COMMISSION OF THE EUROPEAN COMMUNITIES 
Brussels, 11.03.1998 
COM(1998) 143 final 
COMMUNICATION FROM THE COMMISSION 
PUBLIC PROCUREMENT 
IN THE EUROPEAN UNION 

1 INTRODUCTION :. I 
2 ADAPTING THE REGULATORY FRAMEWORK TO MARKET CHANGES 5 
2.1 The ground rules: simplification and flexible response to market 
developments 5 
2.1.1 Objective.... .....5 
2.1.2 Presentation of a legislative package 5 
2.1.2.1 Adjustment of the scope of Directive 93/38/EEC in line 
with changes in the sectors it covers 6 
2.1.2.2 Facilitating dialogue 7 
2.1.2.3 The role of framework contracts 8 
2.1.2.4 Treatment of concessions and other forms of 
pubiic-private partnership 8 
2.1.3 Clarification and consolidation 10 
2.2 Improving the implementation of public procurement policy: a joint 
responsibility for the Member States, the Commission and economic 
operators 11 
2.2.1 Objective 11 
2.2.2 Improving checks aï the Community level 12 
2.2.3 Independent authorities 13 
2.2.4 Market monitoring 14 
2.2.5 Attestation: a guarantee of non-discriminatory procurement 15 
2.2.5 Fighting corruption 15 
2.2.7 Contracts awarded by the Commission 16 
3 DEVELOPING A FAVOURABLE ENVIRONMENT FOR BUSINESSES, AND IN 
PARTICULAR SMES 18 
3.1 Training, information and measures helping SfvîEs 18 
3.1.1 Objective , 18 
3.1.2 Information 18 
3.1.3 Training and commercial practices ("best practice") 19 
3.1.4 Measures in favour of SMEs 19 
3.1.5 Qualification of suppliers 20 
3.2 Towards efficient electronic procurement ^... 20 
3.2.1 Preparing the EU to meet the exciting new challenge of electronic 
commerce 20 
3.2.2 The way ahead: pan-European electronic procurement 22 
3.2.3 Measures proposed 23 
4 COMPLEMENTING AND.ACHIEVING SYNERGY WITH OTHER COMMUNITY 
POLICIES 25 
4.1 Objective 25 
4.2 Defence..... , .25 
4.3 Protection of the environment 26 
4.4 Public procurement and social aspects 28 
4.5 Consumer protection .29 
4.6 Internationa! aspects . 29 
4.6.1 Opening up third-country public procurement markets for European 
companies 29 
4.6.2 Integrating neighbouring economies into the Union's public 
procurement policy 30 
4.6.3 Ensuring efficiency in the award of contracts financed by the EU 
within the context of external aid.... 30 
ANNEX 1 : STATE OF TRANSPOSITION.. 32 
ANNEX 2 : TIME TABLE 33 
Optimising the functioning of the internal market is of vital importance for the European 
Union. The Commission's Single Market Action Plan1, which was endorsed by the 
Amsterdam European Council and the European Parliament, is intended to ensure that 
the single market fulfils its potential. As part of the Action Plan, the Commission 
published, in November Î 997, the first edition of the Scoreboard2 containing detailed 
indicators on the state of implementation and application of single market legislation. 
The Scoreboard confirmed that public procurement is one of the key areas of the single 
market where results do not'yet meet expectations. This is particularly significant 
because of the economic importance of public procurement markets: they represent more 
than ECU 720 billion or about 11% of the Union's GDP, equivalent to half of the GDP of 
the Federal Republic of Germany. 
Existing policy aims to open up national public procurement markets to competition from 
other Member States, offering competitive suppliers significant opportunities. Today 
these opportunities extend to the EEA countries and Europe's major trading partners, the 
USA, Canada and Japan. As regards the EEA, this extension results from the integration 
of the Community "acquis" in public procurement in the Agreement on the EEA and, in 
consequence, in the legislation of the EFTA countries signing it. The agreement 
guarantees access of these countries' suppliers to the Community market in the same way 
as Community firms are guaranteed access to the markets of the EFTA countries. 
Existing policy seeks to encourage transparent and competitive purchasing behaviour in 
order to deliver the best value for money. Community-wide competition for public 
contracts will lead to an efficient allocation of resources and thus enhance the quality of 
public sendees, improve economic growth, competitiveness and job creation. Efficient 
procurement is particularly important on the eve of the single currency and in the 
prevailing climate of stability and budgetary restraint necessary for such fundamental 
change to occur and develop under satisfactory conditions. A good public procurement 
policy, by preventing inefficient public spending and by providing a major means of 
avoiding corruption, can give taxpayers confidence that their money is being spent 
correctly and thus reinforce public trust in government. While the fight against corruption 
is not the primary objective of public procurement, improvements in public procurement 
procedures can make a useful contribution3. Accordingly, proposals in this 
communication aimed at enhancing transparency and clarity, such as publication of 
tendering information or the designation of independent authorities in each Member 
State, will help create a system which minimises opportunities for corruption. 
1 CSE (97)1 final, 4.6.1997. 
2 Single Market Scoreboard, No 1, November ! 997, SEC 97/2196. 
•* See Commission Communication to the Council and the European Parliament on A Union Policy against 
Corruption (COM(97)()192 - C4-0273/97). 
The legal framework composed of the principles and rules enshrined in the Treaty and 
developed in detail by six Directives, was completed nearly four years ago, the first 
Directives dating back more than twenty years. However, several Member States have 
failed to implement all the Directives. As the November 1997 Scoreboard shows, public 
procurement is one of the areas where the deficit in transposition is greatest, with only 
55.6%4 of the Directives correctly implemented in all Member States. Moreover, the 
Commission's communication on the Impact and Effectiveness of the Single Market5 
makes it clear that the economic results so far achieved fall short of expectations. The 
level of import penetration in the public sector (that is, the sum of direct and indirect 
imports by public purchasers) may have risen from 6% in 1987 to 10% today. It can be 
observed, however, that specific sectors remain closed because of the use of standards 
and certification and qualification systems. Moreover, there is no clear evidence of price 
convergence between Member States over the same period. 
Concerned by Member States' failure to implement the Directives and by the 
disappointing economic results, the Commission launched its Green Paper on Public 
Procurement in the European Union: Exploring the Way forward6, published in 
November 1996. The high level of response to the Green Paper is gratifying. Nearly 300 
contributions have been received from a wide range of key players and the Commission 
thanks all - institutions, Member States, suppliers and purchasers, representative 
organisations on the demand and the supply sides and other interested parties - for their 
valuable contribution. Discussions in the Council, in the European Parliament and in the 
Advisory Committees for public procurement have been extremely productive and 
helpful. 
The Commission has carefully analysed all of the contributions received. The measures 
proposed by the Commission in the present communication take them fully into account, 
recognise that procurement policy needs to be reinvigorated in order to reap the full 
benefits of the regime and define the direction that public procurement policy in the 
European Union will take over the next five years. 
The conclusions the Commission draws from the debate are twofold. First, the Union 
must take action to ensure the public procurement regime in place delivers the economic 
benefits it has promised. Secondly, it must adapt existing instruments to the changing 
economic environment. Achieving this will require enormous effort from all those 
involved: the Commission, the Member States and the private sector. While the aims of 
the internal market policy have remained the same since the adoption of the Treaty of 
Rome, Europe has gone through immense changes since the adoption of the first public 
procurement Directives in the 1970s. These are the information revolution, the change of 
attitude to the State's role in the economy combined with the introduction of budgetary 
restraint - privatisation, liberalisation of utilities, public-private partnerships - and the 
increase of cross-border trade in goods and services brought about by the internal market. 
Together, they have resulted in a highly competitive commercial environment and an 
increased public awareness of the need to fight corruption and prevent misuse of public 
finance. 
See Annex I. 
COM (96) 520 final, 30.10.1996. 
COM (96) 583 final, 27.! 1.1996. 
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The main theme emerging from the Green Paper debate is the need to simplify the legal 
framework and adapt it to the new electronic age while maintaining the stability of its 
basic structure and avoiding unnecessary changes involving further legislative work at 
Community and national level. 
The Community's response and the measures proposed in this communication contain 
the following main elements: 
• The Commission recognises that a stable legal framework is crucial to the smooth 
operation of public procurement markets and to maintaining market players' 
confidence in the efficiency of the system. However, the current legal framework does 
not exist for its own sake but in order to attain the benefits of the single market in the 
area of public procurement. Rules, policy and enforcement should follow reality 
rather than the other way round. In the light of the momentous changes, which have 
occurred since the publication of the first Directives in the seventies, the Commission 
recognises the need to re-orient its policy and streamline its rules. 
