Opinion of the Committee of the Regions on improving the effectiveness of review procedures concerning the award of public contracts
Date: 2007-02-13
Institutions: European Committee of the Regions
Subjects: action brought before an administrative court, award of contract, infringement of EU law, public contract

30.6.2007

EN

Official Journal of the European Union

C 146/69

Opinion of the Committee of the Regions on improving the effectiveness of review procedures
concerning the award of public contracts

(2007/C 146/10)

THE COMMITTEE OF THE REGIONS

— endorses the proposal to introduce a ten-day standstill period in order to prevent awarding authorities
from concluding contracts before the procurement decision has been communicated to competing
suppliers. This procedure makes it possible to review the decision before it becomes final, which bene-
fits both awarding authorities and suppliers;

— considers that the proposal to prevent illegal direct procurement is too far-reaching and prefers the
current system that provides for damages. The Commission claims that illegal direct procurement is a
big problem, but does not back this up with, for example, relevant statistics. The CoR calls on the
Commission to provide details of the extent of illegal direct procurement;

— takes the view that the extent to which the remedies directives apply to procurement of services over
the threshold value in Annex II B is unclear. The Committee of the Regions considers that a review of
procurement of ‘B’ services should be explicitly exempt from the scope of the remedies directives and
it should be left entirely to the Member States to decide how to guarantee legal certainty for suppliers
in the procurement of ‘B’ services. Several of these services, such as healthcare services and social
services, are at the very heart of regional and local authority work. The European Union's competence
within these areas is very limited and it should not be using the remedies directives to extend this
competence through the backdoor.

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Official Journal of the European Union

30.6.2007

Reference Document

Proposal for a Directive of the European Parliament and of the Council amending Council Directives
89/665/EEC and 92/13/EEC CEE with regard to improving the effectiveness of review procedures
concerning the award of public contracts

COM(2006) 195 final

THE COMMITTEE OF THE REGIONS,

Having regard to the European Commission's proposal for a Directive of the European Parliament and of
the Council amending Council Directives 89/665/EEC and 92/13/EEC with regard to improving the effec-
tiveness of review procedures concerning the award of public contracts (COM(2006) 195 final —
2006/066 (COD));

Having regard to the decision of the European Commission of 4 May 2006 to consult it on this subject,
under the first paragraph of Article 265 of the Treaty establishing the European Community;

Having regard to its Bureau's decision of 25 April 2006 to instruct the Commission for Economic and
Social Policy to draw up an opinion on this subject;

Having regard to the draft opinion (CdR 182/2006 rev. 2), adopted on 15 December 2006 (Rapporteur:
Catarina Segersten Larsson (SE/EPP) Member of Värmland County Council);

adopted the following opinion at its 68th plenary session, held on 13-14 February 2007 (meeting of
13 February):

1. Views of the Committee of the Regions

The Committee of the Regions

quence could be excessive focus on the lowest price. There is no
disputing which tender comes in at the lowest price, whereas
quality and similar parameters are easier to query;

1.1 welcomes the proposal for new remedies directives as it
believes that an effective, more transparent review system leads
to better protection for suppliers, which hopefully makes them
more inclined to submit tenders. This increases competition,
which ultimately benefits the awarding authorities;

1.2
believes, however, that simple legislation is one of the
most important requirements in order to reduce the number of
legal proceedings. Simple rules are easier to follow and offer less
scope for misinterpretation. Unfortunately, the new procure-
ment directives do not deliver this. The directives' complicated
procedural rules make it easy for awarding authorities to make
mistakes. This particularly affects the smaller local and regional
authorities that do not have access to legal procurement specia-
lists. The CoR would also remind the European Commission
that public procurement is largely carried out by local and
regional authorities rather than at national level;

1.4
endorses the proposal to introduce a ten-day standstill
period in order to prevent awarding authorities from concluding
contracts before the procurement decision has been communi-
cated to competing suppliers. This procedure makes it possible
to review the decision before it becomes final, which benefits
both awarding authorities and suppliers. The Committee of the
Regions also endorses the proposal to enable Member States to
require anyone wishing to seek review to inform the awarding
authority of the claimed infringement and of their intention to
request a review. At the same time,
the
Regions urges the Commission to examine, after one year, the
impact of introducing such a ten-day period and thus determine
the extent to which this has, as in a number of Member States,
resulted in a marked increase in review cases;

the Committee of

considers that excessive penalties for breaches of the
1.3
framework is
procurement rules, especially where the legal
complicated, could have negative consequences. For example,
the awarding authorities might simply decline to tender services
out, and opt to run them themselves instead. Another conse-

