Tag Archives: Supplies contract

Public procurement in the fields of defence and security

Outline of the Community (European Union) legislation about Public procurement in the fields of defence and security

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Internal market > Businesses in the internal market > Public procurement

Public procurement in the fields of defence and security

Document or Iniciative

Directive 2009/81/EC of the European Parliament and of the Council of 13 July 2009 on the coordination of procedures for the award of certain works contracts, supply contracts and service contracts by contracting authorities or entities in the fields of defence and security, and amending Directives 2004/17/EC and 2004/18/EC (Text with EEA relevance). [See amending act(s)].

Summary

This Directive applies to public contracts in the fields of defence and security for:

the supply of military equipment;
the supply of sensitive equipment;
works, supplies and services directly related to military or sensitive equipment;
works and services for specifically military purposes or sensitive works and sensitive services.

Public procurement

Economic operators, whether they are natural or legal persons, can participate in invitations to tender in these fields. Groups of economic operators may also participate. If a contract is awarded to them, they may be required to assume a specific legal form.

Market thresholds and exclusions

This Directive shall apply to contracts which have a value excluding value-added tax (VAT) estimated to be no less than the following thresholds:

EUR 400,000 for supply and service contracts;
EUR 5,000,000 in the case of works contracts.

Exclusions

Certain specific contracts are excluded from the scope of this Directive, including:

contracts governed by specific procedural rules pursuant to an international agreement or arrangement between Member States and third countries and markets governed by the specific procedural rules of an international organisation purchasing for its purposes;
contracts for which the application of the rules of this Directive would oblige a Member State to supply certain information the disclosure of which it considers contrary to the essential interests of its security;
contracts awarded in the framework of a cooperation programme aimed at developing a new system;
contracts for the purposes of intelligence activities;
contracts awarded in a third country when forces are deployed outside the territory of the Union and transactions take place in the area of operations;
contracts relating to immovable property;
contracts awarded between governments.

Procedures

Contracting authorities/entities shall apply national procedures for the award of public contracts adjusted for the purposes of this Directive, by using the restricted procedure or the negotiated procedure with publication of a contract notice. An open procedure cannot be chosen.

Member States may use a competitive dialogue in the case of particularly complex contracts. In this case, contracting authorities/entities open a dialogue with the candidates selected in order to identify and define the means best suited to satisfying their needs.

There are also exceptional cases in which it is possible to use the negotiated procedure without publication of a contract notice.

The procedures are adjusted for the specific purposes of this Directive, in particular by proposing specific rules for the security of information, the security of supply and subcontracting.

The contracting authorities/entities may also conclude framework agreements, the duration of which may not exceed seven years. They must not, however, restrict competition.

Rules on advertising and transparency

Contracting authorities/entities may publish a prior information notice on their buyer profiles or on Tenders Electronic Daily (TED). They are obliged to publish a contract notice on TED with the sole exception of an exceptional negotiated procedure without publication of a contract notice.

In the case of restricted or negotiated procedures, contracting authorities/entities shall invite the selected candidates to submit their tenders and to negotiate. They shall also be invited to negotiate under the negotiated procedure. This invitation shall include contract documents, the deadline for receipt of tenders and an indication of any documents to be annexed.

For every contract or framework agreement, the contracting authorities/entities must draw up a written report describing the selection procedure chosen as well as information concerning the candidates.

Contract award criteria

Contracting authorities/entities shall award contracts on the basis of:

the most economically advantageous tender. Award shall then be based on various criteria linked to the subject-matter of the contract in question, such as quality, price or technical merit); or
the lowest price.

Subcontracting

Contracting authorities/entities may oblige the successful tenderer to organise a transparent and non-discriminatory competition when awarding subcontracts to third parties.

In addition, Member States may allow or require their contracting authorities/entities to ask that subcontracts representing at least a certain share of the value of the contract (a maximum of 30 %) be awarded to third parties following a transparent and non-discriminatory competition.

