C-243/89

Mr President, Group (hereinafter 'ESG'), one of the five Members of the Court, international consortia which were invited to submit tenders under a restricted invitation 1. In the present case the Commission seeks to tender put out by Aktieselskabet Store­ a declaration from the Court that, in the pro­ bæltsforbindelsen (hereinafter 'Storebælt'), a cedure for inviting tenders for the construc­ company wholly controlled by the Danish tion of a bridge across the western channel State and the contracting authority for the of the Storebælt (Great Belt), the Kingdom work in question. Storebælt, which had of Denmark has failed to fulfil its obligations drawn up three different projects as a basis under Articles 30, 48 and 59 of the EEC for tenders, opened talks with the preselected Treaty and under Council Directive consortia and then pursued negotiations with 71/305/EEC of 26 July 1971 concerning the ESG, which had exercised the option pro­ coordination of procedures for the award of vided for in Condition 3, Clause 3, of the public works contracts. 1 The Commission general tender conditions, of submitting an challenges two aspects of the procedure for alternative tender; those negotiations ended awarding the contract: a) the inclusion in the in the signature of the contract on 26 June general tender conditions of a clause which 1989. invited tenders on condition that the greatest possible use was made of Danish materials and consumer goods and of Danish labour and equipment (hereinafter the 'Danish con­ tent clause'); b) the fact that the negotiations 3. On 18 May 1989, the Commission had with the selected consortium were conducted contacted the Danish authorities to express on the basis of a tender which did not com­ its doubts about the compatibility with ply with the general tender conditions. Community law of both the Danish content clause and the fact that the negotiations with 2. The facts and the pre-litigation procedure ESG had been conducted on the basis of a are described in detail in the Report for the tender which did not comply with Con­ Hearing, to which reference is made. Here I dition 3, Clause 3, of the general tender con­ shall therefore merely recapitulate, so far as ditions. Not satisfied with the explanations is necessary to make the subsequent observa­ offered by the Danish Government, the tions easier to follow, the essential aspects of Commission sent a letter of formal notice on the matter. 21 June 1989 requesting inter alia postpone­ ment of the signature of the contract. In The contract for the construction of a bridge reply to that letter the Danish authorities over the western channel of the Storebælt informed the Commission that they did not was awarded to the European Storebælt consider it appropriate to postpone the sign­ ing of the contract, but that, by letter of 21 June, they had requested Storebælt to * remove the Danish content clause, so that it Original language: Italian. 1 — OJ, English Special Edition 1971 (II), p. 682. no longer appeared in the final contract.

Considering that an infringement had been cle 169, retaining as one of its grounds of committed and that removal of the clause in complaint that on which the application for question after the contract had been awarded interim measures had been based. Subse did not expunge the failure to fulfil obliga quently, however, the Commission, which in tions, the Commission, by telex message of its application initiating proceedings had 14 July 1989, delivered a reasoned opinion reserved the right at a later date to supple addressed to Denmark in which inter alia it ment and develop the grounds of its applica stated that, since the contract had already tion, requested — and for the most part been signed, the only way for the situation obtained — from the Danish Government to be remedied was to ask Storebælt to can various documents relating to the tendering cel the contract with ESG and to reopen the procedure and to the final version of the tendering procedure. contract, on the basis of which it then adduced, in the form of a reply, new reasons in support of its application.

4. At the hearing of the application for relied on by the Commission. interim measures on 22 September 1989, the Danish Government stated that it recognized that the Danish content clause constituted a breach of the fundamental principle of non (a) The Danish content clause discrimination enshrined in the EEC Treaty and undertook (a) to avoid any discrimina tory clause or practice in relation to future contracts for public works or supplies, (b) to 5. The Danish Government objects that the ensure that compensation would be paid for Commission is widening the dispute to the damage incurred by the tenderers pro include clauses in the general tender condi vided that they were able to demonstrate tions other than those referred to in the let that their claims for damages were well ter of formal notice or the reasoned opinion founded in Danish law, and (c) in any event since, in substance, new pleas in law are to ensure that bidding costs were recovered thereby introduced, which are contained and through arbitration, without the undertak developed only in the reply. ings concerned having to establish that their failure to be awarded the contract was caused by the discriminatory effect of the Danish content clause. Indeed, in the course of the pre-litigation procedure, the Commission referred to only Following that statement, the Commission the Danish content clause as laid down in withdrew its application for interim mea Condition 6, Clause 2, of the general tender sures but continued proceedings under Arti conditions; in its application, however, and

