The European Commission proposed the Directive last year which
seeks to improve the national review procedures that businesses can
use to challenge an award. Its first reading in Parliament was
approved this week.
Internal Market and Services Commissioner Charlie McCreevy
welcomed the Parliament's support.
"Effective procedures for seeking review are essential in making
sure that public contracts ultimately go to the company which has
made the best offer," he said. "I believe that by strengthening
national review procedures in line with this Directive, businesses
will have stronger incentives to bid for contracts anywhere in the
EU."
How the Directive would improve bidders' rights
According to the proposed Directive, contracting authorities
would need to wait for at least 10 days after deciding who has won
the public contract before the contract can actually be signed.
This 'standstill period' is designed to give bidders time to
examine the decision and to assess whether it is appropriate to
initiate a review procedure. If this standstill period has not been
respected, the Directive requires national courts under certain
conditions to set aside a signed contract, by rendering the
contract 'ineffective'.
The Directive also seeks to combat illegal direct awards of
public contracts, which is the most serious infringement of EU
procurement law. National courts will also be able to render these
public contracts ineffective if they have been illegally awarded
without transparency and prior competitive tendering. In these
cases the contract will need to be tendered again, this time
according to the appropriate rules.
National courts may decide that these contracts remain in force
only if required by overriding reasons relating to a general
interest. In those cases, alternative penalties must be applied
instead. These alternative penalties must be effective,
proportionate and dissuasive, and may entail the shortening of the
duration of the contract or the imposition of fines on the
contracting authority.
For contracts based on framework agreements and dynamic
purchasing systems, where speed and efficiency are an essential
part of their success, the Directive provides for a specific review
mechanism. For these types of contracts, Member States may choose
to replace the standstill obligation by a post-contractual review
procedure.
The Directive is expected to be formally adopted by the Council
and published in the EU's Official Journal later this year. EU
Member States will then have 24 months to implement it in their
national laws.
Objectives of the review of the Remedies Directives
The review of the Remedies Directives, which was based on
extensive consultations with contracting authorities and
businesses, seeks to strengthen legal review procedures in the area
of public procurement.
Effective procedures for seeking redress are essential in making
sure that public contracts ultimately go to the company which has
made the best offer. Such procedures will also help make businesses
and citizens more confident that public procurement procedures are
being conducted in a fair and competitive manner throughout the
EU.
Public procurement is a cornerstone of the internal market and
accounts for some 16% of EU GDP. The Commission hopes that the
Directive will stimulate a further opening up of public procurement
markets, providing stronger incentives for businesses to bid for
public contracts in EU Member States.
