C-57/01

OPINION OF MRS STIX-HACKL — CASE C-57/01

OPINION OF ADVOCATE GENERAL STIX-HACKL delivered on 11 July 2002 1

I — Introductory remarks I I— Legal framework

A — Community law

1. These proceedings concern the interpre- tation of a works coordination directive as 2. Of the directives material to the award well as of Council Directive 89/665/EEC of process, Directive 71/305/EEC concerning 21 December 1989 on the coordination of coordination of procedures for the award the laws, regulations and administrative of public works contracts, 3as amended by provisions relating to the application of Directive 89/440/EEC, 4 is relevant, and review procedures to the award of public essentially corresponds to Council Direc- supply and public works contracts 2(here- tive 93/37/EEC of 14 June 1993 concerning inafter 'the legal remedies directive'). In the coordination of procedures for the particular, the question in issue is whether award of public works contracts 5(here- a change in the composition of a consor- inafter 'the works procurement coor- tium is permissible during procedures for dination directive') to which reference will award of a contract, and the effects of such also be made below. a change on the legal protection available.

3 — OJ 1971 L 185, p. 5. 1 — Original language: German. 4 — OJ 1989 L 210, p. 1. 2 — OJ 1989 L 395, p. 33. J —OJ 1993 L 199, p. 54, since amended.

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7. Article 2(1) of the said directive pro- related matters' (23A) and of Presidential vides, inter alia, Decree No 609/1985 (223A).

'The Member States shall ensure that the measures taken concerning the review pro- 9. In the present case, the contracting cedures specified in Article 1 include provi- authority opted for a contract award pro- sion for the powers to: cedure pursuant to Article 4(2)(b) of Law No 1418/1984. This type of procedure provides for the following stages:

10. Pre-selection of candidates, submission of tenders, assessment of tenders from a (b) either set aside or ensure the setting technical point of view, assessment of aside of decisions taken unlawfully, tenders from an economic and financial including the removal of discrimina- point of view and negotiations with the tory technical, economic or financial so-called provisional contractor or contrac- specifications in the invitation to tors. tender, the contract documents or in any other document relating to the contract award procedure;

11. Article 5(6) of Law No 1418/1984 states: (c) award damages to persons harmed by an infringement.'

14. Finally, Article 35 of the abovemen- 12. Article 51(1) of Presidential Decree tioned presidential decree contains provi- No 609/1985, which was adopted on the sions concerning the obligations of the basis, inter alia, of the foregoing provision, members of a contracting consortium as provides as follows: regards completion of the work which are borne by the consortium; paragraphs 6 and 7 of that article determine what happens to the consortium and the obligations of its members in the event of the death of the natural persons who, with their individual '1. The substitution of another contracting undertakings, participated in it, and in the undertaking in the construction of the work event of the insolvency of a member of the in accordance with Article 5(6) of Law consortium. No 1418/1984 shall be proposed by the department managing the project and shall be authorised by the responsible authority. In order that substitution may be auth- orised, the contracting undertaking which seeks to replace the contractor must have the same qualifications as those which were required for the award of the works to the 15. It is apparent from the combination of contractor and must satisfy the responsible these provisions that the legislation relating authority that it offers the appropriate to the tendering procedure for public works guarantees for completion of the works.' contracts provides, under certain con- ditions, for the substitution of a member of a consortium where such a contract has been awarded to the consortium in ques- tion. Such substitution, always after appro- val by the developer, is provided for only at the stage of execution of the works, that is 13. The other provisions of this Article to say the stage which follows signature of concern authorisation of substitution with the contract between the contractor and the