The Commission acknowledges the complexity of the current legal framework and the 
rigidity of its procedures. It intends, therefore, to simplify the former and make the 
latter more flexible. Simplification, in this context implies, on the one hand, the 
clarification of existing rules and, on the other hand, their amendment. In order to 
preserve the stability of the framework, priority will be given to clarification of 
existing rules to resolve the most complex issues. Where clarification is not sufficient 
or where it is felt that the current framework is not flexible enough to take account of 
new practices or market reality, the Commission intends to propose amendments 
through a legislative package. 
The use of information and communication technologies (ICT) in public procurement 
will determine, our ability to adapt in the future and maintain a competitive European 
industry. Fully-fledged electronic procurement will allow the procurement process to 
take place much more rapidly and significantly reduce transaction costs over the entire 
lifecycle of the goods or services purchased. 
Simply laying down and enforcing legal rules cannot on its own guarantee economic 
benefits. Other measures aimed at improving market access are equally important and 
necessary: 
- It is of the utmost importance, if one seeks to achieve efficient purchasing, to 
give the different operators involved in a given public procurement a training, 
which makes real professionals of them. This training should not focus on the 
legal provisions as such but on how to use them in an effective way in day-to-day 
procurement and on how to develop new ways of working in a changing market 
environment. 
- The relatively low response from suppliers to the enormous volume of contract 
opportunities needs to be addressed through raising awareness of what is at stake, 
improving transparency of, and access to, information on contract opportunities, 
general market monitoring and other useful information. 
- Specific action in favour of the participation of SMEs has been sought by the 
European Parliament. Measures will be taken in connection with the general 
problems of supplier participation. 
In the process of ensuring a single market for procurement, Member States and European 
industry have a key role to play. Governments, by enforcing the legal framework and by 
setting a good example themselves, will help to build confidence in the openness of their 
procurement markets. European industry, for its part, should actively seek out new 
market opportunities and when it encounters difficulties, should be more courageous in 
defending its rights. Public procurement is too fundamental for the European economy to 
be left in the hands of a limited number of specialists: only the establishment of a real 
partnership between the Community, the Member States and industry will bring about the 
benefits that are to be expected. 
2 ADAPTING THE REGULATORY FRAMEWORK TO 
MARKET CHANGES 
2.1 The ground rules: simplification and flexible response to 
market developments 
2.1.1 Objective 
It is evident from the debate launched by the Commission's Green Paper that the existing 
legal framework7 and procedures need to be simplified. The Commission endorses the 
call for simplification, which is in line with one of the strategic targets of its Single 
Market Action Plan, namely that of strengthening the existing legal framework by 
simplifying and improving national and Community rules (Strategic Target 1, Action 4). 
The Commission is in any event under the obligation to re-examine the application of the 
Directives within the deadlines laid down therein, as Parliament pointed out in its opinion 
on the Green Paper. This communication is therefore a response both to Parliament's 
request and to the obligation laid down in the Directives. 
"Simplification" means in this context both the clarification of provisions which are 
obscure or complex and adjustment of the rules in force where the problems to be 
addressed cannot be resolved through interpretation of the provisions. 
The Commission takes the view that certain important issues cannot be dealt with 
through mere interpretative documents and that the legislation needs to be amended. 
Such amendment will not be tantamount to over-regulation but will endeavour on the 
contrary to make the rules and procedures clearer and more flexible. Amendments will 
be precisely targeted so as to preserve the structure and foundations of the legal 
framework. 
These amendments are in line with measures announced in the Single Market Action 
Plan, in which the Commission stressed the need to remedy weaknesses in the existing 
legal framework for public procurement in order to ensure that the single market 
functions properly in this area (Strategic Target 1, Action 5). 
2.1.2 Presentation of a legislative package 
Although the Commission is convinced of the need to adjust some aspects of the existing 
legal framework, it would stress that, three years after expiry of the deadline for 
transposing the last of the Directives adopted in the public procurement field, the 
Directives 93/36/EEC, 93/37/EEC and 92/50/EEC on public supplies, public works and public services (the 
"traditional" Directives) as amended by directive 97/52/EC; Directive 93/38/EEC on procurement procedures of 
entities operating in the water, energy, transport and telecommunications sectors (the "Utilities Directive"); 
Directives 89/665/EEC and 92/13/EEC on review procedures (the "Remedies Directives"). 
requisite national legislation is still not fully in place in all Member States. Many of the 
contributions prompted by the -Green Paper, and in particular Parliament's opinion, 
deplore this state of affairs and call on the Commission to act as a matter of urgency. 
The Commission invites the Member States to demonstrate their political commitment to 
putting an end to delays in transposition at the earliest possible opportunity. Since the 
transposition and correct application of the Directives is a precondition for the proper 
implementation of public procurement policy, the Commission reaffirms its 
determination to take all the necessary steps to ensure that Member States fulfil their 
obligations. It is proposing a set of measures to that end (see point 2.2 below). 
The Commission intends to table a set of amendments to the existing legal framework 
concerning the following aspects: 
• Submission of proposals to exclude from the field of application of Directive 
93/38/EEC, the sectors or services to which it currently applies (water, energy, 
transport and telecommunications) that operate, in each of the Member States, under 
conditions of effective competition. 
introduction of more flexible procedures, namely a competitive negotiated procedure 
and framework contracts, in response to the criticism sometimes levelled at the system 
that procedures are excessively rigid and formalistic and, where complied with 
strictly, can lead to malfunctioning in the award of contracts; 
adoption of rules to take account of certain trends, such as concessions and other 
forms of partnership between the public and private sectors and privatisation, to 
ensure that their proper functioning is compatible with that of the single market; 
fully electronic procurement (see point 3.2 below). 
These measures will be tabled by the Commission în a legislative package 
designed to make certain adjustments to the existing Segal framework in 
areas where interpretation of the rules to take account of changing 
circumstances would not be sufficient to solve the problems. 
2.1.2.1 Adjustment of the scope of Directive 93/38/EEC m line with 
changes in the sectors it covers 
Following the liberalisation of some of the sectors covered by Directive 93/38/EEC, it is 
necessary to examine the degree of openness to competition of the liberalised sectors 
with a view to deciding whether the constraints the directive impose on contracting 
entities are still justified. They were introduced because of the lack of competition 
resulting from the State's decision to grant a monopoly or a privileged position to an 
operator. In return for this preferential treatment by the State, the operators concerned 
had to comply with certain advertising and procedural requirements when awarding 
contracts. If a sector is found to be effectively open to competition, the constraints 
imposed by the directive should be removed. 
The Commission was the prime mover in the process of liberalisation in the sectors 
covered by Directive 93/38/EEC (see 3. Report on the implementation of the 
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telecommunication regulation package8). It must now take account of the changes that 
have occurred and the new factors that are emerging on the market, by excluding from 
the scope of the Directive entities operating under real competitive conditions in the same 
way as private entities which base their decisions on purely economic criteria. 
The Commission intends, before the end of 1938, to submit proposals to 
exclude from the field of application of Directive S3/33/EEC sectors or 
services to which Et appelés (water, energy, transport Sitid 
telecommunications) which operate, in each of the Member States under 
conditions of real competition. 
in the immediate future, the Commission is resolved, in the light of the 
Jurisprudence of the Court of Justice, to use the possibilities provided by 
Article 8 of Directive 93/38/EEC to exempt services In the 
telecommunications sector operating in a fully competitive environment. 
Accordingly, the Commission invites the contracting entities to notify the 
services that they consider excluded from the scope of the Directive. 
In its evaluation of the real operation of competition, the Commission vlil 
take particular account of the degree of transposition &nû implementation 
of the relevant Community legal framework. 
2.1.2.2 Facilitating dialogue 
Many contributions confirmed the Commission's finding that, especially in the case of 
particularly complex contracts in areas that are constantly changing, such as high 
technology, purchasers are well aware of their needs but do not know in advance what is 
the best technical solution for satisfying those needs. Discussion of the contract and 
dialogue between purchasers and suppliers are therefore necessary in such cases. But the 
standard procedures laid down by the "traditional" Directives leave very little scope for 
discussion during the award of contracts and are therefore regarded as lacking in 
flexibility in situations of this type. 
