EN
ANNEX
Guidelines
for determining financial corrections to be made to expenditure financed by the Union
under shared management, for non-compliance with the rules on public procurement
1
link to page 3 link to page 3 link to page 3 link to page 3 link to page 4 link to page 4 link to page 5 link to page 5 link to page 5 link to page 5 link to page 5 link to page 5 link to page 7 link to page 7 link to page 8 link to page 8 link to page 8 link to page 8 link to page 14 link to page 14 link to page 17 link to page 17
Table of Contents
1. Introduction .................................................................................................................. 4
1.1.
Purpose and scope of the guidelines ............................................................................ 4
1.2.
Legal basis and reference documents........................................................................... 5
1.2.1.
Guidelines on financial corrections ............................................................................. 6
1.2.2.
Union law applicable to contract awards not (or not fully) subject to the Public
Procurement Directives................................................................................................ 6
1.3.
Criteria to consider when deciding which rate of correction to apply ......................... 7
2.
Main types of irregularities and corresponding rates of financial corrections ............. 9
2.1.
Contract notice and tender specifications..................................................................... 9
2.2.
Evaluation of tenders.................................................................................................. 15
2.3. Contract
implementation ............................................................................................ 18
2
1.
Introduction
1.1.
Purpose and scope of the guidelines
Guidelines for the financial corrections should be applied primarily in the case of irregularities
which constitute breaches of public procurement rules applicable to contracts financed from the
Union budget and subject to the shared management method. These public procurement rules are
laid out in the Directives on public procurement as specified in section 1.2 (hereinafter - the
‘Directives’) and in the relevant national law.
The rates of corrections provided in section 2 are also applicable to contracts not (or not fully)
subject to the Directivesi. The range of rates between 5% and 100% established in section 2 are
the same as the ones set out in the Commission Decision of 19 October 2011 on the approval of
guidelines on the principles, criteria and indicative scales to be applied in respect of financial
corrections made by the Commission under Articles 99 and 100 of Council Regulation (EC)
No 1083/20061 (hereafter – the "Decision on financial corrections"). For Articles 97 and 98 of
Council Regulation (EC) N°1198/2006 of 27 July 2006, the same range of rates of correction was
reproduced,
mutantis mutandis, in the "Guidelines on financial corrections principles, criteria and
indicative scales to be applied in respect of financial corrections made by the Commission under
Council Regulation (EC) No 1198/2006", applicable to the European Fisheries Fund (hereafter -
the "EFF guidelines"). For Article 44 of Council Decision 2007/435/EC of 25 June 2007, Article
46 of Decision No 573/2007/EC of the European Parliament and of the Council of 23 May 2007,
Article 48 of Decision No 574/2007/EC of the European Parliament and of the Council of 23 May
2007 and Article 46 of Decision No 575/2007/EC of the European Parliament and of the Council
of 23 May 2007, a similar approach was also applied with the Commission Decision C(2011)9771
of 22 December 2011 on the approval of guidelines on the principles, criteria and indicative scales
to be applied in respect of financial corrections made by the Commission under the four Funds of
the General Programme "Solidarity and Management of Migration Flows" (hereafter "the IF,
ERFIII, EBF and RF Decision on financial corrections").
These guidelines replace and update the previous guidelines on the same subject (see recital 5 of
this Decision). The updated guidelines reflect the experience drawn from the application of the
previous guidelines and intends to bring clarification on the level of corrections to be applied in
line with the principle of proportionality and taking into account the relevant case-law. The main
differences compared to previous guidance are: 1) clarification on the level of corrections to be
applied for some cases, introducing clearer criteria; 2) inclusion of further irregularities not
specified in previous guidance but corresponding to cases where irregularities were detected
during Union audits and for which financial corrections have been made; 3) harmonization of the
level of corrections covering contracts subject to Directives and to Treaty principles. Furthermore,
the scope of the guidelines has been widened as the new guidelines apply also to other expenditure
than that of the Structural Funds or the Cohesion Fund.
These guidelines should be applied when making financial corrections related to irregularities
detected after the date of their adoption. In relation to audit findings and financial corrections of
1 C(2011) 7321 final.
3
the Structural Funds, Cohesion Fund, EFF and the four Funds of the General Programme
"Solidarity and Management of Migration Flows" for which the contradictory procedure with the
Member State is on-going as at the date of adoption of these guidelines, the Commission will
apply the previous existing guidelines (mentioned in recital 5 of this Decision) or these guidelines,
ensuring that the rate of correction is the one more favourable to the Member State.
