The full force of the procurement rules of the European Community (European Union) applies to the public service contracts with the most potential for cross-border trade in the internal market. Contract value distinguishes the larger contracts through threshold amounts. The nature of services separates so called priority services from non-priority ones.
Yesterday’s blog post looked at priority services listed in Annex II A of the Procurement Directive 2004/18/EC. Today we deal with non-priority services, listed in Annex II B.
Article 21 of the Procurement Directive deals with the second tier of public service contracts, the non-priority services considered to be less suitable for normal procurement procedures:
Arrangements for public service contracts)
Service contracts listed in Annex II B
Contracts which have as their object services listed in Annex II B shall be subject solely to Article 23 and Article 35(4).
Definition of service contract
Public service contracts are defined in Article 1(2)(d) of the Procurement Directive 2004/18/EC:
(d) ‘Public service contracts’ are public contracts other than public works or supply contracts having as their object the provision of services referred to in Annex II.
A public contract having as its object both products and services within the meaning of Annex II shall be considered to be a ‘public service contract’ if the value of the services in question exceeds that of the products covered by the contract.
A public contract having as its object services within the meaning of Annex II and including activities within the meaning of Annex I that are only incidental to the principal object of the contract shall be considered to be a public service contract.
Non-priority services explained
Recital 19 of the Procurement Directive explains the Upstairs ─ Downstairs two-tier solution adopted with regard to public service contracts.
The detailed provisions of the Procurement Directive do not encompass all services. For the time being only the contracts with most potential for cross-border trade in the internal market were made subject to the application of the detailed award procedures.
The distinctions have been made on two grounds. Contract value means that the largest contracts are included (thresholds). The type or nature of service determines the applicable rules.
For non-priority services the application of the Procurement Directive is limited.
The current situation is not the final word on the matter. The Commission monitors developments in the internal market, which may lead to legislative proposals in the future:
(19) As regards public service contracts, full application of this Directive should be limited, for a transitional period, to contracts where its provisions will permit the full potential for increased cross-frontier trade to be realised. Contracts for other services need to be monitored during this transitional period before a decision is taken on the full application of this Directive. In this respect, the mechanism for such monitoring needs to be defined. This mechanism should, at the same time, enable interested parties to have access to the relevant information.
As always, the principles of the Treaty establishing the European Community (TEC) apply to the actions of contracting authorities, as interpreted by the Court of Justice of the European Communities (ECJ) with regard to the requirements of transparency and non-discrimination.
The concrete provisions of the Procurement Directive 2004/18/EC applicable to non-priority services are Article 23 and Article 35(4).
Article 23 of the Procurement Directive 2004/18/EC on technical specifications applies even to non-priority services. Primarily European standards should be used and in a non-discriminatory manner:
1. The technical specifications as defined in point 1 of Annex VI shall be set out in the contract documentation, such as contract notices, contract documents or additional documents. Whenever possible these technical specifications should be defined so as to take into account accessibility criteria for people with disabilities or design for all users.
2. Technical specifications shall afford equal access for tenderers and not have the effect of creating unjustified obstacles to the opening up of public procurement to competition.
3. Without prejudice to mandatory national technical rules, to the extent that they are compatible with Community law, the technical specifications shall be formulated:
(a) either by reference to technical specifications defined in Annex VI and, in order of preference, to national standards transposing European standards, European technical approvals, common technical specifications, international standards, other technical reference systems established by the European standardization bodies or — when these do not exist — to national standards, national technical approvals or national technical specifications relating to the design, calculation and execution of the works and use of the products. Each reference shall be accompanied by the words ‘or equivalent’;
(b) or in terms of performance or functional requirements; the latter may include environmental characteristics. However, such parameters must be sufficiently precise to allow tenderers to determine the subject-matter of the contract and to allow contracting authorities to award the contract;
(c) or in terms of performance or functional requirements as mentioned in subparagraph (b), with reference to the specifications mentioned in subparagraph (a) as a means of presuming conformity with such performance or functional requirements;
(d) or by referring to the specifications mentioned in subparagraph (a) for certain characteristics, and by referring to the performance or functional requirements mentioned in subparagraph (b) for other characteristics.
4. Where a contracting authority makes use of the option of referring to the specifications mentioned in paragraph 3(a), it cannot reject a tender on the grounds that the products and services tendered for do not comply with the specifications to which it has referred, once the tenderer proves in his tender to the satisfaction of the contracting authority, by whatever appropriate means, that the solutions which he proposes satisfy in an equivalent manner the requirements defined by the technical specifications.
An appropriate means might be constituted by a technical dossier of the manufacturer or a test report from a recognised body.
