Practice Areas

 Two important freedoms enshrined in the European Treaties from which public procurement legislation is said to emanate are, the freedom of establishment and the freedom to provide services (Article 49 TFEU and Article 56 TFEU respectively). These freedoms further encompass within themselves a number of other important principles, particularly, the principle of transparency, equality of treatment, proportionality and mutual recognition.[1]

Both the Classical sector Directive as well as the Utilities sector Directive state that contracting entities shall treat economic operators equally and non-discriminatorily and shall act in a transparent way.[2] It could be said that the principles of equal-treatment and transparency are really two facets of the principle of non-discrimination.[3] ‘Of relevance are also long-established tenets of administrative law, such as reasonableness, fairness and respect for the rules of “natural justice”.’[4] 

The principle of equal treatment requires that comparable situations are not treated differently and that different situations are not treated similarly unless such a difference or similarity in treatment can be justified objectively.[5] Procurement authorities should act in a fair manner all throughout the procurement process and should provide equal opportunities to all interested bidders. The contracting authority must ensure that all interested bidders are placed on a level playing field. This point was expressly stated by the CJEU in the case Commission vs. France, where it was held that, ‘the principle of non-discrimination applies to all the stages of the tendering procedure and not only from the time when a contractor submits a tender’.[6]

The principle of transparency in public procurement or openness as it is sometimes referred to, denotes that the public procurement activities are to be carried out as openly as possible in order to make the decision-making process better and improve public access to information, which in its turn verifies the democratic nature of the institutions and fidelity of the society to the administration.[7] Namely, this principle manifests itself in publishing all the information related to the procurement process in a manner that may be equally accessed by all interested bidders. In addition sufficient information should be made available to all bidders to enable them to make an informed decision on whether to seek review of the award decision or not. 

Directive 92/13/EEC and Directive 89/665/EEC as amended by Directive 2007/66/EC surely are the vademecum of anyone studying the remedies regime in public procurement. 

Directive 92/13/EEC is concerned with the effective application of rules on the procurement procedures of entities operating in the water, energy, transport and telecommunications sector and therefore it applies to contracts referred to as the utilities sector, found in Directive 2004/17/EC. On the other hand Directive 89/665/EEC applies to the classical sector that is, to the review of the award of public supply, services and public works contracts emanating from Directive 2004/18/EC. The purpose of having two different directives, one regulating the so called classical sector and the other regulating the utilities sector is due to the different nature of the contracts. Procurement contracts falling within the scope of the utilities sector tend to be spread over a large network system and also require a greater degree of flexibility in the process. 

In 2007, Directive 2007/66/EC was adopted, substantially amending the two Remedies Directives mentioned above. This directive aims at improving the effectiveness of national review procedures that tenderers can use when they wish to challenge the award of a public procurement contract.[8] Thus, it is important that the Remedies Directive applicable to the classical sector and the utilities sector are not seen in isolation but in the light of the amendments brought by the 2007 directive.

The public procurement directives do not apply across the board to all public contracts. They are applicable only if certain value thresholds are met.[10] Therefore, the directives are made subject to monetary considerations in relation to the value of the relevant contracts.[11] Such value thresholds are clearly stipulated in the directives. Apart from contracts categorised as being below the threshold, there remains a wide range of contracts which are either not regulated or partially regulated by the public procurement directives. One could mention service contracts which are listed in Annex II B to Directive 2004/18/EC and in Annex XVII B to Directive 2004/17/EC that exceed the thresholds, and service concession contracts.

Although, as pointed above contracts below the value thresholds are not subject to the rigorous regime envisaged by the directives, contracting authorities are nonetheless under an explicit obligation to respect the basic principles of EU law, that is, non-discrimination on nationality grounds and transparency, especially if the contract in question presents a cross-border interest. It could be said that this further complements one of the objectives underlying the directive in placing all European economic operators on a level playing-field. Reference could thus be made to a number of important CJEU cases, supporting this view.

