C-318/94

COMMISSION ν GERMANY

OPINION OF ADVOCATE GENERAL ELMER delivered on 8 February 1996 *

Introduction that reason possible to award the works con­ tract by negotiated procedure without prior publication of a tender notice.

1. In this case the Commission seeks a dec­ laration that, by virtue of the fact that the The relevant provisions of Community law Wasser-und Schiffahrtsamt (Waterways and Navigation Office) Emden awarded a public works contract for the dredging of part of the lower Ems from Papenburg to Oldersum by negotiated procedure without publishing a tender notice in the Official Journal of the European Communities, the Federal Repub­ lic of Germany has failed to fulfil its obliga­ 3. Article 5(1) of the directive provides that, tions under Council Directive 71/305/EEC in awarding public works contracts, the con­ of 26 July 1971 concerning the coordination tracting authorities must apply 'open proce­ of procedures for the award of public works dures', 'restricted procedures' or 'negotiated contracts, 1 as amended by Council Directive procedures'. 89/440/EEC of 18 July 1989, 2 (hereinafter 'the directive').

Under Article 5(2), the contracting authori­ ties may, in a number of specified cases, 2. Although the Federal Republic of Ger­ award public works contracts by negotiated many does not deny that the project in ques­ procedure with prior publication of a tender tion is covered by the directive, it submits notice and after having selected the candi­ that the action brought against it should be dates according to qualitative public criteria. dismissed on the ground that the conditions contained in Article 5(3)(c) of the directive, cited below, were satisfied and that it was for

'in so far as is strictly necessary when, for reasons of extreme urgency brought about by events unforeseen by the contracting authorities in question, the time-limit laid down for the open, restricted or negotiated Article 14 lays down rules on the time-limits procedures referred to in paragraph 2 above which, in restricted procedures and negoti- cannot be kept. The circumstances invoked ated procedures as described in Article 5(2), to justify extreme urgency must not in any the contracting authorities may fix for event be attributable [to] the contracting receipt of requests to participate. The period authorities'. set may not in general be less than 37 days from the date of dispatch of the notice of the project to the Office for Official Publications of the European Communities. Article 15(1), however, provides that in cases where urgency renders impracticable the time- limits laid down in Article 14, a period of not less than 15 days must be fixed. Article 5(4) states that 'in all other cases, the contracting authorities shall award their pub- lic works contracts by the open procedure or by the restricted procedure.'

5. In September 1989, a decision was taken, following a request from the town of Papen­ burg, to attempt to deepen the lower Ems so as to make it navigable for Panama class ves­ sels with a 6.80 metre draught. Within the 8. After a number of necessary preliminary context of general transport development, examinations, the Wasser-und Schiffahrts­ this deepening was regarded as being of gen­ direktion Aurich initiated the approval pro­ eral economic significance for the region cedure on 5 November 1990 in order that inasmuch as it would benefit the economic the project could, if appropriate, obtain structures of a region which was already approval at the end of May 1991. A discus­ structurally weak. sion of the project took place on 11 April 1991. The Bezirksregierung für Weser-Ems (Weser-Ems Regional Authority), whose agreement was necessary before the plans could be approved, did not on this occasion express any objections to the project.

6. It transpired in 1990 that the region's largest employer, the Meyer-Werft shipyard, had concluded a contract for the delivery of a vessel with a 6.80 metre draught, the Zenith, for a price of approximately 9. The Wasser-und Schiffahrtsamt Emden DM 500 million. This vessel could be deliv­ intended to put the whole of the works con- ered only if part of the lower Ems was deep­ tract for the deepening of the lower Ems out ened. The delivery of the vessel was sched­ to public tender and accordingly published a uled for 18 February 1992, at the expected short description of the planned works in a period of spring tide. If this delivery date supplement to the Official Journal of the was not complied with, the shipyard was European Communities of 20 April 1991. required to pay a per diem contractual pen­ alty of USD 80 000.

13. On the previous day, 14 August 1991, the Commission had sent to the German Government a telex message pointing out that, in the Commission's opinion, the con- 11. In reply to a request from a non-German ditions governing the award of a contract by company for more detailed information con- negotiated procedure without prior publica- cerning the works announced on 20 April tion of a tender notice had not been satisfied. 1991, the Wasser-und Schiffahrtsamt Emden By letter of 2 September 1991, the German informed that company on 30 May 1991 that Government replied to the Commission that it could receive documentation on the the conditions in Article 5(3)(c) of the direc- project only after the tender notice had been tive governing the award of a contract by published in the Official Journal of the Euro- negotiated procedure without prior publica- pean Communities. On 19 June 1991, the tion of a tender notice had, in its view, been Wasser-und Schiffahrtsamt Emden further satisfied. informed the company in question that the planned public tender could not be carried out because of pressure of time.