These guidelines also address the need to correct tender evaluations affected by conflicts of
interests in respect of which a specific type of irregularity is introduced in section 2 (see
irregularity n° 21).
These guidelines also contribute to address the European Parliament 2010 discharge
recommendation to harmonise the treatment of public procurement errors for the following policy
areas: Agriculture and Natural Resources, Cohesion, Energy and Transport and to promote an
increased harmonisation of the European Court of Auditors’ and the Commission’s quantification
of irregularities in public procurement. The Commission will invite the European Court of
Auditors to apply these guidelines in the context of their audit work, in order to address the above-
mentioned European Parliament's recommendation.
The types of irregularities described in section 2 are the most frequently found types of
irregularities. Other irregularities not indicated in that section should be dealt with in accordance
with the principle of proportionality and, where possible, by analogy to the types of irregularities
identified in these guidelines.
Where the Commission detects irregularities related to the non-compliance with public
procurement rules, it determines the amount of the financial correction applicable in accordance
with these guidelines. The amount of the financial correction is calculated in view of the
expenditure amount declared to the Commission and related to the contract (or part of it) affected
by the irregularity. The percentage of the suitable scale applies to the amount of the affected
expenditure declared to the Commission for the contract in question. The same correction rate
should be applied also to any future expenditure related to the same affected contract, before such
expenditure is certified to the Commission. Practical example: The amount of the expenditure
declared to the Commission for a works contract concluded after the application of illegal criteria
is EUR 10 000 000. If the applicable correction rate is 25%, the amount to be deducted from the
expenditure statement to the Commission is EUR 2 500 000. Accordingly, the Union financing is
reduced on the basis of the relevant financing rate. If afterwards the national authorities intend to
declare further expenditure concerning the same contract and affected by the same irregularity,
that expenditure should be subject to the same correction rate. In the end, the entire value of the
payments related to the contract are corrected on the basis of the same correction rate.
The Member States also detect irregularitiesii; in such event, they are required to make the
necessary corrections. The competent authorities in the Member States are recommended to apply
the same criteria and rates when correcting irregularities detected by their own services, unless
they apply stricter standards.
1.2.
Legal basis and reference documents
These guidelines take into account Article 80(4) of the Regulation (EU,EURATOM) No 966/2012
on the financial rules applicable to the general budget of the Union, sector-specific rules
applicable to the Union co-financing subject to the shared management method, the Directivesiii,
4
and the reference documents specified in sections 1.2.1 and 1.2.2, namely the Decision on
financial corrections, the EFF guidelines and the Commission interpretative communication
n° 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".
In section 2, reference is made to Directive 2004/17/EC of the European Parliament and of the
Council of 31 March 2004 coordinating the procurement procedures of entities operating in the
water, energy, transport and postal services sectors2 and Directive 2004/18/EC of the European
Parliament and of the Council of 31 March 2004 on the coordination of procedures for the award
of public works contracts, public supply contracts and public service contracts3. If a public
procurement procedure or contract is governed by a prior or subsequent Directive, the correction
will be made in line with section 2, where possible, or by analogy to the cases described in that
section. Furthermore, the various national public procurement provisions transposing the
mentioned Directives should also be considered as a reference when analysing the irregularities at
stake.
1.2.1. Guidelines on financial corrections
The Decision on financial corrections applies to the programming period 2007-2013iv and sets out
the general framework and the scales of flat-rate financial corrections applied by the Commission
under shared management method for the European Regional Development Fund, the European
Social Fund and the Cohesion Fund. The EFF guidelines also reflect the same approach set out in
the Decision on financial corrections. The present guidelines follow the same reasoning and scale
of corrections. The IF, ERFIII, EBF and RF Decision on financial corrections reflects this
approach in regard to the four Funds of the General Programme "Solidarity and Management of
Migration Flows". The document VI/5330/97 fixes the Guidelines for the calculation of financial
consequences when preparing the decision regarding the Clearance of the Accounts of EAGGF
Guarantee.
1.2.2. Union law applicable to contract awards not (or not fully) subject to the
Public Procurement Directives
As set out in Commission interpretative communication No 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 (hereinafter "the interpretative communication"), the Court of Justice of
the European Union has confirmed that "the rules and the principles of the EC Treaty apply also
to contracts that fall outside the scope of the Directives".
