OPINION OF ADVOCATE GENERAL
Ruiz-Jarabo Colomer
delivered on 8 September 2005 1(1)
Case C‑331/04
Temporary Association of Undertakings constituted by
EAC Srl
and
Viaggi di Maio Snc
v
ACTV Venezia SpA,
Provincia di Venezia
and
Comune di Venezia
(Reference for a preliminary ruling from the Consiglo di Stato (Italy))
(Public service contracts – Award procedures – Harmonisation of laws – Directives 92/50/EEC and 93/38/EEC – Articles 36(2) and 34(2) respectively – Award criteria – Economically most advantageous tender – Award of contracts for supplying public transport services – Criteria established in the tender notice or in the contract documents – Power of the jury to specify or supplement them – Principles of the equal treatment of tenderers and of transparency)
1. This reference for a preliminary ruling concerns the interpretation of Article 36(2) of Council Directive 92/50/EEC and Article 34(2) of Council Directive 93/38/EEC, which harmonise the methods of awarding public service contracts (2) and those concluded in certain sectors. (3)
2. The reference from the Consiglio di Stato relates to the award of a contract to the economically most advantageous offer and the guidelines for making the decision, and raises the question of the powers of the contracting authority and of the jury, so as to establish whether the former may simply set out the parameters in the tender notice or the contract documents and leave it to the latter to specify and supplement them.
3. In order to give a reply to that court, it is necessary to observe mandatory principles governing public procurement, which seek to introduce objective rules of participation and allocation, with transparent procedures in which discriminatory measures and clauses are prohibited.
I – The provisions requiring interpretation
4. Both directives, which focus on the equal treatment of bidders (Article 3(2) of Directive 92/50 and Article 4(2) of Directive 93/38), provide neutral methods of granting contracts, either based on the lowest price or on the most advantageous tender from an economic point of view (Articles 36(1) and 34(1) respectively).
5. As regards the latter, Article 36(2) of Directive 92/50 provides that ‘the contracting authority shall state in the contract documents or in the tender notice the award criteria ... in descending order of importance’. Article 34(2) of Directive 93/38 is expressed in almost identical terms.
II – The facts in the main proceedings and the questions referred for a preliminary ruling
6. The temporary association of undertakings constituted by EAC Srl and ‘Viaggi di Maio’ Snc (‘EAC’) took part in a negotiated procedure arranged by the Azienda del Consorcio Trasporti Veneciano (‘ACTV’), using the second of the methods stated, pursuant to Article 24(1)(b) of Legislative Decree No 158/1995, (4) for the subcontracting of public passenger transport services. (5)
7. The contract documents contained the instructions for identifying the best tender: the third instruction related to the organisational procedures and support structures for implementing the service, which the jury could assess with a maximum of 25 points. (6) It was necessary to state: (a) the depots and/or areas where buses could be parked, (b) the procedures for supervising the service and the number of employees supervising the service, (c) the number of regular drivers and the type of licence which authorises them to drive coaches, (d) the company’s premises in the province of Venice and (e) the staff engaged in organising drivers’ shifts.
8. After the envelopes had been submitted and before they had been opened but, in any event, knowing who the candidates were, the jury allocated the points between the five aforementioned headings, giving 8 to the first, 7 to the second, 6 to the third and 2 to each of the other two.
9. The service was awarded to the temporary association of undertakings ‘La Línea’, which received 86.53 points; EAC received only 83.50 points and therefore challenged the result before the Tribunale Amministrativo Regionale del Veneto (Regional Administrative Court, Veneto) alleging that its opponent won as a result of the distribution ex post facto of points relating to the organisational procedures and support structures, and relying on Article 36 of Directive 92/50 and Article 24(1)(b) of Legislative Decree 158/1995.
10. The Tribunale dismissed the action by judgment of 15 April 2003, against which the EAC brought an appeal before the Consiglio di Stato, whose case-law approves the practice of giving award juries some freedom of action to introduce factors, to add specific detail to the general guidelines set out in the tender notice and to provide for subheadings in the main categories already defined.
11. In order to establish whether Article 36 of Directive 92/50 and Article 34 of Directive 93/38 permit that interpretation, the Consiglio di Stato refers the following questions to the Court of Justice:
‘(1) Is it lawful to interpret those provisions as flexible rules allowing the contracting authority, where the award is to be made on the basis of the economically most advantageous tender, to fix the criteria in a general way in the tender notice or the contract documents, leaving it to the jury to specify or supplement those criteria, if need be, provided always that such specifying or supplementing is carried out before the packets containing the tenders have been opened, and does not alter those criteria or, on the contrary, must those provisions be interpreted as a rigid rule requiring the contracting authority to determine, analytically, the criteria for the award of the contract in the tender notice or the contract documents, and in any case before the prequalification stage or the invitation to tender, and as meaning that the jury may not subsequently do anything to specify or supplement those criteria or to create subheadings or sub-marking since for reasons of transparency every piece of information concerning the criteria for the award must appear in the notice or contract documents?
