PROPOSAL FOR A COUNCIL DIRECTIVE COORDINATING THE LAWS, REGULATIONS AND ADMINISTRATIVE PROVISIONS RELATING TO THE APPLICATION OF COMMUNITY RULES ON THE PROCUREMENT PROCEDURES OF ENTITIES OPERATING IN THE WATER, ENERGY, TRANSPORT AND TELECOMMUNICATIONS SECTORS
Date: 1990-07-30
Institutions: European Commission
Subjects: energy distribution, means of public conveyance, public contract, supplies contract, telecommunications, water supply

COMMISSION  OF  THE  EUROPEAN  COMMUNITIES 

' C0MC90) 297 final  -SYN292 

Brussels,  30  July  1990 

Proposal  for a 

COUNCIL  DIRECTIVE 

coordinating  the  laws, regulations  and  administrative  provisions 

relating  to the application  of  Community  rules on  the  procurement 

procedures  of  entities  operating  in the  water, energy, 

transport  and  telecommunications  sectors 

(presented  by  the  Commission) 

- 2 -

Explanatory Memorandum 

I.  INTRODUCTION 

(a)  The context 

1.  In October  1988, as contemplated by the programme for completing the 

Internal market by 1992, the Commission sent the Council two proposals 

for a Council Directive on the procurement procedures of entities 

operating  In the water, energy and transport sectors d)  and of those 
operating  In the telecommunications sectors^2) (hereafter  "the 

utilities"). These two proposals became one single proposal on the 

recommendation of the Parliament and an amended proposal was submitted 

to the Council  in August  1989(3), following the adoption of the 
European Parliament's  opinion^4) In May of that year. The Council's 

common position was adopted on 29 March 1990. 

2. 

In December  1989, the Council adopted Directive 89/665/EEC (5) on the 

coordination of the  laws, regulations and administrative provisions 

relating to the application of review procedures to the award of 

public supply and public works contracts. This Directive applies to 
the fields covered by Directives 71/305/EEC <6> and 77/62/EEC<7>: 

purchases of works and supplies by the public administration.  It does 

not apply to the award of works and supply contracts  In the water, 

energy, transport and telecommunications sectors. 

(1)  OJ No C 319, 12.12.1988. 

(2)  OJ No C 40, 17.2.1989. 

(3)  OJ No C 264, 16.10.1989. 

(4)  OJ No C 158, 26.6.1989. 

(5)  OJ No L 395/33, 30.12.1989. 

(6)  OJ No L 185, 16.8.1971, most recently amended by Directive 89/440/EEC 

(OJ No L 210, 21.7.1989). 

(7)  OJ No L 13, 15.1.1977, most recently amended by Directive 88/295 

(OJ No L 127, 20.5.1988). 

-  3 -

3. The  availability  of  adequate  remedies  and  control  procedures  is as 

important  in  the  hitherto  "excluded  sectors"  as  it  Is  in  the 

general  field  of  public  procurement.  Only  such  guarantees  will 

ensure  that  the  Community  rules  on  contract  procedures  are  In 

practice  respected  and  that  the  Community's  fundamental  objectives 

in  this  area  of  the  internal  market  programme  are  realized.  This 

new  proposal  thus  fills  an  important  gap  and  is  the  necessary 

complement  to the proposals already made. 

b) General  approach 

4. As  matters  stand  at  the  present  time,  the  remedies  open  to  a 

contractor  or  supplier  concerning  the  procedures  for  awarding 

contracts  vary  considerably  from  one  Member  State  to  another. 

Suspension  of  illegal  award  procedures  or  similar  interim  remedies 

are  not  available  under  similar  conditions  in  all  Member  States. 

The  possibility  of  obtaining  damages  is  also  subject  in  many 

Jurisdictions  to  such  constraints  that  it  is  really  a  theoretical 

possibility  on I y(8).  Moreover,  since  the  utilities  have  In  many 

cases  not  been  subject  to  regulation  of  their  procurement 

procedures, national  systems of  remedies may  simply  not  exist. 

5. The  Commission  therefore  considers  it  necessary  for  Member  States 

to  amend,  where  appropriate,  their  administrative  and  Judicial 

procedures  so  as  to afford  contractors  and  suppliers  interested  in 

taking  part  in  relevant  contract  award  procedures  effective  and 

rapid  remedies  against  procedures, practices  and  decisions  that  are 

incompatible  with  Community  procurement  law.  As  noted  above,  this 

is  as  necessary  for  the  utilities  as  it  is  in  relation  to  the 

established  public  procurement  regime. 

(8)  The  situation  in the Member  States  is analysed  in a summary  of  studies 

recently  carried  out  on  this  subject  in  a  Commission  Information 

document  Ill/F/7086/fInal,  June 1990. 

- 4 -

6.  It  should  also  be  recalled  that  Article  5  EEC  imposes  a  general 

duty  on Member  States  to make  effective  Judicial  remedies  available 

for  the enforcement  of  directly  applicable Community  rights  arising 

under  the  Treaty  Itself  (Case  33/76  REWE-ZentralfInanz  [1976]  ECR 

1989).  This  duty  has since  been  specifically  recognised  in  relation 

to Treaty  provisions  concerning  free movement  of  goods  (Case  178/84 

CommIssIon  v.  Germany  [1987] ECR  1227) and  of  workers  (Case  222/86 

Hey I ens  [1987]  ECR  4097).  New  secondary  Community  legislation  on 

remedies  should  take  account  of  this  legal  duty  as  well  as 

considerations  calling  for  remedies  to  be  available  on  a  broader 

basis. 

7. The  following  general  considerations  have  in particular  guided  the 

Commission  in preparing  this proposal: 

(i)  the  need  to  ensure  that  effective  remedies  for  disadvantaged 

tenderers  are  available  at  national  level  and  at  Community 

level; 

(li) the  need  to  ensure  that  these  remedies  in  the  sectors  of 

water,  energy,  transport  and  telecommunications  be 

in 

principle  as  close  as  possible  to  those  already  adopted  for 

the  general  system  of  public  procurement  review  procedures 

while  taking  into  account  the  particular  characteristics  of 

the  entities  engaged  in  those  sectors  from  the  economic, 

technical  and  legal  points of  view; 

( M i)  the  need  to  ensure  that  effective  remedies  are  available  to 

disadvantaged  tenderers  Irrespective  of  the  public  law  or 

private  law status of  the utilities; 

(iv) the  need  to ensure  that  remedies  are  available  In  as.flexible 

and  unbureaucratle  a manner  as  possible; 

-  5  -

(v)  the  need  to  ensure  that  compliance  with  Community  law  may  be 

effectively  supervised  at  Community  level; 

(vi)  the  need  to  ensure  that  a  litigious  approach  Is  not  the  only 

method  of  dispute  settlement  available  to  interested  parties; 

(vil) the  need  to  take  account  of  the  different  character  of  the 

national  legal  systems within  which  the  review  procedures  and 

remedies  must  be  created. 

8. There 

are 

various 

remedies  which 

may, 

depending 

on 

the 

circumstances,  be  relevant  in  connection  with  ensuring  compliance 

with  Community  law, apart  from  the  Inherent  right  of  the  Commission 

to  exercise  its  discretion  to  bring  infringement  proceedings  under 

Article  169  EEC.  In considering  these  remedies,  it  is  important  to 

remember  that  infringement  of  Community  rules on  public  procurement 

generally  occur  before  the  contract  is  awarded.  Since  contract 

award  procedures  are  of  short  duration  (a  decision  is often  taken 

within  a  few  weeks),  any  failure  to comply  with  the  Community  rules 

in  question  needs,  if  possible,  to  be  dealt  with  urgently  and 

rapidly.  Among  the  principal  remedies  are  therefore  interlocutory 

remedies,  designed  to  correct  the  alleged  Infringement  by,  for 

example,  ordering  the  setting  aside  or  modification  of  a  contested 

clause  or  to  prevent  further  damage  to  the  party  concerned  by,  for 

example,  securing  the  suspension  of  the  award  procedure  or  of  the 

Implementation  of  a  decision  of  the  awarding  entity.  On  its  own, 

however,  interlocutory  relief  is not  enough  and,  as has  been  agreed 

in relation  to Directive  89/665/EEC,  it  is necessary  to ensure  that 

damages  may  be  awarded  for  those  breaches  of  relevant  Community 

provisions which  it has not  proved  possible  to avoid  or  correct. 