According to points 1.1 and 1.2 of the interpretative communication, contracting entities from
Member States have to comply with the rules and principles of the Treaty on the Functioning of
the European Union whenever they conclude public contracts falling into the scope of the Treaty.
These principles include the free movement of goods (Article 34 TFEU), the right of
establishment (Article 49 TFEU), the freedom to provide services (Article 56 TFEU), non-
discrimination and equal treatment, transparency, proportionality and mutual recognition.”
The Court of Justice
has developed a set of basic standards for the award of public contracts
which are derived directly from the rules and principles of the EC Treaty. The principles of equal
2 OJ L 134, 30.4.2004, p. 1–113.
3 OJ L 134, 30.4.2004, p. 114–240.
5
treatment and non-discrimination on grounds of nationality imply an obligation of transparency.
This obligation, according to the case-law of the Court of Justice
v, "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 the procedures to be reviewed".”
The concept of “sufficient degree of advertising” vi must be interpreted in the light of the
principles enshrined in the Treaty, as interpreted by the Court of Justice and summed up in the
interpretative communication.
In light of judgments of the Court of Justice in cases C-412/044, joined cases C-147/06 and C-
148/065, and C-507/036, within the context of an infringement procedure, when claiming non-
compliance with the rules and principles of the Treaty
“it is for the Commission to establish that”
- notwithstanding the fact that a contract is not (or not fully) subject to the provisions of the
Directives, the contract at stake
“was of certain interest to an undertaking located in a different
Member State to that of the relevant contracting authority, and
- that that undertaking was unable to express its interest in that contract because it did not have
access to adequate information before the contract was awarded”vii.
According to paragraph 34 of the judgment in Case C-507/03,
“a mere statement by [the
Commission] (…) that a complaint was made to it in relation to the contract in question is not
sufficient to establish that the contract was of certain cross-border interest and that there was
therefore a failure to fulfil obligations”.
In this context, when detecting cases of apparent non-respect of principles of transparency and
non-discrimination in contracts not (or not fully) subject to the provisions of the Directives, there
is a need to determine whether there are elements that would substantiate cross-border interest,
including the following:
- the subject-matter of the contract,
- its estimated value, the specifics of the sector concerned (size and structure of the market,
commercial practices, etc.),
- the geographic location of the place of performance,
- evidence of tenders from other Member States or expressed interest by companies from a
different Member State.
Regardless of the existence of a certain cross-border interestviii in relation to a given contract not
(or not fully) subject to the provisions of the Directives, there is a need to examine whether the
expenditure declared for that contract complies with the national rules on public procurement.
If cross-border interest exists or there is non-compliance with national legislation, the
Commission may propose the application of a financial correction based on the criteria
4
Commission v. Italy [2008] ECR I-619.
5
SECAP SpA and Santorso Soc. V. Comune di Torino [2008] ECR I-3565.
6
Commission v. Ireland [2007] ECR I-9777.
6
established below in section 1.3 and on the scales of corrections defined in section 2. When
assessing the cases of non-compliance with national public procurement law the Commission
shall take into consideration the national interpretative rules by the competent national authorities.
1.3.
Criteria to consider when deciding which rate of correction to apply
These guidelines set out a range of corrections of 5%, 10%, 25% and 100% that are applied to the
expenditure of a contract. They take into account the seriousness of the irregularity and the
principle of proportionality. These rates of corrections are applied when it is not possible to
quantify precisely the financial implications for the contract in question.
The seriousness of an irregularity related to non-compliance with the rules on public procurement
and the related financial impact to the Union budget is assessed taking into account the following
factors: level of competition, transparency and equal treatment. When the non-compliance at stake
has a deterrent effect to potential tenderers or when the non-compliance leads to the award of a
contract to a tender other than the one that should have been awarded, this is a strong indicator
that the irregularity is serious.
When the irregularity is only of a formal nature without any actual or potential financial impact,
no correction will be made.
Where a number of irregularities are detected in the same tender procedure, the rates of correction
are not cumulated, the most serious irregularity being taken as an indication to decide the rate of
correction (5 %, 10%, 25% or 100%).
After a correction of a certain type of irregularities has been implemented and the Member State
does not take the appropriate corrective measures in regard to other tender procedures affected by
the same type of irregularities, the rates of financial corrections may be increased to a higher level
of correction (i.e. 10%, 25% or 100%).
A financial correction of 100% may be applied in the most serious cases when the irregularity
favours certain tenderer(s)/ candidate(s) or where the irregularity relates to fraud, as established
by a competent judicial or administrative body.
