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COM ( 83) 005 
 
 
 
Vol. 19 83/0004 
  
 
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concernant l'ouverture au public des archives historiques de la Communauté économique 
européenne et de la Communauté européenne de l'énergie atomique (JO L 43 du 15.2.1983, 
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In accordance with Council Regulation (EEC, Euratom) No 354/83 of 1 February 1983 
concerning the opening to the public of the historical archives of the European Econom ic 
Communit y and the European Atom ic Energy Communit y (OJ L 43, 15.2.1983, p. 1), as 
amended by Regulation (EC, Euratom) No 1700/2003 of 22 September 2003 (OJ L 243, 
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file have been declassified in conformity with Article 5 of the aforementioned regulation.  
In Übereinstimmung mit der Verordnung (EWG, Euratom) Nr. 354/83 des Rates vom  1. 
Februar 1983 über die Freigabe der historischen Archive der Europäischen 
Wirtschaftsgemeinschaft und der Europäischen Atomgem einschaft (ABI. L 43 vom  15.2.1983, 
S. 1), geändert durch die Verordnung (EG, Euratom) Nr. 1700/2003 vom 22. Septem ber 2003 
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COMMISSION  OF THE EUROPEAN COMMUNITIES 
COM(83) 5 final. 
Brussels, 13 January 1983. 
REPORT FROM THE COMMISSION TO THE COUNCIL 
on measures taken or proposed in order to improve the terms of competition for participation in EDF-financed contracts 
(Report presented in accordance with Article 43 of the 
Financial Regulation applicable to the fourth EDF) 
COM (83) 5 final. 

On 10 August  the Commission  transmitted to the Council the  results  as at 31 1. 
December 1981 of invitations to tender issued under the first four European 
Development  Funds (1). 
The work of the ACP-FIN  Working  Party throughout  1981 and in the  first six 
months of this year shows the importance  the Member  States attach to the issue 
of competition for  EDF-financed  contracts. Accordingly, to  complement  the 
tender results,  the Commission  decided to  send the Council a sequel to its 
January  1981 (2)report, again  based on Article  43 of the  Financial  Regulation 
for the fourth EDF and  detailing  measures  which the Commission  has taken or 
intends to take in order to  improve  the terms of competition for  participation 
in EDF invitations  to tender. It is in two parts. 
Part One  reviews  the implementation  of the guidelines  which have been under 
discussion  in the ACP-FIN  Working  Party since 1979 and  have given rise to a 
number of measures.  Part Two contains an analysis of competition for 
EDF-financed  contracts. 
(1) COM(82)538  final. 
(2) COM(80)911 final, 9 January 1981. 

2. 
PART ONE: REVIEW  OF GUIDELINES  AGREED WITH THE MEMBER  STATES 
The guidelines  agreed  in 1980 consisted  essentially  of a set of six  measures 
which had been unanimously  approved  by the Member  States, while the  ACP-FIN 
Working  Party was to continue consideration of a further  seven measures. 
In this report the  Commission  will be describing the  implementation  of the six 
measures  which it was  jointly  decided  to put  into operation  immediately,  plus 
those of the seven other measures  which have a direct  bearing on competition 
for contracts. 
I. Implementation  of unanimously-approved  measures 
1. Operational  summary  of development  projects 
The operational  summary  is published  every two months  in the 
ACP-EEC  Courier, and  businessmen  are increasingly  aware of the 
value of  these "blue pages". 
Twelve operational  summaries  have been issued in two years, and 
their scope has expanded  considerably  over that period. The  first 
summary,  in November  1980, covered  153 projects, while the  latest 
(September  1982) dealt with 391, 321 of  them in ACP States or OCT. 
The surge is largely  attributable  to the advent  of projects  from 
the fifth EDF, most  still at the  identification  stage;  this is in 
line with the aim of the  summary,  which is to draw firms' 
attention  to projects at the  earliest  possible  stage of the 
gestation period. 

