C-27/86

Accordingly, Article 2 provides that: 'In awarding public works contracts, the auth- That directive was adopted on the same day orities awarding contracts shall apply their as Council Directive 71/304/EEC 2 national procedures adapted to the concerning the abolition of restrictions on provisions of this directive'. freedom to provide services in respect of public works contracts and on the award of public works contracts to contractors acting through agencies or branches. Directive It should therefore be borne in mind from 71/304 requires Member States to abolish in the outset that any matters not dealt with by particular restrictions which prevent persons Directive 71/305 fall to be determined covered by the Community provision under the national law of each Member ('beneficiaries') from providing services State (provided, of course, that there is under the same conditions and with the no discrimination between Community same rights as nationals, those existing by nationals). reason of administrative practices which result in treatment being applied to benefi- ciaries which is discriminatory by The questions submitted by the Conseil comparison with that applied to nationals, d'Etat relate to Title IV of the directive, and those existing by reason of practices entitled 'Common rules on participation', which, although applicable irrespective of and in particular Chapter I thereof relating nationality, none the less hinder exclusively to criteria for qualitative selection. The text or principally the professional or trade acti- of Articles 25, 26 and 28, to which those vities of nationals of other Member States questions relate, is set out in the Report for (see Article 3 of Directive 71/304). I cite the Hearing. those provisions because they circumscribe the underlying objectives of the Council's legislation in this field. Article 25 enumerates the documents which may be submitted in order to establish a * Translated from the French. contractor's financial and economic 1 — Official Journal, English Special Edition 1971 (II), p. 682. standing. Those documents are termed 2 — Official Journal, English Special Edition 1971 (II), p. 678. 'references'.

provisions were followed by an article with the following wording: The corresponding wording in the Commission proposal for the directive 'The authorities awarding contracts shall (Article 14) was as follows: determine the standard of the references to be submitted by contractors pursuant to the last subparagraph of Article 20 and Articles 'In open procedures, the notice shall include 22 to 25 on the basis of the nature, scale and at least the following information: value of the works to be carried out and having regard to the financing and payment rules laid down under Articles 14 and 16' (i) the documentation which must be (Article 26 of the proposal; emphasis enclosed with the tender in order to added). establish the contractor's technical quali- fications and economic standing as provided for in Articles 20 to 26.' At that time evidence of financial and technical standing was to be governed by Article 23 and evidence of technical It therefore seems to me that the Council knowledge and ability by Article 24, both of probably took the view that the Commission which therefore came under the terms of the proposal left a lacuna in not requiring the provision just cited. notice of call for tender to specify the minimum standards or the standard of the That provision, however, was not incor- references required of contractors in order porated in the final text of the directive to be able to submit tenders for a specific adopted by the Council. contract. Accordingly, the Council supplemented the article relating to notices of tender with a provision requiring publi- On the other hand the concept of the cation of minimum standards and omitted 'standard of references' is now to be found the proposed Article 26 as unnecessary. in another form in Article 16, which reads Unfortunately, in drawing up the new as follows: Article 16 (1), which provides that those requirements may not be other than those specified in Articles 25 and 26, the Council 'In open procedures, the notice shall include forgot that the remainder of the provisions at least the following information: no longer refers to the standard but merely to the types of references. Logically the Council should therefore have used a form of wording such as 'fulfilment of those requirements may not be established 3 — Published by the Economic and Social Committee in the preamble to its Opinion 65/187/EEC, Journal Officiel No otherwise than as provided for in Articles 25 63, 13. 4. 1965, p. 929 (no official English version). and 26'.

It may therefore be inferred that Articles 25 The second paragraph provides that the and 26 enumerate only methods of proof authorities awarding contracts must specify and that it is for the authority awarding 'what references other than those mentioned contracts to determine in each call for under (a), (h) or (c)'are to be produced. tender what needs to be established, namely the standard of references required. That interpretation is in keeping with the general Finally, the third paragraph of Article 25 scheme of the directive, which is solely provides that 'if, for any valid reason, the intended to coordinate the procedures for the contractor is unable to supply the references award of public works contracts and even requested by the authorities awarding for that purpose seeks as far as possible to contracts, he may prove his economic and take account of national procedures. It financial standing by any other document follows a fortiori that the standard of which the authorities awarding contracts economic and technical qualification consider appropriate'. required of contractors must be laid down by the national authorities. The clear and unambiguous meaning of those provisions was confirmed by the Court in its judgment in Transporoute4 at The answers to the questions submitted by paragraph 9 of the decision: the Conseil d'Etat follow in large measure from that conclusion. 'Thus Article 27 states that the authority awarding contracts may invite the contractor to supplement the certificates and I — Question 1 in Case 27/86 documents submitted only within the limits of Articles 23 to 26 5 of the directive,

II — Question 2 in Case 27/86 the awarding authority was in fact asking for a reference when it requested the contractors who submitted tenders to In Question 2 the Conseil d'Etat asks: 'forward the list and corresponding values of both public and private works which you have or will have to carry out at the same time having regard to the state of progress 'can the value of the works which may be of the contracts in the course of completion carried out at one time be regarded as a in the event of the contract (for works on reference enabling a contractor's financial the Chênée-Grosses Battes link) being and economic standing to be determined awarded to you'.6 The information within the meaning of Article 25 of the requested related to facts which a contractor directive?' had to submit in the form of a written document.

