← back
The Pan-European General Principles on Public Procurement and other Competitive Award Procedures
(compiled by Ulrich Stelkens)
I. Definition of Competitive Award Procedures
II. Scarce CoE-Sources on Competitive Award Procedures
III. Scarce Case Law of the ECtHR Regarding Competitive Award Procedures
I. Definition of Competitive Award Procedures
There is no general concept of 'competitive award procedures' in the sources of the CoE. This is also due to the fact that the particularities and commonalities of these administrative procedures seem to have been recognised and analysed at the European level only since the 1990s (especially in connection with the development of the EEC and EC public procurement directives, namely Council Directive 89/665/EEC of 21 December 1989 on the coordination of the laws, regulations and administrative provisions relating to the application of review procedures to the award of public supply and public works contracts).
Following para. 29 ff. of the Explanations to Book IV of the ReNEUAL Model Rules on EU Administrative Procedure, the most pertinent examples of these procedures (partly also dealt with in 'CoE law') would be
- public procurement procedures (cf. guiding principle 14 of Resolution (97)24 on the twenty Guiding Principles for the fight against corruption)
- sales of assets and other privatisation procedures (cf. section 5 of the Recommendation No. R(93)7 of the Committee of Ministers to member states on privatisation of public undertakings and activities)
- selection of public officials in recruitment procedures (cf. Articles 4 and 5 of the Recommendation CM/Rec(2000)6 of the Committee of Ministers to member states on the status of public officials in Europe)
See for the nature of 'recruitment procedures' of public officials as 'competitive award procedures' (on the example of german administrative law) U. Stelkens, 'Judicial Protection and Competitive Award Procedures in Germany', (2021) 14:1 REALaw, pp. 141 - 165 (pp. 154 ff.)
- granting of financial aids in competitive procedures (in contrast to financial aids granted following the 'watering can principle').
By 'generalising' Article IV-9 (1) of the ReNEUAL Model Rules on EU Administrative Procedure 'competitive award procedures' may be defined as
"administrative procedures where the public authority is not legally obliged to grant an award to every person satisfying the criteria for the award".
Another approach would be to understand these procedures above all as procedures aimed at the allocation of 'scare goods'.
See e. g. F. Wollenschläger, 'EU Law Principles for Allocating Scarce Goods and the Emergence of an Allocation Procedure', (2015) 8:1 REALaw, pp. 205 - 256 (p. 208): "The article understands an allocation procedure to be an administrative procedure which aims at selecting, by using specific criteria, from among a number of individuals, one or more individuals for a specific purpose, the consideration of all applicants being ruled out because the object that is to be allocated is scarce, for whatever reason"). Scarcity, following this concept, may be natural (e. g. natural resources) or be the result of a deliberate decision of the legislator (e. g. scarcitiy of gambling or taxi concessions) or, finally, when the "public sector itself demands or supplies goods, but only does so in a limited quantity because of limited demand or of finite availability: Places at university, subsidies, public contracts or posts in the civil service are appropriate examples" (cf. Wollenschläger, op. cit., p. 206).
The latter cases (public sector demanding or supplying goods) are usually the primary focus of attention, and this is also the case here.
II. Scarce CoE-Sources on Competitive Award Procedures
1. Public Procurement and Guiding Principle 14 of Resolution (97)24 on the twenty Guiding Principles for the fight against corruption
Guiding principle 14 of Resolution (97)24 on the twenty Guiding Principles for the fight against corruption:
"The Committee of Ministers [...]
agrees [...]
14. to adopt appropriately transparent procedures for public procurement that promote fair competition and deter corruptors."
Resolution 97(24) was prepared by CoE's 'Multidisciplinary Group on Corruption (GMC)' (cf. GMC's Activity Report (1994-2000) (CM(2000)158) 27 October 2000).