The Commission wHI therefore propose amendments to the existing texts 
of the Directives with a view to making procedures more flexible and 
allowing dialogue in the course of such procedures and not just in 
exceptional circumstances. It will propose a new standard procedure, the 
"competitive dialogue", which would operate alongside open and 
restricted procedures and would replace the existing negotiated 
procedure with prior publication of a notice. The conditions and the rules 
under which contracting authorities would be avowed to use this new 
procedure and the details of the procedure itself will have to be spelt out 
and will be based inter alia on the principles of transparency and equal 
treatment. The only remaining exceptional procedure would then be a 
"direct-agreement procedure", the conditions for the application of which 
must be construed strictly, in line with the case law of the Court of Justice. 
COM (98) 80, 19.2.1998 
This is an initiative which does not aim to introduce new regulatory constraints: on the 
contrary, it is clearly designed to achieve the procedural simplification and flexibility 
called for by all interested parties who took part in the Green Paper debate, whether from 
the institutional sphere or the private sector. It will give operators more room for 
manoeuvre, which will not fail to yield beneficial effects in terms of the quality and 
efficiency of procurement. 
2.1.2.3 The role of framework purchasing 
On markets, which are constantly changing, such as the markets for information 
technology products and services, it is not economically justifiable for public purchasers 
to be tied to fixed prices and conditions. Public purchasers therefore increasingly feel the 
need to manage their procurement on a long-term basis. The essential features of 
contracts of this nature should consequently offer the necessary flexibility. The question 
of the compatibility of such flexibility with the traditional Directives was raised in many 
of the contributions. 
With a view to simplifying procedures and clarifying the situation, the 
Commission will propose amendments to the existing instruments, which 
would permit more extensive use of flexible contracts allowing product 
developments and price changes to be taken into account. Long-term 
contracts may, however, pose a threat to competition in that they could 
cause positions to become entrenched and certain firms to be shut out. It 
is essential therefore that precise rules be laid down for the use of these 
procedures. Without anticipating the direction that will be taken by 
discussions on this issue, the Commission takes the view that objective 
and transparent information should be published on framework contracts. 
Once candidates had come forward, lists of potential contractors could be 
drawn up. To ensure that these contracts are not walled off, lists should 
either be valid only for a limited period or be kept permanently open to 
new firms. 
2.1.2.4 Treatment of concessions and other forms of public-private 
partnership 
The concept of public-private partnership encompasses the different ways in which 
private capital can take part in the financing and operation of infrastructures and public 
services. The role, which the public authorities still play in such partnerships, varies 
greatly according to the situation concerned. The Commission has no intention of 
intervening in Member States' decisions as to whether these infrastructures and services 
are to be financed and operated by the public or the private sector, since such decisions 
are their responsibility. However, if it is to be fully in tune with reality, the Commission 
has a duty to devise a legal framework, which allows the development of these forms of 
partnership, while guaranteeing compliance with the competition rules and the 
fundamental Treaty principles. 
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At present, only works concessions are subject to specific rules laid down in a Directive; 
service concessions, public service contracts or other partnerships involving the provision 
of services are not covered9. Treaty rules and principles such as equal treatment and 
non-discrimination are of course applicable, but cannot always be readily implemented in 
specific cases. A legal framework therefore needs to be devised for these arrangements 
in order to clarify and simplify the conditions in which they may operate, thereby 
ensuring greater legal certainty. 
In the interests of simplification and clarification, the Commission 
envisages the following action to establish uniform principles for all 
types of concession. 
In the first stage, the Commission will draw up an interpretative 
document explaining and spelling out the rules and principles that it 
considers, on the basis of the cases it has had to deal with, should apply 
to concessions. In this context, the Commission will also be examining 
other forms of public-private partnership in order to determine whether 
and to what extent the public procurement rules can constitute an 
appropriate legal framework for ensuring compliance with the Treaty 
rules without hindering the development of these forms of co-operation. 
This rethink could lead to clarification or even adjustment of existing 
instruments. In the same way, the Commission intends to tackle some 
urgent interpretation problems that have arisen in connection with 
Trans-European Networks (TENs). It has already announced to the 
high-level group chaired by Mr Kinnock and to other bodies its intention 
to publish an explanatory guide providing concrete solutions to certain 
questions arising in this area in the light of the existing legal framework. 
In a second stage, the Commission envisages proposing amendments to 
the Directives in order to cover all forms of concessions, that are not yet 
subject to regulation. The aim would be to guarantee that partners were 
chosen after Community-wide competition ensured by prior publication 
of a notice and minimum procedural rules, which, in the interests of 
flexibility, allow ample scope for, dialogue between the parties involved 
while upholding the principle of equal treatment. To respond to the 
legitimate concerns voiced by certain operators, the amendments would 
include provisions allowing the chosen consortium to award contracts to 
its partners, provided that the existence of such contracts is announced 
during the award procedure. 
One aspect of the public-private partnership issue is the trend towards privatisation in 
which the public authorities transfer to the private sector responsibility for tasks that they 
previously carried out themselves. The process can take many different forms, ranging 
from a simple transfer of assets to more complex arrangements. These could combine 
transfer of ownership from a public body to the private sector and the establishment of a 
contractual relationship (purchase of goods or services, concessions, etc.) between that 
body and the privatised entity in question. 
Except for the public tendering procedures in cases where for reasons which are in the public interest, Member 
States restrict access to intra-Community air routes or to the ground handling markets at Community airports. 
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The option of whether or not to carry out such privatisation falls entirely within the 
competence of Member States. The Commission ought nevertheless to ensure the 
removal of all the obstacles that could unduly hinder this type of transaction. 
It is clear that the rules and principles of the Treaty, particularly Articles 34, 52, 59 and 
67 on free movement of goods, the right of establishment, freedom to provide services 
and free movement of capital have a valid application as regards the transfer of assets to 
private purchasers. 
The Commission will look into the problems arising in this area from the 
standpoint of the public procurement Directives and, in the interests of 
clarity, publish an interpretative document on the topic. 
2.1.3 Clarification and consolidation 
As stressed in the introduction to this communication, the Commission is convinced of 
the importance of a stable legal framework in providing a favourable environment for 
businesses. The framework must, however, also be transparent. The Commission will 
therefore endeavour, wherever possible, to avoid constantly amending legislation and to 
solve problems that arise through interpreting the law in a manner that takes account of 
changing circumstances and in the light of the principles developed by the Court, the 
only institution which has the power to give an authentic interpretation of Community 
law. 
The Commission therefore undertakes to shoulder its responsibilities by 
clearly stating its position on the complex questions which have arisen in 
relation to the application of Community law and which were mentioned in 
responses to the Green Paper.10 
'" The Commission proposes to clarify the following particular topics in an interpretative document: 
• definitions of such basic concepts as "body governed by public law", "work", "special or exclusive rights", 
"contracting authority" and "contracting entity" and the borderline between works contracts and service contracts; 
• service contracts covered by the Directive, in particular the situation of financial services and R&D services; 
• "in-house" contracts, i.e. contracts awarded within the public administration, for example between a central and 
local administration or between an administration and a company wholly owned by it; 
• the "technical dialogue" whereby a contracting authority enters into technical discussions with potential bidders 
when determining its needs, before the contract award procedure is initiated, while observing the principle of 
equal treatment and safeguarding competition; 
• the methods to be used for calculating whether or not a contract exceeds the thresholds for application of the 
Directives; 
• an operational distinction between selection criteria and award criteria; 
• identification of "abnormally low tenders" within the meaning of the Directives; 
• definition of the concept of "irregular", "unacceptable" and "inappropriate" tenders within the meaning of the 
Directives; 
• the conditions in which "variants" may be used; 
The Commission also intends to adopt interpretative communications, particularly in the following areas: 
• the Treaty rules applicable to contracts not covered by the directives and the relevant principles clarified by the 
jurisprudence of the Court of Justice, such as, for example, the principles of equality of treatment, non­
discrimination, transparency, mutual recognition and proportionality and the principles applicable to the stage 
following contract award; 
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Bringing the Commission's position on these problems to the attention of all parties will 
enhance legal certainty, and this will in turn help to create a favourable climate that will 
encourage firms to be more active in bidding for contracts. 
The view is also taken in many quarters that the "traditional" Directives (on supplies, 
works and services) should be consolidated in order to iron out inconsistencies and make 
them easier to understand. 
The Commission intends ultimately, once the work on interpretation and 
adjustment of the existing legislation is complete, to combine the three 
"traditional" Directives into a single instrument. The consolidation 
exercise would be strictly confined to incorporating the adjustments and 
clarifications made since the Directives were adopted and eliminating any 
inconsistencies. 
It should not be forgotten, however, that if consolidation of the Community Directives is 
genuinely to result in greater clarity of the rules applicable in the field of public 
procurement, it must be backed up by consolidation and clarification of the relevant 
national rules. 
