Articles

Third country bids in EU procurement: always excluded?

Third country bids in EU procurement: always excluded?

Third country bids in EU procurement: always excluded?

12.11.2019 EU law

The European Commission recently issued guidance on the participation of third country bidders in public procurement. It clarified bids may be excluded, but remains silent on whether they may be accepted and under which conditions. The Commission is of the opinion that contracting authorities or entities can exclude bids if no access is secured. However, it does not discuss if and under which conditions contracting authorities or entities can allow foreign bids if no access is secured.

The European Commission recently issued guidance on the participation of third country bidders in public procurement. It clarified bids may be excluded, but remains silent on whether they may be accepted and under which conditions. 

Commission guidance on the participation of third country bidders and goods

On 24 July 2019 the European Commission issued a communication on public procurement and the participation of third country bidders to address the lack of level playing field between EU and non-EU bidders, goods and services. Non-EU bidders are not necessarily bound by the same, or equivalent, environmental, social or labour standards as those applicable to EU bidders. Therefore, the Commission aims to stimulate contracting authorities or entities to apply public procurement more strategically to foster innovation, sustainability, green procurement etc. To this end it provides guidance on tools for contracting authorities or entities to ensure such strategic goals when dealing with third country participation. The Commission discusses the ability to reject abnormally low tenders and to insert quality standards (applicable to all bids alike, foreign or not), as well as the access of third country bidders to the EU procurement market.

The guidance stresses that the EU has granted access to its procurement market under international agreements such as the Agreement on Government Procurement (GPA) and bilateral free trade agreements. Moreover, the Public Contracts Directive and the Utilities Directive require equally favourable treatment to EU and non-EU works, supplies, services and economic operators to the extent an international agreement covers the procurement. 

The guidance emphasises that economic operators from third countries or foreign goods and services have no secured access to EU procurement procedures outside the scope of these abovementioned international agreements. This may according to the guidance result in exclusion. 

This way, the Commission appears to indicate that contracting authorities or entities have the right but not the obligation to reject foreign bids if access is not secured. Nevertheless, the guidance does not explicitly confirm that such foreign bids can be allowed. 

EU International Procurement Instrument

In previous documents, the Commission did not expand on this question either. The Commission’s proposal for an international procurement instrument (IPI), would provide for a price penalty whenever there is a substantial lack of reciprocal opening of public procurement access in the originating country. In essence, this proposed regulation would allow the Commission to investigate the access that EU economic operators have to the procurement market of a third country. If the Commission established disadvantageous treatment of EU goods, it could request the third country to open up its procurement market. If unsuccessful, a 20% price penalty could be imposed for the evaluation of the bids from this third country (article 8). Importantly, the proposal would also prevent member states and contracting authorities or entities to restrict access beyond the price penalty (article 1.5). It would thus prevent more restrictive measures, such as an exclusion. Interestingly, a previous version of the proposal explicitly allowed exclusion under certain circumstances as an alternative course of action (article 6). 

The IPI proposal has been dormant since 2016. However, in early 2019 the Commission urged Council and Parliament to continue the legislative process, and to adopt the IPI before the end of 2019. Progress would appear more likely now since several Member States (Germany, France, Spain) have indicated that their position has changed. 

In any case, the IPI proposal does not discuss the question whether contracting authorities or entities could allow foreign bids and under which conditions. 

Conclusion

In conclusion, the Commission is of the opinion that contracting authorities or entities can exclude bids if no access is secured. This is at least the case as long as the IPI proposal is not adopted which would prevent more restrictive measures than the 20% price penalty. 

However, both the recent Commission guidance and the IPI proposal do not discuss if and under which conditions contracting authorities or entities can allow foreign bids if no access is secured. 

Team

Related news

07.05.2020 NL law
ECJ confirms: no shortcut for ‘by object’ antitrust infringements

Short Reads - The European Court of Justice has found there is no shortcut for determining whether particular conduct can be held to have the object to restrict competition. A competition authority will always need to assess carefully whether the conduct reveals "a sufficient degree of harm to competition” before labelling it a ‘by object’ infringement. This is the case where there is sufficiently solid and reliable experience showing that this type of conduct is commonly regarded as being inherently anticompetitive.

Read more

28.04.2020 EU law
Origin of the primary ingredient - Implementing Regulation 2018/775

Short Reads - Since the beginning of this month, the origin of the primary ingredient of a food must be clearly indicated on the product when it differs from the origin given for the product as a whole. This is the result of the implementation of Article 26 (3) of the European Regulation 1169/2011 on the provision of food information to consumers.  

Read more

07.05.2020 NL law
COVID-19: fast-forwarding competition law

Short Reads - Competition authorities are temporarily ‘green-lighting’ certain collaboration initiatives to safeguard the supply of essential products in light of the COVID-19 outbreak. At the same time, authorities warn against using the current exceptional circumstances to engage in anti-competitive practices, such as price-fixing, excessive pricing, refusals to deal or opportunistic takeovers. 

Read more

07.05.2020 NL law
Spreading fast: Dutch and Belgian COVID-19 State-aid approved

Short Reads - Many Member States are taking measures to support the economy during the COVID-19 crisis. The European Commission’s Temporary Framework enables the rapid approval of certain types of State aid. So far, three Dutch State aid schemes and six Belgian schemes were approved, providing the beneficiaries with legal certainty that the aid received is in line with EU State aid law and cannot be challenged at a later stage.

Read more

16.04.2020 BE law
​I am suffering significant financial losses as a result of the spread of the corona virus. Is there a possibility of State aid? [Update]

Short Reads - COVID-19 brings certain questions to centre stage regarding State aid. In this short read, Peter Wytinck, Sophie Van Besien and Michèle de Clerck discuss the possibility of State aid in case of significant financial losses as a result of the spread of the corona virus.

Read more

This website uses cookies. Some of these cookies are essential for the technical functioning of our website and you cannot disable these cookies if you want to read our website. We also use functional cookies to ensure the website functions properly and analytical cookies to personalise content and to analyse our traffic. You can either accept or refuse these functional and analytical cookies.

Privacy – en cookieverklaring