In short, is the traditional line of interpretation followed in the past in the Consiglio di Stato’s case-law, which permits the jury to supplement the award criteria before the envelopes are opened, lawful in the light of Community law?
(2) Is it lawful, in the light of those provisions loosely interpreted having regard to the adverbial phrase “where possible”, for the contracting authority to adopt conditions for participation that provide, with regard to one of the criteria for the award (in this instance, the organisational and support procedures), with reference to a complex series of parameters for which the tender notice does not allocate individual points, so that they were in that sense in part indeterminate, that the points should be allocated at the absolute discretion of the contracting authority, or do not those provisions in any case require that the criteria should as a general rule be formulated absolutely definitively, which is not compatible with the fact that those criteria were not allocated separate points in the notice; if it is lawful, because the provisions are considered to be flexible and because it is not essential to give points to every item, is it permissible, where the tender notice does not give express power to the jury, for the latter to specify or supplement the criteria (simply by allocating individual importance and relative weight to every single item that the notice intended to be assessed by the overall allocation of a maximum of 25 points), or is it not on the contrary necessary to apply the conditions of the tender literally, allocating the points on an overall assessment of the various and complex matters taken into consideration by the lex specialis?
(3) Is it lawful, in the light of [those provisions] to give the jury which is to assess the tenders, regardless of the manner in which criteria have been formulated in the tender notice, in a procedure for an award on the basis of the economically most advantageous tender, the power, in respect of the complexity of the matters to be assessed, to restrict its own actions, by specifying the parameters for the application of the criteria previously determined in the tender notice, and may such power be exercised by creating subheadings, sub-points, or simply by setting more specific criteria than those laid down in the tender notice or the contract documents, before the envelopes have been opened?’
III – Procedure before the Court of Justice
12. Written observations were submitted, within the time-limit laid down in Article 20 of the EC Statute of the Court of Justice, by the Commission, the Austrian and Netherlands Governments, EAC and ACTV, who presented oral argument at the hearing held on 7 July 2005.
IV – Admissibility of the questions referred for a preliminary ruling
13. The Austrian Government and ACTV contend that the reference for a preliminary ruling is inadmissible, for different reasons and to different extents.
14. The former complains that the order for reference is vague as to the provisions of which it requires an interpretation, and infers from page 10 of the order that Article 34 of Directive 93/38 is unconnected with the main action. Neither of these criticisms is persuasive, since the Consiglio di Stato raises its doubts ‘with regard to the rule laid down in Article 34 of Directive 93/38 and, in particular, to the similar rule in Article 36 of Directive 92/50’, indicating that the appeal refers to the wording of Article 36 of Directive 92/50, which is similar to that of Article 34 of Directive 93/38, ‘applicable to the present case, even if it is not expressly quoted by the appellant’.
15. In a way, the Austrian Government is not seeking the rejection in limine of the proceedings, but wants the analysis to be limited to the second of the provisions cited, which has the same meaning as Article 34 of Directive 93/38. In the circumstances, that claim of admissibility may only be described as superfluous because whatever interpretation is suggested will suit both provisions, and it will be up to the national court to choose between them; the Court of Justice must not intervene in that task, unless the facts are incompatible with Community law or the doubt raised with regard to interpretation is based on mere hypothesis, unconnected with the true circumstances of the case.
16. ACTV’s claim of inadmissibility falls within the latter category, as it only gives the appearance of having more weight. ACTV claims that the Italian court’s interest in knowing whether the jury may ‘supplement’ or ‘specify’ the award criteria laid down in the tender notice or the contract documents is irrelevant because, in this case, the jury did not carry out such operations; according to the order for reference, it merely created subcriteria of calculation which define the terms of that document but do not add to it (final paragraph in Point 5).
17. Irrespective of the problem of deciding whether the question referred for a preliminary ruling is hypothetical, (7) this argument is contradictory because it accepts that the approved guidelines were defined more closely and then, immediately afterwards, explains that the Consiglio di Stato does not need to establish whether Article 36 of Directive 92/50 and Article 34 of Directive 93/38 authorise that subsequent operation. Moreover, the questions are formulated in such a way as to highlight the legality of the Italian legislation applicable to the case, which accords the jury powers to make additions before the envelopes are opened. The reference for a preliminary ruling is therefore appropriate.