2.2 Improving the implementation of public procurement policy: 
a joint responsibility for the Member States, the 
Commission and economic operators 
2.2.1 Objective 
If the single market is to function properly, the ground rules must be applied and 
observed uniformly in all Member States; this is far from being the case at present, a fact 
which is highlighted by various surveys and many of the contributions. 
For this purpose, Member States must shoulder their responsibilities for ensuring 
compliance with the existing rules, and it is up to economic operators to use the 
instruments (particularly the means of redress) available to them to make the single 
market work in the field of public procurement. This allocation of responsibilities is in 
line with the principle of subsidiarity and in tune with the idea of the partnership between 
the Community institutions, the Member States and economic operators, which is 
necessary for the successful liberalisation of public procurement. 
The Commission recognises the need to continue streamlining infringement proceedings 
under Article 169 of the Treaty and its own internal procedures. However, it must also 
the conditions under which environmental criteria can be taken into account in public procurement (the use of 
'"eco-labels", "eco-audit" systems, taking into account of production and working methods and the correct use of 
standards at different levels will be dealt with, inter alia), 
the conditions under which social criteria can be taken into account in public procurement. 
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establish better co-operation with Member States, for, in view of the large number of 
cases concerning public procurement, it is necessary that the citizen can quickly obtain 
satisfaction as regards to the difficulties he encounters. 
This is why, in pursuance of the subsidiarity principle, the Commission is encouraging 
Member States to set up or to designate independent authorities, which would deal with 
the vast majority of disputes in the public procurement field. The Commission would 
thus concentrate on cases having a Community-wide impact or raising major questions of 
interpretation. The objective pursued is to deal with problems at the appropriate level. 
The Commission is also concerned with fighting irregularities affecting public 
procurements under two aspects i.e. 
- Corruption occurring during the procedure for awarding the contract. 
- Irregularities occurring during the execution of the contract once awarded. 
This is particularly true for the contracts either awarded by the Commission (direct 
expenditure) or financed by the Commission (indirect expenditure) where the 
Communities' financial interests are at stake. 
2.2.2 Improving checks at the Community level 
Infringement proceedings under Article 169 of the Treaty are the main weapon in the 
Commission's arsenal for enforcing Community law. But the Article 169 procedure 
cannot on its own guarantee the rapid and effective settlement of disputes which is 
necessary in public procurement: by the time the dispute is settled, contracts have more 
often than not already been awarded, or even performed. 
The European Parliament proposes strengthening the Commission's powers to conduct 
investigations and impose penalties in this area, along the lines of the powers it exercises 
in the competition field, so that it can enforce the legal framework effectively. The 
Amsterdam European Council has also requested the Commission to make proposals to it 
for the setting up of an efficient mechanism for combating serious infringements of 
Community law in the field of free movement of goods. 
The Commission will consider whether it is opportune to provide, if necessary, such a 
mechanism for dealing with infringements of the public procurement rules. It could also 
consider having recourse, in appropriate cases, to Article 90, paragraph 3, of the EC 
Treaty. 
The Commission is determined to speed up its own procedures for dealing 
with infringement cases. 
However, these efforts also require the co-operation of Member States, which should 
respond to the Commission's requests within the specified time limits. More generally, 
the Commission is firmly resolved, in all cases where it proves necessary, to use the 
procedure available under Article 171 of the EC Treaty, under which the Commission 
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can request the Court of Justice to impose penalty payments on Member States which fail 
to comply with a Decision establishing a breach of the public procurement rules. 
Another shortcoming pointed up by certain contributions resides in the fact that the 
Commission does not act systematically against infringements of the public procurement 
rules but haphazardly, as and when it receives complaints. 
In response to this criticism, the Commission undertakes to follow an 
approach, which will be less reactive and more proactive. It will therefore 
first seek to prevent infringements by reinforcing co-operation with 
Member States e.g. when they prepare for major events or when they plan 
large infrastructure projects having particular public procurement 
relevance. In the second place, the Commission will pay special attention 
to particularly serious infringements brought to its knowledge by whatever 
means, including the media; in such cases it will take the initiative in 
launching proceedings under Article 169. Finally, when a specific case 
brought to its attention raises a general problem of application, it will 
check the situation in all Member States and initiate proceedings against 
all similar infringements. 
2.2.3 Independent authorities 
In its Green Paper, the Commission invited the Member States to designate independent 
authorities specialised in public procurement. 
The Commission is not proposing that new institutions are set up from scratch, but rather 
that already existing bodies, such as audit offices or competition authorities, be used for 
the purpose. Without trying to evade its responsibilities as the guardian of Community 
law, the Commission takes the view that it cannot set itself up as a kind of "super 
enforcement authority" for settling all disputes in the public procurement field. Neither 
does it have enough human and material resources to solve all the problems arising. The 
aim of devolving the handling of disputes to national authorities is to relieve the 
Commission of some of the caseload of disputes currently submitted to it. This would 
enable it to concentrate on its rule-making tasks and on those cases which have a 
Community-wide impact or raise major questions of interpretation, while complainants 
would be able to find solutions to their disputes at national level. 
The Commission therefore encourages Member States to set up or 
designate independent authorities with the task of identifying problems of 
interpretation and discussing the treatment of individual cases. These 
authorities would serve as contact points for the rapid, informal solution 
of problems encountered in gaining access to contracts, and could co­
operate with each other and with the Commission, in the latter case 
inter alia with a view to producing reliable statistics. 
-13-
•\. 
These positive effects will be further enhanced following the pilot project for co­
ordination and co-operation between these authorities suggested by Denmark and soon to 
be implemented.11 Under this project, a supplier facing a problem with a procurement 
procedure in another Member State can contact the independent authority in that country. 
However, he can also address himself to the authority in his own country, which would 
then contact the authority in the Member State concerned. These contacts should enable 
a rapid, informal and adequate solution to be found. This could contribute to the creation 
of a genuinely open European procurement market without obliging suppliers to go to 
court. 
2.2.4 Market monitoring 
An effective public procurement policy is feasible only if all the parties involved 
(purchasers, suppliers and public authorities) have sufficient information on the real 
operation of the market and on the - particularly economic - impact of the policies 
pursued. 
Very little information is currently available. What does exist is too patchy to serve as a 
tool for assessing the effectiveness of current policy and the economic benefits for the 
main players. Member States and contracting entities currently supply the statistics 
required by the Directives and the Agreement on Government Procurement (GPA) very 
late, if at all. The amount and complexity of the information required goes some way 
towards explaining this situation. 
The Commission will propose that these statistical requirements be scaled 
down to the minimum strictly necessary for effectively monitoring the market. 
It will ensure that statistical reporting obligations are complied with. 
In future, an alternative solution for obtaining these statistical data could be based on 
contract award notices within the SIMAP system. The necessary information could be 
gathered from these notices if the format was adjusted and notices actually published. 
The possibility of requiring price information only on a confidential basis, enabling the 
Commission to aggregate the data, could be considered. 
The Commission insists on compliance with the obligation to publish 
contract award notices (CANs) and will use all necessary means at its 
disposal in order to enforce it. If the obligation were complied with, it could 
consider abolishing the requirement to supply statistical data. 
Within the SIMAP system a market analysis tool will be developed to present market 
information in a user-friendly manner. Suppliers and purchasers could use this 
11 The pilot project suggested by the Danish Government is supported by the Commission. It is the first concrete 
project following up ideas developed in the Action Plan for the Single Market under Strategic Target 1, Action 2 
(establish a framework for enforcement and problem solving) and follows the logic of the so-called observatory, 
launched via the Advisory Committee for Public Procurement in 1994. 
-14-
information to gain a better understanding of the markets they are working in. Such a 
system would significantly improve transparency of procurement markets. 
In order to pursue the series of statistical surveys in the Member States, 
which have so far been carried out, by the national statistical offices in 
Greece, Portugal and Germany, the Commission invites other Member States 
to volunteer for such a study. 
Bringing together all the information available, the Commission will define indicators to 
measure market trends and the impact of public procurement policy over time. 
Alongside these planned actions, the Commission will if necessary carry out 
additional economic studies. 
2.2.5 Attestation: a guarantee of non-discriminatory procurement 
Bearing in mind that prevention is better than cure, the EU set up an attestation system 
for purchasers. Nevertheless, as can be seen from the contributions to the Green Paper 
debate, if the system is to be used, it must confer certain benefits on the entity undergoing 
attestation. 
Among these benefits, the Commission is thinking in particular of exemption 
from certain constraints currently imposed by the Directives, which could be 
seen as an excessive burden for an entity that had agreed to undergo 
attestation. 
