by Sue Arrowsmith - Public Procurement Network

Professor Sue Arrowsmith,
Achilles Professor of Public Procurement Law and Policy,
University of Nottingham
www.nottingham.ac.uk/law/pprg

Summary
• Litigation is a problem
• Two-pronged approach needed:
• Simplification of the legal rules
• A different approach to enforcement
• Supplier remedies limited to cases where there is negligence
and a likely impact on the decision
• Alternative national enforcement methods?

The functions of supplier remedies
• Deter violations
• Correct violations
• Interpretation
• In national courts
• Through CJEU

Why legal remedies for suppliers?
• Legal remedies for suppliers can:
• Give suppliers confidence and control
• Encourage supplier participation
• Encourage focus on important areas

The problems of litigation
• Disruption to procurement
• Financial costs for contracting authorities
• Problems for other suppliers in the award procedure –
including the winning supplier
• Can deter participation by good suppliers

The problems of litigation
• Settlement of complaints by promises of future contracts
• “Over-compliance”:
• purchasers are concerned more with complying with technical rules
than value for money, and make the procedure unnecessarily
bureaucratic
• affects value for money and efficiency of the procedure, and
attraction of working in public procurement

A better balance between costs and
benefits of supplier litigation?
• Simplification of the legal rules
• Reform of the supplier remedies system and focus on
alternative approaches
• Would:
• Reduce many of the problems mentioned
• Preserve most of the benefits of supplier enforcement
• Enhance enforcement in some respects

Simplification of the legal rules
• Law is too difficult to apply and litigation excessive
because of:
• Complexity of material
• Volume of material
• Low quality of legislation (poor drafting, inconsistency between
regimes etc)
• Low quality and unpredictable nature of CJEU decisions
• Uncertainty (because of above and because some issues not dealt
with)
• This fact underlies the rule that cannot deny damages
because there were other errors in the award
procedure that would require a re-tender

Simplification of the legal rules
• More detailed rules will not solve these problems
• Volume and complexity of material is increased
• Some uncertainty removed - but more created and new issues
emerge

Simplification of the legal rules
• Single directive to apply to all covered entities and
activities, including concessions
• Should replace:
• Public Sector Directive 2004/18
• Utilities Directive 2004/17
• Defence and Security Directive 2009/81
• The proposed directive on concessions

Simplification of the legal rules
• Should be based on Utilities Directive 2004/17
• Should be some amendments e.g.:
• Need to clarify can consider whole life cycle, including production impacts
(in Commission proposal)
• Deal with “Lianakis” issue (in Commission proposal)
• Exception for framework agreements (hybrid between Directive 2004/17 and
Directive 2004/18?)
• Electronic auction rules need amending to allow negotiation after tenders,
to align with general rules
• Make the “dynamic” purchasing system into a truly dynamic one by
removing the notice and tender for individual purchases
• Will also give flexibility:
• Free use of the negotiated procedure with a call for competition
• Use of mandatory qualification systems
• Use of qualification systems and PINs to advertise
• No defined list of evidence that can be required for suppliers

Simplification of the legal rules
• Simplification
• One set of rules instead of 4 and some bits
• No need to define boundaries between regimes (should have
same thresholds for all “regimes”)
• No difficulty in fitting together
• Less to know for those working with more than one regime
• Less detail than most of the current rules

Simplification of the legal rules
• See further: S. Arrowsmith “Modernising the EU’s
Public Procurement Regime: a Blueprint for Real
Simplicity and Flexibility” (2012) 21 P.P.L.R. 71-82
• Text available at www.nottingham/ac/uk/law/pprg
(publications)

Supplier remedies: a different approach
• Remedies should be required under EU law only when:
• Manifest error of fact or commercial judgment or
application of the law (negligence)
• E.g remedy for not advertising a contract only when it is clear
the law required an advertisement
• Currently cannot require fault: Case C-314/09, Stadt Graz v
Strabag
• Burden of showing manifest error/negligence should be
on the supplier?

Supplier remedies: a different approach
• Remedy should not be required when the breach is not
likely to have had an impact on the position of the
supplier
• Burden should be on contracting authority to show
impact not likely?

How would these changes to remedies affect the
functions of the supplier remedy system?
• Deterrence
• Would still deter most breaches – but would reduce excessive
caution
• E.g. production criteria as accepted in Case C-368/10, Commission v
Netherlands (Fair Trade case)
• Correction of breaches
• Would limit this function but only in a few cases
• Interpretation
• Would reduce interpretation function
• May need other approaches to this to replace national-level
supplier litigation e.g. national advisory body (Commission
could still bring CJEU proceedings)

How would these changes to remedies affect the
functions of the supplier remedy system?
• Would not significantly affect supplier confidence in
the system

A role for attestation?
• Attestation = independent accreditation that a procuring
entity follows the EU procurement rules in its policies and
practices
• Formerly an option for utilities under the Utilities Remedies
Directive
• Could be an additional enforcement system to supplier
remedies, that would make limited supplier remedies more
acceptable
• Could be:
• Mandatory for all regulated entities alongside reduced
supplier remedies or
• Option for regulated entities/Member States that would
entail more limited supplier remedies regime