and in particular transactions by the contracting entities to raise money or capital".

In order to prevent these provisions - which have been amended along the same lines as Amendment 37 of the European Parliament to the classic Directive and, partly, along those of Amendment 84 to this Directive - from being interpreted as possibly expanding the exclusion provided for by Community law, the Commission included in the Council minutes the statement attached as an Annex.

Article 2(3): the definition of special and exclusive rights was changed by deleting the last part of the definition given in the initial proposal ("in the same geographical area under substantially equivalent conditions"). This change was made in order to ensure that the definition did not overlap excessively with the assessment of the competitive situation to be carried out under the terms of Article 30 as part of the procedure which is intended to establish whether a given sector is fully exposed to competition.

Article 30 (ex 29): this Article concerns the conditions for taking into account direct exposure to competition in one of the sectors covered by the Directive, and, where this is the case, the procedure which is to be followed to determine that the Directive is not applicable to the contracts awarded to pursue such an activity.

The conditions which must be met in order to be able to determine that an activity is fully exposed to competition have not been changed, with the exception of the clarification in paragraph 2 that the examination of the competitive situation must be based on criteria "that are in conformity with the Treaty provisions on competition", such as those already mentioned in this provision.

On the other hand, a number of changes have been made to the provisions governing the procedure to be followed, though this does not affect legal certainty or the uniform application of Community law resulting from decisions taken by the Commission which have legal force. More specifically, the provisions governing the procedure have been changed as follows:

- the specific provisions which apply when the initiative is from a Member State have been placed in paragraph 4, and those which apply when the procedure is implemented at the initiative of a contracting entity or by the Commission itself, in paragraph 5;

- paragraph 4 makes a distinction between 1) cases where none of the Community legislation mentioned in Annex XI has been implemented and is applied and/or no positive position has been taken by an independent national authority which is competent in the activity concerned and 2) cases where implementing and applying such a Community act makes possible a presumption of free access to the activity in compliance with the first subparagraph of paragraph 3 and where the independent national authority has concluded that paragraph 1 is applicable. In the first case, paragraph 1 only applies if the Commission has taken a "positive" decision or if no decision has been taken within the prescribed time limit. In the second case, paragraph 1 applies unless the Commission has taken a "negative" decision within the prescribed time limit;

- for obvious reasons of subsidiarity, the Council has specified that determining whether contracting entities themselves may initiate the procedure (as provided for under Amendment 117) is a matter for national legislation;

- the rules on the time limits and the arrangements for applying the procedure are set out in paragraph 6. It has been confirmed that a three-month time limit is usual, and that any extensions - which may be granted only once - may not be longer than three months. If the notification comes from a Member State, any extension is limited to one month. Other changes to the Common Position consist of providing more detail on the content of the applicable rules to be adopted, in particular by setting precise rules to ensure transparency and legal certainty by publishing the start date of the procedure and the cases were paragraph 1 applies "by default".

3.3. New provisions

3.3.1. Provisions which were not the subject of amendments and which were reformulated in the common position, or which are an extension of the provisions already set out in the initial proposal

General comment: the changes set out below can largely be explained by the need to draw the consequences throughout the text of certain changes introduced. This is the case, for instance, of the recitals which accompany the new provisions on the exclusion criteria, or where the provisions governing design contests have to be brought into line with the changes made to the provisions governing contracts.

Recital (5): this brings Recital 4 of the initial proposal up-to-date by inserting references to the seventh report on the implementation of the telecommunications regulations.

Recital (16), third paragraph: this paragraph was inserted in order to clarify the provisions of Article 17(4) on the method of calculating the estimated value of works contracts.

Recital (25): in accordance with case law [3] and as per the definition of the concept of "exclusive and special rights" set out in other Community legislation (in particular certain telecommunications Directives and the "transparency" Directive [4]), it is specified that rights granted by a Member State to a limited number of undertakings on the basis of objective, proportionate and non-discriminatory criteria that allow any interested party fulfilling those criteria to enjoy those rights may not be considered exclusive or special rights.

[3] The Queen v Secretary of State for Trade and Industry, ex parte British Telecommunications plc., Case C-302/94, [1996] ECR I-6417. Judgment of 12 December 1996.

[4] Commission Directive 2000/52/EC of 26 July 2000 amending Directive 80/723/EEC on the transparency of financial relations between Member States and public undertakings. OJ L 193, 29 July 2000, P. 75 - 78.

