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HARMONISATION OF PUBLIC PROCUREMENT SYSTEM IN UKRAINE WITH EU
STANDARDS
COMPENDIUM OF EU PUBLIC PROCUREMENT DIRECTIVES
(With Introductory remarks from Steen Bruun-Nielsen and Dr
Eugene Stuart)
January 2015
A Project funded by the European Union and implemented by a
Consortium led by Crown Agents Ltd
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The contents of this Compendium are the sole responsibility of
Crown Agents Ltd. and its Consortium partners and the opinions
expressed in this document are not to be understood as in any way
reflecting an official opinion of EUROPEAID, the European Union or
any of its constituent
or connected organisations.
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TABLE OF CONTENTS
Page
Preface to the Compendium of EU Public Procurement Directives Dr
Eugene Stuart
4
1. INTRODUCTION TO THE EU PUBLIC PROCUREMENT DIRECTIVES Steen
Bruun-Nielsen
7
2. THE PUBLIC SECTOR DIRECTIVE Directive 2014/24/EU of the
European Parliament and of the Council of 26 February 2014 on
public procurement and repealing Directive 2004/18/EC.
23
3. UTILITIES PROCUREMENT DIRECTIVE Directive 2014/25/EU of the
European Parliament and of the Council of 26 February 2014 on
procurement by entities operating in the water, energy, transport
and postal services sectors and repealing Directive 2004/17/EC.
239
4. REMEDIES DIRECTIVES 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.
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.
396
5. DEFENCE PROCUREMENT DIRECTIVE Directive 2009/81/EC of the
European Parliament and of the Council of 13 July 2009 on the
coordination of procedures for the award of certain works
contracts, supply contracts and service contracts by contracting
authorities or entities in the fields of defence and security, and
amending Directives 2004/17/EC and 2004/18/EC.
412
6. CONCESSIONS CONTRACTS DIRECTIVE Directive 2014/23/EU of the
European Parliament and of the Council of 26 February 2014 on the
award of concession contracts.
498
7. ELECTRONIC INVOICING DIRECTIVE Directive 2014/55/EU of the
European Parliament and of the Council of 16 April 2014 on
electronic invoicing in public procurement.
578
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PREFACE TO THE COMPENDIUM OF EU PUBLIC PROCUREMENT
DIRECTIVES
The EU funded Project: Harmonisation of Public Procurement
System in Ukraine with EU Standards commenced work in Kiev on 11
November 2013. The Project, which is managed and implemented by an
international Consortium headed by CROWN AGENTS Ltd, will operate
until November 2016. The Project is focused on public procuremenmt
reforms in Ukraine together with the development of the Ukrainian
State aid regulatory system. More specifically, the Projects remit
is to contribute to the development of a solid and consistent
public finance management through the establishment of a
comprehensive and transparent regulatory framework for public
procurement, an efficient public procurement institutional
infrastructure, the accountability and integrity of public
authorities in regard to public procurement and the development of
the Ukrainian state aid system. In both field of operation (public
procurement reform and State aid regulation), the focus is on
reforms and system building in line with the relevant EU standards
(both in legal terms and in the context of best practices).
The main beneficiary of the Project is the Ministry of Economic
Development and Trade on account of that organisations primary
responsibility for the public procurement system of Ukraine. In
parallel, the Anti-Monopoly Committee of Ukraine is also a main
beneficiary on account of its responsibilities for the appeals
system in public procurement and for the development of the
Ukrainian State aid supervision system. At the same time, the
Project is also working with a wider range of stakeholders
including the Cabinet of Ministers, the Parliament (Verkhovna
Rada), the Ministry of Finance, the Ministry of Justice, the
Accounting Chamber, the State Financial Inspection, the numerous
Contracting Authorities and Utility companies involved in public
procurement, central, regional and local authorities which are
relevant to the planned state aid system, the Media and Civil
Society. Project support activities are primarily focused on expert
advice on policies, legislation and institutional structures and
operations together with a range of training activities and
awareness raising and public outreach activities and
initiatives.
The publication of this Compendium of EU Public Procurement
Directives, in both Ukrainian and English languages, primarily
seeks to address the fact that no translations of the core EU legal
requirements is otherwise available to stakeholders in public
procurement reforms and those tasked in Ukraine with approximating
the Ukrainian public procurement system to EU standards under the
terms of the EU-Ukraine Association Agreement. At this point, there
is an increasing interest in EU public
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procurement legislation as a natural consequence of Ukraines
status as an EU associated country. Accordingly, it is generally
desirable that the Ukrainian authorities and other stakeholders
become progressively more knowledgeable about the detailed rules in
the directives and this Compendium aims to facilitate this. The
Compendium covers seven Directives:
1. Directive 2014/24/EU of 26 February 2014 (the new Public
Sector Directive);
2. Directive 2014/25/EU of 26 February 2014 (the new Utilities
Procurement Directive);
3. Directive 89/665/EEC of 21 December 1989 (the Remedies
Directive applying to general public sector procurement) as amended
in 2007 by Directive 2007/66/EU;
4. Directive 92/13/EEC of 25 February 1992 (the Remedies
Directive related to utilities procurement in the water, energy,
transport and telecommunications sectors) as amended in 2007 by
Directive 2007/66/EU;
5. Directive 2009/81/EC of 13 July 2009 (Defence
procurement);
6. Directive 2014/23/EU of 26 February 2014 (on the award of
Concession contracts);
7. Directive 2014/55/EU of 16 April 2014 (on electronic
invoicing in public procurement).
Four of these are very new, having been adopted in the course of
2014. This partly reflects the completion of a public procurement
reform in the EU which resulted in the adoption of the new Public
Sector Directive (Directive 2014/24/EU) and the new Utilities
Procurement Directive (Directive 2014/25/EU). These will become
fully operational across the EU from 2016. In addition, there is
now for the first time an EU Directive on Concession Contracts
(Directive 2014/23/EU). And finally, the Directive on Electronic
Invoicing (Directive 2014/55/EU) is a new contribution to the
increased use of electronic communications in public procurement
across in the European Union. From the Ukrainian standpoint, the
Association Agreement sets out a transitional period of up to eight
years for the full approximation of the Ukrainian public
procurement system with EU law and policy. This is reflected
primarily in a timetable for the implementation of the current EU
Directives but it also pre-supposes their credible and effective
enforcement. While the Agreement does not specify the four new
Directives, the underlying approach of the Agreement is to make its
provisions living instruments; thus implying that new developments
in EU law and policy (including landmark judgments from the
European Courts) need to be followed by Ukraine. For that reason,
it would make little sense for Ukraine to structure and apply its
approximation efforts from this point onwards based on the current
EU law on the various subjects covered or not covered by the four
new Directives. Also, for the same reason, this Compendium of EU
Public Procurement Directives excludes the 2004 Directives to be
fully replaced by the 2014 Directives in 2016 and adds the
Concession Contracts Directive and the Electronic Invoicing
Directive.
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It can also be noted that the completion of the recent EU
reforms of the main directives creates a significant stability in
EU standards from the Ukrainian point of view and, with the
approach outlined above, this Compendium offers full accessibility
by all interested parties to the core EU public procurement
legislation in this new stable environment. Finally, while every
effort has been made to ensure linguistic quality as regards the
Ukrainian translation of the Directives, the Directives as
presented in the Ukrainian edition of this Compendium should be
regarded as an unofficial translation. In the event that a reader
of the Compendium encounters a significant difficulty with some
part of the Ukrainian text, we recommend cross-checking the point
with the authentic English language edition. Both language texts
are available on www.eupublicprocurement.org.ua. We would also
welcome direct communication to the website in relation to any such
problems as this will allow us to incorporate any necessary
language refinements in the Ukrainian edition.