7
2.
MAIN TYPES OF IRREGULARITIES AND CORRESPONDING RATES OF FINANCIAL CORRECTIONS
2.1.
Contract notice and tender specifications
No Type of irregularity
Applicable law / reference Description of the irregularity
Rate of correction
document
1.
Lack of publication of contract Articles 35 and 58 of The contract notice was not 100%
notice.
Directive 2004/18/EC
published in accordance with the
relevant rules (e.g. publication in the 25% if publication of a contract
Article 42 of Directive
Official Journal of the European notice(s) is required by the Directives
2004/17/EC
Union (OJEU) where this is required and the contract notice(s) was(not
by the Directivesix).
published in the OJEU but it was
Section 2.1 of the Commission
published in a way that ensures that
interpretative communication
an undertaking located in another
n° 2006/C 179/02
Member State has access to
appropriate information regarding the
public procurement before it is
awarded, so that it would be in a
position to submit a tender or express
its interest to participate in obtaining
that contract. In practice, this means
that either the contract notice was
published at national level (following
the national legislation or rules in that
regard) or the basic standards for the
publication of contract notice was
respected. For more details on these
standards, see section 2.1 of the
Commission interpretative
8
No Type of irregularity
Applicable law / reference Description of the irregularity
Rate of correction
document
communication n° 2006/C 179/02.
2.
Artificial splitting of
Article 9(3) of Directive
A works project or proposed 100%
works/services/supplies
2004/18/EC
purchase of a certain quantity of
contracts.
supplies and/or services is
25% if publication of a contract
Article 17(2) of Directive subdivided resulting in its coming notice is required by the Directives
2004/17/EC
outside the scope of the Directives, and the contract notice was not
i.e., preventing its publication in published in the OJEU but it was
OJEU for the whole set of works, published in a way that ensures that
services or supplies at stake.
an undertaking located in another
Member State has access to
appropriate information regarding the
public procurement before it is
awarded, so that it would be in a
position to submit a tender or express
its interest to participate in obtaining
that contract. In practice, this means
that either the contract notice was
published at national level (following
the national legislation or rules in that
regard) or the basic standards for the
publication of contract notice was
respected. For more details on these
standards, see section 2.1 of the
Commission interpretative
communication n° 2006/C 179/02.
9
No Type of irregularity
Applicable law / reference Description of the irregularity
Rate of correction
document
3. Non-compliance
with
Article 38 of Directive
The time limits for receipt of tenders 25% if reduction in time limits >=
2004/18/EC
(or receipt of requests to participate) 50%
- time limits for receipt of
were lower than the time limits in the
tenders;
Article 45 of Directive
Directives.
10% if reduction in time limits >=
2004/17/EC
30%
or
5% if any other reduction in time
- time limits for receipt of
limits (this correction rate may be
requests to participatex.
reduced to between 2% and 5%,
where the nature and gravity of the
deficiency is not considered to justify
a 5% correction rate).
4. Insufficient time for potential Article 39(1) of Directive Time for potential
25% if the time that potential
tenderers/candidates to obtain 2004/18/EC
tenderers/candidates to obtain tender tenderers/candidates have to obtain
tender documentation
documentation is too short, thus tender documentation is less than
Article 46(1) of Directive creating an unjustified obstacle to the 50% of time limits for receipt of
2004/17/EC
opening up of public procurement to tenders (in line with relevant
competition.
provisions).
Corrections are applied on a case by 10% if the time that potential
case basis. In determining the level tenderers/candidates have to obtain
of the correction, account will be tender documentation is less than
taken of possible mitigating factors 60% of time limits for receipt of
related to the specificity and tenders (in line with relevant
complexity of the contract, in provisions).
particular a possible administrative
burden or difficulties in providing 5% if the time that potential
10
No Type of irregularity
Applicable law / reference Description of the irregularity
Rate of correction
document
the tender documentation.
tenderers/candidates have to obtain
tender documentation is less than
80% of time limits for receipt of
tenders (in line with relevant
provisions).
5.
Lack of publication of
Article 2 and Article 38(7) of The time limits for receipt of tenders 10%
Directive 2004/18/EC
(or receipt of requests to participate)
- extended time limits for
were extended without publication in The correction can be decreased to
receipt of tenders;
Articles 10 and 45(9) of accordance with the relevant rules 5% depending on the seriousness of
Directive 2004/17/EC
(i.e., publication in the OJEU if the the irregularity.
or
public procurement is covered by the
Directives).
