Esta es la versión HTML de un fichero adjunto a una solicitud de acceso a la información 'COBU Working Documents 10, 11 and 12 on the future of the TAOs: supervision or dismantling? - 4 November 1999'.

 
EUROPEAN PARLIAMENT 
 
 
COMMITTEE ON BUDGETS 
 
2000 BUDGET PROCEDURE 
 
 
 
 
 
 
WORKING DOCUMENTS Nos 10, 11 and 12 
 
 
on the future of the TAOs: supervision or dismantling? 
 
 
- Part I   – Strategies 
- Part II  – Approaches 
- Conclusion – Timetable 
 
 
 
General rapporteur:  Jean-Louis Bourlanges 
 
 
 
 
 
 
 
4 November 1999 
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CONTENTS 
 
WORKING DOCUMENT No. 10 
 
 
 
INTRODUCTION .............................................................................................................................................................................  5 
 
PART I: STRATEGIES ....................................................................................................................................................................  6 

 
A. 

THE CRISIS AND THE ISSUES AT STAKE ..................................................................................................................  6 
 
 

1. 
EFFICIENCY ..........................................................................................................................................................   6 
 
2. 
ADEQUACY OF RESOURCES .............................................................................................................................  6 
 
3. 
TRANSPARENCY ..................................................................................................................................................  6 
 
B. 
THE COMMISSION’S OBJECTIVES .............................................................................................................................  6 
 
1. 
IMPROVING COST-EFFECTIVENESS BY MEANS OF MORE 
FLEXIBLE ADMINISTRATIVE MANAGEMENT .............................................................................................  6 
2. 
AVAILABILITY OF THE HUMAN RESOURCES REQUIRED TO IMPLEMENT 
 
COMMUNITY POLICIES ......................................................................................................................................  7 
3. 
ESTABLISHMENT OF A BUFFER BETWEEN THE COMMISSION AND ‘PEOPLE ON 
THE GROUND’ ......................................................................................................................................................  8 
 
C. 

PARLIAMENT’S CONCERNS ........................................................................................................................................  9 
 
 

1. 
UNDERSTANDING THE NEEDS, IDENTIFYING THE ABUSES ...................................................................  9 
 
  2. 
THE SEARCH FOR A BALANCED COMPROMISE ..........................................................................................  9 
    3.    THE AGREEMENT ON THE 1999 BUDGET: AN IMPORTANT FIRST STEP TOWARDS 
 
TRANSPARENCY ................................................................................................................................................  10 
 
D. 
THE PARLAIMENT/COMMISSION DISPUTE .......................................................................................................... 10 
 
 

1. 
PARLIAMENT’S TOUGHER APPROACH IN THE CONTEXT OF THE 2000 BUDGET GUIDELINES ...  10 
 
 
a.  The call for a survey of staff requirements.................................................................................................  11 
 
 
b.  The call for the dismantling of the TAOs ...................................................................................................  11 
 
 
c.  The incorporation in the nomenclature of specific sub-items to cover technical assistance ..................  11 
 
 

2. 
THE COMMISSION’S REFUSAL .......................................................................................................................  11 
 
 
3. 
TOWARDS A BROADER REFORM ..................................................................................................................  12 
 
 
a.  Parliament cannot accept the outgoing Commission’s refusal to acknowledge the problem .................  12 
b.  The Commission cannot ignore the intellectual logic underpinning the criticisms of the 
current system ..............................................................................................................................................  12 
 
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WORKING DOCUMENT N° 11 : 
 
