OPINION OF ADVOCATE GENERAL

STIX-HACKL

delivered on 1 July 2004 ( )

Case C-247/02

Sintesi SpA

v

Autorità per la Vigilanza sui Lavori Pubblici

(Reference for a preliminary ruling from the Tribunale Amministrativo Regionale per la Lombardia (Italy))

(Article 30(1) of Directive 93/37/EEC – Public works contracts – Criterion for the award of contracts – Right of the contracting authority to choose between the criterion of the lowest price and the criterion of the most economically advantageous tender – National legislation which allows only the criterion of the lowest price in open and restricted procedures)

I – Introduction

1. The present case raises the question whether Member States may require the contracting authorities in a tendering procedure to award a contract solely on the basis of the criterion of the lowest price.

II – Legal background

A – Community law

2. The relevant provisions of Community law are set out in Council Directive 93/37/EEC of 14 June 1993 concerning the coordination of procedures for the award of public works contracts ( ) (‘Directive 93/37’).

3. Although Directive 93/37 applies in principle to the award of public works contracts, Article 3 also lays down provisions governing the award of public works concessions. Article 3 also contains provisions concerning the award of contracts by the concessionaire.

4. Article 3(3) applies where the concessionaire is himself a contracting authority, as referred to in Article 1(b). In such circumstances, he is to ‘comply with the provisions of this Directive in the case of works to be carried out by third parties’.

5. Article 3(4) concerns the award of contracts by a concessionaire other than a contracting authority and, in that regard, provides as follows:

‘Member States shall take the necessary steps to ensure that a concessionaire other than a contracting authority shall apply the advertising rules listed in Article 11(4), (6), (7), and (9) to (13), and in Article 16, in respect of the contracts which it awards to third parties when the value of the contracts is not less than ECU 5 000 000. …’

6. The basic rules on the criteria for the award of contracts are set out in Article 30 of Directive 93/37, which provides in paragraph 1 that:

‘1. The criteria on which the contracting authorities shall base the award of contracts shall be:

(a) either the lowest price only;

(b) or, when the award is made to the most economically advantageous tender, various criteria according to the contract: e.g. price, period for completion, running costs, profitability, technical merit.’

B – National law

7. Article 21 of Framework Law No 109 of 11 February 1994 on public works (‘the Framework Law’) lays down inter alia the criteria for the award of contracts. In the version applicable to the main proceedings, Article 21(1) of that law provides that the award of contracts under open or restricted procedures must be based on the criterion of the lowest price.

III – Facts, main proceedings and questions referred to the Court

8. In December 1989 and January 1990, the City of Brescia approved a project for the construction of an underground car park at Fossa Bagni, together with the relevant notice for the award of a concession contract to construct and manage that car park and a draft of the concession contract. In February 1991, the City of Brescia entrusted the construction and management of the car park to Sintesi SpA (‘Sintesi’).

9. The final text of the agreement between the City of Brescia and Sintesi provided that Sintesi, as concessionaire, must award the works contract by means of restricted invitation to tender at European level in accordance with the rules governing public works contracts.

10. On 22 April 1999, Sintesi published an invitation to tender on the basis of the most economically advantageous tender, to be assessed on the basis of price, technical merit and the time necessary for completion of the work.

11. After the pre-selection phase, Sintesi sent the pre-qualifying undertakings an invitation to tender together with the contract documentation. Ingg. Provera e Carrassi SpA (‘Provera’), which was also invited to tender, sought and was granted an extension of the period for submitting its tender. However, Provera informed Sintesi that it would not take part in the tendering procedure, which it claimed was unlawful. Nevertheless, Provera did not institute any legal proceedings directed against the subsequent procedural measures.

12. In May 2000, the tender identified as the most economically advantageous tender was accepted. In December 2000, the Autorità per la Vigilanza sui Lavori Pubblici adopted an unfavourable decision on the grounds that under the Framework Law the contract may be awarded only on the basis of the criterion of the lowest price and the criterion of the most economically advantageous tender can be applied only in the case of notices to tender for public construction and management concessions.