In so far, then, as the objections raised for The Commission seeks to justify that step by the first time by the Commission in the claiming that in the pre-litigation procedure application and the reply concern clauses in its purpose was to challenge the Danish con­ the general tender conditions, and therefore tent clause in general and that, therefore, the clauses which already existed when the letter submissions contained in the reply should be of formal notice was sent, the inescapable understood as simply amplifying this more conclusion according to settled case-law is general ground of application and do not that the Commission should have, or at least constitute new separate pleas in law. Indeed, could have, known of them. it cannot be denied that the clauses referred to by the Commission both in the originat­ ing application and in the reply are in essence no more than particular instances of the Danish content condition as expressed in It follows that those 'discriminatory' clauses Condition 6, Clause 2, of the general tender may not be taken into consideration in these conditions. proceedings: the preliminary objection of inadmissibility raised by the Danish Govern­ ment must therefore be upheld. 6. That said, it should be pointed out that, 2 according to settled case-law, the scope of an application under Article 169 of the Treaty is delimited by the pre-litigation pro­ cedure provided for in that article as well as by the forms of order sought, and both the Nevertheless, I must add that, put in those reasoned opinion and the application must terms, the question is a purely formal one. be based on the same grounds and pleas in By that I mean that, if the Danish content law. Although the Court allows new matters clause is incompatible with Community law of fact to be raised in the course of an action — a fact not in dispute — it seems to me that if they are 'of the same kind as those to the defaulting State has a duty in any case to which the reasoned opinion referred and accept the obvious consequences, that is to constituted the same conduct', 3those facts say, to remove all those provisions which must nevertheless, according to Article 42(2) embody the Danish content condition. That of the Rules of Procedure, have occurred the Danish Government was well aware of this is evident both from its reply to the rea­ soned opinion, in which it gave assurances that the final version of the contract con­ 2 — See, most recently, the judgment in Case C-52/90 Commis- sion v Denmark [1992] ECR I-2187, paragraph 23. tained no clause analogous to the Danish 3 — See the judgment in Case 42/82 Commission v France [1983] content condition, and from its statement to ECR 1013 and in Case 113/86 Commission v Italy [1988] ECR 607. the effect that, since it had to remove the

Danish content condition before the contract as those raised in the reasoned opinion and was signed, and therefore had little time in relate to the same conduct. Besides, if the which to act, some specific instructions final version of the contract was in fact regarding the use of Danish materials had drawn up before the reasoned opinion was escaped its notice, simply because it was act delivered, it follows that the applicant insti 4 ing in haste. tution — which, moreover, cannot be accused of either delay or negligence given the extreme rapidity with which it brought

this point, too. munity law in the course of being commit ted, since the construction of the bridge is still in progress. 8. Now that it has been established that the subject-matter of the plea under examination is confined to the Danish content clause, as expressed in Condition 6, Clause 2, of the Of course, it could also be argued that to general tender conditions, and bearing in take into consideration, for the purposes of mind that the incompatibility of that clause these proceedings, requirements in those with Articles 30, 48 and 59 of the Treaty is clauses which are possibly unlawful, is not in dispute, the first point to be examined unlikely to lead to any significant change in is whether or not the Danish Government, in the subject-matter of the action, since the removing the clause in question, complied grounds of objection are of the same nature with the reasoned opinion.

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in Case C-362/90 Commission v Italy. In tract was concluded on the basis of an irreg­ that connection I must point out immedi­ ular tendering procedure, it seems to me that ately that in my opinion the case under — given the undisputed unlawfulness of the examination is not comparable with the case Danish content condition — the existence of just mentioned. an infringement cannot be denied.

In Case C-362/90 the infringement com­ plained of had already produced all its effects by the time the reasoned opinion was deliv­ It is obvious that the infringement could ered. Furthermore, the Court specifically have been eliminated only by means of a criticized the Commission for its failure to fresh tendering procedure, since the pro­ 'act in good time in order to prevent, by cedure followed was conducted in flagrant means of procedures available to it, the breach of Community law. In other words, it infringement complained of from producing unquestionably follows from the fact that effects and did not even invoke the existence the Danish content clause had influenced the of circumstances preventing it from conclud­ submission of the tenders that its subsequent ing the pre-litigation procedure laid down in removal, even before signature of the con­ Article 169 of the Treaty before the infringe­ tract, could not in any circumstances have ment ceased to exist'. 7 made good such a serious defect in the ten­ dering procedure.

