EU politics: Czech Council in tray

Today the Czech Government published its Work Programme for the EU Council Presidency running from 1 January to 30 June 2009. Europe without Barriers is the theme for the programme, available here:

http://www.eu2009.cz/en/news-and-documents/news/the-czech-presidency-presents-its-priorities-and-work-programme-4810/

The Czech Republic’s stint at the head of the Council of the European Union occurs in the middle of the second 18 month Presidency trio programme, drafted by France, the Czech Republic and Sweden. Especially the later Presidencies have reasons to update the joint programme, but their own programme offers certain possibilities to underline their own priorities.

In addition to the motto – Europe without Barriers – the Czech Government tries to catch attention by three Es: Economy, Energy and the European Union in the World. These are presented as priorities of the Czech Presidency.

Knowing that the Czech Parliament has not approved or even voted on the Treaty of Lisbon, we are served the following enlightening sentence on the introductory page:

The issue of institutional reform, connected to the future of the Lisbon Treaty ratification, is a task of no lesser importance for the efficient functioning of the European Union and its internal and external policies.

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Why should anyone read this Presidency programme voluntarily?

The European Union has a lot of dossiers moving (or not) at any given time, so the Presidency programmes can be read as valuable refreshers on where different issues stand from the Council’s point of view.

After the introductory (thematic) pages, the following 28 pages offer the reader a glimpse of the Council’s in tray for the coming six months. The Czech programme is divided into 16 policy areas and these into 84 further sub-headlines in all.

Consequently, the treatment is brief, concentrated or bland (however you want to see it), almost telegraphic in style.

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Following the age old custom of writers to carp, let me pick one introductory phrase (on page vii): The EU is a significant global player…

Are Hamas and Israel listening?


Ralf Grahn

P.S. As a reminder to mainstream media: In spite of hype the which has surrounded Nicolas Sarkozy, the Czech Republic has not taken over the EU Presidency, just the Presidency of the EU Council, one of the main three political institutions of the European Union, even if arguably the most important one.

EU Law: Supplementary research programmes

In addition to the general European Community (European Union) Framework Programme for Research and Technological Development (now FP7) and the specific programmes implementing it – Cooperation, Ideas, People, Capacities and the Joint Research Council – there exists an option to agree on supplementary programmes involving the participation of certain Member States only.

We are reminded of this optional instrument both at treaty level and by the secondary legislation concerning the FP7, running from 1 January 2007 to 31 December 2013.

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Article 168 TEC

Article 168 (ex Article 130k) of the Treaty establishing the European Community (TEC) concerns supplementary programmes for research and technological development involving only some member states.

The supplementary programmes are primarily financed by the participating states. The Council decides on rules with regard to dissemination of knowledge and access by other member states.

The current Article 168 of the Treaty establishing the European Community (TEC), as published in the latest consolidated version of the treaties, OJEU 29.12.2006 C 321 E/122:

(TITLE XVIII
RESEARCH AND TECHNOLOGICAL DEVELOPMENT)

Article 168 TEC

In implementing the multiannual framework programme, supplementary programmes may be decided on involving the participation of certain Member States only, which shall finance them subject to possible Community participation.

The Council shall adopt the rules applicable to supplementary programmes, particularly as regards the dissemination of knowledge and access by other Member States.


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Original Lisbon Treaty (ToL)

Article 2, point 140 of the Lisbon Treaty amended Article 168 TEC (OJEU 17.12.2007 C 306/86):

140) In Article 168, second paragraph, the words ‘the Council’ shall be replaced by ‘the Union’.


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Renumbering the Treaty of Lisbon (ToL)

The Table of equivalences of the original Treaty of Lisbon tells us that Title XVIII first became Title XVIII with the addition of space in the TFEU (ToL), and later renumbered Title XIX Research and technological development and space in the consolidated version.

Article 168 TEC initially became Article 168 TFEU (ToL) before the renumbering of the treaty made it into Article 184 TFEU in the consolidated version of the Lisbon Treaty (OJEU 17.12.2007 C 306/217–218).


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Lisbon Treaty consolidated

Article 184 TFEU

After one specific amendments and renumbering Article 184 TFEU appears like this in the consolidated version of the Treaty of Lisbon (OJEU 9.5.2008 C 115/130):

(TITLE XIX
RESEARCH AND TECHNOLOGICAL DEVELOPMENT AND SPACE)

Article 184 TFEU
(ex Article 168 TEC)

In implementing the multiannual framework programme, supplementary programmes may be decided on involving the participation of certain Member States only, which shall finance them subject to possible Union participation.

The Union shall adopt the rules applicable to supplementary programmes, particularly as regards the dissemination of knowledge and access by other Member States.


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FP7 – Seventh Framework Programme (2007–2013)

Having looked at the treaty level, we move on to supplementary research programmes in practice.

Decision No 1982/2006/EC of the European Parliament and of the Council of 18 December 2006 concerning the Seventh Framework Programme of the European Community for research, technological development and demonstration activities (2007-2013), published in OJEU 30.12.2006 L 412/1, is available here:

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2006:412:0001:0041:EN:PDF

Although the treaty provision on supplementary programmes has its historical roots and causes, including limited use, here we are interested in the possible existence of such EU research programmes.

Recital 26 of the FP7 Decision 1982/2006 refers to supplementary programmes:

(26) Implementation of the Seventh Framework Programme may give rise to supplementary programmes involving the participation of certain Member States only, the participation of the Community in programmes undertaken by several Member States, or the setting up of joint undertakings or other arrangements within the meaning of Articles 168, 169 and 171 of the Treaty.


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In other words, the FP7 Decision treats supplementary research programmes as a potential instrument.


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Rules on supplementary programmes?

Is the text of the FP7 Decision Recital 26 just a reminder of an existing optional instrument, or are there more detailed rules in existence governing the use of supplementary programmes?


The rules for participation and for dissemination of research results are set out in Regulation (EC) No 1906/2006 of the European Parliament and of the Council of 18 December 2006 laying down the rules for the participation of undertakings, research centres and universities in actions under the Seventh Framework Programme and for the dissemination of research results (2007-2013), published OJEU 30.12.2006 L 391/1:

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2006:391:0001:0018:EN:PDF


I found no mention of supplementary research programmes in Regulation 1906/2006. This indicates that the treaty provision sets the legal framework for the potential use of supplementary programmes. The legal act or acts would probably be drafted according to the objectives, the participants and other circumstances, drawing on existing EC (EU) research Decisions, Regulations and practices.

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Specific programmes

The Framework Programme for Research and Technological Development (FP7) is implemented through specific programmes. The possibility of supplementary programmes is mentioned in the context of the FP7 or the specific programme in question, but we leave it to the interested reader to dig more deeply.

Note that the specific programmes initially published have been corrected and the corrigenda published in the Official Journal of the European Union (OJEU) 22 February 2007 L 54. The links in earlier posts have been replaced below.


Cooperation programme

COUNCIL DECISION 2006/971/EC of 19 December 2006 concerning the Specific Programme "Cooperation" implementing the Seventh Framework Programme of the European Community for research, technological development and demonstration activities (2007 to 2013), initially published OJEU 30.12.2006 L 400/86. The corrigendum OJEU 22.2.2007 L 54/30 is available here:

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2007:054:0030:0080:EN:PDF

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Ideas programme

COUNCIL DECISION 2006/972/EC of 19 December 2006 concerning the specific programme: "Ideas" implementing the Seventh Framework Programme of the European Community for research, technological development and demonstration activities (2007 to 2013), initially published in OJEU 30.12.2006 L 400/243. The corrigendum OJEU 22.2.2007 L 54/81 is available here:

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2007:054:0081:0090:EN:PDF



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People programme


COUNCIL DECISION 2006/973/EC of 19 December 2006 concerning the specific programme "People" implementing the Seventh Framework Programme of the European Community for research, technological development and demonstration activities (2007 to 2013), was initially published in OJEU 2006 L 400. Here is a link to the corrigendum OJEU 22.2.2007 L 54/91:

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2007:054:0091:0100:EN:PDF




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Capacities programme

COUNCIL DECISION 2006/974/EC of 19 December 2006 on the Specific Programme: "Capacities" implementing the Seventh Framework Programme of the European Community for research, technological development and demonstration activities (2007 to 2013), initially published OJEU 30.12.2006 L 400/299. The corrigendum OJEU 22.2.2007 L 54/101 is available here:

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2007:054:0101:0125:EN:PDF



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Joint Research Centre


COUNCIL DECISION 2006/975/EC of 19 December 2006 concerning the Specific Programme to be carried out by means of direct actions by the Joint Research Centre under the Seventh Framework Programme of the European Community for research, technological development and demonstration activities (2007 to 2013), initially published OJEU 30.12.2006 L 400/368. The corrigendum OJEU 22.2.2007 L 54/126 is available here:

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2007:054:0126:0138:EN:PDF


Ralf Grahn

EU Law: Research participation and dissemination

One of the aims of the European Community’s (European Union’s) Seventh Framework Programme for Research and Technological Development (FP7) was to streamline the procedures for participants.

