Commission calls on Greece to amend procedure for awarding a supply contract

The European Commission has decided to request Greece to ensure full compliance with EU public procurement rules in relation to the award of a contract for submarine battery kits. The Commission is concerned that Greece has breached EU public procurement rules by including discriminatory requirements in the call for tenders, which would favour Greek products over similar products produced elsewhere in the EU. The Commission considered unjustified the Greek authorities’ claim that the discriminatory requirements were necessary on national security grounds. The aim of public procurement rules is to ensure fair and transparent competition for public contracts in Europe, thereby creating opportunities for European companies while ensuring best value for public money. This formal request takes the form of a reasoned opinion. If Greece does not reply satisfactorily within two months, the Commission may refer the matter to the European Court of Justice.

What is the aim of the EU rules in question?
Public procurement is about how public authorities spend public money. It covers works, services and supplies. Total public procurement in the EU is estimated at about 17% of the Union’s GDP. The open and transparent tendering procedures required under EU public procurement rules mean more competition, stronger safeguards against corruption and better service and value for money for taxpayers.

How is Greece not respecting these rules?
According to the European public procurement Directive 2004/18/EC, public contracts above certain values must be awarded on the basis of an EU-wide tender procedure. However, the Directive provides for an exemption from this obligation in cases where the contracting authority buys specific military material. A public tender would then put the essential security interests of the relevant Member State at risk.

In 2009, the Greek Ministry of Defence launched an open tendering procedure for the supply of six submarine battery kits with a total value of €22 million. The call for tenders included a requirement that 35% of the material used for the batteries should be produced in Greece. The Greek authorities justified this special requirement on the basis of national security interests, hence EU public procurement rules would not be applicable they claimed.

However, in line with EU law and jurisprudence of the EU Court of Justice, Member States cannot deviate from standard public procurement rules on a discretionary basis when procuring military equipment. In the Commission’s view, the Greek authorities are in breach of EU rules as they failed to provide a detailed and reasoned argumentation clearly evidencing that using the standard EU public procurement rules would endanger Greek security interests.

Moreover, the Commission considers the special requirement to be discriminatory as it favours companies that can offer materials produced in Greece.

How are EU citizens and/or businesses suffering as a result?
The discriminatory requirements in the call for tenders precluded interested companies that could not offer material produced in Greece from participating. By disrespecting the principle of equal treatment enshrined in the EU public procurement rules, the Greek authorities have distorted competition and may have wasted taxpayers’ money.

Source : European Commission

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