Recital (27) and Article 5(2): these provisions have been rewritten, without making any changes to their substance, in order to clarify: 1) that the contracting entities operating in the bus transport sector, which were already excluded from the scope of the current "Utility" Directive 93/38/EEC pursuant to its Article 2(4), continue to be excluded from the scope of this Directive, and 2) that the contracting entities from the same sector which were not excluded under the current Directive, may be excluded from the scope of the new Directive only under the terms and according to the procedure set out in its Article 30.

Recital (29) and Article 9: the provisions concerning the legal framework which applies to contracts intended for the pursuit of several activities have been amended by deleting the phrase "and which cannot be split up" from paragraph 1. The way to determine what activity the contract is mainly intended for has also been clarified by the new Recital (29). Lastly, the second subparagraph of the first paragraph was added as a safeguard clause against possible abuse when choosing between awarding a single contract and awarding several separate contracts.

Recital (32), Article 23(2) to (4): as a result of the unanimous decision by the Council to extend this exclusion to works and supply contracts (cf. point 3.1 above), the Article has been amended, in particular, as follows:

- the conditions under which a contract may be awarded to an affiliated undertaking without a call for competition have been combined in paragraph 3, which introduces the same percentage (80%) of the average turnover for works and supply contracts as that already laid down for service contracts. It has also been stated that the turnover and the relevant percentage are to be calculated separately for each of the three kinds of contracts, so as to prevent, for example, the award of a significant works contract being subsequently used to justify the award of a large number of service contracts without any call for competition;

- the provisions relating to the award of contracts to joint ventures or contracting entities which are part of a joint venture are set out in paragraph 4, to which the conditions concerning the make-up and the duration of joint ventures have also been added. It should be pointed out that these conditions in no way prevent the formation of a joint venture which has a different make-up or a different duration - in such cases, the provisions of paragraph 4 simply mean that no contracts with, for example, a party to a joint venture, which is not a contracting entity, may be awarded without a call for competition.

Lastly, these changes to Article 23 were specified in the new Recital (32).

Recital (36): in line with the effort on clarification, the final part of this Recital ("provision of services on other bases, such as laws or regulations, or employment contracts, is therefore not covered") has been deleted, as experience in applying the current Directive has shown that it lends itself to incorrect interpretations.

Recital (38) and Article 27: these provisions have been brought up-to-date by adding Austria to the Member States which have obtained a decision under Article 3 of the current Directive, without any other changes.

Recital (49): this complements Recital (39) of the initial proposal, by specifying that the rules and criteria used for selection do not necessarily imply weighting.

Recital (50): this new Recital accompanies the changes made to Articles 53 and 54 (cf. point 3.2.1 above) with regard to the possibility of relying on the capabilities of other entities, and further clarifies how the qualification systems function.

Article 1: in general terms, the order of the paragraphs has been rearranged so that it follows the order in which the aspects set out appear in the Directive.

Article 1(2): this modifies Article 1(2) to (5) of the initial proposal. The changes concern the definition of contracts, for which it is added that the contract may be concluded by "several contracting entities", and the definitions of supply contracts - "contracts other than those referred to in point (b)" - and of service contracts - "other than works or supply contracts". The first change is necessary to take account of the need to simplify procedures, for instance, in the event of cooperation between contracting entities in order to achieve the same objective. The other changes underline the background to the adoption of the basic Directives.

Article 5(1): the definition of the activities covered by the Directive with regard to the transport sector was brought into line with that of other activities which involve the use of physical networks (cf. Articles 3 and 4) by adding "provision" in order to improve legal certainty for the entities - particularly in the railway sector - which are already applying the Directive on the basis of an interpretation of the phrase "operation of networks".

Article 16: this brings Article 15 of the initial proposal up-to-date by adapting the amounts of the thresholds into line with the amounts in force for the period 2002-2004, which were recalculated in accordance with the biennial revision mechanism for the thresholds provided for in order to adapt them to the changes that have occurred in the parities between the European currencies and SDR. The increase in the thresholds given in the common position, as compared with those given in the initial proposal, reflects the thresholds expressed in SDR (special drawing rights) set out in the Public Procurement Agreement.

Article 36: purely editorial changes were made to this Article in order to simplify and clarify the provision. It should in particular be pointed out that the deletion of paragraph 2 of the initial proposal ("Article 34 shall apply to variants") in no way changes the substance, as the general thrust of the Directive makes it clear that the rules on technical specifications apply to all technical specifications, whether or not they are defined within the context of variants.

Article 51: the wording of this general provision on the conduct of procedures was clarified, without making any changes to the substance.

Article 61: Article 59 of the initial proposal was modified to bring the thresholds for design contests into line with those applicable to public service contracts. The second subparagraph of paragraphs 1 and 2 contains details of the arrangements for calculating the value of contests. These new subparagraphs are aligned with the formulation of the provisions of Article 67 of the classic Directive.