The European Year of Creativity and Innovation 2009 started a few days ago with the objective to raise awareness of importance of creativity and innovation for personal, social and economic development, to disseminate good practices, stimulate education and research, and promote policy debate and development:

http://create2009.europa.eu/

We take a peek at the treaty level provisions concerning EU research and technological development (RTD) activities, especially secondary legislation with regard to participation and dissemination of research results.

Participants are invited to comment on how successful the FP7 streamlining exercise has been.

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Article 167 TEC

Article 167 (ex Article 130j) of the Treaty establishing the European Community (TEC) concerns rules for the participation in the multiannual framework programme for research and technological development and rules governing the dissemination of results.

The current Article 167 of the Treaty establishing the European Community (TEC), as published in the latest consolidated version of the treaties, OJEU 29.12.2006 C 321 E/122:

(TITLE XVIII
RESEARCH AND TECHNOLOGICAL DEVELOPMENT)

Article 167 TEC

For the implementation of the multiannual framework programme the Council shall:

— determine the rules for the participation of undertakings, research centres and universities,

— lay down the rules governing the dissemination of research results.



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Original Lisbon Treaty (ToL)

Article 2, point 138 of the Lisbon Treaty amended Article 167 TEC (OJEU 17.12.2007 C 306/86):

139) In Article 167, the words ‘the Council’ shall be replaced by ‘the Union’.



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Renumbering the Treaty of Lisbon (ToL)

The Table of equivalences of the original Treaty of Lisbon tells us that Title XVIII first became Title XVIII with the addition of space in the TFEU (ToL), and later renumbered Title XIX Research and technological development and space in the consolidated version.

Article 167 TEC initially became Article 167 TFEU (ToL) before the renumbering of the treaty made it into Article 183 TFEU in the consolidated version of the Lisbon Treaty (OJEU 17.12.2007 C 306/217–218).


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Lisbon Treaty consolidated

Article 183 TFEU

After one specific amendments and renumbering Article 183 TFEU appears like this in the consolidated version of the Treaty of Lisbon (OJEU 9.5.2008 C 115/130):

(TITLE XIX
RESEARCH AND TECHNOLOGICAL DEVELOPMENT AND SPACE)

Article 183 TFEU
(ex Article 167 TEC)

For the implementation of the multiannual framework programme the Union shall:

— determine the rules for the participation of undertakings, research centres and universities,

— lay down the rules governing the dissemination of research results.




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Overview: EU research funding 2007 to 2013

Before looking at the detailed rules, some readers may want an overview of what the European Union has to offer in the area of research funding generally.

The Commission has published the booklet Competitive European regions through research and innovation – Practical guide to EU funding opportunities for research and innovation (Revision 2, 2 December 2008; 59 pages), available here:

ftp://ftp.cordis.europa.eu/pub/fp7/docs/practical-guide-rev2_en.pdf

At the Community level, the Union possesses three key funding instruments to support research and innovation: Cohesion policy which is funded through the Structural Funds and Cohesion Fund; the Research Framework Programme (FP7) and the Competitiveness and Innovation Framework Programme (CIP).

The Practical guide offers information about EU funding opportunities.


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CORDIS

CORDIS – the Community Research & Development Information Service – offers a wealth of information about the Seventh Framework Programme (FP7), accessible from here:

http://cordis.europa.eu/fp7/home_en.html

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FP7 in Brief

The Seventh Framework Programme for Research and Technological Development (2007 to 2013) is presented in an introductory brochure called FP7 in Brief – How to get involved in the EU 7th Framework Programme for Research (a pocket guide for newcomers):

http://ec.europa.eu/research/fp7/pdf/fp7-inbrief_en.pdf


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FP7 – Seventh Framework Programme (2007–2013)

After the background presented above, it is time to mention the main legal act concerning the FP7.

Decision No 1982/2006/EC of the European Parliament and of the Council of 18 December 2006 concerning the Seventh Framework Programme of the European Community for research, technological development and demonstration activities (2007-2013), published in OJEU 30.12.2006 L 412/1, is available here:

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2006:412:0001:0041:EN:PDF


FP7 themes

The research and technological development (RTD) activities within the Seventh Framework Programme from 1 January 2007 to 31 December 2013 are carried out in the following thematic areas (Article 2):

(a) Health;

(b) Food, Agriculture and Fisheries, and Biotechnology;

(c) Information and Communication Technologies;

(d) Nano-sciences, Nano-technologies, Materials and New Production Technologies;

(e) Energy;

(f) Environment (including Climate Change);

(g) Transport (including Aeronautics);

(h) Socio-economic Sciences and Humanities;

(i) Space;

(j) Security.

(ii) Ideas: supporting ‘investigator-driven’ research carried out across all fields by individual national or transnational teams in competition at the European level.

(iii) People: strengthening, quantitatively and qualitatively, the human potential in research and technological development in Europe, as well as encouraging mobility.

(iv) Capacities: supporting key aspects of European research and innovation capacities such as research infrastructures; regional research driven clusters; the development of a full research potential in the Community's convergence and outermost regions; research for the benefit of small and medium-sized enterprises (‘SMEs’); ‘Science in Society’ issues; support to coherent development of policies; horizontal activities of international cooperation.

2. The Seventh Framework Programme shall also support the non-nuclear direct scientific and technical actions carried out by the Joint Research Centre (‘JRC’) as defined in Annex I.

*

The Decision offers some general rules and and its Annexes present thematic objectives, reasons, activities, a breakdown of available financial resources etc.


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Rules for participation and dissemination

The specific objective of this post is to point to the rules on participation in FP7 activities and the dissemination of research results.

The rules for participation mentioned in the first indent and for dissemination of research results mentioned in the second indent of Article 167 TEC (and Article 183 TFEU) are set out in Regulation (EC) No 1906/2006 of the European Parliament and of the Council of 18 December 2006 laying down the rules for the participation of undertakings, research centres and universities in actions under the Seventh Framework Programme and for the dissemination of research results (2007-2013), published OJEU 30.12.2006 L 391/1, available here:

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2006:391:0001:0018:EN:PDF

Article 1 of Regulation 1906/2006 indicates the scope:

Article 1
Subject matter

This Regulation lays down the rules for the participation of undertakings, research centres and universities and other legal entities in actions undertaken by one or more participants by means of funding schemes identified in part (a) of Annex III to Decision No 1982/2006/EC, hereinafter ‘indirect actions’.

It also lays down rules, in accordance with those laid down in the Financial Regulation and the Implementing Rules concerning the Community financial contribution to participants in indirect actions under the Seventh Framework Programme.

As regards the results of research carried out under the Seventh Framework Programme, this Regulation lays down rules for the disclosure of foreground by any appropriate means other than that resulting from the formalities for protecting it, and including the publication of foreground in any medium, hereinafter ‘dissemination’.

In addition, it lays down rules for the direct or indirect utilisation of foreground in further research activities other than those covered by the indirect action concerned, or for developing, creating and marketing a product or process, or for creating and providing a service, hereinafter ‘use’.

In respect of both foreground and background, this Regulation lays down rules concerning licences and user rights thereto, hereinafter ‘access rights’.



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Guidance for participants

CORDIS offers participants further guides and model agreements on the page Find a document:

http://cordis.europa.eu/fp7/find-doc_en.html


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Specific programmes

The specific programmes have their own rules, which require compliance.

Cooperation programme

COUNCIL DECISION 2006/971/EC of 19 December 2006 concerning the Specific Programme "Cooperation" implementing the Seventh Framework Programme of the European Community for research, technological development and demonstration activities (2007 to 2013), published OJEU 30.12.2006 L 400/86, is available here:

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2006:400:0086:0242:EN:PDF


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Ideas programme

COUNCIL DECISION 2006/972/EC of 19 December 2006 concerning the specific programme: "Ideas" implementing the Seventh Framework Programme of the European Community for research, technological development and demonstration activities (2007 to 2013), published in OJEU 30.12.2006 L 400/243, is available here:

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2006:400:0243:0271:EN:PDF


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People programme


COUNCIL DECISION 2006/973/EC of 19 December 2006 concerning the specific programme "People" implementing the Seventh Framework Programme of the European Community for research, technological development and demonstration activities (2007 to 2013), was published in OJEU 2006 L 400, but the link did not lead to the first page of the Decision; look for page 270 manually.