ance with the criteria of economic and short-term liabilities (wage-bills, supplies, financial standing and of technical equipment purchased on credit, etc). knowledge or ability referred to in Articles 25 to 28'. The total value of the works to be carried out by a contractor at a given time is a factor which must logically enter into the We have seen that (like Article 26) Article evaluation of his suitability to take on an 25 does not actually lay down criteria but additional project of some size. rather enumerates the appropriate methods of proof. Article 16 (1), however, requires the publication of the 'minimum economic and technical standards which the auth- It is therefore consonant with the spirit of orities awarding contracts require of Articles 20 and 25 for an awarding contractors for their selection'. authority to wish to be informed of that total value and it is legitimate for such an authority to take the view that an under- taking of a given size in economic and financial terms cannot safely undertake It is clear from that provision that of all works above a certain total value. those contractors not excluded auto- matically under Article 23 (bankruptcy, etc.) only those who meet the prescribed minimum standards are eligible to have The plaintiff in the main action argues, contracts awarded to them. however, that the criterion of the total value of the public and private works which may be carried out at one time serves a number of additional objects which have nothing to Those minimum standards obviously relate do with a contractor's intrinsic merits. As primarily to the size of the undertaking as the Conseil d'Etat itself has stated, its aim defined by its turnover in the three previous 'is to avoid any monopoly and to permit a financial years, its balance sheet, and the rational allocation of work and to avoid any sums held in its bank accounts or the credit unbridled competition or speculation on the which banks are willing to extend to it. part of contractors resulting in their incurring commitments beyond their means'. 7

does not constitute an obstacle to the Banking statements, balance sheets, freedom of undertakings in other Member statements of turnover, and the total value States to provide services. of works in progress are references which give an indication of a contractor's intrinsic circumstances. On the other hand the thre- Moreover, it must be acknowledged that the sholds laid down by the awarding authority, other objectives pursued by reference to that namely a minimum amount of own funds or criterion are not contrary to the provisions assets, minimum balance-sheet figures, of the EEC Treaty and that they fall within minimum turnover and the maximum value spheres of competence which Directive of the works which may be carried out at 71/305 was not intended to affect. one time, constitute criteria external to the contractors which are determined in the light of the nature and scale of the works to CEI further argues that the total value of be awarded. We have seen that the adoption the works which may be carried out at one of such criteria is not only legitimate but time constitutes a 'criterion external to the indispensable. contractor' and bears no relation to the contractor's intrinsic economic and ¡financial strength. In fact the criterion constitutes a disqualification rule comparable to those laid down in Article 23. They must enable the competent authorities to reject tenders which may be low, but are from contractors who lack the economic However, it is clear from what I have and financial standing necessary for the already said that the situation in this regard proper performance of the works in is no different from that regarding the other question or who have taken on so many references provided for by Article 25. large-scale works that their ability to Accordingly that argument cannot be complete them satisfactorily is questionable accepted. despite their considerable resources.

It seems to me that it may have been. The In the two actions brought by Bellini, the notice of call for tender specified the class Belgian Conseil d'Etat has submitted to the in which contractors had to be recognized Court two identical questions, which are in order to be eligible to tender. In Belgium worded as follows: that class automatically determines the maximum value of the works which may be carried out at one time. A notice requiring contractors to be recognized in a particular 'Does Directive 71/305/EEC of 26 July class may therefore be taken to imply that a 1971 concerning the coordination of reference relating to the total value of procedures for the award of public works works in progress must be produced and contracts, and in particular Article 25 and that the criterion of the maximum value Article 26 (d) thereof, permit a Belgian corresponding to that class will be applied. awarding authority to reject a tender submitted by an Italian contractor on the grounds that the undertaking has not shown that it possesses the minimum amount of The plaintiff in the main action further own funds required by Belgian legislation argues that three of the four requirements and that it does not have in its employ on which must be satisfied in order for the average the minimum number of workers competent Belgian authorities to ask the and managerial staff required by that legis- Recognition Committee for an exemption lation, when the contractor is recognized in from the maximum total value of works Italy in a class equivalent to that required in themselves constitute criteria external to the Belgium by virtue of the value of the tenderer or his undertaking (see part B, contract to be awarded?' paragraph 10, of the plaintiffs' obser- vations). I have already made it clear that an awarding authority is entitled to lay down minimum standards as regards both the That is certainly true. In my view, however, amount of own fimds and the manpower of it is of no concern to the Court in what tenderers, including both managerial staff circumstances a Member State will grant and workers. exemptions from its own legislation in regard to the value of the works which may be carried out at one time provided that the This third question asks in substance if relevant rules do not create any discrimi- those standards may no longer be required nation between nationals of different where a contractor is recognized in his own Member States. country in a class which enables him to

As the Court stated at paragraph 13 of its The inclusion of those references in the decision in Transporoute, cited above, regis- certificate of recognition cannot have any tration in such a list constitutes an alter- practical value unless the awarding authority native means ofproof. is able to deduce from it objective infor- mation on the evidence provided by the certificate of recognition. The corollary of the competent authority's freedom to Like the Belgian Régie des bâtiments, the determine the level of financial and Confédération nationale de la construction, economic standing and technical ability the Belgian State, the Kingdom of Spain which it requires is its power not to award a and the Commission, I take the view that public works contract to tenderers who the effect of the presumption of suitability cannot establish that they are of that established by Article 28 of the directive is minimum standing. The 'references which that a certificate of registration in a list of enabled them to be registered' are the basis recognized contractors in a Member State on which an awarding authority in Member replaces, for the purposes of another State 'A' must decide, without calling them Member State, the presentation of a balance into question, whether the recognition sheet and a statement of turnover (Article granted in Member State 'B' proves that the 25 (b) and (c)) and also a statement of contractor has the standing and ability manpower (Article 26 (d)). required for the contract in question.

However, the fact that this is a mere It may therefore evaluate the information presumption of suitability means that it is deducible from a certificate of recognition rebuttable. Only 'information which can be which is covered by the presumption of deduced from registration in official lists suitability and decide at its own discretion