Public procurement: Commission requests the Netherlands to review contract for supply and management of coffee machines in Noord-Holland

3 November 2009

The European Commission has decided to send a formal request to The Netherlands concerning the award of a public contract for the supply and management of coffee machines by the Province of Noord-Holland. In the Commission's view, the tender procedure used by the Province of Noord-Holland did not meet the requirements of EU public procurement rules, thereby restricting competition. This formal request takes the form of a "reasoned opinion", the second stage of the infringement procedure laid down in Article 226 of the EC Treaty. If there is no satisfactory reply within two months, the Commission may refer the matter to the European Court of Justice.

Public supply contract not meeting the requirements of EU public procurement rules

The Province of Noord-Holland awarded this contract through a European open tender procedure. The Commission however considers that the award procedure did not meet the requirements flowing from public procurement Directive 2004/18/EC. In particular the Province of Noord-Holland did not follow the provisions in the Directive on technical specifications, selection criteria and award criteria. The Commission is of the opinion that in view of these violations, the Netherlands has failed to fulfil its obligations under the EU public procurement rules.

Technical specifications

The Province of Noord-Holland requested the tenderers to supply tea and coffee with one or two specific labels concerning biological and ethically traded products, which is not allowed under Article 23 of Directive 2004/18/EC. Although the contracting authority stated it would accept comparable labels and/or products that meet the same or comparable criteria, the Commission notes that it did in any case not specify substantial criteria that could clarify to potential tenderers when a product would be comparable, which is not transparent for tenderers.

Selection criteria

With regard to the selection of economic operators, the contracting authority did not assess the abilities of the tenderers only on the basis of the means listed in Article 48 of the Directive, but rather in a manner which is not foreseen in and not allowed by the Directive. The Commission furthermore observes that it was in any case not clear how, and on the basis of which criteria, the contracting authority would assess the information submitted by the tenderers, which is detrimental to the transparency of the tender procedure.

Award criteria

Lastly, the Province of Noord-Holland also violated the rules on award criteria by using an award criterion under which additional points are granted to tenders that offer ingredients (sugar, milk) that have a specific fair trade or eco-label or a label comparable thereto. According to the Commission a contracting authority can not use such an award criterion, since a label as such is not a criterion that is suitable to identify the economically most advantageous offer. The Commission also notes that the Province of Noord-Holland did not specify any substantial criteria in this regard.

Background

Total public procurement in the EU – i.e. the purchases of goods, services and public works by governments and public utilities – is estimated at about 16% of the Union’s GDP. The open and transparent tendering procedures required under EU public procurement law mean more competition, stronger safeguards against corruption, and better service and value for money for taxpayers.

Under the EC Treaty, the European Commission has powers to take legal action – known as infringement procedures – against a Member State that is not respecting its obligations under EU rules. These procedures consist of three steps. The first is that the Member State receives a letter of formal notice and has two months to respond. In case further compliance with EU legislation is needed, the Commission sends a reasoned opinion. Again the Member State has two months to reply. If there is no satisfactory reply, the Commission can refer the matter to the European Court of Justice in Luxembourg. It can also request that the Court impose a fine on the country concerned if it does not comply with the Court's ruling.