Contracts concerning public telecommunications networks and services are excluded from the scope of the European Community (European Union) Procurement Directive 2004/18/EC:
Article 13
Specific exclusions in the field of telecommunications
This Directive shall not apply to public contracts for the principal purpose of permitting the contracting authorities to provide or exploit public telecommunications networks or to provide to the public one or more telecommunications services.
***
Telecommunications sector
Liberalisation of the telecommunications sector gradually led to more effective competition. Recital 21 of the Procurement Directive tries to explain some of the reasons:
(21) In view of the situation of effective market competition in the telecommunications sector following the implementation of the Community rules aimed at liberalising that sector, public contracts in that area should be excluded from the scope of this Directive insofar as they are intended primarily to allow the contracting authorities to exercise certain activities in the telecommunications sector. Those activities are defined in accordance with the definitions used in Articles 1, 2 and 8 of Council Directive 93/38/EEC of 14 June 1993 coordinating the procurement procedures of entities operating in the water, energy, transport and telecommunications sector, such that this Directive does not apply to contracts which have been excluded from the scope of Directive 93/38/EEC pursuant to Article 8 thereof.
***
Definitions
The definitions relating to telecommunications are found in Article 1(15) of the Procurement Directive:
15. For the purposes of Article 13, Article 57(a) and Article 68(b), the following phrases shall have the following meanings:
(a) ‘public telecommunications network’ means the public telecommunications infrastructure which enables signals to be conveyed between defined network termination points by wire, by microwave, by optical means or by other electromagnetic means;
(b) a ‘network termination point’ means all physical connections and their technical access specifications which form part of the public telecommunications network and are necessary for access to, and efficient communication through, that public network;
(c) ‘public telecommunications services’ means telecommunications services the provision of which the Member States have specifically assigned, in particular, to one or more telecommunications entities;
(d) ‘telecommunications services’ means services the provision of which consists wholly or partly in the transmission and routing of signals on the public telecommunications network by means of telecommunications processes, with the exception of broadcasting and television.
***
Utilities Directive: Telecommunications competition
Article 13 of the Procurement Directive excluding public telecommunications sector from the scope prevented these contracts from falling within the scope of the general procurement rules, when they were excluded from the new Utilities Directive 2004/17/EC.
The old Utilities Directive 98/38/EC included contracting entities operating in the telecommunications sector, but market liberalisation had already started to erode their privileged position. The new Utilities Directive was built on the premise that effective competition existed in the telecommunications sector, both de jure and de facto, dropping telecommunications from the name and from the scope of the new Utilities Directive 2004/17/EC, as explained in Recital 5 of this Directive:
(5) The scope of Directive 98/38/EEC covers, at present, certain contracts awarded by contracting entities operating in the telecommunications sector. A legislative framework, as mentioned in the Fourth report on the implementation of the telecommunications regulations of 25 November 1998, has been adopted to open this sector. One of its consequences has been the introduction of effective competition, both de jure and de facto, in this sector. For information purposes, and in the light of this situation, the Commission has published a list of telecommunications services which may already be excluded from the scope of that Directive by virtue of Article 8 thereof. Further progress has been confirmed in the Seventh report on the implementation of telecommunications regulations of 26 November 2001. It is therefore no longer necessary to regulate purchases by entities operating in this sector.
***
Continued monitoring of telecommunications
Recital 7 of the Utilities Directive 2004/17/EC added the proviso that the Commission will continue monitoring internal market developments in the telecommunications sector:
(7) Nevertheless, it is appropriate to continue to monitor developments in the telecommunications sector and to reconsider the situation if it is established that there is no longer effective competition in that sector.
***
Purchase of telecommunications services
Following the introduction of more effective competition in the telecommunications sector, governments and other public bodies can profit from competitive buying of telecommunications services, as explained by Recital 8 of the new Utilities Directive:
(8) Directive 93/38/EEC excludes from its scope purchases of voice telephony, telex, mobile telephone, paging and satellite services. Those exclusions were introduced to take account of the fact that the services in question could frequently be provided only by one service provider in a given geographical area because of the absence of effective competition and the existence of special or exclusive rights. The introduction of effective competition in the telecommunications sector removes the justification for these exclusions. It is therefore necessary to include the procurement of such telecommunications services in the scope of this Directive.
***
Scope of telecommunications services
Cf. Article 31 of the Utilities Directive and Category 5 Telecommunications services in Annex XVII A (replaced by Annex VI in OJEU 15.3.2008 L 74/373) with CPV references from 64200000-8 to 64228200-2, 72318000-7, and from 72700000-7 to 72720000-3.
Ralf Grahn
Showing posts with label Directive 2004/17/EC. Show all posts
Showing posts with label Directive 2004/17/EC. Show all posts
Monday, 12 January 2009
Sunday, 11 January 2009
EU procurement: Contracts excluded from both Directives
Public procurement is an important area of internal market law, but some contracts are excluded from the Directives on procurement. We continue our presentation of the relevant provisions to public officials and interested businesses.
The general European Community (European Union) Procurement Directive 2004/18/EC, also known as the Classic Directive, does not apply to public contracts in the special sectors covered by the Utilities Directive 2004/17/EC.
But when a contract in the special sectors is excluded from the Utilities Directive on certain grounds, it would fall within the default Procurement Directive if not specifically excluded from reverting.
We look at these cases of double exclusion.
***
Article 12 Procurement Directive
Article 12 of the Procurement Directive 2004/18/EC excludes the sectors to which the so called Utilities Directive 2004/17/EC applies as ‘lex specialis’: water, energy, transport and postal services.
In this blawg post we follow the thread of non-application ‘to public contracts excluded from the scope of that Directive under Article 5(2) and Articles 19, 26 and 30 thereof’:
S e c t i o n 3
Excluded contracts
Article 12
Contracts in the water, energy, transport and postal services sectors
This Directive shall not apply to public contracts which, under Directive 2004/17/EC, are awarded by contracting authorities exercising one or more of the activities referred to in Articles 3 to 7 of that Directive and are awarded for the pursuit of those activities, or to public contracts excluded from the scope of that Directive under Article 5(2) and Articles 19, 26 and 30 thereof.
[However, this Directive shall continue to apply to public contracts awarded by contracting authorities carrying out one or more of the activities referred to in Article 6 of Directive 2004/17/EC and awarded for those activities, insofar as the Member State concerned takes advantage of the option referred to in the second subparagraph of Article 71 thereof to defer its application.]
(Although not relevant for today’s blog post, the second paragraph is obsolete since 1 January 2009.)
***
Exclusion of utilities explained
First, a few words on the general scheme of things. Recital 20 of the Procurement Directive refers to Directive 2004/17/EC, the so called Utilities Directive, and explains the exclusion of specific sectors from the Procurement Directive:
(20) Public contracts which are awarded by the contracting authorities operating in the water, energy, transport and postal services sectors and which fall within the scope of those activities are covered by Directive 2004/17/EC of the European Parliament and of the Council of 31 March 2004 coordinating the procurement procedures of entities operating in the water, energy, transport and postal services sectors. However, contracts awarded by the contracting authorities in the context of their service activities for maritime, coastal or river transport must fall within the scope of this Directive.
***
Double exclusion
The headline ‘water, energy, transport and postal services sectors’ gives us a rough indication of the activities, which fall under the Utilities Directive 2004/17/EC, but the scope of the Utilities Directive needs to be defined in order to determine when this Directive takes precedence.
The Utilities Directive is applied to public contracts awarded by contracting authorities exercising one or more of the activities referred to in Articles 3 to 7 of that Directive and awarded for the pursuit of those activities.
In earlier blog posts we have looked at Articles 3 to 7 of the Utilities Directive, which applies to the following activities:
Article 3 Gas, heat and electricity
Article 4 Water
Article 5 Transport services
Article 6 Postal services
Article 7 Exploration for, or extraction of, oil, gas, coal or other solid fuels, as well as ports and airports
The special exclusions from the scope of the Utilities Directive under Article 5(2) and Articles 19, 26 and 30 thereof do not lead to the application of the fall-back Procurement Directive.
Next, we look at the instances excluded from both Directives.
***
Bus transport services excluded
Article 5(2) Utilities Directive
2. This Directive shall not apply to entities providing bus transport services to the public which were excluded from the scope of Directive 93/38/EEC pursuant to Article 2(4) thereof.
***
Old Utilities Directive: Excluded bus transport services
Article 2(4) of the old Utilities Directive 93/38/EEC excluded the following bus transport services where effective competition existed. This exclusion still applies:
4. The provision of bus transport services to the public shall not be considered to be a relevant activity within the meaning of paragraph 2(c) where other entities are free to provide those services, either in general or in a particular geographical area, under the same condition as the contracting entities.
***
Bus transport exclusion explained
Recital 19 of the current Utilities Directive explains the scope of excluded bus transport services:
(27) Certain entities providing bus transport services to the public were already excluded from the scope of Directive 93/38/EEC. Such entities should also be excluded from the scope of this Directive. In order to forestall the existence of a multitude of specific arrangements applying to certain sectors only, the general procedure that permits the effects of opening up to competition to be taken into account should also apply to all entities providing bus transport services that are not excluded from the scope of Directive 93/38/EEC pursuant to Article 2(4) thereof.
***
Resale or lease to third parties
Article 19 of the Utilities Directive excludes contracts awarded for purposes of resale or lease to third parties:
SUBSECTION 2
Exclusions applicable to all contracting entities and to all types of contract
Article 19 Utilities Directive
Contracts awarded for purposes of resale or lease to third parties
1. This Directive shall not apply to contracts awarded for purposes of resale or lease to third parties, provided that the contracting entity enjoys no special or exclusive right to sell or lease the subject of such contracts, and other entities are free to sell or lease it under the same conditions as the contracting entity.
2. The contracting entities shall notify the Commission at its request of all the categories of products or activities which they regard as excluded under paragraph 1. The Commission may periodically publish in the Official Journal of the European Union, for information purposes, lists of the categories of products and activities which it considers to be covered by this exclusion. In so doing, the Commission shall respect any sensitive commercial aspects that the contracting entities may point out when forwarding information.
***
Water and energy contracts
Pursuant to Article 26 of the Utilities Directive, certain contracting entities are excluded with regard to contracts for the purchase of water and for the supply of energy or of fuels for the production of energy:
SUBSECTION 4
Exclusions applicable to certain contracting entities only
Article 26 Utilities Directive
Contracts awarded by certain contracting entities for the purchase of water and for the supply of energy or of fuels for the production of energy
This Directive shall not apply:
(a) to contracts for the purchase of water if awarded by contracting entities engaged in one or both of the activities referred to in Article 4(1).
(b) to contracts for the supply of energy or of fuels for the production of energy, if awarded by contracting entities engaged in an activity referred to in Article 3(1), Article 3(3) or Article 7(a).
***
Competitive markets
Article 30(1) of the Utilities Directive establishes the principle to exclude contracts from the application of the Directive, if the activity is directly exposed to competition on markets to which access is not restricted.
The rest of Article 30 deals with the criteria and the procedures:
Article 30 Utilities Directive
Procedure for establishing whether a given activity is directly exposed to competition
1. Contracts intended to enable an activity mentioned in Articles 3 to 7 to be carried out shall not be subject to this Directive if, in the Member State in which it is performed, the activity is directly exposed to competition on markets to which access is not restricted.
2. For the purposes of paragraph 1, the question of whether an activity is directly exposed to competition shall be decided on the basis of criteria that are in conformity with the Treaty provisions on competition, such as the characteristics of the goods or services concerned, the existence of alternative goods or services, the prices and the actual or potential presence of more than one supplier of the goods or services in question.
3. For the purposes of paragraph 1, access to a market shall be deemed not to be restricted if the Member State has implemented and applied the provisions of Community legislation mentioned in Annex XI.
If free access to a given market cannot be presumed on the basis of the first subparagraph, it must be demonstrated that access to the market in question is free de facto and de jure.