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Capacities programme

COUNCIL DECISION 2006/974/EC of 19 December 2006 on the Specific Programme: "Capacities" implementing the Seventh Framework Programme of the European Community for research, technological development and demonstration activities (2007 to 2013), published OJEU 30.12.2006 L 400/299, is available here:

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2006:400:0299:0367:EN:PDF



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Joint Research Centre


COUNCIL DECISION 2006/975/EC of 19 December 2006 concerning the Specific Programme to be carried out by means of direct actions by the Joint Research Centre under the Seventh Framework Programme of the European Community for research, technological development and demonstration activities (2007 to 2013), published OJEU 30.12.2006 L 400/368, is available here:

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2006:400:0368:0403:EN:PDF


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European research area

The Commission’s Green Paper The European Research Area: New Perspectives (Text with EEA relevance), Brussels, 4.4.2007 COM(2007) 161 final.

The Green Paper raised a number of questions on how to deepen and widen the European Research Area so that it fully contributes to the renewed Lisbon strategy:

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2007:0161:FIN:EN:PDF

Based on the consultation, on 2 December 2008 the Council agreed on a European Research Area Vision 2020 and the Commission has launched five new initiatives:

http://ec.europa.eu/research/era/2020_era_vision_en.html

http://ec.europa.eu/research/era/specific-era-initiatives_en.html


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Commission research activities

The Commission’s Directorate-General Research offers news, information and links to activities concerning research and technological development. General and updated information is available here:

http://ec.europa.eu/research/index.cfm

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Community research legislation

The Commission’s web page Research and innovation serves as a portal to summaries of EC (EU) law with regard to research and technological development:

http://europa.eu/scadplus/leg/en/s23000.htm


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Has the Seventh Framework Programme of European Union managed to streamline the rules for participation and dissemination enough, or are they still too heavy?


Ralf Grahn

EU procurement law: Central purchasing bodies (CPB)

Contracting authorities can achieve market clout by joint purchasing through a central purchasing body (CPB).

Allowing the use of CPBs is voluntary for each member state, but the EC (EU) Procurement Directive covers the basic points for this form of collaborative public purchasing.



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Article 11 Procurement Directive


Procurement Directive Article 11 allows central purchasing bodies (CPBs), meant to achieve economies of scale for buyers. The national legislation in each member state can make use of this opportunity.

The CPB can make either one off bulk purchases or use framework agreements for recurring needs.


If the CPB complies with Directive, the contracting authority is deemed to have complied with it:

Article 11
Public contracts and framework agreements awarded by central purchasing bodies

1. Member States may stipulate that contracting authorities may purchase works, supplies and/or services from or through a central purchasing body.

2. Contracting authorities which purchase works, supplies and/or services from or through a central purchasing body in the cases set out in Article 1(10) shall be deemed to have complied with this Directive insofar as the central purchasing body has complied with it.


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Central purchasing body explained


The Recitals of the Procurement Directive present reasons for the consolidated legislation and for novelties. Recital 15 describes the central purchasing body (CPB):

(15) Certain centralised purchasing techniques have been developed in Member States. Several contracting authorities are responsible for making acquisitions or awarding public contracts/framework agreements for other contracting authorities. In view of the large volumes purchased, those techniques help increase competition and streamline public purchasing. Provision should therefore be made for a Community definition of central purchasing bodies dedicated to contracting authorities. A definition should also be given of the conditions under which, in accordance with the principles of non-discrimination and equal treatment, contracting authorities purchasing works, supplies and/or services through a central purchasing body may be deemed to have complied with this Directive.


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Voluntary nature

The voluntary nature of central purchasing bodies is further underlined in Recital 16 of the Procurement Directive:

(16) In order to take account of the different circumstances obtaining in Member States, Member States should be allowed to choose whether contracting authorities may use framework agreements, central purchasing bodies, dynamic purchasing systems, electronic auctions or the competitive dialogue procedure, as defined and regulated by this Directive.


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Central purchasing body defined


The EC (EU) Procurement Directive 2004/18/EC, also known as the Classic Directive, defines a central purchasing body (CPB) in Article 1(10):



10. A ‘central purchasing body’ is a contracting authority which:

— acquires supplies and/or services intended for contracting authorities, or

— awards public contracts or concludes framework agreements for works, supplies or services intended for contracting authorities.


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Contracting authority described


The definition of a central purchasing body builds on the concept of a contracting authority.

You can turn to the blog post EU procurement: Contracting authority, at:

http://grahnlaw.blogspot.com/2008/12/eu-procurement-contracting-authority.html


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Guidance on central purchasing bodies




UK OGC

The United Kingdom Office of Government Commerce has published OGC Guidance on Central Purchasing Bodies (March 2008):

http://www.ogc.gov.uk/documents/OGC_Guidance_on_Central_Purchasing_Bodies.pdf

The updated six page brochure (pdf) gives advice to contracting authorities entering into agreements with central purchasing bodies. Basic points are covered through questions and answers, including potential compliance problems.




Ralf Grahn

EU Law: Framework Programme for research, technological development and demonstration activities

The European Community (European Union) Framework Programme for research, technological development and demonstration activities sets out the European level activities.

The current Framework Programme is the seventh – FP7 – and it runs from 2007 to 2013.

Specific progammes implement the framework. The programmes are called Cooperation, Ideas, People and Capacities. In addition there are the direct actions by the Joint Research Centre.

We look at the treaty level provisions and refer to the relevant secondary legislation.






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Article 166 TEC

Article 166 (ex Article 130i) of the Treaty establishing the European Community (TEC) is the legal base for a multiannual framework programme. This programme is adopted according to the co-decision procedure and it shall set out all the European Community’s activities in research and technological development.

The indents present the main characteristic of this framework.

The framework programme can be adapted or supplemented during its lifetime.

Specific implementing programmes are adopted within the framework by the Council.

The current Article 166 of the Treaty establishing the European Community (TEC), as published in the latest consolidated version of the treaties, OJEU 29.12.2006 C 321 E/121–122:

(TITLE XVIII
RESEARCH AND TECHNOLOGICAL DEVELOPMENT)

Article 166 TEC

1. A multiannual framework programme, setting out all the activities of the Community, shall be adopted by the Council, acting in accordance with the procedure referred to in Article 251 after consulting the Economic and Social Committee.

The framework programme shall:

— establish the scientific and technological objectives to be achieved by the activities provided for in Article 164 and fix the relevant priorities,

— indicate the broad lines of such activities,

— fix the maximum overall amount and the detailed rules for Community financial participation in the framework programme and the respective shares in each of the activities provided for.

2. The framework programme shall be adapted or supplemented as the situation changes.

3. The framework programme shall be implemented through specific programmes developed within each activity. Each specific programme shall define the detailed rules for implementing it, fix its duration and provide for the means deemed necessary. The sum of the amounts deemed necessary, fixed in the specific programmes, may not exceed the overall maximum amount fixed for the framework programme and each activity.

4. The Council, acting by a qualified majority on a proposal from the Commission and after consulting the European Parliament and the Economic and Social Committee, shall adopt the specific programmes.



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Original Lisbon Treaty (ToL)

Article 2, point 138 of the Lisbon Treaty amended Article 165 TEC (OJEU 17.12.2007 C 306/86):

138) Article 166 shall be amended as follows:

(a) in paragraph 4, the words ‘The Council, acting by a qualified majority on a proposal from the Commission’ shall be replaced by ‘The Council, acting in accordance with a special legislative procedure’;

(b) the following new paragraph 5 shall be added:

‘5. As a complement to the activities planned in the multiannual framework programme, the European Parliament and the Council, acting in accordance with the ordinary legislative procedure and after consulting the Economic and Social Committee, shall establish the measures necessary for the implementation of the European research area.’.


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Renumbering the Treaty of Lisbon (ToL)

The Table of equivalences of the original Treaty of Lisbon tells us that Title XVIII first became Title XVIII with the addition of space in the TFEU (ToL), and renumbered Title XIX Research and technological development and space in the consolidated version.

Article 166 TEC initially became Article 166 TFEU (ToL) before the renumbering of the treaty made it into Article 182 TFEU in the consolidated version of the Lisbon Treaty (OJEU 17.12.2007 C 306/217–218).


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Lisbon Treaty consolidated

Article 182 TFEU

With the specific amendments and after the horizontal amendments which replaced the Community by the Union and renamed the legislative procedure in paragraph 1 as well as the renumbering of the Article, Article 182 TFEU appears like this in the consolidated version of the Treaty of Lisbon (OJEU 9.5.2008 C 115/129–130):

(TITLE XIX
RESEARCH AND TECHNOLOGICAL DEVELOPMENT AND SPACE)

Article 182 TFEU
(ex Article 166 TEC)

1. A multiannual framework programme, setting out all the activities of the Union, shall be adopted by the European Parliament and the Council, acting in accordance with the ordinary legislative procedure after consulting the Economic and Social Committee.