developer, and not prior to the award of minutes of the meetings of the boards of the contract. 6 directors of all the members of the con- sortium, authorising their participation in the consortium in cooperation with the other members, which were to be men- tioned by name, as well as copies of the articles of association of any new members of the consortium. Finally, it was provided 16. In the supplementary notice in respect that the file had to include all the items of the invitation to tender which is in issue referred to in paragraphs 7.1, 7.2, 7.3 and in these proceedings (notice concerning the 7.4 of the notice relating to the first stage of second stage of the award procedure), it the tendering procedure. was stated that those entitled to take part in that stage were the eight groups which declared their interest in the first stage of the award procedure and had been pre- selected. It was also stated that those groups were entitled to take part in the form that they had taken during the first stage of the award procedure, that the creation of groupings or other forms of cooperation between them was strictly precluded and, finally, that it was possible for a group to be enlarged by the addition of new members provided that the new members had not been included in any 18. Moreover, it was stated in the said other groups pre-selected to take part in the notice that the consortia would be required second stage of the procedure. to set out their intentions regarding the extent of their involvement in the financing of the project, and to submit a statement attesting to their willingness to invest the capital sums which were essential, in addi- tion to any subsidies, to ensure completion, maintenance and operation of the work. 17. In addition, Article 12 of that notice Furthermore, any construction undertaking provided that each tenderer's file should or consultancy was required to submit a include all the documents showing that the certificate of registration in the commercial tenderer constituted, from a legal perspec- register of the country in which it was tive, a consortium. Such documents established and to submit evidence of its included a certificate from a notary that a financial and economic resources and its consortium had been formed by all the technical capabilities. Finally, undertakings members of the pre-selected group, includ- within the consortium which would have ing any new members, in accordance with more specific responsibility for running the Article 6 of the supplementary notice. Each project, were required to submit appropri- consortium had also to include certified ate certificates and to demonstrate their capability and their experience in the running of transportation projects and, in 6 — Council of State 971/1998, plenary. particular, of underground railways.

21. At the pre-selection stage, the members of the initial Makedoniko consortium were III — Facts, main proceedings and ques- the undertakings Mikhaniki AE, Fidel SpA, tions referred for preliminary ruling Edi-Sta-Edilizia Stradale SpA and Teknoc- enter-Centro Servizi Administrativi-SRL.

20. The Ministry for the Environment, Planning and Public Works issued a notice of an invitation to tender, approved by Decision Dld/2/207 of 18 June 1992 of the Minister, announcing the first stage (pre- selection stage) of an international tender- 22. In the second stage of the tendering ing procedure for the appointment of a procedure in question, that is, after the pre-selection stage and invitation to tender, the consortium was enlarged by the addi- 7 — Council of State 971/1998, plenary. tion of the undertaking AEG Westinghouse

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Transport Systems GmbH (hereinafter undertakings Mikhaniki AE, Adtranz and 'AEG'). Thus composed, the consortium Transurb Consult. As the file shows, the submitted a bid. agreement for the formation of the con- sortium in that composition was not sub- mitted to the authorities. That notarial act was signed on 27 November 1996, barely two days before the decision of the Min- ister for the Environment, Planning and Public Works concerning the failure of 23. As is apparent from the file, and not negotiations, and almost two and a half disputed by the parties, that was the com- years after the nomination of the appellant position of the consortium when it was as the provisional contractor. It was also in nominated as provisional contractor (on that composition that the consortium later 14 June 1994) and thus after the assessment brought the action. of the bids.

cil of State considered that a change in the a preliminary ruling be made to the Court composition of a consortium was only of Justice of the European Communities on permissible prior to submission of bids. the interpretation of the relevant Commu- Thus, the consortium was not entitled, in nity provisions. its altered composition, to apply for the decision to be set aside.

31. By order of 14 June 2000, the Adminis- trative Court of Appeal, Athens, referred the following question to the Court of 28. In its action before the Administrative Justice: Court of First Instance, Athens, Make- doniko, together with the other undertak- ings in the consortium, sought a declaration that the State was liable to pay the sums specified in the statement of claim by way of damages and financial compensation for 'Must a change in the composition of a the non-material losses suffered by them as consortium participating in procedures for a result of the above unlawful act and the award of a public-works contract which omission. occurs after submission of tenders and selection of the group as the provisional contractor, and is tacitly accepted by the awarding authority be interpreted in such a way as to result in the loss of that consortium's right to participate in the procedure and, by extension, also of its right to, or interest in, the award of the 29. That claim was dismissed by the contract for execution of the works? Is such Administrative Court of First Instance, an interpretation consistent with the provi- Athens, on the ground that, in the new sions and spirit of Directives 93/37/EEC composition in which the consortium had and 89/665/EEC?' brought the action, it was not entitled to claim compensation.

35. On the basis of the information sup- plied in the order for reference, having 36. Makedoniko argues that the enlarge- regard in particular to the fact that the ment of the consortium by the addition of national court has made this reference in AEG before submission of tenders was consistent with the supplementary notice of invitation to tender. As regards the 8 — Compare regarding public procurement, Case C-107/98 subsequent change in the composition of Teokal [1999] ECR I-8121. the consortium, namely the withdrawal of 9 — Case C-107/98, cited in footnote 8, paragraph 33; and Case 17/92 Distribuidores Cinematográficos [1993] ECR I-2239, AEG and addition of Adtranz, Make- paragraph 8. doniko points out that this company was 10 — Case 107/98, cited in footnote 8, paragraph 34; Case 251/83 Haug-Adrion [1984] ECR 4277, paragraph 9; and created by the merger of AEG, which, in Case C-168/95 Arcaro [1996] ECR I-4705, paragraph 21. the meantime, had changed its name to

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38. Makedoniko makes the point that such events are typical for a public works contract. Even if this were a case of a public works concession, the legal remedies directive would apply, because it is only a particular manifestation of the general principle of effective legal protection.