4. When a Member State considers that, in compliance with paragraphs 2 and 3, paragraph 1 is applicable to a given activity, it shall notify the Commission and inform it of all relevant facts, and in particular of any law, regulation, administrative provision or agreement concerning compliance with the conditions set out in paragraph 1, where appropriate together with the position adopted by an independent national authority that is competent in relation to the activity concerned.
Contracts intended to enable the activity concerned to be carried out shall no longer be subject to this Directive if the Commission:
— has adopted a Decision establishing the applicability of paragraph 1 in accordance with paragraph 6 and within the period it provides for, or
— has not adopted a Decision concerning such applicability within that period.
However, where free access to a given market is presumed on the basis of the first subparagraph of paragraph 3, and where an independent national authority that is competent in the activity concerned has established the applicability of paragraph 1, contracts intended to enable the activity concerned to be carried out shall no longer be subject to this Directive if the Commission has not established the inapplicability of paragraph 1 by a Decision adopted in conformity with paragraph 6 and within the period it provides for.
5. When the legislation of the Member State concerned provides for it, the contracting entities may ask the Commission to establish the applicability of paragraph 1 to a given activity by a Decision in conformity with paragraph 6. In such a case, the Commission shall immediately inform the Member State concerned.
That Member State shall, taking account of paragraphs 2 and 3, inform the Commission of all relevant facts, and in particular of any law, regulation, administrative provision or agreement concerning compliance with the conditions set out in paragraph 1, where appropriate together with the position adopted by an independent national authority that is competent in the activity concerned.
The Commission may also begin the procedure for adoption of a Decision establishing the applicability of paragraph 1 to a given activity on its own initiative. In such a case, the Commission shall immediately inform the Member State concerned.
If, at the end of the period laid down in paragraph 6, the Commission has not adopted a Decision concerning the applicability of paragraph 1 to a given activity, paragraph 1 shall be deemed to be applicable.
6. For the adoption of a Decision under this Article, in accordance with the procedure under Article 68(2), the Commission shall be allowed a period of three months commencing on the first working day following the date on which it receives the notification or the request. However, this period may be extended once by a maximum of three months in duly justified cases, in particular if the information contained in the notification or the request or in the documents annexed thereto is incomplete or inexact or if the facts as reported undergo any substantive changes. This extension shall be limited to one month where an independent national authority that is competent in the activity concerned has established the applicability of paragraph 1 in the cases provided for under the third subparagraph of paragraph 4.
When an activity in a given Member State is already the subject of a procedure under this Article, further requests concerning the same activity in the same Member State before the expiry of the period opened in respect of the first request shall not be considered as new procedures and shall be treated in the context of the first request.
The Commission shall adopt detailed rules for applying paragraphs 4, 5 and 6 in accordance with the procedure under Article 68(2).
These rules shall include at least:
(a) the publication in the Official Journal, for information, of the date on which the three-month period referred to in the first subparagraph begins, and, in case this period is prolonged, the date of prolongation and the period by which it is prolonged;
(b) publication of the possible applicability of paragraph 1 in accordance with the second or third subparagraph of paragraph 4 or in accordance with the fourth subparagraph of paragraph 5; and
(c) the arrangements for forwarding positions adopted by an independent authority that is competent in the activity concerned, regarding questions relevant to paragraphs 1 and 2.
***
Exposure to competition explained
Direct exposure to competition is explained by Recitals 40 and 41 of the Utilities Directive:
(40) This Directive should apply neither to contracts intended to permit the performance of an activity referred to in Articles 3 to 7 nor to design contests organised for the pursuit of such an activity if, in the Member State in which this activity is carried out, it is directly exposed to competition on markets to which access is not limited. It is therefore appropriate to introduce a procedure, applicable to all sectors covered by this Directive, that will enable the effects of current or future opening up to competition to be taken into account. Such a procedure should provide legal certainty for the entities concerned, as well as an appropriate decision-making process, ensuring, within short time limits, uniform application of Community law in this area.
(41) Direct exposure to competition should be assessed on the basis of objective criteria, taking account of the specific characteristics of the sector concerned. The implementation and application of appropriate Community legislation opening a given sector, or a part of it, will be considered to provide sufficient grounds for assuming there is free access to the market in question. Such appropriate legislation should be identified in an annex which can be updated by the Commission. When updating, the Commission takes in particular into account the possible adoption of measures entailing a genuine opening up to competition of sectors other than those for which a legislation is already mentioned in Annex XI, such as that of railway transports. Where free access to a given market does not result from the implementation of appropriate Community legislation, it should be demonstrated that, de jure and de facto, such access is free. For this purpose, application by a Member State of a Directive, such as Directive 94/22/EC opening up a given sector to competition, to another sector, such as the coal sector, is a circumstance to be taken into account for the purposes of Article 30.
***
Annex XI Community legislation
Access to a market shall be deemed not to be restricted if the Member State has implemented and applied the provisions of Community legislation mentioned in Annex XI.
Commission Decision 2008/963/EC of 9 December 2008 amending the Annexes to Directives 2004/17/EC and 2004/18/EC of the European Parliament and of the Council on public procurement procedures, as regards their lists of contracting entities and contracting authorities, published OJEU 24.12.2008 L 349/1, amended Annexes I to X of the Utilities Directive.
Annex XI was left untouched, so we should be safe in accessing this Annex from the latest consolidated version (15 September 2008) of the Utilities Directive. Here is the list of relevant internal market legislation (but look for possible amendments to the Directives mentioned):
ANNEX XI
LIST OF COMMUNITY LEGISLATION REFERRED TO IN ARTICLE 30(3)
A. TRANSPORT OR DISTRIBUTION OF GAS OR HEAT
Directive 98/30/EC of the European Parliament and of the Council of 22 June 1998 concerning common rules for the internal market in natural gas (1)
B. PRODUCTION, TRANSMISSION OR DISTRIBUTION OF ELECTRICITY
Directive 96/92/EC of the European Parliament and of the Council of 19 December 1996 concerning common rules for the internal market in electricity (2)
C. PRODUCTION, TRANSPORT OR DISTRIBUTION OF DRINKING WATER
—
D. CONTRACTING ENTITIES IN THE FIELD OF RAIL SERVICES
—
E. CONTRACTING ENTITIES IN THE FIELD OF URBAN RAILWAY, TRAMWAY, TROLLEYBUS OR MOTOR BUS SERVICES
—
F. CONTRACTING ENTITIES IN THE FIELD OF POSTAL SERVICES
Directive 97/67/EC of the European Parliament and of the Council of 15 December 1997 on common rules for the development of the internal market of Community postal services and the improvement of quality of service (3)
G. EXPLORATION FOR AND EXTRACTION OF OIL OR GAS
Directive 94/22/EC of the European Parliament and of the Council of 30 May 1994 on the conditions for granting and using authorisations for the prospection, exploration and production of hydrocarbons (4)
H. EXPLORATION FOR AND EXTRACTION OF COAL OR OTHER SOLID FUELS
—
I. CONTRACTING ENTITIES IN THE FIELD OF SEAPORT OR INLAND PORT OR OTHER TERMINAL EQUIPMENT
—
J. CONTRACTING ENTITIES IN THE FIELD OF AIRPORT INSTALLATIONS
—
-----
(1) OJ L 204, 21.7.1998, p. 1.
(2) OJ L 27, 30.1.1997, p. 20.
(3) OJ L 15, 21.1.1998, p. 14. Directive last amended by Directive 2002/39/EC (OJ L 176, 5.7.2002, p. 21).
(4) OJ L 164, 30.6.1994, p. 3.
(Check if the Directives have been amended.)
Ralf Grahn
The general European Community (European Union) Procurement Directive 2004/18/EC, also known as the Classic Directive, does not apply to public contracts in the special sectors covered by the Utilities Directive 2004/17/EC.
But when a contract in the special sectors is excluded from the Utilities Directive on certain grounds, it would fall within the default Procurement Directive if not specifically excluded from reverting.
We look at these cases of double exclusion.
***
Article 12 Procurement Directive
Article 12 of the Procurement Directive 2004/18/EC excludes the sectors to which the so called Utilities Directive 2004/17/EC applies as ‘lex specialis’: water, energy, transport and postal services.
In this blawg post we follow the thread of non-application ‘to public contracts excluded from the scope of that Directive under Article 5(2) and Articles 19, 26 and 30 thereof’:
S e c t i o n 3
Excluded contracts
Article 12
Contracts in the water, energy, transport and postal services sectors
This Directive shall not apply to public contracts which, under Directive 2004/17/EC, are awarded by contracting authorities exercising one or more of the activities referred to in Articles 3 to 7 of that Directive and are awarded for the pursuit of those activities, or to public contracts excluded from the scope of that Directive under Article 5(2) and Articles 19, 26 and 30 thereof.
[However, this Directive shall continue to apply to public contracts awarded by contracting authorities carrying out one or more of the activities referred to in Article 6 of Directive 2004/17/EC and awarded for those activities, insofar as the Member State concerned takes advantage of the option referred to in the second subparagraph of Article 71 thereof to defer its application.]
(Although not relevant for today’s blog post, the second paragraph is obsolete since 1 January 2009.)
***
Exclusion of utilities explained
First, a few words on the general scheme of things. Recital 20 of the Procurement Directive refers to Directive 2004/17/EC, the so called Utilities Directive, and explains the exclusion of specific sectors from the Procurement Directive:
(20) Public contracts which are awarded by the contracting authorities operating in the water, energy, transport and postal services sectors and which fall within the scope of those activities are covered by Directive 2004/17/EC of the European Parliament and of the Council of 31 March 2004 coordinating the procurement procedures of entities operating in the water, energy, transport and postal services sectors. However, contracts awarded by the contracting authorities in the context of their service activities for maritime, coastal or river transport must fall within the scope of this Directive.
***
Double exclusion
The headline ‘water, energy, transport and postal services sectors’ gives us a rough indication of the activities, which fall under the Utilities Directive 2004/17/EC, but the scope of the Utilities Directive needs to be defined in order to determine when this Directive takes precedence.
The Utilities Directive is applied to public contracts awarded by contracting authorities exercising one or more of the activities referred to in Articles 3 to 7 of that Directive and awarded for the pursuit of those activities.
In earlier blog posts we have looked at Articles 3 to 7 of the Utilities Directive, which applies to the following activities:
Article 3 Gas, heat and electricity
Article 4 Water
Article 5 Transport services
Article 6 Postal services
Article 7 Exploration for, or extraction of, oil, gas, coal or other solid fuels, as well as ports and airports
The special exclusions from the scope of the Utilities Directive under Article 5(2) and Articles 19, 26 and 30 thereof do not lead to the application of the fall-back Procurement Directive.
Next, we look at the instances excluded from both Directives.
***
Bus transport services excluded
Article 5(2) Utilities Directive
2. This Directive shall not apply to entities providing bus transport services to the public which were excluded from the scope of Directive 93/38/EEC pursuant to Article 2(4) thereof.
***
Old Utilities Directive: Excluded bus transport services
Article 2(4) of the old Utilities Directive 93/38/EEC excluded the following bus transport services where effective competition existed. This exclusion still applies:
4. The provision of bus transport services to the public shall not be considered to be a relevant activity within the meaning of paragraph 2(c) where other entities are free to provide those services, either in general or in a particular geographical area, under the same condition as the contracting entities.
***
Bus transport exclusion explained
Recital 19 of the current Utilities Directive explains the scope of excluded bus transport services:
(27) Certain entities providing bus transport services to the public were already excluded from the scope of Directive 93/38/EEC. Such entities should also be excluded from the scope of this Directive. In order to forestall the existence of a multitude of specific arrangements applying to certain sectors only, the general procedure that permits the effects of opening up to competition to be taken into account should also apply to all entities providing bus transport services that are not excluded from the scope of Directive 93/38/EEC pursuant to Article 2(4) thereof.