V – The rules governing public procurement
18. The Consiglio di Stato wishes to know whether, in a procedure for an award on the basis of the economically most advantageous tender, the provisions to which it refers allow the contracting authority to fix the criteria for assessing the tenders in a general way in the tender notice or contract documents, leaving it to the jury to specify or supplement them (question 1).
19. It also seeks to clarify whether, in the light of that broad interpretation and having regard to the words ‘where possible’ used in the two articles at issue, the Authority may allocate points to one of the criteria for assessment, to be divided between complex parameters, which are stated but without indication of their relative weight, so that their order of priority is determined later by the jury, which may restrict its own actions by specifying the rules previously determined in the tender notice, in particular by creating subheadings or subpoints (questions 2 and 3).
20. To dispel those doubts, it is necessary to follow the advice given in the opinion in Lombardini and Mantovani (8) to recall the principles underlying selection of a contractor, in order better to understand Article 36 of Directive 92/50 and Article 34 of Directive 93/38.
21. The Directives on public contracts, each one concerned with a specific field, aim to promote the development of open competition by realising the four fundamental freedoms of European integration (free movement of goods, persons, services and capital). (9) Those directives aim to give effect to the requirements set out by the Community legislature in Articles 9, 52, 59 and 73B of the EC Treaty (now, after amendment, Articles 23 EC, 43 EC, 49 EC and 56 EC).
22. Giving effect to those requirements and the pursuit of that objective can only be achieved if those who wish to be awarded public contracts can apply on an equal basis, without any hint of unjustified bias. To this end, a system based on objectivity, in terms of both substance and form, is indispensable. Such a system must be established, as regards substance, by setting objective criteria for participation in the tender and award of contracts, (10) and as regards form, by making provision for transparent procedures in which publication is the norm.
23. The criteria for selection of candidates refer to the professional, economic and technical suitability of applicants. To rule out any discriminatory effect, it is necessary in each case to predetermine the rules governing the selection procedure, as well as the levels of skill and experience required. (11)
24. Once the tenderers qualifying for award of the contract have been selected, that award is subject to objective parameters of assessment, whether the lowest bid or the economically most advantageous tender. If the second criterion is applied, the contracting authority sets out the award criteria in the contract documents or tender notice, (12) stating their respective importance, in accordance with the provisions with which this reference for a preliminary ruling is concerned.
25. Consequently, the system leaves nothing to chance or subject to any arbitrary decision on the part of the body which makes the final decision. Equality of treatment for tenderers requires that any person who wishes to be awarded a contract must know beforehand what he must do to be awarded it, so that the awarding body is confined, given the discretion involved in the technical evaluation, to applying parameters set out in the lex contractus, both those rules governing public contracts in a general sense, and those which involve in particular a specific contract.
26. To ensure that such a system is effective and that there is no discrimination, it is not sufficient to set objective criteria for the procedures, but application of the criteria must be based on transparency. This must apply from the time of the tender notice, in the contract documents and, finally, in the selection stage itself, (13) both in the open procedures and the restricted procedures.
VI – The reply to the questions referred for a preliminary ruling
27. Some of the claims made at the hearing have taken the Court of Justice far from Luxembourg, to an Italian court where the main action is to be decided, but it must be made clear that it is not for this European Court, but for the Consiglio di Stato, to determine whether the transport services contract in question was awarded in accordance with the law.
28. This Court has a different, more complex and more important task: to determine whether the articles for which an interpretation is sought permit, in the light of the aforementioned principles, situations in which the jury does not merely assess – although, inevitably, with some latitude – the tenders received in accordance with the rules set out in the tender notice or the contract documents, because it has been given the additional role of specifying, adding to and supplementing them. In short, it is necessary to ascertain whether that body, whose function is to implement, can acquire ‘quasi-legislative’ responsibilities, by defining the content of the lex contractus in some way.
A – The first question referred for a preliminary ruling
29. Article 36 of Directive 92/50 and Article 34 of Directive 93/38 are rules for awarding contracts, which lay down for that purpose two basic criteria which have already been mentioned: the lowest price and the economically most advantageous tender. The former, because it is fixed, leaves no room for assessment by the awarding body. The latter, however, constitutes an undefined legal concept, which the contracting authority must specify in each case, to which end Articles 36(1)(a) and 34(1)(a) provide a non-exhaustive list of various points which must be included in the contract documents or the tender notice in descending order of importance, as required under Articles 36(2) and 34(2).
