WRITTEN QUESTION No. 4077/97 by Guido PODESTÀ to the Commission. Promotion of a 'performance bond' guarantee system in the European Union
Date: 1998-01-14
Institutions: European Parliament, PODESTA
Subjects: EU publication, European Commission, administrative contract, building industry, exchange of information, guarantee, public contract, single market, small and medium-sized enterprises

22. 6. 98

EN

Official Journal of the European Communities

C 196/71

Answer given by Mr Van Miert on behalf of the Commission

(9 March 1998)

On the basis of the information currently in its possession, the Commission believes that the restructuring of the
Fondiaria group does not create a distortion of competition according to Articles 85 to 94 of the EC Treaty.

It is not possible to give an abstract answer to the question about consumer rights. While the general principle of
pacta sunt servanda obviously applies, specific circumstances may allow for cancellation. Contractual clauses
allowing for this might be considered unfair in the sense of Council Directive 93/13/EEC of 5 april 1993 on
unfair terms in consumer contracts (1) but this cannot be established without close scrutiny. In any event it is not
up  to  the  Commission  to  examine  whether  companies  comply  with  national  measures  implementing  this
Directive.

(1)  OJ L 95, 21.4.1993.

(98/C 196/97)

WRITTEN QUESTION E-4077/97

by Guido Podesta‘ (UPE) to the Commission

(14 January 1998)

Subject: Promotion of a (cid:145)performance bond(cid:146) guarantee system in the European Union

On 21 October 1997, in response to a statement which I made in plenary regarding the Tappin report on public
procurement, Commissioner Monti said that he was not opposed to the introduction of new instruments designed
to guarantee punctual performance of public contracts, such as (cid:145)performance bonds(cid:146), but that it was necessary to
avoid discriminating against and penalizing SMEs.

Can the Commission state whether it intends to conduct studies into the feasibility and arrangements for the
introduction of such guarantee instruments and, if so, when?

If it does not intend to carry out such studies, would it state its reasons for not doing so?

If it does, will it be able to draw up a proposal for the introduction into Community law of such public contract
performance guarantees, and how long does it think this will take?

Answer given by Mr Monti on behalf of the Commission

(10 March 1998)

As indicated by the Commission in response to a question asked by the Honourable Member during the debate
about the Tappin report on the public procurement green paper (1), performance bonds can play an important role
in facilitating the opening-up of public procurement in the construction sector. The study into the impact and
effectiveness  of  the  single  market (2)  programme  which  was  undertaken  for  the  Commission  in  1996
demonstrated  that  public  procurement  in  this  area  has  not  yet  been  opened  up  to  a  significant  degree.  The
Commission is convinced that this is due mainly to a lack of actual competition and welcomes therefore any
measures which can favour an increase in competition.

In addition to initiatives taken by the Commission such as the mandate which has been given to the European
Committee  for  standardisation  (CEN)  and  the  European  Committee  for  electrotechnical  standardization
(Cenelec)  to  develop  a  qualification  standard,  initiatives  from  the  private  sector  are  certainly  needed.  The
development  of  performance  bonds  would  seem  to  be  a  very  promising  example  of  such  initiatives.  The
Commission follows such initiatives very closely but does not think that its intervention is needed at this stage. It
will, however, closely monitor this and similar developments. If this reveals that an important contribution to the
success  of  the  initiatives  can  be  made  by  the  Commission,  it  will  take  appropriate  decisions  based  on  the
information available to it at the time.

(1)  COM(96) 583 final.
(2)  COM(96) 520 final.