Dr EUGENE STUART TEAM LEADER January 2015
http://www.eupublicprocurement.org.ua/
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1. INTRODUCTION TO THE EU PUBLIC PROCUREMENT DIRECTIVES
THE ORIGINS AND DEVELOPMENT OF EU PUBLIC PROCUREMENT LAW AND
POLICY The original EC Treaties and the latest EU Treaty (Treaty on
the Functioning of the European Union TFEU) make no specific
mention of public procurement. However, the Treaty provided (from
the earliest Treaty versions of the 1950s) for basic principles
applicable to public procurement systems the free movement of goods
and services and the related ban on quantitative restrictions on
imports and exports and all measures having equivalent effect to
such quantitative restrictions. This applies, moreover, to goods
both originating in the EU and to goods from non-member countries
that are put into free circulation in the Member States. These
economic freedoms imply obligations on EU Member States not to
create or maintain barriers to trade within the EU. The case law of
the Court of Justice of the EU (CJEU) 1 has established a very wide
understanding of these obligations to include also cases where
discrimination is not overt or even intentional. Thus, any decision
or actual behaviour that actually creates restrictions for some
enterprises can, on the basis of these Treaty rules and principles,
be challenged as being barriers to trade. A notable example in the
field of public contracting is the use technical specifications
that would put foreign enterprises at a disadvantage. However, the
creation of a common market for public-sector procurement and
construction contracts was unlikely to come about entirely as a
result of the obligations Member States had undertaken in the
Treaties to remove restrictions on foreign goods, services and
businesses. It was still likely to be frustrated by differences in
national regulations. For this reason, Community legislation was
necessary to make sure that government contracts were open to all
nationalities on equal terms and to make tendering procedures more
transparent so that compliance with the principles laid down in the
Treaties could be monitored and enforced. Therefore, to reinforce
the prohibition on import restrictions resulting from
discriminatory public purchasing and to make it easier for national
and foreign firms to compete for public-sector contracts, the
Council issued directives to coordinate procurement procedures in
all public-sector procurement subject to the Treaties. 1 The case
law of the Court as regards trade barriers is considerable and has
developed over many years,
starting with famous leading cases, such as Cassis de Dijon case
(C-120/78) concerning bans on marketing of a certain type of liquor
and the Reyners case (C-2/74) on access to professions. Special
cases concerning trade barriers in public procurement include in
the early stages C-21/88, Du Pont de Nemours which concerned a
preferential scheme in public procurement and which illustrates the
relation between the procurement directives and the EU Treaty.
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The public procurement directives had, and continue to have, a
particular focus on:
The fullest EU-wide advertising of contracts; so that firms in
all Member States are given an opportunity of bidding for them.
The banning of technical specifications liable to discriminate
against potential foreign bidders.
The application of objective criteria in tendering and award
procedures. More than forty years ago when the economic integration
strategies of the then European Economic Communities (EEC) were not
as yet developed, the regulation of public procurement started out
quite modestly. Directive 70/32/EEC2 on procurement supplies
basically reiterated the already existing trade barrier ban of the
Treaty and included examples of provisions that would constitute
unlawful barriers to trade. These include any exclusion of foreign
products, preferential schemes, technical specifications that are
unnecessarily restrictive or any other provision placing foreign
products at a disadvantage. The Directive did no provide any actual
harmonisation of procurement procedures; but the first step in this
direction was taken by means of Directive 71/305/EEC3 and Directive
77/62/EEC4 concerning works and supplies respectively. These
directives are virtually identical and were limited to require
EUwide advertising of contracts and the use of objective criteria
for participation. No harmonisation of tender procedures was made
other than a listing of cases where the use of procedures other
than open procedures was allowed. The effect was that procurement
in these cases fell outside the directives. This phase of legal
development concluded with amending Directive 80/767/EEC5 to
reflect and incorporate the 1979 GATT Agreement on Government
Procurement (AGP) which obliged the EU to grant market access to
suppliers from other GATT members on the basis of reciprocity.
Since then, the EU public procurement directives have widened in
scope and developed further in several phases of legislative
reforms from 1985 to 2014 as summarised in the Box below. 2
Commission Directive 70/32/EEC of 17 December 1969 on provision of
goods to the State, to local
authorities and other official bodies, OJ L 13 of 19 January
1970. 3 Council Directive 71/305/EEC of 26 July 1971 concerning the
co-ordination of procedures for the award of
public works contracts, OJ L 185/1 of 1971. 4 Council Directive
77/62/EEC of 21 December 1976 coordinating procedures for the award
of public supply
contracts, OJ L 13 of 15 January 1977. 5 Directive 80/767/EEC,
OJ No L 215 of 18 August 1980.
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The development of the EU Public Procurement Directives 1985 to
2014
Phase Period Main emphasis Legislation adopted
1 1985-1992
Tightening the rules, and extending them to utilities and
regulating remedies. By 1985, when the EU was looking to the
completion of the Internal Market, serious and urgent problems in
regard to the supplies and works directives were identified. These
included failure to advertise contracts in the EU Official Journal,
ignorance of EU rules by contracting authorities, splitting up
contracts, use of national standards to discriminate, unlawful
disqualification of bidders and discriminatory award criteria. In
order to address the deficiencies of the original rules, new
directives were adopted.
Council Directive 88/295/EEC
6 amended
Directives 77/62/EEC and 80/767/EEC (as regards public supplies)
and Council Directive 89/440/EEC
7 amended
Directive 71/305/ EEC on public works. Directive 90/531
8 became the first
Utilities Directive. These directives substantially improved
definitions and the scope of EU rules on public supplies and public
works contracts, introduced the use of EU technical standards as
basis for technical specifications policy and required the
publication of award notices. Directive 89/440/EEC explicitly
recognised consortia in public works contracts, extended the scope
of the rules to include concessions
9 and
excluded works contracts in the utilities and defence sectors.
Directive 90/531 (the
6 Council Directive 88/295/EEC of 22 March 1988 amending
Directive 77/62/EEC relating to the
coordination of procedures on the award of public supply
contracts and repealing certain provisions of Directive 80/767/EEC,
OJ L 127 of 20 May 1988. 7 Council Directive EU 89/440/EEC of 18
July 1989 amending Directive 71/ 305/EEC concerning
coordination
of procedures for the award of public works contracts, OJ No L
210, 21. 7. 1989. 8 Council Directive 90/531/EEC of 17 September
1990 on the procurement procedures of entities operating
in the water, energy, transport and telecommunications sectors,
OJ L 297 of 29 October 1990. 9 Concessions may have several
meanings, including a business operated under a contract or licence
e.g.
concession shops or kiosks at sporting arenas, parks etc. Large
modern Department stores also typically contain concessions
operated by retailers other than the main retailer. In the case of
a public service concession, a private company enters into an
agreement with the government to have the exclusive right to
operate, maintain and carry out an investment in a public utility
(such as a water supply system, mining or exploration rights or
roads) for a given number of years. In all cases, the owner of the
concession the concessionaire pays either a fixed sum or a
percentage of revenue to the entity with the ability to assign
exclusive rights for an area or facility.
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first Utilities Directive) applied a flexible regime to the
water, energy, transport and telecommunications sectors. Review
procedures (Remedies) in the case of a breach of the EU legislation
became an integral part of EU law and policy on public procurement
with the adoption of Directive 89/665/EEC in this period
10.
2 1992-1995
Inclusion of public service contracts, consolidation and the WTO
GPA. While the ancillary supply of services was covered by the
existing Directives on public procurement, services contracts per
se were generally not regulated by EU law. Directive 92/50/EEC
(Services Directive)
11 addressed this
situation in 1992. The Directive followed the same structure as
the Works and the Supplies Directives but also contained special
innovative provisions on the conduct of design contests. Remedies
in Utility procurement were also separately regulated and the
possibility of awarding damages was first introduced. All EU Member
States became parties to the WTO Government Procurement Agreement
(GPA) which came into force in 1996
Directive 92/50/EEC (Services Directive) - The consolidation of
previous public procurement Directives was achieved in 1993 in
regard to supplies, works and utilities. This involved some
amendments of the earlier directives, mostly to update procedural
issues and alignment with international obligations. The directives
on works were consolidated in Council Directive 93/37/EEC
12 and the
directives on supplies were consolidated in Council Directive
93/36/EEC
13. The
consolidation of legislation on public works, supplies and
services contracts in the Utilities (water, energy, transport and
telecommunications) sectors was carried out
10
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, OJ L 395 of 30 December
1989. 11
Council Directive 92/50/EEC of 18 June 1992 relating to the
coordination of procedures for the award of publicservice
contracts, OJ L 209 of 24 July 1992. 12
Council Directive 93/37/EEC (the Works Directive) of 14 June
1993, OJ L199 of 9 August 1993. 13
Council Directive 93/36/EEC (the Supplies Directive) of 14 June
1993, OJ L 199 of 9 August 1993.