In 1997, the 2nd Conference of Specialised Services in the fight against corruption was organised in Tallinn to deal with the subject "Corruption in Public Procurement". At the close of the Conference the participants adopted 17 conclusions, which appear as Appendix II to the GMC's Activity Report (1994-2000), CM(2000)158 (Restricted) 27 October 2000. Concerning public procurement procedures the participants concluded as follows:
"2. Public procurement procedures should be cost-efficient, fair and impartial, transparent and efficient. They should render corruption as difficult as possible, facilitate detection and pay particular attention to specific vulnerable points. In particular:
a) specifications and designs should be clear, precise, accessible and non-discriminatory,
b) decision-making criteria should be as objective as possible and discretion reduced to the minimum extent possible,
c) opening of bids should, as a general rule, be in public allowing, at least, the presence of public authorities and bidders and, preferably, the participation of outside interested bodies (consumer or professional associations, media, etc),
d) as far as possible, awarding should not be made by an individual person, but by committees, where evaluations are conducted collectively with independence and freedom from any undue interference by the administration or the private sector,
e) where free competition and publicity are not possible due to the very nature of the contract (e.g. security or defense expenditure) alternative means of control should be devised in order to avoid corruption,
f) those responsible for public procurement should be held accountable for their decisions,
g) independent commissions should be established to review the correctness of public procurement procedures; bidders and other interested persons should be entitled to file complaints before such commissions,
h) public administrations should provide adequate external and internal control mechanisms and auditing procedures. Among the services responsible for these controls and procedures sharing of information and co-ordination is essential.
3. The law should deal appropriately with the consequences of public procurement contracts awarded through corruption, particularly by making provision for:
a) loss of contract,
b) forfeiture of bid security,
c) liability for damages,
d) black-listings of companies and managers involved in corrupt practices."
All this shows a close link of the role of "appropriately transparent procedures for public procurement" to the fight against corruption.
2. Sales of Assets and other Privatisation Procedures and Section 5 of Recommendation No. R(93)7 of the Committee of Ministers to member states on privatisation of public undertakings and activities
"The Committee of Ministers [...]
Recommends the governments of member states to be guided in their law and administrative practice by the principles set out in the appendix to this recommendation,
[...]
Appendix to Recommendation No. R (93) 7
[...]
Section 5: Protection of potential purchaser
The procedures for privatisation should be established with due regard to the need for transparency and equal treatment of potential purchasers. These aims may be achieved by a variety of means, for example, public tender or competitive sale."
See on Section 5 point 3.2.6. of the Explanatory memorandum (reproduced in CoE (ed.), The administration and you (1st edition 1996/1997), pp. 494 ff.):
"The aims to which member states are called upon to have due regard in this principle are transparency and equal treatment of potential purchasers. "Transparency" implies openness on the part of the public undertaking or public authorities with regard to the disclosure of the relevant information; equal treatment arises not only as regards the provision of information but also as regards all other aspects of the privatisation where there are a number of potential purchasers. However, the principle contained in Section 5 refer in particular to public tender and competitive sale as especially likely, in the event that there is more than one purchaser, to result, in practice, in the aims stated in this principle being achieved.
The question as to who should be admitted to the position of a potential purchaser, and in particular, whether foreign nationals or undertakings should be allowed to participate in the privatisation process, is a matter for the domestic law of the member states in accordance, if appropriate, with international engagements undertaken by those states, such as the EC treaties.
Where the chosen procedure is public tender or competitive sale, this principle stresses not only the necessitiy to give adequate information [...] to potential purchasers, but also the necessity that those concerned with the privatisation should not be in a position of potential conflict between their private interests and their public duty. In particular, care should be taken to ensure that the persons who participate in the management of the enterprise to be privatised or who are in charge of organising privatisation are not in position to take illicit advantage of their situation.
In some member states the concerns to which this section is directed may be adressed by the ordinary private law governing contract and commercial transactions without its being necessary to institute specific procedures."
Click here for the genesis of Recommendation No R(93)7 in general. For the "public utility doctrine" underlying Section 2 of the Appendix to Recommendation No. R (93)7 click here. For Recommendation No. R (93) 7 as a general source of the pan-European general principles on privatisation click here.
3. Selection of Civil Servants in Recruitment Procedures and Articles 4 and 5 of Recommendation CM/Rec(2000)6 of the Committee of Ministers to member states on the status of public officials in Europe
"Appendix to Recommendation No. R (2000) 6
[...]