3. 
Judging by the  requests  for additional information attracted  by 
the "blue pages"  , this aim would appear  to have been  fairly 
successfully  achieved. 
Certainly,  the new  feature  has been well received  by firms, 
consultancies  in particular. 
The "institutionalization"  of the  blue pages operational  summary 
has also had an  impact on dealings  between  the Commission  and the 
Member States;  at the  latter's  request  it has now become 
established practice  where possible,  not to  submit financing 
proposals  to the EDF  Committee  unless the projects  concerned have 
already appeared  in the  blue pages. 
Because of this new practice,  and also to keep readers  of the 
two-monthly  feature  as up to  date as possible,  the Commission  will 
now be inserting  a "stop press" section enabling  the very latest 
projects  to be included  at the  time of going to press. 
The Commission  is keen to do whatever it  can to improve the 
content and/or  layout of the  blue pages.  Accordingly,  it has 
decided to adopt a Member  State's  suggestion  to indicate projects 
which are appearing  for the first time, so that readers  get a 
better overall picture  of the  situation.  It has  also decided  on 
its own initiative  to incorporate  a sector-by-sector  index to 
enable firms to locate particular  types of project more easily. 

2 Publication  of notices of invitation  to tender in "Development Forum" 
Between the first issue,  dated 18 August 1980, and 31  August 1982, 
294 notices  of invitations  to tender for Community-financed 
projects  in developing countries  were published  in the UN  magazine 
"Development Forum",  219 of  them for  projects  in ACP  States or 
OCT. 
This has unquestionably increased  the publicity  given to 
Community-financed  contracts  - so much  so, indeed, that despite 
all efforts  to make the  conditions  of eligibility  as clear as 
possible,  the Commission  has received applications  for tender 
specifications  from American  and Swiss firms. 
However,  in assessing  the effectiveness  of this measure it  has to 
be borne  in mind that "Development Forum"  comes out  only every two 
months, so that it inevitably lags  behind the supplements  to the 
Official  Journal (published  on a daily basis). 
In practice, therefore,  where an invitation  to tender notice  is 
sent simultaneously  to Luxembourg  and Geneva,  there can in  extreme 
cases, be a delay of up to as much as a  month between  publication 
in the OJ  Supplement  and publication  in the "Development Forum", 
making it difficult  for those reading only  the latter to submit 
their tenders in time. 
Publishing  invitation  to tender notices  in "Development Forum  ", 
therefore,  is basically  a means of  spreading  awareness  of the 
Community's development  activities,  everr if  the impact is fairly 
modest in operational  terms. 

5. 
3. Quarterly  notification  of statistics relating  to contracts 
Since 30 September  1980, in  response  to a request  from the Member 
States, the Commission  has been regularly providing quarterly 
statistics  on contracts,  in addition  to the  yearly returns 
annexed to the  annual report on results  of invitations  to tender. 
The quarterly returns  originally  applied  to the  fourth EDF alone: 
statistics  relating  to contracts  in non-associated 
developing countries  and the  Maghreb  and Mashreq  countries 
were added on 30 September  1981, and 
statistics  for the  fifth EDF on 30  June 1982, the  latter two 
sets of figures could  not be  included  until a sufficiently 
large number of  projects  had reached  the execution stage. 
4. Summary of  current  invitations  to tender 
The Member  States asked the Commission  to supplement  the 
publication  of invitations  to tender as and when  they are issued 
with a weekly summary in the  Official  Journal of procedures  under 
way. 
As the Commission  explained  in the  previous report, it  was unable 
to do this right  away. The  first summary  appeared  in supplement 
to the Official  Journal No. S 199 of 14  October  1982,  listing 45 
notices of invitation  to tender, 32 of them for ACP States or OCT. 
Unfortunately,  practical  problems  with the actual publication 

meant that this first summary  was well out of  date by the time it 
appeared,  as it only  went up to 15  August.  The gap should be 
closed in  subsequent  editions. Nevertheless, the  experience  does 
suggest  that in  view of the  difficulties  involved, the  Commission 
would have trouble in bringing out a  weekly summary.  A more 
realistic  undertaking, in the  Commission's  view, would be to 
publish a  monthly  statement  which,  given the  time normally allowed 
for tendering, should be quite  adequate  as a guide to the  latest 
position. 
5. Updating  the programme  of contracts  under the fourth EDF 
As the Commission  stated in its previous report, the  "programme", 
an advance  timetable for the issue of invitations to tender, was 
updated  to cover the period  1980/81-1983  on the basis of projects 
known as at 1 July 1980. Projects for the fourth EDF as a  whole 
were well advanced  by that  date, so the Commission  sees no need 
for any further updating. It is  worth considering,  incidentally, 
whether  this document  actually  serves  any useful  purpose,  since if 
the information provided in the "operational  summary"  (measure  No. 
1) is used correctly the  programme  would be redundant. 
6. Keeping  the recipient countries  informed  via the  Commission 
Delegates  of what Member  States' firms,  particularly  those without 
on-the-spot,  representation, can offer in the way of  mutual 
agreement  contracts 
The circular  announced  in the  earlier  report was  sent out to all 
Delegates  on 24 February  1981, with the aim of notifying  them of 
all measures  agreed  with the  Member  States to  improve  the terms of 
competition. Particular  emphasis  was placed on  measure  No. 6, 