13. Sintesi challenged that decision before the Tribunale Amministrativo Regionale per la Lombardia (District Court, Lombardy) on the ground, inter alia, of breach of Article 3 and Article 7 et seq. of Law No 241 of 7 August 1990 and breach of the law consisting in failure to comply with Article 30(1) of Directive 93/37.

14. The Tribunale takes the view that only the plea relating to Article 30 of Directive 93/37 is decisive and that it is therefore necessary to determine the discretion conferred on the contracting authority. Disapplication of national law can be justified only in the light of Article 81 EC. The contracting authorities are free to decide whether to award the contract on the basis of one criterion or the other. The principle of competition is relevant as regards the choice of the type of tendering procedure but not as regards the choice of the criterion for the award of contracts.

15. The Tribunale Amministrativo Regionale per la Lombardia therefore stayed proceedings and referred the following questions to the Court for a preliminary ruling:

‘(1) Does Article 30(1) of Directive 93/37 of 14 June 1993, in so far as it allows individual contracting authorities to choose either the lowest price or the most economically advantageous tender as the criterion for the award of a contract, constitute a logically consistent application of the principle of free competition which is already enshrined in Article 85 of the EC Treaty (now Article 81 EC) and requires that all tenders submitted as part of a procedure for the award of a contract announced within the single market be assessed in such a way as not to prevent, restrict or distort comparison between them?

(2) Does Article 30(1) of Directive 93/37 of 14 June 1993, as a strictly logical consequence, preclude Article 21 of Law No 109 of 11 February 1994 from excluding, for the award of public works contracts under open and restricted procedures, the choice by the contracting authority of the criterion of the most economically advantageous tender, and prescribing, as a general rule, that of the lowest price only?’

IV – Admissibility of the questions

16. It is first necessary to consider the argument that neither the relevant legal provisions nor the facts have been set out correctly and that the questions referred are theoretical. In that regard, reference must be made to the principles developed by the Court on the admissibility of references for preliminary rulings.

17. According to the Court’s case-law, the admissibility of questions referred for a preliminary ruling turns on whether the national court defines the factual and legislative context of the questions it is asking or, at the very least, explains the factual circumstances on which those questions are based. ( )

18. Although the order for reference in this case does not contain an exhaustive description of the legal and factual situation, the information provided by the national court is adequate and the questions relate to specific technical points, thus enabling the Court to give a useful reply. According to the Court’s case-law, ( ) that is sufficient.

19. A further criterion for the admissibility of questions referred for a preliminary ruling is that the information provided in orders for reference must not only enable the Court usefully to reply but also give the governments of the Member States and other interested parties the opportunity to submit observations pursuant to Article 20 of the Statute of the Court of Justice. It is the Court’s duty to ensure that the opportunity to submit observations is safeguarded, bearing in mind that, by virtue of the abovementioned provision, only the orders for reference are notified to the interested parties. ( )

20. The number and content of the written observations submitted to the Court show that this requirement was fulfilled.

21. Finally, the order for reference also fulfils the requirement that the national court give details of the precise reasons which prompted it to consider the interpretation of Community law and to deem it necessary to refer questions to the Court of Justice for a preliminary ruling. ( )

22. It is now necessary to consider the argument put forward by several parties that the second question relates to the interpretation of national law and its compatibility with Article 30 of Directive 93/37.

23. In that regard, it should be noted that the grounds of the order for reference refer to the compatibility of ‘Article 21(1) of Law No 109 of 11 February 1994 with Article 81 EC et seq.’, whereas the second question refers to the lawfulness of this national provision in the light of Article 30 of the directive.

24. On the basis of the principle that it is not for the Court to examine the compatibility of national law in the context of a reference for a preliminary ruling, the second question is inadmissible in so far as it relates to the compatibility of national provisions with Community law. However, the second question is admissible in so far as it concerns the interpretation of Community law, namely of Article 30(1) of Directive 93/37. As thus reinterpreted, the second question is therefore admissible without there being any need for it to be expressly reformulated.

V – The questions

25. For the purpose of providing the national court with useful information, it would appear appropriate to deal with both questions together.