15. As will be clear from the introduction, the question whether the German Govern­ ment should be held guilty in this case of breaching its obligations under Community law depends on whether the conditions set With regard to the former Article 9, the out in Article 5(3)(c) of the directive have Court has generally held 3 that: been satisfied. If they have been satisfied, the Federal Republic of Germany will have been entitled to award the contract for the perfor­ mance of the works in question by negoti­ ated procedure without prior publication of a tender notice. If, on the other hand, those 'the provisions of Article 9 of Directive conditions have not been satisfied, the Fed­ 71/305, which authorize derogations from eral Republic of Germany will not have been the rules intended to ensure the effectiveness entitled to award the contract in the manner of the rights conferred by the Treaty in con­ in which it did and must be held guilty in nection with public works contracts, must be accordance with the form of order sought by interpreted strictly and the burden of prov­ the Commission. ing the actual existence of exceptional cir­ cumstances justifying a derogation lies on the person seeking to rely on those circum­ stances.'

16. In what follows regarding each individ­ ual aspect of Article 5(3)(c) of the directive, I shall therefore examine the views of the par­ The Court further held in a judgment of ties and set out my own opinion thereon. 2 August 1993 4 that:

'According to Article 9(d) of the directive, First, however, I must point out that the the derogation for which it provides, namely negotiated procedure under Article 5(2) and (3) of the directive must, according to the 16th recital in the preamble, be 'considered 3 — Sec most recently Case C-57/94 Commission ν Italy [1995] to be exceptional and therefore only applica­ ECR I- 1249, paragraph 23. 4 — Case C-107/92 Commission ν Italy [1993] ECR I-4655, para­ ble in certain limited cases'. The provision graph 12.

18. I must first stress that failure to complete the project for deepening part of the lower Ems by 18 February 1992 would have had the consequence that the Meyer-Werft ship- yard would have been unable to meet its 17. The German Government contends that contractual obligations. If a Member State there were 'reasons of extreme urgency' for could deviate from tendering procedures completing the project before 18 February every time an undertaking might be unable 1992 in so far as the Zenith, the vessel built to meet its contractual obligations as a result by the Meyer-Werft shipyard, was to be of delay in completing public works, the handed over on that date. Failure to comply scope of Article 5(3)(c) would be extremely with that time-limit would have had the wide. This would not be in keeping with the result that the vessel could not have been fact that the provision is an exception which delivered on time and that consequently the can be applied only in so far as is strictly Meyer-Werft shipyard, the largest employer necessary. The desire on the part of a Mem- in the area, with some 1 800 employees, ber State to assist an undertaking to meet its would have forfeited its reputation and been commitments cannot therefore, in my view, required to pay a contractual penalty. More- be treated as constituting in itself 'reasons of over, concern not simply for the Meyer- extreme urgency' for departing from the ten- Werft shipyard but also for the structurally dering procedures laid down. weak region made it imperative to complete the project before 18 February 1992, in so far as the long-term consequence of any failure by the Meyer-Werft shipyard to meet its contractual obligations might well have been that the shipyard would incur a bad reputa- tion with regard to reliability and productiv- ity. This would have led to a loss of orders and consequent loss of jobs. At worst, the 19. If, however, one proceeds on the basis shipyard would have had to close, resulting that the consequences of a failure to com- in the loss for the region of its major plete the project by 18 February 1992 would employer. have been as the German Government has

submitted, that failure to comply with the urgency' within the meaning of Article time-limit would have had particularly seri 5(3)(c) of the directive. ous consequences. The region in which the Meyer-Werft shipyard is situated is, accord ing to the information submitted by the Ger man Government, structurally weak and the Meyer-Werft shipyard, with 1 800 employ 21. According to the view taken by the Ger ees, is the largest regional employer. Further, man Government, the condition that the rea according to the available information, some sons of extreme urgency, which in that Gov 1 700 jobs in a range of suppliers also depend ernment's view made it impossible to respect on the shipyard's existence. I can fully the time-limits laid down in the directive understand why a Government should be with regard to the tendering procedures, doing all in its power to save jobs, and it is should be 'brought about by events unfore also evident that the preservation of the ship seen by the contracting authorities in ques building industry is a matter of importance tion' was also satisfied in this case.

20. Furthermore, the German Government tracting authorities could not have foreseen has not argued in the course of the proceed in so far as the Wasser-und Schiffahrtsamt ings that the works project was necessary in Emden ought to have taken into consider- order to prevent the waste of assets which ation the possibility that such a change in would have resulted if it had not been possi policy might occur. The Commission has ble to hand over the completed vessel and it added that the reasons of extreme urgency had consequently been necessary to scrap it. were brought about by the German authori- It is therefore unnecessary to consider in any ties' own conduct and that the circumstances greater detail to what extent this view might, were therefore attributable to the contracting in this case, have led to 'reasons of extreme authority.