7. 
concerning competition  for direct contracts  and the  role the 
Delegates  were expected  to play in that connection, with reference 
inter alia to the  specific  problems  of Irish, Luxembourg and 
Danish firms, for which the difficulties  involved  as regards 
representation  in the ACP  States are far  greater. 
The Delegates  were asked to see  that the procedures  followed  by 
the recipient country's authorities  complied  with the basic 
principle  enshrined  in the EDF  General  Conditions,  and indeed most 
other sets  of general conditions, viz. that  the conclusion  of 
contracts  by mutual agreement in no way  rules out competition 
among a number of potential contractors  or suppliers  - rather the 
reverse. 
With this in mind the Commission  prepared  information  brochures  on 
the Danish,  Irish, Luxembourg and  Dutch internal  markets, 
including  a list of major firms in various sectors  in these four 
Member States,  which were sent to all Delegates.  Delegates  were 
told that these guides were to be  kept at their offices  for 
consultation  in connection with contracts  by mutual agreement and 
restricted  invitations  to tender, and asked to let the authorities 
know they were available,  and remind them of  their existence 
whenever  a restricted  tender or direct contract  procedure  was 
contemplated. 
II. Other measures  relating  to competition 
Among the other guidelines indicated  by the  Council  for further 
consideration  by the ACP-FIN  Working  Party, action  has so far been  taken 
on two points with  a direct bearing  on matters  of competition. 

1. Updating  by the  Commission  of the  booklet "Access  to Contracts" 
"The European  Development  Fund: Access to Contracts"  was a 
Commission  booklet  first published  in 1973 and subsequently 
revised in 1977. The updated  version, issued  in 1981, is entitled 
"How to  participate  in contracts financed  by the  European 
Development  Fund 
The change of title marks a deliberate  attempt  to make the  booklet 
more accessible for  businessmen,  more geared to practical 
considerations that  the earlier  versions ; it now contains , among 
other features , tables and an  explanation  of the  competition rules 
for different  types of contracts. 
At the same  time, the Commission  reissued  an updated  version  of 
the booklet  on EDF  procedures,  originally  published  in 1972. 
With these two publications  businessmen  now have an up-to-date 
source of information  both general  and practical  which should 
enable them to find their way round the field of EDF-financed 
projects  and contracts. 
2. The  role of Commission  Delegates  in ensuring equality  of access to  
EDF-financed  contracts 
The February  1981 circular  to Commission  Delegates  mentioned  above 
not only outlined  what Delegates  were expected  to do in  connection 
with contracts  by mutual agreement  (see above), but also provided 
guidelines  for their work in supplying information  to firms and 
Member States. 

9. 
a) Firms:  on the  assumption that  the greater  accessibility  of 
information  in the  blue pages and elsewhere  would lead to an 
increase in the  number of requests for  details,  the 
Commission  asked Delegates,  who often receive such requests 
direct, to make  sure that they dealt with  them 
conscientiously  and took time  to answer them. As a 
corollary  to those instructions,  the ACP-FIN  Working  Party 
was told that should  a firm, exceptionally,  be dissatisfied 
with the treatment it  had received,  the Commission  should be 
informed via  the Permanent  Representation concerned  of the 
specific  circumstances  of the  case. 
b) Member  States:  the Commission  has reminded  Delegates  of the 
importance  of the  clause in the  financing  agreements  which 
stipulates  that the Government  of the  recipient  country  must 
notify Member  States' consular representatives  of invitation 
to tender  notices.  Delegates  were asked to draw the 
national  authorities'  attention  to this practice,  the point 
of which has sometimes  been overlooked,  and if necessary  to 
take steps  to see  that it  was complied with. 
These guidelines  on the  role Delegates  are expected  to play in 
matters of competition  are to be  incorporated  and enlarged  on in 
the forthcoming  edition  of the  "Manual of Instructions  for 
Commission  Delegates", which  is currently  being prepared.  The new 
edition  will,incidentally,  be in  loose-leaf  form so that it  can be 
more easily updated. 