Nevertheless, even if an entity were exempted from certain requirements, the 
basic principles, such as transparency, non-discrimination and equal 
treatment of all suppliers, would still apply. 
2.2.6 Fighting corruption 
The Commission in its Communication on Corruption12 highlights the importance of 
public procurement for an effective Union-wide policy to the fight against corruption. 
The Commission will explore the possibility of obliging public procurement 
entities to enter into anti-corruption pledges and a corresponding obligation 
on tenderers to agree that they will not use bribery to obtain a contract. 
See Commission Communication to the Council and the European Parliament on A Union Policy 
against Corruption (COM(97)0J92 - C4-0273/97). 
-15-
The need for a blacklisting system has been raised within the European Union on at least 
two fronts. Firstly, the Commission's Communication on Corruption mentioned above 
commits the Commission to working on a scheme of blacklisting applicable to areas 
where Community finances are at risk. Similarly, the European Council in June 1997 
adopted an Action Plan for Combating Organised Crime13. This contains a 
recommendation that Member States and the Commission provide for the possibility of 
exclusion from public tender procedures of an applicant who has committed or is under 
investigation or prosecution for having committed an offence connected with organised 
crime. 
The Commission will explore how a blacklisting system could be used as an 
anti-corruption tool. 
2.2.7 Contracts awarded by the Commission 
The Commission has been criticised by other Community institutions (the Council 
(internal market) and the Economic and Social Committee) and by economic operators 
with regard not only to its own contract award procedures but also to the contracts it 
finances (on the latter, see point 4.6.3 below). 
Other shortcomings, such as excessive delays in paying contractors and failure to publish 
indicative and contract award notices, as required by the Directives, have also been 
mentioned. 
The Commission is nevertheless convinced that considerable progress has been achieved 
in recent years, particularly in the wake of the SEM 200 (Sound and Efficient 
Management 200) programme, which is aimed at rationalising its procurement and 
managing it on a more professional basis. 
As regards the fight against corruption and financial irregularities concerning contracts to 
be awarded by the Commission, its communication on "Sound Financial Management 
and Administration Improving Action against Incompetence, Financial Irregularities, 
Fraud and Corruption"14 of November 1997 explicitly deals with public procurement and 
announces a number of measures to be taken to improve its procedures for awarding 
contracts. In particular, it has improved its internal administrative procedures concerning 
public procurement and established an internal early warning system. 
The Commission reaffirms its commitment to observing the same rules as 
national authorities. The contract award procedures of the Community 
institutions already provide for the application of the Council public 
procurement directives on works, supplies and services. The Commission 
proposes to add a reference to the multilateral agreement on public 
procurement concluded within the framework of the WTO. It undertakes to be 
13 OJC 251 of 15.8.97, page 1 
14 SEC(97) 8198 18/11/97. 
-16-
more careful in complying with the Directives and to tighten its payment 
discipline. The Commission has undertaken to include in all its contracts 
involving identifiable deliverables, a clause obliging payment within 60 days 
of receipt of the claim with interest in case of delay. For contracts falling 
below the thresholds laid down in the Directives, it will likewise observe the 
principles of transparency, non-discrimination and equal treatment 
The Commission intends to explore the different possible methods of re-
enforcing monitoring of observance of the principles and rules applicable to 
the award of public contracts, including the designation of an independent 
authority accessible to goods and services providers. This authority could 
exercise monitoring responsibilities and other functions, especially those of 
conciliation and assistance. 
In the interests of transparency, Commission departments will make more 
extensive use of new IT systems, in particular the Internet. They will thus 
offer access to much more information than is currently available via the 
Official Journal and the TED database, thereby making it possible, among 
other things, to consult tender specifications on the Internet and even print 
them direct, so that interested suppliers can obtain these documents 
forthwith. 
-17-
3 DEVELOPING A FAVOURABLE ENVIRONMENT 
FOR BUSINESSES, AND IN PARTICULAR SMES 
3.1 Training, information and measures helping SMEs 
3.1.1 Objective 
The opening-up of public procurement markets to competition is a significant supply-side 
operation. Eliminating red tape is of enormous economic importance, creating business 
opportunities for competitive European suppliers from nearly all economic sectors. 
The weakness of the impact of the Community regime is due in particular to the low 
response rate of suppliers. This is confirmed by the findings on public procurement 
published in the "The Single Market Review"15. Moreover, a recent supplier survey 
revealed that an average of only 10% of suppliers answer calls for tenders. In this 
connection, many contributions to the Green Paper, and in particular that of the European 
Parliament, highlight the disappointing record of SMEs and their specific problems. 
An efficient public procurement policy needs to increase supplier participation. The 
Commission therefore proposes a set of measures addressing the various aspects of the 
problem: Making markets more transparent through better information; Increasing 
confidence in contract procedures by training focused on professionalism and best 
practice; Specific action to help SMEs overcome obstacles to selling to the public sector; 
Promoting mutual recognition of qualification procedures by contracting entities, thus 
reducing the costs to suppliers of entry to public procurement. 
3.1.2 Information 
The information given on public procurement is a key element in creating a business 
friendly environment. Indeed, low supplier participation may indicate that information on 
potential public procurement markets must be extended and made more accessible. 
The Commission will therefore exchange the present system of publication 
for an Internet based solution. This will allow free and easy access to 
information essential to potential contractors, including purchaser profiles 
(see point 3.2) and market monitoring information (see point 2.2.4). 
Commission and Member States need to work together to make information 
on the legal framework in the different Member States and on administrative 
procedures available. The Commission will also draw up interpretative texts 
(see point 2.1.3). 
15 The Single Market Review, Subseries III: Dismantling of Barriers, Volume 2: Public Procurement (OPOCE 1996). 
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3.1.3 Training and commercial practices ("best practice") 
A higher degree of professionalism among both purchasers and suppliers could 
significantly improve the environment in which public procurement takes place. 
Adequate training is therefore of the utmost importance in the opening up of markets, and 
there is wide support for a Community initiative for this purpose. Given the wide field to 
be covered, the diversity of administrative cultures and training programmes, a training 
policy will only be effective with the participation of Member States and economic and 
training actors at national, regional and local levels. The Commission, for its part, will 
develop a framework for implementing an effective public procurement training policy in 
the Union. This policy will also take into account measures to integrate environmental, 
social and consumer protection objectives. 
The Commission, on the basis of contributions from Member States and 
other interested parties, will complete a stocktaking of existing training 
needs, best practices, actions and current programmes in this field. 
The Commission will examine the results of the stocktaking exercise with a 
view to developing guidelines on a public procurement training policy. This 
policy will make full use of the possibilities offered by information 
technology. 
3.1.4 Measures in favour of SMEs 
SMEs have the potential to supply that additional competition, flexibility and capacity for 
innovation essential to the successful opening up of public procurement markets. Every 
effort to make public procurement more accessible for businesses should start off from 
the point of view of the SME. While the Community regime has enabled SMEs to enjoy 
some success in breaking into regional and national procurement markets, however, 
experience of direct participation in cross-border contracts has remained disappointing. 
Replies to the Green Paper suggest many reasons for this failure. SMEs face obstacles at 
every stage of the procurement procedure. SMEs must surmount many problems, such as 
lack of information about potential contracts, inability to draw up business plans, 
mismatch between the size of the enterprise and the large size of many contracts, anxiety 
about currency fluctuations, and the need to meet standards, certification and 
qualification requirements. Other problems, such as delays in payment, may arise in the 
post award stage. 
The Commission will adopt a comprehensive and concerted approach in a 
communication on SMEs and public procurement. This strategy will, in 
particular, develop the possibilities of improving access to information, 
crucial for SME, by consistent application of information and 
communications technology. 
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This approach will be based particularly on an information policy based on electronic 
communication, high quality services provided by European-scale networks focused on 
SMEs, on better mutual recognition of qualification systems, on clarification of general 
provisions generally applicable to below thresholds, on promoting co-operation between 
SMEs and on the conditions for SMEs participation in large-scale projects.16 
3.1.5 Qualification of suppliers 
Purchasers must be given the confidence to deal with new and previously unknown 
suppliers. Several Member States have set up nation-wide qualification systems, while in 
other Member States individual contracting entities have created their own qualification 
system. 
The Commission sees an important role for qualification systems, provided 
they do not result in additional barriers for suppliers. The principle of mutual 
recognition applies in this area: a supplier which has been qualified in one 
Member State should also be able to use this qualification in others, without 
having to be qualified again or at least without having to go through the full 
qualification procedure in other Member States. The Commission will use all 
the means available to it, in particular the powers conferred on it by Article 
169, to ensure that the principle of mutual recognition is respected and that 
qualification systems are used to open up markets rather than to create new 
barriers. 