Review

A review of a decision taken by contracting authorities/entities may be sought in the event of an infringement of Community law. Member States must ensure that any operator that has suffered harm has access to effective and rapid rights to review. They may require that operators who wish to seek review either inform the contracting authority or first seek review from it.

During a review procedure, interim or final measures may be taken. In both cases, damages shall be granted to the persons concerned.

Context

The 2005 Green Paper on defence procurement highlighted the fact that it was essential to create a European market for defence equipment. This Directive should prove to be an appropriate legislative framework since it meets the specific requirements relating to goods and services in the fields of defence and security.

Reference

Act	Entry into force	Deadline for transposition in the Member States	Official Journal
Directive 2009/81/EC	21.8.2009	21.8.2011	OJ L216, 20.8.2009

Amending act(s)	Entry into force	Deadline for transposition in the Member States	Official Journal
Regulation (EC) No 1177/2009	1.1.2010	–	OJ L 314, 1.12.2009
Regulation (EU) No 1251/2011	2.12.2011	–	OJ L 319, 2.12.2011

Successive amendments and corrections to Directive 2009/81/EC have been incorporated into the original text. This consolidated version is for reference only.

Remedies mechanisms: water, energy, transport and postal services sectors

Outline of the Community (European Union) legislation about Remedies mechanisms: water, energy, transport and postal services sectors

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Internal market > Businesses in the internal market > Public procurement

Remedies mechanisms: water, energy, transport and postal services sectors

Document or Iniciative

Council Directive 92/13/EEC of 25 February 1992 coordinating the laws, regulations and administrative provisions relating to the application of Community rules on the procurement procedures of entities operating in the water, energy, transport and telecommunications sectors [See amending acts].

Summary

This Directive seeks to guarantee the effective application of the provisions of Directive 2004/17/EC coordinating the procurement procedures of entities operating in the water, energy, transport and postal services sectors.

The provisions of the Directive are based on three main elements:

adaptation to the water, energy, transport and postal services sectors (the so-called “special” sectors) of the redress mechanisms available under Directive 89/665/EEC concerning national remedies relating to public supply, works and service contracts awarded by the contracting authorities;
an attestation procedure;
a corrective mechanism to strengthen the lines of action open to the Commission in cases where a clear and manifest infringement has been committed.

In the case of certain redress mechanisms, the Directive empowers the Member States to choose between two options . They may take measures to permit:

either direct intervention in the procurement procedures to suspend those procedures and repeal any illegal decisions;
or the exercising of an indirect influence on contracting entities through the specific imposition of a financial penalty.

In both instances the aim is to ensure that any infringements of the law are corrected and that the relevant interests are protected. Independently of the option chosen, the Directive provides for the possibility of obtaining damages and interest.

Remedies

The Directive states that where a contract award infringes the procedures, any person who is harmed or is likely to suffer damage may apply for an effective review of the decision taken by the contracting entity. To this end, the following time limits are laid down:

at least 15 days (or 10 days if electronic means are used) between the award decision and the conclusion of the contract;
a maximum of 15 days (or 10 days if electronic means are used) between the decision by the contracting entity and the application for review (however, enforcement of this period remains at the discretion of the Member State);
30 days between the decision to award the contract and cancellation of this decision;
maximum of six months between conclusion of the contract and cancellation of the award decision.

Attestation

The contracting entity may award the contract without prior publication of a notice in the Official Journal of the European Union. However, it must publish its intention to award the contract.

The Advisory Committee for Public Contracts assists the Commission.

Corrective mechanism

Where the Commission feels that a clear and manifest infringement of the Community provisions has been committed in the course of the procurement procedure, it may ask the Member State to correct the infringement, referring to the review and the ineffectiveness of a contract before it is concluded.