***
Resale or lease to third parties
Article 19 of the Utilities Directive excludes contracts awarded for purposes of resale or lease to third parties:
SUBSECTION 2
Exclusions applicable to all contracting entities and to all types of contract
Article 19 Utilities Directive
Contracts awarded for purposes of resale or lease to third parties
1. This Directive shall not apply to contracts awarded for purposes of resale or lease to third parties, provided that the contracting entity enjoys no special or exclusive right to sell or lease the subject of such contracts, and other entities are free to sell or lease it under the same conditions as the contracting entity.
2. The contracting entities shall notify the Commission at its request of all the categories of products or activities which they regard as excluded under paragraph 1. The Commission may periodically publish in the Official Journal of the European Union, for information purposes, lists of the categories of products and activities which it considers to be covered by this exclusion. In so doing, the Commission shall respect any sensitive commercial aspects that the contracting entities may point out when forwarding information.
***
Water and energy contracts
Pursuant to Article 26 of the Utilities Directive, certain contracting entities are excluded with regard to contracts for the purchase of water and for the supply of energy or of fuels for the production of energy:
SUBSECTION 4
Exclusions applicable to certain contracting entities only
Article 26 Utilities Directive
Contracts awarded by certain contracting entities for the purchase of water and for the supply of energy or of fuels for the production of energy
This Directive shall not apply:
(a) to contracts for the purchase of water if awarded by contracting entities engaged in one or both of the activities referred to in Article 4(1).
(b) to contracts for the supply of energy or of fuels for the production of energy, if awarded by contracting entities engaged in an activity referred to in Article 3(1), Article 3(3) or Article 7(a).
***
Competitive markets
Article 30(1) of the Utilities Directive establishes the principle to exclude contracts from the application of the Directive, if the activity is directly exposed to competition on markets to which access is not restricted.
The rest of Article 30 deals with the criteria and the procedures:
Article 30 Utilities Directive
Procedure for establishing whether a given activity is directly exposed to competition
1. Contracts intended to enable an activity mentioned in Articles 3 to 7 to be carried out shall not be subject to this Directive if, in the Member State in which it is performed, the activity is directly exposed to competition on markets to which access is not restricted.
2. For the purposes of paragraph 1, the question of whether an activity is directly exposed to competition shall be decided on the basis of criteria that are in conformity with the Treaty provisions on competition, such as the characteristics of the goods or services concerned, the existence of alternative goods or services, the prices and the actual or potential presence of more than one supplier of the goods or services in question.
3. For the purposes of paragraph 1, access to a market shall be deemed not to be restricted if the Member State has implemented and applied the provisions of Community legislation mentioned in Annex XI.
If free access to a given market cannot be presumed on the basis of the first subparagraph, it must be demonstrated that access to the market in question is free de facto and de jure.
4. When a Member State considers that, in compliance with paragraphs 2 and 3, paragraph 1 is applicable to a given activity, it shall notify the Commission and inform it of all relevant facts, and in particular of any law, regulation, administrative provision or agreement concerning compliance with the conditions set out in paragraph 1, where appropriate together with the position adopted by an independent national authority that is competent in relation to the activity concerned.
Contracts intended to enable the activity concerned to be carried out shall no longer be subject to this Directive if the Commission:
— has adopted a Decision establishing the applicability of paragraph 1 in accordance with paragraph 6 and within the period it provides for, or
— has not adopted a Decision concerning such applicability within that period.
However, where free access to a given market is presumed on the basis of the first subparagraph of paragraph 3, and where an independent national authority that is competent in the activity concerned has established the applicability of paragraph 1, contracts intended to enable the activity concerned to be carried out shall no longer be subject to this Directive if the Commission has not established the inapplicability of paragraph 1 by a Decision adopted in conformity with paragraph 6 and within the period it provides for.
5. When the legislation of the Member State concerned provides for it, the contracting entities may ask the Commission to establish the applicability of paragraph 1 to a given activity by a Decision in conformity with paragraph 6. In such a case, the Commission shall immediately inform the Member State concerned.
That Member State shall, taking account of paragraphs 2 and 3, inform the Commission of all relevant facts, and in particular of any law, regulation, administrative provision or agreement concerning compliance with the conditions set out in paragraph 1, where appropriate together with the position adopted by an independent national authority that is competent in the activity concerned.
The Commission may also begin the procedure for adoption of a Decision establishing the applicability of paragraph 1 to a given activity on its own initiative. In such a case, the Commission shall immediately inform the Member State concerned.
If, at the end of the period laid down in paragraph 6, the Commission has not adopted a Decision concerning the applicability of paragraph 1 to a given activity, paragraph 1 shall be deemed to be applicable.
6. For the adoption of a Decision under this Article, in accordance with the procedure under Article 68(2), the Commission shall be allowed a period of three months commencing on the first working day following the date on which it receives the notification or the request. However, this period may be extended once by a maximum of three months in duly justified cases, in particular if the information contained in the notification or the request or in the documents annexed thereto is incomplete or inexact or if the facts as reported undergo any substantive changes. This extension shall be limited to one month where an independent national authority that is competent in the activity concerned has established the applicability of paragraph 1 in the cases provided for under the third subparagraph of paragraph 4.
When an activity in a given Member State is already the subject of a procedure under this Article, further requests concerning the same activity in the same Member State before the expiry of the period opened in respect of the first request shall not be considered as new procedures and shall be treated in the context of the first request.
The Commission shall adopt detailed rules for applying paragraphs 4, 5 and 6 in accordance with the procedure under Article 68(2).
These rules shall include at least:
(a) the publication in the Official Journal, for information, of the date on which the three-month period referred to in the first subparagraph begins, and, in case this period is prolonged, the date of prolongation and the period by which it is prolonged;
(b) publication of the possible applicability of paragraph 1 in accordance with the second or third subparagraph of paragraph 4 or in accordance with the fourth subparagraph of paragraph 5; and
(c) the arrangements for forwarding positions adopted by an independent authority that is competent in the activity concerned, regarding questions relevant to paragraphs 1 and 2.
***
Exposure to competition explained
Direct exposure to competition is explained by Recitals 40 and 41 of the Utilities Directive:
(40) This Directive should apply neither to contracts intended to permit the performance of an activity referred to in Articles 3 to 7 nor to design contests organised for the pursuit of such an activity if, in the Member State in which this activity is carried out, it is directly exposed to competition on markets to which access is not limited. It is therefore appropriate to introduce a procedure, applicable to all sectors covered by this Directive, that will enable the effects of current or future opening up to competition to be taken into account. Such a procedure should provide legal certainty for the entities concerned, as well as an appropriate decision-making process, ensuring, within short time limits, uniform application of Community law in this area.
(41) Direct exposure to competition should be assessed on the basis of objective criteria, taking account of the specific characteristics of the sector concerned. The implementation and application of appropriate Community legislation opening a given sector, or a part of it, will be considered to provide sufficient grounds for assuming there is free access to the market in question. Such appropriate legislation should be identified in an annex which can be updated by the Commission. When updating, the Commission takes in particular into account the possible adoption of measures entailing a genuine opening up to competition of sectors other than those for which a legislation is already mentioned in Annex XI, such as that of railway transports. Where free access to a given market does not result from the implementation of appropriate Community legislation, it should be demonstrated that, de jure and de facto, such access is free. For this purpose, application by a Member State of a Directive, such as Directive 94/22/EC opening up a given sector to competition, to another sector, such as the coal sector, is a circumstance to be taken into account for the purposes of Article 30.
***
Annex XI Community legislation
Access to a market shall be deemed not to be restricted if the Member State has implemented and applied the provisions of Community legislation mentioned in Annex XI.
Commission Decision 2008/963/EC of 9 December 2008 amending the Annexes to Directives 2004/17/EC and 2004/18/EC of the European Parliament and of the Council on public procurement procedures, as regards their lists of contracting entities and contracting authorities, published OJEU 24.12.2008 L 349/1, amended Annexes I to X of the Utilities Directive.
Annex XI was left untouched, so we should be safe in accessing this Annex from the latest consolidated version (15 September 2008) of the Utilities Directive. Here is the list of relevant internal market legislation (but look for possible amendments to the Directives mentioned):
ANNEX XI
LIST OF COMMUNITY LEGISLATION REFERRED TO IN ARTICLE 30(3)
A. TRANSPORT OR DISTRIBUTION OF GAS OR HEAT
Directive 98/30/EC of the European Parliament and of the Council of 22 June 1998 concerning common rules for the internal market in natural gas (1)
B. PRODUCTION, TRANSMISSION OR DISTRIBUTION OF ELECTRICITY
Directive 96/92/EC of the European Parliament and of the Council of 19 December 1996 concerning common rules for the internal market in electricity (2)
C. PRODUCTION, TRANSPORT OR DISTRIBUTION OF DRINKING WATER
—
D. CONTRACTING ENTITIES IN THE FIELD OF RAIL SERVICES
—
E. CONTRACTING ENTITIES IN THE FIELD OF URBAN RAILWAY, TRAMWAY, TROLLEYBUS OR MOTOR BUS SERVICES
—
F. CONTRACTING ENTITIES IN THE FIELD OF POSTAL SERVICES
Directive 97/67/EC of the European Parliament and of the Council of 15 December 1997 on common rules for the development of the internal market of Community postal services and the improvement of quality of service (3)
G. EXPLORATION FOR AND EXTRACTION OF OIL OR GAS
Directive 94/22/EC of the European Parliament and of the Council of 30 May 1994 on the conditions for granting and using authorisations for the prospection, exploration and production of hydrocarbons (4)
H. EXPLORATION FOR AND EXTRACTION OF COAL OR OTHER SOLID FUELS
—
I. CONTRACTING ENTITIES IN THE FIELD OF SEAPORT OR INLAND PORT OR OTHER TERMINAL EQUIPMENT
—
J. CONTRACTING ENTITIES IN THE FIELD OF AIRPORT INSTALLATIONS
—
-----
(1) OJ L 204, 21.7.1998, p. 1.
(2) OJ L 27, 30.1.1997, p. 20.
(3) OJ L 15, 21.1.1998, p. 14. Directive last amended by Directive 2002/39/EC (OJ L 176, 5.7.2002, p. 21).
(4) OJ L 164, 30.6.1994, p. 3.
(Check if the Directives have been amended.)
Ralf Grahn
Saturday, 10 January 2009
EU Procurement Directive: Fuel extraction and terminal facilites
The general European Community (European Union) Procurement Directive 2004/18/EC, also known as the Classic Directive, does not apply to public contracts in the special sectors covered by the Utilities Directive 2004/17/EC.
Here we look at contracts excluded from the Procurement Directive because they fall within the scope of Article 7 of the Utilities Directive: Exploration for, or extraction of, oil, gas, coal or other solid fuels, as well as ports and airports.
***
Article 12 Procurement Directive
Article 12 of the Procurement Directive 2004/18/EC excludes the sectors to which the so called Utilities Directive 2004/17/EC applies as ‘lex specialis’: water, energy, transport and postal services:
S e c t i o n 3
Excluded contracts
Article 12
Contracts in the water, energy, transport and postal services sectors
This Directive shall not apply to public contracts which, under Directive 2004/17/EC, are awarded by contracting authorities exercising one or more of the activities referred to in Articles 3 to 7 of that Directive and are awarded for the pursuit of those activities, or to public contracts excluded from the scope of that Directive under Article 5(2) and Articles 19, 26 and 30 thereof.
[However, this Directive shall continue to apply to public contracts awarded by contracting authorities carrying out one or more of the activities referred to in Article 6 of Directive 2004/17/EC and awarded for those activities, insofar as the Member State concerned takes advantage of the option referred to in the second subparagraph of Article 71 thereof to defer its application.]
(Although not relevant for today’s blog post, the second paragraph is obsolete since 1 January 2009.)