-  6  -

9.  However,  the  preparatory  work  and  consultations on  this  proposal 

have  shown  that  the  particular  characteristics  of  the  utilities 

concerned,  and  of  the  national  legal  orders  within  which  review 

procedures  and  remedies  must  be made  available,  require  a  degree 

of  flexibility  to  be  introduced  Into  the  proposal.  In  some 

contexts  it may  be  possible,  legally  and  politically,  to  apply  a 

classical 

system 

of 

the 

type 

applied 

to 

the 

public 

administration  generally.  In  other  contexts,  this  could  create 

major  difficulties.  For  example,  given  the  industrial  character 

of  some  organisations  concerned,  and  also  their  need  to  satisfy 

imperative  requirements  of  continuous  service  to  the  public,  the 

view  is  strongly  held  in  some  quarters  that  classical  remedies 

which  directly  affect 

the  decision-making  of  the  bodies 

concerned  would  not  be  appropriate.  Suspension  of  contract  award 

procedures  and  setting  aside  of  award  decisions  are  accordingly 

said  to be  unacceptable. 

10. 

In  some  Member  States,  indeed,  the  application  of  such  remedies 

to  bodies  governed  by  private  law  would  face  constitutional  [or 

other  serious]  obstacles  due  to  the  adverse  impact  on  the 

autonomy  of  the  bodies  concerned. 

11. 

Thus,  in  Germany,  attention  has  had  to  be  given  to  the  basic 

rights  of  enterprises  pursuant  to  Articles  12  and  19(3)  of  the 

Basic  Law:  the  principle  of  non-interference  In  the  exercise  of 

a  trade  or  profession.  The  proposed  directive  respects  this 

principle  as  it  permits  the  Member  States  to  offer  entities  a 

flexible  means  of  demonstrating  compliance  with  Community  law 

which  does  not  involve  mandatory  interference  with  their  freedom 

of  commercial  action.  Thus  Article  11  is drafted  so  as  to  permit 

effective  interim  relief  whilst  respecting  this  freedom. 

- 7 -

12. 

In  Spain,  any  re-dlstrIbutIon  of  Jurisdiction  arising  from  the 

implementation  of  this  proposal  may  require  modification  of  the 

organic  law on  the  Judiciary  by  a special  majority  in Parliament 

In accordance  with  Article  81  of  the  Constitution. 

13. 

Means  have  accordingly  had  to  be  found  to  resolve  these 

difficulties  through  the  Introduction  of  a degree  of  flexibility 

which  is  nevertheless  conditioned  to  ensure  its  compatibility 

with  the  principle  of  equal  treatment  of  similarly  situated 

undertakings  both  as  between  Member  States  and  whether  they  are 

pub Iic or  pr ivate. 

14. 

This  approach  has  also  served  to  Introduce  into  the  Community 

procurement  framework  for  the  first  time  a  form  of  control  which 

has  its  own  particular  merits:  attestation  on  a  regular, 

periodic  basis  or,  as  it  is  often  called,  " a u d i f ' O ).  |n 

brief,  where  Member  States  choose  to  depart  from  the  classical 

approach  applied  to  the  public  administration  by  not  providing 

for  remedies  such  as  suspension  of  procedures  and  setting  aside 

of  decisions,  they  may  do  so  subject  to  two  conditions:  the 

bodies  concerned  must  be  subject  to  regular  attestation  of  the 

general  conformity  of  their  procurement  systems  with  Community 

law  by  an  independent,  qualified  person;  and,  in  addition, 

effective  interlocutory  remedies  must  still  be  available  though 

in  a  way  which 

leaves  the  body 

concerned 

the 

final 

responsibility  to  decide  whether  to  correct  an  infringement  or 

instead  pay  a financial  penalty. 

15. 

Since,  in any  event,  the  industrial, public  service  character  of 

the utilities may  well  make  it more  difficult  for  individuals  to 

obtain  effective  interlocutory  relief  due  to  the  utilities' 

possibility  of  relying  on  arguments  to  show  that  suspension  of 

procedures  Is not 

(9)  "Audit-  Is  not  used  In  the  proposal  to  avoid  possible  confusion 

with  the  financial  audit  of  corporate  accounts.  "Cert IfIcatIon-

has  also  been  rejected  because  of  Its  use  In  connection  with 

technical  standards. 

-  8  -

procedures  is  not  Justified  taking  account  of  all  possible 

Interests  likely  to  be  affected,  Including  the  public  interest, 

the  proposal  also  seeks  to  ensure  that  in  all  Member  States 

claims  to  damages  will  be  a  practical  proposition  and  therefore 

a  genuine  incentive  to  compliance.  In particular,  it  should  not 

be  necessary  for  interested  parties  seeking  to  recover  the  costs 

of  bid  preparation  or  of  their  participation  in  an  illegal 

procedure  to  show  that  they  would  have  been  awarded  the 

contract.  Such  proof  will  in many  cases  be  extremely  difficult 

and  makes  the  availability  of  remedies  in  damages  far  less 

effective  as  an  incitation  to  contracting  bodies  to  comply  with 

the  law.  Interested  parties  should  be  required  to show  only  that 

their  chances  of  securing  the  contract  were  adversely  affected. 

In  addition,  disputes  about  the  exact  amount  of  their  bidding 

costs  should  be  limited  by  providing  for  a  minimum  amount, 

related  to  the  value  of  the  contract,  which  will  be  payable  in 

the  absence  of  proof  that  the costs were  in fact  higher. 

16. 

Different  considerations  apply  to  claims  for  other  losses  such 

as  lost  profits.  These  raise  complex  issues  which  are  resolved 

by  the  Member  States  in  the  context  of  their  particular 

approaches  to  the  quantification  of  economic  loss.  Much  of  the 

law  is  Judge  made  and  of  general  application,  applying  outside 

the  field  of  procurement.  Harmonisation  of  these  approaches 

would  certainly  encounter  considerable  difficulties.  Such 

matters  are  accordingly  left  to  be  resolved  for  the  time  being 

according  to national  law as under  Council  Directive  89/665/EEC. 

In  the  longer  term,  it will  be  necessary  to  see  whether  further 

action  at  Community  level  is necessary. 

17. 

The  proposal  further  envisages  a  rapid  corrective  mechanism 

whereby  the Commission  may  invoke  certain  procedures  when,  prior 

to  a  contract  being  concluded,  it  considers  that  a  clear  and 

manifest  infringement  of  Community  provisions  on  procurement  in 

-  9 -

the  fields  covered  is  being  committed  during  a  contract  award 

procedure.  This  proposed  corrective  mechanism  is  in  terms 

Identical  to  those  of  Article  3 of  Directive  89/665/EEC  and  has 

the same  Justification. First,  remedies  at  national  level, while 

vital,  need  to  be  complemented  by  possibilities  for  effective 

intervention  at  Community  level. Parties  directly  concerned  may 

not  consider  their  intervention  at  national  level  to be  in their 

own  best  Interests.  Nevertheless,  important  violations  of 

Community  procurement  law  may  have  occurred  calling  into 

question  its credibility.  In these  circumstances,  the  Commission 

must  be  able  to act  and  obtain  a  rapid  intervention  at  national 

level, preferably  to correct  the situation  before  the damage  has 

become  irreparable.  In  addition,  rapid  clarification  of  the 

issues  will  facilitate  the  Commission's  possibility,  in 

appropriate  cases,  of  seizing  the  Court  of  Justice  of  the 

European  Communities,  in  good  tfme,  of  requests  for  interim 

measures  where  it considers  that  necessary  corrective action  has 

not  been  taken  at  national  level. 

18. 

The  proposal  finally  envisages  a  conciliation  procedure  at 

Community  level.  This  would  be  available  to  interested  parties 

as  a  non-litigious  method  of  dispute  settlement  without 

prejudice  to  the  possibility  of  infringement  procedures  being 

taken  under  Article  169 or  170  EEC, or  to  the  possibility  of  a 

corrective  mechanism  being  used,  or  to  the  rights  of  persons 

invoking  the  procedure,  of  the  contracting  entity  or  of  any 

other  person  under  applicable  national  laws  unless  they  enter 

into  an  agreement  for  the  resolution  of  the  differences  between 

them.  Experience  in  certain  Member  States  suggests  that  such  a 

procedure  may  have  a useful  role  to play,  not  least  by  avoiding 

unnecessary  law  suits. Considerable  interest  has  been  expressed 

in  the  possibility  in  some  quarters.  Accordingly,  It  seems 

appropriate  to  establish  such  a  system  with  a  view  to  testing 

its utI I Ity  in pract ice. 