Article 62: this Article simplifies Article 60 of the initial proposal, relating to exclusions from the scope of the rules applicable to design contests, by refering to the provisions applicable to service contracts. Moreover, it has been adapted to the new wording of Article 30.

Article 63: Article 63(2) is modified through references to the corresponding Articles, applicable to contracts, which apply to design contests.

Article 65: for the purpose of clarification, and as with the analogous provisions of the classic Directive (Articles 73 and 74), the provisions of Article 63(3) of the initial proposal were split up: Article 65(3) is devoted to the composition of the jury, while the provisions relating to the jury's decisions are set out in Article 66.

Article 66: the provisions of the third subparagraph of Article 63(3) of the initial proposal were modified in order to further clarify the obligations with regard to anonymity, strengthen the transparency of the work of the jury by making minutes mandatory, and allow for improved assessments by the jury by making available to it, if necessary, clarifications on the plans and projects drawn up by the participants. These provisions have been brought into line with those of Article 74 of the classic Directive.

Article 68: Article 65 of the initial proposal, relating to the Advisory Committee, was the subject of a purely linguistic change in paragraph 2. Paragraph 3 was brought into line with the comitology rules.

Article 69: in line with the provisions of Article 78 of the classic Directive, Article 66 of the initial proposal relating to the revision of the thresholds was taken on board with one clarification in paragraph 1 (first subparagraph: automatic verification every two years and revision, i.e. modification, only where necessary, that is, only when the change in parity between the euro and SDRs justifies this) and a change concerning the rounding-down of the thresholds when being revised ("thousand euro" instead of "ten thousand").

Article 71: this Article, which relates to the implementation of the Directive, was modified as follows:

- in line with the change made to the corresponding article of the classic Directive (Article 80), the time limit for implementation of the Directive was changed to 21 months after its entry into force;

- for the reasons set out in the fifth indent of point 3.1 above, an additional implementation period for the provisions concerning the postal sector was introduced; this shall expire no later than 1 January 2009;

- it was specified that the procedure for deciding on the possible opening to competition of a given sector, provided for under Article 30, would be applicable as from the date of entry into force of the Directive.

Annexes I to X: these Annexes were modified to take account of changes in the national situations.

3.3.2. New provisions resulting from being brought into line with the provisions of the classic Directive

General comment: the changes set out below can largely be explained by the Council's concern, which the Commission shares, with avoiding the creation of unjustified differences between the two Directives, which would have the damaging consequences explained under the third indent of point 3.1 above. Due to this, a number of the provisions have been taken on board, for instance, those concerning electronic auctions, dynamic purchasing systems, and the definition of service concessions. These changes have been taken on board as they are set out in the Common Position for the classic Directive, although adapted as necessary for this Directive (for example, references to contracting entities instead of contracting authorities, no references to competitive dialogue, which is not included in this Directive, etc.). Some of the changes are the result of amendments made to the classic Directive.

Recital (11): this takes the form of Recital 4 of the classic Directive, as it is set out in the Common Position, with regard to the obligation on Member States to prevent any distortions of competition arising due to the participation in public procurement of bodies governed by public law. As a result, Amendment 1 to the classic Directive has been taken on board the same way in both texts.

First and second subparagraphs of Recital (16): this Recital concerns the conclusion of the service and works contracts; it takes over Recital (9) of the classic Directive and, consequently, Amendments 142, 7 and 171-145 to it.

Recital (20): this new recital, which is taken from Recital (11) of the classic Directive, stresses that the new electronic procurement techniques must comply with the rules of the Directive and the principles governing it, and clarifies how tenders may assume the form of an electronic catalogue.

Recital (21), Article 1(5), Article 15 and Annex XIII D "Simplified contract notice for use in a dynamic purchasing system": these provisions take on board the new substantive provisions in the classic Directive (cf. Recital (12), Article 1(6), Article 33 and Annex VII A "Simplified contract notice for use in a dynamic purchasing system"). These provisions introduce a new instrument - dynamic purchasing systems - for making commonly used purchases.

For detailed comments on the new provisions, see the Commission's Communication on the common position for the classic Directive, point 3.3.2).

Being able to use a dynamic purchasing system in no way affects the option contracting entities have of using qualification systems, including in conjunction with electronic means.

Recital (22), Article 1(6), Article 56: these provisions introduce electronic auctions, and are taken from the provisions on electronic auctions in the classic Directive (cf. its Recital (13), Article 1(7) and Article 54 - Amendments 23, 54 and 65 to the classic Directive). As was made clear in Recital (20), the addition of these provisions on electronic auctions does not prejudice the possibility of using other forms of electronic purchasing or, for example, of using electronic means to carry out a negotiated procedure with a call for competition.

