WRITTEN QUESTION P-1907/00

by Chris Davies (ELDR) to the Commission

(6 June 2000)

Subject: Beal Valley Contract: public procurement

The Beal Valley Action Group first made contact with the Commission in April 1999 regarding the alleged failure of Oldham Council to advertise the Beal Valley golf course project according to EC rules on public procurement.

On 3 September 1999 the Action Group received a response from the Directorate-General for Competition requesting further information regarding the case. On 30 September 1999, copies of correspondence between the Beal Valley Action Group and the Commission were hand delivered to the Directorate-General for Competition together with extracts from the advice on the case from the Queen's Counsel and Barrister (dated May 1998).

A letter was received from John Mogg, Director-General of the Directorate-General for Competition, on 26 October requesting further information about the contract value of the works in question. On 25 January, a letter was sent by myself to Mr Mogg asking exactly what additional information was required.

On 7 February, the Beal Valley Action Group's Financial Report to the European Commission was hand delivered to the Directorate-General for Competition.

Further contract by telephone with officials at this Directorate-General has revealed that the Commission still considers that more proof is needed to substantiate the claims made by the Beal Valley Action Group against Oldham Council. However, the Commission has so far been unable to clarify exactly what additional information is required.

Exactly what evidence does the Commission require as proof that a local authority has not properly advertised a contract, given that the same local authority is thereafter likely to seek to disguise this fact from the Commission?

How many actions for failure to properly advertise contracts are currently being pursued?

Finally, when will the Beal Valley Action Group get a full and comprehensive response to the submission to the Commission?

Answer given by Mr Bolkestein on behalf of the Commission

(4 July 2000)

The first issue that needs to be tackled with respect to the Beal Valley project concerns the rules applicable to this case. If the estimated value of the contract is over the threshold and a public works contract, in the sense of Council Directive 93/37/EEC of 14 June 1993 concerning the coordination of procedures for the award of public works contracts(1), has been concluded, then the detailed provisions of the directive would be applicable to this case. If it is a public works contract under the threshold the relevant provisions would be the general rules and principles regarding Community law.

Two letters were sent to the complainant, namely on 3 September 1999 and 5 October 1999, in order to tackle this first issue. The complainant replied to the first letter on 23 September 1999. The information included in this reply did not bring forward any new elements that would permit further analysis. Therefore, a second letter was addressed to the complainant, asking for further information about the contract value of the works in question and in particular the method used to arrive at any contract valuation.

The complainant sent two replies to the above mentioned second letter. The first reply, dated 29 October 1999, basically consisted of a repetition of the information that had been originally sent. The second reply, dated 7 February 2000, includes new information which is currently under analysis. It would appear from the documents contained in this second reply that a service concession, as that concept is clarified and defined in the Commission interpretative communication on concessions(2) may be involved.

As regards the question concerning the evidence required to examine the alleged infringements, the Commission needs substantiated information showing that an infringement of the public procurement rules has taken place. Otherwise, factual information would be needed in order to have sufficient foundation to address specific issues to the Member State.

Finally, with respect to current actions for failure to properly advertise contracts, there are currently about 228 public procurement infringement cases open, including some involving failure to advertise in the Official journal.

If, as a result of the analysis of the documentation, it appears there has been an infringement of Community law, the Commission will adopt the necessary measures.

(1) OJ L 199, 9.8.1993.

(2) OJ C 121, 29.4.2000.