- 10 -

19. 

Given  the  Important  changes  that  the  directive  will  introduce 

and  also  the  necessarily  limited  nature  of  some  of  its 

provisions,  for  example,  on  damages,  a  review  of  Its working  In 

practice  after  a  sufficient  period  of  time  would  appear  to  be 

useful.  Provision  is  accordingly  made  to  this  effect  along  the 

lines of  the  provision  already  included  in Directive  89/665/EEC. 

I I. 

DETAILED  COMMENTARY 

(a) 

Chapters  1 and  2: remedies  at  national  level 

20. 

Chapter  I requires  that  Member  States  ensure  that  adequate  means 

of  Independent  review  are  available  to  any  person  having  or 

having  had  an  Interest  in  obtaining  a  particular  contract  and 

who  has  been  or  risks  being  harmed  by  an  alleged  infringement. 

The  provisions  of  the  chapter  are  for  the  most  part  the  same  as 

those  in Articles  1 and  2 of  Council  Directive  89/665/EEC.  Since 

in  many  cases  it  will  be  necessary  to  seek  review  at  an  early 

stage  prior  to  the  award  of  a  contract,  provision  is  made  for 

obtaining 

Interim  relief  by 

interlocutory 

procedure, 

in 

particular,  suspension  of  the  award  procedure.  Provision  is also 

made  for  the  award  of  damages  and,  for  the  reasons  given  above, 

this  includes  specific  provision  concerning  the  recovery  of 

bidding  costs. 

21. 

Considerable  flexibility  is  left  for  the  Member  States  to 

implement  the  directive's  requirements  in  accordance  with  their 

particular  approaches  to  administrative  and  Judicial  review, 

including  the  procedural  and  other  conditions  applying  to  such 

remedies.  This  is  to  facilitate  the  insertion  of  the  new 

remedies  into existing  national  structures. 

- 11 -

22. 

However,  to  ensure  that  the  fundamental  guarantees  offered  by 

different  national  systems  are  equivalent,  if  the  review  bodies 

are  not  themselves  Judicial  In  character,  their  decisions  must 

be  subject  to  review  by  a  body  which  is  capable  of  making 

references  to  the  Court  of  Justice  of  the  European  Communities 

and  which  is  independent  both  of  the  contracting  entity  and  the 

review  body.  This  requirement  was  the  provision  which  was 

central  to  the  resolution  of  the  differences  of  view  concerning 

Directive  89/665/EEC. 

23. 

Chapter  2 permits Member  States  to adopt  an  alternative  approach 

in cases  in which  they  consider  that  the  classical  remedies  such 

as  suspension  of  award  procedures  or  setting  aside  decisions  of 

contracting  bodies  are  inappropriate  for  reasons  already  given. 

Those  particular  remedies  then  need  not  be  made  available  under 

the  conditions  that  the  utilities  in  question  are  subject  to 

regular  certification  of  their  purchasing  systems,  and  that,  in 

addition,  effective  interim  remedies  are  still  available. 

Article 1 

24. 

This  Article  sets  out  the  principle  of  decisions  by  contracting 

entities  on  award  procedures  falling  within  the  scope  of  the 

utilities  directive  already  proposed  being  subject  to  effective 

and  rapid  review  on  the  ground  of  infringements of  Community  law 

in  the  field  of  procurement  or  national  rules  implementing  that 

law.  The  coverage  is complete  in  the  sense  that  breaches  of  all 

provisions  of  the  directive  already  proposed  which  require  the 

utilities  to  act  In  a  particular  way  will  be  subject  to  the 

review  procedures  specified.  For  this  reason,  specific  reference 

is  made  to  Article  3  (2)  of  the  utilities  directive  which 

obliges 

entities 

subject 

to 

the 

alternative,  regime 

-  12 -

for  the  exploration  for  and  extraction  of  oil,  gas,  coal  and 

other 

solid 

fuels 

to  respect 

the 

principles 

of 

non 

discrimination  and  competitive  procurement,  particularly  as 

regards 

Information  on  their  procurement 

intentions  made 

available  to  undertakings. 

25. 

No  discrimination  between  undertakings  may  result  from  the 

distinction  made  in  the  proposed  Directive  between  national 

rules  implementing  Community  law and  other  national  rules. 

26. 

The  Member  States will  be  at  liberty  to establish  detailed  rules 

relating  to  the  review  procedures,  for  example,  concerning 

procedural  formalities  or  costs.  Of  course,  in  so  doing,  they 

must  in  no  way  disadvantage  those  who  seek  to  use  the  remedies 

for  breaches  of  Community  law by  comparison  with  persons  seeking 

redress  for  breaches  of  national  rules. This  is  in  line with  the 

approach  of  the  Court  of  Justice  In  myriad  cases  (for  example 

Case  199/82 Amminlstrazione  del le FInanze  dello  Stato  v.  Spa  San 

Giorgio  [1983] ECR  3595) which  requires  that  the  availability  of 

remedies  for  breach  of  Community  law  must  be  on  conditions  no 

less  favourable  than  those  governing  the  availability  of 

remedies  for  breach  of  national  law and  that  the  conditions must 

not  be  such  as  to  render  the  remedies  illusory  or  virtually 

Impossible  to obtain. 

27. 

Accordingly  the  procedures  must  be  open  at  least  to  persons 

having  or  having  had  an  interest  in  obtaining  a  particular 

contract  and  who  have  been  or  risk  being  harmed  by  an  alleged 

infringement. Review will  be  thus  available  to  those  who  have  or 

have  had  a  legitimate  Interest  in  the  outcome  of  a  particular 

procedure.  Nevertheless,  express  provision  is made  to  the  effect 

that  Member  States  will  be  free  to  require  that  the  person 

seeking  review  should  have  previously  notified  the  contracting 

entity  of  the  alleged  infringement  and  of  his  intention  to  seek 

review.  This  has  the  advantage  of  ensuring  that  there  Is  the 

possibility  of  achieving  a settlement  prior  to  the  dispute  going 

to  formal  review. 

-  13 -

28. 

The  wording  of  this  Article  closely  reflects  that  of  the 

equivalent  Article  In Directive  89/665/EEC. 

Article  2 

29. 

This Article  deals with  the  remedies  for  which  provision  must  be 

made;  it  does  not  preclude  a  Member  State  from  providing  for 

additional  remedies.  The  first  set  of  remedies  are  essentially 

Interim  remedies,  designed  to  correct  the  alleged  Infringement 

or  prevent  further  damage  to  the  interests  concerned.  This  set 

Includes  the  power  to  suspend  or  ensure  the  suspension  of  the 

procedure  for  the  award  of  a  contract  or  the  implementation  of 

any  decision  taken  by  the contracting  entity.  The  second  set  of 

remedies  concerns  the  setting  aside  of  decisions  taken 

unlawfully. This  set  Includes  the power  to  remove  discriminatory 

technical  economic or  financial  specifications  in the  invitation 

to  tender,  the contract  documents or  any other  document  relating 

to  the  contract  award  procedure.  The  final  remedy  is  the  right 

to damages  for  injury  caused  by  the  Infringement. 

30. 

The  Member  States  will  be  able  to  endow  separate  bodies  with 

powers  in relation  to different  aspects of  the  review  procedure. 