1.5
envisages problems, however, with regard to the effect
of contracts that are concluded in breach of the provisions. The
proposed directive states that such agreements will be consid-
ered invalid, but the Committee of the Regions considers that
this should be left to the Member States to decide, so that
national legislation on contracts and damages can be adapted;

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Official Journal of the European Union

C 146/71

1.6
questions the Commission's assumption that the intro-
duction of a ten-day rule could lead to an initial increase of a
few per cent in the number of appeals. In Sweden, for example,
appeals initially increased by 150 % after the introduction of a
standstill period such as the one suggested, and the number of
appeals has continued to grow (1);

to prevent

the proposal

considers that

illegal direct
1.7
procurement is too far-reaching and prefers the current system
that provides for damages. The Commission claims that illegal
direct procurement is a big problem, but does not back this up
for example, relevant statistics. The CoR calls on the
with,
Commission to provide details of the extent of illegal direct
procurement. The on-line questionnaire referred to is far too
inadequate to provide the basis for such a major upheaval.
Mandatory publication of all public
contracts above the
threshold value and which an awarding authority considers may
be concluded without a formal tender procedure and subsequent
standstill period is a major encroachment on awarding bodies.
This area includes agreements with in-house companies and
certain agreements on inter-municipal cooperation. Previous
the Regions opinions have highlighted the
Committee of
problems involved in procurement with in-house companies
and the problems that arise in inter-municipal cooperation. The

Committee of the Regions takes the view that procurement
legislation must not hinder these processes or render them unvi-
able;

1.8
takes the view that the extent to which the remedies
directives apply to procurement of services over the threshold
value in Annex II B (2) is unclear. The Committee of the Regions
considers that a review of procurement of ‘B’ services should be
explicitly exempt from the scope of the remedies directives and
it should be left entirely to the Member States to decide how to
guarantee legal certainty for suppliers in the procurement of ‘B’
services. Several of these services, such as healthcare services
and social services, are at the very heart of regional and local
authority work. The European Union's competence within these
areas is very limited and it should not be using the remedies
directives to extend this competence through the backdoor. The
CoR believes that the legal arrangements for procurement of ‘B’
services and services under the threshold value must be left
exclusively to the Member States;

endorses

1.9
mechanism and the conciliation procedure;

the proposal

to repeal

the

attestation

2. Recommendations of the Committee of the Regions

Recommendation 1

Commission's proposed amendments to Article 1(3) of Directive 89/665/EEC

Commission's proposed amendments to Article 1(3) of Directive 92/13/EEC

Text proposed by the Commission

CoR Amendment

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 particular public contract and
who has been or risks being harmed by an alleged infringe-
ment.

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 particular public contract, who is
able to fulfil the requirements of the tender, and who
has been or risks being harmed by an alleged infringement.

Reason

To ensure that the review procedures are only available to suppliers who are actually able to perform the
duties required by the awarding authority.

(1) Nämnden för offentlig upphandling (Swedish Public Procurement

Agency), Annual Report 2003 and 2004.

(2) Directive 2004/18/EC on the coordination of procedures for the award
of public works contracts, public supply contracts and public service
contracts.

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Official Journal of the European Union

30.6.2007

Recommendation 2

Commission's proposed amendments to Article 2(4) of Directive 89/665/EEC

Commission's proposed amendments to Article 2(4) of Directive 92/13/EEC

Text proposed by the Commission

CoR Amendment

The Member States may provide that, when considering
whether to order interim measures, the body responsible
for review procedures 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 when their negative consequences
could exceed their benefits.

The Member States may provide that, when considering
whether to order interim measures, the body responsible
for review procedures may take into account the probable
consequences of the measures for all interests likely to be
harmed, as well as especially the public interest, and may
decide not to grant such measures when their negative
consequences could exceed their benefits.

Reason

The public interest must be given greater emphasis.

Brussels, 13 February 2007.

The President

of the Committee of the Regions

Michel DELEBARRE