The framework programme shall:

— establish the scientific and technological objectives to be achieved by the activities provided for in Article 180 and fix the relevant priorities,

— indicate the broad lines of such activities,

— fix the maximum overall amount and the detailed rules for Union financial participation in the framework programme and the respective shares in each of the activities provided for.

2. The framework programme shall be adapted or supplemented as the situation changes.

3. The framework programme shall be implemented through specific programmes developed within each activity. Each specific programme shall define the detailed rules for implementing it, fix its duration and provide for the means deemed necessary. The sum of the amounts deemed necessary, fixed in the specific programmes, may not exceed the overall maximum amount fixed for the framework programme and each activity.

4. The Council, acting in accordance with a special legislative procedure and after consulting the European Parliament and the Economic and Social Committee, shall adopt the specific programmes.

5. As a complement to the activities planned in the multiannual framework programme, the European Parliament and the Council, acting in accordance with the ordinary legislative procedure and after consulting the Economic and Social Committee, shall establish the measures necessary for the implementation of the European research area.


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Main changes

The ordinary legislative procedure and the special legislative procedures do not change the substance of the provision.

The new fifth paragraph takes over the substance of Article III-251(4) of the Constitutional Treaty, which means that a specific legal base is created for the European research area.



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EU research competence

In the general ordering of European Union competence, the Lisbon Treaty deals with research in under shared competence, but with a particular twist. Article 4(3) TFEU states:

3. In the areas of research, technological development and space, the Union shall have competence to carry out activities, in particular to define and implement programmes; however, the exercise of that competence shall not result in Member States being prevented from exercising theirs.


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FP7 – Seventh Framework Programme (2007–2013)

Decision No 1982/2006/EC of the European Parliament and of the Council of 18 December 2006 concerning the Seventh Framework Programme of the European Community for research, technological development and demonstration activities (2007-2013), published in OJEU 30.12.2006 L 412/1, is available here:

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2006:412:0001:0041:EN:PDF


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Specific programmes

Cooperation programme

COUNCIL DECISION 2006/971/EC of 19 December 2006 concerning the Specific Programme "Cooperation" implementing the Seventh Framework Programme of the European Community for research, technological development and demonstration activities (2007 to 2013), published OJEU 30.12.2006 L 400/86, is available here:

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2006:400:0086:0242:EN:PDF


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Ideas programme

COUNCIL DECISION 2006/972/EC of 19 December 2006 concerning the specific programme: "Ideas" implementing the Seventh Framework Programme of the European Community for research, technological development and demonstration activities (2007 to 2013), published in OJEU 30.12.2006 L 400/243, is available here:

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2006:400:0243:0271:EN:PDF


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People programme


COUNCIL DECISION 2006/973/EC of 19 December 2006 concerning the specific programme "People" implementing the Seventh Framework Programme of the European Community for research, technological development and demonstration activities (2007 to 2013), was published in OJEU 2006 L 400, but the link did not lead to the first page of the Decision; look for page 270 manually.


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Capacities programme

COUNCIL DECISION 2006/974/EC of 19 December 2006 on the Specific Programme: "Capacities" implementing the Seventh Framework Programme of the European Community for research, technological development and demonstration activities (2007 to 2013), published OJEU 30.12.2006 L 400/299, is available here:

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2006:400:0299:0367:EN:PDF



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Joint Research Centre


COUNCIL DECISION 2006/975/EC of 19 December 2006 concerning the Specific Programme to be carried out by means of direct actions by the Joint Research Centre under the Seventh Framework Programme of the European Community for research, technological development and demonstration activities (2007 to 2013), published OJEU 30.12.2006 L 400/368, is available here:

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2006:400:0368:0403:EN:PDF


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European research area

The Commission’s Green Paper The European Research Area: New Perspectives (Text with EEA relevance), Brussels, 4.4.2007 COM(2007) 161 final.

The Green Paper raised a number of questions on how to deepen and widen the European Research Area so that it fully contributes to the renewed Lisbon strategy:

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2007:0161:FIN:EN:PDF

Based on the consultation, on 2 December 2008 the Council agreed on a European Research Area Vision 2020 and the Commission has launched five new initiatives:

http://ec.europa.eu/research/era/2020_era_vision_en.html

http://ec.europa.eu/research/era/specific-era-initiatives_en.html


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Commission research activities

The Commission’s Directorate-General Research offers news, information and links to activities concerning research and technological development. General and updated information is available here:

http://ec.europa.eu/research/index.cfm

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Community research legislation

The Commission’s web page Research and innovation serves as a portal to summaries of EC (EU) law with regard to research and technological development:

http://europa.eu/scadplus/leg/en/s23000.htm


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Dear readers, your comments with views and experiences are appreciated.

Ralf Grahn

EU law: Defence procurement

Military procurement in the internal market can be divided into two groups of materials: 1) arms, munitions and war material, and 2) products not intended for specifically military purposes.

We look at how the EC (EU) Procurement Directive 2004/18/EC deals with military procurement and at the treaty level security derogations. After a look at the (historical) scope of military material and interpretation of member states’ security prerogatives, we summarise some of the latest proposals in the field of defence procurement in the internal market.

The European economic and security interests at stake are huge.



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Procurement Directive Article 10

The Procurement Directive 2004/18/EC mentions defence procurement under Specific situations. In principle, procurement in the field of defence falls within the scope of the Directive, but subject to Article 296 TEC:

S e c t i o n 2
Specific situations

Article 10
Defence procurement

This Directive shall apply to public contracts awarded by contracting authorities in the field of defence, subject to Article 296 of the Treaty.


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Article 296 TEC

Article 296 of The Treaty establishing the European Community (TEC) is problematic from a legal point of view. It constitutes a wide derogation from the treaty provisions on grounds of essential national security interests.

Each member state can refuse to supply the European Community (European Union) and the other member states information on grounds of essential security interests, but the refusal requires proper justification.

Article 296(1)(b) deals specifically with defence procurement. The provision distinguishes between the production of and trade in arms, munitions and war material on the one hand, and products not intended for specifically military purposes on the other hand. The latter would seem to be subject to normal competition rules in the internal market.

The second paragraph refers to an initial agreement on the materials covered, but for a long time the list of 15 April 1958 was not even published. In other words, the scope of a vast derogation was not even in the public domain, although it concerned the interests of private enterprises.

The Council can alter the scope of paragraph 1(b) by changing the list by unanimous decision.

Here is Article 296 TEC (ex Article 223) as it was published in the latest consolidated version of the treaties, OJEU 29.12.2006 C 321 E/173:

Article 296 TEC

1. The provisions of this Treaty shall not preclude the application of the following rules:

(a) no Member State shall be obliged to supply information the disclosure of which it considers contrary to the essential interests of its security;

(b) any Member State may take such measures as it considers necessary for the protection of the essential interests of its security which are connected with the production of or trade in arms, munitions and war material; such measures shall not adversely affect the conditions of competition in the common market regarding products which are not intended for specifically military purposes.

2. The Council may, acting unanimously on a proposal from the Commission, make changes to the list, which it drew up on 15 April 1958, of the products to which the provisions of paragraph 1(b) apply.


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Lisbon Treaty

If the Lisbon Treaty enters into force, Article 296 TEC would remain intact as Article 346 of the consolidated Treaty on the Functioning of the European Union. The provision would extend the blanket derogation to ‘the Treaties’ and the ‘internal market’ would replace the ‘common market’ according to the horizontal (general) amendments (OJEU 9.5.2008 C 115/194).

Even if shifting global security challenges would tend to emphasise the common security interests of the EU member states, the Lisbon Treaty takes a step in the opposite direction. Article 4(2) of the Treaty on European Union sets out that in particular, national security remains the sole responsibility of each member state.


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Arms, munitions and war materials

The list of 15 April 1958 was published when the Council replied to a written question in 2001 (OJEC 20.12.2001 C 364 E/85–86). This unorthodox procedure to publish acts with legal implications merits republication of the question and the reply:


(2001/C 364 E/091) WRITTEN QUESTION E-1324/01
by Bart Staes (Verts/ALE) to the Council

(4 May 2001)

Subject: Article 296(1)(b) of the EC Treaty

Pursuant to Article 296(1)(b), Member States are permitted to waive the general principle of competition (Title VI of the EC Treaty) in the case of military procurement. The Council adopted the list of products to which this applies on 15 April 1958.

What products appear on the list of 15 April 1958 to which Article 296(1)(b) refers?

Reply

(27 September 2001)

The list of the arms, munition and war materiel, including nuclear arms, to which the provisions of Article 296 paragraph 1(b) of the Treaty of Rome are applicable is given below.

1. Portable and automatic firearms, such as rifles, carbines, revolvers, pistols, sub-machine guns and machine guns, except for hunting weapons, pistols and other low calibre weapons of the calibre less than 7 mm.

