The Remedies Directives in the eyes of enterprises, contract authorities and legal practitioners

A 2015 European Commission public consultation (24 April - 20 July) aimed to evaluate the effectiveness of the provisions of Directive 2007/66/EC on remedies in public procurement. It was open to all but particular contributions were sought from contracting authorities/contracting entities, review bodies, economic operators and lawyers.

The consultation yielded 170 responses from all EU countries. Respondents stressed the following four main advantages of the EU Public Procurement Remedies Directives:

• a direct and effective way for rapid action when there is an alleged breach of a procurement directive.
• a more transparent, fairer, open and accessible public procurement process, as well as making it more likely for contracting authorities/entities to comply with EU public procurement rules. .
• the automatic debrief and standstill period before the signature of the contract were usually regarded as the most useful elements of the Directives.
• the cost for using the remedies system is relatively high, but the benefits outweigh the costs.

Additional data in the Staff Working Document

More data on the perception of remedies by businesses and public contracting authorities is found in the Staff Working Document on the Remedies Directives.

The most relevant data includes:

• Procurement markets:  71% of Contract Authority Entities (CAE) and 51% of suppliers state that the Directives enhanced the functioning of public procurement.
• Openness: 49% of CAEs and 35% of suppliers stated the directives reduced anti-competitive barriers in the market and promoted healthy competition.
• 61% of CAEs and 38% of suppliers say that fairness in the procurement market ensures a level playing field for all suppliers..
• Transparency in the procurement market: 75% of CAEs and 53% of suppliers said that the directives increase transparency and help to ensure information is easily accessible and available for all companies.

Cause of complaints from suppliers and contract authorities

1. Discriminatory specification, illegal qualifications and lack of transparency

A third of suppliers reported the following reasons for seeking review:

• Discriminatory specification in tender notice (e.g. contractor must be located in a specific town).
• illegal qualification (e.g. no legal minimum wage requested).
• insufficient reasoning (e.g. tender notices are vague).
• lack of transparency in tender process (e.g. no open tender) .

Contracting authorities listed the following reasons for review:  insufficient qualifications (20%), specifications (18%), seasoning (16%) and other (43%).

What type of remedies were sought?

The most frequently sought initial remedy was to set aside decisions, followed by interim measures (suspension of concluding a contract) and the removal of discriminatory specifications (e.g. the requirement to be located in a specific place).

Data on decisions indicate that complaints are more commonly dismissed than granted in the EU, whereas the length of review procedures varies.

2. Legal practitioners count on the Remedies Directive

A sample of legal practitioners who took the questionnaire consider the suspension of contract award procedure (80%) and the standstill provision (76%) as the most important part of the Directive. This highlights the underlining theme of the Directive (challenging inappropriate procurement processes) and underlines the value of the Directive to the legal profession.

3. Why did companies not participate in public tenders?

43% of suppliers cited lack of trust as the main barrier to participating in tendering processes. Other reasons for not participating were: very competitive environment (50%), procurement rules/procedures "too difficult" (46%), lack of resources (32%), and procedures "too costly"(24%).

The reasons for supplier dissatisfaction with the outcome of award procedures were:  abnormally low (cheap) tender (45%), lack of transparency (38%), no trust (35%), discriminatory specifications (34%), insufficient reasons (26%), and rules too difficult (15%).

More information