40. The Greek Government points out that 39. Makedoniko suggests that the answer neither the works procurement coor- to the questions referred for preliminary dination directive nor the legal remedies ruling should be that a change in the directive refer to a change in the composi- composition of a consortium which has tion of a consortium. A change in com- participated in a public works contract position is not permitted during negoti- award procedure or the issue of a public ations with the tenderer which has pro- works concession, which occurs after sub- visionally been selected as contractor. This

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follows from the fact that the only subject also have a certain amount of flexibility, of negotiations is the final terms of the for example, in establishing rules relating contract to be awarded and not the identity to consortia. The parameters of this flexi- of the contractor, which is not negotiable. bility are set by primary legislation. Therefore the identity of a provisionally selected contractor may not change.

44. The purpose of the public procurement directives is to prevent preferential treat- ment being given to domestic tenderers, 41. In the absence of a rule under Com- and to exclude the possibility of contracting munity law, the permissibility of a change authorities being guided by anything other in the composition of a consortium arises than economic considerations. solely under national law, which does not provide for substitution of a member of a consortium during negotiations. The ques- tion referred for preliminary ruling must, therefore, be answered in the affirmative.

preted to mean that the Court should 49. Further, the Commission presumes that comment on national law, over which, the principle of equal treatment of ten- however, it has no jurisdiction. Therefore, derers would be undermined if a contract- the Commission proposes that the question ing authority could, for the benefit of one be rephrased, and divided into three parts. tenderer, unilaterally change the terms which are fixed in the tender documen- tation as not being open to variation, without reopening the whole award pro- cedure. This would otherwise prevent the other — and also potential — tenderers from benefiting from the change. The answer to the second part of the question should, therefore, be that Community law does not allow a public contracting auth- ority to continue to negotiate with a bidder 47. First, it should be noted that the works whose composition has changed, contrary procurement coordination directive con- to national law or to the terms of the tains no express provisions concerning a contract documentation. change in the composition of a consortium. Article 21 merely provides that groups of contractors which submit tenders may not be required to assume a specific legal form prior to the award. It is therefore, left to the national legislature or the individual con- tracting authority, to regulate the details. This applies also to public works conces- sions. 50. With regard to the third part of the question, the Commission points out that, under Article 1(1) of the legal remedies directive, only infringements of Commu- nity law and national rules implementing that law may be reviewed. This provision does not, therefore, require Member States to provide for procedures to allow review of decisions which have been taken in the context of an award procedure and which infringe rules that do not implement pro- 48. The answer to the first part of the curement directives. rephrased question should, therefore, be that the works procurement coordination directive contains no provisions which preclude a provision of national legislation or of the contract documentation to the effect that a change in the composition of a consortium ceases to be permissible after a certain stage in the award procedure. This is particularly relevant after the submission 51. In the Commission's view, therefore, of tenders. the question referred to the Court should be

55. The Greek Government's view is also undermined by the fact that there may in principle also be cases in which the con- 53. While that question is being examined, tracting authority has to award the contract the question of whether the purpose of the in accordance with Community law; the procurement procedure in issue was to question arises, therefore, whether there is award a public works concession or a public works contract may remain open for the time being. 11 — Case C-27/98 Fracasso and Leitschutz [1999] ECR I-5697.

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such an obligation in the main proceedings requirement that consortia assume a par- as well. This presupposes, however, that ticular legal form for the purpose of Community law governs such a set of tendering, it does permit such requirement circumstances at all, namely the change in in the event of the award of a contract. the composition of the consortium.

56. It is therefore now necessary to ascer- 59. The view taken by the Austrian Gov- tain whether the works procurement coor- ernment and the Commission that the dination directive applies to rules on con- public procurement directives do not sortia such as those in the main proceed- expressly regulate changes in the composi- ings, and whether that directive precludes tion of a consortium is, therefore, well- the national rules in issue. founded.

became applicable with the change in the Greek Government rightly refers to the composition of the consortium which took principles of transparency and competition. place after the evaluation of its suitability. In that connection, the Court has declared In this respect, the Commission rightly that it is clear from the preamble to, and points out that one cannot infer from the the second and tenth recitals of, the works public procurement directives any obli- procurement coordination directive, that gation for the contracting authority to it's aim is 'to abolish restrictions on the check the suitability of the consortium in freedom of establishment and the freedom its new composition. If national legislation to provide services in respect of public provides for a fresh evaluation of the works contracts in order to open up such consortium after a change in its composi- contracts to genuine competition between tion, and this is not, however, carried out, entrepreneurs in the Member States'. 13 then that is a legal issue to be determined according to national law.