2. Artillery, and smoke, gas and flame throwing weapons such as:

(a) cannon, howitzers, mortars, artillery, anti-tank guns, rocket launchers, flame throwers, recoilless guns;

(b) military smoke and gas guns.

3. Ammunition for the weapons at 1 and 2 above.

4. Bombs, torpedoes, rockets and guided missiles:

(a) bombs, torpedoes, grenades, including smoke grenades, smoke bombs, rockets, mines, guided missiles, underwater grenades, incendiary bombs;

(b) military apparatus and components specially designed for the handling, assembly, dismantling, firing or detection of the articles at (a) above.

5. Military fire control equipment:

(a) firing computers and guidance systems in infra-red and other night guidance devices;

(b) telemeters, position indicators, altimeters;

(c) electronic tracking components, gyroscopic, optical and acoustic;

(d) bomb sights and gun sights, periscopes for the equipment specified in this list.

6. Tanks and specialist fighting vehicles:

(a) tanks;

(b) military type vehicles, armed or armoured, including amphibious vehicles;

(c) armoured cars;

(d) half-tracked military vehicles;

(e) military vehicles with tank bodies;

(f) trailers specially designed for the transportation of the ammunition specified at paragraphs 3 and 4.

7. Toxic or radioactive agents:

(a) toxic, biological or chemical agents and radioactive agents adapted for destructive use in war against persons, animals or crops;

(b) military apparatus for the propagation, detection and identification of substances at paragraph (a) above;

(c) counter-measures material related to paragraph (a) above.

8. Powders, explosives and liquid or solid propellants:

(a) powders and liquid or solid propellants specially designed and constructed for use with the material at paragraphs 3, 4 and 7 above;

(b) military explosives;

(c) incendiary and freezing agents for military use.

9. Warships and their specialist equipment:

(a) warships of all kinds;

(b) equipment specially designed for laying, detecting and sweeping mines;

(c) underwater cables.

10. Aircraft and equipment for military use.

11. Military electronic equipment.

12. Cameras specially designed for military use.

13. Other equipment and material.

14. Specialised parts and items of material included in this list insofar as they are of a military nature.

15. Machines, equipment and items exclusively designed for the study, manufacture, testing and control of arms, munitions and apparatus of an exclusively military nature included in this list.


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Interpretative Communication


The Commission’s Interpretative Communication on the application of Article 296 of the Treaty in the field of defence procurement, Brussels, 7.12.2006 COM(2006) 779 final, referred to an annual defence procurement market of € 80 billion, fragmented into national markets.

The Commission recalled two proposals from 2005, saying:

(1) Adoption of an "Interpretative Communication on the application of Article 296 TEC in the field of defence procurement". This Communication will not modify, but clarify the existing legal framework;

(2) Preparation of a possible new directive on the procurement of defence equipment to which the derogation in Article 296 TEC does not apply. This directive could offer new, more flexible rules adapted to the specificities of the defence sector.

The Communication summarises the discussion and ECJ case law on how the member states can exercise their prerogative to interpret their essential security interests, and it sets out guidelines on balancing these essential security interests with fundamental principles of the internal market.


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Defence package


One of the latest developments is the Commission’s defence procurement package constisting of a Communication on strategy and two legislative proposals.


Strategy proposal


Communication A strategy for a stronger and more competitive European defence industry, Brussels, 5.12.2007 COM(2007) 764 final.

The aim of the Communication is to promote a strong defence technological and industrial base (DTIB) in Europe, as a fundamental underpinning of the European Security and Defence Policy (ESDP). In the Commission’s view, only a competitive DTIB can provide Europe with autonomy, affordability and the ability to cooperate internationally in the development and production of defence equipment.




The Communicatio was accompanied by two proposed Directives:


Intra-EU transfers

The Proposal for a Directive of the European Parliament and of the Council on simplifying terms and conditions of transfers of defence-related products within the Community, Brussels, 5.12.2007 COM(2007) 765 final.

The aim of proposal is to contribute to the emergence of a European Defence Equipment Market (EDEM) as well as the functioning of the internal market by replacing current national licensing requirements by a streamlined system of general or global licenses, to which individual licensing would remain the exception. The Directive would not affect the arms exports of member states to third countries.

On 16 December 2008 the European Parliament voted in favour of the proposed Directive, with amendments.


Defence procurement


The aim of the proposed directive on defence procurement is to enhance openness and competitiveness of defence markets in the EU taking into account specific features, such as security of supply and security of information. According to the Commission, it will reduce the regulatory patchwork in this field. It will increase competition and transparency and so aid SMEs to find, and bid for, sub-contracts. By providing new rules applicable to the procurement of arms, munitions and war material and to certain sensitive non-military security items, this initiative should further limit the use of Article 296 to exceptional cases as stipulated by the Court of Justice and build upon earlier steps taken by the Commission and the EDA to encourage greater openness of defence markets, says the Commission.


The Proposal for a Directive on the coordination of procedures for the award of certain public works contracts, public supply contracts and public service contracts in the fields of defence and security,Brussels, 5.12.2007 COM(2007) 766 final.

The Commission aims to introduce a new legal instrument tailored to the specific nature of "sensitive" purchases for which specific requirements and precautions govern the award of contracts, in these fields. The Commission argues that the Member States will then have at their disposal a common framework of procurement rules that not only ensure the application of the principles of the EC Treaty but also take into account the particular requirements of these purchases, such as security of information, security of supply and the necessary flexibility of the procedures.

The plenary of the European Parliament is expected to vote in about ten days on the Committee on the Internal Market and Consumer Protection report A6-0415/2008, generally supportive of the Commission’s aims.





Ralf Grahn

EU Law: European research coordination

The European research area is gradually taking shape on the ground and the excruciatingly slow process of treaty reform would incorporate some new elements at treaty level, if the EU Treaty of Lisbon enters into force.

The voluntary open method of coordination (OMC) would be enshrined at treaty level with regard to coordination of European Community (European Union) and member states’ policies concerning research and technological development.

How do you evaluate the European Union’s future as a knowledge based society?


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Article 165 TEC


Article 163 TEC (ex Article 130f) set out the research and technology aims of the European Community (European Union), namely to:

1. strengthen the scientific and technological bases of industry,
2. make industry more competitive internationally and
3. promote other research activities.

Article 164 TEC (Article 130g) built on the preceding Article by presenting more concrete activities to achieve the objectives. The Community activities complement the activities in the member states.

Community research activities are to:

1. implement research, technological development and demonstration programmes,
2. promote international cooperation,
3. disseminate and optimise research results, and
4. stimulate training and mobility of researchers.

Article 165 TEC (ex Article 130h) takes up the coordination of research and technological development activities between the European Community and the member states.

The aim is consistency between national policies and Community policy.

The Commission has a non-specified right to take initiatives to promote coordination (but this is not a base for legal acts).

The current Article 165 of the Treaty establishing the European Community (TEC), as published in the latest consolidated version of the treaties, OJEU 29.12.2006 C 321 E/121:

(TITLE XVIII
RESEARCH AND TECHNOLOGICAL DEVELOPMENT)

Article 165 TEC

1. The Community and the Member States shall coordinate their research and technological development activities so as to ensure that national policies and Community policy are mutually consistent.

2. In close cooperation with the Member State, the Commission may take any useful initiative to promote the coordination referred to in paragraph 1.


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Original Lisbon Treaty (ToL)

Article 2, point 137 of the Lisbon Treaty amended Article 165 TEC (OJEU 17.12.2007 C 306/86):

137) The following shall be added at the end of Article 165(2): ‘, in particular initiatives aiming at the establishment of guidelines and indicators, the organisation of exchange of best practice, and the preparation of the necessary elements for periodic monitoring and evaluation. The European Parliament shall be kept fully informed.’.

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Renumbering the Treaty of Lisbon (ToL)

The Table of equivalences of the original Treaty of Lisbon tells us that Title XVIII first became Title XVIII with the addition of space in the TFEU (ToL), and renumbered Title XIX Research and technological development and space in the consolidated version.

Article 165 TEC initially became Article 165 TFEU (ToL) before the renumbering of the treaty made it into Article 181 TFEU in the consolidated version of the Lisbon Treaty (OJEU 17.12.2007 C 306/217–218).


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Lisbon Treaty consolidated

Article 181 TFEU

With the specific amendment and after the horizontal amendment replacing the Community by the Union and the renumbering of the Article, Article 181 TFEU appears like this in the consolidated version of the Treaty of Lisbon (OJEU 9.5.2008 C 115/129):

(TITLE XIX
RESEARCH AND TECHNOLOGICAL DEVELOPMENT AND SPACE)

Article 181 TFEU
(ex Article 165 TEC)

1. The Union and the Member States shall coordinate their research and technological development activities so as to ensure that national policies and Union policy are mutually consistent.