II.  APPROACHES. .................................................................................................................................................. 14 
A.  PUTTING THE ISSUE OF THE TAOs ............................................................................................................ 14 
1.  THE COMMISSION'S SUBCONTRACTING POLICY MUST BE COMPLETELY RETHOUGHT. ....... 14 
2.  THE CRITERIA USED BY THE COMMISSION TO DEFINE THE TAOS ARE ARTIFICIAL .................... 14 
a.  Duration ................................................................................................................................................ 14 
b.  Externality ............................................................................................................................................ 15 
c.  The nature of the beneficiary. ............................................................................................................... 16 
d.  The nature of the measure ..................................................................................................................... 15 
3.  ALL THE COMMISSION'S CONTRACT-RELATED PRACTICES MUST BE REFORMED. ............................................. 16 
B.  DEFINING THE TASKS WHICH MUST NOT BE PRIVATISED ........................................................... 17 
1.  THE DIRECT OR INDIRECT EXERCISE OF A DISCRETIONARY POWER. ................................................................ 17 
2.  TASKS WHICH CANNOT BE REGULATED BY THE  MARKET. .............................................................................. 18 
a.  A clear assessment in advance of the service to be contracted out ....................................................... 19 
b.  The possibility of substituting one contract for another ........................................................................ 19 
c.  Ex post facto assessment. ..................................................................................................................... 20 
C.  REORGANISING THE EXTERNALISATION  PROCESS ...................................................................... 21 
1.  DETERMINING THE OBJECTIVES OF EXTERNALISATION. .................................................................................. 21 
a.  Flexibilisation ....................................................................................................................................... 21 
b.  Giving staff an increased sense of responsibility. ................................................................................. 23 
c.  Involving outside partners .................................................................................................................... 23 
2.  BROADENING THE RANGE OF EXTERNALISATION INSTRUMENTS. .................................................................... 23 
a.  Tailoring externalisation strategies ....................................................................................................... 23 
b.  Creating new administrative instruments .............................................................................................. 24 
3.  ENSURING BUDGETARY TRANSPARENCY ........................................................................................................ 25 
a.  Bringing an end to the funding of administrative expenditure from operating appropriations ............. 25 
b.  Reforming the budget nomenclature. .................................................................................................... 25 
c.  Guaranteeing the powers of the legislative authority and the budgetary authority ............................... 26 
4.  RATIONALISATION AND STREAMLINING THE MANAGEMENT AND SUPERVISION OF EXTERNAL ACTIVITIES. .... 26 
a.  Rejecting the bureaucratic excesses of the guide. ................................................................................. 26 
b.  Doing away with the paranoia characterising relations between the Community Administration and the 
 
 TAOs ................................................................................................................................................... 27 
 
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WORKING DOCUMENT N° 12 : 
 
CONCLUSION : TIMETABLE .............................................................................................................................. 29 
A.  BEFORE THE SECOND READING OF THE BUDGET .......................................................................... 29 
B.  BEFORE 15 APRIL 2000. .............................................................................................................................. 30 
 

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link to page 5 WORKING DOCUMENT No. 10 
 
Introduction 
 
‘The cases examined by the Committee of Independent Experts and mentioned in its report of 15 
March 1999 concern directorates-general which have a high rate of external resources.’  This 
quote from the document summarising the screening exercise known as the Decode report 
highlights, in the most effective and dispassionate way possible, the central nature of the 
problems posed to the Commission in recent years by the increasing externalisation of certain of 
its administrative tasks.  The authors of the Decode report go on to note that ‘of the seven 
departments which show a substantial degree of dependence on outside staff, five have been the 
subject of specific consideration by the Committee of Independent Experts’1.  It is no 
exaggeration to say that it is the problems relating to subcontracting, which became acute as a 
result, in particular, of the maladministration affecting the Echo programme and the Leonardo 
TAO, which led directly to the resignation of the Santer Commission in March 1999. 
 
Since the technical assistance offices (TAOs), which are generally defined as private bodies 
performing administrative or technical tasks, integrated to varying degrees, on the basis of 
contracts awarded by the Commission, represent the culmination of this trend towards 
externalisation, it is natural that the issue of their future should be at the centre of the new 
Commission’s concerns and reform projects.  Moreover, that body will find that it has inherited a 
draft guide, published by the outgoing College on 1 July 1999, laying down a regulatory and 
procedural framework designed to eliminate the abuses and problems previously brought to light 
in connection with the management of the TAOs.  It will thus fall to Mr Prodi’s team to decide 
whether the nature of that document is such as to enable it to achieve the desired objective and, 
more generally, to choose between additional efforts to supervise the existing offices and a more 
radical approach, recommended by Parliament in its budget guidelines of 23 March 1999, that of 
dismantling a system which has been built up, with no guiding philosophy behind it, in response 
to short-term political requirements and in the light of the tactical interests of the Community 
administration. 
 