References

Act	Entry into force	Deadline for transposition in the Member States	Official Journal
Directive 92/13/EEC	1.1.1993 30.6.1995 (Spain) 30.6.1997 (Greece and Portugal)	1.1.1993 30.6.1995 (Spain) 30.6.1997 (Greece and Portugal)	OJ L 76 of 23.03.1992

Amending Act(s)	Entry into force	Deadline for transposition in the Member States	Official Journal
Act concerning the conditions of accession of the Kingdom of Norway, the Republic of Austria, the Republic of Finland and the Kingdom of Sweden and the adjustments to the Treaties on which the European Union is founded	1.1.1995	–	OJ C 241 of 29.8.1994
Directive 2006/97/EC	20.11.2006	1.1.2007	OJ L 363 of 20.12.2006
Directive 2007/66/CE	9.1.2008	20.12.2009	OJ L 335 of 20.12.2007

Subsequent amendments and corrections to Directive 92/13/EEC have been incorporated into the basic text. This consolidated version is for reference only.

Related Acts

Council Directive 93/38/EEC of 14 June 1993 coordinating the procurement procedures of entities operating in the water, energy, transport and telecommunications sectors [OJ L 199, 9.8.1993].

Derivatives

Outline of the Community (European Union) legislation about Derivatives

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Internal market > Financial services: general framework

Derivatives

Document or Iniciative

Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee, the Committee of the Regions and the European Central Bank of 20 October 2009 – Ensuring efficient, safe and sound derivatives markets: Future policy actions [COM(2009) 563 final – Not published in the Official Journal].

Summary

This Communication defines ways to make more efficient, safer and sounder derivatives markets. The latter contributed substantially to the financial crisis due to their risky nature and the lack of transparency of the financial markets. The Commission therefore decided to adopt measures aimed at making derivatives more efficient, safer and sounder.

Role of derivatives

Derivatives enable economic agents to transfer the risks inherent in certain economic activities to other economic agents who are willing to bear those risks.

However, derivatives have unreliable aspects in that they allow leverage to increase and interconnect market participants. These aspects contributed towards the financial crisis of 2008.

Mitigating counterparty credit risk

The 2008 crisis showed that market participants did not price counterparty credit risk correctly. The latter may be managed bilaterally between the two counterparties or at central market level, by means of a central counterparty (CCP).

The Commission and the G20 have identified the CCP as the main tool to manage counterparty risks. CCPs are currently regulated at national level. For this reason, the Commission intends to propose a European framework for CCPs laying down standards in matters of security, regulation and operation.

The European CCP framework is to cover the different asset classes for which the CCPs provide services. These asset classes generally include cash equities, fixed income and derivatives.

However, not all derivatives are suitable for central clearing. As a result, the Commission intends to submit a proposal aimed at requiring financial firms to post initial margin specific to counterparty characteristics and variation margin depending on the change in the value of the contract.

The Commission also intends to subject non-centrally cleared contracts to higher capital requirements.

The Commission also intends to make it mandatory to clear standardised derivatives through CCPs.

Reducing operational risk

Operational risk includes legal risk and risk relating to losses resulting from inadequate or failed internal processes or from external events.

The Commission intends to take measures to reduce operational risk by facilitating the standardisation of contracts in terms of processing and standard legal terms.

Increasing transparency

Over-the-counter or OTC derivatives markets are characterised by a lack of transparency of prices, transactions and positions. This lack of transparency has hindered regulators from supervising the derivatives market.

It therefore appears necessary to report all transactions to trade repositories and to impose new reporting obligations on market participants. These bodies should be regulated and comply with a common legal framework. The Commission believes that the European Securities and Markets Authority (ESMA) should be responsible for supervising these bodies.

During the G20 at Pittsburgh in September 2009, it was agreed that all standardised OTC derivatives contracts should be traded on exchanges or electronic trading platforms.

At European level, these transactions should take place on organised markets. It appears necessary to increase transparency of trading on these markets.

Enhancing market integrity and oversight

The Commission intends to review the Market Abuse Directive in order to cover derivatives markets effectively

In addition, the Commission intends to propose rules to give regulators the possibility to counter concentrations of speculative positions and disproportionate price movements.

Context

In the light of the considerable development of derivatives on global markets, a robust and convergent international regulatory framework must be ensured. This Communication is in line with the objectives outlined in the G20 meeting of 25 September 2009 calling for the improvement of OTC derivatives markets.