2. In close cooperation with the Member State, the Commission may take any useful initiative to promote the coordination referred to in paragraph 1, in particular initiatives aiming at the establishment of guidelines and indicators, the organisation of exchange of best practice, and the preparation of the necessary elements for periodic monitoring and evaluation. The European Parliament shall be kept fully informed.

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Main changes

The substance of the first paragraph of Article 181 TFEU did not change.

The open-ended Commission right to take legally non-binding initiatives took over the text of Article III-250 of the Constitutional Treaty.

The addition gives the Commission’s activities a certain direction, by importing elements of the open method of coordination (OMC).

As a reminder, we recall the Conclusions of the European Council in Lisbon 23 to 24 March 2000 (point 37):

Implementing a new open method of coordination

37. Implementation of the strategic goal will be facilitated by applying a new open method of coordination as the means of spreading best practice and achieving greater convergence towards the main EU goals. This method, which is designed to help Member States to progressively develop their own policies, involves:

- fixing guidelines for the Union combined with specific timetables for achieving the goals which they set in the short, medium and long terms;

- establishing, where appropriate, quantitative and qualitative indicators and benchmarks against the best in the world and tailored to the needs of different Member States and sectors as a means of comparing best practice;

- translating these European guidelines into national and regional policies by setting specific targets and adopting measures, taking into account national and regional differences;

- periodic monitoring, evaluation and peer review organised as mutual learning processes.




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EU research competence

In the general ordering of European Union competence, the Lisbon Treaty deals with research in under shared competence, but with a particular twist. Article 4(3) TFEU states:

3. In the areas of research, technological development and space, the Union shall have competence to carry out activities, in particular to define and implement programmes; however, the exercise of that competence shall not result in Member States being prevented from exercising theirs.


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Commission research activities

The Commission’s Directorate-General Research offers news, information and links to activities concerning research and technological development:

http://ec.europa.eu/research/index.cfm

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Community research legislation

The Commission’s web page Research and innovation serves as a portal to summaries of EC (EU) law with regard to research and technological development:

http://europa.eu/scadplus/leg/en/s23000.htm


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Dear readers, your comments with views and experiences are appreciated.


Ralf Grahn

EU procurement: Calculating contract value

It is necessary to estimate the contract value before the start of the procurement process.

The detailed provisions of the Procurement Directive apply to public contracts above certain thresholds. These bigger contracts are considered to be the ones most important for the functioning of the internal market.

Rules are therefore needed to define the total (aggregate) value of contracts as a whole or over time. One aim is to prevent the artificial splitting of contracts in order to evade the application of the Procurement Directive.

In addition, only certain elements of contract values can be calculated, while others have to be estimated. The ‘correct’ answer cannot be known with certainty in advance, so the Procurement Directive offers the contracting authorities certain general rules. Different kinds of public contracts need individual basic rules of presumption to arrive at harmonised procedures in the EU member states.


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Article 9

The EC (EU) Procurement Directive 2004/18/EC presents the rules for calculating the values of different types of public contracts:

Article 9
Methods for calculating the estimated value of public contracts, framework agreements and dynamic purchasing systems

1. The calculation of the estimated value of a public contract shall be based on the total amount payable, net of VAT, as estimated by the contracting authority. This calculation shall take account of the estimated total amount, including any form of option and any renewals of the contract.

Where the contracting authority provides for prizes or payments to candidates or tenderers it shall take them into account when calculating the estimated value of the contract.

2. This estimate must be valid at the moment at which the contract notice is sent, as provided for in Article 35(2), or, in cases where such notice is not required, at the moment at which the contracting authority commences the contract awarding procedure.

3. No works project or proposed purchase of a certain quantity of supplies and/or services may be subdivided to prevent its coming within the scope of this Directive.

4. With regard to public works contracts, calculation of the estimated value shall take account of both the cost of the works and the total estimated value of the supplies necessary for executing the works and placed at the contractor's disposal by the contracting authorities.

5. (a) Where a proposed work or purchase of services may result in contracts being awarded at the same time in the form of separate lots, account shall be taken of the total estimated value of all such lots.

Where the aggregate value of the lots is equal to or exceeds the threshold laid down in Article 7, this Directive shall apply to the awarding of each lot.

However, the contracting authorities may waive such application in respect of lots the estimated value of which net of VAT is less than EUR 80 000 for services or EUR 1 million for works, provided that the aggregate value of those lots does not exceed 20 % of the aggregate value of the lots as a whole.

(b) Where a proposal for the acquisition of similar supplies may result in contracts being awarded at the same time in the form of separate lots, account shall be taken of the total estimated value of all such lots when applying Article 7(a) and (b).

Where the aggregate value of the lots is equal to or exceeds the threshold laid down in Article 7, this Directive shall apply to the awarding of each lot.

However, the contracting authorities may waive such application in respect of lots, the estimated value of which, net of VAT, is less than EUR 80 000, provided that the aggregate cost of those lots does not exceed 20 % of the aggregate value of the lots as a whole.

6. With regard to public supply contracts relating to the leasing, hire, rental or hire purchase of products, the value to be taken as a basis for calculating the estimated contract value shall be as follows:

(a) in the case of fixed-term public contracts, if that term is less than or equal to 12 months, the total estimated value for the term of the contract or, if the term of the contract is greater than 12 months, the total value including the estimated residual value;

(b) in the case of public contracts without a fixed term or the term of which cannot be defined, the monthly value multiplied by 48.

7. In the case of public supply or service contracts which are regular in nature or which are intended to be renewed within a given period, the calculation of the estimated contract value shall be based on the following:

(a) either the total actual value of the successive contracts of the same type awarded during the preceding 12 months or financial year adjusted, if possible, to take account of the changes in quantity or value which would occur in the course of the 12 months following the initial contract;

(b) or the total estimated value of the successive contracts awarded during the 12 months following the first delivery, or during the financial year if that is longer than 12 months.

The choice of method used to calculate the estimated value of a public contract may not be made with the intention of excluding it from the scope of this Directive.

8. With regard to public service contracts, the value to be taken as a basis for calculating the estimated contract value shall, where appropriate, be the following:

(a) for the following types of services:

(i) insurance services: the premium payable and other forms of remuneration;

(ii) banking and other financial services: the fees, commissions, interest and other forms of remuneration;

(iii) design contracts: fees, commission payable and other forms of remuneration;

(b) for service contracts which do not indicate a total price:

(i) in the case of fixed-term contracts, if that term is less than or equal to 48 months: the total value for their full term;

(ii) in the case of contracts without a fixed term or with a term greater than 48 months: the monthly value multiplied by 48.

9. With regard to framework agreements and dynamic purchasing systems, the value to be taken into consideration shall be the maximum estimated value net of VAT of all the contracts envisaged for the total term of the framework agreement or the dynamic purchasing system.


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Estimating works contracts

The Commission’s Guide to the Community rules on public works contracts is based on the old Directive 93/37/EEC, so the monetary values mentioned are obsolete, but the principles are worth reading (page 16 to 17):


2.2 Estimation of contract value

2.2.1 Rules

In general terms, the value to be taken into account in determining whether a public works contract reaches the threshold is the estimated value excluding VAT of the contract which the contracting authority intends to award. The estimation should therefore include all the services, materials, etc. to be covered by the contract. For example, where a contracting authority chooses to award a development contract, the estimated contract value should include not only activities covered by Class 50 of the NACE nomenclature, but also all other tasks to be entrusted to the contractor under that contract.

Alongside the above general rule, which flows from the way in which public works contracts are defined, the Directive lays down rules for estimating the contract value in three specific cases.

Where the contracting authority itself makes available to the contractor supplies needed to carry out the works, the contract value must include the estimated value of those supplies as well as the value of the works.

Supplies should be understood here as referring not only to materials to be incorporated in the building or structure, but also to the plant or equipment necessary for the works: a contracting authority could, for example, provide the contractor with a crane or lorries. In the case of plant and equipment, the value to be taken into account will of course not always be the purchase price, but instead the price normally charged on the market for hiring it. Which of the two prices is taken into account will depend on the average life of the equipment and the length of time it is made available by the contracting authority: if an item of equipment is designed to have a useful life that is longer than the time it is made available (for example, the equipment is made to last for five years and the contractor can use it for one year), the value to be taken into account will be the hire price. If, on the other hand, the equipment is made available for longer than its average life, the contracting authority will have to include its purchase price in the estimate of the contract value.

Where a work is subdivided into several lots, each one the subject of a contract, the aggregate value of all the lots must be taken into account in determining whether or not the threshold has been reached. If that is the case, the Directive is to be applied to the award of each contract, irrespective of the value of the lot to which it relates. Nevertheless, contracting authorities are allowed to award freely lots whose estimated value excluding VAT is less than ECU 1 million. Permission to depart from the Directive is, however, limited: the aggregate value of lots awarded freely may not exceed 20% of the total estimated value of all lots.