The aim of this document is to consider the strategies employed hitherto by the two main 
protagonists, the Commission and Parliament – the Council has kept remarkably quiet on this 
issue – to outline the principles of a reform, the scope of which, although not the need for which, 
is a matter of discussion, and, finally, to put forward guidelines on the basis of which the 
Commission and Parliament could take action in the context of the 2000 budget procedure. 
 
                                                 
1 Decode report, ‘Designing tomorrow’s Commission’, pp. V and 19. 
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PART I: STRATEGIES 
 
 
The crisis and the issues at stake 
 
 
The interinstitutional crisis caused by the Commission and Parliament’s differing perception of 
the problems linked to the management by the Community administration of its external 
resources came to a head in winter 1998-1999, but it had been building for many years, leading 
to a series of confrontations and compromises between the two institutions based around three 
main issues: 
 
1. 
efficiency 
 
The concern for efficiency, i.e. productivity, the wish to make optimum use of public funds 
(value for money), has been fuelling a partly ideological debate between those who condemn the 
excessive cost of a public bureaucracy composed of established, well-paid officials and those 
worried about the scope of the misappropriation of public funds which the philosophy of 
‘farming out’ which underpins the establishment of the TAOs would offer unscrupulous co-
contractors. 
 
2. 
adequacy of resources 
 
The Commission regards itself as facing a structural shortfall in human resources, when set 
against the regular increases in the volume of its tasks, and has been seeking, by means of a 
variety of procedures, including the use of TAOs, to free itself from the constraints linked to the 
imposition of a ceiling on Heading 5 (administrative expenditure) of the financial perspective.  
 
3. 
transparency 
 
The parliamentary arm of the budgetary authority is particularly keen to combat the unlawful use 
of operating appropriations entered in Part B of the budget to pay staff performing administrative 
tasks, given that, under the Financial Regulation, such payments should be entered in Part A of 
the budget.  
 
The Commission and Parliament have reacted very differently to the conundrum posed by these 
three issues. 
 
The Commission’s objectives 
 
It has pursued three distinct objectives, of which only the first has been clearly and consistently 
acknowledged: 
 
1. 
Improving cost-effectiveness by means of more flexible administrative management 
 
Evidence of this ambition, which is posited on the comparative analysis of the costs generated by 
the various forms of management (benchmarking), can be seen in all the documents drawn up by 
the Commission on the subject, in particular SEM 2000, MAP 2000, the Decode report and, 
now, the guide to TAOs. It is significant that the latter document makes cost-effectiveness the 
sole criterion governing the decision to use a TAO, stipulating that this option will be chosen 
once the relevant departments have demonstrated that the delegation of certain tasks meets the 
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link to page 7 link to page 7 link to page 7 link to page 7 objectives of sound financial management and the flexible management of programmes and 
measures2. Although Annex 1 – and not the body of the guide itself – seems to exclude ‘public 
authority’ tasks from the scope of the arrangements, those tasks are defined in such vague and 
loose terms that, ultimately, it is the economic criterion which is clearly intended to determine, 
practically alone, any decision to use a TAO.  
 
Moreover, this is what the Commission makes abundantly clear when its issues the following 
general warning: ‘insisting that the Commission departments should be in a position to deal with 
all the aspects of the implementation of Community policies would not only be unrealistic, but 
also undesirable. It would imply an internalisation of responsibilities and tasks which would 
create a need to increase substantially the number of Commission staff involved in that 
implementation’3. Explanations come no clearer than this: the primary purpose of a TAO is to 
make available, even if only indirectly, relatively cheap para-administrative staff. 
 