26. There is no need to undertake a separate examination of Article 81 EC, referred to in the first question, since it must be concluded that it is Article 30 of Directive 93/37 and not Article 81 EC that is to be applied in the present case. Although there may indeed be situations in which the provision of competition law must be applied in cases relating to the award of public contracts, it is not evident from the question itself or from the other explanations provided by the national court that the main proceedings relate to the independent application of Article 81 EC. As well as procedural grounds, there are also substantive grounds which preclude Member States’ legislative activities from being assessed on the basis of their compatibility with Article 81 EC, because that provision is directed at undertakings.

27. Nor does the present case relate to the validity of Article 30 of Directive 93/37 and its examination in the light of Article 81 EC. This provision may be taken into account at most as a criterion for an interpretation in conformity with primary law, that is to say an interpretation of Article 30 of the directive which is guided by the principle of competition.

A – Directives on the award of public contracts and the principle of competition in general

28. A number of parties refer in various ways to the importance of competition in relation to the directives on the award of public contracts. In that regard, it should be pointed out that, as the Commission notes, Directive 93/37 does not serve to implement Article 81 EC.

29. As regards the importance of the principle of free competition or principle of competition in relation to the directives on the award of public contracts, it is also appropriate to examine the legal basis of those directives. The three classic directives on services, supplies and works are based on Articles 57(2) and 66 of the EC Treaty (now Articles 47(2) EC and 55 EC), on Article 100a of the EC Treaty (now, after amendment, Article 95 EC) or on all three provisions.

30. Those legal bases are concerned with fundamental freedoms or with the common market, but do not relate expressly to competition.

31. However, the three classic directives on the award of public contracts – and not only those – have a different connection to competition. Thus, the development of effective competition in the field of public contracts is expressly stated as an objective in the preamble to each of them. ( ) In numerous judgments, the Court has confirmed that the aim of the directives is to ensure such competition. ( )

32. The Court has consistently held ( ) that the directives, just like Community law in general, ( ) are designed, first, to eliminate practices that restrict competition and, second, to open up the procurement market concerned to competition, that is to say to ensure free access in particular for undertakings from other Member States.

33. The principle of competition is therefore one of the fundamental principles of Community law on the award of public contracts.

34. It fulfils several protective purposes. Firstly, the principle of competition is aimed at relations between the undertakings themselves, that is to say the candidates or tenderers. There is to be parallel competition between them when they respond to a call for tenders.

35. Secondly, the principle of competition concerns the relationship between the contracting authorities which must be classified as undertakings and the undertakings, in particular the conduct of a contracting authority in a dominant position on the market vis-à-vis the undertakings or of an undertaking in a dominant position on the market vis-à-vis the contracting authority, and the assessment of that conduct in the light of Article 82 EC. ( )

36. Thirdly, the principle of competition is designed to protect competition as an institution.

37. The principle of competition is expressed in the actual provisions of the directives on the award of public contracts, which include, first, the provisions on the permissible forms of procedure for the award of contracts and the conduct thereof, in particular the time-limits to be complied with in the various phases of the procedure, and the prohibition on renegotiation. ( )

38. Concrete expressions of the principle of competition also include, second, the provisions on contract documents, primarily technical specifications, the provisions on the selection of undertakings, and the provisions on the criteria for the award of contracts to which this case relates.

39. A minimum degree of transparency is required to guarantee competition. To that end, the directives on the award of contracts lay down a number of obligations concerning publicity. The obligation placed on the contracting authority to define the criteria in advance and also to adhere to them thereafter serves competition. On the other hand, in certain cases the need to ensure competition makes it necessary to withhold certain information about an undertaking from other undertakings. ( )

40. Finally, the participation in a tender procedure of those undertakings which were involved in the preparatory work therefor is also an important aspect of competition. ( )

B – Criteria for the award of contracts and competition

41. As regards the effect on competition of the two criteria for the award of contracts, it must be concluded that these criteria, laid down both in Article 30(1) of Directive 93/37 and also in the parallel provisions of the other directives on the award of public contracts, are intended to ensure genuine competition. ( )

42. An assessment of the effect on competition of the two criteria for the award of contracts in the context of the main proceedings is, in so far as it constitutes the application of the provisions of Community law to a specific case, not the object of the reference for a preliminary ruling.

