I. Implementation of the European Community Legislation by the

WORLD TRADE
ORGANIZATION
GPA/32
12 January 2000
(00-0109)
Committee on Government Procurement
Original: English/
French
REVIEW OF NATIONAL IMPLEMENTING LEGISLATION
European Community
The present document reproduces the questions put to the delegation of the European
Community and the responses given and comments made during the review of national implementing
legislation at the Committee's meetings of 7 October 1998 and 5 October 1999.
1
The European
Community's notification of its national implementing legislation in accordance with the Committee's
Decision in GPA/1/Add.1 has been circulated in document GPA/20, dated 28 January 1998.
_______________
REPLIES TO THE QUESTIONS FROM KOREA AND THE UNITED STATES
I. IMPLEMENTATION OF THE EUROPEAN COMMUNITY LEGISLATION BY THE
MEMBER STATES
Question from Korea
1. Korea thinks that at the EC level, legislation on public procurement is generally in conformity
with the rules of the WTO Agreement on Government Procurement.
However, Korea has concerns about the implementation of that legislation by EC member
States. The important aspect is not EC legislation per se but rather its full compliance by member
States. According to "Single Market Scoreboard", which is issued by the EC Commission every six
months to assess the degree of implementation of Directives for the single market, government
procurement was reported to be the most poorly implemented area (only 55 per cent of the Directives
are implemented by member States). Furthermore, as far as Korea knows, infringement procedures
were initiated this year by the EC Commission against Greece, Spain and Italy due to their
non-implementation of EC Directives.
Regarding these concerns, Korea would appreciate knowing what actions the EC is, and will
be taking, to better comply with the GPA.
Through the decision of the Council of the European Communities of December 1994,
ratifying the entire Uruguay Round package, the GPA has become a part of the domestic law of the
European Community, in its entirety, from 1 January 1996, and is fully in force within the
Community from that date. The EC Directives, which were the internal legislation of the European
Community at the time of entry into force of the GPA was, to a large extent, in line with the GPA.
The limited number of areas where this legislation was not entirely in line with the GPA related to the
issues of threshold, the statistical reporting requirements and a very limited number of other issues.
1
The minutes of these meetings have been circulated in documents GPA/M/10 and 12.

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These areas were subsequently brought in line with the requirements in the GPA through two
Directives which were adopted on 10 October 1996.
The Community acts in the procurement area through Directives which the relationship
between deal with the suppliers and purchasers within the Community, giving suppliers certain rights
and creating obligations for purchasers. The EC Directives do not deal directly with the relationship
between suppliers from the GPA Parties (other than the EU member States ) and purchasers within
EU. With regard to the issue of whether domestic legislation of EC member States are in conformity
with the requirements of the GPA on national treatment, relationship between the suppliers in GPA
Parties members and purchasers within the Community is fully governed by the GPA which in its
entirety has been made part of the EU Law since December 1994. In the context of GPA rules, it is
important to ensure that non-European Community suppliers are governed by exactly the same
procurement regime as suppliers from the Community. Any problems with the implementation of the
Directives relates to relationship between the Community suppliers and purchasers and does not mean
that any rights arising from the GPA for suppliers in the GPA countries, other than EU, has been
affected in any way. The Commission and the member States consider it important that the Directives
should be fully and correctly implemented within the deadlines laid down. Any problems with the
implementation of the EC Directives does not affect the obligations of the member States under the
GPA.
The reference to 55 per cent of the Directives in the Korean question relates to the cases in
which the member States have not adopted all measures necessary to implement those Directives as
far as they relate to purchases by EC contracting entities of products, services and works supplied by
suppliers from the Community and is, therefore, outside the GPA context.
The European Commission, as the institution charged with the enforcement of the rules
within the EC is fully committed to the implementation of the Single Market legislation. An Action
Plan for the Single Market was approved by the Commission in 1997. One of its targets is to ensure
that rules are effectively applied. Under this plan, each member State will be called upon to submit its
detailed timetable and to demonstrate political commitment to eliminate urgently all delays in
transposition. The Single Market Scoreboard, issued by the Commission every six months, is used to
keep track of the progress in the implementation of the Directives for Single Market. Meanwhile, the
Commission will continue to pursue infringement procedures vigorously and swiftly against member
States which fail in these obligations, using sanctions against them where necessary.
In addition, as far as public procurement is specifically concerned, the Commission has
approved this year a Communication on its future policy in this field in which a specific subchapter on
improving the implementation of public procurement policy was included. The text of the
Communication is available in the SIMAP website (http://simap.eu.int).
II. IMPLEMENTATION OF THE EC UTILITIES DIRECTIVE 93/38
Question from the United States
2. Section I.1(i), Section I.1(iii) and Section IV.2(6) of the EC Notification of National
Implementing Legislation make reference to the EC Utilities Directive 93/38. Section IV.2(6) refers
specifically to Article 36 of the Utilities Directive. Is Article 36 of the Utilities Directive currently
being implemented and enforced by Greece, Portugal and Spain?
Directive 93/38 is applicable in its entirety in Spain as from 1 January 1997 and
Directive 93/38 is applicable in its entirety in Greece and Portugal as from 1 January 1998
(Cfr. Article 45 §2 of Directive 93/38).