4. Conditions and requirements for recruitment
Recruitment of public officials should be defined by equality of access to public posts and selection based on merit, fair and open competition and an absence of discrimination. Some pre-conditions may exist for accessing public posts. In addition, general requirements and specific requirements may exist for recruitment. In so far as they constitute exceptions to these principles, they should be admitted only if lawfully justified.
5. Recruitment procedures
In respect of the principles referred to above, recruitment systems and procedures should be open and transparent, and their rules should be clear. They should allow the best candidate to be appointed to meet the specific needs of the department or organisation concerned.
States should provide for the legal protection of applicants to public positions including, inter alia, ensuring the due confidentiality of sensitive information provided in the context of the selection procedure and a legal remedy for the candidates against the decision of the competent authority."
III. Scarce Case Law of the ECtHR Regarding Competitive Award Procedures
ECtHR, judgement Tinnelly and Sons Ltd. and Others and McElduff and Others v. UK (20390/92) 10 June 1998, para 72 ff.: The ECtHR simply applies the 'civil limb' of Article 6 (1) ECHR with regard to claims based on national non-discrimination legislation in competitive award procedures.
"The Court recalls that Article 6 § 1 of the Convention secures to everyone the right to have any claims relating to his civil rights and obligations brought before a court or tribunal. In this way the Article embodies the "right to a court", of which the right of access, that is, the right to institute proceedings before courts in civil matters, constitutes one aspect [...].
In the present case, the issue which arises is whether Article 6 of the Convention applies to the proceedings at issue.
The Court must ascertain in particular whether there has been a dispute (contestation) over a "right" which can be said, at least on arguable grounds, to be recognised under domestic law [...]. In this respect, the Court recalls that Article 6 § 1 of the Convention does not itself guarantee any particular content of "civil rights and obligations" and is not meant to create new substantive rights which have no legal basis in the State concerned. Rather, the provision aims at giving procedural protection to rights which can be said, at least on arguable grounds, to be recognised under domestic law [...].
In the present case, Section 3 of the Tenders Act of the Canton of Lucerne determines that construction works and supplies shall as a rule be awarded following a competitive invitation for tenders. The Ordinance completing the Tenders Act provides in its Section 18 that the award shall fall to the cheapest offer, though it is also stated that, given the substantive requirements and the time-limits involved, the lowest tender will not always be the cheapest. Section 19 lists further criteria to be considered in case of equal or similarly favourable offers. Section 22 provides that no reasons need be given to candidates whose offers have not been considered.
It is true, in the Court’s view, that these provisions set up a competitive scheme for the award of contracts concerning public works. But it is also true that they afford the public authorities considerable discretion when taking their decision. No right emerges from these provisions for any candidate to have any particular project carried out by the public authorities.
This view is confirmed by the decisions of the Administrative Court of the Canton of Lucerne of 16 July 1996, and of the Federal Court of 12 November 1996, both of which concluded that domestic law did not grant the applicants a "right" to be awarded a particular offer upon tender.
The Court concludes that at no time could the applicants plausibly claim any particular right under domestic law. The case thus falls to be distinguished from that of Tinelly & Sons Ltd and others and McElduff and others v. the United Kingdom concerning a "right" arising from alleged discrimination of the candidates (see the judgment of 10 July 1998, Reports of Judgments and Decisions 1998-IV, p. 1655 et seq.). No specific claim of discrimination has been made in the present case.
It follows that Article 6 of the Convention is not applicable to the proceedings at issue. The application is, therefore, incompatible ratione materiae with the provisions of the Convention within the meaning of Article 35 § 3 of the Convention and must be rejected, pursuant to Article 35 § 4 of the Convention."
See on this case law F. Wollenschläger, 'EU Law Principles for Allocating Scarce Goods and the Emergence of an Allocation Procedure', (2015) 8:1 REALaw, pp. 205 - 256 (p. 238 ff.)