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in a separate Directive 93/38/EEC
14.
On remedies, Directive 92/13/EEC
15127
regulated the existence of effective and fast review procedures
in the awarding of public contracts for water, energy, transport
and telecommunications sectors.
3 1996-2006
New Public Sector Directive, new Utilities Directive. Following
a 1996 Green Paper on Public Procurement
16 and a 1998
Communication17
, and reflecting the Lisbon Agendas approach to economic reform
within the EU Internal market and the European Commissions desire
to simplify and modernise the regulation of public procurement, the
first reforms of the public procurement legislation took place.
The new Public Sector Directive 2004/18/EC
18and the
new Utilities Directive 2004/17/EC
19 were
adopted in 2004 and came into effect on 31 January 2006. The
Directives added new procedures for the first time. Competitive
Dialogue was introduced for large, highly complex projects
requiring supplier input into defining the needs of the buyer. And
in anticipation of the age of electronic commerce, the Directives
permitted communication by email, online delivery of documentation,
and completely electronic
14
Council Directive 93/38/EEC of 14 June 1993 coordinating the
procurement procedures of entities operating in the water, energy,
transport and telecommunications sectors, OJ L 82 of 25 March 1994.
15
Council Directive 92/13/EEC with regard to improving the
effectiveness of review procedures concerning the award of public
contracts, OJ L 76 of 23 March 1992. 16
European Commission: Public Procurement in the European Union
Exploring the Way Forward, 27 November 1996. 17
European Commission Communication: Public Procurement in the
European Union, COM (1998) 143 Final of 11 March 1998. 18
Directive 2004/18/EC of the European Parliament and of the
Council of 31 March 2004 on the coordination of procedures for the
award of public works contracts, public supply contracts and public
service contracts, OJ L 134 of 30 April 2004. 19
Directive 2004/17/EC of the European Parliament and of the
Council of 31 March 2004 coordinating the procurement procedures of
entities operating in the water, energy, transport and postal
services sectors, OJ L 134 of 30 April 2004.
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procedures in the form of dynamic purchasing systems and
electronic auctions. The latter were introduced by the EU
Directives 18 and 17 of 2004 because it was recognised that
electronic purchasing can increase competition and streamline
public purchasing, particularly in terms of the savings in time and
money.
4 2007-2010
Amending the Remedies Directives and a new Defence Procurement
Directive. In 2007, a new Remedies Directive was adopted which came
into force on 20 December 2009
20. Then in 2009,
the EU adopted its first legislation to deal with procurement in
the Defence Sector. The Defence Procurement Directive
21, described
as tailor-made to such procurement and capable of application to
the vast majority of defence and security procurement contracts
without putting essential security interests at risk, establishes
harmonised rules for the procurement of arms, munitions and war
material (plus related works and services) for defence purposes,
but also for the procurement of sensitive supplies, works and
services for non-military security purposes.
The Remedies Directive of 2007 is an amending instrument, but
replaced almost entirely the material provisions of the previous
directives from 1989 and 1992. The Directive codified the concept
of standstill period between the award decision and the conclusion
of the subsequent contract. (This had previously been a requirement
introduced by the European Court of Justice in its ruling in the
1999 Alcatel Case
22) The
Directive formulates a minimum 10 day standstill period during
which contracting authorities would have to inform bidders of the
proposed award decision
20
Directive 2007/66/EC of the European Parliament and of the
Council of 11 December 2007 amending Council Directives 89/665/EEC
and 92/13/EEC with regard to improving the effectiveness of review
procedures concerning the award of public contracts, OJ L 335 of 20
December 2007. 21
Directive 2009/81/EC of the European Parliament and of the
Council of 13 July 2009 on the coordination of procedures for the
award of certain works contracts, supply contracts and service
contracts by contracting authorities or entities in the fields of
defence and security, and amending Directives 2004/17/EC and
2004/18/EC , OJ L 216 of 20 August 2009. 22
Case C-81/98: Alcatel Austria AG v Bundesministerium fur
Wissenschaft und Verkehr, (1999) ECR I-07671).
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and provide certain information regarding that decision. In
principle this offers bidders sufficient time in which to seek an
injunction during the standstill period, before the contract is
entered into.
5 2011-2014
Review and improvement of the main 2004 Directives, new
directives on concession contracts and electronic invoicing. The
changes to the Public Sector and Utilities Directives were made for
various reasons linked to the European Unions Europe 2020 strategy.
They include facilitating SME access to public procurements,
promoting innovation in public procurement and other EU policies
via public procurement such as environmental and social
protection.
The two new public procurement directives (Directive
2014/24/EU
23
-the new Public Sector Directive and Directive 2014/25/EU
24 - the new
Utilities Procurement Directive) include a considerable number
of changes e.g. addressing the use of e-communications, the use of
self-declarations to simplify procedures, division of contracts
into lots to facilitate SME participation. The new directives also
include amended rules on sub-contracting; which extend the present
rules to regulate the relationship between a bidder and
sub-contractors. The Concessions Directive
25
applies to contracts over 5 million with flexible procedures and
specific concession rules e.g. on the duration of concession
contracts.
23
Directive 2014/24/EU of the European Parliament and of the
Council of 26 February 2014 on public procurement and repealing
Directive 2004/18/EC, OJ L 94 of 28 March 2014. 24
Directive 2014/25/EU of the European Parliament and of the
Council of 26 February 2014 on procurement by entities operating in
the water, energy, transport and postal services sectors and
repealing Directive 2004/17/EC, OJ L 94 of 28 March 2014. 25
Directive 2014/23/EU of the European Parliament and of the
Council of 26 February 2014 on the award of concession contracts,
OJ L 94 of 28 March 2014.
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The Electronic Invoicing Directive
26 is a
contribution to a larger e-communications policy and aims to
remove trade barriers resulting from different rules and technical
requirements for e-invoicing in EU Member States.
Broadly speaking, the EU public procurement directives are aimed
at all public authorities and entities and certain private
utilities with specific privileges; laying down an obligation for
public sector entities to award larger contracts by means of
competitive and transparent procedures based on objective and
verifiable criteria set in advance. For this purpose, the
directives include rules on: publication requirements, various
competitive procedures suitable for different types of contracts
and requirements concerning types of criteria and specifications to
be used during the public procurement procedures. Furthermore, the
directives require institutions and procedures to ensure that award
of contracts can be effectively reviewed. Public procurement
procedures are considered necessary because the public sector
cannot be presumed to behave as a normal customer in a market. A
normal customer can be trusted to choose best quality at lowest
price. The public sector, however, can be motivated by factors
other than price and quality. Thus, for political reasons a local
authority may prefer to award a contract to a local enterprise
rather than a cheaper and better competitor from outside. Public
procurement rules are therefore necessary to rectify this type of
public sector behaviour. The directives also assume that increased
competition will produce best quality at lowest price and thereby
efficiency/effectiveness gains for the public sector. Because of
fiscal constraints in many countries, the efficient and effective
performance of public administration in delivering public services
to society is becoming more and more important. Related to this,
the use of procurement procedures is also seen as a guarantee in
relation to financial control and the use of transparent procedures
is also often considered a means for preventing fraud, corruption
and malpractice. The detailed rules of the directives generally
apply at and above specific (and generally high) thresholds. Below
these thresholds national rules apply typically to smaller
contracts and each EU Member State has a public procurement system
combining its own rules with the requirements of the directives.