***
Exclusion of utilities explained
Recital 20 of the Procurement Directive refers to Directive 2004/17/EC, the so called Utilities Directive, and explains the exclusion of specific sectors from the Procurement Directive:
(20) Public contracts which are awarded by the contracting authorities operating in the water, energy, transport and postal services sectors and which fall within the scope of those activities are covered by Directive 2004/17/EC of the European Parliament and of the Council of 31 March 2004 coordinating the procurement procedures of entities operating in the water, energy, transport and postal services sectors. However, contracts awarded by the contracting authorities in the context of their service activities for maritime, coastal or river transport must fall within the scope of this Directive.
***
Additional contracts excluded (and included)
The headline ‘water, energy, transport and postal services sectors’ gives us a rough indication of the activities, which fall under the Utilities Directive 2004/17/EC, but the scope of the Utilities Directive needs to be defined in order to determine when this Directive takes precedence.
The Utilities Directive is the primary source concerning public contracts awarded by contracting authorities exercising one or more of the activities referred to in Articles 3 to 7 of that Directive and awarded for the pursuit of those activities.
In earlier blog posts we have looked at Articles 3 to 6 of the Utilities Directive. Article 7 of the Utilities Directive applies to activities relating to the exploitation of a geographical area – land or water – for certain purposes (subject to further precisions):
Article 7 Utilities Directive
Exploration for, or extraction of, oil, gas, coal or other solid fuels, as well as ports and airports
This Directive shall apply to activities relating to the exploitation of a geographical area for the purpose of:
(a) exploring for or extracting oil, gas, coal or other solid fuels, or
(b) the provision of airports and maritime or inland ports or other terminal facilities to carriers by air, sea or inland waterway.
***
Fuel exploration or extraction
Recital 38 Utilities Directive
The exploitation of a geographical area for the purpose of exploring for or extracting oil, gas, coal or other solid fuels is given the following explanation in Recital 38 of the Utilities Directive:
(38) To forestall the proliferation of specific arrangements applicable to certain sectors only, the current special arrangements created by Article 3 of Directive 93/38/EEC and Article 12 of Directive 94/22/EC of the European Parliament and of the Council of 30 May 1994 on the conditions for granting and using authorisations for the prospection, exploration and production of hydrocarbons governing entities exploiting a geographical area for the purpose of exploring for or extracting oil, gas, coal or other solid fuels should be replaced by the general procedure allowing for exemption of sectors directly exposed to competition. It has to be ensured, however, that this will be without prejudice to Commission Decision 93/676/EEC of 10 December 1993 establishing that the exploitation of geographical areas for the purpose of exploring for or extracting oil or gas does not constitute in the Netherlands an activity defined by Article 2(2)(b)(i) of Council Directive 90/531/EEC and that entities carrying on such an activity are not to be considered in the Netherlands as operating under special or exclusive rights within the meaning of Article 2(3)(b) of the Directive, Commission Decision 97/367/EC of 30 May 1997 establishing that the exploitation of geographical areas for the purpose of exploring for or extracting oil or gas does not constitute in the United Kingdom an activity defined by Article 2(2)(b)(i) of Council Directive 93/38/EEC and that entities carrying on such an activity are not to be considered in the United Kingdom as operating under special or exclusive rights within the meaning of Article 2(3)(b) of the Directive, Commission Decision 2002/205/EC of 4 March 2002 following a request by Austria applying for the special regime provided for in Article 3 of Directive 93/38/EEC and Commission Decision 2004/73/EC on a request from Germany to apply the special procedure laid down in Article 3 of Directive 93/38/EEC.
***
Article 20 Utilities Directive
Article 20 of the Utilities Directive limits the scope of the Directive concerning contracts awarded by contracting authorities for purposes outside Articles 3 to 7 or with regard to activities in third countries:
Article 20
Contracts awarded for purposes other than the pursuit of an activity covered or for the pursuit of such an activity in a third country
1. This Directive shall not apply to contracts which the contracting entities award for purposes other than the pursuit of their activities as described in Articles 3 to 7 or for the pursuit of such activities in a third country, in conditions not involving the physical use of a network or geographical area within the Community.
2. The contracting entities shall notify the Commission at its request of any activities which they regard as excluded under paragraph 1. The Commission may periodically publish in the Official Journal of the European Union for information purposes, lists of the categories of activities which it considers to be covered by this exclusion. In so doing, the Commission shall respect any sensitive commercial aspects that the contracting entities may point out when forwarding this information.
***
Countries with exceptions
The exceptions for Austria, Germany, the Netherlands and the United Kingdom explained in Recital 38 are given legal form in Article 27 of the Utilities Directive:
Article 27
Contracts subject to special arrangements
Without prejudice to Article 30 the Kingdom of the Netherlands, the United Kingdom, the Republic of Austria and the Federal Republic of Germany shall ensure, by way of the conditions of authorisation or other appropriate measures, that any entity operating in the sectors mentioned in Decisions 93/676/EEC, 97/367/EEC, 2002/205/EC and 2004/73/EC:
(a) observes the principles of non-discrimination and competitive procurement in respect of the award of supplies, works and service contracts, in particular as regards the information which the entity makes available to economic operators concerning its procurement intentions;
(b) communicates to the Commission, under the conditions defined in Commission Decision 93/327/EEC defining the conditions under which contracting entities exploiting geographical areas for the purpose of exploring for or extracting oil, gas, coal or other solid fuels must communicate to the Commission information relating to the contracts they award.
***
Article 30 Utilities Directive
The reference to Article 30 above refers to contracts excluded from the scope of the Utilities Directive because they are directly exposed to competition. Paragraph 1 sets out the main rule (and the rest of the Article lays down the procedure):
1. Contracts intended to enable an activity mentioned in Articles 3 to 7 to be carried out shall not be subject to this Directive if, in the Member State in which it is performed, the activity is directly exposed to competition on markets to which access is not restricted.
***
Contracting authorities
The indicative lists of contracting authorities for different kinds of contracts offer some guidance on contracts subject to the Utilities Directive:
Annex VII Contracting entities in the sectors of exploration for and extraction of oil or gas
Annex VIII Contracting entities in the sectors of exploration for and extraction of coal and other solid fuels
***
Airports, ports or terminal facilities
Recital 25 Utilities Directive
Recital 25 of the Utilities Directive refers to circumstances when the construction of port or airport facilities does not constitute an exclusive right within the meaning of the Directive:
(25) There has to be an appropriate definition of the concept of special or exclusive rights. The consequence of the definition is that the fact that, for the purpose of constructing networks or port or airport facilities, an entity may take advantage of a procedure for the expropriation or use of property or may place network equipment on, under or over the public highway will not in itself constitute exclusive or special rights within the meaning of this Directive. Nor does the fact that an entity supplies drinking water, electricity, gas or heat to a network which is itself operated by an entity enjoying special or exclusive rights granted by a competent authority of the Member State concerned in itself constitute an exclusive or special right within the meaning of this Directive. Nor may rights granted by a Member State in any form, including by way of acts of concession, to a limited number of undertakings on the basis of objective, proportionate and non-discriminatory criteria that allow any interested party fulfilling those criteria to enjoy those rights be considered special or exclusive rights.
***
Contracting authorities
The indicative lists of contracting authorities for different kinds of contracts offer some guidance on contracts subject to the Utilities Directive:
Annex IX Contracting entities in the field of maritime or inland port or other terminal facilities
Annex X Contracting entities in the field of airport installations
(The new Annexes IX and X are found in Commission Decision 2008/963/EC of 9 December 2008 amending the Annexes to Directives 2004/17/EC and 2004/18/EC of the European Parliament and of the Council on public procurement procedures, as regards their lists of contracting entities and contracting authorities, published OJEU 24.12.2008 L 349/1.)
***
Purpose
Activities relating to the exploitation of a geographical area for the purposes mentioned in Article 7 of the Utilities Directive is a broad definition. When a contract relates to an activity mentioned in Article 7(a) or (b) it must be presumed to fall within the scope of the Directive if the purpose does not clearly set it outside the ‘normal’ scope of activities of an explorer or extractor of fuels, or of a provider of an airport, port or terminal.
Ralf Grahn
Here we look at contracts excluded from the Procurement Directive because they fall within the scope of Article 7 of the Utilities Directive: Exploration for, or extraction of, oil, gas, coal or other solid fuels, as well as ports and airports.
***
Article 12 Procurement Directive
Article 12 of the Procurement Directive 2004/18/EC excludes the sectors to which the so called Utilities Directive 2004/17/EC applies as ‘lex specialis’: water, energy, transport and postal services:
S e c t i o n 3
Excluded contracts
Article 12
Contracts in the water, energy, transport and postal services sectors
This Directive shall not apply to public contracts which, under Directive 2004/17/EC, are awarded by contracting authorities exercising one or more of the activities referred to in Articles 3 to 7 of that Directive and are awarded for the pursuit of those activities, or to public contracts excluded from the scope of that Directive under Article 5(2) and Articles 19, 26 and 30 thereof.
[However, this Directive shall continue to apply to public contracts awarded by contracting authorities carrying out one or more of the activities referred to in Article 6 of Directive 2004/17/EC and awarded for those activities, insofar as the Member State concerned takes advantage of the option referred to in the second subparagraph of Article 71 thereof to defer its application.]
(Although not relevant for today’s blog post, the second paragraph is obsolete since 1 January 2009.)
***
Exclusion of utilities explained
Recital 20 of the Procurement Directive refers to Directive 2004/17/EC, the so called Utilities Directive, and explains the exclusion of specific sectors from the Procurement Directive:
(20) Public contracts which are awarded by the contracting authorities operating in the water, energy, transport and postal services sectors and which fall within the scope of those activities are covered by Directive 2004/17/EC of the European Parliament and of the Council of 31 March 2004 coordinating the procurement procedures of entities operating in the water, energy, transport and postal services sectors. However, contracts awarded by the contracting authorities in the context of their service activities for maritime, coastal or river transport must fall within the scope of this Directive.
***
Additional contracts excluded (and included)
The headline ‘water, energy, transport and postal services sectors’ gives us a rough indication of the activities, which fall under the Utilities Directive 2004/17/EC, but the scope of the Utilities Directive needs to be defined in order to determine when this Directive takes precedence.
The Utilities Directive is the primary source concerning public contracts awarded by contracting authorities exercising one or more of the activities referred to in Articles 3 to 7 of that Directive and awarded for the pursuit of those activities.
In earlier blog posts we have looked at Articles 3 to 6 of the Utilities Directive. Article 7 of the Utilities Directive applies to activities relating to the exploitation of a geographical area – land or water – for certain purposes (subject to further precisions):
Article 7 Utilities Directive
Exploration for, or extraction of, oil, gas, coal or other solid fuels, as well as ports and airports
This Directive shall apply to activities relating to the exploitation of a geographical area for the purpose of:
(a) exploring for or extracting oil, gas, coal or other solid fuels, or
(b) the provision of airports and maritime or inland ports or other terminal facilities to carriers by air, sea or inland waterway.
