C-103/88

FRATELLI COSTANZO v COMUNE DI MILANO

OPINION OF MR ADVOCATE GENERAL LENZ delivered on 25 April 1989 *

Mr President, criterion for the award was that of the Members of the Court, lowest priced bid, subject to the admission of supplementary bids. Under a transitional arrangement introduced by decree law, intended to accelerate procedures for the award of public works contracts during a 2 two-year period, the invitation to tender A — Facts of the case allowed for the automatic exclusion of abnormally low tenders, determined on a purely arithmetical basis. Through the application of that temporary special rule the plaintiff was excluded from the 1. The proceedings for a preliminary ruling tendering procedure. The plaintiff was the on which I shall give my views today are only tenderer whose bid was less than the concerned with the interpretation and effect basic amount of LIT 82 043 643 386. The of Council Directive 71/305 of 26 July 1971 contract was won by a consortium (Ing. concerning the coordination of procedures Lodigiani SpA) whose tender exceeded the for the award of public works contracts. 1 set figure by 9.85%. The court submitting the questions, the Tribunale amministrativo regionale per la Lombardia, wishes essentially to establish the content and scope of Article 29(5) of Directive 71/305, and to ascertain whether it is directly applicable and whether national 3. Subsequently the validity of Article 4 of administrative authorities are entitled — or the Decree Law — the legal basis for the indeed obliged — to apply Article 29(5) accelerated procedure — was disputed and even in the face of conflicting national law. it was not converted into statute. However, administrative measures adopted under the Decree Law were declared definitive.

9. Question A of the reference for a 6. Although the questions submitted by the preliminary ruling asks, in effect, to what national court were considered in the extent the legislative content of Article 29(5) written procedure to be inadmissible in part, of Directive 71/305 must be incorporated in it must be accepted that the request the national provision implementing it. The addressed to the Court was legitimate. At terms used are somewhat confused, most, there may be some doubt as to the inasmuch as they distinguish between the admissibility of the questions in so far as 'provisions as to results' and the 'provisions they ask whether national law is compatible as to form and methods' of a directive. That with Community law. The Court has consis­ distinction is an oblique reference to the tently held that it is not its duty to examine definition of a directive contained in Article whether national law is compatible with 189 of the EEC Treaty, according to which Community law. In such cases the Court a directive is binding, as to the result to be regularly reformulates the questions and achieved, upon each Member State to which lays down the guiding criteria on the basis it is addressed, but leaves to the national of which the national court may resolve for authorities the choice of form and methods. itself the issue of compatibility. The formulation itself shows that it is inap­ propriate to distinguish within a directive between provisions as to results and provisions as to form and methods, since by definition a directive is silent as to the form 7. Whenever questions on the interpretation and methods of transposition. of Community law are unclear the Court has taken upon itself the task of establishing the relevant issue of Community law and answering the national court accordingly. 10. The extent to which a Member State is obliged to incorporate the provisions of a directive without amendments or, conversely, is permitted to depart from them 8. The questions referred to the Court must be determined by the interpretation of should be arranged in a logical order as the provision at issue. The basis must be the

11. Article 29 of Directive 71/305 enum­ erates the criteria for the award of a contract and lays down the procedure to be followed in each case. The enumeration of the criteria governing the award and the 14. By contrast, Article 29(5) does not establishment of the procedure to be indicate precisely what is to be understood observed give transparency to what is done by an 'obviously abnormally low tender'; no and at the same time represent an element specific procedure is laid down for deter­ of legal certainty. It is precisely the stan­ mining such a tender. Here there is dardization of procedure which that article undoubtedly room for specific provisions in seeks to achieve that gives potential the implementing measures of the Member tenderers a clearer view of the conditions to States. For the same reason it is not abso­ which they submit when taking part in the lutely essential for the terms to be tendering procedure. Thus Article 29(5) not reproduced verbatim in the implementing only requires the awarding authority to measure. It is more important to emphasize examine tenders which are obviously abnormally low in relation to the trans­ 3 — See the judgment of 10 February 1982 in Case 70/68 Transporoute v Minister for public works[1982]ECR 4 17, action, and states how that must be done, at paragraph 18