The Commission has not tried to solve the problem by means of the more effective use of its in-
house human resources, even though recently, in the context of adjustments linked to transfers of 
appropriations, it justified reductions in the appropriations entered against certain budget 
headings with reference to savings achieved in respect of studies or technical assistance tasks 
carried out in-house, despite the fact that the initial appropriation was based on forecasts for 
outside assistance. Moreover, the Inspectorate-General’s report shows that the cost of a TAO 
employee is equivalent to that of an A5 post. 
 
There is every justification, therefore, for putting the following question: has the Commission 
tried to subcontract tasks it did not wish to perform, or has it continued to perform tasks it did 
not wish to delegate? 
 
2. 
Availability of the human resources needed to implement Community policies 
 
Long denied on the grounds that it was dictated by the desire to escape the straitjacket imposed 
by Heading 5 of the financial perspective and thus led the Commission to disregard the wishes of 
the budgetary authority, the use of TAOs as a means of overcoming the shortfall in 
administrative staff was finally acknowledged, in very clear terms, by President Santer at the 
height of the crisis in winter 1998-1999. Whilst appearing to accept the objective of zero growth 
in staff complements announced by the budgetary authority, the Commission in fact pursued a 
very different objective. Starting in 1993, the Commission has developed, not without success, a 
four-pronged approach: 
 
a. 
The creation in Part A of the budget of 1 830 new posts4 negotiated between 1993 and 
1998 in return for an agreement to reconsider the principle of mini-budgets and obtained 
by converting operating appropriations into administrative posts (CAP). The Commission 
can thus be said to have reaped the benefits of its own sharp practice. 
 
b. 
Continued recourse, on the basis of a derogation, to substantial technical and/or 
administrative assistance separate from the TAOs and funded from Part B of the budget, 
assistance estimated by the Commission at 710 persons/year5. This took the form, for 
                                                 
2 Guide, p. 4. 
3 Outline paper of 30 November 1998 on the inquiry into the use of external technical and administrative assistance 
by Commission departments, p. 2. 
4 Assessment report on the policy of converting appropriations into posts (CAP), Annex I, p. 5. 
5 Outline paper of 30 November 1998 on the enquiry into the use of external technical and administrative assistance 
by Commission departments, p. 4. 
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link to page 8 link to page 8 link to page 8 link to page 8 example, of residual mini-budgets (Structural Funds, research) or ‘STAP facilities’ 
granted by Parliament to Mr Liikanen in 1996 with a view to improving the management 
of the Phare, Tacis, Meda and, subsequently, Echo programmes. For the record, one 
could quote here the funding of certain staff involved in the management of the Echo 
programme and paid on the basis of a contract with the firm Perry Lux, in flagrant breach 
of the STAP agreements and, moreover, under terms revealed as fraudulent. 
 
c. 
The increase in the number of posts charged to Part A of the budget resulting from the 
creation, over the four years between 1993 and 1997, of 2 618 posts, i.e. 1 448 more than 
were created by means of the CAP exercise. 
 
d. 
The establishment of TAOs, whose numbers were put by the Decode report at 516, and 
which accounted, as far as could be ascertained from the opaque arrangements, for an 
ever increasing volume of appropriations (for example, an increase of EUR 30 m 
between the 1999 budget and the 2000 draft budget). According to the Commission 
inquiry7, the TAOs today perform work totalling some 1000 person/years and consume 
annually, for their own administrative needs, EUR 190 m, of which EUR 170 m is 
entered in Part B of the budget. In that connection, the report by the Inspectorate-
General8 clearly illustrates the link between the restrictions on appropriations entered in 
Part A of the budget and the use of TAOs funded from operating appropriations9: the 
report notes that there is clear evidence to show that the charging of TAO-related costs to 
one part of the budget rather than another is more and more being determined by the 
shortage of resources in Part A by comparison with those in Part B and that the 
distinction between ‘administrative’ and ‘operating’ technical assistance costs is 
becoming more and more artificial and is not being drawn on the basis of objective, 
harmonised criteria. 
The report fails to mention that, whilst making use of outside staff, the Commission has 
left a very large number of posts in its establishment plan vacant. 
 
