The European Commission has released guidance for contracting authorities, outlining how they can comply with European standards when awarding contracts of low-value. The Interpretive Communication outlines ways in which these types of contracts may be advertised, awarded and reviewed.

The public procurement Directive contains rules on tendering procedures which are intended to stamp out favouritism in the award of large public contracts. Since the Directive does not, however, apply to contracts whose value fall below certain thresholds (and certain contracts for services) a large number of contracts are sheltered from competition. Such contracts present significant opportunities in particular for small and medium sized enterprises and start-up companies.

The European Court of Justice has ruled that the internal market principles of the EC Treaty are relevant to the award of such contracts. Thus the award must be compatible with the principles of free movement of goods, non-discrimination and equal treatment, transparency and proportionality.

There has been some confusion among contracting authorities as to how compliance can be achieved and the current guidance from the European Commission is intended to provide help to contracting authorities in achieving compliance with the standards developed by the European Court, in particular in the following areas:

Advertising

The Communication explains how to ensure that low-value contracts are advertised adequately and transparently.

It notes that the method of advertising should be guided by the subject matter of the contract, its value and the customary practices of the relevant sector. The greater the interest to potential contractors, the wider the coverage.

The guidance provides examples of types of advertising including advertising on the procuring authorities' own website and making use of portal websites specifically created for contract advertisements.

The advertisement and any additional documentation made available should also provide as much information as an undertaking will need to make a decision on whether to express an interest in obtaining the contract.

Contract award

The guidance also details how contracting authorities can ensure a fair and impartial procedure for awarding a contract.

In particular, contracting authorities should ensure that the description of the subject matter of the contract is non-discriminatory. This means that the product or service required should not refer to a specific origin or source or type of production unless this is justified and even then should be accompanied by the words "or equivalent". There should also be equal access for economic operators from all Member States, mutual recognition of formal qualifications regardless of which Member State they were awarded in and transparent and objective procedures.

Contracting authorities may take measures to limit the number of applicants to an appropriate level provided that this is done in a transparent and non-discriminatory manner. In doing so they can apply objective factors such as experience, infrastructure or professional ability of contractors.

The final decision awarding the contract must comply with procedural rules set down at the outset and again the principles of non-discrimination and equal treatment are to be fully respected.

Review procedures

The Communication also notes the importance of an adequate review mechanism to guarantee compliance with the standards of fairness and. It is therefore necessary that bidders should have a right to request a review of the impartiality of decisions taken in the course of an award procedure.

Any decisions adversely affecting a person having or having had an interest in obtaining the contract should be subject to review for possible violations. In order to allow for effective exercise of this right contracting authorities should state the grounds for decisions which are open to review either in the decision itself or upon request after communication of the decision.

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