Recital (24): like Recital (15) of the classic Directive, which it takes over mutatis mutandis, this clarifies that the Member States have the choice of using the new procurement methods set out in the Directive - central purchasing bodies, dynamic purchasing systems and electronic auctions.

Recital (31): in order to prevent difficulties in interpretation, this Recital has been brought into line with the corresponding Recital in the classic Directive (21).

Recital (33): by adding the phrase "or to rights to such properties", this Recital has been brought into line with Recital (23) of the classic Directive, which also brings it into compliance with the wording of Article 24, point a), which it accompanies.

Recital (47): like Recital 35 of the classic Directive, from which it was taken, this Recital supplements the text of Recital (37) of the initial proposal, relating to the transmission of information by electronic means, by stressing the importance of the security and confidentiality requirements inherent in contracts and design contests, and the usefulness of voluntary accreditation schemes to that end.

Recital (53): this new Recital accompanies the changes made to Articles 53 and 54 (cf. point 3.2.1 above) with regard to exclusion criteria. It corresponds, mutatis mutandis, to Recital (41) of the classic Directive and therefore takes into account Amendment 170 to it.

Article 1(3): this gives definitions of "works concessions" and "service concessions" with a view to the exclusion specifically set out in the new Article 18. These definitions have been taken on board from Article 1(3) and (4), respectively, of the classic Directive. These definitions are new in this Directive - as is the definition of service concessions in the classic Directive.

Article 1(4): this definition was drawn up on the basis of the definition given in the classic Directive (cf. Article 1(5)) in order to ensure that the same concept was not defined differently. The definition given in the classic Directive is closely based on that in the current sectors Directive. The change is that it has been clarified that several contracting entities may be party to a framework agreement. Note that having brought the definition into line in no way affects the differences in the legal system applicable to framework agreements and to contracts based on such agreements.

Article 1(9)(b) and (d): the definitions of "restricted procedure" and of "design contest" have been brought into line with those of the classic Directive (cf. the second and fifth subparagraphs of Article 1(11)) and by adding, respectively, the phrases "in which any economic operator may request to participate and in which" and "of town and country planning".

Article 1(12), Annex XII (first footnote added) and Annex XVII (first footnote added): these provisions have been brought into line with those of the classic Directive (cf. Article 1(14), Annex I (first footnote) and Annex II (first footnote)) in order to clarify the fact that the scope of the Directive cannot be changed because of the use of the "Common Procurement Vocabulary" (CPV).

Article 2(1): a purely terminological change, which has no legal impact, was made by changing the term "public authorities" to "contracting authorities" so as to ensure that the same concept, defined identically, was not referred to by a different name in the two texts.

Article 10: this Article was brought into line with Article 2 of the classic Directive, thereby strengthening the application of the principles of equality of treatment, transparency and non-discrimination, referred to in Article 9 of the initial proposal, by imposing directly on contracting authorities the obligation to comply with them.

Article 11: this was brought into line with Article 4 of the classic Directive, thus rewording and modifying Article 10 of the initial proposal relating to groups of economic operators. The possibility of asking for an indication of the persons who will perform the contract is also provided for in the case of works contracts and supply contracts involving siting and installation operations. This is justified by the confidence in the know-how, effectiveness, experience and reliability needed for such services.

Article 13(2): this paragraph was brought into line with the provisions of Article 6 of the classic Directive (itself based on the provisions of Article 4(4) of the current utilities Directive). This takes into account Amendment 31 to the classic Directive.

Article 18: this new Article is, as far as service concessions are concerned, in line with Article 17 of the classic Directive, and explicitly excludes works and service concessions from the scope of the Directive for the purpose of clarifying the legal situation. Moreover, in the case of service concessions, the case law of the Court of Justice has been taken on board [5].

[5] Judgment of 7 December 2000, Case C-324/98 "Teleaustria", ECR 2000 page I-10745.

Article 25: this Article concerns the award of service contracts to contracting authorities on the basis of an exclusive right and has been brought into line with Article 18 of the classic Directive, which made it possible to partly take on board Amendment 38 to the classic Directive.

Article 28: this new Article concerns the reservation of contracts for sheltered workshops and is in line with Article 19 of the classic Directive, which makes it possible to partly take on board Amendment 36 to the classic Directive into this Directive.

Article 37: this has been brought into line with Article 25 of the classic Directive so as to clarify that the Member States may oblige contracting entities to set out requirements relating to subcontracting. On the other hand, the substitution of the words "proposed subcontractors" for the words "appointed subcontractors" leaves some leeway for economic operators to take account of situations in which definite identification of the subcontractors might be an obstacle to the submission of tenders.