10. 
PART TWO: THE STATE OF COMPETITION 
At 31 December  1981 the  total value of works and supply contracts  concluded 
under the fourth EDF was 1 262 480 000 ECU. 
Contracts  awarded  on the  basis of international  invitation  to tender accounted 
for 877 032 000 ECU or 69.5% of  that figure.  The remaining  30.5%,  worth 
385 439 000 ECU,  represented  the exceptional  performance  procedures  provided 
for in Article 19 of Protocol  No. 2 to the  first Lome Convention,  viz. the 
placing of contracts after  restricted  invitations  to tender and the  conclusion 
of contracts  by direct agreement,  or the  performance  of contracts  by public 
works departments. 
1. Breaking  down these figures  by type of contract  shows that: 
i) 72.5% of  works contracts  were awarded  on the  basis of inter­
national  invitations  to tender, and 27.5% of  them after restricted 
procedures; 
ii) the  corresponding figures for supply contracts  are 61.3% and 
38.7%. 
For works contracts, therefore,  the international  invitation  to tender 
is still very much the  rule; the few  exceptions tend  to be for direct 
labour operations.  The international  invitation  to tender is less 
predominant  for supply contracts;  restricted  invitations  to tender and 
contracts  by mutual agreement  are not  infrequent. 
2. The  position  as regards the nationality  of contractors,  broken down by 
contract  award procedure,  is as follows: 

11. 
2.1 International  invitations  to tender 
a) works  contracts : the lion's share of these (31.23%)  went to 
France, a fact attributable  mainly to the  high level of par­
ticipation  by French  firms in the  invitations  to tender.  An 
analysis  of fourth EDF works  contracts  for more than 2m ECU showed 
that French  firms accounted  for 220 out of a  total of 638 bids 
(34.5%) and succeeded  in winning  27 out of the  76 contracts. 
A sizeable  share (23.98%)  also went to ACP  firms, for the  same 
reason; they accounted  for 22.9% of bids and won  22 contracts. 
ACP firms also get practically  all contracts  awarded on the  basis 
of invitations  to tender by the  expedited procedure. 
The rate of participation  by German and Italian  firms (10% and 
10.8% respectively)  was more or less identical,  as was the  success 
rate (9 contracts each ); the difference  in the  share - 10.44%  for 
Germany as against  15.02% for Italy - is due to the  size of the 
various contracts concerned. 
b) supply  contracts  : the salient  feature here  is the  near-equality 
between the  United Kingdom,  Italy, France and Germany:  their 
respective  shares range from 18.40%  to 21.29%,  a spread of no more 
than three percentage  points.  The competitive balance  between the 
four countries  is striking.  There is  also a balance,  at a lower 
level, between  Belgium  and the  Netherlands (around  4.3%). It is 
also striking  that, in the  case of international  invitations  to 
tender, the percentage  of supplies  of ACP  origin is very low, less 
than 3%. 

12. 
2.2 Closed procedures(restricted  invitations  to tender,  mutual agreement,  
direct labour) 
The first point to  note here is that the proportion of  works to supply 
contracts  is different;  where closed procedures  are used, supply 
contracs  account  for 33.64%  of the  total, compared  to 23.35% where the 
international  invitation  to tender  procedure  is used, while works 
contracts  make up 66.36%  as against  76.65%.  This is in  line with the 
tendency  already noted to  waive the international  invitation  to tender 
procedure  more often in the  case of supply contracts. 
a) works contracts : the salient  point here is the marked  pre­
ponderance  of ACP-OCT  contractors,  whose share amounts  to 92.7%. 
This basically  reflects  the prevalence of  direct  labour contracts, 
by definition  carried  out exclusively  by the  recipient  countries  1  
administrations.  Also,  restricted  invitations  to tender and 
contracts  by mutual agreement  are usually too small to  attract 
international  competition,  though  they are  ideally  suited to the 
capacities  of local contractors. 
b) supply contracts  : France heads the list with 26.37%,  slightly 
higher than its share  under international  invitations  to tender. 
Germany does slightly  less well than  under international 
invitations  to tender, but  still takes a respectable  18.33%. 
The UK, again, takes  18.64%,  more or less the same as its 
performance  under international  invitations  to tender, and the 
same applies, at a lower  level (4.3%)  to Belgium  and the 
Netherlands . 