30. It may therefore be inferred that the criteria which the jury must take into consideration when selecting the most advantageous tender must be laid down by the contracting authority in the tender notice or the contract documents, and they cannot be fixed by reference, nor can that task be deferred until a later time.
31. This, for Community case-law, is an inescapable corollary of the principles of transparency, publicity and non-discrimination. The assessment criteria must be appropriate for identifying the economically most advantageous tender, so they must necessarily be linked to the subject-matter of the contract (14) and be included in the aforementioned documents, (15) in such a way as to allow all reasonably well‑informed and normally diligent tenderers to interpret them in the same way; (16) their order of importance should also be stated. (17)
32. Thus, the contracting authority does not have complete freedom of action: it does not have a discretionary power to establish formulae for assessing the tenders; nor does it have the capacity to choose when to publicise them, or to change them during the selection procedure, which also prevents it from altering their meaning. (18)
33. In the light of all those considerations, the jury must not be permitted to initiate any changes and its participation must be limited to applying the criteria prepared beforehand by the contracting authority, of which all the tenderers are duly aware, because they have been subject to transparency and have been publicised. Consequently, the specification and supplementation activities to which the Consiglio di Stato refers in its first question, to the extent that they involve creating new schemes, not merely implementing those already established, infringe the spirit of Directives 92/50 and 93/38, because they fail to have regard to the grounds on which they are based.
34. It is irrelevant that that task is carried out before the envelopes are opened, because equal treatment is required not only in the decision but also in the participation, so that the lack of complete information regarding the conditions of the selection procedure means less publicity, which is likely to leave out of the running possible competitors who, if they had had access to all the requirements, might have decided to compete. (19) Furthermore, as the Commission and the Austrian Government suggest, that possibility would give the body responsible for identifying the most acceptable offer the ability to influence the end result, thus jeopardising impartiality, because, when it comes to calculating the final totals, although it may not know the content of the envelopes, it does know who the candidates are, and might tip the scales in favour of one of them.
35. In short, under Article 36(2) of Directive 92/50 and Article 34(2) of Directive 93/38, the contracting authority must state the award criteria, in detail, in the tender notice or contract documents; the jury is not authorised to do anything other than to apply them and is precluded from making any alterations, even if this is done before the envelopes are opened.
B – The second and third questions
36. All the weighting factors must therefore be announced in advance, in decreasing order of importance.
37. Consequently, the criteria for awarding the contract must always appear in the tender notice or the contract documents, and the jury may not eliminate any of them, add others or subdivide those initially laid down. As I have already pointed out, it does not have competence to introduce new criteria or to alter or supplement those already existing.
38. If it is impossible to weight the various award criteria in the tender notice or contract documents, it might be thought that this was a task for the jury, but the wording of Article 36(2) of Directive 92/50 and Article 34(2) of Directive 93/38 does not permit it. This accords with the general principles of public procurement, because it might change the parameters and influence the outcome of the selection procedure. In that event, it is more in keeping with the spirit of directives to entrust that task to an expert, who is not involved in the final decision. (20)
39. Directives 2004/18 and 2004/17/EC, (21) both currently in force, confirm these views, requiring the contracting authorities, in Articles 53 and 55 respectively, to state each of the criteria selected for identifying the most advantageous offer, using a range of points with an appropriate maximum spread. Where this is not possible for demonstrable reasons, the contracting authority is required to indicate the criteria in descending order of importance. Thus, no competence is conferred on the jury to intervene in this matter.
40. There is all the more reason for rejecting a modus operandi such as the one adopted in the main proceedings, in which the contracting authority has laid down a criterion to be assessed on the basis of various factors to which it allocates an overall number of points but no order of priority, leaving it to the jury not only to distribute those points but also to grade them.
41. I therefore consider that, where it is impossible to state the award criteria in order of importance in the tender notice or contract documents, Article 36(2) of Directive 92/50 and Article 34(2) of Directive 93/38 do not allow the jury to do so subsequently, even if it does so before the envelopes are opened; accordingly, the jury may not assume rules to govern that intervention, nor may it distribute the points initially set out in those documents between the various parameters, by arranging these in order of importance.
VII – Conclusion
42. In the light of the foregoing considerations, I propose that the Court of Justice give the following reply to the questions referred by the Consiglio di Stato:
(1) Article 36(2) of Council Directive 92/50/EEC of 18 June 1992 relating to the coordination of procedures for the award of public service contracts and Article 34(2) of Council Directive 93/38/EC of 14 June 1993 coordinating the procurement procedures of entities operating in the water, energy, transport and telecommunications sectors require the contracting authority to set out the award criteria, in detail, in the tender notice or contract documents; the jury is not authorised to do anything other than to apply them and is precluded from making any alterations, even if this is done before the envelopes containing the offers are opened.
