Communication from the Commission - Procedure for informing candidates and tenderers, after a contract has been awarded and before the actual contract has been signed, in respect of public procurement contracts awarded by the Commission under Article 105 of the Financial Regulation
Date: 2003-07-16
Institutions: European Commission
Subjects: appeal, award of contract, dissemination of information, public contract

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 16.7.2003
COM(2003) 395 final/2

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COMMUNICATION FROM THE COMMISSION

Procedure for informing candidates and tenderers, after a contract has been awarded
and before the actual contract has been signed, in respect of public procurement
contracts awarded by the Commission under Article 105 of the Financial Regulation

COMMUNICATION FROM THE COMMISSION

Procedure for informing candidates and tenderers, after a contract has been awarded
and before the actual contract has been signed, in respect of public procurement
contracts awarded by the Commission under Article 105 of the Financial Regulation

1.

BACKGROUND

At the request of the Ombudsman, the Commission has agreed to put in place, within
the  public  procurement  procedures  covered  by  Article  105  of  the  Financial
Regulation, a procedure for informing tenderers or candidates (depending on whether
the procedure is open or restricted) before the actual contract has been signed. It sent
the following reply to the Ombudsman on 7 November 2002:

Remedies available to bidders in tender procedures organised by the Commission

In the light of the judgement of the Court of Justice mentioned in the Ombudsman's
letter, the Commission agrees that, prior to contract signature, authorising officers
will have to inform without delay all bidders or candidates of the award decision in
the  public  procurement  procedures  covered  by  Article  56  of  the  current  Financial
Regulation and by Article 105 of the new Financial Regulation, and should provide
for  a  reasonable  delay  before  contract  signature  in  order  to  enable  bidders  and
candidates to request the reasons for the award decision and, the case being, file a
judicial recourse against such a decision.

The  Commission  will  pay  particular  attention  to  the  practical  and  organisational
aspects  of  this  procedure,  in  order  to  ensure  a  timely  management  of  its  activities,
taking account of the high number of the Commission's public purchases every year
(several  hundreds)  and  the  duration  of  the  public  procurement  procedures.  In  the
light of this, the Commission intends to work out the practical arrangements so that
the above-described procedure could be in place from the beginning of 2003 and is
taken into account in the planning of the new public procurement procedures to be
launched by then.

In  reply  to  the  Commission's  letter,  the  Ombudsman  wrote  again  on  10 December
asking  the  Commission  to  specify  the  procedure  and  arrangements  it  intends  to
apply.  He  also  called  on  the  Commission  to  state  whether  it  plans  to  set  up  a
non-judicial  appeal  procedure  for  bidders  who  would  prefer  it  to  the  judicial
procedure.

The information procedure covered by this decision is without prejudice to any court
actions which candidates and tenderers may bring.

It is therefore neither the purpose nor the effect of any requests for information and
the  ensuing  replies  to  suspend  the  time  allowed  for  lodging  appeals  against  award
decisions notified to candidates and tenderers. Under Article 230 EC, candidates and
tenderers  have  two  months  to  appeal  from  the  date  on  which  they  are  notified  of
award decisions.

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2.

LEGAL BASIS

The  procedures  for  informing  candidates  or  tenderers  after  a  contract  has  been
awarded are laid down in the Financial Regulation and its Implementing Rules.

Article 100(2) of the Financial Regulation states:

"The  contracting  authority  shall  notify  all  candidates  or 
tenderers  whose
applications or tenders are rejected of the grounds on which the decision was taken,
and all tenderers whose tenders are admissible and who make a request in writing of
the characteristics and relative advantages of the successful tender and the name of
the tenderer to whom the contract is awarded.

However,  certain  details  need  not  be  disclosed  where  disclosure  would  hinder
application of the  law, would be  contrary  to  the  public  interest  or  would  harm  the
legitimate  business  interests  of  public  or  private  undertakings  or  could  distort  fair
competition between those undertakings."

Article 101 of the Financial Regulation adds "The contracting authority may, before
the  contract  is  signed,  either  abandon  the  procurement  or  cancel  the  award
procedure  without  the  candidates  or  tenderers  being  entitled  to  claim  any
compensation. The decision must be substantiated and be brought to the attention of
the candidates or tenderers."

Further details are provided in Article 149 of the Implementing Rules:

"1.  The  contracting  authorities  shall  as  soon  as  possible  inform  candidates  and
tenderers of decisions reached concerning the  award of  the  contract,  including  the
grounds  for  any  decision  not  to  award  a  contract  for  which  there  has  been
competitive tendering or to recommence the procedure.

2. The contracting authority shall, within not more than  fifteen calendar days from
the  date  on  which  a  written  request  is  received,  communicate  the  information
provided for in Article 100(2) of the Financial Regulation."

3.

PROCEDURE PROPOSED

Approach

In accordance with the Commission's reply to the Ombudsman of 7 November 2002,
the proposed procedure allows a reasonable length of time, after the award decision
and  before  the  contract  has  actually  been  signed,  to  enable  unsuccessful  tenderers
and candidates to ask the contracting authority for additional information  about the
reasons for the award decision and, if appropriate, to bring a judicial action against
the  decision.  It  will  apply  to  public  procurement  contracts  awarded  by  the
Commission under Article 105 of the Financial Regulation.

The  advantage  of  the  proposed  procedure  lies  not  just  in  informing  candidates  and
tenderers. It offers the contracting authority the possibility of being informed quickly
after  the  award  decision  of  any  relevant  point  which  might  need  to  be  taken  into
account  for  the  subsequent  stages  of  the  procedure,  before  a  contract  is  actually
concluded.

