| Author (Person) | McLauchlin, Anna |
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| Series Title | European Voice |
| Series Details | Vol.12, No.17, 4.5.06 |
| Publication Date | 04/05/2006 |
| Content Type | News |
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By Anna McLauchlin Date: 04/05/06 Companies are hoping the European Commission will encourage EU governments to play fair when awarding public contracts under a proposal to be published on Thursday (11 May). The new rules will amend existing 'remedies directives' and aim to strengthen companies' right to seek legal redress if they consider that they have unfairly lost out on a tender for a public contract - also known as public procurement. "It's about access to justice and the hope is that making it easier for companies to get that access will encourage better practice in public procurement," said an EU official. There are several obstacles which make it both costly and risky for a company to take a government to court over its award of a public contract. In many member states, legal challenges are often rejected once a contract has been signed and yet there is no minimum time period between the announcement of a contract and the signing. Other countries only allow the company concerned to press for compensation for costs incurred rather than the loss of their potential profit. As some also only allow these damages to be granted if the firm has already obtained an annulment of a decision, many businesses decide it is simply not worth the hassle to complain. But according to one executive, the main problem is that governments often just ignore EU law, under which they must award public contracts to the most attractive bidder from anywhere in the EU - instead awarding public contracts to their favoured national bidder. As there is no provision in existing remedies directives for this illegal direct procurement, companies are currently powerless to act. "If a public authority decides to ignore the rules, not even publish a tender and just offer the contract to whomever it wants - and this is commonplace all over the EU - then there is no remedy at all," the industry source said. EU business association UNICE wants the Commission to recognise illegal direct procurement so that companies can demand a review of a process they consider unfair. Other demands include forcing public authorities to inform unsuccessful bidders of the identity of the winning company as well as the reasons why their bid was not accepted, to encourage them to take EU law more seriously. Firms are also demanding a minimum time period between the contract announcement and its signature, that member states be allowed to set up an independent body to oversee the legality of procurement rules and harmonised EU rules allowing companies to claim compensation for profit lost. A UNICE spokesman added that new rules should not penalise the successful bidder, which might not be aware that the authority concerned had awarded a contract unfairly. "It's important that whatever solution the Commission goes for, the burden rests with the authority that is responsible for following the rules and not the company," he said. Article anticipates the adoption of new rules on public procurement contracts in the EU by the European Commission on 11 May 2006. The new rules would amend existing 'remedies directives' and aimed to strengthen companies' right to seek legal redress if they consider that they have unfairly lost out on a tender for a public contract - also known as public procurement. |
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| Source Link | http://www.european-voice.com/ |
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| Subject Categories | Internal Markets |
| Countries / Regions | Europe |