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66. The equal treatment obligation in the addressed to the State, including legislation public procurement directives, as well as on State aid. 16 the principle of equality, would be breached, however, if the contracting auth- ority unilaterally departed from its own rules concerning changes in the composi- tion of consortia, particularly if it were to negotiate with a tenderer whose tender did not match the terms advertised. To that 69. In this context, it must be generally extent, an infringement of Community law noted that the fundamental freedoms do can flow from the infringement of a not prohibit only direct or indirect dis- national prohibition. crimination, but also rules applicable with- out distinction which disproportionately inhibit any of the fundamental freedoms. From the information available to the Court, there is no indication that Greek law infringes the freedom to provide ser- vices. In any event, interpretation of the 67. The prohibition on discrimination freedom to provide services is not the under Article 1(2) of the legal remedies subject of the question referred to the directive cited by Makedoniko is, on the Court for a preliminary ruling, nor, there- other hand, not relevant. Whilst that fore, of these proceedings for a preliminary provision contains requirements for estab- ruling. lishing legal protection, it does not extend the applicability of the legal remedies directive to infringements of national law.

4. The principles of equivalence and effec- tiveness

3. Primary law

generally to the principles of equivalence 74. The applicability of the legal remedies and effectiveness which have been devel- directive is supported by the argument that oped in case-law. 17 the review procedures thereunder, in the submission of the Commission, also cover decisions of the contracting authority which interrupt negotiations with ten- derers. That follows from the broad terms of Article 1 and Article 2 of the legal 71. According to the principle of equival- remedies directive, which refer to 'de- ence, the rules of national law, thus also of cisions' without further qualification. That specific public procurement law, must not broad interpretation not only may be be less favourable than those of cor- inferred from the travaux préparatoires, responding, that is to say comparable, but also corresponds to the purpose of the domestic provisions. legal remedies directive; which is to improve legal protection and to make it effective.

72. The principle of effectiveness obliges Member States, including the State's con- tracting authority, not to make the exercise of rights conferred by the system of Com- munity law virtually impossible or excess- As regards the applicability of the legal ively difficult. remedies directive, one could also point to the fact that Article 1 comprises measures which Member States are to take in relation to 'procedures falling within the scope of [the] Directives...'. However, it is not dis- puted that the contract award procedure in 5. Legal protection in the review procedure issue falls, as such, within the scope of one of the public procurement directives.

76. Such an interpretation is supported by Article 1 of the legal remedies directive. 79. Where the decision of a contracting According to that provision, the legal authority infringes both national law and remedies directive applies only to infringe- Community law or rules implementing ments of 'Community law in the field of Community law, such a decision is subject public procurement or national rules imple- to the legal remedies directive in so far as menting that law'. review of the decision according to the principles of Community law, or rules implementing Community law, is con- cerned. The provisions of the legal remedies directive, the right to a review procedure, apply only in that respect. Whether the contracting authority in the contract award procedure in issue has also taken decisions 77. Given the absence of such (that is to other than the decision to exclude the say, Community) legal rules on changes in consortium because of a change in its the composition of a consortium, there composition, or whether the decision to cannot, logically, be any infringement of exclude also incorporates other measures, them or the rules implementing them. As such as the continuation of the contract rules of that type are purely a matter of award procedure with another tenderer, is national law, one of the preconditions for not the issue in terms of the question which the applicability of the legal remedies has been referred for preliminary ruling. directive has not, in this case, been satis- That question is limited to the applicability fied. of the legal remedies directive in relation to rules on changes in the composition of consortia.

The provisions of Directive 71/305/EEC concerning coordination of procedures for the award of public works contracts, as amended by Directive 89/440/EEC, and of Directive 93/37/EEC concerning the coordination of procedures for the award of public works contracts are to be interpreted as not precluding rules which prohibit a change in the composition of a consortium after submission of a tender.

Directive 89/665/EEC on the coordination of the laws, regulations and adminis- trative provisions relating to the application of review procedures to the award of public supply and public works contracts does not apply to decisions concerning a change in the composition of a consortium such as that in issue in the main proceedings.

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