3. Establishment of a buffer between the Commission and ‘people on the ground’ 
 
Although this would of course be strenuously denied, it is difficult not to see the establishment 
of these buffer areas around the Commission as the expression of a culture which might be 
termed ‘Platonic’, one which sought to free the institution from the day-to-day management 
tasks which the Greek philosopher might have termed ‘servile’ and to protect it from unpleasant 
contact with the public. Traditionally more inclined towards the framing of policy than its 
implementation, and having at its disposal powerful  intermediaries in the form of the national 
civil services, when exercising the direct responsibilities conferred on it in recent years the 
Commission has sought, unprompted, to create structures to protect it against the risks inherent 
in an overly intimate relationship with the ultimate beneficiaries of its work. Under these 
                                                 

Decode report, point 1.7.1., p. 20. 

Inquiry into the use of technical and administrative assistance, p. 3. 

Inspection report by the Inspectorate-General on the Commission’s use of technical assistance offices 
(TAOs), Brussels, 4 February 1998, p. 37. 

On 14 May 1993 the Directors-General of DGs IX, IXX and XX had sent all the directors-general and 
heads of departments a note seeking to clarify the procedures for charging staff expenditure to each of the 
two parts of the budget. According to that note, ‘expenditure on technical assistance provided to the 
Commission by a legal person (or a natural person) in connection with the implementation of a policy, 
because the Commission does not have sufficient staff or staff with the specific qualifications required, 
must be entered in Part A. In contrast, technical assistance funded from the budget in connection with the 
implementation of a policy and designed to offset the lack of administrative or technical skills in the 
recipient countries should be entered in Part B. (Inspectorate-General’s report, p. 39). 
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link to page 9 circumstances, and regardless of the careful formulations excluding ‘public authority’ tasks from 
the remit of the TAOs, it is hardly surprising that the latter have often had administrative 
responsibilities handed to them, since recourse to private bodies was justified not so much by the 
nature of the tasks performed as by the need to create an ersatz bureaucracy to fill the 
organisational vacuum created by the lack of any formal administrative structure to assist the 
Commission.   
 
Faced with what they might regard as exaggerated accusations of bureaucratic over-
cautiousness, the Commission officials are no doubt tempted to justify their actions by pointing 
to the substantial number of projects, and therefore contracts, which they are required to manage 
and which could not be managed on a centralized basis without creating bottlenecks.  Without 
calling into question the acute nature of the mangement problems created by the proliferation of 
small-scale Community measures with high unit administrative costs, there must be some doubt 
as to whether the TAOs represent a commensurate response to this challenge, since, according to 
official estimates10, they employ roughly one thousand persons per year, a figure equivalent to 
less than one-twentieth of the Commission staff complement and one barely greater than the 
number of posts currently vacant.  It is thus a qualitative issue of freeing official from 
management responsibilities deemed too prosaic rather than a quantitative issue of scaling up the 
resources mobilized for the same purpose, which explains the Commission’s predilection for 
private administrative intermediaries in the form of the TAOs and, beyond that, consultancies 
and consultants. 
 
The increase in the number of TAOs seems to have been prompted by three main types of 
concern, economic, administrative and cultural, felt by the Commission, some of which were 
more legitimate than others and more clearly acknowledged by the institution, but which go to 
explain the vigorous nature of the phenomenon and the determination displayed by the 
Community administration to find accommodations with Parliament which would safeguard the 
existence of the TAOs. 
 