5. Where a contracting authority uses the option laid down in paragraph 3 to prescribe in terms of performance or functional requirements, it may not reject a tender for works, products or services which comply with a national standard transposing a European standard, with a European technical approval, a common technical specification, an international standard or a technical reference system established by a European standardisation body, if these specifications address the performance or functional requirements which it has laid down.
In his tender, the tenderer must prove to the satisfaction of the contracting authority and by any appropriate means that the work, product or service in compliance with the standard meets the performance or functional requirements of the contracting authority.
An appropriate means might be constituted by a technical dossier of the manufacturer or a test report from a recognised body.
6. Where contracting authorities lay down environmental characteristics in terms of performance or functional requirements as referred to in paragraph 3(b) they may use the detailed specifications, or, if necessary, parts thereof, as defined by European or (multi-) national eco-labels, or by and any other eco-label, provided that:
— those specifications are appropriate to define the characteristics of the supplies or services that are the object of the contract,
— the requirements for the label are drawn up on the basis of scientific information,
— the eco-labels are adopted using a procedure in which all stakeholders, such as government bodies, consumers, manufacturers, distributors and environmental organisations can participate, and
— they are accessible to all interested parties.
Contracting authorities may indicate that the products and services bearing the eco-label are presumed to comply with the technical specifications laid down in the contract documents; they must accept any other appropriate means of proof, such as a technical dossier of the manufacturer or a test report from a recognised body.
7. ‘Recognised bodies’, within the meaning of this Article, are test and calibration laboratories and certification and inspection bodies which comply with applicable European standards.
Contracting authorities shall accept certificates from recognised bodies established in other Member States.
8. Unless justified by the subject-matter of the contract, technical specifications shall not refer to a specific make or source, or a particular process, or to trade marks, patents, types or a specific origin or production with the effect of favouring or eliminating certain undertakings or certain products. Such reference shall be permitted on an exceptional basis, where a sufficiently precise and intelligible description of the subject-matter of the contract pursuant to paragraphs 3 and 4 is not possible; such reference shall be accompanied by the words ‘or equivalent’.
In the context of Chapter VI on rules on advertising and transparency and its Section 1 on publication of notices, Article 35 concerns notices. The contracting authority has an obligation to provide a notice of the results of the award or at least statistical information for non-priority services, meant to enable the Commission to monitor developments and to assess the needs for legislative initiatives:.
The fourth paragraph sets out the following obligations for the contracting authorities:
4. Contracting authorities which have awarded a public contract or concluded a framework agreement shall send a notice of the results of the award procedure no later than 48 days after the award of the contract or the conclusion of the framework agreement.
In the case of framework agreements concluded in accordance with Article 32 the contracting authorities are not bound to send a notice of the results of the award procedure for each contract based on that agreement.
Contracting authorities shall send a notice of the result of the award of contracts based on a dynamic purchasing system within 48 days of the award of each contract. They may, however, group such notices on a quarterly basis. In that case, they shall send the grouped notices within 48 days of the end of each quarter.
In the case of public contracts for services listed in Annex II B, the contracting authorities shall indicate in the notice whether they agree to its publication. For such services contracts the Commission shall draw up the rules for establishing statistical reports on the basis of such notices and for the publication of such reports in accordance with the procedure laid down in Article 77(2).
Certain information on the contract award or the conclusion of the framework agreement may be withheld from publication where release of such information would impede law enforcement or otherwise be contrary to the public interest, would harm the legitimate commercial interests of economic operators, public or private, or might prejudice fair competition between them.
Annex II B non-priority services
Annex II B lists the so called non-priority services mentioned in Article 21 of the Procurement Directive 2004/18/EC. Actually, all the services mentioned in points 17 to 26 are just concrete examples for the benefit of the reader, because point 27 Other services means that all services not listed as priority services in Annex II A are considered to be non-priority services.
Since an overview is intended here, the non-priority services in Annex II B are presented without the binding CPC references or the helpful CPV (Common Procurement Vocabulary) codes:
17 Hotel and restaurant services
18 Rail transport services
19 Water transport services
20 Supporting and auxiliary transport services
21 Legal services
22 Personnel placement and supply services, except employment contracts
23 Investigation and security services, except armoured car services
24 Education and vocational education services
25 Health and social services
26 Recreational, cultural and sporting services, except contracts for the acquisition, development, production or co-production of programmes by broadcasting organisations and contracts for broadcasting time.
27 Other services
Guidance on non-priority services
The Commission has issued an Interpretative Communication on the Community law applicable to contract awards not or not fully subject to the provisions of the Public Procurement Directives
(OJEU 1.8.2006 C 179/2).
The Communication gives guidance for two different situations, where the Procurement Directives do not apply fully to a procurement procedure.
The first concerns contracts which fall below the procurement thresholds and the second one relates to today’s theme, Annex II B services.