- extended time limits for
receipt of requests to
participatexi.
6.
Cases not justifying the use of Article 30(1) of Directive
Contracting authority awards a 25%
the negotiated procedure with 2004/18/EC
public contract by negotiated
prior publication of a contract
procedure, after publication of a The correction can be reduced to 10%
notice.
contract notice, but such procedure is or 5% depending on the seriousness
not justified by the relevant of the irregularity.
provisions.
7.
For the award of contracts in the Directive 2009/81/EC
100%.
Contracting authority awards a
field of defence and security
public contract in the area of defence
falling under directive
The correction can be decreased to
and security by means of a
2009/81/EC specifically,
25%, 10% or 5% depending on the
competitive dialogue or negotiated
11
No Type of irregularity
Applicable law / reference Description of the irregularity
Rate of correction
document
inadequate justification for the
procedure without publication of a seriousness of the irregularity.
lack of publication of a contract
contract notice whereas the
notice
circumstances do not justify the use
of such a procedure.
8.
Failure to state:
Articles 36, 44, 45 to 50 and The contract notice does not set out 25%
53 of Directive 2004/18/EC the selection criteria.
- the selection criteria in the and Annexes VII-A (public
The correction can be decreased to
contract notice;
contract notices: points 17 and And/or
10% or 5% if the selection/award
23) and VII-B (public works
criteria were stated in the contract
and/or
concessions notices: point 5) When neither the contract notice nor notice (or in the tender specifications,
thereof.
the tender specifications describe in as regards award criteria) but with
- the award criteria (and their
sufficient detail the award criteria as insufficient detail.
weighting) in the contract notice Articles 42, 54 and 55 and well as their weighting.
or in the tender specifications.
Annex XIII of Directive
2004/17/EC
9.
Unlawful and/or discriminatory Articles 45 to 50 and 53 of Cases in which operators have been 25%
selection and/or award criteria Directive 2004/18/EC
deterred from bidding because of
laid down in the contract notice
unlawful selection and/or award The correction can be decreased to
or tender documents
Articles 54 and 55 of Directive criteria laid down in the contract 10% or 5% depending on the
2004/17/EC
notice or tender documents. For seriousness of the irregularity.
example:
- obligation to already have an
establishment or representative in the
country or region;
12
No Type of irregularity
Applicable law / reference Description of the irregularity
Rate of correction
document
- tenderers’ possession of experience
in the country or region.
10. Selection criteria not related and Article 44 (2) of Directive When it can be demonstrated that the 25%
proportionate to the subject- 2004/18/EC
minimum capacity levels of ability
matter of the contract
for a specific contract are not related The correction can be decreased to
Article 54(2) of Directive
and proportionate to the subject- 10% or 5% depending on the
2004/17/EC
matter of the contract, thus not seriousness of the irregularity.
ensuring equal access for tenderers
or having the effect of creating
unjustified obstacles to the opening
up of public procurement to
competition.
11. Discriminatory
technical Article 23(2) of Directive
Setting technical standards that are 25%
specifications
2004/18/EC
too specific, thus not ensuring equal
access for tenderers or having the The correction can be decreased to
Article 34(2) of Directive
effect of creating unjustified
10% or 5% depending on the
2004/17/EC
obstacles to the opening up of public seriousness of the irregularity.
procurement to competition.
12. Insufficient definition of the Article 2 of Directive
The description in the contract notice 10%
subject-matter of the contract
2004/18/EC
and/or the tender specifications is
insufficient for potential
The correction can be decreased to
Article 10 of Directive
tenderers/candidates to determine the 5% depending on the seriousness of
2004/17/EC
subject-matter of the contract.
the irregularity.
13
No Type of irregularity
Applicable law / reference Description of the irregularity
Rate of correction
document
Cases C-340/02
In case the implemented works were
(Commission/France) and C-
not published, the corresponding
299/08 (Commission/France)
amount is subject to a correction of
100%
2.2.
Evaluation of tenders
No Type of irregularity
Legal basis / Description of irregularity
Rate of correction
reference
document
13. Modification of selection criteria after Article 2 and The selection criteria were modified during the selection 25%
opening of tenders, resulting in Article 44 (1) of phase, resulting in acceptance of tenderers that should not
incorrect acceptance of tenderers.
Directive
have been accepted if the published selection criteria had The correction can be
2004/18/EC
been followed.
decreased to 10% or
5% depending on the
Article 10 and
seriousness of the
Article 54(2) of
irregularity.