This  flexibility  permits  Member  States  to  allocate  functions  to 

different  bodies  in accordance  with  their  existing  practices.  In 

some  cases,  those  practices  reflect  sensitive  and  deep  seated 

constitutional  considerations such  as  the national  conception of 

the  separation  of  powers  between  the  administration  and  the 

Judiciary.  Because  suspension  may  not  always  be  appropriate,  the 

proposed  Directive  provides  that  review  procedures  need  not  in 

themselves  have  an  automatic  suspensive  effect  in  relation  to 

-  14 -

the  award  procedure  concerned.  The  Member  States  are  also  free 

to  provide  that  In  considering  whether  to  order  an  Interim 

measure  the  body  concerned  may  have  regard  to  the  balance  of 

convenience.  Interests  that  may  be  taken  into  account  Include 

those  of  other  participants  in  the  award  procedure  as  well  as 

those  of  persons  to  whom  the  contracting  entity  provides  a 

service  and  indeed  the  public  In  general.  As  is  customary,  a 

decision  not  to  grant  interim  measures  will  not  prejudice  the 

outcome  of  any  other  claim  which  an  applicant  for  such  measures 

may  make.  The  Member  States  may  require  that  a  contested 

decision  be  set  aside  or  declared  illegal  before  an  award  of 

damages may  be made  in relation  to an unlawful  decision. 

31. 

It  will  be  for  national  law  to  determine  the  effect  of  the 

exercise  of  the  review  powers.  Save  where  a  Member  State  has 

made  setting  aside  a  precondition  for  the  award  of  damages,  a 

Member  State  may  restrict  the  powers  of  the  reviewing  body, 

after  the  conclusion  of  a  contract  following  its  award,  to  the 

award  of  damages.  The  provision  on  claims  for  damages  Is  a 

limited  step  designed  to  ensure  that  in  all  Member  States  such 

claims will  be  a practical  possibility. Given  likely  constraints 

on  suspension  and  equivalent  interim  measures,  the  possibility 

of  claims  for  damages  will  be  a  particularly  important  part  of 

the  system.  A  high  level  of  harmonisation  of  the  quantification 

of  damages  is an  unrealistic  objective  at  this  stage.  A  limited 

step  of  the  kind  proposed  is  both  feasible  and  sufficient  to 

meet  the  Community's  immediate  objectives  in  the  procurement 

field.  In any  event,  Member  States  must  ensure  that  decision  of 

the  reviewing  bodies  can  be effectively  enforced.  As  part  of  the 

guarantee  of  transparency,  if  reviewing  bodies  are  non-Judicial 

in  character,  they  must  give  written  reasons  for  their 

decisions. Any  allegedly  illegal  measures  taken  by  the  reviewing 

body  or  any  alleged  defect  in the exercise  of  its powers  must  be 

subject  to  Judicial  review  or  to  review  by  a  body  which  is 

-  15 -

a  body  capable  of  making  a  reference  to  the  Court  of  Justice 

under  Article  177  EEC  and  which  is also  Independent  of  both  the 

contracting  entity  and  the  reviewing  body.  The  purpose  of  this 

requirement 

Is  to  ensure  that  the  review  systems  offer 

equivalent  guarantees  as  to  the  effective  application  of  the 

requirements  of  Community  procurement  law.  References  to  the 

Court  of  Justice  of  the  European  Communities  for  a  preliminary 

ruling will  also  ensure  the coherent  development  of  case  law  In 

the  different  Member  States.  If  the  Judicial  or  other 

Independent  body  Is  of  last  instance  Jurisdiction  then  the 

obligation  in  third  paragraph  of  Article  177  EEC  will  apply,  as 

interpreted  by  the Court  of  Justice. 

32. 

The  wording  of  this  Article  reflects  that  of  the  equivalent 

Article  in Directive  89/665/EEC. 

Article  3 

33. 

This  Article  empowers  the  Member  States  to  set  up  a  system  of 

attestation  whereby  contracting  entities  attested  in  accordance 

with  the  system  set  out  in  chapter  2  need  not  be  subject,  in 

particular,  to  the  suspension  of  their  awards  of  contracts  or 

to  the  setting  aside  of  unlawful 

decisions, 

Including 

specifications.  They  remain,  however,  subject  to  other  interim 

measures  designed  to  correct  alleged  infringements  or  prevent 

further  damage  to  interested  parties  and  to  the  award  of  damages 

to persons  harmed  by  any  infringement. 

34. 

The  purpose  of  this  system  is  to  satisfy  concerns  which  have 

been  expressed  about  the  feasibility  of  suspension  or  setting 

aside  of  the  award  of  contracts  in  certain  sectors  in  which 

meeting  deadlines  is  of  crucial  importance  while,  at  the  same 

-  16  -

time,  ensuring  that  the  utilities  concerned  will  be  subject  to 

effective  means  for  ensuring  their  compliance  with 

the 

requirements  of  Community  procurement  law,  both  in  general  and 

in  particular  cases,  including  situations  in  which  problems 

arise  before  a contract  is awarded. 

35. 

The  attestation  system  affords  the  opportunity  of  controlling 

the whole  purchasing  system  of  contracting  entities on  a  regular 

and  systematic  basis. 

It 

is  thus  envisaged 

as 

having 

considerable  preventive  effects  since  the entities will  be  aware 

that  any  decision  may  be  the  subject  of  subsequent  examination 

by  an  independent,  qualified  person. 

36. 

Since  the  attestation  system  addresses  the  procedure  of  a 

utility  taken  as  a  whole,  it  does  not  provide  remedies  for 

particular  claims  by  individuals.  Accordingly,  contracting 

entities  subject  to  attestation  will  still  be  liable  to  pay 

damages  to  persons  harmed  by  an  infringement  in  accordance  with 

Article  2.  In  addition,  Article  3(b)  ensures  that  effective 

interim  relief  will  also  be  available  with  a  view  to  correcting 

the  alleged  infringement  or  preventing  further  damage  to  the 

person  concerned.  The  characteristics of  this  interim  relief  are 

specified  in Article  II. 

Article  4 

37. 

An  attestation  by  an  authorised  person  on  at  least  an  annual 

basis  offers  an  effective  continuing  basis  on  which  to  evaluate 

procurement  practices  and  procedures. 

-  17 -

Article  5 

38. 

The  appointment  and  removal  of  those  who  attest  the  purchasing 

procedures  and  practices  must  be  subject  to  appropriate 

guarantees  of  Independence. 

Article  6 

39. 

This  Article  lays  down  the  qualities  and  qualifications  of 

persons  who  attest  in  order  to  ensure  their  Independence  and 

professional  competence. 

Article  7 

40. 

This  Article  deals  with  the  subject-matter  of  the  attestation. 

The  examination  covers  the  overall  fairness  of  the  opportunity 

given  to potential  suppliers  and  contractors  to secure  the  award 

of  contracts  and  whether  the  procedures  and  practices  of  the 

contracting  entities  conform  with  national  and  Community  law 

concerning  the  award  of  contracts. 

Article  8 

41. 

This Article  sets out  the minimum  contents  of  the written  report 

which 

it 

requires 

persons 

attesting 

to  prepare. 

Such 

requirements  are  essential  in  the  interests  of  transparency  and 

to ensure  that  the  report  is an effective  Instrument. 

-  18  -

Article  9 

42. 

This  Article  specifies  those  who  are  entitled  to  receive  copies 

of  the  report  drawn  up  by  those  who  have  carried  out  the 

attestation.  It  permits  supervision  by  interested  persons,  the 

Commission  and  the  relevant  competent  authority  at  national 

level. 

Article  10 

43. 

This  Article  requires  contracting  entities  benefiting  from 

derogations  under  Article  3  of  this  proposal  to  indicate  the 

general  nature  of  the  derogation  from  which  they  benefit  in  the 

tender  and  periodic  indicative  notices  published  in the  Official 

Journal  pursuant  to Articles  16 and  17 of  Directive... 

Article  11 

44. 

Attestation  procedures  do not  address  immediately  the  particular 

problems  of  interested  suppliers or  contractors,  though  they  may 

disclose  facts  which  enable  them  to  take  action.  Claims  for 

damages,  though  an  important  part  of  the  system,  do  not  address 

the  Issue  of  corrective  action  while  a  contract  award  procedure 

is  still  running.  The  form  of  interim  relief  described  by  this 

Article  permits  such  action  to  be  taken  while  at  the  same  time 

not  interfering  directly  with  the  internal  decision  making  of 

the  contracting  entity.  Conflict  with  any  constitutionally 

protected  freedoms  of  the  contracting  entity  are  thus  avoided 

while,  at  the  same  time,  effective  means  for  defending  their 

interests  are  put  at  the  disposal  of  interested  persons. 

45. 

The  sum  of  money  payable  in  the  event  that  an  infringement  is 

not  avoided  or  corrected  is  to  be  fixed  at  a  dissuasive  level. 