IV. Subsidiary Applicability of the Pan-European General Principles on Discretion, on Administrative Procedure and on Judicial Review
The awarding decision in competitive award procedures can be considered
- as an 'administrative act' in the sense of in the sense of Resolution (77)31 on the protection of the individual in relation to the acts of administrative authorities ("any individual measure or decision which is taken in the exercise of public authority and which is of such nature as directly to affect the rights, liberties or interests of persons whether physical or legal (administrative acts")
and
- as an 'administrative act' in the sense of Recommendation No R(80)2 of the Committee of Ministers to member states concerning the exercise of discretionary powers by administrative authorities ("any individual measure or decision which is taken in the exercise of public authority and which is of such nature as directly to affect the rights, liberties or interests of persons whether physical or legal (administrative acts)"
and
- as an 'individual decision' ("Individual decisions are those addressed solely to one or more individuals.") in the sense of Section II of the Recommendation CM/Rec(2007)7 of the Committee of Ministers to member states on good administration
and
- as an 'administrative act' in the sense of Recommendation Rec(2004)20 of the Committee of Ministers to member states on judicial review of administrative acts ("legal acts – both individual and normative – [...] taken in the exercise of public authority which may affect the rights or interests of natural or legal persons").
Thus, the basic principles enshrined in these recommendations may apply also to awarding decisions, at least with regard to the unsuccessful participants of such a procedure. Therefore, the basic principles enshrined in these recommendations may apply also in the case of to awarding decisions, i.e. the pan-European general principles
- on discretion (for these principles click here),
- fair administrative procedure, namely on taking action within a reasonable time limit, on the right to be heard and access to files, the right to representation and assistance, as well as the obligation to take decisions on the basis of duly established acts and, finally, the obligation to give reasons (for these principles click here) and
- on judicial review (for these principles click here).
As an example for such an adaption may serve the rules in the Chapter on 'Competitive award procedures' in Book IV (Article IV-9 - IV- 19) of the ReNEUAL Model Rules on EU Administrative Procedure.
V. Concretisation of the Pan-European General Principles of Transparency and Equality in Competitive Award Procedures by Non-CoE Sources?
2. Article 9 (1) of the United Nations Convention against Corruption
3. EU's Transparency Principle in Competitive Award Procedures
1. OECD Principles on Public Procurement (as a 'Key Focus Area' in the Field of 'Anti-Corruption and Integrity in the Public Sector)
- OECD Recommendation of the Council on Public Procurement (2015) - namely recommendation II on ensuring an 'adequate degree of transparency of the public procurement system in all stages of the procurement cycle', recommendation III on preserving 'the integrity of the public procurement system through general standards and procurement-specific safeguards' and recommendation IV on facilitating 'access to procurement opportunities for potential competitors of all sizes'
- OECD Public Procurement Toolbox ("In addition to better familiarising you with the 12 Principles [of Recommendation of the Council on Public Procurement], the Toolbox provides policy tools, specific country examples as well as indicators to measure your public procurement system").
2. Article 9 (1) of the United Nations Convention against Corruption
The United Nations Convention against Corruption has been signed and ratified by all CoE Member States and the EU. This Convention therefore does not "only" reflect global standards in the fight against corruption, but is a legally binding instrument in the entire "European administrative area" (and can therefore also concretise the pan-European general principles of good administration).
As part of Chapter II on 'Preventive measures" Article 9 of the United Nations Convention against Corruption stipulates:
"Article 9 - Public procurement and management of public finances
(1) Each State Party shall, in accordance with the fundamental principles of its legal system, take the necessary steps to establish appropriate systems of procurement, based on transparency, competition and objective criteria in decision-making, that are effective, inter alia, in preventing corruption. Such systems, which may take into account appropriate threshold values in their application, shall address, inter alia:
(a) The public distribution of information relating to procurement procedures and contracts, including information on invitations to tender and relevant or pertinent information on the award of contracts, allowing potentialtenderers sufficient time to prepare and submit their tenders;
(b) The establishment, in advance, of conditions for participation, including selection and award criteria and tendering rules, and their publication;
(c) The use of objective and predetermined criteria for public procurement decisions, in order to facilitate the subsequent verification of the correct application of the rules or procedures;
(d) An effective system of domestic review, including an effective system of appeal, to ensure legal recourse and remedies in the event that the rules or procedures established pursuant to this paragraph are not followed;
(e) Where appropriate, measures to regulate matters regarding personnel responsible for procurement, such as declaration of interest in particular public procurements, screening procedures and training requirements.