The EU thresholds are intended to reflect public procurements of
interest to cross-border or Internal market trade and the
application of the free movement Treaty principles. At the same
time EU law has established that, even below the thresholds of the
directives, the legal principles of non- 26
Directive 2014/55/EU of the European Parliament and of the
Council of 16 April 2014 on electronic invoicing in public
procurement, OJ L 133 of 6 May 2014.
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discrimination, equal treatment, transparency and
proportionality must apply. Against this background, it is useful
to look more closely at the logic and content of the different
elements of the overall directive package contained in this
Compendium of EU Public Procurement Directives. This begins with
some remarks concerning the Public Sector and the Utilities
Directives, both in their current form (from 2004) and in the
revised form of the 2014 directives, which take effect in the EU in
2016.
THE PUBLIC SECTOR AND UTILITIES PROCUREMENT DIRECTIVES
The present directives (Public Sector Directive 2004/18/EC and
Utilities Procurement Directive 2004/17/EC) As seen earlier, the
current EU directives on public procurement date from 2004. The
reform at that time resulted in the consolidation of the directives
into two directives; one for the public sector generally and the
second for utilities sectors. The changes introduced via the 2004
directives included the following:
The directives clarified the situation as regards framework
contracts by providing explicit rules on the types of framework
agreements to use and specific rules concerning procedures. Rules
were also elaborated for centralised procurement schemes - where
framework agreements are often the tool being used. It was left to
EU Member States whether to introduce the possibility for framework
agreements and centralised procurement in their legislation. This
was also the case for the entirely new competitive dialogue
procedure, which allows a structured negotiation process for the
use in complex contracts.
Requirements concerning the integrity and transparency of means
and devices for electronic communication were included to enable
the development and application of e-procurement. Specific
electronic procedures were introduced - dynamic purchasing systems
and e-auctions, the latter to complement normal procedures and to
allow a fine-tuning of price.
In case of certain serious crime (organised crime, corruption,
certain cases of fraud, money laundering) exclusion from a tender
procedure became mandatory. Moving from pre-qualification criteria
to award criteria, an important change was the explicit inclusion
of environmental considerations as a type of sub-criterion to
reflect CJEU case law concerning so-called non-economic
sub-criteria. Another important change was the requirement to
indicate the relative weighting of each sub-criterion in the
contract notice or tender documents.
The rules on technical specifications were further tightened for
the benefit of bidders so that procuring entities, as a matter of
priority, must use European or international standards in their
tender dossier; but at the same time allowing bidders to use
alternative, equivalent standards in their bids. The use of
functional and performance requirements is allowed as an
alternative to specifications requiring a certain technical
approach. Furthermore, as part of the general emphasis on the use
of environmental and social requirements, the directive also
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explicitly allowed the inclusion of environmental and social
characteristics of relevance.
The 2004 Directives also included a number of technical
amendments reflecting the case-law of the CJEU that had occurred
since the last reforms. The different approach of the Utilities
Procurement Directive As regards the approach to regulation of the
Utilities Sectors, the Utilities Directive essentially extends the
scope of application of public procurement to include not just
public authorities and other entities but also public enterprises
as well as certain privileged private ones. Moreover, it allows
more flexibility than the Public Sector Directive. This more
flexible approach can partly be explained by the variation of
ownership arrangements in utility sectors existing across the EU.
In some countries the operators in, for example, the water sector
may be private enterprises that benefit from special/exclusive
rights. At the same time, they are considered part of the public
sector due to their dependency vis--vis the public grantor of these
rights; while it is equally recognised that they are private
enterprises and should be given the necessary market flexibility to
act as such. Another reason for the flexible approach is that the
utilities operators have in common an obligation to ensure
continuity and safety in the supply of water, energy, transport
services etc. to the population. The Utilities Directive
specifically covers so called relevant activities within the
sectors of water, energy, transport etc. The relevant activities
are precisely defined and typically focus on the management of
public networks. This is because these are precisely the activities
that are normally considered as public tasks to be ensured by
utility operators. The Utilities Directive includes a mechanism for
future exclusion of sectors where competition, as a result of EU
liberalisation, increases to such a degree that the procurement
policies of entities within the sector cannot be influenced by any
public dependency or privilege. This mechanism has been applied in
the case of the telecommunication and postal sectors and most
recently on oil and gas exploration. The flexibilities allowed by
the Directive are numerous and of differing importance. The main
ones are: the possibility for higher thresholds, the possibility
for using negotiated procedure alongside open and restricted
procedure, the possibility for by-passing pre-qualification by
using a qualification system, the possibility for replacing a
contract notice by a periodic indicative notice, the wider
discretion in respect of time limits and the slightly wider scope
for using the negotiated procedure without prior publication.
The EU Public Procurement Reform 0f 2014 (Public Sector
Directive 2014/24/EU and Utilities Procurement Directive
2014/25/EU)
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The two new public procurement Public Sector and Utilities
Procurement directives include a considerable number of changes.
These changes are made for various reasons linked to the European
Unions Europe 2020 strategy. They include facilitating SME access
to public procurements, promoting innovation in public procurement
and other EU policies via public procurement such as environmental
and social protection. The main changes include the following:
The use of e-communication means and devices in procurements
will after a transitional period and as a main rule become
mandatory. This is considered feasible in view of the stage of the
development of the general e-environment within the EU.
A right for bidders to use self-declarations during the
qualification phase is introduced. This means that participants in
a tender do not need to provide detailed documentation in advance.
Especially for smaller enterprises, this will make it possible to
react more quickly when tender opportunities come up. Only the
winner will be required to provide documentation for fulfilment of
the qualification requirements.
The possibility for basing a contract award on lowest price only
is essentially abolished. Price can still be used as a
sub-criterion; but will need to be supplemented with qualitative
sub-criteria as well. The use of award criteria covering the entire
life cycle of a product is facilitated by laying down rules for the
calculation of e.g. the waste management costs in connection with
disposal of the product.
Possibilities are introduced for more flexible procedures, for
example shorter time limits in the case of procuring entities on a
regional level.
Certain health, social and other local services are excluded as
not being relevant for cross-border economic activity within the
EU. However, very large contracts will still be covered but may be
subject to simplified procedures.
Introduction of a new procedure for complex contracts, namely
the so-called innovation partnership. This is a procedure
comprising not just the procurement of innovative supplies,
services or works but the entire preceding process of
conceptualisation, development, design etc. The procedure is aimed
especially at projects under EU research and development
programmes.
For the purpose of allowing better access for smaller
enterprises there is also now an obligation to divide contracts
into lots whenever possible. Essentially, contracting entities are
obliged to justify their position whenever contracts are not
divided into lots. In addition, there is an option for national law
to require that certain types of contracts must be divided into
lots.
The directives did not previously deal with procedural measures
to ensure transparency and equal treatment. Thus, the EU directives
never regulated the bid opening procedure and chose to leave this
to the EU Member States. However, contrary to this trend, the
directives now lay down obligations for contracting entities to
take measures preventing, identifying and remedying cases of
conflict of interest. The choice of measures is left for the EU
Member States to decide; but the directive requires such measures
to be taken.
The directives regulate as something new the possibilities for
amending contracts after they have been signed and following the
procurement process. The intention is to clarify cases where
amendment does not change the subject matter of the contract to the
extent that a new tender process is required. For example, the new
provisions allow minor changes in terms of the scope or value and
require in terms of balance, in
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certain cases, the public notification of such changes. There
are also rules setting out cases where contracts may be terminated
for reasons linked to the procurement process.
Other changes are intended to make the directives easier to read
and as in previous reforms - to clarify various parts in the light
of the ever-evolving CJEU case law. One example of the latter kind
is the new provision on contracts between contracting entities,
which is based on the case-law concerning so called in-house
contracts. The new directives also include areas of contract law
normally not dealt with in EU law. A notable example concerns the
amended rules on sub-contracting which extend the present rules to
regulate the relationship between a bidder and sub-contractors. In
most of these cases, the directives leave sufficient options to
ensure coherence with existing national private law, including
contract law.
