Opinion of the Economic and Social Committee on the "Proposal for a directive of the European Parliament and of the Council coordinating the procurement procedures of entities operating in the water, energy and transport sectors"
Date: 2001-04-26
Institutions: European Economic and Social Committee
Subjects: common transport policy, energy policy, public contract, water management

10.7.2001

EN

Official Journal of the European Communities

C 193/1

II

(Preparatory Acts)

ECONOMIC AND SOCIAL COMMITTEE

Opinion of the Economic and Social Committee on the ‘Proposal for a directive of the European
Parliament and of the Council coordinating the procurement procedures of entities operating in
the water, energy and transport sectors’

(2001/C 193/01)

On 8 September 2000 the Council of the European Union decided to consult the Economic and Social
Committee, under Articles 47(2), 55 and 95 of the EC Treaty, on the above-mentioned proposal.

The Section for the Single Market, Production and Consumption, which was responsible for preparing
the Committee’s work on the subject, adopted its opinion on 7 February 2001. The rapporteur was
Mr Green.

At its 381st plenary session on 25 and 26 April 2001 (meeting of 26 April 2001) the Economic and
Social Committee adopted the following opinion by 88 votes to 17 with 10 abstentions.

1.

Introduction

1.1.
In response to the Green Paper entitled Public Procure-
ment in the European Union: Exploring the Way Forward
published by the European Commission in November 1996 (1),
the European Economic and Social Committee adopted an
opinion unanimously on 28 May 1997 (2).

The amendments proposed by the Commission to the directive
on special sectors (93/38/EEC) coordinating the procurement
procedures of entities operating in the water, energy, transport
and telecommunications sectors (3),
following the gradual

(1) Opinion on the Green Paper, Rapporteur Henri Malosse, OJ

C 287, 22.9.1997, p. 92.

(2) Green Paper on Public Procurement in the European Union:

Exploring the Way Forward, COM(96) 583 final.

(3) Directive 93/38/EEC coordinating the procurement procedures of
entities operating in the water, energy, transport and telecom-
munications’ sectors (‘special sectors’ directive’) as amended
most recently by Directive 98/4/EC; Directives 89/665/EEC and
92/13/EEC on the application of appeal procedures (‘appeal
(OJ L 199, 9.8.1993) as modified by Directive
directives’)
94/22/EC of 30.5.1994 (OJ L 164, 30.6.1994) and Directive
98/4/EC of 16.2.1998 (OJ L 101, 1.4.1998).

liberalisation of certain sectors, involve rethinking the whole
of European law on public procurement. The Commission
also proposes recasting the directives on supplies, works and
services, one aspect of which process would be to exclude the
telecommunications sector from the scope of the directives. In
the directive under consideration it is proposed to amend the
present provisions to take account of the effective liberalisation
of telecommunications markets. The proposal involves amend-
ments grouped under two headings: simplification of the
directive and modifications to the legal framework.

1.2.
The ESC congratulates the Commission in particular
on the work accomplished through the opening of markets,
promoted by the European Community from the outset, but
wishes to propose modifications or amendments to the text of
the proposed directive.

After some general comments on the proposed simpli-
1.3.
fications and on the changes to legislation proposed by this
text, the ESC’s proposals will be set out.

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2. General comments on the proposed simplifications

to Directive 93/38/EEC

The proposed amendments affect the scope of Directive
2.1.
in the water, energy,
93/38/EEC on public procurement
transport and telecommunications sectors, to take account of
the gradual liberalisation of these sectors, the introduction of
electronic purchasing mechanisms, a clarification of provisions
on technical specifications to encourage innovative enterprises
in particular, the strengthening of the provisions on allocation
criteria, simplification of thresholds and the introduction of a
common procurement vocabulary.

The ESC endorses these changes, but regrets that European law
is modified too often: this has a damaging effect on knowledge
It calls upon the
and comprehension of European law.
Commission to consider establishing more flexible and more
stable general frameworks to avoid impairing the necessary
development of knowledge of European law.

2.2.
The ESC welcomes the clarification provided by this
new draft directive, set out under four headings which
cover definitions, rules applicable to contracts, specific rules
applicable to design contests, and statistical rules and final
provisions. However,
the text remains laborious to read
through an excess of details on certain points (e.g. Article 26)
and a clear lack of precision on other points, such as Article 9
which is not explained.