In order to make different national qualification systems in the construction industry 
more comparable, the Commission has given a mandate to the standardisation bodies 
CEN and CENELEC to develop a European standard for qualification of construction 
enterprises for contracts covered by Directive 93/37/EEC. This standard, which the 
Commission awaits, will ensure a balance between the legitimate requirements of 
contracting authorities to have certain information at their disposal and the wish of 
suppliers to see administrative requirements limited to a strict minimum. 
The Commission will also consider in which other areas a similar process of 
harmonisation of qualification systems can be undertaken. 
3.2 Towards efficient electronic procurement 
3.2.1 Preparing the EU to meet the exciting new challenge of electronic commerce 
One of the most exciting and challenging developments for the future of public 
procurement is the emergence of the new Information and Communication Technologies 
(ICTs). These technologies allow the current procedures to run more smoothly and could 
16 See also points 2.1.3, 3.1.2., 3.1.3., 3.1.5., 3.2. of this communication and OJ C 285 of 20.9.1997, p. 17. For the 
European Economic Interest Grouping (E.E.I.G.). 
-20-
enable a more efficient purchasing process, reducing the need for detailed regulation. 
They also offer the best possibility yet to ensure meaningful participation of SMEs in the 
procurement process. The Commission and the Member States are co-ordinating their 
efforts in this regard within the SIMAP project, which has been funded through the 
Commission's IDA project17. 
On 12th December 1997, the Commission proposed a second phase of the IDA 
programme to the EP and the Council. In this second phase, the Commission proposes to 
enhance and extend the SIMAP-project to comprise the entire procurement process. 
The Commission will ensure that the tools and systems developed through 
its SIMAP Information System will be compatible with and not duplicate tools 
already developed by the private sector The Commission will furthermore 
ensure that all the requirements of the Member States are taken into account 
in the SIMAP framework. 
The SIMAP system for electronic creation and submission of procurement notices has 
been tested through pilot projects with a limited number of purchasers and suppliers 
throughout the Community and the EEA and will now be made available to all 
contracting entities. 
The Commission will provide the possibility to all contracting entities to 
electronically prepare and submit their notices for publication through 
procurement transparency system operated by the EU institutions. Several 
options, including electronic mail and the Internet, will be provided. 
The software developed through Simap has been found to result in substantial savings for 
the EU taxpayer and deliver better information to suppliers through more consistently 
accurate notices. However, costs to the taxpayer will remain unacceptably high so long 
as contracting entities continue to submit poor-quality notices, which do not comply with 
the legal obligations imposed by the Directives. Finally several comments stress the high 
costs of TED and the difficulties of using the paper OJ "S" series on account of the 
increasing number of notices published. 
The Commission will consider incentives to encourage contracting entities 
to use these electronic means of submission. Currently a notice must be 
published within twelve days of being sent. Where electronic mail and the 
Internet are used to provide instant publication the Commission intends to 
propose to reduce the overall length of the procedure, for example from 52 
to 40-45 days (in an open procedure). 
The Commission will continue to publish notices without cost to the 
procuring entity only when it submits a notice which complies with the 
17 Interchange of Data between Administrations 
-21-
formai requirements of the Directives, includes a reference to the CPV and 
follows standard forms or model notices. In other cases the costs of 
ensuring notices meet those requirements will be recovered from the 
contracting entity concerned. 
The Commission has decided to discontinue the publication of the paper 
version of the Supplement to the Official Journal from July 1938. It will be 
replaced by the CD-ROM version already being available. Moreover, the TED 
database will be made available to all users for free over the Internet. 
For ease of use suppliers should be able to find all notices in one single location. In order 
to prepare a bid, however, suppliers need more information than that provided in the 
notice. They need in particular the tender documents themselves. The new ICTs, and in 
particular the emergence of the Internet, offer important new opportunities in this regard. 
Another basic characteristic of this development will be to make it easier than at present 
to publish tender notices in all the Community languages. 
The Commission will encourage the publication of all tender documents, in 
particular in open procedures, on the Internet. It invites contracting entities 
who already have a site ("homepage") on the Internet, to make tender 
documents available on a "purchaser profile" on their homepage. 3n order 
to promote the establishment of such purchaser profiles the Commission 
will make mode! software available over its SIMAP homepage. 
3.2.2 The way ahead: pan-European electronic procurement 
Although the Commission has a clear role in the collection and dissemination of public 
procurement notices, the development of fully-fledged electronic procurement systems is 
not its direct responsibility. 
The Commission calls for the active participation of interested purchasers 
and suppliers, companies active in the ICT sector and others, including Euro 
Info Centers, in order to stimulate the development of a pan-European 
electronic procurement environment in which a substantial number, for 
example 25%, of all procurement transactions takes place electronically by 
the year 2003. 
Member States also have a very important role to play in promoting electronic 
procurement. The highest potential for savings will probably exist for relatively small 
purchases of readily available, "off-the-shelf products. Such purchases often remain 
below the threshold values laid down in the Directives. 
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The Commission will seek a commitment from the Member States to ensure 
mutual compatibility and interoperability of electronic procurement systems 
which they set up for below threshold purchases. To facilitate such 
compatibility it will publish any necessary specifications on the SIMAP 
homepage. 
Pilot projects will be identified which use electronic mail, electronic data interchange and 
Internet technology to conduct procurement activities. These projects will, of course, 
need to respect the principles of non-discrimination and transparency. Specific attention 
will be given to the use of electronic catalogues, virtual procurement networks and the 
promotion of best practice through procurement clubs. 
The Commission will come forward with recommendations for further 
measures to be taken in modifying the legal regime, developing standards 
or specifications or establishing a regulatory framework. The Commission 
will ensure that the requirements of electronic procurement are taken into 
account in any proposals for standards or legislation on digital signatures. 
The Commission recognises that electronic procurement needs to be seen in the context 
of globalisation. It will increasingly play an important role in opening-up markets 
outside the EU (see also point 4.4). Bilateral contacts have already started with some of 
our major trading partners. 
The Commission will seek agreement with its international partners in the WTO 
in order to simplify and harmonise the exchange of information on both public 
procurement opportunities and statistics in the electronic procurement context. 
3.2.3 Measures proposed 
The majority of comments received highlighted the need to allow the widespread use of 
Information and Communication Technologies (ICT). Recent amendments to the 
Directives already allow the use of electronic mail in some procurement procedures. 
Further changes are needed, however, to allow its use e-mail for all exchanges of 
information specified in the Directives (see also point 2.1.2). 
The Commission will propose amendments to the Directives to put electronic 
means of exchanging information on an equal footing with other means. 
The hardly predictable development of electronic procurement makes it difficult to 
modify the Directives to reflect the latest state of the art. The Commission intends to 
encourage electronic procurement through pilot projects, before proposing major changes 
-23-
to the regime. These pilots may need waivers from certain provisions in the Directives 
for the duration of a pilot. Where pilots demonstrate their value, formal changes of the 
Directives can be contemplated to allow for their general and more permanent 
application. Obviously the underlying principles (non-discrimination/equal treatment, 
transparency etc.) should not be jeopardised by such waivers and should at all times be 
guaranteed. 
The Commission will allow as soon as possible the running of pilot projects in 
order to test specific electronic procurement procedures. To this effect it will 
also take the necessary legislative initiatives to allow such projects to take place 
as soon as possible while respecting the principles of the public procurement 
regime. The details of these initiatives will be determined after discussions with 
all interested parties, including in particular the Member States who should allow 
similar projects to take place for below-th res hold purchases. The Commission 
will continue to take an active part in related discussions which are currently 
taking place in the WTO committees on modifying the Government Procurement 
Agreement (see point 4.6.2). 
4 COMPLEMENTING AND ACHIEVING SYNERGY WITH 
OTHER COMMUNITY POLICIES 
4.1 Objective 
The Communities' public procurement policy integrates Member States' procurement 
markets into the single market putting in place a market economy with free competition. 
The decision in favour of "best value for money" principle is more and more heard in the 
area of defence procurement. Budgetary pressure and the need for a serious restructuring 
of the supply side in this sector have fostered a debate on how to extend the principles of 
competitive procurement to defence procurement. 
The best value for money objective in public procurement does not exclude taking 
environmental, social and consumer protection considerations into account. Nor does it 
require changing the present rules. It is, however, necessary to lay down clear guidelines 
to purchasers on how they how environmental and social criteria can be taken into 
account in their contract award procedures, while complying with Community law, 
particularly as regards transparency and non-discrimination and the public procurement 
rules. Such guidelines are necessary if European suppliers are to be placed on an equal 
footing. 