(2) [...]
(3) [...]."
See for Article 9 (1) of the United Nations Convention against Corruption para. 69 ff. of the Legislative Guide for the Implementation of the United Nations Convention against Corruption and pp. 85 ff. and pp. 105 ff. of the Travaux Préparatoires; for Article 9 (2) of the United Nations Convention against Corruption click here. See, furthermore, Y. Marique, 'Article 9: Public Procurement and Management of Public Finance' in C. Rose, M. Kubiciel and O. Landwehr (eds.), The United Nations Convention Against Corruption - A Commentary (2019), pp. 91 - 105.
3. EU's Transparency Principle in Competitive Award Procedures
For a discussion of the possibility to 'integrate' EU's transparency principle in competitive award procedures into the pan-European general principles on competitive award procedures see U. Stelkens, 'Vers la reconnaissance des principes généraus paneuropéens du droit administratif dans l'Euope des 47?', in J.-B. Auby and J. Dutheil de la Rochère (eds.), Traité de droit administratif européen (2nd edition 2014), pp. 713 – 740 (pp. 734 ff.)
a) Transparency principle in public procurement
b) Transparency principle and awarding gambling licences
c) Transparency principle and privatisation procedures
a) Transparency principle in public procurement
"59 However, the fact that such a contract does not fall within the scope of Directive 93/38 does not preclude the Court from helping the national court which has sent it a series of questions for a preliminary ruling. To that end, the Court may take into consideration other factors in making an interpretation which may assist the determination of the main proceedings.
60 In that regard, it should be borne in mind that, notwithstanding the fact that, as Community law stands at present, such contracts are excluded from the scope of Directive 93/38, the contracting entities concluding them are, none the less, bound to comply with the fundamental rules of the Treaty, in general, and the principle of non-discrimination on the ground of nationality, in particular.
61 As the Court held in Case C-275/98 Unitron Scandinavia and 3-S [1999] ECR I-8291, paragraph 31, that principle implies, in particular, an obligation of transparency in order to enable the contracting authority to satisfy itself that the principle has been complied with.
62 That obligation of transparency which is imposed on the contracting authority consists in ensuring, for the benefit of any potential tenderer, a degree of advertising sufficient to enable the services market to be opened up to competition and the impartiality of procurement procedures to be reviewed.
63 It is for the national court to rule on the question whether that obligation was complied with in the case in the main proceedings and also to assess the materiality of the evidence produced to that effect."
ECJ, judgement SAG ELV Slovensko and Others (C-599/10) 29 March 2012
"25. With regard to Article 2 of Directive 2004/18, it must be borne in mind that the principal objectives of the European Union rules in the field of public procurement include that of ensuring the free movement of services and the opening-up to undistorted competition in all the Member States. In order to pursue that twofold objective, European Union law applies, inter alia, the principle of equal treatment of tenderers and the obligation of transparency resulting therefrom [...]. The obligation of transparency, for its part, is essentially intended to preclude any risk of favouritism or arbitrariness on the part of the contracting authority [...]. As regards the award of contracts, Article 2 of Directive 2004/18 requires contracting authorities to comply with the same principles and obligations."
ECJ, judgement ANAS (C-545/21) 8 June 2023
"31. The role of the European Union is therefore to finance, through its funds, only actions conducted in complete conformity, inter alia, with the principles and rules on the award of public contracts [...], in particular the principle of equal treatment of tenderers and the principle of transparency, guaranteed in Article 2 of Directive 2004/18.
32. The principle of equal treatment of tenderers requires economic operators interested in a public contract to be afforded equality of opportunity when formulating their tenders, to be made aware of the exact constraints of the procedure and to be in fact assured that all tenderers are subject to the same conditions [...]. Furthermore, tenderers must be in a position of equality both when they formulate their tenders and when those tenders are being assessed by the contracting authority
33. The principle of transparency is essentially intended to preclude any risk of favouritism or arbitrariness on the part of the contracting authority [...]..
See, furthermore,
- the compilation of 'legal principles' underlying the EU public procurment regulation by C. H. Bovis. 'Public Procurement Regulation' in H. C. H. Hofmann, G. C. Rowe and A. H. Türk (eds.), Specialized Administrative Law of the European Union, pp. 476 - 508 (pp. 483 ff.)