2.3.
National legislation will have to be adapted after the
adoption of this directive, since new common provisions with
the purpose of clarification are found in the consolidated
directive, such as those on the information to be given to
participants in a contract-award procedure, about the results
of that procedure, or the information to be given to applicants
for qualification following a qualification system established in
accordance with the directive. Another substantive change is
proposed: the obligation to provide information on the result
of a contract-award procedure is extended to all the awarding
bodies: this is useful. A step forward is the introduction of the
general principles of mutual recognition and equality of
treatment into the selection procedure for participants in a
restricted and negotiated procedure.

It is legitimate for contracting authorities to take
2.3.1.
social and environmental aspects into account when assessing
the quality of tenders, provided that the principle of equal
treatment is respected and the current national and European
social and environmental legislation, as well as ILO agreements
ratified by the Member States, are complied with. This should
be reflected in the directive.

2.4.
Other welcome innovations are recognition of quality
assurance systems for service contracts as well as works and
supplies contracts, and the obligation to refer to European
standards concerning quality assurance or certification (the
standards of the series EN 29 000 and EN 45 000) and
recognise other means of proof. The reference to the Member
States’ experiment with their own standards ought to be
specified more clearly in the draft directive, since it could be
confusing or lead to excessive requirements amounting to a
disguised restriction of access to the market. These frequent
changes in legislation are in any case disruptive for economic
operators.

2.5.
The ESC would also take issue with the lack of
references in the proposal to environmental considerations
which are crucial to Europe’s future. Reasonably compatible
environmental criteria which do not distort the contract could
be incorporated in more specific terms in Article 53. These
should only be taken into account when they have a decisive
influence on the environmental impact depending on how the
tenderers intend to carry out the works.

Equally remarkable is the absence of any social aspects among
the criteria for awarding a contract. Social criteria could also
be developed in a specific manner in Article 53. The Committee
realises that it is difficult to cover these points in detail
and recommends that the future Commission interpretative
Communications dealing with environmental and social
aspects are transformed into guidelines for Member States,
containing the details on how these aspects could be
implemented. In addition, the Commission is now working on
a Green Public Procurement Handbook in order to guide
public authorities on taking into account environmental
characteristics when awarding a contract. The ESC rec-
ommends the drafting of a Social Procurement Handbook
with a view to guiding public authorities in this field also.

2.6.
The gradual disengagement of the State, and increased
budgetary rigour, lead the Commission to propose simplifi-
cation, flexibility and modernisation measures to take account
of new technology and alleviate rules which are sometimes
too detailed and complex. However, the ESC notes that to take
full account of this disengagement it would be necessary to
define more clearly public procurement as a whole, and go
beyond the old definitions in earlier directives which involve
grey areas, particularly where concessions are concerned. The
ESC regrets that the Commission has not taken the opportunity
offered by this renewal of the directive to define clearly the
ways of concluding contracts and the contractual framework
of the PPP (public/private partnership) and concessionary
contracts, involving a new definition of concessionary con-
tracts and of public/private partnership as suggested by the
ESC in a number of opinions, and most recently in the opinion
on the strengthening of the law on concessions and PPP in
European law (1): ‘A public works concession is an act (whether

(1) ESC opinion, OJ C 14, 16.1.2001, p. 91, rapporteur Mr Levaux,

point 4.1.3.

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by contract or unilateral) whereby a public authority delegates
to a private organisation the task of designing, constructing,
financing, maintaining and operating an infrastructure and/or
service for a predetermined extended period.’ A better defi-
nition of concessions on services is essential, particularly with
regard to contracting procedures involving all types of public
or private entity.

Article 2(3) of the draft directive is the ideal place in the text
to incorporate the ESC’s proposals and the content of the
interpretative communication on ways of allocating con-
cessionary or PPP contracts. The ESC is pleased to note that a
directive or regulation is being drawn up with a view to
establishing clear principles on awarding of contracts within
the EU, and that it will reflect the content of the interpretative
communication of April 2000.

2.7.
The ESC regrets that the proposed text does not cover
the allocation of exclusive suppliers’ rights, when the problem
arises at this level mainly with regard to the allocation of
service concessions. This brings us back to what has already
been stated on the definition of concessionary and PPP
contracts; the ESC thinks it important to reaffirm that the
points in the Interpretative Communication on the subject are
extremely important; they clearly show that the granting of
exclusive rights must be subject to the rules of the Treaty and
the basic principles of European law. It is a complex prob-
lem (1), which cannot be dealt with in a peripheral way since
the public authorities exclude whole areas of activity from the
competition rules without an objective justification:
this
impedes the unification of the European market.