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ings. In that connection, the Danish Govern ment contends that by that statement it not only recognized the existence of the infringe One final observation on this point. In my ment but also acknowledged its own finan view, it is all too clear that, if the Court were cial liability towards the tenderers, so that to accept the argument of the Danish Gov the statement was equivalent in effect to a ernment, the whole raison d'être of the Court ruling definitively finding that an infringement proceedings would be rendered infringement had been committed. nugatory where there is a quite specific fail ure to fulfil obligations, that is to say where there is a risk that the failure will be already 'consummated' during the pre-litigation pro Although the Danish Government recog cedure and possibly before delivery of the nized the infringement and gave assurances reasoned opinion. Moreover, that is obvi that compensation would be provided for ously a risk which arises almost as a matter the damage suffered by the tenderers, the of course in a sector such as public works fact is that this does not remove the interest

However, it has not complied with the reasoned opin 8 does not seem to me correct to deduce from ion', nor can one contend, as in Case that conduct of the Commission that the C-362/90 to which I referred earlier, that 'at action is inadmissible or unfounded. Other the date of expiry of the period laid down in wise, the principle would be established that the Commission's reasoned opinion . . ., the the Commission must abandon an action infringement complained of no longer whenever, in the course of proceedings, the existed' as it had produced all its effects.

11. Moreover, it appears from the settled 8 — See the judgment in Case 121/84 Commission v Italy [1986] ECR 107, paragraph 10. case-law on this point, in which the Court

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In the light of the foregoing I am therefore However, the matter of the re-wording of of the opinion that, since Storebælt awarded the form of order sought is more delicate. a public works contract on the basis of a Originally, the Commission took objection clause which invited tenders subject to the to the fact that Storebælt had held negotia­ condition that the greatest possible use was tions with ESG on the basis of a tender made of Danish materials and labour, the which did not comply with Condition 3, Kingdom of Denmark has failed to fulfil its Clause 3, of the general tender conditions. In obligations under Articles 30, 48 and 59 of its reply the Commission then re-worded the the Treaty. form of order sought, claiming that, on the basis of a tender which did not comply with

the general tender conditions, Storebælt had of order sought is permissible if it delimits, held negotiations with ESG with the result in the sense of 'restricts', the formal claim. In that the final contract contained amendments my opinion, that is precisely the position in to the conditions of the invitation to tender the present case, in so far as the Commission favouring exclusively that individual tenderer — by no longer relying in general on the fact and relating in particular to price factors. that the negotiations were conducted on the Furthermore, the Commission added an basis of a tender which did not comply with express reference to the principle of equal the general tender conditions, but rather on treatment as the basis of Directive 71/305, the fact that the subject-matter of those whereas the form of order sought in the negotiations was a clause in the general ten­ original application refers, in particular, to der conditions which was not open to dero­ Title IV of that directive. gation and that they led to results manifestly contrary to the principle underlying Direc­ tive 71/305, which is, namely, the equal treat­ ment of tenderers — in the end essentially delimited and restricted the scope of its charge as expressed in the reasoned opinion. The Danish Government contends that, by re-wording the form of order sought in that respect, its scope has been widened; it cites settled case-law to the effect that a party may not change the subject-matter of a dispute in the course of proceedings and contends that, consequently, the merits of the action must be assessed with regard only to the form of order sought in the application originating With regard to the argument that the princi­ 1 proceedings. 3The defendant further con­ ple of equal treatment constitutes a new legal tends that the form of order sought, as now basis, I would first of all observe that, re-worded, has a new legal basis, namely, the although such a principle was actually principle of equal treatment which underlies included in the form of order sought for the the directive. Such a step is unacceptable in first time in the reply, the Commission had so far as it amounts to a breach of the rights already taken issue with the Danish Govern­ of the defence, since the defendant has had ment during the pre-litigation procedure for no opportunity to submit its observations on breach of that principle. In particular, I those points in good time and in the pre­ would remind the Court that the Commis­ scribed manner. sion expressly stated in its reasoned opinion that the fact of having held negotiations on the basis of a tender which did not comply with the general tender conditions 'infringed the principle of equal treatment of all con­ tractors which lies at the heart just as much 13. I cannot accept that argument. In the of national laws in the field of procurement first place, as the Danish Government itself as of Council Directive 71/305'. It follows, has acknowledged, a reframing of the form therefore — as is clear moreover from both the reply to the reasoned opinion and from the defence —· that the Danish Government had an opportunity to submit its observa­ 13 — See, for instance, the judgment in Case 278/85 Commission v Denmark [1987] ECR 4069. tions in that regard.