Directive
2004/17/EC
14. Modification of selection criteria after Articles 2 and 44 The selection criteria were modified during the selection 25%
opening of tenders, resulting in (1) of Directive phase, resulting in rejection of tenderers that should have The correction can be
incorrect rejection of tenderers
2004/18/EC
been accepted if the published selection criteria had been decreased to 10% or
followed.
5% depending on the
Articles 10 and
seriousness of the
54(2) of
irregularity.
14
No Type of irregularity
Legal basis / Description of irregularity
Rate of correction
reference
document
Directive
2004/17/EC
15. Evaluation of tenderers/candidates Article 53 of During the evaluation of tenderers/candidates, the selection 25%
using unlawful selection or award Directive
criteria were used as award criteria, or the award criteria (or
criteria
2004/18/EC
respective sub-criteria or weightings) stated in the contract The correction can be
notice or tender specifications were not followed, resulting decreased to 10% or
Article 55 of in the application of unlawful selection or award criteria.
5% depending on the
Directive
seriousness of the
2004/17/EC
Example: Sub-criteria used for the award of the contract are irregularity.
not related to the award criteria in the contract notice/tender
specifications.
16. Lack of transparency and/or equal Articles 2 and 43 The audit trail concerning in particular the scoring given to 25%
treatment during evaluation
of Directive
each bid is unclear/unjustified/lacks transparency or is non-
2004/18/EC
existent.
The correction can be
reduced to 10% or 5%
And/or
Articles 10 of
depending on the
Directive
The evaluation report does not exist or does not contain all seriousness of the
2004/17/EC
the elements required by the relevant provisions.
irregularity.
17. Modification of a tender during Article 2 of
The contracting authority allows a tenderer/candidate to 25%
evaluation
Directive
modify its tender during evaluation of offers
2004/18/EC
The correction can be
reduced to 10% or 5%
Article 10 of
depending on the
Directive
seriousness of the
15
No Type of irregularity
Legal basis / Description of irregularity
Rate of correction
reference
document
2004/17/EC irregularity.
18.
Negotiation during the award
Article 2 of
In the context of an open or restricted procedure, the 25%
procedure
Directive
contracting authority negotiates with the bidders during the
2004/18/EC
evaluation stage, leading to a substantial modification of The correction can be
the initial conditions set out in the contract notice or tender reduced to 10% or 5%
Article 10 of specifications.
depending on the
Directive
seriousness of the
2004/17/EC
irregularity.
19. Negotiated procedure with prior Article 30 of In the context of a negotiation procedure with prior 25%
publication of a contract notice with Directive
publication of a contract notice, the initial conditions of the
substantial modification of the
2004/18/EC
contract were substantially altered, thus justifying the The correction can be
conditions set out in the contract notice
publication of a new tender.
reduced to 10% or 5%
or tender specificationsxii
depending on the
seriousness of the
irregularity.
20. Rejection of abnormally low
tenders Article 55 of Tenders appear to be abnormally low in relation to the 25%
Directive
goods, works or services but the contracting authority,
2004/18/EC
before rejecting those tenders, does not request in writing
details of the constituent elements of the tender which it
16
No Type of irregularity
Legal basis / Description of irregularity
Rate of correction
reference
document
Article 57 of considers relevant.
Directive
2004/17/EC
21. Conflict of interest
Article
2
of When a conflict of interest has been established by a 100%
Directive
competent judicial or administrative body, either from the
2004/18/EC
part of the beneficiary of the contribution paid by the Union
or the contracting authority.
Article 10 of
Directive
2004/17/EC
2.3.
Contract implementation
No Type of irregularity
Legal
basis
/ Description of irregularity
Rate of correction
reference
document
22. Substantial modification of the Article 2 of
The essential elements of the award of the 25% of the amount of the contract
contract elements set out in the Directive
contract include but are not limited to
contract notice or tender
2004/18/EC
pricexiv, nature of the works, the plus
specificationsxiii
completion period, the terms of payment,
Article 10 of
and the materials used. It is always the value of the additional amount of the
Directive
necessary to make an analysis on a case- contract resulting from the substantial
2004/17/EC Case by-case basis of what is an essential
17
No Type of irregularity
Legal
basis
/ Description of irregularity
Rate of correction
reference
document
law:
element.
modification of the contract elements.
