1. Implementation of the EU PP Remedies Directive – the AUT case EBRD Project Ukraine Dr. Michael Fruhmann Federal Chancellery, Austria 9/6/2015 1

2. contents 9/6/2015 2 General introduction to EU PP system Basic features of the EU Remedies Directives Transposition in AUT

3. Volume of PP in EU 27 - 2010 9/6/2015 3 © Michael Fruhmann 20123  Total expenditure on works, goods and services: EU: 2.406,98 billion € (19,7% of GDP) AUT: 65,76 billion € (23% of GDP)  Volume of PP published in TED: EU: 447,03 billion € (= 18,6 % of total volume)  No. of published tenders in TED: 163.058

4. 9/6/2015 4 EU PP system Directives Regu- lations Trade Agreements Recommendations/ Communications mandates to CEN (for ex EN 45503) Decisions (Utilities) TFEU – Basic Principles Association Agreements EEA-AEurope-AGPA bilateral PP Agreements (for ex CH)

5. Public Procurement European Secondary Legislation (excl. defence area) © Michael Fruhmann 20125 contracting authority contracting entities (utilities) supplie s worksservices remedies 2004/18/EC 89/665/EEC 92/13/EEC 2007/66/EC suppliesworksservices 2007/66/EC 2004/17/EC remedies

6. Remedy system 2 Directives 89/665/EC + 92/13/EC amended by 2007/66/EC:  all decision during a PP procedure falling in the scope of the procedural Directives may be reviewed (see ECJ Case C-26/03, Stadt Halle)  review must be effective and, in particular, as rapidly as possible  review procedures must be available at least to any person having or having had an interest in obtaining a particular contract and who has been or risks being harmed by an alleged infringement 9/6/2015 6

7. Remedy system II Review procedures must include provision for powers to  take interim measures (esp. suspension of the procedure)  set aside unlawful decisions, including the removal of discriminatory technical, economic or financial specifications in any document relating to the contract award procedure  award damages to persons harmed by an infringement (without condition that infringement being culpable; C-314/09, Strabag) 9/6/2015 7

8. Remedy system III MS must ensure that decisions taken by bodies responsible for review procedures can be effectively enforced Remedies Directives contain institutional/organizational requirements regarding the review bodies:  written reasons for their decisions  judicial review by a body which is a court or tribunal within the meaning of Article 267 TFEU  contradictory procedure (both sides must be heard)  must fulfill requirements of Art. 6 ECHR (independence) 9/6/2015 8

9. Remedy system IV Directive 2007/66/EC introduced:  compulsory standstill period prior to the conclusion of a contract (see ECJ C-81/98, Alcatel; only limited exceptions to this obligation exist) + written reasons for their decisions  harsh consequences if contracting authorities infringe basic obligations of the procurement process 9/6/2015 9

10. Remedy system V MS must ensure that a contract is considered ineffective by a review body independent of the contracting authority in the following cases:  contract award illegally without prior publication in the OJEU  infringement of the standstill obligation  illegal “call-offs” of contracts based on a framework agreement and a dynamic purchasing system 9/6/2015 10

11. Remedy system VI consequences of a contract being considered ineffective shall be provided for by national law  retroactive cancellation of all contractual obligations (ex tunc annullment) or  limitation of the scope of the cancellation to those obligations which still have to be performed (ex nunc annullment) – in this case: compulsory application of “alternative” penalties 9/6/2015 11

12. Remedy system VII “alternative” penalties  must be effective, proportionate and dissuasive  shall be - imposition of fines on the contracting authority; and/or - shortening of the duration of the contract 9/6/2015 12

13. Remedy system VIII (absolute) time limits for challenging a concluded contract application for review must be made before the expiry of at least  30 calendar days with effect from the day following the date on which the contracting authority published a contract award notice in accordance with the procedural Directive or  in any case before the expiry of a period of at least six months with effect from the day following the date of the conclusion of the contract 9/6/2015 13

14. 14 Transposition in AUT Directives Federal Procurement Act 2006 (BVergG 2006) contains common material provisions FPA 2006 – contains remedy system for federal procurement State Laws for Remedy system for respective State (regional + local procurement)

15. © Michael Fruhmann 201215 Transposition in AUT II Basic features:  FPA contains only rules on remedies for federal level and incorporates EU regime  FPA regime covers PP above + below EU thresholds – same remedy system applies! (constitutional reasons)  Federal Public Procurement Office (FPPO) – a specialised body (“court” according to EU standards) - is the review body of first instance at federal level (will be replaced by Administrative Court of First Instance from 2014 on)

16. © Michael Fruhmann 201216 Transposition in AUT II Basic features contd.:  FPPO rules in senates (3 persones: 2 lay judges and 1 full time judge; exceptions for “minor” decisions and for interim measures)  complaints initited at FPPO are not for free (system of charges depending on type of contract and contract value; betw 219.- and 5.472.- €)  no system of Procurement State Attorneys

17. Transposition in AUT III Specific features:  Remedy procedures only for tenderers/candidates (not for contracting authorities) – see ECJ C-570/08: 2(8) 89/665 does not require the MS to provide, also for contracting authorities, a right to seek judicial review of the decisions of non-judicial bodies responsible for review procedures concerning the award of public contracts (however MS may do so) 9/6/2015 17

18. Transposition in AUT IV Specific features:  ECJ “all decisions must be subject to review” – in AUT: yes “all” but not all decisions right away – “sequencing” of the procurement process to focus potential remedy procedures at sensitive phases of the procurement procedure (system of separately and non seperately contestable decisions) 9/6/2015 18

19. Transposition in AUT V Specific features contd.:  “sequencing” of the procurement: example open procedure - seperately contestable: (all) fixtures in tender documents, decisions during offer period, decision to exclude a tender, decision to cancel the procedure, contract award decision  all decisions “between” seperately contestable decisions can be challenged only in connection with the consequent seperately contestable decision 9/6/2015 19

20. Transposition in AUT VI Specific features contd.:  above mentioned system combined with system of rigid delays (above thresholds 10 days, below 7 days)  after publication/communication of seperately contestable decisions complaints must be initiated within these delays; delay sanctioned with preclusion (foreclosure; admissible according to ECJ see C- 470/99, Universale) 9/6/2015 20

21. Transposition in AUT VII Specific features contd.:  System of “ineffectiveness” basically mirrors Directive 2007/66 with following additions  “ineffectiveness” = annullment of illegal decisions: default rule – ex tunc annullment!  exception ex nunc annullment when - restitution “in natura” or - restitution without any reduction of value not possible  Annullment below EU tresholds only if procedure was manifestly illegal 9/6/2015 21

22. Transposition in AUT VIII Specific features contd.:  If no “ineffectiveness” (annullment) Directive 2007/66 asks for “alternative” penalties  AUT: alternative penalties = fines!  fines both for natural and legal persons  Limitation of maximum fines to 20% of contract value (gentleman’s agreement btwn Commission and MS) 9/6/2015 22

23. Thank you for your attention! Contact: Dr. Michael Fruhmann Constitutional Service, Republic of Austria michael.fruhmann@bka.gv.at 9/6/2015 23