- Commission interpretative Communication (2006/C 179/02) on the Community law applicable to contract awards not or not fully subject to the provisions of the Public Procurement Directives: It formulates 'basic standards' on advertising, the contract award and judicial protection for contracts 'beyond' the procurement directives. This communcation has been considered not to contain "for the award of public contracts which go beyond the obligations under Community law as it currently stands" by the General Court, judgement Germany v. Commission (T-258/06) 20 March 2010, para. 60 ff.
- the Chapter on 'Competitive award procedures' in Book IV (Article IV-9 - IV- 19) of the ReNEUAL Model Rules on EU Administrative Procedure which builds on the aforementioned Commission Communication (2006/C 179/02).
b) Transparency principle and awarding gambling licences
ECJ, judgement Commission v. Italy (C-260/04) 13 September 2007:
"20. As the Commission rightly observed, the Italian Government has not denied, either during the pre-litigation procedure or in the course of these proceedings, that the award of licences for horse-race betting operations in Italy constitutes a public service concession. That classification was accepted by the Court in Placanica and Others (C‑338/04, C‑359/04 and C‑360/04 [2007] ECR I-0000), in which it interprets Articles 43 and 49 EC in relation to the same national legislation.
21. It is common ground that public service concessions are excluded from the scope of Directive 92/50 [...].
22. The Court has held that, notwithstanding the fact that public service concession contracts are, as Community law stands at present, excluded from the scope of Directive 92/50, the public authorities concluding them are, none the less, bound to comply with the fundamental rules of the EC Treaty, in general, and the principle of non-discrimination on the grounds of nationality, in particular [...].
23.The Court then stated that the provisions of the Treaty applying to public service concessions, in particular Articles 43 and 49 EC, and the prohibition of discrimination on grounds of nationality are specific expressions of the principle of equal treatment [...].
24. In that regard, the principles of equal treatment and non-discrimination on grounds of nationality imply, in particular, a duty of transparency which enables the concession-granting public authority to ensure that those principles are complied with. That obligation of transparency which is imposed on the public authority consists in ensuring, for the benefit of any potential tenderer, a degree of advertising sufficient to enable the service concession to be opened up to competition and the impartiality of procurement procedures to be reviewed [...].
25. In the present case, it must be observed that the complete failure to invite competing bids for the purposes of granting licences for horse-race betting operations does not accord with Articles 43 and 49 EC, and, in particular, infringes the general principle of transparency and the obligation to ensure a sufficient degree of advertising. The renewal of the 329 old licences without a call for tenders precludes the opening up to competition of the licences and review of the impartiality of the procurement procedures."
c) Transparency principle and privatisation procedures
ECJ, judgement Club Hotel Loutraki and Others (C-145/08 and C-149/08) 6 May 2010
"59. The transfer of shares to a tenderer in the context of a privatisation of a public undertaking does not fall within the scope of the directives on public contracts.
60. Moreover, that is rightly pointed out in point 66 of the Green Paper on public-private partnerships and Community law on public contracts and concessions (COM(2004) 327 final).
61. In point 69 of its abovementioned Green Paper on public-private partnerships, the Commission points out that it is necessary to ensure that such a capital transaction does not in reality conceal the award to a private partner of contracts which might be termed public contracts or concessions. Nevertheless, in the present case, there is nothing in the documents to cast doubt on the nature of the transaction at issue in the main proceedings, as categorised by the national court.
62. Having regard to the foregoing considerations, the conclusion must be that a mixed contract of which the main object is the acquisition by an undertaking of 49% of the capital of a public undertaking and the ancillary object, indivisibly linked with that main object, is the supply of services and the performance of works does not, as a whole, fall within the scope of the directives on public contracts.
63. That conclusion does not preclude the fact that such a contract must observe the basic rules and general principles of the Treaty, in particular those on the freedom of establishment and the free movement of capital. However, there is no reason in the present case to consider the question of observance of those rules and principles, given that the result of such an examination could in no way lead to a finding that Directive 89/665 applies."