43. A general assessment as to whether the criterion of the lowest price has, as a general rule, more favourable effects on competition than the criterion of the most economically advantageous tender cannot form the subject-matter of a legal analysis in a reference for a preliminary ruling. It must not be forgotten that the criterion of the most economically advantageous tender allows not only competition on price but also competition through other factors, that is to say competition in respect of conditions. An assessment of the effects on competition of a particular criterion must be made on the basis of the specific circumstances, in particular the market concerned, and is therefore a matter for the national court.

44. In that respect, the national court has to take account of the following: the primary decisive factor as regards the effects on competition is whether the same, objective criteria are applied to all the undertakings. ( ) As regards the criterion of the most economically advantageous tender, it is the way in which it is precisely defined in the specific tendering procedure, that is to say the individual factors taken into account in assessing the most economically advantageous offer, that is decisive. Like the criteria for selecting tenderers, these factors must always be examined in the light of primary law. That naturally also includes the provisions of competition law.

45. However, the interpretation by the Court of the provisions of Community law on competition also depends on certain conditions being satisfied. For example, according to settled case-law, ‘the need to provide an interpretation of Community law which will be of use to the national court makes it necessary for the national court to define the factual and legal context of the questions it is asking or, at the very least, explain the factual circumstances on which those questions are based. Those requirements are of particular importance in certain areas, such as that of competition, where the factual and legal situations are often complex.’ ( )

C – Power of the Member States to lay down a particular criterion for the award of contracts

46. Central to this case is the question whether the Member States have the power to lay down, as a general rule, the criterion of the lowest price in respect of certain types of contract. Such a power of the Member States would also restrict the freedom of choice of the contracting authority which is affected by such a criterion.

47. At this juncture, it should be borne in mind generally that although the Member States enjoy a certain margin of discretion in transposing directives, they must observe the limits imposed by Community law. The Member States are also bound by those limits where they adopt measures to attain Community objectives, such as ensuring greater transparency in the field of the law governing public contracts and stemming abuse by contracting authorities.

48. Therefore, it is first necessary to consider the argument put forward by a number of the parties concerned that the legal act to be interpreted in the present case is a directive. In that regard, it should be noted that it cannot be inferred from the fact that the directives on the award of public contracts, like other directives, are addressed to the Member States, that the Member States are therefore empowered to lay down a particular criterion for the award of contracts.

49. It is also necessary to consider the argument that Directive 93/37 does not lay down a complete set of rules on the award of contracts. On that view, the fact that the aim of Directive 93/37 is not to lay down a complete system of legislation governing public contracts but simply to coordinate national procedures for the award of public works contracts, in the same way as the other directives on the award of contracts, might militate in favour of the Member States being empowered to lay down the criterion for the award of contracts. ( ) Whilst it is necessary to concur with that conclusion, it cannot consequently be inferred that Directive 93/37 does not contain definitive rules on certain stages or aspects of the tendering procedure. Instead, this argument must be qualified in so far as the directives on the award of contracts definitively harmonise certain aspects of the tendering procedure.

50. On the other hand, the fact that the parties concerned – apart from certain purely private companies, as covered by the sectoral directive – are generally public contracting authorities, that is to say they can be associated with the relevant Member State, militates in favour of the Member States being able to lay down a criterion in an abstract manner. That follows from the definition of the term ‘contracting authority’ and finds expression in the possibility, recognised in the case-law, ( ) of penalising infringements committed by them by means of the procedure for failure to fulfil obligations laid down in Article 226 EC.

51. From that aspect, the choice of criterion is therefore, strictly speaking, also a choice by the Member State. However, the difference concerning the criterion in the main proceedings lies in the fact that it was laid down in the Framework Law, that is to say in a general and abstract manner, and at a different level, in fact by the legislature and not the contracting authority itself.

52. In order to answer the central question whether the Member States have the power to lay down in the abstract just a single criterion for the award of contracts, it is necessary to proceed from the following consideration.

53. The directives on the award of contracts expressly provide for two kinds of power, namely those of the Member States, such as the power to permit certain kinds of transmission, ( ) and those of the contracting authorities, such as the ability, in certain cases, to carry out a negotiated procedure, permit variants, and prescribe a range.