OPINION OF MR LENZ — CASE 103/88

the exceptional nature of the low tender, 17. In areas in which the national legis­ such that it raises doubts whether the tender lature enjoys some discretion it may is a genuine one. The investigation and, certainly introduce subsequent amendments. where appropriate, elimination of those It is, indeed, in accordance with Community doubts is the purpose of the examination law to introduce improvements by reference procedure. The imbalance between the to Community provisions where the need transaction and the tender is what charac­ arises. Provisions which run counter to the terizes the situation envisaged, and this must provisions and objectives of a directive are be reflected in the implementing measure. not permitted.

16. It remains to be determined (Question B — 1) whether a national measure enacted for the implementation of a directive may 19. In Question D of the reference to the subsequently be amended by the legislature Court the Tribunale amministrativo asks of the Member State concerned. The first whether the municipal authority was bound point is that in formal terms a national by Community provisions, in the event that implementing measure is entirely the same the Court should find the Italian legislation as the autonomous legislation of a Member in question to be inconsistent with Article State. A priori, therefore, it may be 29(5) of Directive 71/305. Since, as I have amended in just the same way as any other already pointed out, it is not for the Court national legal measure. However, in so far of Justice but for the national court to as the national legislature was bound by the resolve this point, on the basis of the criteria substance of a directive when adopting the set out by the Court of Justice, any further implementing provisions in the first place, discussion must proceed on the assumption the same must necessarily apply to that the national implementing measures are subsequent amendments. incompatible with the Directive.

FRATELLI COSTANZO v COMUNE DI MILANO

20. In determining whether and to what directives is not intended to secure compre­ extent the national administrative authorities hensive observance of the directive are bound by Community provisions in the otherwise than through its implementation event of inconsistency between Community in national law, as is clear from the fact that and national law, a distinction must first be the provisions of a directive which impose drawn according to the legal nature of the obligations on individuals cannot be directly relevant Community measures. applicable.

OPINION OF MR LENZ — CASE 103/88

therefore not possible to invoke the directive any other condition and is laid down in even if the national measure departs, within detail. The provision is therefore uncondi­ the permitted limits, from the content of the tional and sufficiently precise. Its application directive. Incorrect implementation may does not necessarily presuppose the consist in a legal measure incompatible with adoption of further legal measures. the directive ab initio or a subsequent change in the legal situation which only later causes it to be incompatible. In such circumstances the Member States' obligation under Articles 189 and 5 of the EEC Treaty to implement directives fully and accurately continues to subsist or is revived, as the case 27. Lastly, Article 29(5) of Directive 71/305 may be. In such cases, too, the Court of is of such a nature as to create rights for Justice has allowed individuals to rely on individuals. As the Court ruled in the Trans- the directive. 8 It should be noted in this poroute 11 judgment, and confirmed in Case 12 connection that the subsequent amendment 31/87, 'the aim of the provision ... is to of the legal situation constitutes a separate protect tenderers against arbitrariness on the act contrary to Community law. For their part of the authority awarding contracts'. part, State authorities may not rely against That aim could not be achieved if it were individuals on action by the Member State left to that authority to judge whether or which is contrary to Community law. 9 not it was appropriate to seek explanations. The obligation to examine the tender, which has the effect of a procedural guarantee, may be construed as a right vesting in the tenderer who submits an obviously abnormally low tender.

29. The obligation to apply Community law thus also concerns State authorities. When 32. Such proceedings are required only if the State as a whole is prohibited from the individual has invoked the directly relying against individuals on provisions applicable directive unsuccessfully in his derogating from the directive which were dealings with the authorities. In such a case introduced or maintained in disregard of it is the duty of the courts to safeguard the obligations under Community law, the State individual's position with regard to 14 authorities are also materially affected. Community law. This comprehensive duty to act in accordance with Community law finds expression in Article 5 of the EEC Treaty.