Case C-496/99 P,
CAS Succhi di
Frutta SpA,
[2004] ECR I-
3801 paragraphs
116 and 118
Case C-340/02,
Commission v.
France [2004]
ECR I- 9845
Case C-91/08,
Wall
AG, [2010]
ECR I- 2815
23. Reduction in the scope of the
Article 2 of
The contract was awarded in compliance Value of the reduction in the scope
contract
Directive
with the Directives, but was followed by a
2004/18/EC
reduction in the scope of the contract.
Plus
Article 10 of
25% of the value of the final scope (only
Directive
when the reduction in the scope of the
2004/17/EC
contract is substantial).
18
No Type of irregularity
Legal
basis
/ Description of irregularity
Rate of correction
reference
document
24.
Award of additional
Point 1(c) and The main contract was awarded in 100% of the value of the supplementary
works/services/supplies contracts
point 4(a) of
accordance with the relevant provisions, contracts.
(if such award constitutes a Article 31 of
but was followed by one or more
substantial modification of the Directive
additional works/services/supplies
Where the total of additional
original terms of the contract xv) 2004/18/EC
contracts (whether or not formalised in works/services/supplies contracts
without competition in the absence
writing) awarded without complying with (whether or not formalised in writing)
of one of the following conditions
the provisions of the Directives, i.e., the awarded without complying with the
provisions related to the negotiated provisions of the Directives does not
- extreme urgency brought about by
procedures without publication for reasons exceed the thresholds of the Directives
unforeseeable events;
of extreme urgency brought about by and 50% of the value of the original
unforeseeable events or for award of contract, the correction may be reduced
- an unforeseen circumstancexvi for
complementary supplies, works and to 25%.
complementary works, services,
services.
supplies.
25. Additional works or services Last subparagraph The main contract was awarded in 100% of the amount exceeding 50% of
exceeding the limit laid down in the of §4(a) of Article accordance with the provisions of the the value of the original contract
relevant provisions
31 of Directive Directives, but was followed by one or
2004/18/EC
more supplementary contracts exceeding
the value of the original contract by more
than 50%xvii.
19
ENDNOTES:
i Public contracts below the thresholds for application of the Directives and public contracts for services listed in Annex I B to Directive 92/50/EEC, Annex XVI B to Directive
93/38/EEC, Annex II B to Directive 2004/18/EC and Annex XVII B to Directive 2004/17/EC.
ii In the context of the Structural Funds and Cohesion Fund, the following is noted.
The
“Guidance document on management verifications to be carried out by Member States on operations co-financed by the Structural Funds and the Cohesion Fund for
the 2007 – 2013 programming period” (COCOF note 08/0020/04 of 5 June 2008), sets out the Commission’s view on how the management verifications should be
organised in order to prevent and detect irregularities in the area of public procurement. As stated in this document,
“verifications should be carried out as soon as possible
after the particular process has occurred as it is often difficult to take corrective action at a later date”.
The Member State has the obligation to ensure that operations are selected for funding in accordance with applicable EU and national rules (Articles 60(a)-(b) and 61(b)ii of
Council Regulation (EC) No 1083/2006), including those related to public procurement:
a) When the national ex-ante control detects that the tender procedure used for a public contract is in breach of public procurement rules and this
contract has not been
signed yet, the managing authority should recommend the beneficiary to launch a new tender procedure in full compliance with the mentioned rules if the launching of a
new tender does not entail significant additional costs. In case no new tender is launched, the managing authority shall correct the irregularity, by applying these guidelines
or stricter rules defined at national level.
b) If an irregularity is detected
after the contract has been signed and the operation has been approved for funding (at any stage of the project's cycle), the managing
authority shall correct the irregularity, by applying these guidelines or stricter rules defined at national level.
iii Depending on the date when the contract procedure was launched, the following Directives are relevant: 86/665/EEC, 92/50/EEC, 93/36/EEC, 93/37/EEC, 93/38/EEC, 92/13/EEC,
2001/78/EC, 2004/17/EC, 2004/18/EC. This is only an indicative list.
iv For the period 2000-2006, the “Guidelines on the principles, criteria and indicative scales to be applied by the Commission departments in determining financial corrections under
Article 39(3) of Regulation (EC) No 1260/1999” were adopted by Commission Decision C/2001/476. A similar document was adopted for the Cohesion Fund (see Commission
Decision C/2002/2871).
v Cases C-324/98
Telaustria [2000] ECR I-10745, paragraph 62, C-231/03
Coname, [2005] ECR I-7287, paragraphs 16 to 19 and C-458/03
Parking Brixen, [2005] ECR I-8585,
paragraph 49.
