The European Commission has decided to refer the United Kingdom to the European Court of Justice in three separate cases involving infringement of Internal Market rules. These require member states to ensure that public procurement contracts are awarded under open and competitive conditions.

In all three cases, the Commission does not agree with the UK authorities' interpretation of the public procurement Directives concerning supplies, works and services. The first case involves a contract awarded by the Home Office for the provision of a radio communications system and related equipment for the police based on a specific standard. The Commission believes a public authority is not entitled to reject tenders on the grounds that they are not based on a specific standard.

The second case concerns the minimum number of firms that must be selected for a tender. The third case involves conditions for the awarding of tenders under framework agreements.

Radio communications system for the police
This case arose out of a contract awarded by the Home Office for the provision of a radio communications system and related equipment. The Home Office stated that the equipment and services had to comply with the TETRA European technical standard for mobile radio services and that proposals not based on this standard would not be taken into account.
Essentially, this case concerns whether or not a public authority is entitled to reject tenders on the ground that they are not based on a specified technical standard.

The Commission takes the view that it is not sufficient for the contracting authority to carry out a prior study as a result of which it concludes that only candidates using a specified standard will be considered for selection. The Commission considers that this practice is incompatible with the procurement Directives, because it could give rise to discrimination against firms which may offer genuinely equivalent solutions, even if not based on the specified standard.

Minimum number of firms to be selected
The Community Directives on public procurement of goods, works and services require public authorities to invite a sufficient number of firms to tender so as to ensure effective competition in the award of public contracts. In cases where public authorities state in advance how many firms they intend to select, the Commission considers that a minimum of five firms should be selected.

The United Kingdom authorities interpret the Directives to mean that, at least in certain circumstances, only three firms need to be selected. The Commission has therefore referred the UK to the Court of Justice.

Framework agreements
This case arose from a complaint concerning the use of so-called 'framework agreements' by the Northern Ireland Department of the Environment. The idea behind a framework agreement is to select a number of eligible firms who are subsequently invited to tender for individual contracts within the overall framework of the agreement. As in other public procurement contracts, there are strict procedures to be followed in the awarding of framework agreements.

The framework agreement itself must be awarded in accordance with the public procurement Directives. The Commission takes the view that if the terms of a framework agreement are sufficiently specific as to detail the key elements of any individual contracts to be awarded subsequently, and if these are set out in binding form, when those individual contracts are awarded it is not necessary to follow the detailed procedural requirements of the Directives.

However, where the key terms and conditions of individual contracts are vague, or simply not specified at all, they must be advertised in the Official Journal and follow the detailed procedural requirements of the public procurement Directives.

In this case, the Commission considers that the essential conditions of individual contracts were not specified in a binding manner in the framework agreement. Individual contracts awarded under the framework agreement should therefore have followed the detailed procedural requirements of the public procurement Directives.

Richard Byatt