(2) Where it is impossible to state the award criteria in order of importance in the tender notice or contract documents, those provisions do not allow the jury to do so subsequently, even if it does so before the envelopes are opened; accordingly, the jury may not assume rules to govern that intervention, nor may it distribute the points initially allocated between the various parameters, by arranging these according to their relative importance.
1 – Original language: Spanish
2 – Directive of 18 June 1992 relating to the coordination of procedures for the award of public service contracts (OJ 1992 L 209, p. 1).
3 – Directive of 14 June 1993 coordinating the procurement procedures of entities operating in the water, energy, transport and telecommunications sectors (OJ 1993 L 199, p. 84).
4 – Gazzeta Ufficiale della Repubblica No 104, of 6 May 1995. That article provides that ‘in the case of the most economically advantageous tender, decided on the basis of various criteria, which vary according to the market ..., the contracting authorities shall state, in the contract documents or in the tender notice, all the award criteria ... in descending order of importance’.
5 – The Mestre urban transport service, lot No 1, from 16 June 2002 to 31 December 2003.
6 – Paragraph 3.10, No 6 of the contract documents.
7 – The only case-law which has prohibited hypothetical questions – established in Case 104/79 Foglia v Novello [1980] ECR 745 and Case 244/80 Foglia v Novello [1981] ECR 3045 – has not been upheld subsequently and has drawn criticism from the most authoritative academic lawyers (Barav. A., ‘Preliminary Censorship? The Judgment of the European Court in Foglia v Novello’, in European Law Review 1980, pp. 443 to 468).
8 – Joined Cases C‑285/99 and C‑286/99 [2001] ECR I‑9233.
9 – In particular, the second recital in the preamble to Directive 92/50 and the first of the preamble to Directive 93/38. The same notion is found in the second recital in the preamble to Directive 2004/18/EC of the European Parliament and of the Council of 31 March 2004 on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts (OJ 2004 L 134, p. 114) which will replace inter alia Directive 92/50 when the time-limit for its transposition expires in 2006.
10 – The distinction between the two kinds of criteria, which was drawn by Advocate General Darmon in his Opinion in Case 31/87 Beentjes [1988] ECR 4635, is also contained in Directive 2004/18 (recitals 39 and 46).
11 – Articles 29 to 35 of Directive 92/50 and Articles 30 to 33 of Directive 93/38 refer to this aspect.
12 – The contractor is to be selected according to circumstances connected with the subject-matter of the contract, which may relate to quality, technical merit, aesthetic and functional characteristics, technical assistance and service, delivery date, delivery period or period of completion, cost-effectiveness, price or running costs (Article 36(1)(a) of Directive 92/50 and Article 34(1)(a) of Directive 93/38).
13 – Article 15 and corroborating articles of Directive 92/50, and also Article 21 et seq. of Directive 93/38.
14 – See to this effect Case C‑513/99 Concordia Bus Finland [2002] ECR I‑7215, paragraph 59, applying Article 36(1)(a) of Directive 92/50.
15 – The judgment in Beentjes stated that a general reference to a provision of national legislation cannot satisfy the publicity requirement (paragraph 35).
16 – Case C‑19/00 SIAC Construction [2001] ECR I‑7725, paragraph 42. The judgment in Case C‑448/01 EVN and Wienstrom [2003] ECR I‑14527, paragraph 57, confirms this approach.
17 – Case C‑470/99 Universale-Bau [2002] ECR I‑11617, paragraph 97.
18 – This last consequence is reflected in the aforementioned judgments in SIAC Construction, paragraph 43, and EVN and Wienstrom, paragraph 92.
19 – The judgments in Case C‑87/94 Commission v Belgium [1996] ECR I‑2043, paragraph 88, and in Universale-Bau, paragraph 98, give as grounds for the obligation imposed on the contracting authorities the expediency of enabling potential tenderers to be aware, before preparing their tenders, of the criteria to be taken into account in selecting the best offer and the relative importance of those criteria. Moreover, that requirement ensures the observance of the principles of equal treatment and of transparency.
20 – This was implicitly acknowledged by the judgment in SIAC Construction, to which I have already referred, which stated that the opinion of an expert on a factual matter that will be known precisely only in the future guarantees that the criteria are applied objectively and uniformly to all tenderers (paragraph 44).
21 – Directive of the European Parliament and of the Council of 31 March 2004 coordinating the procurement procedures of entities operating in the water, energy, transport and postal services sectors (OJ 2004 L 134, p. 1) which, when the time-limit for its transposition expires, will replace Directive 93/38.
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