It  should  In  any  event  cover  the  plaintiffs  costs  of  preparing 

or  bid  or  participating  in  a  procedure.  To  facilitate  the 

quantification  of  these  costs,  a  minimum  amount  Is  fixed  in 

accordance  with  the  probable  size  of  the  contract  in  the  same 

ways  as  In Article 2(7). 

- 19 -

(b) 

Chapter  3: corrective  mechanism 

46. 

This  chapter  establishes  a  corrective  mechanism  whereby  the 

Commission  may  Intervene  prior  to  the  award  of  a  contract,  In 

cases  In  which  it  considers  that  a  clear  and  manifest 

Infringement  of  Community  public  procurement  provisions  in  this 

field  has been  committed  during  a contract  award  procedure.  This 

mechanism  Is,  however,  without  prejudice  to  the  right  of  the 

Commission  or  a  Member  State  to  bring  Infringement  proceedings 

against  a  Member  State  under  Articles  169  or  170  EEC 

respectIvely. 

Article  12 

47. 

This  Article  sets  out  the  procedure  of  the  corrective  mechanism 

which  the  Commission  may  Invoke.  It  parallels  the  provisions  of 

Article  3 of  Directive  89/665/EEC.  (10) 

(c) 

Chapter  4: cone I Illation 

48. 

This  chapter  establishes  a  conciliation  procedure  at  Community 

level  In  addition  to  any  existing  procedures  at  national  level 

as a means of  non-litigious dispute  settlement. The  conciliation 

procedure  may  be  Invoked  by  any  party  having  an  interest  in 

obtaining  a particular  contract  in the  field  who  has been  harmed 

or  risks  being  harmed.  There  is, though,  a  filter  in the  form  of 

the  Commission  or  the  national  authorities  of  the  Member  States 

who  must  be  prepared  to  seize  the  relevant  advisory  committee. 

The  conciliation  procedure  is available without  prejudice  to  the 

possibility  of  infringement  proceedings  being  commended  under 

Articles  169 or  170  EEC or  to  the  possibility  of  the  corrective 

mechanism  provided  for  in Chapter  3 of  the  present  proposal.  It 

is  also  without  prejudice  to  the  rights  of  the  parties  to  the 

particular  dispute  under  national  law  save  in  so  Tar  as  they 

agree  to  resolve  the  issues between  themselves. 

(10)  see  note  5 above. 

-  20  -

Article  13 

49. 

This  Article  sets  out  the  persons  who  have  standing  to  invoke 

the  conciliation  procedure.  Thus  any  person  who  has  an  Interest 

In  obtaining  a  particular  contract  in  the  field  and  who  in 

relation  to  the  procedure  for  that  contract  has  been  or  risks 

being  harmed  by  an  alleged  infringement  of  Community  procurement 

law  or  national  rules  Implementing  that  law  may  invoke  the 

conciliation  procedure  by written  notification  to  the  Commission 

or  to  the  national  authorities  of  the  Member  States  listed  in 

Annex  I  to  the  present  proposal.  It  is  up  to  the  person 

concerned  whether  he sends  his notification  to  the Commission  or 

to  the  national  authorities  involved. 

Article  14 

50. 

This  Article  sets  out  the  mechanics  of  the  conciliation 

procedure.  Both  the  person  Invoking  the  procedure  and  the 

contracting  entity  are  to  be  given  the  opportunity  to  make 

either  oral  or  written  representations  on  the  matter  concerned. 

The  working  group  endeavours  to  resolve  the  dispute  by  making 

recommendations  to  the  parties  and  Inviting  their  agreement.  If 

necessary,  the  working  group  acts  by  majority  vote.  The 

recommendations  are  not,  however,  legally  binding  and  there  is 

no  sanction  for  failure  to  enter  into  agreement  although  the 

whole  procedure  is  without  prejudice  to  the  possibilities 

envisaged  In  Article  15  of  the  present  proposal.  The  working 

group  reports  to  the Committee  on  its findings  and  on  any  result 

achieved.  In  keeping  with  the  non-litigious  nature  of  the 

proceedings,  the  parties  to  the  conciliation  proceedings  bear 

their  own  costs. 

Article  15 

51. 

The  first  paragraph  of  this  Article  ensures  that  conflicts  will 

not  arise  between  the  conciliation  procedure  and  review 

proceedings  at  national  level.  The  second  paragraph  makes  it 

clear  that  the  conciliation  procedure  does  not  prejudice  any 

21  -

possible  action  under  Articles  169 or  170 EEC or  the  possibility 

of  the  corrective  mechanism  set  up  under  the  present  proposal 

being  applied.  The  conciliation  procedure  likewise  does  not 

prejudice  the  rights  of  the  person  invoking  the  procedure  and 

the  contracting  entity  under  national  laws or  any  other  person, 

save  In  so  far  as  they  may  agree  to  resolve  the  Issues  between 

them. 

(d) 

Chapter  5:  final  provisions 

52. 

This  chapter  contains  provisions  to  enable  the  system  to  be 

properly  reviewed  after  a  sufficient  period  of  operation  which 

shall  not  be  later  then  1  January  1996  (Article  16)  and  to 

ensure  the  adoption  and  application  of  the  necessary  measures 

according  to  the  schedule  fixed  by  the  utilities  directive 

Itself  (Article 17). 

-  22 -

A N N EX 

This Annex  indicates  the Articles of  Directive 89/665/EEC which  correspond 
to  the provisions of  this proposal. 

Directive  89/665 

This proposal 

Article 1 

Article 1 

1 
2 
3 

1 
2 
3 

Article  2 

Article  2 

1 
2 
3 
4 
5 
6 
7 
8 

1 
2 
3 
4 
5 
6 
8 

Article  3 

Article  12 

1 
2 
3 
4 
5 

1 
2 
3 
4 
5 

Article  4 

Article  16 

1 
2 

1 
2 

Article  6 

Article  18 

- 23 -

Proposal for a 

COUNCIL DIRECTIVE 

coordinating the laws, regulations and administrative provisions 

relating to the application of Community  rules on the procurement 

procedures of entities operating  In the water, energy, 

transport and telecommunications sectors 

THE COUNCIL OF THE EUROPEAN COMMUNITIES, 

Having  regard  to the Treaty  establishing  the European  Economic  Community, 

and  in particular Article 100a thereof, 

Having regard to the proposal  from the Commission,<1> 

In co-operation with the European Par I lament, <2> 

Having regard to the opinion of the Economic and Social Committee,(3) 

Whereas  Directive  .../.../...  on  the  procurement  procedures  of  entitles 

operating  in  the  water,  energy,  transport  and  telecommunications 
sectors<4)  does  not  contain  any  specific  provisions  ensuring  its 

effective application; 

Whereas  Council  Directive  89/665/EEC  of  21  December  1989  on  the 

coordination  of  the  laws,  regulations  and  administrative  provisions 

relating  to  the  application  of  review  procedures  to  the  award  of  public 

(1)  OJ No 

(2)  OJ No 

(3)  OJ No 

(4)  OJ No 

- 24 -

supply  and  public  works  contracts*5*  Is  limited  to  contract  award 

procedures within the scope of Council Directive 71/305/EEC of 26 July 1971 
coordinating  procedures  for  the  award  of  public  works  contracts,(6)  as 
last  amended  by  Directive  89/440/EEC,<7>  and  Council  Directive  77/62/EEC 

of 21 December  1976 coordinating procedures for the award of public supply 
contracts,<8) as  last amended by Directive 88/295/EEC^9^; 

Whereas the existing arrangements at both national and Community  levels for 

ensuring  its application will  otherwise  not  always  be  adequate  to ensure 

compliance with  the relevant  Community  provisions particularly  at  a stage 

when  infringements can be corrected; 

Whereas the openlng-up of procurement  In the sectors concerned  to Community 

competition  necessitates  a  substantial  increase  in  the  guarantees  of 

transparency  and  non-discrimination  and  whereas,  for  it  to  have  tangible 

effects,  effective  and  rapid  remedies  must  be  available  in  the  case  of 

infringements of Community  law  In the field or national  rules  implementing 

that  law; 

Whereas  in  certain  Member  States  the  absence  of  effective  remedies  or 

Inadequacy  of  existing  remedies  deter  Community  undertakings  from 

submitting  tenders  in the Member  State  in which  the contracting  authority 

Is established; whereas, therefore, the Member States concerned must remedy 

this situation; 

Whereas, since procedures for the award of contracts are of short duration, 

competent  review bodies must, among other  things, be able to take rapid and 

effective  interim  measures  aimed  at  correcting  or  avoiding  Infringements 

during the procedures; 

Whereas  it is necessary  to ensure that adequate procedures exist  in all the 

Member States to permit  the setting aside of decisions taken unlawfully and 

compensation of persons harmed by an Infringement; 

(5)  OJ No L 395, 30.12.1989, p. 33. 