C.  Parliament’s concerns 
 
1.  Understanding the needs, identifying the abuses 
 
Parliament has long fought shy of challenging the principle underlying the use of TAOs.  In 
recent years its attitude has been characterised by a mixture of support, reservations and 
hostility: support for the determination to modernise the public administration in the light of the 
need to implement new programmes, reduce costs and make Community administrative 
arrangements more flexible, in line with the Union’s new political priorities; reservations 
concerning the idea of a direct or indirect increase in staff numbers not accompanied by 
sufficient efforts to reduce the number of vacant posts and redeploy staff; finally, open hostility 
to the unlawful use of operating appropriations to cover staff expenditure in complete disregard 
of the Financial Regulation and the most basic requirements of transparency. 
 
2.  The search for a balanced compromise 
 
Very logically, the complex nature of its expectations and concerns led Parliament to avoid open 
confrontation with the Commission in favour of a reformist, watchdog approach and efforts to 
seek an agreement between the two institutions with a view to laying down a framework for the 
development of the TAOs and preventing abuses, without calling into question the basic 
                                                 
10 Inquiry into the use of technical and administrative assistance, p. 3. 
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principle of their existence.  It was inevitable that a number of compromises would be secured 
between Parliament, which was cautious but open to dialogue, and the Commission, which was 
aware of the need to make minor concessions in order to ward off major sacrifices.  Those 
compromises were all more or less based on a dual balance: 
  
 

balance between the Commission’s deliberate vagueness as to the nature of the tasks 
which the TAOs might perform and the legislative and/or budgetary authority’s concern 
to ensure that the use of TAOs went hand-in-hand with procedural guarantees concerning 
the assessment of costs, competitive tendering, performance appraisal and price and 
quality control. In other words, tacit acceptance in return for constant administrative 
supervision in a variety of forms! 
 

balance between the acknowledged right to use to certain operating operations to fund 
administrative tasks, i.e. staff expenditure, and, in return, efforts to restrict the use made 
of such facilities (abolition of some of the mini-budgets) and to illustrate in budget 
documents the share of operating appropriations earmarked, on a de facto basis, for staff 
expenditure. In other words, transparency as a prerequisite for a derogation! 
 
3. 
The agreement on the 1999 budget: an important first step towards transparency 
 
The horizontal amendment at the start of Part B of the 1999 budget represented the culmination 
of these efforts to seek a compromise acceptable to the three institutions. It is based on four main 
ideas: 
 

The division of TAOs into three categories, with reference to the beneficiary of the 
proposed task: depending on whether the TAO acts solely to the benefit of the partners, 
to the mutual benefit of the Commission and its partners or solely to the benefit of the 
Commission, the charging of its administrative expenditure to Part B of the budget is 
automatic, authorised by the legislative and/or budgetary authority or quite simply 
prohibited. 
 

Continued application of the traditional derogations from the principle that the mini-
budgets should be abolished, in respect of research and the Structural Funds. 
 

The drawing of a distinction between established and new measures: in the case of the 
former, expenditure on technical or administrative assistance can be charged to Part B of 
the budget on the authorisation of the budgetary authority (remarks); in the case of the 
latter, however, the approval of both the legislative authority (legal bases) and the 
budgetary authority is required, under what is termed the ‘double-key’ system. 
 

Imposition of a ceiling on the share of operating expenditure which can be earmarked for 
technical and administrative assistance and disclosure of the relevant figures in the 
remarks in the budget or in a specific report. 
 
D. 
The Parliament/Commission dispute 
 
1. 
Parliament’s tougher approach in the context of the 2000 budget guidelines 
 
The vote on the budget guidelines for the 2000 financial year, on 14 April 1999, was marked by 
an unmistakable toughening of Parliament’s position: aiming its remarks at the Commission 
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whose members had just resigned, it reiterated the two requirements laid down a few weeks 
before by the Committee on Budgets:   
 
a. 
The call for a survey of staff requirements. Parliament called on the Commission to 
produce a report by 30 June 1999 which sets out its staffing priorities and real staffing 
requirements, both in terms of numbers as well as nature, to ensure the effective 
operation of EU policies in the 21st century’. 
 
