It put forward a proposal last week to improve the national
review procedures that businesses can use when they consider that a
public authority has awarded a contract unfairly.
The proposed Directive would require public authorities to wait
a certain number of days, known as a 'standstill period', before
concluding a public contract following the announcement of its
award. This would give rejected bidders the opportunity to start an
effective and swift review procedure at a time when any unfair
decisions could still be corrected.
It would apply not only to contracts awarded following a tender
procedure, but also to contracts awarded directly to a single
bidder, which under EU law are allowed only exceptionally and under
very restrictive conditions.
The introduction of these new rights for rejected bidders would
create stronger incentives for EU businesses to bid for contracts
anywhere in the EU, according to the Commission. Providing clear
and effective procedures for seeking redress is crucial to making
sure contracts ultimately go to the company which has made the best
offer, and therefore to building confidence among businesses and
the public that public procurement procedures are fair.
Internal Market and Services Commissioner Charlie McCreevy said:
"Businesses who bid for public contracts – and taxpayers who
ultimately finance them – need to be confident that they are
awarded fairly. So if a public authority does make an unfair
decision, businesses need to have the opportunity to challenge the
decision while it can still be corrected, no matter where in the EU
the public authority is based."
Problems with existing EU law on public procurement
remedies
The current Remedies Directives require Member States to ensure
that review procedures are available to anyone who has an interest
in obtaining a given public contract and may have been affected by
an unfair decision taken by an awarding authority.
The review procedures must be effective and rapid, and must go
through national courts and/or administrative bodies. In all Member
States, available remedies must include the possibility of taking
interim measures (such as suspension of the award procedure in
question), the setting aside of unlawful decisions and of
discriminatory specifications in the invitation to tender, and the
compensation of injured parties.
However, consultations carried out by the Commission identified
areas where the existing Remedies Directives do not always achieve
their objectives, such as the lack of effective remedies against
illegal direct awards of public contracts, i.e. public contracts
awarded in a non-transparent and non-competitive manner to a single
bidder; and the rapid conclusion of a public contract (known as the
'race to signature'), which deprives businesses of the opportunity
to bring remedies actions effectively.
So the Commission is now proposing a new Directive, amending the
current Remedies Directives, to improve the situation.
How the proposed Directive would improve rejected bidders'
rights
The proposed Directive aims mainly to introduce a 'standstill
period' for public contracts covered by the EU public procurement
Directives. This would mean that awarding authorities would be
obliged to suspend the conclusion of a public contract for a short
period of time after the communication of the award decision, in
order to allow bidders to bring review procedures in the most
effective manner.
The Directive also specifies the details of the standstill
obligation, such as its scope, consequences and enforcement, the
time span (in principle, 10 calendar days) and permissible
exceptions (for example in cases of extreme urgency).