Let us take an example: a contract for building works is divided into three lots, estimated at ECU 3 million, ECU 1 200 000 and ECU 900 000. The aggregate estimated value is therefore ECU 5 100 000, which clearly exceeds the threshold for application of the Directive. However, the derogation may be used for the lot estimated at ECU 900 000, since its individual value is less than ECU 1 million and does not exceed 20% of the total value of all the lots. The Directive does not apply to this lot, which need not be advertised, but it does apply to the other two.

Where a contracting authority intends “subsequently” to award, by negotiated procedure, further works consisting of the repetition of similar works to the successful tenderer for the contract that is being put up for tender, it must include in the calculation of the value of the first contract the estimated total cost of the subsequent works and, where appropriate, the estimated value of all the necessary supplies that it will make available to the contractor.

2.2.2 Splitting of contracts

Lastly, no work or contract may be split up with a view to avoiding application of the Directive. This blanket prohibition catches any splitting which is not justified on objective grounds and is thus solely designed to circumvent the rules laid down in the Directive.


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Estimating supply contracts

The Commission’s Guide to the Community rules on public supply contracts (based on the old Directive 93/36/EEC) explains how to estimate the value of supply contracts (page 14 to 15):



2.2 Estimation of contract value

2.2.1 Methods

In establishing whether or not the relevant threshold is reached, the way in which the value of a contract is calculated is obviously crucial. To ensure that identical calculation methods are used throughout the Community and to prevent evasion of the procurement rules by artificially low valuations, the Directive lays down specific rules.

Where the contract is to be concluded in the form of a lease, rental or hire–purchase agreement, the calculation method varies according to the contract’s duration.

The estimated value is to be calculated on the basis of:

• where its term is 12 months or less, the total value for the contract’s duration;

• where its term exceeds 12 months, the total value for the contract’s duration, including the estimated residual value of the products;

• where the contract is concluded for an indefinite period or where its term cannot be defined, the monthly value multiplied by 48.

Where contracts are of a regular nature or are to be renewed over a given period, the following must be taken into account:

• either the actual aggregate value of similar successive contracts awarded over the previous 12 months or accounting period, adjusted where possible for anticipated changes in quantity or value over the subsequent 12 months;

• or the estimated aggregate value of the successive contracts concluded during the 12 months following the initial delivery or accounting period, where this exceeds 12 months.

In any event, the choice between these two valuation methods must not be made with the intention of keeping contracts outside the scope of the Directive.

If a proposed procurement of supplies of the same type may lead to contracts being awarded at the same time in separate lots, the estimated value of all the lots must be taken into account. If it reaches the relevant threshold, all the lots must be awarded in compliance with the Directive. The same rules apply when estimating the value of leasing, rental or hire–purchase contracts.

“Supplies of the same type” are to be understood as products which are intended for identical or similar uses, e.g. supplies of a range of foods or of different items of office furniture.

Where provision is explicitly made for options, the basis for calculating the estimated contract value must be the highest possible total permitted for the purchase, lease, rental or hire purchase, options included.

2.2.2 Time of estimation

The value of the supplies which it is wanted to procure may vary depending on a number of factors. The time at which the value is estimated, therefore, may turn out to be crucial to determining whether the contract attains the threshold laid down in the Directive.

Accordingly, contracting authorities are obliged, regardless of any earlier estimate of the contract, to take account of the value which the supplies that are the subject of the contract will have when the award procedure is initiated by the dispatch of the notice for publication or by an invitation to negotiate.

2.2.3 Splitting of contracts

There is a blanket prohibition on the splitting of a procurement requirement with the intention of circumventing the rules on estimating the contract value and, more widely, on applying the Directive as a whole.

For example, where a contracting authority comprises several departments that are not decentralized from an administrative viewpoint and, consequently, cannot be regarded as contracting authorities in their own right with the power to award public supply contracts within the meaning of the Directive, it must take into account all the requirements of its constituent departments when estimating the value of a contract.


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Estimating service contracts

The Commission’s Guide to the Community rules on public procurement of services (based on the old Directive 92/50/EEC) offers the following guidance on estimating values of service contracts (page 15 to 17):

2.2 Calculation of the contract value

2.2.1 Methods

The general rule is that the contracting authority must take into account the estimated total remuneration for the service net of VAT. For certain types of service contracts, the Services Directive specifies certain items which constitute remuneration, notably:

- the premium payable, in the case of insurance services;

- fees, commissions and interest, in the case of banking and other financial services;

- fees or commissions, in the case of design contracts.

The Commission considers this list to be illustrative and does not limit, in any way, the general principle that the total remuneration received must be taken into account.

In the case of contracts which do not specify a total price, the basis for calculating the estimated contract value is:

- in the case of fixed-term contracts, where their term is 48 months or less, the total contract value for its duration;

- in the case of contracts of indefinite duration or with a term of more than 48 months, the monthly instalment multiplied by 48.

In the case of regular contracts or of contracts which are to be renewed within a given time, the contract value may be established on the basis of:

- either the actual aggregate cost of similar contracts for the same categories of services awarded over the previous fiscal year of twelve months, adjusted, where possible, for anticipated changes in quantity or value over the twelve months following the initial contract,

- or the estimated aggregate cost during the twelve months following the first service performed or during the term of the contract, where this is greater than twelve months.

Where a proposed contract provides for options, the basis for calculating the contract value shall be the maximum total possible assuming that all the options will be exercised.

In any event, selection of the valuation method may not be made with the intention of avoiding the application of the Services Directive.

2.2.2 Split contracts

The Services Directive prohibits any division of services with the intention of avoiding application of the value thresholds. This prohibition is directed at any division of a contract which is not justified by objective considerations and so is presumed to be designed to avoid application of the Directive.

2.2.3 Division of the contract into lots

Where the services are divided into several lots, each one the subject of a contract, the cumulative value of all the lots must be taken into account in determining whether the ECU 200,000 threshold has been reached. If the threshold is reached, the Services Directive must be applied to each contract, irrespective of the fact that its individual value may be less than ECU 200,000.

A contracting authority need not apply the provisions of the Services Directive to any lots which have an estimated individual value net of VAT of less than ECU 80,000, provided that the total value of such lots does not exceed 20% of the total value of all the lots. Exclusion of lots in this way does not prevent their value from being taken into account to determine whether the other lots must be awarded in accordance with the Services Directive.

Example:

A services contract for maintenance of buildings is divided into the following lots:

Lot 1 ECU 100,000
Lot 2 ECU 60,000
Lot 3 ECU 45,000
Lot 4 ECU 45,000
Total ECU 240,000

The cumulative value is ECU 240,000 so the value threshold for application of the Services Directive has clearly been reached. Each of the lots 2, 3 and 4 is less than ECU 80,000 but the derogation is permitted only up to 20% of the cumulative value, namely ECU 48,000. The contracting authority therefore has the option of excluding Lot 3 or Lot 4, but not both, from application of the Services Directive. The three lots not excluded must be awarded in accordance with the Directive because their total value including the excluded lot, is not less than ECU 200,000.

2.2.4 Intended repetition of similar services

It should be remembered that when a contracting authority intends to have recourse to the negotiated procedure without publication of a notice for the purposes of procuring new services as a repetition of similar services (see 3.3.2.6), it must aggregate the value of the original services and the intended subsequent services in determining whether the threshold has been achieved.



Ralf Grahn

EU Law: Research activities

Research and technological development within the European research area is crucial if the European Union wants to realise the Lisbon strategy aim to become the most competitive and dynamic knowledge-based economy in the world capable of sustainable economic growth with more and better jobs and greater social cohesion, ever (even if not by 2010 as originally proclaimed).

The treaties form the legal framework for all EU activities. Consequently EU law is the first stop before moving on to EU policies, here research.

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Article 164 TEC


Article 163 TEC (ex Article 130f) set out the research and technology aims of the European Community (European Union), namely to:

1. strengthen the scientific and technological bases of industry,
2. make industry more competitive internationally and
3. promote other research activities.

The second paragraph of Article 163 TEC presented a rough sketch of activities addressed at businesses, research centres and universities. Small and medium-sized enterprises (SMEs) were indicated specifically among the businesses (undertakings).

Research and technological development was mentioned alongside actions to open up the potential of the internal market (public procurement, common standards and the removal of legal and fiscal obstacles to cooperation).

The third paragraph presented the new concept ‘demonstration projects’, but otherwise it just referred the reader to the following Articles of the Title.

Article 164 TEC builds on the preceding Article by presenting more concrete activities to achieve the objectives. The Community activities complement the activities in the member states.

