On 23 April 2009, the ECJ held that Belgium did not properly transpose Procurement Directive 2004/18 into national law (case C-292/07). In fact, Belgium already has new procurement Acts (dating from 15 and 16 June 2006) but they have not entered into force, because the new Royal Decrees implementing these Acts have not been adopted. Therefore, Belgium decided to modify the old Royal Decrees (from 1996). This article will analyse two topics: the negotiated procedure and the procedure for handling abnormally low offers.
1. Criticisms of the ECJ
As a preliminary point, the ECJ indicated that, as the Belgian legislation had been adopted to transpose the old Public Procurement Directives into Belgian law (and not the Directive 2004/18), it could not a priori, have correctly transposed the provisions simplifying and modernising public procurement procedures, that Directive 2004/18 aimed to achieve.
A) Negotiated procedure
In many respects, a negotiated procedure allows more freedom than an open or restricted procedure. Article 30.2 of Directive 2004/18 outlines the purpose of the negotiated procedure, by stipulating that contracting authorities must negotiate tenders with the tenderers, to ensure they meet the requirements described in the contract notice, the specifications and additional documents, and must then select the best tender. Paragraph 3 of the same Article highlights the obligation of the authority to ensure the equal treatment of all tenderers and prohibits them from providing information in a manner which gives one or more tenderers advantages over the other tenderers.
Article 30.4 of the Directive 2004/18 stipulates that contracting authorities may use staged procedures to reduce the number of tenders to be negotiated, and that they may apply award criteria as specified in the contract notice or the specifications. The ECJ adds that it is important for the award criteria to be recalled at every stage of the procedure.
Belgium argued that those provisions did not require specific transposition. Furthermore, Paragraph 3 had been transposed in the new Belgian legislation (which had not yet entered into force). However, the ECJ upheld the Commission’s complaint concerning the inadequate transposition of Article 30, par. 2, 3 and 4 of the Directive.
B) Abnormally low offers
Article 43 of Directive 2004/18 stipulates a list of items to be included in the report drafted by the contracting authorities for every contract. According to that list, the contracting authorities have to give reasons for the rejection of any tenders found to be abnormally low. The Belgian legislation only refers to abnormally low tenders as a reason for refusal, but does not oblige the contracting authorities to issue an in-depth explanation of the reason(s) behind such a refusal.
Pursuant to Article 55 of Directive 2004/18, before rejecting a tender which it considers to be abnormally low, the contracting authority must request in writing details of the constituent elements of the tender. The stipulation is followed by a list of elements to which those details may relate. The list explicitly refers to compliance with employment protection legislation and working conditions in force at the place where the services are to be performed (point d), and to mentioning any state subsidies available to the tenderer (point e). Furthermore, Article 55.3 of Directive 2004/18 states that “where a contracting authority establishes that a tender is abnormally low because the tenderer has obtained State aid, the tender can be rejected on that ground alone only after consultation with the tenderer where the latter is unable to prove, within a sufficient time limit fixed by the contracting authority, that the aid in question was granted legally. Where the contracting authority rejects a tender in these circumstances, it shall inform the Commission of that fact.”
Belgium had argued that Article 55 of the Directive contains an illustrative list and that point e (possibilities of obtaining state aid) has been implemented into Belgian law by the Royal Decree of 23 November 2007. The ECJ rejected the first part of this argument, and held that the list was not purely illustrative, but rather that its aim was to limit the possibility of the contracting authorities’ operating margin justifying an abnormally low tender. The explicit transposition into national law was necessary as it sought to protect tenderers by recognising their right to justify their “abnormally low“ offers. The second part of the argument was also rejected by the ECJ, because the 2007 Royal Decree was adopted after the deadline laid down in the Commission’s reasoned opinion.
2. Belgian reaction
By adopting the Royal Decree of 29 September 2009, Belgium attempted to make its national legislation compliant with the ECJ’s ruling of 23 April 2009.
As to the negotiated procedure, an Article 122ter was added to the Royal Decree of 8 January 1996 which directly transposed the relevant text from the Directive (art. 30.2-30.4). Article 122ter will only apply to tender procedures above the European threshold.
As to the abnormally low offers, the obligation to explain the reasons behind rejecting abnormally low offers will be changed, and Article 110, § 3 of the Royal Decree of 8 January 1996 will be replaced by a text similar to that of Article 55.1 of Directive 2004/18. In its advice relating to the 2009 Royal Decree, the Council of State pointed out that it was not clear how Articles 55.2 and 55.3 of Directive 2004/18 were transposed. In its reply to this advice, the Belgian government pointed out that the 1996 Royal Decree already contains a procedure on how to consult the tenderer who filed an abnormally low offer. It cannot be excluded that this reply will be held insufficient in the future.
3. Conclusion
The ECJ insisted on a very precise, and transparent transposition of the Procurement Directive 2004/18 into Belgian law for the sake of legal certainty, even if this meant rejecting established case law. This case clearly shows how difficult it has been for Belgium to implement all the Directive’s requirements. Other problems can be expected.