2.8.
As the ESC has stated on a number of occasions,
and again recently in the own-initiative opinion mentioned
above (2), a complete clarification of public procurement
(contracts and delegated contracts) in European law has still
not been achieved, as the place of concessionary contracts and
PPP contracts in European law remains confused; this is shown
by the Interpretative Communication on Concessions in
Community law (3) of April 2000, and it means that private
investments in public infrastructure cannot be made in a
sufficiently clear and stable legal framework. Although the
Commission announces that this Communication is without
prejudice to any specific draft legislation on concessions, it
would have been desirable to include a definition of con-
cessionary and PPP contracts in the proposed directive, to
avoid proceeding by continual changes to European legislation.

(1) In its judgement of 12 December 1996, the Court of Justice stated
‘that the exclusive or special rights referred to must generally be
taken to be rights which are granted by the authorities of a
Member State to an undertaking or a limited number of undertak-
ings otherwise than according to objective, proportional and non-
discriminatory criteria, and which substantially affect the ability
of other undertakings to provide or operate telecommunications
networks or to provide telecommunications services in the same
geographical area under substantially equivalent conditions.’
(2) Opinion of 19 October 2000, OJ C 14, 16.1.2001, p. 91,

rapporteur Mr Levaux.

(3) Commission Interpretative Communication on Concessions in

Community law, OJ C 121, 29.4.2000, p. 2.

The ESC also proposes that Article 1 should contain a
2.9.
partial cross-reference to Article 1 of the consolidated directive,
which is more complete and of largely similar content.

2.10.
The ESC wishes to point out that public bodies acting
as economic operators must not take advantage of their
position to distort the conditions of competition. It is notable
that in several Member States administrative corporations or
para-public companies with a privileged status have compe-
titive advantages in relation to private companies. It is essential
for the text of the proposal to clarify this point, for which
European law fails to provide a clear answer for lack of
clearly enunciated European principles. Judicial precedents on
universal service cannot provide an answer to a question that
European law does not cover clearly.

2.11.
Consequently, additional rules to oblige awarding
authorities to check that public bodies bear the same costs —
particularly fiscal, social and financial costs — as private
operators are indispensable. The obligation to use a compe-
tition procedure for the allocation of contracts, or of activities
equivalent to a contract, in the private sector must also be
imposed on the awarding authorities in their relations with
public, para-public or private entities which are dependent on
them or on other awarding authorities. This point was clearly
made in the Commission’s Interpretative Communication on
PPP and concessionary contracts in April 2000 and the ESC
considers that it would be necessary to use the principles set
out in this document when drafting the present directive.

Nor is it desirable for monopolistic conditions to
2.12.
prevail on certain markets to the advantage of private firms. It
should be ensured that neither public nor private operators are
the object of discriminatory treatment in the awarding of
public contracts, that exactly the same terms of competition
apply to all participants, and that these terms comply with
Community law.

3. Detailed comments on the proposed amendments

3.1.

The ESC endorses the two principles proposed:

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3.1.1.
The Commission indicated that it would submit
proposals to exclude from the scope of Directive 93/38/EEC
the sectors or services (water, energy, transport and telecom-
munications) which operate within a given Member State
under effective conditions of competition. In view of full
liberalisation of the telecommunications sector on the one
hand, and the developments in other sectors covered by
Directive 93/38/EEC, the draft directive introduces different
types of solution for these sectors. One can only agree with
this.

The regulatory framework for liberalisation of telecom-
3.2.
munications is based on Articles 86 and 95 of
the EC
Treaty. Under Directive 90/388/EEC, as amended by Directive
96/19/EC, the Member States were to take the necessary
steps to guarantee every enterprise the right
to provide
telecommunications services or to establish or supply the
telecommunications networks required for the provision of
such services by 1 January 1998 at the latest. The planned
measures have indeed been transposed into national legislation
(national
intercon-
nection, universal service, pricing etc.); moreover, the Com-
mission reached the conclusion that public procurement for
most telecommunications services in most Member States was
regarded as being already excluded from the scope of this
directive (1). The ESC takes note of this but wonders about the
means adopted by the Commission to promote liberalisation
in the other fields covered by Directive 93/38/EEC. Article 29
appears to offer a satisfactory framework, but the situation
which can result from it varies enormously in the European
Union.

regulatory authorities,

authorisation,

3.3.
The ESC would question the need to include, in the
consolidated version of the ‘traditional directives’ — submitted
in parallel with the proposal under consideration — provisions
which could continue to exempt public authorities from
the scope of these directives for their purchasing in the
telecommunications sector. The ESC wonders by what prin-
ciple the awarding authorities would not be subject to the
rules of competition in this field (see Article 15 of the
consolidated directive).