33. From the point of view of the individual it is essential that he should be able to rely on the directly applicable measures. If need 30. In previous cases where a national of a be he must take the matter to court, and in Member State has pleaded the direct appli­ doing so may avail himself of the full range cability of the provisions of a directive, the of national legal remedies, as if he were Court has always proceeded on the basing his case on national law alone. assumption that he does so in proceedings However, the possibilities for relying on a before the national courts, and that those directly applicable provision of a directive courts must observe the directly applicable do not go so far as to create new 15 measures as valid Community law. procedures for the protection of legal 16 interests.

37. That conclusion also resolves the 35. From the point of view of the adminis­ problem raised during the oral procedure by trative authorities, on the other hand, a the representative of the Commission, distinction should be drawn according to namely whether the Commission has two whether the authorities are in doubt as to opportunities to bring an action against a the consistency of the national provision Member State which has not given effect to with Community law or the dispute has a directive — first on account of failure to already been the subject of a judicial ruling. implement it and secondly for failure to In that regard we must base ourselves on apply it. In so far as the administrative auth­ established case-law, whereby an individual orities are not, I submit, obliged to apply may rely on such provisions in court directly a provision in a directive, there is proceedings. If he may do so before the no possibility of bringing an action against a courts he must also be accorded the right to Member State. This is where it differs from do so in dealings with the administrative a regulation. The administrative authorities authorities, so as to ensure that those auth­ of the Member States are not merely orities are fully informed of the individual's entitled but positively obliged to apply a basic position in the matter to be resolved. regulation, even in the face of conflicting If, however, the individual has the right to national law. In doing so they enjoy the present his arguments to the administrative protection of Article 189 of the EEC authorities, then those authorities must be Treaty: the binding nature and direct appli­ given the right to agree with them. It would cability of a regulation are beyond doubt. indeed be absurd to prevent the authorities The application of provisions of that kind from making a decision consistent with falls within the normal duties of all adminis­ Community law, as they are ultimately trative authorities. obliged to do.

41. In view of the fact that Article 29(5) of Directive 71/305 has been held in a 39. The circumstances are similar in the preliminary ruling to be directly 20 event of a prior judicial ruling. Once the applicable, it may be inferred for the conflict of rules has been resolved in purpose of answering the questions now abstracto the administrative authorities before the Court that the administrative cannot be prevented from applying the authorities were entitled to apply Article directly applicable measures in concreto, 29(5) of Directive 71/305 directly. It is true especially since they are no longer entitled that the judgment referred to was not to rely against an individual on the measures delivered until after the authority had made 21 contrary to Community law. 18 The matter its decision. need not necessarily have been resolved by a national court but may instead have been settled by the Court of Justice in previous proceedings for a preliminary ruling. 42. Nevertheless, the illegality of a Although preliminary rulings do not procedure for the automatic exclusion of an formally have effect erga omnes, the Court Obviously abnormally low tender' had has held in respect of rulings concerning the 22 already been established by the Court. In validity of Community provisions in substantive law there were therefore cogent proceedings under Article 177 of the EEC grounds for the authority concerned to Treaty that a judgment, although addressed refrain from applying a legal measure only to the national court which has requiring exclusion on a purely arithmetical requested it, is sufficient reason for any basis. other national court to regard the act in question as void for the purposes of a judgment which it has to give. The Court of Justice bases its decision on the requirements of a uniform application of 43. Although it is therefore possible to infer Community law and the need for legal justification under Community law for 19 certainty. An individual must also have the refraining to apply the national legal right to rely on a directive in dealings with measures in question, no obligation to do so administrative authorities, and those auth­ can be derived from the above consider­ orities must be entitled to comply with his ations. Whenever serious doubts remain as request. 20 — See judgment in Case 31/87, cited above. 18 — See the judgment in Case 5/84, cited above, at paragraphs 21 — The judgment in Case 31/87 was given on 20 September 37 and 38. 1988, the contested decision on 24 July 1987 (reference to 19 — Judgment of 13 May 1981 in Case 66/80 International the Court dated 16 December 1987; first paragraph under Chemical Corporation v Amministrazione delle finanze dello heading 'Facts of the case'). S/a/o [1981] ECR 1191. 22 — 22 Judgment in Case 76/81, cited above.