(6)  OJ No L 185, 16.8.1971, p. 5. 

(7)  OJ No L 210, 21.7.1989, p. 1. 

(8)  OJ No L 13. 15.1.1977, p. 1. 

(9)  OJ No L 127, 20.5.1988, p. 1. 

-  25 -

Whereas  It  Is necessary  to  ensure  equivalent  treatment  and  guarantees  for 

contracting  entitles  Irrespective  of  their  public  law  or  private  law 

status; 

Whereas  it  is necessary,  to  take  account  of  the  specific  nature  of  certain 

legal orders, to authorize  the Member  States  to choose  to apply  for  any  one 

category of  contracting  entity  a control  system  based  on  attestation  by an 

independent  body  and  offering  equivalent  guarantees  in  relation  to  the 

transparency  and  non-discriminatory nature of  the awarding  procedure; 

Whereas,  when  undertakings  do  not  seek  review,  certain  infringements  may 

not  be corrected  unless  a specific mechanism  is put  in place; 

Whereas,  accordingly,  the  Commission,  when  it  considers  that  a  clear  and 

manifest  Infringement  has been committed  during a contract  award  procedure, 

should  be able  to bring  it to the attention of  the competent  authorities of 

the  Member  State  and  of  the  contracting  entity  concerned  so  that 

appropriate  steps are  taken  for  the  rapid  correction of  any  infringement; 

Whereas  it  is  necessary  to  provide  for  the  possibility  of  non-1 ItIgious 

conciliation at Community  level; 

Whereas  the  application  In  practice  of  the  provisions  of  this  Directive 

should  be  reviewed  not  later  than  1  January  1996  on  the  basis  of 

Information  to be  supplied  by  the Member  States  concerning  the  functioning 

of  the national  review procedures, 

- 26 -

HAS ADOPTED THIS DIRECTIVE: 

Chapter  I - Remedies at national level 

Article 1 

(1)  The  Member  States  shall  take  the measures  necessary  to  ensure  that 

decisions  taken  by  contracting  entities  may  be  reviewed  effectively 

and,  in  particular,  as  rapidly  as  possible  in  accordance  with  the 

conditions  set  out  in  the  following  Articles  and,  in  particular, 

Article  2(8), on  the  grounds  that  such  decisions  have  infringed 

Community  law  In  the  field  of  procurement  or  national  rules 

implementing that  law as regards: 

(a)  contract  award  procedures  falling  within  the  scope  of 

Directive  .../.../...<1°); and 

(b)  compliance with Article 3(2)(a) of that Directive  in the case 

of the contracting entities to which that provision applies. 

(2)  Member  States  shall  ensure  that  there  is no  discrimination  between 

undertakings  claiming  Injury  in  the  context  of  a  procedure  for  the 

award  of  a  contract  as  a  result  of  the  distinction  made  by  this 

Directive between national  rules  implementing Community  law and other 

national rules. 

(3)  The  Member  States  shall  ensure  that  the  review  procedures  are 

available, under detailed rules which the Member States may establish, 

at  least to any person having or having had an  interest  in obtaining a 

(10) The  proposed  Directive  on  the  procurement  procedures  of  entities 

operating  in  the  water,  energy,  transport  and  telecommunications 

sectors: see OJ No C 264, 16.10.1989, p. 22. 

-  27 -

particular  contract  and  who  has  been  or  risks  being  harmed  by  an 

alleged  Infringement.  In  particular,  the  Member  States  may  require 

that  the  person  seeking  the  review  must  have  previously  notified  the 

contracting  entity  of  the alleged  infringement  and of  his  intention  to 

seek  review. 

Article  2 

(1)  The  Member  States  shall  ensure  that  the measures  taken  concerning  the 

review  procedures  specified  in  Article  1  Include  provision  for  the 

powers  to: 

(a) 

take, at  the earliest  opportunity  and  by way  of  interlocutory 

procedures,  interim  measures  with  the  aim  of  correcting  the 

alleged  infringement  or  preventing  further  damage  to  the 

interests  concerned,  including  measures  to  suspend  or  to 

ensure  the  suspension  of  the  procedure  for  the  award  of  a 

contract  or  the  implementation  of  any  decision  taken  by  the 

contracting  entity; 

(b) 

either  set  aside  or  ensure  the  setting  aside  of  decisions 

taken  unlawfully,  including  the  removal  of  discriminatory 

technical,  economic  or  financial  specifications  in  the 

invitation  to  tender,  the  contract  documents  or  in any  other 

document  relating  to the contract  award  procedure; 

(c) 

award  damages  to persons  harmed  by  an  infringement. 

(2)  The  powers  specified  in  paragraph  1  may  be  conferred  on  separate 

bodies  responsible  for  different  aspects of  the  review  procedure. 

-  28 -

(3)  Review  procedures  need  not  In themselves  have  an  automatic  suspensive 

effect  on  the contract  award  procedures  to which  they  relate. 

(4)  The  Member  States  may  provide  that  when  considering  whether  to  order 

Interim  measures  the  body  responsible  may  take  into  account  the 

probable  consequences  of  the  measures  for  all  interests  likely  to  be 

harmed,  as  well  as  the  public  Interest,  and  may  decide  not  to  grant 

such  measures  where  their  negative  consequences  could  exceed  their 

benefits. A decision  not  to grant  Interim measures  shall  not  prejudice 

any other  claim of  the person  seeking  these measures. 

(5)  The  Member  States  may  provide  that  where  damages  are  claimed  on  the 

grounds  that  a  decision  was  taken  unlawfully,  the  contested  decision 

must  first  be  set  aside  or  declared  illegal  by  a  body  having  the 

necessary  powers. 

(6)  The  effects  of  the  exercise  of  the  powers  referred  to  in paragraph  1 

on a contract  concluded  subsequent  to  its award  shall  be determined  by 

national  law.  Furthermore,  except  where  a  decision  must  be  set  aside 

prior  to  the  award  of  damages, a Member  State  may  provide  that,  after 

the  conclusion  of  a  contract  following  Its  award,  the  powers  of  the 

body  responsible  for  the  review  procedures  shall  be  limited  to 

awarding  damages  to any person  harmed  by an  infringement. 

(7)  Where  a claim  is made  for  damages  representing  the  costs  of  preparing 

a bid or of  participating  in an award  procedure,  the person making  the 

claim  shall  be  required  to prove  the  Infringement  of  Community  law  in 

the  field  of  procurement  or  national  rules  implementing  that  law  and 

that  the  Infringement  adversely  affected  his  chance  of  being  awarded 

the  contract.  He  shall  not  be  required  to  prove  that,  in  the  absence 

-  29  -

of  the  infringement,  he  would  have  been  awarded  the  contract.  The 

amount  of  such  costs  shall  be  deemed  to  be one  per  cent  of  the  value 

of  the  contract  unless  the  person  making  the  claim  proves  that  his 

costs were  greater. 

(8)  The  Member  States  shall  ensure  that  decisions  taken  by  bodies 

responsible  for  review  procedures  can be effectively  enforced. 

(9)  Where  bodies  responsible  for  review  procedures  are  not  Judicial  In 

character,  written  reasons  for  their  decisions  shall  always  be  given. 

Furthermore,  In  such  a  case,  provision  must  be  made  to  guarantee 

procedures  whereby  any  allegedly  Illegal  measures  taken  by  the  review 

body  or  any  alleged  defect  in the exercise  of  the  powers  conferred  on 

it  can  be  the  subject  of  Judicial  review  or  review  by  another  body 

which  is a  court  or  tribunal  within  the meaning  of  Article  177 of  the 

Treaty  and  independent  of  both  the  contracting  entity  and  the  review 

body. 