As to the technical specifications, the ESC considers
3.4.
that the new wording with the reference to performance and
functional requirements is an improvement that will make it
easier to overcome disguised barriers to competition. With
regard to the specifications covered by Article 34, paragraph 3
of which stipulates that they ‘must be formulated by reference
to European standards’: it is necessary to indicate that these

references must be explicitly named and listed precisely in the
set of specifications, since the contractor can only demonstrate
that he meets criteria that are clearly defined and precisely
referenced.

a

The

recognition of

confidentiality principle
3.5.
(Article 12) for the information provided by economic oper-
ators is in line with supporting innovation by enterprises by
protecting their intellectual contribution. However, a text of
this importance should clarify rather better the scope of this
principle, particularly with regard to its purpose and duration.
The ESC takes the view that the confidentiality principle
concerns not only the tenders but also all proposals forwarded
to the awarding authority (2) and all information relating to
business matters and to the enterprises themselves. Moreover,
this could be done with reference to Article XIV of the
Government Procurement Agreement (GPA). The ESC takes
the view that Community law must clearly cover tenderers’
intellectual property rights and must condemn any attempt to
cream off the best ideas, which would undermine the principle
of real and fair consultation.

4. Comments on methods of consultation

4.1.
The introduction of electronic purchasing mechanisms
is essential because of current developments in methods.
Uncertainty prevails as to the security of these forms of
communication, and the ESC calls for protection of electronic
communication and data storage to be made a precondition
for any innovation in the forms of consultation. The Com-
mission takes the view that electronic transmission should
make it possible to reduce the period of 12 days (necessary
at present for transmission to the Publications Office and
publication in the Official Journal) to five days. This reduction
seems excessive, and it is doubtful whether this shortening of
the time-limit would enhance European competition, particu-
larly as complex services are involved which often require
preliminary studies and periods for enterprises to reflect before
committing themselves to public procurement procedures. In
these circumstances SMEs are likely to encounter real difficult-
ies when tendering for offers.

4.2.
The strengthening of provisions relating to award
criteria and selection is an excellent innovation. It is healthy to
set a general rule beforehand on a compulsory relative
weighting of criteria from the start of any procedure. The
proposal in the new directive is an obligation to mention the
relative weighting of each criterion in the contract notice or

the purchasing of voice telephony,

(1) The introduction of effective competition in the sector implies
that
telex, mobile radio
telephony, radio-messaging and satellite telecommunications ser-
vices can from now on be carried out according to the normal
rules applicable to service contracts, as is already the case for
other telecommunications services.

(2) For example: draft solutions, authorised variants, proposals made
during negotiations and everything that relates to communications
between the awarding authority and the enterprises.

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set of specifications (1). The ESC fully supports the weighting
of criteria for award of contract to the most economically
advantageous tender, which would make it possible to enhance
transparency of contract award procedures and guarantee
equality of treatment among tenderers. Another welcome
provision is the application of restricted or negotiated pro-
cedures which involve a restriction in the number of applicants
called upon to tender by applying objective criteria announced
in advance. Article 54 could lay down the social and environ-
mental criteria, with the proviso that they are not directly or
indirectly discriminatory. These criteria must necessarily
accord with the main objective of the contract. Social criteria
can only be applied to the selection of applicants or to contract
award procedures if they are in accordance with the current
jurisprudence of the ECJ, i.e. where equivalent tenders are
submitted.

4.3. With regard to abnormally low tenders (Article 55) it
would be useful to provide for the awarding authorities to be
obliged to examine tenders which seem abnormally low in
relation to the other tenders submitted in accordance with
Community rules, on the basis of the GPA (Article XIII(4) (a)).
It must also be specified that when the reasons given are not
satisfactory, the tenders in question must be rejected. There
must be effective machinery to combat social dumping, which
seriously distorts the market for public procurement, since
differences in social rights in Member States and in neighbour-
ing countries are conducive to unfair competition. The ESC
takes the view that the directive should cover the competition-
distorting effects of social dumping. The following text should
therefore be inserted: ‘When examining tenders, the awarding
authorities must take into consideration the actual respect of
obligations concerning employee protection, labour law and
the social regimes in force in the host countries’.

