WRITTEN QUESTION E-0844/03 by Herbert Bösch (PSE) to the Commission. Contracts with management consultants.
Date: 2003-03-18
Institutions: European Parliament, Provisional data
Subjects: commercial contract, damage, damages, database, invitation to tender, payment, provision of services, self-employed person, statistics

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In the light of the above, and since it is impossible to see which ‘non-strictly medical’ facets of the medical
service justify having an administrative official as the head of that service, does the Commission not
consider that
the new arrangements for that service are incompatible with the need for a sound
management of resources and liable to undermine the principle that there should always be mutual trust
between the institution and its officials?

What measures has the Commission taken to prevent the head of the medical service (cid:1) who has
absolutely no medical knowledge (cid:1) from becoming party, even inadvertently, to health-related data
contained in the files processed by the medical service? Has the European Data Protection Supervisor been
notified of these measures, pursuant to Article 27 of Regulation (EC) No 45/2001 (2) of the European
Parliament and of the Council of 18 December 2000?

(1) See page 1.
(2) OJ L 8, 12.1.2001, p. 1.

Answer given by Mr Kinnock on behalf of the Commission

(8 April 2003)

The Commission reaffirms the fact, as stated in the reply to the Honourable Member’s uestion No P-0021/
03 (1), that the medical side of the Medical Service is managed entirely by the Medical Adviser whose
qualifications and experience are beyond doubt.

The Administrator whose function the Honourable Member questions has no access to medical data.
The Commission also points out
to which Article 49 of
Regulation 45/2001 (2) refers, gives guarantees of protection of the confidentiality of personal data. It is
the provisions of that Article which ensure that the personnel of the Medical Service secretariat, who may
see medical data, are subject to an obligation of strict confidentiality.

the Staff Regulations,

that Article 17 of

Article 10(3) of Regulation 45/2001 provides that ‘… those data are processed by a health professional
subject to the obligation of professional secrecy or by another person also subject to an equivalent
obligation of secrecy’.

Provisions have been adopted so that any processing operations which could be likely to present specific
risks to the rights and freedoms of data subjects will, for the purposes of Article 27, be notified to the
European Data Protection Supervisor once he has taken up his duties.

The reference to hospital management in the previous answer was not ‘erroneous’ and it was merely
intended to illustrate managerial options in large organisations in order to assist the Honourable Member.
Hospitals and other medical services do, as he says, have ‘essentially curative aims’. They also need to be
run effectively as organisations. Putting an administrator in charge of administration enables the medical
expert to focus exclusively on the critically important medical functions of the service.

(1) See page 1.
(2) Regulation (EC) No 45/2001 of the Parliament and of the Council of 18 December 2000 on the protection of
individuals with regard to the processing of personal data by the Community institutions and bodies and on the free
movement of such data, OJ L 8, 12.1.2001.

(2004/C 84 E/0007)

WRITTEN QUESTION E-0844/03

by Herbert Bösch (PSE) to the Commission

(18 March 2003)

Subject: Contracts with management consultants

Management consultants such as Andersen Consulting or Ernst & Young have hit the headlines recently for
allegedly inadequate advisory services. Andersen came in for criticism over the Enron scandal and
Ernst & Young is now faced with a demand for CHF 3 billion following more serious allegations of
unsatisfactory work for the Cantonal Bank of Geneva.

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These incidents give rise to the following questions:

(cid:1) How many contracts were concluded in 2002 between the Commission and management consultants

and what is their total value?

(cid:1) Has the Commission ever become aware of consultancy work being carried out unsatisfactorily? What

criteria does the Commission apply when assessing advisory services?

(cid:1) Has a consultancy contract ever proved damaging to the Commission?

(cid:1) If so, to what extent and was compensation demanded? If not, why not?

(cid:1) Why are management consultants and not Commission officials called on to carry out certain tasks?

Supplementary answer
given by Mrs Schreyer on behalf of the Commission

(3 February 2004)

The model of the service contract currently used by the Commission refers in more than ten articles
1.
to the assessment and quality control of advisory services. The most important clause is related to the
definition of the subject of the contract and thereby referring to the technical specifications in the
invitation to tender as well as to the tender itself. The contractor is obliged to perform his obligations with
the highest professional standards. In order to enforce these major obligations the clause establishes a
schedule for interim reports and audits. Consequently the provisions on interim and final payments are on
condition that technical reports are submitted and approved.