Community research activities, namely to:

1. implement research, technological development and demonstration programmes,
2. promote international cooperation,
3. disseminate and optimise research results, and
4. stimulate training and mobility of researchers.

The current Article 164 of the Treaty establishing the European Community (TEC), as published in the latest consolidated version of the treaties, OJEU 29.12.2006 C 321 E/120–121:

(TITLE XVIII
RESEARCH AND TECHNOLOGICAL DEVELOPMENT)

Article 164 TEC

In pursuing these objectives, the Community shall carry out the following activities, complementing the activities carried out in the Member States:

(a) implementation of research, technological development and demonstration programmes, by promoting cooperation with and between undertakings, research centres and universities;

(b) promotion of cooperation in the field of Community research, technological development and demonstration with third countries and international organisations;

(c) dissemination and optimisation of the results of activities in Community research, technological development and demonstration;

(d) stimulation of the training and mobility of researchers in the Community.



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Original Lisbon Treaty (ToL)

Article 2, point 136 of the Lisbon Treaty amended Article 163 TEC and point 137 concerns Article 165 (OJEU 17.12.2007 C 306/85–86).

Article 164 TEC was not amended specifically.


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Renumbering the Treaty of Lisbon (ToL)

The Table of equivalences of the original Treaty of Lisbon tells us that Title XVIII first became Title XVIII with the addition of space in the TFEU (ToL), and renumbered Title XIX Research and technological development and space in the consolidated version.

Article 164 TEC initially became Article 164 TFEU (ToL) before the renumbering of the treaty made it into Article 180 TFEU in the consolidated version of the Lisbon Treaty (OJEU 17.12.2007 C 306/217–218).


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Lisbon Treaty consolidated

Article 180 TFEU

Without specific amendments, but after the horizontal amendment replaces the Community by the Union and the Article has been renumbered, Article 180 TFEU appears like this in the consolidated version of the Treaty of Lisbon (OJEU 9.5.2008 C 115/129):

(TITLE XIX
RESEARCH AND TECHNOLOGICAL DEVELOPMENT AND SPACE)

Article 180 TFEU
(ex Article 164 TEC)

In pursuing these objectives, the Union shall carry out the following activities, complementing the activities carried out in the Member States:

(a) implementation of research, technological development and demonstration programmes, by promoting cooperation with and between undertakings, research centres and universities;

(b) promotion of cooperation in the field of Union research, technological development and demonstration with third countries and international organisations;

(c) dissemination and optimisation of the results of activities in Union research, technological development and demonstration;

(d) stimulation of the training and mobility of researchers in the Union.


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Did anything change?

Article 180 TFEU did not change the activities to undertake at EU level, but their future contents may as a result of the European research area evoked among the objectives in the preceding Article.

Not to raise premature hopes(?), the member states’ governments had added a damp squib Declaration on Article 179 TFEU on the research objectives:

34. Declaration on Article 179 of the Treaty on the Functioning of the European Union

The Conference agrees that the Union's action in the area of research and technological development will pay due respect to the fundamental orientations and choices of the research policies of the Member States.


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EU research competence

In the general ordering of European Union competence, the Lisbon Treaty deals with research in under shared competence, but with a particular twist. Article 4(3) TFEU states:

3. In the areas of research, technological development and space, the Union shall have competence to carry out activities, in particular to define and implement programmes; however, the exercise of that competence shall not result in Member States being prevented from exercising theirs.


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Community research legislation

The Commission’s web page Research and innovation serves as a portal to summaries of EC (EU) legislation:

http://europa.eu/scadplus/leg/en/s23000.htm


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Commission research activities

The Commission’s Directorate-General Research offers news, information and links to research activities on:

http://ec.europa.eu/research/index.cfm


Ralf Grahn

EU procurement: Subsidised contracts

The EC (EU) Procurement Directive 2004/18/EC covers the award of building contracts concerning hospitals, facilities intended for sports, recreation and leisure, school and university buildings and buildings used for administrative purposes, even if the awarding entity is private, if the contract is subsidised by more than 50 per cent by contracting authorities (public bodies) and the value of the contract is equal to or greater than EUR 5 150 000.

Related service contracts of at least EUR 206 000 fall within the scope of the Procurement Directive.


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Article 8

Article 8 of the Procurement Directive (Classic Directive) sets out the scope in more detail:


Article 8
Contracts subsidised by more than 50 % by contracting authorities

This Directive shall apply to the awarding of:

(a) contracts which are subsidised directly by contracting authorities by more than 50 % and the estimated value of which, net of VAT, is equal to or greater than EUR 5 150 000,

— where those contracts involve civil engineering activities within the meaning of Annex I,

— where those contracts involve building work for hospitals, facilities intended for sports, recreation and leisure, school and university buildings and buildings used for administrative purposes;

(b) service contracts which are subsidised directly by contracting authorities by more than 50 % and the estimated value of which, net of VAT, is equal to or greater than EUR 206 000 and which are connected with a works contract within the meaning of point (a).

Member States shall take the necessary measures to ensure that the contracting authorities awarding such subsidies ensure compliance with this Directive where that contract is awarded by one or more entities other than themselves or comply with this Directive where they themselves award that contract for and on behalf of those other entities.


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Subsidy level

The Procurement Directive applies if a number of cumulative conditions are met. The contract awarded by a private entity is subsidised by more than 50 per cent by one or more contracting authorities (public bodies).

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Thresholds

The estimated value of the contract, net of VAT, is equal to or greater than EUR 5 150 000.

The estimated value of the related service contract, net of VAT, is equal to or greater than EUR 206 000.


The sums were amended from the beginning of 2008 by Commission Regulation (EC) No 1422/2007. For EU member states outside the eurozone, the corresponding amounts in national currencies are found in the Commission’s information, published in OJEU 13.12.2007 C 301/, taking into account the corrigendum published OJEU 20.12.2007 C 310/37.


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Civil engineering activities


The contract involves civil engineering (building) activities within the meaning of Annex I.



New Annex I

In the consolidated version (of 15 September 2008) of the Procurement directive 2004/18/EC, Annex I stands as amended by Commission Regulation (EC) No 213/2008 (OJEU 15.3.2008 L 74/1), which replaced the old Annex I with a new one. The Regulation applies from 15 September 2008.


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Type of building (intended purpose)



In addition, the contract involves building work for one of the following: hospitals, facilities intended for sports, recreation and leisure, school and university buildings and buildings used for administrative purposes.




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Related service contracts

Article 8 point (b) covers related service contracts, which are subsidised directly by contracting authorities by more than 50 % and the estimated value of which, net of VAT, is equal to or greater than EUR 206 000 and which are connected with a works contract within the meaning of point (a).


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Compliance

The second paragraph of Article 8 entails an obligation for the Member States to take the necessary measures to ensure that the contracting authorities awarding such subsidies ensure compliance with this Directive where that contract is awarded by one or more entities other than themselves or comply with this Directive where they themselves award that contract for and on behalf of those other entities.


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Commission guidance

The Commission’s Guide to the Community rules on public works contracts (based on the old Directive 93/37/EEC) offers the following explanations (page 12 to 13):


1.5 Contracts subsidized to more than 50% by contracting authorities

The Directive requires Member States to take the necessary measures to ensure that contracting authorities comply or ensure compliance with its provisions where they subsidize directly by more than 50% a works contract awarded by an entity other than themselves, whether that entity is public or private.

This requirement applies, however, only to contracts concerning civil engineering works (covered by Class 50, Group 502, of the NACE nomenclature) and to contracts relating to building work for hospitals, facilities intended for sports, recreation and leisure, school and university buildings and buildings used for administrative purposes.

The subsidies to be taken into consideration are all the different forms of assistance, including that provided by the Community, which are directly intended for the works contracts in question.

In view of the subsidy it is granting and its experience in awarding contracts, a contracting authority could itself choose the contractor, even if the outcome of the works is not intended for its own use. In such cases, it must itself comply with the provisions of the Directive.

If, on the other hand, the choice of contractor is left to the recipient of the subsidy, the contracting authority must require the recipient to comply with the Directive, for example by including such compliance among the general conditions to be met in order to obtain certain grants or among the specific conditions laid down in the instrument granting the subsidy.

The list of the types of works concerned given in the relevant article of the Directive is exhaustive. However, the list of premises, namely hospitals, facilities intended for sports, recreation and leisure, school and university buildings and buildings used for administrative purposes, is a generic list of categories of premises. These categories should not be construed narrowly, since a restrictive interpretation would undermine the aim of the Directive, which is to ensure greater transparency in the award of public works contracts.

Homes for retired people or the physically disabled should thus, for example, be treated in the same way as hospitals where their purpose is to provide medical or surgical care for sick people, whether elderly or disabled, rather than assisting the elderly or disabled and only occasionally administering minor treatment.



Ralf Grahn