14. That said, let me move on to consider 15. In my opinion, it clearly follows from the substance of the ground of application. It the wording of paragraph 6.2 that a tender is appropriate first of all to examine Con framed in those terms does not comply with dition 3, Clause 3, of the general tender con Condition 3, Clause 3, of the general tender ditions, that is to say, the wording of the conditions. The argument put forward by clause with which ESG failed to comply the Danish Government — according to when submitting its tender. which the contracting authority is only to assume liability for execution of the project and for the risks of variations in the quanti ties in the event that it undertakes the design According to that provision, the price for an of the project — is moreover contradicted by alternative tender must include the costs of Storebælt itself, as is clear from the note of the detailed design of the project submitted 21 June 1989 annexed to the Danish Govern by the tenderer for acceptance by the con ment's reply to the Commission's request

directly. In that case, liability for the plan treatment to which Title IV of Directive ning of the project and the risk of variations 71/305 gives expression. in quantities, in so far as they result from the detailed design of the project, is to be borne by the contracting authority. In particular, although the Commission acknowledges that tenderers may make res ervations in their tenders, it believes that the availability of that option had its limit in the The alternative tender submitted by ESG for fundamental requirements contained in the a bridge in reinforced concrete provided, at general tender conditions, of which Con paragraph 6.1 (actual tender), that the con dition 3, Clause 3, is certainly an example.

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manner so far as the other tenderers were under which the contractor must assume full concerned. As I have already mentioned, the liability in respect of the project and its exe­ Commission then amplified this complaint in cution, but also, and above all, to the princi­ its reply, stating that the negotiations ple of equal treatment: it is in fact clear that between ESG and Storebælt were incompat­ the other tenderers, in establishing a price for ible with Community law in so far as they the contract, took into account the fact that had an effect on prices. they would have to assume full liability for the work. As regards the risk of variations in the quantities, the contract provides for a fixed sum of DKR 5 million, which corre­ 16. Indeed, as I have just explained, ESG sponds to the estimate made by ESG in the had undertaken to take on the detailed variation on its tender: it is thus clear that design of the project for a fixed sum of DKR the negotiations in question did indeed affect 42 million, but did not undertake to assume prices. liability for the project or for the risks involved. Those conditions must, therefore, have been the subject of negotiation, as must the risk relating to quantity variations.

17. The Danish Government contends nev­ Furthermore, it appears from the documents ertheless that the increase in the price was submitted by the Commission that the con­ quite proportional to the total cost of the tract concluded with ESG provides that its work in question and that, in any case, the liability is to be limited to DKR 300 million facts complained of by the Commission are and to last no longer than six years, which is not governed by Community law; in partic­ clearly contrary not only to Condition 3, ular, the possibility of accepting offers which Clause 3, of the general tender conditions, contain reservations and the contracting authority's right to hold negotiations with tenderers are both matters governed by 15 — The grounds for the refusal being (a) the documents con­ national law. The Danish Government there­ cerned were confidential, and (b) Storebælt was under no fore maintains that Directive 71/305 does not obligation, in any case, to determine the price of the reser­ vations in question. govern the limits within which negotiations

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6 ment. 1 It is self-evident that in so far as 71/305 and its provisions, taken as a whole, Danish rules are shown to be incompatible are more than indicative in this respect. Suf with Community law, the latter prevails. fice it to say that it is expressly stated that the fixing of objective criteria for participa tion constitutes one of the fundamental prin Secondly, I do not see the point of the Dan ciples, observation of which must be ensured ish Government's complaint that the Com throughout procedures for the award of mission interpreted the directive as having public works contracts (third recital); that been based on the principle of equal treat tenders must be submitted in accordance

7 1989, 1 attached to Council Directive 18 89/440/EEC — which in open or 18. It is true that Directive 71/305 does not restricted procedures rules out all negotia contain any specific rule regarding reserva tion with tenderers on fundamental aspects tions; nor does it expressly codify the princi ple of equal treatment. That does not mean,

20. In the light of the foregoing I therefore propose that the Court uphold the application and order the defendant State to pay the costs.

19 — Judgment in Case C-292/89 Antonissen [1991] ECR I-745.

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