Public procurement contracts in third countries are of significant interest for European 
firms, especially when it comes to infrastructure projects. Opening these market 
opportunities for our European suppliers is therefore an integral part of the Communities' 
public procurement policy. In order to allow European firms to win procurement 
contracts outside the Union and the European Economic Area, the same objectives as 
followed for inside the Union need to be pursued vis à vis our trading partners. 
4.2 Defence 
In its recent communication to the Council, the European Parliament, the Economic and 
Social Committee and the Committee of the Regions entitled Implementing European 
Union Strategy on Defence-related Industries™, the Commission announced measures in 
defence procurement, following the appropriate procedures in accordance with Article M 
of the Treaty on European Union, to lay down binding principles, rules and mechanisms 
for transparency and non-discrimination in procurement, taking the current Community 
public procurement rules as a model. 
The rules that will apply to procurement of defence equipment will contribute 
substantially to the creation of a competitive defence technological and industrial base. 
COM(97) 583 final, 4.12.1997. 
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The framework should make provision for competitive tendering whenever feasible. 
Furthermore, it must favour the maintenance and development of the fundamental 
industrial capabilities and key technologies at European level. In addition, the rules must 
guarantee security of supply, while enabling a progressive elimination of over-capacity. 
To this end, taking into account the need to build broad support in this 
matter, it is necessary to establish an appropriate set of principles, rules and 
mechanisms on procurement by the defence sector. In order to take into 
account the specificity of the defence sector, and in particular the need for 
confidentiality and security of supplies, an appropriate level of flexibility 
should be envisaged where necessary. 
For this purpose, materials for the defence sector could be divided into three categories: 
• Products intended for the armed forces but not for military use, and therefore covered 
neither by Article 223 EC nor by Article 2 of Directive 93/36/EEC (markets declared 
secret, protection of vital interests, national security, etc.). As these products are 
already subject to the Community public procurement rules, the Commission will 
specify, where appropriate and in the most suitable form, the conditions for the 
application of these rules; 
• Products intended for the armed forces and for military use, but not constituting 
"highly sensitive defence equipment". The Commission could work out a fairly 
flexible set of rules, while respecting the principles of transparency and non­
discrimination, inspired by the existing Community public procurement rules; 
• Highly sensitive equipment covered by the scope of Article 223 EC. These products 
could be exempted from the rules referred to above, when safety or the protection of 
vital national interests of the country in question so requires. A notification 
mechanism for this purpose should be provided in order to ensure a degree of control 
and transparency. 
4.3 Protection of the environment 
The environment is becoming an increasingly important component of any modern 
economic policy. The Amsterdam Treaty fully recognises this by raising environmental 
objectives to one of the Union's priorities. As confirmed by the contributions received, 
more and more public purchasers wish to buy products and services, which are 
environmentally friendly. Several Member States are already pursuing an active policy. 
OECD has adopted a recommendation on "Greening Public Procurement"19. For its part, 
the Commission is implementing a plan for environmental protection in its 
administration, and, in particular, it's purchasing. 
19 Recommendation of the Council on Improving the Environmental Performance of Governments, 
adopted 20.2.1996. 
-26-
The Commission re-emphasises that Community law, and the public procurement 
directives in particular, offer many possibilities of taking environmental protection into 
account in public purchasing. The Commission recalls the existing possibilities below. 
• In general, any administration which so wishes can, in defining the goods or services 
which it intends to purchase, choose the products and services which correspond with 
its pre-occupations for the protection of the environment. The measures taken must, of 
course, comply with the rules and principles of the Treaty, particularly that of non­
discrimination. 
• The rules of the public procurement directives allow, in certain instances, the 
exclusion of candidates who are in breach of national environmental legislation. 
• Purchasing organisations can draw up technical specifications concerning the 
characteristics of works, supplies and services, which are the object of public 
procurement, which take account of environmental values. They can from now on 
encourage the development of a positive approach by companies to the environment, 
in accepting tenders offering products, which meet the requirements, defined in the 
specifications. 
• The directives allow the inclusion of the objective of protection of the environment in 
the criteria of selection of candidates in so far as these criteria are aimed at testing 
their economic, financial and technical capacity. 
• As regards the award of contracts, environmental elements can serve to identify "the 
most economically advantageous offer", in cases where these elements imply an 
economic advantage for the purchasing entity, attributable to the product or service 
which is the object of the procurement. In evaluating tenders, a purchasing 
organisation can, for example, take account of costs of maintenance, treatment of 
waste or re-cycling. 
• A contracting authority can require the supplier, whose tender has been accepted, that 
the deliverable, which is the object of the contract, be provided with due regard to 
certain constraints aimed at safeguarding the environment. These conditions of 
execution must be known in advance by all the tenderers. 
In general, the Commission reiterates that the object of public procurement remains 
essentially economic and that it is of the utmost importance to determine, for each 
procurement, the environmental factors linked to the goods and services required, which 
can, in consequence, be taken into consideration in a contract award procedure. 
The possibilities offered by the existing regime, which have just been 
spelled out above, will be developed and clarified in a specific 
interpretative document in order to enable the optimum consideration of 
environmental protection in public procurement (see point 2.1.3). in this 
exercise, the Commission will, in particular examine how far it is possible 
to refer in technical specifications to the European eco-label or even to 
national eco-labels. In the same way, it will analyse the question of 
whether purchasing entities can require suppliers to have an eco-audit 
system, such as EMAS or ISO standard 14001. 
-27-
The Commission cannot, however, propose solutions in an interpretative document, 
which go beyond the existing public procurement regime. These would require 
amendments to the legislation. 
In order to promote those practices which give the best results and respect 
the principles stated above concerning the integration of environmental 
aspects in public procurement, the Commission undertakes, with interested 
Member States and the private sector to develop initiatives which would 
make it easier to define environmental concerns in the tender documents in a 
balanced manner. 
4.4 Public procurement and social aspects 
Social policy is of the greatest importance for the European Union. It aims, among other 
things, at promoting a high level of employment and social protection. Furthermore, the 
Amsterdam Treaty lays down as a priority the elimination of inequality and the 
promotion of equality between men and women in all the policies and activities of the 
European Union and requires it to combat every type of discrimination. 
The Commission has already indicated in its Green Paper the conditions under which 
social criteria can play a role in contract award procedures, particularly the possibility of 
including the obligation to comply with existing social legislation, especially Community 
social legislation and, where appropriate, that emerging from the International Labour 
Organisation (ILO). 
There is a range of possibilities for public administration to take the pursuit of social 
objectives into consideration in their purchasing: 
• The rules of the public procurement directives allow the exclusion of candidates who 
breach national social legislation, including those relevant to the promotion of 
equality of opportunities. 
• A second possibility is to lay down as a condition of execution of public contracts, 
compliance with obligations of a social character, aimed for example at promoting 
the employment of women or encouraging the protection of certain disadvantaged 
groups. Of course, only those conditions of execution are authorised which do not 
discriminate, directly or indirectly, against tenderers from other Member States. 
Moreover, indicating these conditions in the tender notice or the specification must 
ensure sufficient transparency. 
Contracting authorities and entities can therefore be called upon to implement the various 
aspects of social policy in awarding contracts, public purchases in practice constituting a 
significant means of influencing the behaviour of economic operators. One can cite, as an 
example of this situation, legal obligations to protect employment and working 
conditions, which must be enforced on the site where a public works contract is being 
carried out. Yet again, there are the so-called "positive actions", that is the use of a public 
contract as a means of achieving the objective sought, for example, establishing a captive 
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market for a sheltered workshop, which could not reasonably be expected to stand up to 
competition from classic commercial companies with a normal level of productivity. 
As in the case of the environment, the Commission intends to clarify the 
principles, which can be applied to allow social factors to be taken into 
account. 
It re-iterates that public contracts can be a means of influencing the actions 
of economic operators, providing the limits laid down by Community law are 
respected. In this context the Commission encourages the Member States to 
use their procurement powers to pursue the social objectives mentioned 
above. The Commission will act similarly in its own procurement activity. 
4.5 Consumer protection 
The improvement of market access and transparency through the implementation of an 
effective procurement policy will bring significant benefit to consumers, including better 
quality and more economically efficient services and infrastructures. It is therefore 
necessary to take greater account of consumer policy in the Union's procurement policy, 
especially with regard to the promotion of transparency and dialogue with consumer 
organisations. 