THE REMEDIES DIRECTIVES (Directives 89/665/EEC and 92/13/EC with
amendments, notably under the terms of Directive 2007/66/EU) The
remedies directives cover public sector procurement and separately
lay down specific remedies rules for the utilities sectors. Over
time, the differences between the two directives have become
minimal to the point that they are now virtually identical. Both
directives require that there is broad possibility for anyone with
a legal interest to complain about decisions, actions or omissions
of procuring entities in public procurement procedures. There are
no significant structural requirements as to the complaints body;
provided that there is always final access to judicial review. To
ensure effective access to complaints procedures, the directives
require a minimum time limit to elapse between the award and
signature of the contract the standstill period. As regards
procedures, the directives include quite basic requirements
concerning swiftness, transparency and simplicity and highlight
specifically the right to be heard. Various aspects of these basic
requirements have been elaborated as concrete requirements in the
case law of the CJEU. The remedies directives also provide for the
type of sanctions that the complaints body must be able to use;
including interim measures (preliminary suspension of on-going
procurement procedures), setting aside of decisions and the
possibility for declaring a contract ineffective (notably in the
extreme case where the procuring entity awarded the contract
without any procedure at all).
THE DEFENCE PROCUREMENT DIRECTIVE (Directive 2009/81/EC) The
Public Sector Directive has a fundamental emphasis on free movement
principles and the removal of trade barriers. The Directive
applies, in principle, to all supplies, works and
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services. However, as mentioned earlier, the TFEU allows such
barriers to be maintained in justified cases, including defence and
security interests of EU Member States. This is relevant, for
example, to contracts concerning military equipment and to
sensitive contracts involving so-called classified information.
Nonetheless, the case-law of the CJEU demonstrates how this
possibility has been abused over the years to exempt all types of
contracts in the defence sector, including normal supplies of for
example stationary and office equipment. The Defence Procurement
Directive was issued largely in response to this problem and in
order to optimise competition in the field of defence and security.
The Directive allows various procedural safeguards to narrow down
the need to invoke the TFEU for reasons of security interests in
public procurement and clarifies the justification for so doing.
The Directive broadly follows the approach of the Utilities
Directive in two respects: (1) by defining a higher threshold than
the Public Sector Directive and (2) by giving more flexibility as
regards the choice of procedure to allow increased dialogue with
interested participants. The Directive also allows contracting
entities to require various specific commitments and documentation
e.g. concerning ability to protect confidential information and
ensure security of supply. Such documentation in the form of
certificates etc. can be required as regards sub-contractors and
all other parts of the supply chain.
CONCESSION CONTRACTS (Directive 2014/23/EU) Traditionally, the
public procurement directives have only applied in a limited way to
concession contracts. In the context of public procurement,
concession contracts refer to contracts where the private party
does not receive payment but rather a right to commercial
exploitation. To illustrate the difference: In the case of road
construction, a normal public procurement contract may include
payment for the construction and a fixed regular fee for
maintaining the road. Alternatively, and as part of a concession,
the private party takes on the task of construction and maintenance
in return for the right to charge motorists a fee (toll) for using
the road and recover his costs and profit in this way. Concessions
are playing an increasingly important role in large infrastructure
projects in the public interest, especially in fields such as
transport, energy supply and certain utilities. One of the reasons,
and another key difference, is that concession contracts typically
do not involve public expenditure; whereas, of course, public
procurement contracts do. The award of concessions is, as with all
public contracts, subject to the requirements flowing from the
principles and the economic freedom provisions of the TFEU.
Concessions are often used as the main legal vehicle in
public-private partnership projects which have also become
increasingly important in recent years. These are among the reasons
why it was considered important to lay down more specific
requirements for concession contracts in parallel with the other
public procurement directives. The Concession Contracts Directive
applies to contracts of 5 million and above. Certain types of
contracts (e.g some utilities areas) are exempted. The procedural
requirements
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are more general than in the other public procurement directives
and therefore leave more discretion as regards such matters as the
setting of time limits, the formulation of selection and award
criteria and the design of the procedure as such (including as
regards the degree of dialogue with bidding participants). This
allows account to be taken of the varying complexity of concession
contracts where, for example, one may be quite straightforward
(e.g. the building of a road), while another can be far more
complex (e.g. concerning the design, financing, construction and
operation of a holiday resort as part of a regional development
project). In addition to the competitive procedure, the Directive
also lays down requirements concerning the allowed duration of
concession contracts as well as the conditions for amending the
concession contract (similar to those that have been introduced for
public contracts in general).
ELECTRONIC INVOICING (Directive 2014/55/EU) To facilitate the
development of e-procurement generally and with a specific focus on
the invoicing following the award and signing of the contract, a
new directive on e-invoicing was adopted in the spring of 2014. The
Directive aims at removing trade barriers resulting from different
rules and technical requirements for e-invoicing in EU Member
States. In particular, the Electronic Invoicing Directive
establishes a set of core requirements regarding the content of
e-invoices. Essentially, these concern basic payment terms and the
clear identification of creditor and debtor. More importantly, and
in line with the normal approach to trade barriers, the Directive
puts an obligation on contracting entities to accept invoices
compliant with an EU (EN) standard on e-invoices to be developed by
the European Standardisation Organisation - CEN. For this purpose,
the Directive also includes a mandate for the European Commission
to have such a standard developed. It is assumed that the standard
will be developed over the coming years to enable the Directive to
enter into force towards the end of 2018.
USING THIS COMPENDIUM When reading the directives, it is
important to keep in mind that they are addressed to EU Member
States and, therefore, may prove initially difficult to understand
fully, in some respects, from the perspective of an associated
country, like Ukraine. The following points will hopefully
facilitate the reading and analysis of the directives:
Many provisions in the directives, especially the new ones,
include obligations of an administrative nature involving EU Member
States and typically the European Commission. These obligations may
concern various regular statistical and other reporting on the
application of the directives that EU Member States are obliged to
fulfil. Other provisions of this type concern various arrangements
for the regular revision of the directives that has been delegated
to an administrative level. A similar issue arises when the
directives refer to the Official Journal of the EU as the place
for
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publication of the various notices in the course of a
procurement procedure. In the Ukrainian national context, such
references must be understood as referring to appropriate media: in
the case of Ukraine, the Official Public Procurement
Web-Portal.
A directive consists of a binding legal text (the Articles)
preceded by a Preamble; where the purpose of the directive and its
individual provisions are explained. The Preamble constitutes a
source of interpretation for the binding Articles in the directive.
One example here is the concept of special and exclusive rights in
the Utilities Directive, where the Preamble explains the reasons
behind the concept that would not otherwise be evident. The CJEU
has in many cases referred to the Preamble - even though, in
principle, the text of the Preamble is not binding as a matter of
law. Whenever it is difficult to understand a provision in the
Articles, it is invariably useful to check whether the Preamble
says something about the rationale for the provision in
question.
The public procurement directives must be read and understood in
the context of the Treaty and on the basis of the case law of the
CJEU. Fortunately, there is easy access to this case law in several
language versions, see http://curia.europa.eu/ which is the CJEU
website with search facilities enabling quick retrieval of relevant
cases.
The case law is particularly important in areas where the
directives set more general requirements. A good example is the
Remedies Directives; where the differences in judicial structures
mean that very detailed common solutions are not possible. The case
law has nevertheless established very specific rights and
obligations of relevance in concrete cases. Thus, it has been held
that the general approach chosen in these directives pre-supposes a
common legal environment characterised by certain basic
constitutional and other legal guarantees to ensure, in particular,
the integrity of individuals in relation to the public sector.
The directives will frequently make reference to other
directives in other EU policy areas concerning e.g. environmental
issues, electronic communications or other policy areas not
specifically linked to public procurement. Those directives each
include their own specific principles and approaches and it may be
necessary, in some cases, to consult relevant EU websites and other
sources to fully understand the implications of such
references.