***
Fuel exploration or extraction
Recital 38 Utilities Directive
The exploitation of a geographical area for the purpose of exploring for or extracting oil, gas, coal or other solid fuels is given the following explanation in Recital 38 of the Utilities Directive:
(38) To forestall the proliferation of specific arrangements applicable to certain sectors only, the current special arrangements created by Article 3 of Directive 93/38/EEC and Article 12 of Directive 94/22/EC of the European Parliament and of the Council of 30 May 1994 on the conditions for granting and using authorisations for the prospection, exploration and production of hydrocarbons governing entities exploiting a geographical area for the purpose of exploring for or extracting oil, gas, coal or other solid fuels should be replaced by the general procedure allowing for exemption of sectors directly exposed to competition. It has to be ensured, however, that this will be without prejudice to Commission Decision 93/676/EEC of 10 December 1993 establishing that the exploitation of geographical areas for the purpose of exploring for or extracting oil or gas does not constitute in the Netherlands an activity defined by Article 2(2)(b)(i) of Council Directive 90/531/EEC and that entities carrying on such an activity are not to be considered in the Netherlands as operating under special or exclusive rights within the meaning of Article 2(3)(b) of the Directive, Commission Decision 97/367/EC of 30 May 1997 establishing that the exploitation of geographical areas for the purpose of exploring for or extracting oil or gas does not constitute in the United Kingdom an activity defined by Article 2(2)(b)(i) of Council Directive 93/38/EEC and that entities carrying on such an activity are not to be considered in the United Kingdom as operating under special or exclusive rights within the meaning of Article 2(3)(b) of the Directive, Commission Decision 2002/205/EC of 4 March 2002 following a request by Austria applying for the special regime provided for in Article 3 of Directive 93/38/EEC and Commission Decision 2004/73/EC on a request from Germany to apply the special procedure laid down in Article 3 of Directive 93/38/EEC.
***
Article 20 Utilities Directive
Article 20 of the Utilities Directive limits the scope of the Directive concerning contracts awarded by contracting authorities for purposes outside Articles 3 to 7 or with regard to activities in third countries:
Article 20
Contracts awarded for purposes other than the pursuit of an activity covered or for the pursuit of such an activity in a third country
1. This Directive shall not apply to contracts which the contracting entities award for purposes other than the pursuit of their activities as described in Articles 3 to 7 or for the pursuit of such activities in a third country, in conditions not involving the physical use of a network or geographical area within the Community.
2. The contracting entities shall notify the Commission at its request of any activities which they regard as excluded under paragraph 1. The Commission may periodically publish in the Official Journal of the European Union for information purposes, lists of the categories of activities which it considers to be covered by this exclusion. In so doing, the Commission shall respect any sensitive commercial aspects that the contracting entities may point out when forwarding this information.
***
Countries with exceptions
The exceptions for Austria, Germany, the Netherlands and the United Kingdom explained in Recital 38 are given legal form in Article 27 of the Utilities Directive:
Article 27
Contracts subject to special arrangements
Without prejudice to Article 30 the Kingdom of the Netherlands, the United Kingdom, the Republic of Austria and the Federal Republic of Germany shall ensure, by way of the conditions of authorisation or other appropriate measures, that any entity operating in the sectors mentioned in Decisions 93/676/EEC, 97/367/EEC, 2002/205/EC and 2004/73/EC:
(a) observes the principles of non-discrimination and competitive procurement in respect of the award of supplies, works and service contracts, in particular as regards the information which the entity makes available to economic operators concerning its procurement intentions;
(b) communicates to the Commission, under the conditions defined in Commission Decision 93/327/EEC defining the conditions under which contracting entities exploiting geographical areas for the purpose of exploring for or extracting oil, gas, coal or other solid fuels must communicate to the Commission information relating to the contracts they award.
***
Article 30 Utilities Directive
The reference to Article 30 above refers to contracts excluded from the scope of the Utilities Directive because they are directly exposed to competition. Paragraph 1 sets out the main rule (and the rest of the Article lays down the procedure):
1. Contracts intended to enable an activity mentioned in Articles 3 to 7 to be carried out shall not be subject to this Directive if, in the Member State in which it is performed, the activity is directly exposed to competition on markets to which access is not restricted.
***
Contracting authorities
The indicative lists of contracting authorities for different kinds of contracts offer some guidance on contracts subject to the Utilities Directive:
Annex VII Contracting entities in the sectors of exploration for and extraction of oil or gas
Annex VIII Contracting entities in the sectors of exploration for and extraction of coal and other solid fuels
***
Airports, ports or terminal facilities
Recital 25 Utilities Directive
Recital 25 of the Utilities Directive refers to circumstances when the construction of port or airport facilities does not constitute an exclusive right within the meaning of the Directive:
(25) There has to be an appropriate definition of the concept of special or exclusive rights. The consequence of the definition is that the fact that, for the purpose of constructing networks or port or airport facilities, an entity may take advantage of a procedure for the expropriation or use of property or may place network equipment on, under or over the public highway will not in itself constitute exclusive or special rights within the meaning of this Directive. Nor does the fact that an entity supplies drinking water, electricity, gas or heat to a network which is itself operated by an entity enjoying special or exclusive rights granted by a competent authority of the Member State concerned in itself constitute an exclusive or special right within the meaning of this Directive. Nor may rights granted by a Member State in any form, including by way of acts of concession, to a limited number of undertakings on the basis of objective, proportionate and non-discriminatory criteria that allow any interested party fulfilling those criteria to enjoy those rights be considered special or exclusive rights.
***
Contracting authorities
The indicative lists of contracting authorities for different kinds of contracts offer some guidance on contracts subject to the Utilities Directive:
Annex IX Contracting entities in the field of maritime or inland port or other terminal facilities
Annex X Contracting entities in the field of airport installations
(The new Annexes IX and X are found in Commission Decision 2008/963/EC of 9 December 2008 amending the Annexes to Directives 2004/17/EC and 2004/18/EC of the European Parliament and of the Council on public procurement procedures, as regards their lists of contracting entities and contracting authorities, published OJEU 24.12.2008 L 349/1.)
***
Purpose
Activities relating to the exploitation of a geographical area for the purposes mentioned in Article 7 of the Utilities Directive is a broad definition. When a contract relates to an activity mentioned in Article 7(a) or (b) it must be presumed to fall within the scope of the Directive if the purpose does not clearly set it outside the ‘normal’ scope of activities of an explorer or extractor of fuels, or of a provider of an airport, port or terminal.
Ralf Grahn
Friday, 9 January 2009
EU Procurement Directive: Excluded postal services
The general European Community (European Union) Procurement Directive 2004/18/EC, also known as the Classic Directive, does not apply to public contracts in the special sectors covered by the Utilities Directive 2004/17/EC.
Here we look at excluded postal services and their inclusion under the Utilities Directive. .
But the operating environment of postal services has changed and continues to move towards guaranteed universal services for consumers, but provided by competing service providers. Thus, the framework for procurement is becoming less public.
Therefore, we take a look at the evolving internal market in postal services.
***
Article 12 Procurement Directive
Article 12 of the Procurement Directive 2004/18/EC excludes the sectors to which the so called Utilities Directive 2004/17/EC applies as ‘lex specialis’: water, energy, transport and postal services:
S e c t i o n 3
Excluded contracts
Article 12
Contracts in the water, energy, transport and postal services sectors
This Directive shall not apply to public contracts which, under Directive 2004/17/EC, are awarded by contracting authorities exercising one or more of the activities referred to in Articles 3 to 7 of that Directive and are awarded for the pursuit of those activities, or to public contracts excluded from the scope of that Directive under Article 5(2) and Articles 19, 26 and 30 thereof.
However, this Directive shall continue to apply to public contracts awarded by contracting authorities carrying out one or more of the activities referred to in Article 6 of Directive 2004/17/EC and awarded for those activities, insofar as the Member State concerned takes advantage of the option referred to in the second subparagraph of Article 71 thereof to defer its application.
***
Exclusion of utilities explained
Recital 20 of the Procurement Directive refers to Directive 2004/17/EC, the so called Utilities Directive, and explains the exclusion of specific sectors from the Procurement Directive:
(20) Public contracts which are awarded by the contracting authorities operating in the water, energy, transport and postal services sectors and which fall within the scope of those activities are covered by Directive 2004/17/EC of the European Parliament and of the Council of 31 March 2004 coordinating the procurement procedures of entities operating in the water, energy, transport and postal services sectors. However, contracts awarded by the contracting authorities in the context of their service activities for maritime, coastal or river transport must fall within the scope of this Directive.
***
Postal services excluded (and included)
The headline ‘water, energy, transport and postal services sectors’ gives us a rough indication of the activities, which fall under the Utilities Directive 2004/17/EC, but the scope of the Utilities Directive needs to be defined in order to determine when this Directive takes precedence.
The Utilities Directive is the primary source concerning public contracts awarded by contracting authorities exercising one or more of the activities referred to in Articles 3 to 7 of that Directive and awarded for the pursuit of those activities.
Postal services are excluded from the general Procurement Directive insofar as they are covered by the Utilities Directive. Article 6 of the Utilities Directive determines the postal service contracts covered by that Directive (subject to further precisions):
Article 6 Utilities Directive
Postal services
1. This Directive shall apply to activities relating to the provision of postal services or, on the conditions set out in paragraph 2(c), other services than postal services.
2. For the purpose of this Directive and without prejudice to Directive 97/67/EC:
(a) ‘postal item’: means an item addressed in the final form in which it is to be carried, irrespective of weight. In addition to items of correspondence, such items also include for instance books, catalogues, newspapers, periodicals and postal packages containing merchandise with or without commercial value, irrespective of weight;
(b) ‘postal services’: means services consisting of the clearance, sorting, routing and delivery of postal items. These services comprise:
— ‘reserved postal services’: postal services which are or may be reserved on the basis of Article 7 of Directive 97/67/EC,
— ‘other postal services’: postal services which may not be reserved on the basis of Article 7 of Directive 97/67/EC; and
(c) ‘other services than postal services’: means services provided in the following areas:
— mail service management services (services both preceding and subsequent to despatch, such as ‘mailroom management services’),
— added-value services linked to and provided entirely by electronic means (including the secure transmission of coded documents by electronic means, address management services and transmission of registered electronic mail),
— services concerning postal items not included in point (a), such as direct mail bearing no address,
— financial services, as defined in category 6 of Annex XVII A and in Article 24(c) and including in particular postal money orders and postal giro transfers,
— philatelic services, and
— logistics services (services combining physical delivery and/or warehousing with other non-postal functions), on condition that such services are provided by an entity which also provides postal services within the meaning of point (b), first or second indent, and provided that the conditions set out in Article 30(1) are not satisfied in respect of the services falling within those indents.
***
Postal services in Utilities Directive explained
The liberalisation of postal services has been gradual at European Community level and uneven across the European Economic Area. Against this background Recital 28 of the Utilities Directive explains the reasons for including postal services in the Utilities Directive:
(28) Taking into account the further opening up of Community postal services to competition and the fact that such services are provided through a network by contracting authorities, public undertakings and other undertakings, contracts awarded by contracting entities providing postal services should be subject to the rules of this Directive, including those in Article 30, which, safeguarding the application of the principles referred to in recital 9, create a framework for sound commercial practice and allow greater flexibility than is offered by Directive 2004/18/EC of the European Parliament and of the Council of 31 March 2004 on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts. For a definition of the activities in question, it is necessary to take into account the definitions of Directive 97/67/EC of the European Parliament and of the Council of 15 December 1997 on common rules for the development of the internal market of Community postal services and the improvement of quality of service.
Whatever their legal status, entities providing postal services are not currently subject to the rules set out in Directive 93/38/EEC. The adjustment of contract award procedures to this Directive could therefore take longer to implement for such entities than for entities already subject to those rules which will merely have to adapt their procedures to the amendments made by this Directive. It should therefore be permissible to defer application of this Directive to accommodate the additional time required for this adjustment. Given the varying situations of such entities, Member States should have the option of providing for a transitional period for the application of this Directive to contracting entities operating in the postal services sector.
***
Postal Directive 97/87/EC
The concept of reserved contracts is heading for extinction.
The Postal Directive, Directive 97/67/EC of the European Parliament and the Council of 15 December 1997 on common rules for the development of the internal market of Community postal services and the improvement of quality of service (originally published OJ 21.1.1998 L 15/14), has been amended three times. The latest consolidated version is from 27 February 2008.
Article 6(2)(b) of the Utilities Directive refers to Article 7 of the Postal Services Directive with regard to reserved postal services and other postal services (postal services which may not be reserved).
