Unlawful exclusion from participation

Wednesday November 16th, 2011

By Ruth McNaught, Solicitor at Harper Macleod LLP

On 27 October 2011, the European Commission announced that it had requested Greece to ensure full compliance with EU rules on public procurement in relation to the purchase of an information system for the Greek Social Security Foundation (IKA), noting that if the rules were not respected, there would be a risk of a ‘closed market and wasted public money’.

The request follows an open public tender by the IKA for the provision of software services for operating an information system. The contract was valued at almost €7.5 million.

In assessing the procedure, the Commission identified two key areas of concern:

  1. The request for tenders contained a stipulation that bidders had to provide references in respect of successful contracts which had been undertaken in Greece and which had the same profile as the one for the IKA. This stipulation, according to case law, contravenes the rule that contracting authorities are not allowed to impose conditions causing direct or indirect discrimination (the example here being local preference) against potential bidders established or active in other Member States.
  2. The request for tenders specified that bidders could not rely on the experience of potential sub-contractors in order to satisfy the selection criteria. This is, however, expressly permitted by virtue of Directive 2004/18.

Article 48, paragraph 2 provides: “Evidence of the economic operators’ technical abilities may be furnished by one or more of the following means according to the nature, quantity or importance, and use of the works, supplies or services:

  • An indication of the proportion of the contract which the services provider intends possibly to subcontract.”

As a result of these unlawful restrictions on access to the process, the Commission considered that IT service companies that have provided similar services in other Member States had been unlawfully excluded from participating in the procurement process and that Greek taxpayers were consequently denied the opportunity to obtain ‘best value’.

The Commission’s request to Greece takes the form of a ‘reasoned opinion’, which constitutes the second step in the infringement procedure. If Greece does not reply satisfactorily within two months, the Commission may refer the matter to the Court of Justice of the European Union.

Ruth is a solicitor at Harper Macleod LLP and can be contacted on [email protected]


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