It will become apparent when studying the directives that they
do not cover everything that normal procurement legislation should
regulate. Thus, the directives focus on issues of relevance to the
competitive phase - including not only the mechanics of the various
procedures but also restrictions as regards technical
specifications and the selection/award criteria to use. The
directives do not regulate the planning phase or for that matter
the bid-opening procedure. The reason is that these topics are not
considered necessary to be covered by common EU rules because they
are not liable to create trade barriers. Such rules are
nevertheless necessary elements in public procurement regulation
and a fully functioning public procurement
http://curia.europa.eu/
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system. When the directives are silent on points such as these,
there is relatively more freedom to lay down specifically tailored
(and even very innovative) national arrangements on these
matters.
More generally, it is significant that the directives set out in
this Compendium constitute the core of EU standards in the field of
public procurement. For that reason, they are the primary source of
reference for Ukraine in advancing its approximation under the
EU-Ukraine Association Agreement and (allowing for the usual
disclaimers concerning any initial translations) this full
resource, for the first time, is also presented here in the
Ukrainian language.
Steen Bruun-Nielsen
& Dr Eugene Stuart
January 2015
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2. THE PUBLIC SECTOR DIRECTIVE
Directive 2014/24/EU of the European Parliament and of the
Council of 26 February 2014 on public procurement and repealing
Directive 2004/18/EC27. 27
OJ L 94 of 28 March 2014
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DIRECTIVE 2014/24/EU OF THE EUROPEAN PARLIAMENT AND OF THE
COUNCIL of 26 February 2014 on public procurement and repealing
Directive 2004/18/EC
(Text with EEA relevance)
THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN
UNION,
Having regard to the Treaty on the Functioning of the European
Union, and in particular Article 53(1), Article 62 and Article 114
thereof,
Having regard to the proposal from the European Commission,
After transmission of the draft legislative act to the national
parliaments,
Having regard to the opinion of the European Economic and Social
Committee (1),
Having regard to the opinion of the Committee of the Regions
(2),
Acting in accordance with the ordinary legislative procedure
(3),
Whereas:
(1) The award of public contracts by or on behalf of Member
States authorities has to comply with the principles of the Treaty
on the Functioning of the European Union (TFEU), and in particular
the free movement of goods, freedom of establishment and the
freedom to provide services, as well as the principles deriving
therefrom, such as equal treatment, non-discrimination, mutual
recognition, proportionality and transparency. However, for public
contracts above a certain value, provisions should be drawn up
coordinating national procurement procedures so as to ensure that
those principles are given practical effect and public procurement
is opened up to competition.
(2) Public procurement plays a key role in the Europe 2020
strategy, set out in the Commission Communication of 3 March 2010
entitled Europe 2020, a strategy for smart, sustainable and
inclusive growth (Europe 2020 strategy for smart, sustainable and
inclusive growth), as one of the market-based instruments to be
used to achieve smart, sustainable and inclusive growth while
ensuring the most efficient use of public funds. For that purpose,
the public procurement rules adopted pursuant to Directive
2004/17/EC of the European Parliament and of the Council (4) and
Directive 2004/18/EC of the European Parliament and of the Council
(5) should be revised and modernised in order to increase the
efficiency of public spending, facilitating in particular the
participation of small and medium-sized enterprises (SMEs) in
public procurement, and to enable procurers to make better use of
public procurement in support of common societal goals. There is
also a need to clarify basic notions and concepts to ensure legal
certainty and to incorporate certain aspects of related
well-established case-law of the Court of Justice of the European
Union.
(3) When implementing this Directive, the United Nations
Convention on the Rights of Persons with Disabilities (6) should be
taken into account, in particular in connection with the choice of
means of communications, technical specifications, award criteria
and contract performance conditions.
(4) The increasingly diverse forms of public action have made it
necessary to define more clearly the notion of procurement itself;
that clarification should not however broaden the scope of
http://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:32014L0024&from=EN#ntr1-L_2014094EN.01006501-E0001http://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:32014L0024&from=EN#ntr2-L_2014094EN.01006501-E0002http://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:32014L0024&from=EN#ntr3-L_2014094EN.01006501-E0003http://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:32014L0024&from=EN#ntr4-L_2014094EN.01006501-E0004http://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:32014L0024&from=EN#ntr5-L_2014094EN.01006501-E0005http://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:32014L0024&from=EN#ntr6-L_2014094EN.01006501-E0006
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this Directive compared to that of Directive 2004/18/EC. The
Union rules on public procurement are not intended to cover all
forms of disbursement of public funds, but only those aimed at the
acquisition of works, supplies or services for consideration by
means of a public contract. It should be clarified that such
acquisitions of works, supplies or services should be subject to
this Directive whether they are implemented through purchase,
leasing or other contractual forms.
The notion of acquisition should be understood broadly in the
sense of obtaining the benefits of the works, supplies or services
in question, not necessarily requiring a transfer of ownership to
the contracting authorities. Furthermore, the mere financing, in
particular through grants, of an activity, which is frequently
linked to the obligation to reimburse the amounts received where
they are not used for the purposes intended, does not usually fall
within the scope of the public procurement rules. Similarly,
situations where all operators fulfilling certain conditions are
entitled to perform a given task, without any selectivity, such as
customer choice and service voucher systems, should not be
understood as being procurement but simple authorisation schemes
(for instance licences for medicines or medical services).
(5) It should be recalled that nothing in this Directive obliges
Member States to contract out or externalise the provision of
services that they wish to provide themselves or to organise by
means other than public contracts within the meaning of this
Directive. The provision of services based on laws, regulations or
employment contracts should not be covered. In some Member States,
this might for example be the case for certain administrative and
government services such as executive and legislative services or
the provision of certain services to the community, such as foreign
affairs services or justice services or compulsory social security
services.
(6) It is also appropriate to recall that this Directive should
not affect the social security legislation of the Member States.
Nor should it deal with the liberalisation of services of general
economic interest, reserved to public or private entities, or with
the privatisation of public entities providing services.
It should equally be recalled that Member States are free to
organise the provision of compulsory social services or of other
services such as postal services either as services of general
economic interest or as non-economic services of general interest
or as a mixture thereof. It is appropriate to clarify that
non-economic services of general interest should not fall within
the scope of this Directive.
(7) It should finally be recalled that this Directive is without
prejudice to the freedom of national, regional and local
authorities to define, in conformity with Union law, services of
general economic interest, their scope and the characteristics of
the service to be provided, including any conditions regarding the
quality of the service, in order to pursue their public policy
objectives. This Directive should also be without prejudice to the
power of national, regional and local authorities to provide,
commission and finance services of general economic interest in
accordance with Article 14 TFEU and Protocol No 26 on Services of
General Interest annexed to the TFEU and to the Treaty on European
Union (TEU). In addition, this Directive does not deal with the
funding of services of general economic interest or with systems of
aid granted by Member States, in particular in the social field, in
accordance with Union rules on competition.
(8) A contract should be deemed to be a public works contract
only if its subject-matter
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specifically covers the execution of activities listed in Annex
II, even if the contract covers the provision of other services
necessary for the execution of such activities. Public service
contracts, in particular in the sphere of property management
services, may, in certain circumstances, include works. However, in
so far as such works are incidental to the principal subject-matter
of the contract, and are a possible consequence thereof or a
complement thereto, the fact that such works are included in the
contract does not justify the qualification of the public service
contract as a public works contract.
However, in view of the diversity of public works contracts,
contracting authorities should be able to make provision for
contracts for the design and execution of work to be awarded either
separately or jointly. This Directive is not intended to prescribe
either joint or separate contract awards.
(9) The realisation of a work corresponding to the requirements
specified by a contracting authority requires that the authority in
question must have taken measures to define the type of the work
or, at the very least, have had a decisive influence on its design.
Whether the contractor realises all or part of the work by his own
means or ensures their realisation by other means should not change
the classification of the contract as a works contract, as long as
the contractor assumes a direct or indirect obligation that is
legally enforceable to ensure that the works will be realised.