Third Postal Directive
The former Article 7 of the Postal Directive was replaced by the amending Directive 2008/6/EC of the European Parliament and of the Council of 20 February 2008 amending Directive 97/67/EC with regard to the full accomplishment of the internal market of Community postal services (OJEU 27.2.2008 L 52/3).
Universal service obligations will replace the notions of reserved and non-reserved postal services. The member states shall bring into force the laws, regulations and administrative provisions necessary to comply with Directive 2008/6/EC by 31 December 2010 at the latest.
By derogation, the following Member States may postpone the implementation of Directive 2008/6/EC until 31 December 2012, in order to continue to reserve services to universal service provider(s), although they may decide to implement the Directive at an earlier stage:
— Czech Republic,
— Greece,
— Cyprus,
— Latvia,
— Lithuania,
— Luxembourg,
— Hungary,
— Malta,
— Poland,
— Romania,
— Slovakia.
The member states with a derogation had to notify the Commission confirming their intention to make use of the implementation delay by 27 August 2008.
Member states that abolish their reserved areas by 31 December 2012 may, between 1 January 2011 and 31 December 2012, refuse to grant the authorisation provided for in Article 9(2) of Directive 97/67/EC for services within the abolished reserved area in question to postal operators providing services within the scope of the universal service, as well as companies controlled by them, which are granted a reserved area in another Member State.
With the distinction between reserved and non-reserved postal services gradually shrinking until it disappears, the new Article 7 is based on the principle of universal service obligations:
New Article 7 Postal Directive
1. Member States shall not grant or maintain in force exclusive or special rights for the establishment and provision of postal services. Member States may finance the provision of universal services in accordance with one or more of the means provided for in paragraphs 2, 3 and 4, or in accordance with any other means compatible with the Treaty.
2. Member States may ensure the provision of universal services by procuring such services in accordance with applicable public procurement rules and regulations, including, as provided for in Directive 2004/17/EC of the European Parliament and of the Council of 31 March 2004 coordinating the procurement procedures of entities operating in the water, energy, transport and postal services, competitive dialogue or negotiated procedures with or without publication of a contract notice.
3. Where a Member State determines that the universal service obligations, as provided for in this Directive, entail a net cost, calculated taking into account Annex I, and represent an unfair financial burden on the universal service provider(s), it may introduce:
(a) a mechanism to compensate the undertaking(s) concerned from public funds; or
(b) a mechanism for the sharing of the net cost of the universal service obligations between providers of services and/or users.
4. Where the net cost is shared in accordance with paragraph 3(b), Member States may establish a compensation fund which may be funded by service providers and/or users' fees, and is administered for this purpose by a body independent of the beneficiary or beneficiaries. Member States may make the granting of authorisations to service providers under Article 9(2) subject to an obligation to make a financial contribution to that fund or to comply with universal service obligations. The universal service obligations of the universal service provider(s) set out in Article 3 may be financed in this manner.
5. Member States shall ensure that the principles of transparency, non-discrimination and proportionality are respected in establishing the compensation fund and when fixing the level of the financial contributions referred to in paragraphs 3 and 4. Decisions taken in accordance with paragraphs 3 and 4 shall be based on objective and verifiable criteria and be made public.
***
Postal services in the internal market
Because of the link between public procurement and the internal market rules regarding postal services, some readers may want to take a closer look at the development of postal services within the single market. The Commission’s DG Internal Market presents the developments on the introductory web page EU Postal Legislation, with a number of useful links (latest update 8 January 2009):
http://ec.europa.eu/internal_market/post/legislation_en.htm
***
Postal Directive report
A recent and overview of the liberalisation of the postal markets is the Report from the Commission to the Council and the European Parliament on the application of the Postal Directive
(Directive 97/67/EC as amended by Directive 2002/39/EC), Brussels, 22.12.2008 COM(2008) 884 final:
http://ec.europa.eu/internal_market/post/doc/reports/report_en.pdf
The report makes the observation that Germany fully opened its postal market as of 1 January 2008. To date four Member States have thus abolished the reserved area before the date foreseen in the Postal Directive (Germany, Finland, Sweden, UK).
The Postal report is accompanied by the more detailed Commission Staff Working Document: Accompanying document to the Report from the Commission to the European Parliament and the Council on the application of the Postal Directive (Directive 97/67/EC as amended by Directive 2002/39/EC), Brussels, 22.12.2008 SEC(2008) 3076, available here:
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=SEC:2008:3076:FIN:EN:PDF
The Staff Working Document presents a view of the postal market situation in individual EU and EEA member states. The section on the Reserved area (page 15 to 17) may be of special interest to the readers of this blog post.
***
Article 30 exemption
Article 30(1) of the Utilities Directive 2004/17/EC exempts contracts in the utilities sector from application, if these activities are conducted under competitive market conditions:
1. Contracts intended to enable an activity mentioned in Articles 3 to 7 to be carried out shall not be subject to this Directive if, in the Member State in which it is performed, the activity is directly exposed to competition on markets to which access is not restricted.
***
No deferred application from 2009
The second paragraph of Article 12 of the Procurement Directive 2004/18/EC referred to the possibility of deferred application:
However, this Directive shall continue to apply to public contracts awarded by contracting authorities carrying out one or more of the activities referred to in Article 6 of Directive 2004/17/EC and awarded for those activities, insofar as the Member State concerned takes advantage of the option referred to in the second subparagraph of Article 71 thereof to defer its application.
The second subparagraph of Article 71(1) of the Utilities Directive 2004/17/EC offered member states an option to defer the application of Article 6 on postal services for and additional 35 months after 31 January 2006.
This additional transitional period ended on 31 December 2008, so from the beginning of 2009 this exception no longer applies in any member state of the European Union.
Ralf Grahn
Here we look at excluded postal services and their inclusion under the Utilities Directive. .
But the operating environment of postal services has changed and continues to move towards guaranteed universal services for consumers, but provided by competing service providers. Thus, the framework for procurement is becoming less public.
Therefore, we take a look at the evolving internal market in postal services.
***
Article 12 Procurement Directive
Article 12 of the Procurement Directive 2004/18/EC excludes the sectors to which the so called Utilities Directive 2004/17/EC applies as ‘lex specialis’: water, energy, transport and postal services:
S e c t i o n 3
Excluded contracts
Article 12
Contracts in the water, energy, transport and postal services sectors
This Directive shall not apply to public contracts which, under Directive 2004/17/EC, are awarded by contracting authorities exercising one or more of the activities referred to in Articles 3 to 7 of that Directive and are awarded for the pursuit of those activities, or to public contracts excluded from the scope of that Directive under Article 5(2) and Articles 19, 26 and 30 thereof.
However, this Directive shall continue to apply to public contracts awarded by contracting authorities carrying out one or more of the activities referred to in Article 6 of Directive 2004/17/EC and awarded for those activities, insofar as the Member State concerned takes advantage of the option referred to in the second subparagraph of Article 71 thereof to defer its application.
***
Exclusion of utilities explained
Recital 20 of the Procurement Directive refers to Directive 2004/17/EC, the so called Utilities Directive, and explains the exclusion of specific sectors from the Procurement Directive:
(20) Public contracts which are awarded by the contracting authorities operating in the water, energy, transport and postal services sectors and which fall within the scope of those activities are covered by Directive 2004/17/EC of the European Parliament and of the Council of 31 March 2004 coordinating the procurement procedures of entities operating in the water, energy, transport and postal services sectors. However, contracts awarded by the contracting authorities in the context of their service activities for maritime, coastal or river transport must fall within the scope of this Directive.
***
Postal services excluded (and included)
The headline ‘water, energy, transport and postal services sectors’ gives us a rough indication of the activities, which fall under the Utilities Directive 2004/17/EC, but the scope of the Utilities Directive needs to be defined in order to determine when this Directive takes precedence.
The Utilities Directive is the primary source concerning public contracts awarded by contracting authorities exercising one or more of the activities referred to in Articles 3 to 7 of that Directive and awarded for the pursuit of those activities.
Postal services are excluded from the general Procurement Directive insofar as they are covered by the Utilities Directive. Article 6 of the Utilities Directive determines the postal service contracts covered by that Directive (subject to further precisions):
Article 6 Utilities Directive
Postal services
1. This Directive shall apply to activities relating to the provision of postal services or, on the conditions set out in paragraph 2(c), other services than postal services.
2. For the purpose of this Directive and without prejudice to Directive 97/67/EC:
(a) ‘postal item’: means an item addressed in the final form in which it is to be carried, irrespective of weight. In addition to items of correspondence, such items also include for instance books, catalogues, newspapers, periodicals and postal packages containing merchandise with or without commercial value, irrespective of weight;
(b) ‘postal services’: means services consisting of the clearance, sorting, routing and delivery of postal items. These services comprise:
— ‘reserved postal services’: postal services which are or may be reserved on the basis of Article 7 of Directive 97/67/EC,
— ‘other postal services’: postal services which may not be reserved on the basis of Article 7 of Directive 97/67/EC; and
(c) ‘other services than postal services’: means services provided in the following areas:
— mail service management services (services both preceding and subsequent to despatch, such as ‘mailroom management services’),
— added-value services linked to and provided entirely by electronic means (including the secure transmission of coded documents by electronic means, address management services and transmission of registered electronic mail),
— services concerning postal items not included in point (a), such as direct mail bearing no address,
— financial services, as defined in category 6 of Annex XVII A and in Article 24(c) and including in particular postal money orders and postal giro transfers,
— philatelic services, and
— logistics services (services combining physical delivery and/or warehousing with other non-postal functions), on condition that such services are provided by an entity which also provides postal services within the meaning of point (b), first or second indent, and provided that the conditions set out in Article 30(1) are not satisfied in respect of the services falling within those indents.
***
Postal services in Utilities Directive explained
The liberalisation of postal services has been gradual at European Community level and uneven across the European Economic Area. Against this background Recital 28 of the Utilities Directive explains the reasons for including postal services in the Utilities Directive:
(28) Taking into account the further opening up of Community postal services to competition and the fact that such services are provided through a network by contracting authorities, public undertakings and other undertakings, contracts awarded by contracting entities providing postal services should be subject to the rules of this Directive, including those in Article 30, which, safeguarding the application of the principles referred to in recital 9, create a framework for sound commercial practice and allow greater flexibility than is offered by Directive 2004/18/EC of the European Parliament and of the Council of 31 March 2004 on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts. For a definition of the activities in question, it is necessary to take into account the definitions of Directive 97/67/EC of the European Parliament and of the Council of 15 December 1997 on common rules for the development of the internal market of Community postal services and the improvement of quality of service.
Whatever their legal status, entities providing postal services are not currently subject to the rules set out in Directive 93/38/EEC. The adjustment of contract award procedures to this Directive could therefore take longer to implement for such entities than for entities already subject to those rules which will merely have to adapt their procedures to the amendments made by this Directive. It should therefore be permissible to defer application of this Directive to accommodate the additional time required for this adjustment. Given the varying situations of such entities, Member States should have the option of providing for a transitional period for the application of this Directive to contracting entities operating in the postal services sector.
***
Postal Directive 97/87/EC
The concept of reserved contracts is heading for extinction.
The Postal Directive, Directive 97/67/EC of the European Parliament and the Council of 15 December 1997 on common rules for the development of the internal market of Community postal services and the improvement of quality of service (originally published OJ 21.1.1998 L 15/14), has been amended three times. The latest consolidated version is from 27 February 2008.
Article 6(2)(b) of the Utilities Directive refers to Article 7 of the Postal Services Directive with regard to reserved postal services and other postal services (postal services which may not be reserved).
Third Postal Directive
The former Article 7 of the Postal Directive was replaced by the amending Directive 2008/6/EC of the European Parliament and of the Council of 20 February 2008 amending Directive 97/67/EC with regard to the full accomplishment of the internal market of Community postal services (OJEU 27.2.2008 L 52/3).
Universal service obligations will replace the notions of reserved and non-reserved postal services. The member states shall bring into force the laws, regulations and administrative provisions necessary to comply with Directive 2008/6/EC by 31 December 2010 at the latest.