vi The concept of “sufficient degree of advertising” implies, in particular, the following considerations:
a) The principles of equal treatment and non-discrimination imply an
obligation of transparency, which consists in ensuring, for the benefit of any potential bidder,
a
degree of advertising sufficient to enable the contract to be subject to competition. The obligation of transparency requires that an
undertaking located in another
20
Member State can have access to appropriate information regarding the contract before it is awarded, so that, if it so wishes, it would be
in a position to express its
interest in obtaining the contract.
b) For individual cases where, because of particular circumstances such as a very modest economic interest at stake, a contract award would be of no interest to economic
operators located in other Member States. In such a case the effects on the fundamental freedoms are to be regarded as too uncertain and indirect to warrant the application
of standards derived from primary Community law and consequently there is no ground for application of financial corrections.
It is the responsibility of the individual contracting entities to decide whether an intended contract award might potentially be of interest to economic operators located in
other Member States. In the view of the Commission, this decision has to be based on an evaluation of the individual circumstances of the case, such as the subject-matter of
the contract, its estimated value, the specifics of the sector concerned (size and structure of the market, commercial practices, etc.) and the geographic location of the place
of performance.
vii See the judgment in Case C-507/03,
Commission v. Ireland, [2007] ECR I-9777, paragraph 32.
viii Case T-384/10, Spain/Commission (GIASA), OJ C 225, 3.8.2013, p. 63–63.
ix For contracts not (or not fully) subject to the Directives, there is a need to determine the existence of a certain cross-border interest or a breach of national legislation on public
procurement. On this matter, see section 1.2.2 of the present guidelines. If there is cross-border interest or a breach of national law, there is a need to determine what level of
publicity should have been applied in that case. In this context, as stated in section 2.1.1 of the Commission interpretative communication n° 2006/C 179/02, the obligation of
transparency requires that an undertaking located in another Member State has access to appropriate information regarding the contract before it is awarded, so that, if it so
wishes, it would be in a position to submit a tender or to express its interest in obtaining that contract. In practice, this implies that either the contract notice was published at
national level (following the national legislation or rules in that regard) or the basic standards for the advertising of contracts were respected. See more details on these standards
on section 2.1 of the mentioned Commission interpretative communication.
x These time limits are applicable to restricted procedures and negotiated procedures with publication of a contract notice.
xi These time limits are applicable to restricted procedures and negotiated procedures with publication of a contract notice.
xii A limited degree of flexibility can be applied to the modifications of a contract after its award even where such possibility as well as for the relevant detailed rules for
implementation are not provided for in a clear and precise manner in the tender notice or in the tender documents (see point 118 of ECJ Case C-496/99,
Succhi di frutta). When
this possibility is not foreseen in the tender documentation, contract modifications are admitted if they are not substantial. A modification is considered substantial if:
(a) the contracting authority introduces conditions, which, had they been part of the initial tender procedure, would have allowed for the admission of tenderers other than those
initially admitted;
(b) the modification allows award of a tender to a tenderer other than the one initially accepted;
21
(c) the contracting authority extends the scope of the contract to encompass works/services/supplies not initially covered;
(d) the modification changes the economic balance in favour of the contractor in a manner not provided for in the initial contract.
xiii See endnote xii above.
xiv For the moment the only modification of the initial price not considered as substantial by the Court concerns the reduction of the price by 1,47 and 2,94% (see points 61 and 62 of
the Case C-454/06,
Pressetext). In cases T-540/10 and T-235/11, the General Court has accepted financial corrections for modifications of less than 2% of the initial price.
xv See endnote xii above.
xvi The concept of "unforeseen circumstances" should be interpreted having regard to what a diligent contracting authority should have foreseen (e.g. new requirements resulting from
the adoption of new EU or national legislation or technical conditions, which could not have been foreseen despite technical investigations underlying the design, and carried out
according to the state of the art). Additional works/services/supplies caused by insufficient preparation of the tender/project cannot be considered "unforeseen circumstances" See
cases T-540/10 and T-235/11 (referred to above)
xvii There is no limit in the case of Directive 2004/17/EC. For the calculation of the 50% threshold, contracting authorities shall take into account the additional works/services. The
value of these additional works/services cannot be compensated by the value of the cancelled works/services. The amount of cancelled works/services has no impact on the
calculation of 50% threshold.
22
Document Outline