Article 41(1): this provision concerns the publication of periodic indicative notices not used as a means of calling for competition, and takes over the provisions of Article 40 of the initial proposal. It has been brought into line, mutatis mutandis, with the provisions of Article 35(1) of the classic Directive. There have been two changes to its substance. The first concerns the possibility of publishing the periodic indicative notice on the buyer profile of the contracting entity. This possibility is supplemented by the obligation to publish a "Notice of the publication of a periodic indicative notice on a buyer profile". The information which this must include is set out in Annex XV B. This change strengthens the role of electronic means in public procurement, while guaranteeing all potential tenderers equal access through publication.

The second change concerns the limitation of the obligation to publish such a notice to cases in which the contracting entity wishes to benefit from the reduction of the time-limit for the receipt of tenders set out in Article 45(4). The Commission accepted this solution despite the fact that it represents a step backwards from its initial proposal, which proposed mandatory periodic indicative notices, on the grounds that the Member States reached agreement on this basis.

Article 42: this Article is unchanged apart from the addition of new paragraph 2 subsequent to the introduction of dynamic purchasing systems. It broadly takes over, mutatis mutandis, the provisions of Article 35(3) of the classic Directive.

Article 43(1): this provision on contract award notices maintains the longer period (two months instead of 48 days), but has otherwise been brought into line with the provisions of the first three subparagraphs of Article 35(4) of the classic Directive, which clarifies the law applicable to framework agreements and to contracts based on such agreements. Moreover, the flexibility introduced in the classic Directive (the possibility of collecting contract award notices on a quarterly basis for contracts based on a dynamic purchasing system) has been taken over.

Article 44: this Article concerns the form and manner of publication of notices and is in line with the provisions of Articles 36 and 37 of the classic Directive. It maintains the existing flexibility (such as the lack of a specific limit on the number of words per notice), but, more specifically, has the effect of clarifying the languages to be used.

Article 45: the provisions of paragraphs 1, 6 and 9 have been brought into line, mutatis mutandis, with the analogous provisions of Article 38 of the classic Directive.

Article 47: paragraphs 1 to 4 have been brought into line, mutatis mutandis, with the similar provisions of Article 40(1) to (5) of the classic Directive, in particular by adding the new paragraphs 2 and 3, which lay down the rules which apply when an entity other than the contracting entity itself is in possession of the contract documents or additional information. Moreover, the provisions of paragraph 4, points e), f), and paragraph 5, point i) have been adapted as a consequence of the changes, set out in Article 55(2), on how to indicate the weighting or, where appropriate, the order of importance.

Article 50(1): in line with the analogous provision in the classic Directive (Article 43), the last subparagraph of this paragraph lays down an obligation to strengthen the transparency of procedures for awards by electronic means by obligating contracting entities to document the progress of procedures conducted by electronic means.

Article 70: this relates to the changes which may be made by comitology procedure. It partly rewrites Article 67 of the initial proposal and brings it into line, mutatis mutandis, with the provisions of Article 79 of the classic Directive. Note that only points e) to h) are new compared to existing law. The remainder are either adaptations or changes to it. Of the new points, 3 (f, g, and h) are related to the need to be able to update new Annexes, while the final point (e) is related to the use of the CPV.

4- CONCLUSIONS

The Commission considers that the text of the common position takes over the key elements contained in its initial proposal and in the amendments of the European Parliament, as taken over in the amended proposal. Where the Commission has not accepted the common position adopted unanimously by the Council, it is because of the situation of financial services. On the other aspects, the common position meets the objectives of clarification, simplification and modernisation set out in the initial proposal of the Commission.

ANNEXES

Statements in the minutes of the Council of 30 September 2002

Statement by the Commission - financial services:

The Commission considers that the public procurement Directives are subject to Community obligations arising from the Government Procurement Agreement, and will therefore interpret these Directives in a manner compatible with this Agreement.

Therefore the Commission considers that Recital 26 (Recital 35 in the common position) and Article 24(c) cannot be interpreted as excluding, among other things, public contracts concerning loans by contracting entities, in particular local authorities, with the exception of loans for "the issue, sale, purchase or transfer of securities or other financial instruments".

In addition, the Commission would reiterate that, in any event, where the Directives are not applicable, for example, below the thresholds, the rules and principles of the Treaty must be observed. In accordance with the case law of the Court, this implies in particular the obligation of transparency consisting in ensuring sufficient publicity to allow contracts to be opened up to competition.