WRITTEN QUESTION E-1369/01

by Gary Titley (PSE) to the Commission

(7 May 2001)

Subject: Defence procurement

Could the Commission set out what exactly are the Community rules in relation to defence procurement as it understands them to be? Within the definition of defence procurement, I include such matters as uniforms, boots, provision of catering facilities and so on.

Answer given by Mr Bolkestein on behalf of the Commission

(19 July 2001)

Public procurement contracts, whether awarded in the field of defence or in any other field, must be awarded in compliance with the procedures for the award of contracts set out in the public procurement Directives.

Three directives on the coordination of procedures for the award of public contracts currently coexist and concern supply, works and services contracts respectively(1). On 10 May 2000, the Commission presented a proposal for a Parliament and Council Directive on the coordination of procedures for the award of public supply, services and works contracts which consolidates the three previous directives(2) in a single text.

The common award procedures, which feature in all the directives, include open or restricted calls for tender and negotiated procedures (in a limited number of cases) with prior publication of a contract notice in the Official Journal. Each of the directives lays down a limited number of special cases and exceptions. In relation to the question, two cases deserve closer attention. On the one hand, the case of contracts covered by Article 296 (ex Article 223) of the EC Treaty and, on the other hand, the case of contracts declared secret or requiring certain security measures or when the protection of essential interests of the State is involved.

Since the contracts are covered by Article 296 of the EC Treaty, a derogation from the award rules set out by the public procurement Directives is possible (Article 3 of the Supply Directive 93/36/EEC and Article 4 of the Services Directive 92/50/EEC).

Article 296 of the EC Treaty provides that:

1. The provisions of this Treaty shall not preclude the application of the following rules:

(a) no Member State shall be obliged to supply information the disclosure of which it would consider contrary to the essential interests of its security;

(b) any Member State may take such measures as it considers necessary for the protection of the essential interests of its security which are connected with the production of or trade in arms, munitions and war material; such measures shall not adversely affect the conditions of competition in the common market regarding products which are not intended for specifically military purposes.

2. The Council may, acting unanimously on a proposal from the Commission, amend the list, which it drew up on 15 April 1958, of the products to which the provisions of paragraph 1(b) apply.

Article 296 does not limit the Community powers ratione materiae, since the verbs may take are used in paragraph 1(b).

In addition, the exception contained in Article 296 is covered by the provisions of Article 298 (ex Article 225) of the EC Treaty. This lays down that the use of Article 296 may not distort the conditions of competition, and the Commission or any Member State may bring the matter directly before the Court of Justice if it considers that another Member State is making improper use of the powers provided for in Article 296.

The Court of Justice gave a restrictive interpretation of the use of Article 296 in its judgment of 16 September 1999(3), by reiterating its previous case law(4). It considers that it is for the Member State which wishes to invoke the exceptions of Article 296 to prove that the measures taken are necessary in order to protect essential interests of its security and that, a contrario, compliance with Community law would have compromised those interests.

The three public procurement Directives (Article 2(b) of the Supply Directive 93/36/EEC, Article 4(b) of the Works Directive 92/37/EEC and Article 4(2) of the Services Directive 92/50/EEC) do not apply to supplies, works and services, which are declared secret or the execution of which must be accompanied by special security measures in accordance with the laws, regulations or administrative provisions in force in the Member States concerned or when the protection of the basic interests of the Member State's security so requires.

Although these derogations from the application of the directives do not relate to a particular field or contracting authority, and it is possible that in certain cases the non-application of public procurement award procedures as defined by the directives is justified in the case of defence contracts, the interpretation given by the Court is strict, and the exception must be justified by the contracting authority invoking it(5).

Finally, as regards the supplies mentioned by the Honourable Member, at first sight it does not seem that the acquisition of such supplies is in breach of the provisions of the public procurement Directives, either under the terms of Article 296 or in relation to the exceptions under the above-mentioned directives.

(1) Council Directive 93/36/EEC of 14 June 1993 coordinating procedures for the award of public supply contracts (OJ L 199, 9.8.1993); Council Directive 93/37/EEC of 14 June 1993, concerning the coordination of procedures for the award of public works contracts (OJ L 199, 9.8.1993); Council Directive 92/50/EEC of 18 June 1992, relating to the coordination of procedures for the award of public service contracts (OJ L 209, 24.7.1992).

(2) OJ C 29, 30.1.2001.

(3) Case 414/97, Commission of the European Communities v. Kingdom of Spain.

(4) Judgment of 15 May 1986, Johnston, 222/84.

(5) Data Processing judgment of 5 December 1989, Case 3/88.