4.6 International aspects 
4.6.1 Opening up third-country public procurement markets for European 
companies 
The Government Procurement Agreement (GPA), which was last amended in 1994, lays 
down disciplines between a limited number of countries including the world's major 
trading blocks. These disciplines cover the traditional national treatment and most 
favoured nation principles but also contain precise requirements with regard to 
procurement procedures, akin to those in the Directives. Thus the GPA affects the 
regulatory regimes of the adhering countries, including the EU, in a far-reaching manner. 
The Commission will continue to take all steps necessary to ensure that the legal 
instruments creating opportunities for EU companies are effectively complied with. 
On the multilateral front, it will seek to further open up third country public procurement 
world wide, with a view to eliminating those barriers to trade, which are harmful to 
European interests. The EU's final objective is to obtain multilateral adherence to a code 
on procurement though its inclusion in the WTO single undertaking. The work 
undertaken in the WTO, such as the review of the GPA, the negotiations on public 
procurement of services within the GATS and the working group on transparency rules in 
government procurement, should help to achieve this objective. In addition, there are 
ongoing processes in other fora, such as the OECD or Uncitral. 
-29-
On the bilateral front, the Commission will continue its efforts -o open-up third country 
markets by concluding bilateral agreements as an alternative or as a complement to its 
multilateral policy. 
Electronic procurement is becoming increasingly widespread and will be one of the main 
aspects of our external policy in procurement. It is already one of the key aspects, which 
are being discussed at multilateral level, in particular in the WTO's GPA and 
Transparency Groups. The use of ICTs can indeed play a major role in achieving real 
and meaningful transparency of procurement world-wide. But the Commission sees its 
task at the multilateral level first and foremost as ensuring that the EU's international 
commitments are consistent with its internal policy on electronic procurement so that the 
development of the latter is not hindered. In addition, it will, as indicated in point 32 
above, pursue these matters bilaterally with its major trading partners. 
The Commission intends to actively participate in these fora in order to 
create the right conditions to allow European Industry to enhance 
competitiveness and maximise commercial opportunities. 
It is also the Commission's intention to ensure that rules and practices at 
international level with respect to the use of information technology in the 
field of public procurement are consistent with its own internal policy on 
the matter. 
4.6.2 Integrating neighbouring economies into the Union's public 
procurement policy 
In some situations our relations in the field of public procurement with third countries go 
beyond the trade and even the regulatory aspects. This relates in particular to the Central 
and Eastern European Countries (involved in the pre-accession process) and the 
Mediterranean Countries. Market opening is not the main objective in this context, but 
rather a tool to improve the economic situation of these countries. With regard to the 
CEECs, the adoption of the acquis communautaire is also part of the AEU's current 
policy. Asymmetric liberalisation and the development of comprehensive technical 
assistance programmes should remain the basis of the AEU's future policy in this area, in 
particular with respect to the Mediterranean countries. 
The Commission is preparing "Road Maps" adapted to the specific 
situation of each of the candidates for accession which will set out 
priorities and actions in order to help them in their efforts to take over the 
acquis. The Commission will address this issue in a communication on 
the single market and the Mediterranean area further to the Barcelona 
Declaration, which aims at establishing a Free Trade Area. 
4.6.3 Ensuring efficiency in the award of contracts financed by the EU 
within the context of external aid 
The Commission is concerned about achieving economy and efficiency in the 
management of the Community's financial resources. In this respect, the responsibility of 
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the Commission includes not only contracts awarded by the Commission itself (see point 
2.2.6 above), but also contracts financed by EU funds in the context of external aid. 
On the one hand, it is justified in insisting on ensuring a certain European visibility when 
awarding contracts financed by the EU funds in the context of the external aid. On the 
other hand, the Commission believes that countries receiving EU funds need to achieve 
economy and efficiency in their public sector operations, and should also respect the 
principles of transparency and accountability in public administration. 
To achieve these objectives, it is necessary to apply best practice and best management 
principles based on competitive procurement in the award procedures. Economic benefits 
for the recipient countries arise from the use of sound procurement policies and practices 
(such as value for money, improved competitiveness of local industry, increased 
efficiency in public administration, more foreign investment etc.). 
Joining the WTO Agreement on Government Procurement, which forms a legal basis for 
open and competitive public procurement on an international basis, would be a desirable 
objective in this respect. The Commission is nevertheless aware that it will be difficult 
for most of the countries receiving EU funds to join this agreement or even adopt 
national procurement rules based on competitive tendering at this stage, since these 
countries may be economies in transition, developing countries or even least developed 
countries. 
As a result, the Commission will continue to see to it that contracts 
financed from Community resources in the framework of external aid are 
awarded in a competitive manner by the recipient countries by respecting 
the relevant EU rules governing this matter, as well as those established 
within the framework of bilateral or regional agreements concluded by the 
European Union. In this regard, the Commission has already presented 
proposals in order to harmonise the different rules and procedures 
presently used for awarding certain contracts financed by the EU 
resources. 
In order to improve the protection of the financial interests of the Community, the 
Commission has improved the legal framework regarding Structural Funds by adopting 
Regulation no. 2064/9720, which will also enable better control of public procurement 
contracts awarded by national authorities but co-financed on the Communities' budget, 
which will help in fighting corruption and avoiding irregularities. 
20 JOL No.290of23.10.1997. 
-3*-
ANNEX 
STATUS OF IMPLEMENTATION OF THE PUBLIC PROCUREMENT 
DIRECTIVES 
DIRECTIVES 
89/440/EEC 
Works (18.7.1989) 
In force since 19.7.1990 
GR, E, P : 1.3.1992 
AT, FF, SE: 1.1.1994 
replaced by 93/37/EEC 
88/295/EEC 
Supplies (2.3.1988) 
In force since 1.1.1989 
GR, E.P: 1.3.1992 
AT, FI, SE: 1.1.1994 DK 
89/665/EEC 
Remedies (21.12.1989) 
In force since 21.12.1991 
AT, FF. SE: 1.1.1994 
90/531/EEC 
Utilities (17.9.1990} 
In force since 1.1.1993 
E: 1.1.1996 
GR, P: 1.1.1998 
AT, FF. SE: 1.1.1994 
92/13/EEC 
Remedies for Utilities 
(25.2.1992) 
In force since 1.1.1993 
AT, FI, SE: 1.7.1994 
E: 30.6.1995 
GR, P: 30.6.1997 
92/50/EEC 
Services. (18.6.1992) 
In force since 1.7.1993 
AT, FI, SE: 1.7.1994 
93/36/EEC 
Supplies (14.6.1993) 
In force since 14.6.1994 
AT, FÎ, SE: 1.7.1994 
93/38/EEC 
Utilities (14.6.1993) 
In force since 1.7.1994 
AT, FI.SE: 1.7.1994 
E: 1.1.1997 
GR, P: 1.1.1998 
Key: 
National implementing measures not communicated or only partly communicated 
National implementing measures communicated and checked; infringement proceedings for 
non-compliance under way 
National implementing measures communicated 
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ANNEX 2 
TIME TABLE 
PRINCIPAL MEASURES TO BE ADOPTED ADOPTION BY THE 
COMMISSION 
Legislative package making some adjustments to the 
legal framework as regards Directive 93/38/EEC, 
competitive dialogue procedure, framework contracts, 
concessions. (See point 2.1.2.) 1998 
Implementation of Article 8 of Directive 93/38/EEC Immediately 
Communications and interpretative documents (2.1.3.) 2. semester 1998 to 2. 
semester 1999 
Communication on concessions and problems 
associated with trans-european networks (TENs) 
(2.1.2.4.) 
Reflection and discussion on questions connected with 
various forms of public-private partnership (2.1.2.4.) 2. quarter 1998 
Consolidation of the classic directives (2.1.3.) 2001 
Improvement of procedures of supervision at 
Community level (2.2.2.) Immediately 
Launching of measures to encourage the setting up or 
designation of independent authorities (2.2.3.) Immediately 
Improvement of the Commission's contracting 
procedures (not requiring legal changes) (2.2.7.) Immediately 
Developing a policy for public procurement training 
(3.1.3.) 2. semester 1998 
Communication on SMEs and public procurement 
(3.1.4.) 2. semester 1998 
Support for pilot operations on electronic tendering 
(3.2.2.) 2. semester 1998 
Establishment of an appropriate set of principles, rules 
and mechanisms on procurement by the defence sector 
(4.2) 1998 
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ISSN 0254-1475 
COM(98) 143 final 
DOCUMENTS 
EN 10 09 08 02 
Catalogue number : CB-CO-98-162-EN-C 
ISBN 92-78-32054-4 
Office for Official Publications of the European Communities 
L-2985 Luxembourg 
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