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The preference granted to EC member States under Article 36 of the Utilities Directive
continues to apply to the purchases not covered by the GPA.
III. PRIOR INFORMATION NOTICE
Question from the United States
3. The EC response in Section IV.2(11) of GPA/20 on "Time Limits for Tendering and Delivery"
indicates that deadlines for receipt of tenders can be reduced in instances where a "prior information
notice" has been published. Please describe what information is required to be included in a prior
information notice, and whether a prior information notice is equivalent to a "pre-information notice"
as described in Section IV.2(8).
The information to be included in the "prior information notices" is specified in Annexes IV
of Directive 93/36, IV of Directive 93/37, III of Directive 92/50 and XIV of Directive 93/38.
The information required is:
- Name, address, etc. of the contracting authority, and, if different, of the service from
which additional information may be obtained.
- Nature and quantity or value of the procurement. This information depends on
whether the procurement concerns goods, services or works.
- Estimated date for initiating the award procedures.
- Other information (including for instance terms of financing of the works in the case
of construction services).
- Date of dispatch of the notice.
- Date of receipt of the notices by the Office for Official Publications of the
European Communities.
- Indication whether the procurement is covered by the GPA.
"Prior Information Notices" (also known as PINs) are also referred to as "indicative notices"
in the directives. In document GPA/20, the expression "pre-information notice" used in
Section IV.2.(8), though not technically accurate, is used as a synonym of "Prior Information Notice".
IV. FRAMEWORK AGREEMENTS
Question from the United States
4. Section IV.2(10) states that Annex 3 entities are permitted to choose between open and
restricted procedures without a call for competition, "for contracts to be awarded on the basis of a
framework agreement ...". Please provide details on the legal definition of a "framework agreement"
as well as information regarding when such agreements are permitted to be used and how they
operate.
Framework agreements in the European Community legislation are specifically dealt with
only in the Utilities Directive, that is only for Appendix 3 entities. It is not mentioned at all in the
Directive relating to public entities that is Appendix 1 and Appendix 2 entities.

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According to Directive 93/38, the Utilities Directive, "framework agreement" shall mean an
agreement between one of the contracting entities and one or more suppliers, contractors or service
providers the purpose of which is to establish the terms, in particular with regard to the prices and,
where appropriate, the quantity envisaged, governing the contracts to be awarded during a given
period.
Annex 3 entities may regard a framework agreement as a contract and award it in accordance
with Directive 93/38: i.e. using the open, restricted or negotiated (with publication) procedure, as
appropriate. When contracting entities have awarded a framework agreement in accordance with
Directive 93/38, a call for competition is not compulsory when awarding contracts based on that
agreement.
According to Article 5 of Directive 93/38, contracting entities may not misuse framework
agreements in order to hinder, limit or distort competition.
V. ENFORCEMENT
Question from the United States
5. Please provide details on infringement actions currently undertaken by the European
Commission against member States for violations of EC procurement laws outlined in GPA/20.
Please also explain the impact of EC member State infringement of Community law in the field of
procurement or national rules implementing that law on the EC’s international obligations under the
WTO GPA.
Details of the infringement procedures undertaken by the European Commission against
member States are not considered to be public, unless cases are brought before the European Court of
Justice. However, the spokesman's service of the European Commission regularly issues press
releases concerning public procurement infringements at earlier stages of the procedure. These press
releases are publicly available and can be accessed through the RAPID database via the EUROPA
server (http://europa.eu.int).
As for the impact of member State infringement of Community Law, it must be recalled that
Article 189 of the EC Treaty provides that the form of Community legislation known as the
"directive" is binding as to the result to be achieved but leaves the national authorities the choice of
form and methods. Member States are therefore under an obligation to take all appropriate measures
to make sure that the provisions of the directive are complied with. These measures have to be taken
within the deadlines laid down.
It can happen that a member State fails to take all necessary measures to implement the
directive by the date laid down, and it might be thought that the directive would then be inapplicable.
But the same Article 189 provides the basis for what is known as "direct effect". The Court of Justice
has interpreted Article 189 to mean that "when the conditions under which the Court has held that
individuals may rely on the provisions of a directive before the national courts are met, all organs of
the administration, including decentralized authorities such as municipalities, are obliged to apply
those provisions" (ECJ, case Costanzo).
The impact of this judgment is not confined to the application of a provision in a particular
directive; it also establishes the principle that national measures may not prevent the application of a
provision in a particular directive if it can be applied directly.

