EU procurement rules possibly exclude Microsoft, Visa, Danone, Interbrew, BASF, Dresdner Bank AG, Siemens AG and others?

Posted by Abdelkrim
April 15, 2008

Plenty of bidders to public procurement have been guilty of serious misconduct and have been convicted to pay very high fines. Banks, telecommunications providers, retail electronic payments network, Oil and gas, Electricity gears, software vendors are the types of companies that should be excluded of procurement procedures if we follow strictly the European directive related to Financial rules to be addressed during a procurement process.

I document, based on this article “EU: Green MEP: ‘EU procurement rules possibly exclude Microsoft’” [2], the rules that each EU Member State as well as the European Commission and the European Agencies must follow while procuring.

I end my post with open questions to those public actors as the execution of such constraints could change drastically our daily life.

Council Regulation (EC, Euratom) No 1605/2002 of 25 June 2002 on the Financial Regulation applicable to the general budget of the European Communities[1] says this:

“Article 93

1. Candidates or tenderers shall be excluded from participation in a procurement procedure if:…
(b) they have been convicted of an offence concerning their professional conduct by a judgement which has the force of res judicata;
(c) they have been guilty of grave professional misconduct proven by any means which the contracting authority can justify;….”

But, if we continue the reading of the regulation we see that the article 95 says “Each institution shall establish a central database containing details of candidates and tenderers who are in one of the situations described in Articles 93 and 94 [3]. The sole purpose of the database shall be to ensure, in compliance with Community rules on the processing of personal data, the correct application of Articles 93 and 94. Each institution shall have access to the databases of the other institutions.”

I have some open questions:

  1. What is the content of the central databases containing details about companies? Where is it stored? Is it public or not?
  2. Are we sure that the lawyers review correctly the procurement rules before contracting?
  3. Are the European Commission, the EU governments and EU agencies negligent, careless or lax?
  4. Should we exclude the convinced companies from any procurement? If yes, for how much time?

Here is a non exhaustive list of companies having infringed the rules:

Telefónica charged record fine for price rigging (4 July 2007): http://www.euractiv.com/en/infosociety/telefonica-charged-record-fine-price-rigging/article-165243

Visa to appeal Commission’s €10m anti-trust fine (3 Oct. 2007): http://www.euractiv.com/en/financial-services/visa-appeal-commission-10m-anti-trust-fine/article-167353

Court confirms abatement of Belgian beer cartel [Danone and Interbrew] (8 Feb. 2007) : http://www.euractiv.com/en/competition/big-fines-vitamins-cartel/article-115485

Heavy fines for German bank [5] cartel: http://www.euractiv.com/en/competition/heavy-fines-german-bank-cartel/article-113823

EU cracks down on electricity-gear [6] cartel : http://www.euractiv.com/en/energy/eu-cracks-electricity-gear-cartel/article-161169

Cartes Bancaires flagged for anticompetitive behaviour: http://www.euractiv.com/en/financial-services/cartes-bancaires-flagged-anticompetitive-behaviour/article-167716

Maximum fines requested in Erika [Total] oil-slick trial: http://www.euractiv.com/en/transport/maximum-fines-requested-erika-oil-slick-trial/article-164264

New EU fine brings Microsoft bill to 1.7 billion: http://www.euractiv.com/en/infosociety/new-eu-fine-brings-microsoft-bill-17/article-170596

Notes / Links:

[1] Regulation of the Financial rules : http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:32002Q1605:EN:HTML

[2] “EU: Green Member of Parliament says ‘EU procurement rules possibly exclude Microsoft’ : http://ec.europa.eu/idabc/en/document/7567

[3] Article 94 of the Regulation on Financial rules

Contracts may not be awarded to candidates or tenderers who, during the procurement procedure:
(a) are subject to a conflict of interest;
(b) are guilty of misrepresentation in supplying the information required by the contracting authority as a condition of participation in the contract procedure or fail to supply this information.

[4] Fines were imposed on the following eight vitamins companies as follows:

[5] Following are the banks found guilty of infringing article 81 of the EC Treaty and the respective fines :

[6] Fines imposed to electricity-gear cartel:

Sources:
© European Communities 2008, “EU: Green MEP: ‘EU procurement rules possibly exclude Microsoft’ [2]“, 10 April 2008
© European Communities, European Commission press releases, 1995-2008, http://europa.eu/rapid/searchAction.do

European Commission

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