The  members  of  the  independent  body  shall  be  appointed  and  leave 

office  under  the  same  conditions  as  members  of  the  Judiciary  as 

regards  the  authority  responsible  for  their  appointment,  their  period 

of  office,  and  their  removal.  At  least  the  President  of  this 

independent  body  shall  have  the  same  legal  and  professional 

qualifications as members of  the  Judiciary. The  Independent  body  shall 

take  its  decisions  following  a  procedure  in  which  both  sides  are 

heard,  and  these  decisions  shall,  by  means  determined  by  each  Member 

State, be  legally  binding. 

-  30 -

Chapter  2 - Attestation 

Article  3 

Member  States  may  choose  to  apply  to  contracting  entities  in  the  same 

category  defined  by objective  criteria  the  system  set  out  in Articles  4  to 

10  instead  of  the  measures  set  out  In Article  2(1)(a)  concerning  measures 

to  suspend  or  to  ensure  the  suspension  of  procedures  for  the  award  of  a 

contract  or  the  implementation  of  any  decision  taken  by  the  contracting 

entity  and  Instead  of  Article  2(1)(b),  provided  that  the  review  procedures 

made  available  pursuant  to  chapter  1  Include  provision  for  the  Interim 

measure  specified  In Article 11. 

Article  4 

The contracting  entitles shall,  at  least once a year,  have  their  purchasing 

procedures  and  practices  attested  by  one  or  more  persons  authorised  by 

national  law to exercise  this  function. 

Article  5 

Persons  who  attest  the  purchasing  procedures  and  practices  of  the 

contracting  entities  shall  be  appointed  to  and  may  be  removed  from  their 

office  either  by  a  competent  authority  designated  for  this  purpose  by  the 

Member  States  or  by  the  contracting  entities  themselves  subject  to  the 

prior  approval  of  such  a competent  authority. The competent  authority  shall 

be  Independent  of  the contracting  entities. 

-  31  -

Article  6 

Persons  who  attest  the  purchasing  procedures  and  practices  of  the 

contracting  entities  shall  be 

(a)  independent  of  the contracting  entitles; 

(b)  holders  of  a  higher  education  diploma  within  the meaning  of  Article 1 

of  Council  Directive  89/48/EEC*11>; 

(c)  persons  having  knowledge  and  practical  experience  of  procurement  law 

and  practice  by  reason of 

(i) 

their  having  passed  an  examination  of  professional  competence 

organized  or  recognised  by  the State; and 

(ii)  their  having  a  minimum  of  three  years  practical  experience  of 

procurement  law  and  practice  in  the  field  of  activity  of  the 

contracting  entities  concerned. 

Article  7 

The  persons  who  attest  the  purchasing  procedure  and  practices  of  the 

contracting  entities  shall  examine  whether  those  procedures  and  practices 

have  been  in  conformity  with  national  and  Community  law  concerning  the 

award  of  contracts  and  have  given  potential  suppliers  and  contractors  a 

fair  opportunity  to secure  the award of  contracts. 

Article  8 

The  persons  who  attest  the  purchasing  procedures  and  practices  of 

contracting  entities  shall  prepare  a written  report  relating  to  the  results 

of  their  work. The  report  shall  contain  the  following  at  least: 

(11) OJ  No L  19, 24.1.1989, p. 16. 

-  32 -

(a)  an  indication  of  whether  the  purchasing  procedures  and  practices  of 

the  contracting  entitles  gave  potential  suppliers and  contracts  a  fair 

opportunity  to secure  the award  of  contracts; 

(b)  observations  concerning  any  infringements of  national  or  Community  law 

concerning  the  award  of  contracts; 

(c)  where  deficiencies  have  occurred  pursuant  to  paragraphs  (a)  or  (b), 

suggestions  as  to  actions  needed  to  prevent  their  repetition  In  the 

future. 

Article  9 

The  report  to which  Article  8  refers  shall  be 

(a)  made  available  by  the  contracting  entities  to  interested  persons  who 

shall  be  supplied  with  copies  at  their  request,  for  which  a  price  may 

be  charged  which  does  not  exceed  the  cost  of  their  copying  and 

transmission; 

(b)  communicated  by  the  contracting  entities  to  the  Commission  and  to  any 

competent  authority  designated  by  a Member  State  by  the  law of  which  a 

contracting  entity  is governed. 

On  the  basis  of  these  reports  the  Commission  may  publish  periodic  summary 

reports  In the Official  Journal  of  the  European  Communities. 

Article  10 

(1)  Contracting  entities  to  which  the  system  set  out  in  Articles  4  to  9 

applies  shall  indicate  in  accordance  with  paragraph  2  the  general 

nature  of  this  system  in  the  tender  and  periodic  indicative  notices 

published  in the Official  Journal  of  the  European  Communities  pursuant 
to Articles  16 and  17 of  Directive  .../.../...<12>. 

(12) OJ  No C  264, 16.10.1989, p. 22. 

- 33 -

(2)  The  first  point  of  the notice  shall  conclude  with  the phrase: "The 

contracting  entity  is subject  to attestation  and  accordingly  is not 

subject  to  certain  powers  specified  in  Article  ...  of  Directive 

.../.../..., namely  those  concerning 

(a) 

suspension of contract  award  procedures; 

(b) 

setting  aside of decisions". 

However,  subparagraph  (a) or (b) of the phrase  shall  be deleted  where 

it does not apply. 

Article 11 

(1)  The  Member  States  shall  ensure,  under  the  conditions  specified  in 

chapter  1,  that  a  review  body  shall  have  the power,  at  the earliest 

opportunity  and by way of  interlocutory  procedure,  to declare  at any 

stage  that, on the basis of the evidence  available  to it at that  time, 

an  infringement  has been  or  risks  being  committed  during  a  contract 

award  procedure  and  that  the  contracting  entity  should  correct  or 

avoid  the  infringement.  A  review  body  shall  also  have  the power  to 

make  an  order  for  the  payment  of  a  sum of  money  to  the  person  or 

persons  seeking  review  in  the  event  that  the  infringement  Is not 

corrected  or  avoided.  The payment  may be made  conditional  on a  final 

decision  being  reached  to the effect  that  the  infringement  has  been 

committed. 

(2)  The  review  body  responsible  for  fixing  the sum of  money  payable  in 

accordance  with  paragraph  1 shall  fix any such sum at a  level  designed 

to  dissuade  the contracting  entity  from  committing  or  continuing  the 

infringement. The amount  shall  at  least  cover  any costs of preparing a 

bid  or  participating  in  the  award  procedure  of  the  person  seeking 

review.  The amount  of  such  costs  shall  be deemed  to be one per  cent 

- 34 

of  the value of  the contract  unless the person  seeking  review proves 

that his costs were greater. An order for payment of a sum of money in 

accordance  with  this  provision  shall  bar  any  further  claim  by  the 

person  concerned  to  the  recovery  of  the costs  taken  into account  by 

the review body when fixing the order. 

Chapter 3 - Corrective mechanism 

Article 12 

(1)  The  Commission  may  invoke  the  procedures  for  which  this  Article 

provides when, prior to a contract being concluded,  It considers that 

a clear and manifest  infringement of Community provisions  In the field 

of  procurement  has been  committed  during  a contract  award  procedure 
falling within  the scope of Directive  .../.../...(13) or  In relation 

to Article  3(2)(a) of  that  Directive  in the case of  the  contracting 

entities to which that provision applies. , 

(2)  The  Commission  shall  notify  the  Member  State  and  the  contracting 

entity  concerned of  the reasons which  have  led  it to conclude  that a 

clear  and  manifest  infringement  has  been  committed  and  request  Its 

correct ion. 

(3)  Within  twenty-one  days of  receipt  of  the notification  referred  to in 

paragraph  2,  the  Member  State  concerned  shall  communicate  to  the 

Commission: 

(a)  Its confirmation that the  infringement has been corrected; or 

(b)  a reasoned submission as to why no correction has been made; or 

(13) OJ No C 264, 16.10.1989, p. 22 

-  35  -

(c) 

a  notice  to  the  effect  that  the  contract  award  procedure  has 

been  suspended  either  by  the  contracting  entity  on  its  own 

Initiative  or  on  the  basis  of  the  powers  specified  in 

Article  2(1)(a). 