(10) The notion of contracting authorities and in particular
that of bodies governed by public law have been examined repeatedly
in the case-law of the Court of Justice of the European Union. To
clarify that the scope of this Directive ratione personae should
remain unaltered, it is appropriate to maintain the definitions on
which the Court based itself and to incorporate a certain number of
clarifications given by that case-law as a key to the understanding
of the definitions themselves, without the intention of altering
the understanding of the concepts as elaborated by the case-law.
For that purpose, it should be clarified that a body which operates
in normal market conditions, aims to make a profit, and bears the
losses resulting from the exercise of its activity should not be
considered as being a body governed by public law since the needs
in the general interest, that it has been set up to meet or been
given the task of meeting, can be deemed to have an industrial or
commercial character.
Similarly, the condition relating to the origin of the funding
of the body considered, has also been examined in the case-law,
which has clarified inter alia that being financed for the most
part means for more than half, and that such financing may include
payments from users which are imposed, calculated and collected in
accordance with rules of public law.
(11) In the case of mixed contracts, the applicable rules should
be determined with respect to the main subject of the contract
where the different parts which constitute the contract are
objectively not separable. It should therefore be clarified how
contracting authorities should determine whether the different
parts are separable or not. Such clarification should be based on
the relevant case-law of the Court of Justice of the European
Union.
The determination should be carried out on a case-by-case basis,
in which the expressed or presumed intentions of the contracting
authority to regard the various aspects making up a mixed contract
as indivisible should not be sufficient, but should be supported by
objective evidence capable of justifying them and of establishing
the need to conclude a single contract. Such a justified need to
conclude a single contract could for instance be present in the
case of the construction of one single building, a part of which is
to be used directly by
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the contracting authority concerned and another part to be
operated on a concessions basis, for instance to provide parking
facilities to the public. It should be clarified that the need to
conclude a single contract may be due to reasons both of a
technical nature and of an economic nature.
(12) In the case of mixed contracts which can be separated,
contracting authorities are always free to award separate contracts
for the separate parts of the mixed contract, in which case the
provisions applicable to each separate part should be determined
exclusively with respect to the characteristics of that specific
contract. On the other hand, where contracting authorities choose
to include other elements in the procurement, whatever their value
and whatever the legal regime the added elements would otherwise
have been subject to, the main principle should be that, where a
contract should be awarded pursuant to the provisions of this
Directive, if awarded on its own, then this Directive should
continue to apply to the entire mixed contract.
(13) However, special provision should be made for mixed
contracts involving defence or security aspects or parts not
falling within the scope of the TFEU. In such cases,
non-application of this Directive should be possible provided that
the award of a single contract is justified for objective reasons
and that the decision to award a single contract is not taken for
the purpose of excluding contracts from the application of this
Directive or of Directive 2009/81/EC of the European Parliament and
of the Council (7). It should be clarified that contracting
authorities should not be prevented from choosing to apply this
Directive to certain mixed contracts instead of applying Directive
2009/81/EC.
(14) It should be clarified that the notion of economic
operators should be interpreted in a broad manner so as to include
any persons and/or entities which offer the execution of works, the
supply of products or the provision of services on the market,
irrespective of the legal form under which they have chosen to
operate. Thus, firms, branches, subsidiaries, partnerships,
cooperative societies, limited companies, universities, public or
private, and other forms of entities than natural persons should
all fall within the notion of economic operator, whether or not
they are legal persons in all circumstances.
(15) It should be clarified that groups of economic operators,
including where they have come together in the form of a temporary
association, may participate in award procedures without it being
necessary for them to take on a specific legal form. To the extent
this is necessary, for instance where joint and several liability
is required, a specific form may be required when such groups are
awarded the contract.
It should also be clarified that contracting authorities should
be able to set out explicitly how groups of economic operators are
to meet the requirements concerning economic and financial standing
as set out in this Directive, or the criteria relating to technical
and professional ability, which are required of economic operators
participating on their own.
The performance of contracts by groups of economic operators may
necessitate setting conditions which are not imposed on individual
participants. Such conditions, which should be justified by
objective reasons and be proportionate, could for instance include
requiring the appointment of a joint representation or a lead
partner for the purposes of the procurement procedure or requiring
information on their constitution.
(16) Contracting authorities should make use of all possible
means at their disposal under national law in order to prevent
distortions in public procurement procedures stemming
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from conflicts of interest. This could include procedures to
identify, prevent and remedy conflicts of interests.
(17) Council Decision 94/800/EC (8) approved in particular the
World Trade Organisation Agreement on Government Procurement (the
GPA). The aim of the GPA is to establish a multilateral framework
of balanced rights and obligations relating to public contracts
with a view to achieving the liberalisation and expansion of world
trade. For contracts covered by Annexes 1, 2, 4 and 5 and the
General Notes to the European Unions Appendix I to the GPA, as well
as by other relevant international agreements by which the Union is
bound, contracting authorities should fulfil the obligations under
those agreements by applying this Directive to economic operators
of third countries that are signatories to the agreements.
(18) The GPA applies to contracts above certain thresholds, set
in the GPA and expressed as special drawing rights. The thresholds
laid down by this Directive should be aligned to ensure that they
correspond to the euro equivalents of the thresholds of the GPA.
Provision should also be made for periodic reviews of the
thresholds expressed in euros so as to adjust them, by means of a
purely mathematical operation, to possible variations in the value
of the euro in relation to those special drawing rights. Apart from
those periodic mathematical adjustments, an increase in the
thresholds set in the GPA should be explored during the next round
of negotiations thereof.
(19) It should be clarified that, for the estimation of the
value of a contract, all revenues have to be taken into account,
whether received from the contracting authority or from third
parties. It should also be clarified that, for the purpose of
estimating the thresholds, the notion of similar supplies should be
understood as products which are intended for identical or similar
uses, such as supplies of a range of foods or of various items of
office furniture. Typically, an economic operator active in the
field concerned would be likely to carry such supplies as part of
his normal product range.
(20) For the purposes of estimating the value of a given
procurement, it should be clarified that it should be allowed to
base the estimation of the value on a subdivision of the
procurement only where justified by objective reasons. For
instance, it could be justified to estimate contract values at the
level of a separate operational unit of the contracting authority,
such as for instance schools or kindergartens, provided that the
unit in question is independently responsible for its procurement.
This can be assumed where the separate operational unit
independently runs the procurement procedures and makes the buying
decisions, has a separate budget line at its disposal for the
procurements concerned, concludes the contract independently and
finances it from a budget which it has at its disposal. A
subdivision is not justified where the contracting authority merely
organises a procurement in a decentralised way.
(21) Public contracts that are awarded by contracting
authorities operating in the water, energy, transport and postal
services sectors and that fall within the scope of those activities
are covered by Directive 2014/25/EU of the European Parliament and
of the Council (9). However, contracts awarded by contracting
authorities in the context of their operation of maritime, coastal
or river transport services fall within the scope of this
Directive.
(22) Being addressed to Member States, this Directive does not
apply to procurement carried out by international organisations on
their own behalf and for their own account. There is, however, a
need to clarify to what extent this Directive should be applied to
procurement governed by specific international rules.
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(23) The awarding of public contracts for certain audiovisual
and radio media services by media providers should allow aspects of
cultural or social significance to be taken into account, which
renders the application of procurement rules inappropriate. For
those reasons, an exception should therefore be made for public
service contracts, awarded by the media service providers
themselves, for the purchase, development, production or
co-production of off-the-shelf programmes and other preparatory
services, such as those relating to scripts or artistic
performances necessary for the production of the programme. It
should also be clarified that that exclusion should apply equally
to broadcast media services and on-demand services (non-linear
services). However, that exclusion should not apply to the supply
of technical equipment necessary for the production, co-production
and broadcasting of such programmes.
(24) It should be recalled that arbitration and conciliation
services and other similar forms of alternative dispute resolution
are usually provided by bodies or individuals which are agreed on,
or selected, in a manner which cannot be governed by procurement
rules. It should be clarified that this Directive does not apply to
service contracts for the provision of such services, whatever
their denomination under national law.