54. On the other hand, certain provisions impose express obligations either on the Member States or on the contracting authorities. The latter category of provisions includes inter alia the provision of Article 30(1) of Directive 93/37 (‘The criteria on which the contracting authorities shall base the award of contracts shall be: (a) either … (b) or …’), which is relevant to this case, and the parallel provisions of the other directives on the award of contracts. Therefore, that provision does not establish an express power on the part of the contracting authority, but the requirement that only one of the two available criteria for the award of contracts be applied also includes the power of the contracting authority to choose one of the two.

55. The contracting authority loses this power in so far as ‘its’ Member State limits this choice, for example where it requires the contracting authorities to allow for only the criterion of the lowest price in certain cases.

56. Even if the contracting authorities have no subjective right to this freedom of choice, the question arises as to whether the Member States may oblige the contracting authorities to lay down a particular criterion.

57. Firstly, the fact that neither Article 30(1) of Directive 93/37 nor the other directives on the award of contracts provide for a corresponding power of the Member States militates against this. However, the need for such an express provision may be inferred from the fact that the directives on the award of contracts do indeed, as a general rule, provide for a power of the Member States to restrict the contracting authorities’ right to lay down certain criteria. For example, the second sentence of Article 23(1) of Directive 93/37 and Article 28(1) of Directive 92/50 empower the Member States to oblige the contracting authorities to provide certain information in the contract documents.

58. However, there is no comparable provision as regards the criteria for the award of contracts.

59. The argument that Member States have the powers to impose on the contracting authorities a single criterion for the award of contracts is also countered by the fact that the equality of the two criteria provided for in all the directives on the award of contracts is thereby removed.

60. Finally, reference should be made to the Court’s case-law, ( ) which specifically states that the provision which is relevant in this case allows the contracting authorities to choose the criteria for the award of contracts.

61. Although this conclusion by the Court concerned the factors relating to the identification of the tender which is economically the most advantageous, it can be applied to the choice of the criterion for the award of contracts itself.

62. Aspects relating to competition may also be relied on to show that Member States do not have the power to lay down the criterion for the award of contracts. For example, laying down such a criterion restricts the contracting authorities’ freedom to choose the criterion which is most appropriate for ensuring free competition in a specific tendering procedure. This possibility would disappear if the legislature laid down one criterion as a general rule. As the Italian Government also stated, Article 30 of Directive 93/37 precisely does not link to particular provisions the choice of one of the two criteria for the award of contracts.

63. Finally, according to the Court’s case-law, ( ) the aim of the directives on the award of contracts, namely to facilitate the operation of free competition between the tenderers as a whole, must be taken into account in interpreting the directive.

64. The judgment which is relevant to the present case in this respect is that in Impresa Lombardini and Others, in which the Court held as follows: ‘It follows that Article 30(4) of the Directive precludes national legislation, such as that applicable in the main proceedings, which, first, requires the contracting authority, for the purposes of verifying abnormally low tenders, to take into account only certain explanations exhaustively listed … and, second, expressly excludes certain types of explanation …’.( )

65. That judgment shows that the national legislature is barred from limiting the discretion of the contracting authorities in a manner not expressly permitted by the directive.

66. When the arguments put forward, and further developed here, for and against the Member States’ power of relevance to these proceedings are weighed up, it is clear that the stronger arguments militate against such power.

VI – Conclusion

67. I therefore propose that the Court should answer the questions referred for a preliminary ruling as follows:

(1) Article 30(1) of Council Directive 93/37/EEC of 14 June 1993 concerning the coordination of procedures for the award of public works contracts is to be interpreted as allowing the individual contracting authorities to choose either the lowest price or the most economically advantageous tender as the criterion for the award of a contract. In addition, the national court must interpret this provision in the light of the principle of free competition within the meaning of Article 81 EC.

(2) Article 30(1) of Directive 93/37 is to be interpreted as precluding national legislation which excludes, for the award of public works contracts under open and restricted procedures, the choice by the contracting authority of the criterion of the most economically advantageous tender, and prescribes, as a general rule, that of the lowest price only.