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Procedure

Under Article 147(3) of the Implementing Rules, the contracting authority, after the
evaluation  procedure  and  in  accordance  with  the  internal  arrangements  in  each
department,  takes  the  decision  on  the  award  of  the  contract,  which  must  contain
various items of information listed in this article.

Once it has taken its decision, the contracting authority would proceed as follows:

–  Where the contract is not awarded, or the procurement procedure abandoned or
cancelled,  the  contracting  authority  must  inform  candidates  or  tenderers  as
soon as possible, giving appropriate reasons.

The  rules  governing  public  procurement  in  the  Financial  Regulation  do  not
stipulate  what  reply  should  be  given  to  requests  from  candidates  or  tenderers
for  additional  information  following  such  notification.  The  general  rules  on
communicating  information  available  to  the  Commission  and  the  Code  of
Good Administrative Behaviour therefore apply.

The  same  procedure  also  applies  where  the  contracting  authority  decides,
during a procurement procedure, to cancel or abandon the procedure.

–  Where the contract is awarded, and prior to signature

It  should  first  be  borne  in  mind  that  the  rules  (see  point  2)  require  the
contracting  authority  itself  to  inform  unsuccessful  candidates  or  tenderers  of
the  reasons  why  their  application  or  bid  has  not  been  accepted,  without  their
having to request this. This proposed procedure and the time limits laid down
are based on these rules.

– 

Notification of unsuccessful tenderers or candidates1

As  soon  as  possible  after  the  award  decision  and  within  the  following
week  at  the  latest,  the  contracting  authority  notifies  all  unsuccessful
tenderers  or  candidates  simultaneously,  by  mail  and  fax  or  email
(preference going to the fastest communication method), that their bid or
application has not been accepted. Each tenderer or candidate is notified
individually;  the  reasons  why  the  bid  or  application  has  not  been
accepted are specified in each case, for instance by taking up in a concise
the  award  decision.
but  explicit 

form  details  contained 

in 

In the  message  the  contracting  authority  informs  unsuccessful  tenderers
or candidates that it will not be  signing the  contract with the  successful
tenderer  until  two  calendar  weeks  have  elapsed  from  the  day  after  the
simultaneous dispatch of the notification messages.

It  will  also  be  stated  that  additional  information  about  the  reasons  for
rejection of the bid or application can be obtained in response to a request
in  writing,  by  mail,  fax  or  email.  For  all  tenderers  who  have  put  in  an

1

A model standard letter will be drafted.

4

                                                
admissible  bid,  this  information  could  also  extend  to  the  characteristics
and  relative  advantages  of  the  bid  accepted  and  the  name  of  the
successful tenderer.

The restrictions referred to in the second subparagraph of Article 100(2)
of the Financial Regulation will apply.

Finally it will be added that if the contract cannot be concluded with the
successful  tenderer  or  if  the  successful  tenderer  were  to  pull  out,  the
contracting  authority  may  review  the  award  decision  and  could  then
award the contract to another tenderer, close the procedure or decide not
to  award  the  contract.  In  this  case  all  candidates  or  tenderers  will  be
informed and appropriate reasons given.

– 

Notification of the successful tenderer2 

The  contracting  authority  notifies  the  successful  tenderer  of  the  award
decision,3at  the  same  time  as  the  other  tenderers  or  candidates  are
informed that they have been unsuccessful. It specifically states that the
notification  does  not  constitute  a  commitment  on  the  part  of  the
Commission.

The  contracting  authority  also  informs  the  successful  tenderer  that
unsuccessful  candidates  or  tenderers  have  been  notified  and  given
reasons why their bid or application has not been accepted and that they
may obtain  additional information from the contracting authority on  the
matter and that unsuccessful tenderers  who submitted an  admissible  bid
may  be  given  the  characteristics  and  relative  advantages  of  the  bid
accepted and the name of the successful tenderer. Any replies to requests
for  additional  information  from  unsuccessful  candidates  or  tenderers
would comply with Article 100(2) of the Financial Regulation.

The  successful  tenderer  will  be  told  that  the  contract  cannot  be  signed
until  two  calendar  weeks  have  elapsed  from  the  day  after  the  date  of
dispatch of the notification. It will also be pointed out that the contracting
authority  may,  until  the  contract  has  been  signed,  either  abandon  the
procurement  or  cancel  the  award  procedure  without  the  candidates  or
tenderers being entitled to claim any compensation. The decision would
have to be substantiated and brought to the attention of the candidates or
tenderers.  Lastly  it  will  be  stated  that  the  contracting  authority  may
suspend signing of the contract for additional examination if justified by
requests  or  comments  made  by  unsuccessful  tenderers  during  the  two
calendar  weeks  mentioned  above  or  by  any  other  relevant  information
received  during  that  period;  all  candidates  or  tenederers  would  then  be
informed within three working days.

2

3

A model standard letter will be drafted.
In some departments which already apply a similar procedure, the successful tenderer may be asked to
confirm  that  certain  aspects  -  such  as  operational  capacity  -  have  not  changed  since  the  tender  was
submitted. The draft contract may also be added.

5

                                                
– 

Budget commitment

The authorising officer responsible may make the budget commitment at
the  same  time  as  the  notifications  are  sent  out.  No  budget  commitment
needs  to  be  made  prior  to  notification  of  the  successful  tenderer  as  this
notification  states  that  it  is  not  a  commitment  on  the  part  of  the
Commission.

If  it  subsequently  transpires  that  the  contract  cannot  or  need  not  be
concluded  with  the  successful  tenderer,  the  authorising  officer  would
make the decommitment.

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