24. In the present case, the Wasser-und Schiffahrtsamt Emden knew from the date on which the decision to deepen the lower Ems was taken that a procedure for approval At the Community level also, a high degree of the project plans would have to be carried of priority has been attached to the environ- out. The Wasser-und Schiffahrtsamt Emden ment, with, for example, the implementation must therefore have been aware for the of the EIA Directive, 5which provides that whole time that objections against the project, on, for instance, environmental grounds, might be forthcoming and that 5 — Council Directive 85/337/EEC of 27 June 1985 on the there was consequently a risk that the assessment of the effects of certain public and private projects on the environment (OJ 1985 L 175, p. 40). Bezirksregierung für Weser-Ems might

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COMMISSION ν GERMANY

25. The refusal by the Bezirksregierung für Weser-Ems to accord its definitive consent to Furthermore, it is not possible, in my view, the plans for dredging the lower Ems cannot to draw a clear distinction in a Member State therefore be regarded as an '[event] unfore- between the authority which, in the particu- seen by the contracting authorities'. lar case, is the contracting authority and other authorities in that Member State. Whether or not it is federal in structure, a Member State must be identifiable with all the authorities in that State. In my view, therefore, a Member State must assume 26. According to the second sentence in responsibility for all actions of the various Article 5(3)(c), the circumstances invoked to authorities within that State. It must not be justify extreme urgency also 'must not in any possible for one authority to excuse itself on event be attributable [to] the contracting the ground that it does not know what authorities'. The purpose of that requirement another authority is doing or is about to do. must be to confine application of the dero- gating provision to those cases in which the events invoked to justify the extreme urgency are attributable to external factors, that is to say, factors which lie beyond the scope of influence of a Member State's administrative authorities.

The condition in the second sentence of Article 5(3)(c) to the effect that the circum- stances invoked to justify extreme urgency 'must not in any event be attributable [to] It follows from what was discussed at point the contracting authorities' can also there- 24 above that the need to apply the pro- fore, in my opinion, not be regarded as hav- cedure in Article 5(3)(c) which has been ing been satisfied.

27. The final condition governing applica- 21 June 1991. On that date, the Wasser-und tion of the derogating provision, namely that Schiffahrtsamt Emden did also in fact insti- for reasons of extreme urgency 'the time- tute the contested tender after negotiated limit laid down for the open, restricted or procedure without publication of a tender negotiated procedures referred to in para- notice. If the Federal Republic of Germany graph 2 above cannot be kept', was, in the was already able on that date to set in German Government's view, satisfied inas- motion that procedure without awaiting the much as a tendering procedure could not be entry into force of the decision approving initiated before the decision to approve the the project for the temporary deepening of project became operative, that is to say, on part of the lower Ems, there could not have 15 August 1991. That date corresponded been anything to prevent it from applying a with the date on which the contract was procedure with a tender notice making awarded. In the alternative, the German implementation of the project conditional on Government submits that it was not possible the approval becoming effective. to comply with the time-limits in Article 15(1) concerning cases of urgency, since experience shows that, in addition to the 15 +10 days laid down in Article 15, making a total of 25 days, it would have been neces- sary to have 14 days to process the applica- tions to participate which had been received, 5 days to view the place of work and 28 days 30. On 21 June 1991, 55 days were available to process the tenders received, making a for the implementation of a tendering pro- total of 72 days, in order to implement the cedure. This number of days would appear procedure. to be adequate for the purpose of imple- menting the procedure in cases of urgency in Article 15(1), since, in addition to the 15 +10 days mentioned therein, making a total of 25 days, a further 30 days were avail- able for, inter alia, processing the applica- 28. Against this, the Commission argues that tions to participate and tenders which had it would in all circumstances have been pos- been received. sible for the contracting authority to comply with the time-limits in cases of urgency laid down in Article 15(1), since the Wasser-und Schiffahrtsamt Emden had, between 21 June 1991, the date on which the six German undertakings were invited to submit tenders, and 15 August 1991, the date on which the contract was awarded, 55 days in which to implement the required procedure. The length of time which the German Gov- ernment claims would have been necessary in addition to the 25 days required under Article 15(1) appears at the outset to be more than necessary. In support of its calculation, the German Government has simply submit- 29. I agree with the Commission that the ted that it is based on long experience Wasser-und Schiffahrtsamt Emden could regarding the length of time required for have instituted a tendering procedure on awarding public works contracts.

33. In view of the foregoing, I p r o p o s e that the C o u r t should rule as follows:

(1) By reason of the fact that t h e Wasser-und Schiffahrtsamt E m d e n a w a r d e d a public w o r k s contract for t h e dredging of part of the lower E m s from P a p e n ­ b u r g t o O l d e r s u m by negotiated p r o c e d u r e w i t h o u t publishing a t e n d e r notice in t h e Official Journal of the European Communities, the Federal R e p u b l i c of G e r m a n y has failed t o fulfil its obligations u n d e r C o u n c i l Directive 71/305/EEC of 26 July 1971 concerning the coordination of p r o c e d u r e s for the award of public w o r k s contracts, as amended by C o u n c i l Directive 89/440/EEC of 18 J u l y 1989.

(2) T h e Federal Republic of G e r m a n y is ordered t o pay the costs of t h e p r o c e e d ­ ings.

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