By derogation, the following Member States may postpone the implementation of Directive 2008/6/EC until 31 December 2012, in order to continue to reserve services to universal service provider(s), although they may decide to implement the Directive at an earlier stage:
— Czech Republic,
— Greece,
— Cyprus,
— Latvia,
— Lithuania,
— Luxembourg,
— Hungary,
— Malta,
— Poland,
— Romania,
— Slovakia.
The member states with a derogation had to notify the Commission confirming their intention to make use of the implementation delay by 27 August 2008.
Member states that abolish their reserved areas by 31 December 2012 may, between 1 January 2011 and 31 December 2012, refuse to grant the authorisation provided for in Article 9(2) of Directive 97/67/EC for services within the abolished reserved area in question to postal operators providing services within the scope of the universal service, as well as companies controlled by them, which are granted a reserved area in another Member State.
With the distinction between reserved and non-reserved postal services gradually shrinking until it disappears, the new Article 7 is based on the principle of universal service obligations:
New Article 7 Postal Directive
1. Member States shall not grant or maintain in force exclusive or special rights for the establishment and provision of postal services. Member States may finance the provision of universal services in accordance with one or more of the means provided for in paragraphs 2, 3 and 4, or in accordance with any other means compatible with the Treaty.
2. Member States may ensure the provision of universal services by procuring such services in accordance with applicable public procurement rules and regulations, including, as provided for in Directive 2004/17/EC of the European Parliament and of the Council of 31 March 2004 coordinating the procurement procedures of entities operating in the water, energy, transport and postal services, competitive dialogue or negotiated procedures with or without publication of a contract notice.
3. Where a Member State determines that the universal service obligations, as provided for in this Directive, entail a net cost, calculated taking into account Annex I, and represent an unfair financial burden on the universal service provider(s), it may introduce:
(a) a mechanism to compensate the undertaking(s) concerned from public funds; or
(b) a mechanism for the sharing of the net cost of the universal service obligations between providers of services and/or users.
4. Where the net cost is shared in accordance with paragraph 3(b), Member States may establish a compensation fund which may be funded by service providers and/or users' fees, and is administered for this purpose by a body independent of the beneficiary or beneficiaries. Member States may make the granting of authorisations to service providers under Article 9(2) subject to an obligation to make a financial contribution to that fund or to comply with universal service obligations. The universal service obligations of the universal service provider(s) set out in Article 3 may be financed in this manner.
5. Member States shall ensure that the principles of transparency, non-discrimination and proportionality are respected in establishing the compensation fund and when fixing the level of the financial contributions referred to in paragraphs 3 and 4. Decisions taken in accordance with paragraphs 3 and 4 shall be based on objective and verifiable criteria and be made public.
***
Postal services in the internal market
Because of the link between public procurement and the internal market rules regarding postal services, some readers may want to take a closer look at the development of postal services within the single market. The Commission’s DG Internal Market presents the developments on the introductory web page EU Postal Legislation, with a number of useful links (latest update 8 January 2009):
http://ec.europa.eu/internal_market/post/legislation_en.htm
***
Postal Directive report
A recent and overview of the liberalisation of the postal markets is the Report from the Commission to the Council and the European Parliament on the application of the Postal Directive
(Directive 97/67/EC as amended by Directive 2002/39/EC), Brussels, 22.12.2008 COM(2008) 884 final:
http://ec.europa.eu/internal_market/post/doc/reports/report_en.pdf
The report makes the observation that Germany fully opened its postal market as of 1 January 2008. To date four Member States have thus abolished the reserved area before the date foreseen in the Postal Directive (Germany, Finland, Sweden, UK).
The Postal report is accompanied by the more detailed Commission Staff Working Document: Accompanying document to the Report from the Commission to the European Parliament and the Council on the application of the Postal Directive (Directive 97/67/EC as amended by Directive 2002/39/EC), Brussels, 22.12.2008 SEC(2008) 3076, available here:
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=SEC:2008:3076:FIN:EN:PDF
The Staff Working Document presents a view of the postal market situation in individual EU and EEA member states. The section on the Reserved area (page 15 to 17) may be of special interest to the readers of this blog post.
***
Article 30 exemption
Article 30(1) of the Utilities Directive 2004/17/EC exempts contracts in the utilities sector from application, if these activities are conducted under competitive market conditions:
1. Contracts intended to enable an activity mentioned in Articles 3 to 7 to be carried out shall not be subject to this Directive if, in the Member State in which it is performed, the activity is directly exposed to competition on markets to which access is not restricted.
***
No deferred application from 2009
The second paragraph of Article 12 of the Procurement Directive 2004/18/EC referred to the possibility of deferred application:
However, this Directive shall continue to apply to public contracts awarded by contracting authorities carrying out one or more of the activities referred to in Article 6 of Directive 2004/17/EC and awarded for those activities, insofar as the Member State concerned takes advantage of the option referred to in the second subparagraph of Article 71 thereof to defer its application.
The second subparagraph of Article 71(1) of the Utilities Directive 2004/17/EC offered member states an option to defer the application of Article 6 on postal services for and additional 35 months after 31 January 2006.
This additional transitional period ended on 31 December 2008, so from the beginning of 2009 this exception no longer applies in any member state of the European Union.
Ralf Grahn
Thursday, 30 October 2008
Public procurement in Sweden
Internal market rules are applied to public procurement in the EU member states through European Community directives, transposed into national law.
But how single is the Single Market, if you are a European or international firm and you want to do business in one of the member states of the European Union?
You may even want to supply goods or services to central, regional or local government.
We look at the procurement legislation in Sweden, with a view to the information available to foreign suppliers in English.
***
The European Community directives are the foundation, and naturally they are available in English.
The so called Classic Directive:
Directive 2004/18/EC of the European Parliament and of the Council of 31 March 2004 on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts (OJ 30.4.2004 L 134/114), since amended. This is a link to the consolidated version:
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CONSLEG:2004L0018:20080101:EN:PDF
The so called Utilities Directive:
Directive 2004/17/EC of the European Parliament and of the Council of 31 March 2004 coordinating the procurement procedures of entities operating in the water, energy, transport and postal services sectors (OJ 30.4.2004 L 134/1) has been amended a few times, so this is a link to the consolidated version:
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CONSLEG:2004L0017:20080101:EN:PDF
***
Preparing transposition in Sweden
When the Swedish Government got around to transposing the EC Directives, it presented a massive Bill to the Parliament. The main proposal runs to 570 pages:
Regeringens proposition 2006/07:128 Ny lagstiftning om offentlig upphandling och upphandling inom områdena vatten, energi, transporter och posttjänster:
http://www.regeringen.se/content/1/c6/08/43/76/9cb61697.pdf
The Government Bill was accompanied by two sets of Annexes.
Annexes 1 – 6 (373 pages):
http://www.regeringen.se/content/1/c6/08/43/76/c6856bc3.pdf
Annexes 7 – 15 (280 pages):
http://www.regeringen.se/content/1/c6/08/43/76/1aa64eec.pdf
***
Two statutes
The new Swedish procurement legislation consists of two main Acts, in force from 1 January 2008.
Lag om offentlig upphandling (Swedish Public Procurements Act)
The Act transposing the Classic Directive 2004/18/EC is called Lag (2007:1091) om offentlig upphandling (abbreviated LOU)
***
Försörjningslagen
Lag (2007:1092) om områdena vatten, energi, transporter och posttjänster (colloquially Försörjningslagen) transposes the Utilities Directive 2004/17/EC.
Current Swedish legislation can be accessed through (in Swedish):
www.lagrummet.se
***
Translations?
The Swedish Government offers some unofficial translations of legal acts on a web page called Swedish statutes in translation, with links to a dozen legal areas, but I was unable to find any translation of the procurement acts there:
http://www.sweden.gov.se/sb/d/3288
***
Swedish Competition Authority
The Swedish Competition Authority (Konkurrensverket) is responsible for improving competition and, since 1 September 2007, for supervising public procurement. It offers some basic information, news and publications in English:
http://www.kkv.se/default____218.aspx
Last year, the Competition Authority published The Strategy of the Swedish Competition Authority and its Direction for Procurement Issues (30 pages), where it set out its main goals to enhance competition in public procurement:
http://www.kkv.se/upload/Filer/ENG/Publications/strategidok_eng.pdf
The main public procurement aims of the Swedish Competition Authority are the following:
procuring entities being aware of their options regarding procurement and that they avoid violating the Swedish Public Procurements Act,
the competitive sector of the Swedish economy grows and the competitive solutions are applied to an increased extent in the public sector,
suppliers have the opportunity and want to take part in procurements,
Swedish consumers, procuring entities and suppliers know about the significance of competition for a varied selection goods and services of good quality at reasonable prices.
By the way, there is an unofficial Swedish translation of the Swedish Competition Act (but I found no translation of the procurement acts):
http://www.kkv.se/upload/Filer/ENG/Publications/compact_eng.pdf
***
State procurement
The Swedish state coordinates its purchasing activities. For some information in English, go to Statlig inköpssammordning, Coordination of government procurement:
http://www.avropa.nu/templates/Page____9.aspx
There is a short presentation of the coordinating body, the Swedish Financial Management Aurhority (Ekonomistyrningsverket) on:
http://www.avropa.nu/upload/Dokument/Yttranden,%20rapporter,%20pm/In%20English.pdf
***
Sveriges offentliga inköpare SOI
Sveriges Offentliga Inköpare SOI is an association for about 1,100 purchasing professionals, but the information is available only in Swedish:
http://www.soi.se/
***
Swedish National Board of Trade
Kommerskollegium (the Swedish National Board of Trade) is the Swedish governmental agency dealing with foreign trade and trade policy. Its main areas of activity are related to the European Community:
The Internal Market
The Customs Union
External Trade policy
The web pages offer a fair amount of basic information in English. For more, go to:
http://www.kommers.se/templates/Standard____3127.aspx
The National Board of Trade is a partner in the SOLVIT network.
***
Green public procurement
Three public procurement themes are the darlings of politicians. One is the participation of small and medium sized enterprises (SMEs), the second is e-procurement and the third one is green public procurement.
Sweden would not be Sweden without green procurement cropping up. Naturvårdsverket (the Swedish Environmental Protection Agency) offers a point of departure on its page More and more public bodies in Sweden have guidelines on green procurement:
http://www.naturvardsverket.se/en/In-English/Menu/Climate-change/Swedish-News-on-Climate-Change/More-and-more-public-bodies-in-Sweden-have-guidelines-on-green-procurement/
***
Upphandling24
Upphandling24 is a commercial website in Swedish, dedicated to public procurement news and information:
http://upphandling24.idg.se/
***
Confederation of Swedish Enterprise
Svenskt Näringsliv (the Confederation of Swedish Enterprise) lobbies for more open public markets. The information is in Swedish:
http://www.svensktnaringsliv.se/fragor/offentlig_upphandling/article15121.ece
***
Local Authorities and Regions
For the members of Sveriges Kommuner och Landsting (the Swedish Association of Local Authorities and Regions, SALAR) the complicated procurement legislation is a constant headache, which results in demands for simplification and continuous monitoring of new proposals and decisions (in Swedish):
http://www.skl.se
***
Freedom of choice
The Swedish Competition Authority has a page in English ‘New rules pave the way for freedom of choice’ on a new government proposal. The law, due to come into force on 1 January 2009, regulates how municipalities and county councils are to proceed if they decide to introduce a freedom-of-choice system in their care services:
http://www.konkurrensverket.se/t/NewsPage____3987.aspx
The Government Bill, Regeringens proposition 2008/09:29 Lag om valfrihetssystem, is available in Swedish:
http://www.regeringen.se/content/1/c6/11/25/56/e7303623.pdf
***
It is hard to penetrate new markets, especially outside one’s own home country, and public procurement adds its own twist.