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The Commission has powers to ensure the full compliance with the directives includes the
power to bring a member State before the Court of Justice. The same power exists when infringement
of the obligations of the GPA is committed by any of the contracting entities covered under the GPA
in any of the member States. An infringement of the obligations under the Directives would relate to
the relationship between Community suppliers and entities and not to the relationship between the
suppliers from the GPA countries and Community entities. As regards the Remedies Directive, if and
when bid challenge rights are not granted in EU legislation because the Remedies Directive may not
have been entirely implemented by a member State, there is a safety net in the community referred to
as the "Francovitch Case Law" which provides suppliers from the GPA Parties other than those from
the EC member States, with the possibility of taking a matter up in the European Court of Justice and
having rapid and effective remedies available as required by the GPA would be able to use the safety
net provided by the Frankovitch Case Law. The "Francovitch" case the Court accepted the principle
that a member State must make good damage suffered by individuals as a result of an infringement of
Community law, e.g. through its failure to transpose a directive into national law or to transpose it
properly. This has been further developed in the "Brasserie du Pêcheur" case. Thus, this safety net
allows any supplier from any GPA country with the possibility to go to court and to have rapid and
effective remedies available to it, as required in the GPA Agreement, therefore, a non-implementation
of the Remedies Directive by a member State does not effect the right of GPA suppliers as they will
be able to use the safety net provided by the "Francovitch Case Law".
Question from the United States
6. Section IV.3 of GPA/20 states that member States are authorized to choose between two
"options" relating to the power of review bodies. Please describe what rapid interim measures, as
required by GPA Article XX:7(a), are provided for in the second option, "indirect pressure".
As stated in Section IV.3 of GPA/20 such "two options" possibility only concerns the legal
regime applicable to Annex 3 entities (contracting entities subject to Directive 93/38). At the time
when Directive 92/13 (the so-called Remedies Utilities Directive) was enacted, it was felt necessary to
take account of the specific nature of certain legal orders in the EC by authorizing the member States
to choose between the introduction of different powers for the review bodies which have equivalent
effects. It is to be noted that claims for damages are always possible.
One of the options includes the power to intervene directly in the contracting entities'
procurement procedures such as by suspending them or by setting aside decisions or discriminatory
clauses in documents or publications. Thus, this option is based on traditional litigation.
However, in some legal orders, review bodies cannot, because of the legal nature of the some
contracting entities, annul or suspend award decisions made by this kind of entities. This is why there
is a second option, referred to in this question, which provide for the power to exert effective indirect
pressure on the contracting entities in order to make them correct any infringements or prevent them
from committing infringements, and to prevent injury from occurring. The kind of measures adopted
are generally making orders for the payment of a particular sum, unless the infringement is corrected
or prevented. This sum must be set at a level high enough to dissuade the contracting entity from
committing or persisting in an infringements. These measures are to be taken at the earliest
opportunity, if possible by way of interlocutory procedures and if necessary by a final procedure on
the substance.
The distinction between the two options concerns the powers exerted by the review bodies
rather than the actual procedure used. In both cases, there is a provision ensuring that measures are
taken at the earliest opportunity.