13. 
Italy, on the other  hand, seems to be "penalized" by the use of closed 
procedures, its share  falling  from the  19.94%  gained under international 
invitations  to tender to a  mere 6.68%,  while the reverse  applies  to the ACP 
States and OCT, which increased  their share under the closed procedures from 
2.85% to  17.34%;  contracts by mutual  agreement,  it appears,  offer a better 
outlet for local supplies. 
0 
0 0 
Member States have expressed concern that  some invitations  to tender  initially 
issued internationally  have subsequently  been cancelled.  As a footnote to 
these considerations on competition, we look at the reasons for these 
cancellations . 
We examined  a sample  of fourteen such cases  among the results  published at  31 
December  1981. The most frequent cause of  cancellation  (seven of the 
fourteen ) was a cost overshoot . In three cases , bids did not conform to 
technical  specifications , in two no bids  were received and in a  further  two 
the authorities  in the  recipient  country decided not to  follow up a tender 
procedure which had  been initiated. 
These changes  of course are obviously very inconvenient, but they  affect fewer 
than 10% of all  invitations  to tender for Community-financed  projects  in a 
year. Also, it should be  clearly  emphasized,  as a number  of cases  have shown, 
that even where an invitation  to tender is  cancelled , the Commission  still 
considères  it most important  that, when a mutual  agreement  procedure is 
subsequently used, a  number  of competing firms should as a  rule still be 
consulted. 

INTERNATIONAL  CONTRACTS 
Figures for fourth EPF as at 31  December  1981 
Breakdown  by country  including  ACP/OCT and  third countries 
'000 ECU 
Works contracts Supply contracts All contracts 
Nationality  of firm 
amount % amount % amount % 
Germany 70.154 10,44 43.594 21,29 113.748 ] .2,97 
Belgium 59.155 8,80 9.331 4,56 68.486 7,81 
France 209.974 31,23 41.897 20,46 251.871 ; 28,71 
Italy 100.974 15 ,02 40.831 19,94 141.805 L6,17 
Luxembourg - - 11 0,01 11 0,01 
Netherlands 31.850 4,74 8.726 4,26 40.576 4,62 
Denmark 2.309 0,34 1.562 0,76 3.871 0,44 
United Kingdom 27.840 4,14 37.671 18,40 65.511 7,47 
Ireland - - 7 0,01 7 0,01 
ACP/OCT 161.212 23,98 .5.830 2,85 167.042 19,04 
Third countries 8.821 
1,31 15.283 7,46 24.104 2,75 
Total 672.289 100,00 204.743 100,00 877.032 100,00 
76,65 23,35 100,00 

- 15 -
RESTRICTED INVITATIONS  TO TENDER- CONTRACTS BY MUTUAL AGREEMENT  - DIRECT LABOUR 
•000 ECU 
Nationality  of firm Work contracts 
Germany 
Belgium 
France 
Italy 
Luxembourg 
Netherlands 
Denmark 
United Kingdom 
Ireland 
ACP/OCT 
Third countries 
Total amount 
684 
2.136 
7.428 
3.284 
3.656 
237.157 
1.433 
255.778 % 
0,27 
0,83 
2,90 
1.28 
1,43 
$2,70 
0,55 
100 ,00 
66 ,36 Supply contracts 
amount 
23.750 
5.461 
34.196 
8.660 
10 
5.716 
406 
24.165 
31 
22.494 
4.772 
129.661 18,33 
4,21 
26,37 
6,68 
0,01 
4,41 
0,31 
18,64 
0,02 
17,34 
3,68 
100,00 
33 ,64 All contracts 
amount 
24.434 
7.597 
41.624 
11.944 
10 
5.716 
406 
27.821 
31 
259.651 
6.205 
385.439 % 
6,35 
1,97 
10,80 
3,10 
1,48 
0,10 
7,23 
0,01 
67,35 
1,61 
100,00 
100,00