Remedies Procurement [EU]

Review procedures: supply, works and service contracts

The purpose of this Directive is to enhance guarantees of transparency and non-discrimination in the award of public procurement contracts in the European Community (EC) in the fields of supply, works and service contracts. It accords to all firms an equivalent level of legal guarantee in terms of remedies in all the Member States.

Council Directive 89/665/EEC of 21 December 1989 on the coordination of the laws, regulations and administrative provisions relating to the application of review procedures to the award of public supply and public works contracts [See amending acts].

Summary

The purpose of this Directive is to ensure the effective application of Directive 2004/18/EC on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts by making it obligatory for the Member States to establish effective and rapid remedies in the event of infringements of these provisions. These procedures are available at least to any person having or having had an interest in obtaining a particular public procurement contract and who has been or is liable to be harmed by an alleged infringement.

Decisions of the contracting authorities which are in breach of the Community law on public procurement contracts must be subject to effective and rapid remedies. In all Member States, such remedies must include, in particular:

• taking, by way of interlocutory procedures, interim measures (such as suspension of the award procedure in question);
• setting aside unlawful decisions including discriminatory technical, economic and financial specifications in the invitation to tender;
• compensating injured parties.

The Member States may provide that where damages are claimed on the grounds that a decision was taken unlawfully, the contested decision must first be set aside by a body having the necessary powers.

Deadlines

To encourage the smooth operation of the review procedure, the Directive sets certain deadlines: Contracts are to be concluded no sooner than 15 days (or ten, if electronic means are used) after they have been awarded. Similarly, national law may provide for a minimum period of 15 days after the contract has been awarded for applying for a review (or ten, if electronic means are used).

If Member States provide for a time limit for applying for a review, it must be a minimum of 30 days after the publication of the contract award notice.

In any event, reviews have to be applied for within six months of the contract being concluded.

Ineffectiveness

Following an independent review, a contract may be considered ineffective. Similarly, contractual obligations may be cancelled retroactively. In addition, Member States may penalise infringements by imposing fines or shortening the duration of the contract.

Corrective mechanism

Where, before a contract is concluded, the Commission considers that a clear and manifest infringement of Community public procurement law has been committed, it may request the Member State concerned to correct it.

Review

The Commission is to examine the implementation of the Directive by no later than 20 December 2012.

Remedies mechanisms: water, energy, transport and postal services sectors

A Community system of remedies relating to the award of contracts in the water, energy, transport and postal services sectors allows injured parties to protect their interests.

ACT

Council Directive 92/13/EEC of 25 February 1992 coordinating the laws, regulations and administrative provisions relating to the application of Community rules on the procurement procedures of entities operating in the water, energy, transport and telecommunications sectors [See amending acts].

Summary

This Directive seeks to guarantee the effective application of the provisions of Directive 2004/17/EC coordinating the procurement procedures of entities operating in the water, energy, transport and postal services sectors.

The provisions of the Directive are based on three main elements:

• adaptation to the water, energy, transport and postal services sectors (the so-called “special” sectors) of the redress mechanisms available under Directive 89/665/EEC concerning national remedies relating to public supply, works and service contracts awarded by the contracting authorities;
• an attestation procedure;
• a corrective mechanism to strengthen the lines of action open to the Commission in cases where a clear and manifest infringement has been committed.

In the case of certain redress mechanisms, the Directive empowers the Member States to choose between two options . They may take measures to permit:

• either direct intervention in the procurement procedures to suspend those procedures and repeal any illegal decisions;
• or the exercising of an indirect influence on contracting entities through the specific imposition of a financial penalty.

In both instances the aim is to ensure that any infringements of the law are corrected and that the relevant interests are protected. Independently of the option chosen, the Directive provides for the possibility of obtaining damages and interest.

Remedies

The Directive states that where a contract award infringes the procedures, any person who is harmed or is likely to suffer damage may apply for an effective review of the decision taken by the contracting entity. To this end, the following time limits are laid down:

• at least 15 days (or 10 days if electronic means are used) between the award decision and the conclusion of the contract;
• a maximum of 15 days (or 10 days if electronic means are used) between the decision by the contracting entity and the application for review (however, enforcement of this period remains at the discretion of the Member State);
• 30 days between the decision to award the contract and cancellation of this decision;
• maximum of six months between conclusion of the contract and cancellation of the award decision.

Attestation

The contracting entity may award the contract without prior publication of a notice in the Official Journal of the European Union. However, it must publish its intention to award the contract.

The Advisory Committee for Public Contracts assists the Commission.

Corrective mechanism

Where the Commission feels that a clear and manifest infringement of the Community provisions has been committed in the course of the procurement procedure, it may ask the Member State to correct the infringement, referring to the review and the ineffectiveness of a contract before it is concluded.