Failure to fulfil obligations by the contractor leads to a reduction of payments, application of sanctions,
and eventually to the termination of the contract. The contractor is not permitted to subcontract without
prior consent, has to replace any personnel that does not comply with the obligation to deliver services of
highest professional standards, and has to respect full confidentiality as well as to participate in checks and
audits to be performed by the Commission, the European Court of Auditors and the European Anti-Fraud
Office.

2. Management of contracts is the responsibility of the local contract managers within each Directorate
General (DG). The decentralised organisation of the contract management has proved to be the most
efficient approach as local managers have the information on requirements and conditions at govern the
execution of individual contracts.

As the Honourable Member may already be aware, the Prodi Commission decided to develop a central
contracts and contractors database Interactive Contracts Network Database (ICON-DB). The work is
progressing well. This will provide central statistics. Pursuant to action 74 of the Commission White Paper
‘Reforming the Commission’ (1), the database will also contain details of candidates and tenderers who are
in one of the situations described in Articles 93 and 94 of the Financial Regulation. Centralised and
consolidated statistics, broken down by Commission department, will thus be available in due course more
rapidly.

The Commission can however provide central statistics from an analysis of the accounts. The payments
made to the five principal
international consultancy firms for services (including, but not exclusively,
management consultancy) supplied to the Commission amount to around EUR 31 million for 2002.

Two tables showing the payments made for all the services provided by the five principal consultancy
firms to the Commission are being sent direct to the Honourable Member and Parliament’s Secretariat.

Unsatisfactory work is a ‘serious breach of contract’ and therefore an exclusion reason stipulated in
3.
Article 93(f) of
the financial regulation represents a feature that will be stored in the operational
applications of ICON-DB. None of the five firms is mentioned in the Commission’s present Early Warning
System.

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A recovery order means that an authorising department has discovered the existence of a claim
4.
against one of the Commission’s debtors that is certain, of a fixed amount and due. The recovery order
does not necessarily mean the contract was performed unsatisfactorily by the debtor. It may, for example,
relate to the recovery of an advance (pre-financing) paid for a service that was originally planned but
ultimately abandoned.

Recovery orders have been issued against:

(cid:1) Coopers and Lybrand (United Kingdom) for EUR 43 892,66, which was paid by offsetting the amount

against other claims (order 3240014022 of 1997, offset in 1999);

(cid:1) Deloitte and Touche (Greece) for EUR 26 145,53 (order 3240402821 of 2003), which will be offset;

(cid:1) Ernst and Young (United Kingdom) for EUR 103 346,41 (order 3240016239 of 1999), which has

been paid.

5.
The use of selected management consultants is a way of enlisting the services of specialists who have
in-depth expertise and have also probably performed comparable tasks in similar public or private
organisations. Their combination of skills enables them to contribute a new and different perspective,
which is both useful and necessary for dealing with specific dossiers.

As a Member of the Budgetary Control Committee of the Parliament, the Honourable Member may be also
aware of the tight staffing situation in the Commission.

(1) According to the terms of the White Paper (Action 74 Contracts Database) [Part II, cf. COM(2000) 200 final,
volume II]:
‘A central database will bring together all contracts and financing agreements concluded by the
Commission. It will be a precondition of any proposal to undertake financial commitments that the data related to
the envisaged contractor have been entered in the database. The database will contain all relevant information on
indirect beneficiaries) and
the beneficiaries
the object of
implementation’.

(including major

the contractor,

the contract,

(2004/C 84 E/0008)

WRITTEN QUESTION E-1350/03

by Christopher Huhne (ELDR) to the Commission

(10 April 2003)

Subject: Cross-border investment

Is the Commission of the view that the introduction of the euro has boosted cross-border investment for
the participating Member States? Will it update those figures given in previous parliamentary answers to
me that showed a sharp increase in cross-border investment in the euro area that was an order of
magnitude greater than the increase for the EU members not participating in the euro? Will it also give the
figures individually for the five largest Member States of the EU?

Answer given by Mr Solbes Mira on behalf of the Commission

(22 May 2003)

Data on Foreign Direct Investment (FDI) inflows for EU-15, split between Eurozone and EU-15/non-
Eurozone countries, together with shares of each aggregate in the total EU-15 are sent direct to the
Honourable Member and to Parliament’s Secretariat. Data for the Eurozone are available as from 1997.
Annual rates of growth are also shown (First set of tables).

Data for the five bigger Member States in terms of FDI inflows, the share of the United Kingdom in EU 15
and annual growth rates are also given (Second set of tables).

Available data for Foreign Direct Investment indicate that the introduction of the euro had a favourable
effect on cross-border investment for the participating Member States.