The
remedies for the breach of the EU Public Procurement Rules - an
overview Introduction The
Treaty of Rome established four fundamental principles to be applied
to the award of public contracts, whatever their value without
laying down specific rules; the principles of non-discrimination
on the grounds on nationality, free movement of goods, freedom
of establishment and freedom to provide services. Building
on these four principles, the EU has laid down in the form of
Directives, the legal framework governing the award of public
contracts, so as to support the creation of a single market for
contracts awarded by public bodies within the EU. Three
Directives called the Public Sector Directives govern the award
of contracts by state, local and other regional or municipal authorities
and public bodies collectively called "contracting authorities".
The Directives are as follows: - - Council
Directive 93/36/EEC of 14th June 1993 on the co-ordination of
procedures for the award of public supply contracts (the Supplies
Directive).
-
Council Directive 93/37/EEC of 14th June 1993 on the co-ordination
of procedures for the award of public works contracts (the Works
Directive).
-
Council Directive 92/50/EEC of 18th June 1992 on the co-ordination
of procedures for the award of public service contracts (the Services
Directive).
There
are a parallel set of rules set out in Council Directive 93/38/EEC
of 14th June 1993 on the co-ordination of the procurement of procedures
of entities operating in the water, energy, transport and telecommunications
sectors (the Utilities Directive). When
do the Directives Apply? The
rules set out in the Directives for the award of public contracts
by contacting authorities will apply if the contract in question
exceeds a specific value threshold, which are set out in the Directives. What
happens if the Directives are breached? The
procurement rules governing the award of public contracts by contracting
authorities under the Public Sector Directives and the Utilities
Directive listed above, are supported by two specific Directives
which deal with remedies for breaches (collectively called "the
Remedies Directive") which are as follows: - - Council
Directive 89/665/EEC of the 21st December 1989 on the co-ordination
on the laws regulations and administrative provisions relating
to the application of review procedures to the award of public
supply and public works contracts (the Supplies, Works and Services
Directives).
- Council
Directive 92/13/EEC of the 25th February 1992 on the co-ordination
of 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 (the Utilities Directive).
The
Remedies Directives oblige each member state to ensure that effective
remedies and means of enforcement are made available to suppliers,
contractors and service providers in the Courts of the member
states where these suppliers, contractors and service providers
believe that they have been harmed as a consequence of a breach
of the public procurement rules. Implementation
of the Remedies Directives in Ireland The
Remedies Directives have been implemented into Irish law by two
Statutory Instruments, SI No. 309/1994 and SI No. 104/1993. Proceedings
alleging a breach of the EU Procurement Rules must be brought
in the High Court. Available remedies include;
- Interim
Orders (Injunctions)
- Set
Aside Orders
- Awards
in damages
In
addition to these remedies, aggrieved parties may also bring an
application before the High Court, seeking judicial review of
the decisions complained of, which must be brought within tight
timeframes. Complaints
to the EU Commission Quite
apart from any actions brought before national courts, aggrieved
parties may also lodge complaints with the EU Commission. Once
such a complaint is lodged the EU Commission may invoke what is
known as "a corrective" procedure, if it is satisfied
that a clear and manifest breach of the public procurement rules
has been committed prior to the award of the contract concerned.
In
such circumstances, the EU Commission will formally notify the
contracting authority and the relevant member state of the complaint.
The EU Commission will set a time limit of at least 21 days in
the case of the public sector, or 30 days in the case of the utility
sectors within which the parties to whom the complaint has been
addressed, must respond. In
circumstances where the EU Commission is not satisfied with the
explanations that it has received, it is entitled to commence
formal proceedings under the provisions of the Treaty of Rome,
which could ultimately result in a case being brought before the
European Court of Justice. Alternative
Dispute Resolution As
with most commercial disagreements, disputes arising as a result
of an alleged breach of the procurement rules, will usually be
most effectively dealt with if the parties to the dispute engage
in arbitration, rather than litigation. Under
Remedies Directive 92/13/EEC, there is a conciliation procedure
laid down for the utilities sectors. Recourse to this conciliation
procedure would involve the following steps: -
- A
request for the use of the conciliation procedure to the
EU Commission by the supplier concerned;
- The
request by the EU Commission to the utility concerned to
confirm its willingness to participate. It the utility declines
this invitation, the matter cannot proceed further;
-
The proposal by the EU Commission of a conciliator drawn
from a list of independent persons. Both sides to the dispute
must state whether this party is acceptable and each side
can designate an additional conciliator;
-
The complainant, the utility concerned and other relevant
tenderers have the opportunity to make representations to
the conciliator, and;
-
The function of the conciliator is to endeavour to reach
agreement in accordance with EU law.
Because
it is a conciliation process, there is no compunction to remain
engaged in the process. Either party to the dispute may withdraw
at any time and unless specifically agreed otherwise, each party
must bear their own costs.
For
further information or general enquiries contact: -
Patrick Ryan
Email: pryan@kilroys.ie
or
Kevin O'Gara
E-mail: kogara@kilroys.ie
Telephone: +3531-439 5600
Fax: +3531-439 5601/439 5602
©
Kilroys Solicitors 2002
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