(4)  A  reasoned  submission  In accordance  with  paragraph  3(b) may  rely  among 

other  matters  on  the  fact  that  the alleged  infringement  is already  the 

subject  of  Judicial  or  other  review  proceedings  or  of  a  review  as 

referred  to  in  Article  2(9).  In  such  a  case,  the  Member  State  shall 

Inform  the  Commission  of  the  result  of  those  proceedings  as  soon  as  it 

becomes  known. 

(5)  Where  notice  has  been  given  that  a  contract  award  procedure  has  been 

suspended  in  accordance  with  paragraph  3(c),  the  Member  State  shall 

notify  the  Commission  when  the  suspension  is  lifted  or  another 

contract  procedure  relating  in  whole  or  in  part  to  the  same  subject 

matter  Is  begun.  That  notification  shall  confirm  that  the  alleged 

infringement  has been  corrected  or  include  a  reasoned  submission  as  to 

why  no  correction  has been  made. 

Chapter  4 - Conciliation 

Article  13 

Any  person  having  or  having  had  an  interest  In  obtaining  a  particular 
contract  falling  within  the  scope  of  Directive  .../.../...(14>  and  who, 

in  relation  to  the  procedure  for  the  award  of  that  contract,  has  been  or 

risks being  harmed  by  an alleged  infringement  of  Community  law  in the  field 

of  procurement  or  national  rules  implementing  that  law  may  invoke  the 

procedure  for  which  this  chapter  provides  by  written  notification  to  the 

Commission  or  to  the  national  authorities  of  the  Member  States  listed  in 

the  Annex. 

(14) OJ  No C  264, 16.10.1989, p. 22. 

- 36 -

Article 14 

(1)  Where  the  Commission  or  the  national  authorities  of  a  Member  State 

consider  that,  following  a  notification  pursuant  to  Article  13, an 

infringement  of  Community  law has occurred,  they may  put  the matter 

before  the Advisory Committee for Public Contracts or, In the case of 

contracting  entities having as one of  their  activities  the operation 

of public telecommunications networks or the provision of one or more 

telecommunications  services  to the public, the Advisory  Committee on 

Telecommunications Procurement. 

(2)  The Chairman of the committee  In question shall  convoke as rapidly as 

possible a working group of at  least two members of the committee and 

himself or another Commission official designated by him. The working 

group shall normally meet within ten working days of the matters being 

put  before  the  relevant  committee.  It may  decide on  a proposal  from 

any  of  Its  members  to  invite  not  more  than  two  other  persons  as 

experts  to advise  It  in  its work. Any other  member  of  the committee 

may attend any meeting of the working group as an observer. 

(3)  The working  group shall  give the person  Invoking  this procedure, the 

contracting  entity  and  any other  candidate or  tenderer  participating 

in the contract  award procedure to which the notification relates the 

opportunity  to make representations on the matter either orally or  In 

wrItIng. 

(4)  The  working  group  shall  endeavour  to reach  an  agreement  between  the 

parties which  is In accordance with Community law. 

(5)  The working  group  shall  report  to the committee  on  its findings and 

any result achieved. 

-  37 -

(6)  The  person  invoking  the  procedure  and  the  contracting  entity  shall 

bear  their  own  costs of  participating  In the  procedure. 

Article  15 

(1)  Where,  in  relation  to  a  particular  contract  award  procedure,  an 

interested  person  within  the  meaning  of  Article  13  other  than  the 

person  Invoking  the  conciliation  procedure  is  pursuing  Judicial  or 

other  review  proceedings  or  proceedings  for  review  according  to 

Article  2(9), the  contracting  entity  shall  inform  the  working  group. 

The  chairman  shall  inform  that  person  that  the  conciliation  procedure 

has  been  invoked  and  shall  invite  that  person  to  indicate  within  a 

time  limit  that  it may  determine  whether  he  agrees  to  participate  in 

the  conciliation  procedure.  If  that  person  does  not  agree  to 

participate  within  that  time  and  the working  group  decides,  acting  if 

necessary  by  majority,  that  his  participation  is necessary  to  resolve 

the  dispute,  it  shall  terminate  its  activities  and  report  to  the 

committee  on  its reason  for  so  doing. 

(2)  Action  taken  pursuant  to  this  chapter  shall  be without  prejudice  to 

(a) 

any  action  that  the  Commission  or  any  Member  State  might  take 

pursuant  to  Articles  169  or  170  of  the  Treaty  or  pursuant  to 

Chapter  3; 

(b) 

the  rights  of  the  person  invoking  the  procedure,  of  the 

contracting  entity  or  of  any  other  person  under  applicable 

national  laws  except  in  so  far  as  they  enter  into  an  agreement 

for  the  resolution  of  issues between  them. 

- 38 -

Chapter 5 - Final provisions 

Article 16 

(1)  Not  later  than  1 January  1996, the Commission,  In consultation  with 

the Advisory  Committee  for Public Contracts, shall  review  the manner 

In which  the provisions of  this Directive  have been  implemented  and, 

if necessary, make proposals for amendments. 

(2)  By  1  March  each  year  the  Member  States  shall  communicate  to  the 

Commission  Information  on  the  operation  of  their  national  review 

procedures  during  the  preceding  calendar  year.  The  nature  of  the 

information shall be determined by the Commission  in consultation with 

the Advisory Committee for Public Contracts. 

(3)  In the case of matters relating to contracting entities the activities 
of which are defined  in Article 2(2)(d) of Directive  .../.../...<15>, 

the  Commission 

shall 

consult 

the  Advisory 

Committee 

on 

Telecommunications Procurement. 

Article 17 

(1)  Member  States shall  adopt, before 1 July 1992, the measures necessary 

to  comply  with  this  Directive.  They  shall  communicate  to  the 

Commission  the  texts  of  the  main  national  laws,  regulations  and 

administrative  provisions which  they  adopt  In the  field  governed  by 

this DirectIve. 

The provisions  adopted  pursuant  to the first  subparagraph  shall  make 

express reference to this Directive. 

(2)  Member  States  shall  bring  into  force  the necessary  measures  adopted 

pursuant  to  paragraph  (1) on  the  same  dates  as  those  contained  in 

Directive 

. . . / . . . / . . , (1 6).  They  shall  immediately  inform  the 

Commission of them. 

(15) OJ No C 264, 16.10.1989, p. 22. 

(16) OJ NO C 264, 16.10.1989, p. 22. 

-  39  -

Article  18 

This Directive  is addressed  to  the Member  States. 

Done  at  Brussels, 

For  the Council 

-  40  -

ANNEX  I 

National  a u t h o r i t i es  of  the  Member  S t a t es  to  which 

w r i t t en  n o t i f i c a t i o ns  may  be  sent 

Invoking  the 

c o n c i l i a t i on  procedure  pursuant  to  A r t i c le  16 

BELGIUM 

Ministère des Affaires Economiques 

Minister le van Economlsche Zaken 

DENMARK 

Indktibsaftaler:  D l r e k t o r a t et 

for  Statens 

Indkéb 

Bygge-og  anlaegskontrakter:  B o l I g m i n i s t er  l et 

GERMANY 

BundesminlsterIurn  fur  W i r t s c h a ft 

M i n i s t ry  of 

Industry,  Energy  and  Techno Ioav 

YTTovpyelo  Biovmxavtas,  Evépretas  <ai  TexvoXorîas 

GREECE 

M i n i s t ry  of  Commerce 

YTTOvpYCto  EuTfoptov 

M i n i s t ry  of  the  Environment,  Planning  and  P u b l ic  Works 

Y i r o v p Y e to  n e p i e a X X o v T O S,  X w p o T a ç i as 

icai  A*nuooîu>v 

'EpY<*>v 

SPAIN 

M i n i s t e r io  de  Economia  y  Hacienda 

FRANCE 

Commission Central  des Marchés 

-  41  -

IRELAND 

Department  of  Finance 

ITALY 

Ministerro del  LavorI  Public! 

LUXEMBOURG 

Ministère  des Travaux  Publics 

THE  NETHERLANDS 

Ministerie van  Economische  Zaken 

PORTUGAL 

Ministerio das Obras Pubiicas Transportes  e  Communicaçoes 

Conselho  Superior  de Obras Pubiicas Transportes  e 

Commun i caçoes 

UNITED  KINGDOM 

HM  Treasury 

ISSN 0254-1475 

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