The language barriers within the internal market are formidable, and in Sweden the available official information in English can be described as basic. But generally Swedish officials are helpful and English is almost a second language to them, so once you get the ball rolling, you have every chance of success.
Ralf Grahn
But how single is the Single Market, if you are a European or international firm and you want to do business in one of the member states of the European Union?
You may even want to supply goods or services to central, regional or local government.
We look at the procurement legislation in Sweden, with a view to the information available to foreign suppliers in English.
***
The European Community directives are the foundation, and naturally they are available in English.
The so called Classic Directive:
Directive 2004/18/EC of the European Parliament and of the Council of 31 March 2004 on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts (OJ 30.4.2004 L 134/114), since amended. This is a link to the consolidated version:
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CONSLEG:2004L0018:20080101:EN:PDF
The so called Utilities Directive:
Directive 2004/17/EC of the European Parliament and of the Council of 31 March 2004 coordinating the procurement procedures of entities operating in the water, energy, transport and postal services sectors (OJ 30.4.2004 L 134/1) has been amended a few times, so this is a link to the consolidated version:
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CONSLEG:2004L0017:20080101:EN:PDF
***
Preparing transposition in Sweden
When the Swedish Government got around to transposing the EC Directives, it presented a massive Bill to the Parliament. The main proposal runs to 570 pages:
Regeringens proposition 2006/07:128 Ny lagstiftning om offentlig upphandling och upphandling inom områdena vatten, energi, transporter och posttjänster:
http://www.regeringen.se/content/1/c6/08/43/76/9cb61697.pdf
The Government Bill was accompanied by two sets of Annexes.
Annexes 1 – 6 (373 pages):
http://www.regeringen.se/content/1/c6/08/43/76/c6856bc3.pdf
Annexes 7 – 15 (280 pages):
http://www.regeringen.se/content/1/c6/08/43/76/1aa64eec.pdf
***
Two statutes
The new Swedish procurement legislation consists of two main Acts, in force from 1 January 2008.
Lag om offentlig upphandling (Swedish Public Procurements Act)
The Act transposing the Classic Directive 2004/18/EC is called Lag (2007:1091) om offentlig upphandling (abbreviated LOU)
***
Försörjningslagen
Lag (2007:1092) om områdena vatten, energi, transporter och posttjänster (colloquially Försörjningslagen) transposes the Utilities Directive 2004/17/EC.
Current Swedish legislation can be accessed through (in Swedish):
www.lagrummet.se
***
Translations?
The Swedish Government offers some unofficial translations of legal acts on a web page called Swedish statutes in translation, with links to a dozen legal areas, but I was unable to find any translation of the procurement acts there:
http://www.sweden.gov.se/sb/d/3288
***
Swedish Competition Authority
The Swedish Competition Authority (Konkurrensverket) is responsible for improving competition and, since 1 September 2007, for supervising public procurement. It offers some basic information, news and publications in English:
http://www.kkv.se/default____218.aspx
Last year, the Competition Authority published The Strategy of the Swedish Competition Authority and its Direction for Procurement Issues (30 pages), where it set out its main goals to enhance competition in public procurement:
http://www.kkv.se/upload/Filer/ENG/Publications/strategidok_eng.pdf
The main public procurement aims of the Swedish Competition Authority are the following:
procuring entities being aware of their options regarding procurement and that they avoid violating the Swedish Public Procurements Act,
the competitive sector of the Swedish economy grows and the competitive solutions are applied to an increased extent in the public sector,
suppliers have the opportunity and want to take part in procurements,
Swedish consumers, procuring entities and suppliers know about the significance of competition for a varied selection goods and services of good quality at reasonable prices.
By the way, there is an unofficial Swedish translation of the Swedish Competition Act (but I found no translation of the procurement acts):
http://www.kkv.se/upload/Filer/ENG/Publications/compact_eng.pdf
***
State procurement
The Swedish state coordinates its purchasing activities. For some information in English, go to Statlig inköpssammordning, Coordination of government procurement:
http://www.avropa.nu/templates/Page____9.aspx
There is a short presentation of the coordinating body, the Swedish Financial Management Aurhority (Ekonomistyrningsverket) on:
http://www.avropa.nu/upload/Dokument/Yttranden,%20rapporter,%20pm/In%20English.pdf
***
Sveriges offentliga inköpare SOI
Sveriges Offentliga Inköpare SOI is an association for about 1,100 purchasing professionals, but the information is available only in Swedish:
http://www.soi.se/
***
Swedish National Board of Trade
Kommerskollegium (the Swedish National Board of Trade) is the Swedish governmental agency dealing with foreign trade and trade policy. Its main areas of activity are related to the European Community:
The Internal Market
The Customs Union
External Trade policy
The web pages offer a fair amount of basic information in English. For more, go to:
http://www.kommers.se/templates/Standard____3127.aspx
The National Board of Trade is a partner in the SOLVIT network.
***
Green public procurement
Three public procurement themes are the darlings of politicians. One is the participation of small and medium sized enterprises (SMEs), the second is e-procurement and the third one is green public procurement.
Sweden would not be Sweden without green procurement cropping up. Naturvårdsverket (the Swedish Environmental Protection Agency) offers a point of departure on its page More and more public bodies in Sweden have guidelines on green procurement:
http://www.naturvardsverket.se/en/In-English/Menu/Climate-change/Swedish-News-on-Climate-Change/More-and-more-public-bodies-in-Sweden-have-guidelines-on-green-procurement/
***
Upphandling24
Upphandling24 is a commercial website in Swedish, dedicated to public procurement news and information:
http://upphandling24.idg.se/
***
Confederation of Swedish Enterprise
Svenskt Näringsliv (the Confederation of Swedish Enterprise) lobbies for more open public markets. The information is in Swedish:
http://www.svensktnaringsliv.se/fragor/offentlig_upphandling/article15121.ece
***
Local Authorities and Regions
For the members of Sveriges Kommuner och Landsting (the Swedish Association of Local Authorities and Regions, SALAR) the complicated procurement legislation is a constant headache, which results in demands for simplification and continuous monitoring of new proposals and decisions (in Swedish):
http://www.skl.se
***
Freedom of choice
The Swedish Competition Authority has a page in English ‘New rules pave the way for freedom of choice’ on a new government proposal. The law, due to come into force on 1 January 2009, regulates how municipalities and county councils are to proceed if they decide to introduce a freedom-of-choice system in their care services:
http://www.konkurrensverket.se/t/NewsPage____3987.aspx
The Government Bill, Regeringens proposition 2008/09:29 Lag om valfrihetssystem, is available in Swedish:
http://www.regeringen.se/content/1/c6/11/25/56/e7303623.pdf
***
It is hard to penetrate new markets, especially outside one’s own home country, and public procurement adds its own twist.
The language barriers within the internal market are formidable, and in Sweden the available official information in English can be described as basic. But generally Swedish officials are helpful and English is almost a second language to them, so once you get the ball rolling, you have every chance of success.
Ralf Grahn
Wednesday, 29 October 2008
Public procurement in Finland
Public information in Finland is available by law in Finnish and (to a lesser degree) in Swedish. But increasingly government information can be found in English for practical reasons.
For international companies and their advisors there is an unofficial English translation of the Finnish Act on Public Contracts (348/2007), based on Directive 2004/18/EC, available at:
http://www.finlex.fi/en/laki/kaannokset/2007/en20070348.pdf
***
The official versions are in Finnish and Swedish.
Finnish: Laki julkisista hankinnoista (348/2007):
http://www.finlex.fi/fi/laki/ajantasa/2007/20070348
Swedish: Lag om offentlig upphandling (348/2007):
http://www.finlex.fi/sv/laki/ajantasa/2007/20070348
***
The Government Bill, leading to the Act on Public Contracts, in Finnish ‘Hallituksen esitys Eduskunnalle laeiksi julkisista hankinnoista sekä vesi- ja energiahuollon, liikenteen ja postipalvelujen alalla toimivien yksiköiden hankinnoista (HE 50/2006 vp) and in Swedish ‘Regeringens proposition till Riksdagen med förslag till lag om offentlig upphandling och lag om upphandling inom sektorerna vatten, energi, transporter och posttjänster (RP 50/2006 rd), is accessible at:
http://www.finlex.fi/fi/esitykset/he/2006/?_offset=220
***
The Act, based upon the Utilities Directive 2004/17/EC, ‘Laki vesi- ja energiahuollon, liikenteen ja postipalvelujen alalla toimivien yksiköiden hankinnoista’ (349/2007) is available only in the official Finnish and Swedish versions.
Here in Finnish:
http://www.finlex.fi/fi/laki/ajantasa/2007/20070349
’Lag om upphandling inom sektorerna vatten, energi, transporter och posttjänster’ (349/2007) in Swedish:
http://www.finlex.fi/sv/laki/ajantasa/2007/20070349
***
The advisory website Hankinnat.fi offers brief information in English at:
http://www.kunnat.net/k_etusivu.asp?path=1;161;122591
***
Tenders are announced in Finnish and Swedish on HILMA:
http://www.hankintailmoitukset.fi/
***
The Ministry of Employment and the Economy offers additional information about tender procedures in English at:
http://www.tem.fi/?l=en&s=102
The Ministry pages contain: Latest updates on Public procurement, Legislation (public procurement), Government institutions (Public procurement), Advice on public contracts, Publication on contracts, Thresholds, Case law (Public procurement), Special sectors (Public procurement) and Further information and links (Public procurement).
Ralf Grahn
For international companies and their advisors there is an unofficial English translation of the Finnish Act on Public Contracts (348/2007), based on Directive 2004/18/EC, available at:
http://www.finlex.fi/en/laki/kaannokset/2007/en20070348.pdf
***
The official versions are in Finnish and Swedish.
Finnish: Laki julkisista hankinnoista (348/2007):
http://www.finlex.fi/fi/laki/ajantasa/2007/20070348
Swedish: Lag om offentlig upphandling (348/2007):
http://www.finlex.fi/sv/laki/ajantasa/2007/20070348
***
The Government Bill, leading to the Act on Public Contracts, in Finnish ‘Hallituksen esitys Eduskunnalle laeiksi julkisista hankinnoista sekä vesi- ja energiahuollon, liikenteen ja postipalvelujen alalla toimivien yksiköiden hankinnoista (HE 50/2006 vp) and in Swedish ‘Regeringens proposition till Riksdagen med förslag till lag om offentlig upphandling och lag om upphandling inom sektorerna vatten, energi, transporter och posttjänster (RP 50/2006 rd), is accessible at:
http://www.finlex.fi/fi/esitykset/he/2006/?_offset=220
***
The Act, based upon the Utilities Directive 2004/17/EC, ‘Laki vesi- ja energiahuollon, liikenteen ja postipalvelujen alalla toimivien yksiköiden hankinnoista’ (349/2007) is available only in the official Finnish and Swedish versions.
Here in Finnish:
http://www.finlex.fi/fi/laki/ajantasa/2007/20070349
’Lag om upphandling inom sektorerna vatten, energi, transporter och posttjänster’ (349/2007) in Swedish:
http://www.finlex.fi/sv/laki/ajantasa/2007/20070349
***
The advisory website Hankinnat.fi offers brief information in English at:
http://www.kunnat.net/k_etusivu.asp?path=1;161;122591
***
Tenders are announced in Finnish and Swedish on HILMA:
http://www.hankintailmoitukset.fi/
***
The Ministry of Employment and the Economy offers additional information about tender procedures in English at:
http://www.tem.fi/?l=en&s=102
The Ministry pages contain: Latest updates on Public procurement, Legislation (public procurement), Government institutions (Public procurement), Advice on public contracts, Publication on contracts, Thresholds, Case law (Public procurement), Special sectors (Public procurement) and Further information and links (Public procurement).
Ralf Grahn
Subscribe to:
Posts (Atom)
Subscribe To Grahnlaw
Posts
All Comments
