Fratelli Costanzo SpA v Comune di Milano.
Date: 1989-06-22
16 With regard to the second part of the third question it should be noted that Article 29(5 ) of Directive 71/305 requires the awarding authority to examine the details of tenders which are obviously abnormally low, and for that purpose obliges the authority to request the tenderer to furnish the necessary explanations . Article 29(5 ) further requires the awarding authority, where appropriate, to indicate which parts of those explanations it finds unacceptable . Finally, if the criterion adopted for the award of the contract is the lowest price tendered, the awarding authority must justify to the Advisory Committee set up by the Council Decision of 26 July 1971 ( Official Journal, English Special Edition 1971 ( II ), p . 693 ) the rejection of tenders which it considers to be too low .
18 That argument cannot be upheld . A mathematical criterion for exclusion deprives tenderers who have submitted exceptionally low tenders of the opportunity of demonstrating that those tenders are genuine ones . The application of such a criterion is contrary to the aim of Directive 71/305, namely to promote the development of effective competition in the field of public contracts .
19 The answer to the second part of the third question must therefore be that Article 29(5 ) of Council Directive 71/305 prohibits Member States from introducing provisions which require the automatic exclusion from procedures for the award of public works contracts of certain tenders determined according to a mathematical criterion, instead of obliging the awarding authority to apply the examination procedure laid down in the Directive, giving the tenderer an opportunity to furnish explanations .
20 With regard to the first question, it should be observed that it was in order to enable tenderers submitting exceptionally low tenders to demonstrate that those tenders are genuine ones that the Council, in Article 29(5 ) of Directive 71/305, laid down a precise, detailed procedure for the examination of tenders which appear to be abnormally low . That aim would be jeopardized if Member States were able, when implementing Article 29(5 ) of the directive, to depart from it to any material extent .
21 The answer to the first question must therefore be that when implementing Council Directive 71/305 Member States may not depart to any material extent from the provisions of Article 29(5 ) thereof .
The second question
26 The examination procedure must be applied whenever the awarding authority is contemplating the elimination of tenders because they are abnormally low in relation to the transaction . Consequently, whatever the threshold for the commencement of that procedure may be, tenderers can be sure that they will not be disqualified from the award of the contract without first having the opportunity of furnishing explanations regarding the genuine nature of their tenders .
28 In the fourth question the national court asks whether administrative authorities, including municipal authorities, are under the same obligation as a national court to apply the provisions of Article 29(5 ) of Council Directive 71/305 and to refrain from applying provisions of national law which conflict with them .
29 In its judgments of 19 January 1982 in Case 8/81 Becker v Finanzamt Muenster-Innenstadt (( 1982 )) ECR 53, at p . 71 and 26 February 1986 in Case 152/84 Marshall v Southampton and South-West Hampshire Area Health Authority (( 1986 ) ECR 723, at p . 748 ) the Court held that wherever the provisions of a directive appear, as far as their subject-matter is concerned, to be unconditional and sufficiently precise, those provisions may be relied upon by an individual against the State where that State has failed to implement the directive in national law by the end of the period prescribed or where it has failed to implement the Directive correctly .
30 It is important to note that the reason for which an individual may, in the circumstances described above, rely on the provisions of a directive in proceedings before the national courts is that the obligations arising under those provisions are binding upon all the authorities of the Member States .
31 It would, moreover, be contradictory to rule that an individual may rely upon the provisions of a directive which fulfil the conditions defined above in proceedings before the national courts seeking an order against the administrative authorities, and yet to hold that those authorities are under no obligation to apply the provisions of the directive and refrain from applying provisions of national law which conflict with them . It follows that when the conditions under which the Court has held that individuals may rely on the provisions of a directive before the national courts are met, all organs of the administration, including decentralized authorities such as municipalities, are obliged to apply those provisions .
32 With specific regard to Article 29(5 ) of Directive 71/305, it is apparent from the discussion of the first question that it is unconditional and sufficiently precise to be relied upon by an individual against the State . An individual may therefore plead that provision before the national courts and, as is clear from the foregoing, all organs of the administration, including decentralized authorities such as municipalities, are obliged to apply it .
33 The answer to the fourth question must therefore be that administrative authorities, including municipal authorities, are under the same obligation as a national court to apply the provisions of Article 29(5 ) of Council Directive 71/305/EEC and to refrain from applying provisions of national law which conflict with them .