(25) A certain number of legal services are rendered by service
providers that are designated by a court or tribunal of a Member
State, involve representation of clients in judicial proceedings by
lawyers, must be provided by notaries or are connected with the
exercise of official authority. Such legal services are usually
provided by bodies or individuals designated or selected in a
manner which cannot be governed by procurement rules, such as for
instance the designation of State Attorneys in certain Member
States. Those legal services should therefore be excluded from the
scope of this Directive.
(26) It is appropriate to specify that the notion of financial
instruments as referred to in this Directive is given the same
meaning as in other internal market legislation and, in view of the
recent creation of the European Financial Stability Facility and
the European Stability Mechanism, it should be stipulated that
operations conducted with that Facility and that Mechanism should
be excluded from the scope of this Directive. It should finally be
clarified that loans, whether or not they are in connection with
the issuing of securities or other financial instruments or other
operations therewith, should be excluded from the scope of this
Directive.
(27) It should be recalled that Article 5(1) of Regulation (EC)
No 1370/2007 of the European Parliament and of the Council (10)
explicitly provides that Directives 2004/17/EC and 2004/18/EC
apply, respectively, to service contracts and public service
contracts for public passenger transport services by bus or
tramway, whereas Regulation (EC) No 1370/2007 applies to service
concessions for public passenger transport by bus or tramway. It
should furthermore be recalled that that Regulation continues to
apply to public service contracts as well as to service concessions
for public passenger transport by rail or metro. To clarify the
relationship between this Directive and Regulation (EC) No
1370/2007, it should be provided explicitly that this Directive
should not be applicable to public service contracts for the
provision of public passenger transport services by rail or metro,
the award of which should continue to be subject to that
Regulation. In so far as Regulation (EC) No 1370/2007 leaves it to
national law to depart from the rules laid down in that Regulation,
Member States should be able to continue to provide in their
national law that public service contracts for public passenger
transport services by rail or metro are to be awarded by a
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contract award procedure following their general public
procurement rules.
(28) This Directive should not apply to certain emergency
services where they are performed by non-profit organisations or
associations, since the particular nature of those organisations
would be difficult to preserve if the service providers had to be
chosen in accordance with the procedures set out in this Directive.
However, the exclusion should not be extended beyond that strictly
necessary. It should therefore be set out explicitly that patient
transport ambulance services should not be excluded. In that
context it is furthermore necessary to clarify that CPV Group 601
Land Transport Services does not cover ambulance services, to be
found in CPV class 8514. It should therefore be clarified that
services, which are covered by CPV code 85143000-3, consisting
exclusively of patient transport ambulance services should be
subject to the special regime set out for social and other specific
services (the light regime). Consequently, mixed contracts for the
provision of ambulance services in general would also be subject to
the light regime if the value of the patient transport ambulance
services were greater than the value of other ambulance
services.
(29) It is appropriate to recall that this Directive applies
only to contracting authorities of Member States. Consequently,
political parties in general, not being contracting authorities,
are not subject to its provisions. However, political parties in
some Member States might fall within the notion of bodies governed
by public law.
However, certain services (such as propaganda film and
video-tape production) are so inextricably connected to the
political views of the service provider when provided in the
context of an election campaign, that the service providers are
normally selected in a manner which cannot be governed by
procurement rules.
Finally, it should be recalled that the statute and funding of
European political parties and European political foundations are
subject to rules other than those laid down in this Directive.
(30) In certain cases, a contracting authority or an association
of contracting authorities may be the sole source for a particular
service, in respect of the provision of which it enjoys an
exclusive right pursuant to laws, regulations or published
administrative provisions which are compatible with the TFEU. It
should be clarified that this Directive need not apply to the award
of public service contracts to that contracting authority or
association.
(31) There is considerable legal uncertainty as to how far
contracts concluded between entities in the public sector should be
covered by public procurement rules. The relevant case-law of the
Court of Justice of the European Union is interpreted differently
between Member States and even between contracting authorities. It
is therefore necessary to clarify in which cases contracts
concluded within the public sector are not subject to the
application of public procurement rules.
Such clarification should be guided by the principles set out in
the relevant case-law of the Court of Justice of the European
Union. The sole fact that both parties to an agreement are
themselves public authorities does not as such rule out the
application of procurement rules. However, the application of
public procurement rules should not interfere with the freedom of
public authorities to perform the public service tasks conferred on
them by using their own resources, which includes the possibility
of cooperation with other public authorities.
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It should be ensured that any exempted public-public cooperation
does not result in a distortion of competition in relation to
private economic operators in so far as it places a private
provider of services in a position of advantage vis--vis its
competitors.
(32) Public contracts awarded to controlled legal persons should
not be subject to the application of the procedures provided for by
this Directive if the contracting authority exercises a control
over the legal person concerned which is similar to that which it
exercises over its own departments, provided that the controlled
legal person carries out more than 80 % of its activities in the
performance of tasks entrusted to it by the controlling contracting
authority or by other legal persons controlled by that contracting
authority, regardless of the beneficiary of the contract
performance.
The exemption should not extend to situations where there is
direct participation by a private economic operator in the capital
of the controlled legal person since, in such circumstances, the
award of a public contract without a competitive procedure would
provide the private economic operator with a capital participation
in the controlled legal person an undue advantage over its
competitors. However, in view of the particular characteristics of
public bodies with compulsory membership, such as organisations
responsible for the management or exercise of certain public
services, this should not apply in cases where the participation of
specific private economic operators in the capital of the
controlled legal person is made compulsory by a national
legislative provision in conformity with the Treaties, provided
that such participation is non-controlling and non-blocking and
does not confer a decisive influence on the decisions of the
controlled legal person. It should further be clarified that the
decisive element is only the direct private participation in the
controlled legal person. Therefore, where there is private capital
participation in the controlling contracting authority or in the
controlling contracting authorities, this does not preclude the
award of public contracts to the controlled legal person, without
applying the procedures provided for by this Directive as such
participations do not adversely affect competition between private
economic operators.
It should also be clarified that contracting authorities such as
bodies governed by public law, that may have private capital
participation, should be in a position to avail themselves of the
exemption for horizontal cooperation. Consequently, where all other
conditions in relation to horizontal cooperation are met, the
horizontal cooperation exemption should extend to such contracting
authorities where the contract is concluded exclusively between
contracting authorities.
(33) Contracting authorities should be able to choose to provide
jointly their public services by way of cooperation without being
obliged to use any particular legal form. Such cooperation might
cover all types of activities related to the performance of
services and responsibilities assigned to or assumed by the
participating authorities, such as mandatory or voluntary tasks of
local or regional authorities or services conferred upon specific
bodies by public law. The services provided by the various
participating authorities need not necessarily be identical; they
might also be complementary.
Contracts for the joint provision of public services should not
be subject to the application of the rules set out in this
Directive provided that they are concluded exclusively between
contracting authorities, that the implementation of that
cooperation is governed solely by considerations relating to the
public interest and that no private service provider is placed in a
position of advantage vis--vis its competitors.
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In order to fulfil those conditions, the cooperation should be
based on a cooperative concept. Such cooperation does not require
all participating authorities to assume the performance of main
contractual obligations, as long as there are commitments to
contribute towards the cooperative performance of the public
service in question. In addition, the implementation of the
cooperation, including any financial transfers between the
participating contracting authorities, should be governed solely by
considerations relating to the public interest.
(34) Certain cases exist where a legal entity acts, under the
relevant provisions of national law, as an instrument or technical
service to determined contracting authorities, is obliged to carry
out orders given to it by those contracting authorities and has no
influence on the remuneration for its performance. In view of its
non-contractual nature, such a purely administrative relationship
should not fall within the scope of public procurement
procedures.
(35) The co-financing of research and development (R&D)
programmes by industry sources should be encouraged. It should
consequently be clarified that this Directive applies only where
there is no such co-financing and where the outcome of the R&D
activities go to the contracting authority concerned. This should
not exclude the possibility that the service provider, having
carried out those activities, could publish an account thereof as
long as the contracting authority retains the exclusive right to
use the outcome of the R&D in the conduct of its own affairs.
However fictitio