In Commission v Italy[12] the Court first pointed out that for contracts falling under a certain threshold there are no specific obligations applicable to them. However, the CJEU continued by saying that, 

Where it is established that such a contract is of certain cross-border interest, the award, in the absence of any transparency, of that contract to an undertaking located in the same Member State as the contracting authority amounts to a difference in treatment to the detriment of undertakings which might be interested in the contract but which are located in other Member States.[13] 

Unless such difference in treatment can be objectively justified, it amounts to indirect discrimination on the basis of nationality, prohibited under Articles 43 EC and 49 EC.[14] The requirement to comply with the principle of transparency and non-discrimination on the ground of nationality for contracts falling below the threshold was also confirmed by the CJEU in Medipac-Kazantzidis.[15] 

In Asociación Profesional de Empresas de Reparto y Manipulado de Correspondencia v Administración General del Estado[16] the CJEU held that if the contract in the case concerned was below the directive’s threshold an award without competition could contravene the TFEU obligations of equal treatment and transparency.[17] Similarly, in Vestergaard[18] it was ruled that even though the public contract falls below the threshold, public authorities are still bound to comply with the fundamental principles of the treaty. 

Speak to us at Calleja Legal for further information about Public Procurement law. We assist clients both at pre-tendering stage with the preparation of tender documents as well at post-tendering stage with the provision of remedies in case they feel aggrieved by an award decision.

The above is only for information purposes and should in no way be construed as legal advice. Each situation requires to be examined on its own merits. We at Calleja Legal can assist you when participating in a public call for tenders or with Public procurement remedies. As such we invite you to contact us with your enquiry. 

[1] Christopher Bovis, EC Public Procurement Case Law and Regulation (Oxford University Press 2006).

[2] Article 10 of Directive 2004/17/EC and article 2 of Directive 2004/18/EC.

[3] Client Earth, Briefing No. 3, The Guiding Principles of Public Procurement; transparency, equal treatment and proportionality (Identifying Opportunities for Sustainable Public Procurement briefing series, 2011) 2, available at <http://www.clientearth.org/reports/procurement-briefing-no-3-guiding-principles-equal-treatment-transparency-proportionality.pdf> accessed 6 November 2014.

[4] Franco B Vassallo and Joseph Camilleri, ‘A practical cross-border insight into public procurement’ [2011] ICLG to: Public Procurement 2012 143, available at <http://www.mamotcv.com/files/5/PP12_Chapter-21_Malta.pdf> accessed 6 November 2014. 

[5] C-21/03 and C-34/03 Fabricom SA v Belgian State I-01559 ECR [3 March 2005] (CJEU). 

[6] C-16/98 Commission v France I-8315 [5 October 2000] (CJEU) para 107.

[7] Anatoly Krivinsh and Andrejs Vilks, ‘Prevention of Corruption in Public Procurement: Importance of General Legal Principles’ (2013) 20(1) Jurisprudencija 235.

[8] Rhodri Williams. 'A new Remedies Directive for the European Community' (2008) 2 PPLR NA19, NA19.

[10] Bovis (n 26) 70.

[11] ibid.

[12] C-412/04 Commission of the European Communities v Italian Republic I-00619 [21 February 2008] (CJEU). 

[13] ibid para 66.

[14] Ibid; In addition, it could be pointed out that article 43EC has now become article 49TFEU and article 49 EC has now become article 56 TFEU. Reference can also be made to article 18 TFEU which also prohibits such discrimination.

[15] Case C-6/05 Medipac-Kazantzidis AE v Venizeleio-Pananeio (PE.S.Y. KRITIS) I-04557 [14 June 2007] (CJEU) 

[16] C-220/06 Asociación Profesional de Empresas de Reparto y Manipulado de Correspondencia v Administración General del Estado I-12175 [18 December 2007] (CJEU). 

[17] Sue Arrowsmith, 'EU Public Procurement Law: An Introduction ' (EU Asia Inter University Network for Teaching). 

[18] I-09505 Bent Mousten Vestergaard v Spøttrup Boligselskab [3 December 2001] C-59/00 (CJEU).