4.4.
On Article 52, the ESC wishes to stress that some
Community countries have set up qualification systems for
services and that this type of certification must appear among
the criteria covered by this article. However, this should not
give rise to disguised barriers to competition, and suitable
arrangements therefore seem acceptable.

Article 36, on the use of variants, is well drafted, and it
4.5.
is welcome that they are made subject to the same provisions as
apply to the selection of the economically most advantageous
tender.

4.6.
The wording of Article 37 on subcontracting does not
correspond to established practice in all Member States,
particularly the reference to designated subcontractors, which
is in itself an unusual practice. The ESC calls for the previous
wording to be retained.

The ESC has doubts about the means of proof in the
4.7.
use of electronic communications, particularly as regards
Article 46 and considers that electronic signature and encryp-
tion procedures should be made more secure.

4.8.
The directive leaves it to the awarding authority to set
the specific level of capacity (Article 53) and experience
required for any particular contract, which would make
possible an effective selection of applicants according to their
ability to carry out the contract in an optimum way. In
restricted or negotiated procedures with publication of a
notice, the obligation to give reasons for any limitation on the
number of applicants according to specific levels of capacity
and experience increases the transparency of these procedures.
However, the ESC regrets the lack of any reference to social
considerations in the award criteria and recommends that
Article 53 be amended to correct this omission.

4.9.
The consultation of enterprises in terms of perform-
ance is a very important step forward in the two new directives,
and this point is supported by the ESC.

4.10.
The current thresholds are complex to handle, and it
is therefore proposed to simplify the thresholds. On the one
hand, the thresholds will be the same for contracts which are
not subject to the GPA as for those which are. On the other
hand, all the thresholds are expressed directly in euro and
rounded down to the nearest EUR 100 000 below the
thresholds laid down in the GPA. This simplification gives two
thresholds:

— EUR 5 300 000, applicable to works contracts whatever
the sector in which the awarding authority operates;

— EUR 400 000, applicable to supply and services contracts
and to design contests, whatever the sector in which the
awarding authority operates and whatever the service
concerned.

The ESC endorses these simplifications.

4.11.
The use of a Common Procurement Vocabulary (CPV)
was recommended by the Commission in 1996 (2). This
nomenclature represents a further development of and an
improvement to the CPA and NACE nomenclatures, in that it
is better suited to the specific characteristics of the public

(1) This weighting can take various forms (e.g. percentages, or
expressed as a relative share in relation to another criterion); to
maintain a certain flexibility, it can be expressed as a range within
which the value of each criterion is stated.

(2) Commission Recommendation 96/527/EC of 30.7.1996 on the
use of the Common Procurement Vocabulary (CPV) for describing
the subject matter of public contracts (JO L 222, 3.9.1996).

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procurement sector. However, since the CPV will be the subject
of a proposed regulation of the Council and the European
Parliament, which will then formally adopt it as the Com-
munity nomenclature applicable to public contracts and will
organise its maintenance, the ESC is not in favour of retaining
it in the directive under consideration.

4.12.
The monopoly arrangements accorded in the past to
enterprises have gradually given way in Europe, particularly in
the field of information technology, to competitive environ-

ments, but under conditions which should be carefully
watched, since they sometimes hide the seeds of significant
distortions of competition. Thus the legal opening to compe-
tition of the market in digital distribution is characterised in
some Member States by a distortion between the actors, as the
public operator enjoys particularly favourable conditions,
enabling him to go on profiting as long as possible from a
monopoly arrangement, so as to be able to cross-subsidise his
monopolistic activities and the launching of a new activity
regarded as competitive. The ESC deplores a lack of firmness
on this matter in the directive under consideration.

Brussels, 26 April 2001.

The President

of the Economic and Social Committee

Göke FRERICHS

APPENDIX

to the Opinion of the Economic and Social Committee

The following amendment was rejected during the debate, but received more than a quarter of the votes cast:

Point 4.3

Delete the last sentence from

‘The following text ...’

Reason

As far as social dumping is concerned, the Committee should simply call for its effects on competition to be taken
into account. The addition to Article 54 proposed here would go against the principle of proportionality. Obliging
awarding authorities to check whether all national requirements are really being met would not only entail
unreasonable costs for them but would in practice also lead to serious discrimination, especially against external
tenderers. The possibility would also arise of numerous legal wrangles that competitors could initiate for minor
infringements.

Result of the vote

For: 46, against: 69, abstentions: 8.