Fabricom SA Procurement Decision Issued

The European Court of Justice ('Court') has published a highly significant
judgment on procurement matters - Fabricom SA v Belgium (Judgment Joined Cases
C-21/03, C-34/03, 3 March 2005). The decision relates to the interpretation
of both the classic (public sector) and the utilities public procurement directives.



Fabricom SA is a contractor which regularly submits tenders for public contracts
in the water, energy, transport and telecoms sectors. The Court was asked by
the Belgian national court whether it was in accordance with the procurement
directives for Belgian law to prohibit persons who have carried out preparatory
research or works from subsequently submitting a tender for the main works.



The Court agreed that a person who has been instructed to carry out preparatory
research or works relating to a public contract could be at an advantage in
formulating a tender given that he may have additional information or experiences
from carrying out such preparatory works that will not be not available to
other tenderers. All tenderers must have equality of opportunity. Such a person
may also suffer from a conflict of interests in that, even unintentionally,
he might influence the conditions imposed upon the contract in a manner favourable
to himself. This in itself could distort competition.



However, the Court noted that the relevant Belgian law contains an absolute
prohibition on involvement in the tender process for a party which has carried
out preparatory works. The Court held that this was a disproportionate method
of attaining the objective of equal treatment of tenderers. The Court instead
looked favourably at national laws which allow such a person an opportunity
to demonstrate that the experience which he has acquired is not capable of
distorting competition between tenderers.



The Court also held that the procurement directives preclude the contracting
entity - once it has all of the necessary information to make a decision -
from refusing to make, or stalling, the decision on whether a person involved
in the preparatory work (or a third party connected to that person) can participate
in the tender process until near the end of the tender evaluation procedure.
In other words, the contracting authority should not stall the decision until
it is too late for the person affected to seek an effective remedy for an infringement
by the contracting authority of the national procurement rules.