b. 
The call for the dismantling of the TAOs. Parliament included among its priorities ‘the 
gradual dismantling of technical assistance offices carrying out duties which the 
Commission administration should discharge itself’. In this way, the Committee on 
Budgets, which had gone beyond the rapporteur’s proposals on each of these two points, 
was informing the Commission that administrative and budgetary ‘quick fixes’ were a 
thing of the past. Parliament’s message was that an in-depth review of policy with regard 
to the Commission’s administrative and human resources had become essential, a review 
which would clarify the two major areas of uncertainty preventing any rational approach 
to the problem: the lack of any definition of the tasks suitable, by their nature, to be 
delegated by contract to private bodies and the genuine or professed ignorance of the 
resources required by the Commission to carry out its work properly. 
 
c. 
The interpretation in the nomenclature of specific sub-items to cover technical assistance. 
During the 2000 budget procedure, Parliament split the budget headings which included a 
maximum amount earmarked for technical assistance by creating in each case a sub-item 
BA to which only expenditure on technical assistance and administrative expenditure 
directly linked to the measure funded under the corresponding B heading can be charged. 
The amendment prohibits any funding of such expenditure under the B heading and 
stipulates that any transfer between the B headings and the BA sub-items must be 
authorised by the budgetary authority, pursuant to Article 26(3) of the Financial 
Regulation. The appropriations entered against the BA headings may be used to fund 
decentralised implementation units (DIUs) which enjoy administrative-management 
autonomy, provided that management and supervision is carried out by officials who are 
appointed, and can be dismissed, by the Commission. The establishment of these 
structures requires the adoption of an internal Commission regulation, after consultation 
of the budgetary authority and the Court of Auditors. In conjunction with this exercise 
involving the nomenclature, Parliament has entered 90% of the appropriations for each 
BA sub-item in the reserve. They will be released in two stages once certain conditions, 
involving the dismantling of the TAOs in accordance with a precise timetable, the 
forwarding by the Commission of a report on its staff priorities and the establishment by 
the Commission of the DIUs, have been met.  
 
2. 
The Commission’s refusal 
 
The Commission reacted anything but positively to this unmistakable call from the parliamentary 
arm of the budgetary authority. Its response was doubly inappropriate. As regards the assessment 
of its requirements, it quite simply refused not only to submit the report on the agreed date, but 
even to give an undertaking that such a report would be drawn up, merely inviting Parliament to 
consider the Decode (Designing Tomorrow’s Commission) report, a document which, although 
very valuable, in that it provides an interesting snapshot of the current administrative situation, is 
so lacking in forecasts for the future that it should perhaps be renamed ‘Designing Today’s 
Commission’. As regards the call concerning the TAOs, it prompted the drafting of the guide 
published on 1 July, which, far from prefiguring any ‘gradual dismantling’ instead seeks to make 
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the operation of the TAOs subject to an impressive system of regulatory and procedural 
constraints – a frightening example of red tape gone mad. 
 
Whilst Parliament was inviting the Commission to lay down, on the basis of sound intellectual 
principles, a division between those activities which in the future should and should not be 
managed directly by the Community administration, the guide merely proposed arrangements by 
means of which the existing system could be institutionalised and perpetuated. 
 
3. 
Towards a broader reform 
 
The position to which the Commission appeared to cling throughout spring 1999 was in fact 
completely untenable and it is to the credit of the new Commission that it has seemingly 
acknowledged this, through the mouth of its Vice-President, Mr Neil Kinnock, although it is not 
yet possible to determine the scope of the changes which the latter seems prepared to envisage.  
The Commission’s volte-face on this sensitive issue has been prompted by both political and 
intellectual considerations. 
 
a. 
Parliament cannot accept the outgoing Commission’s refusal to acknowledge the problem 
The new Commission would be wrong to see the toughening of Parliament’s stance in the 
discussions on the 2000 budget as nothing more than a whim.  As pointed out in the 
introduction to this working document, it is the crisis affecting subcontracting in the 
broad sense of the term which led to the resignation of the Santer Commission earlier this 
year and it is the reform of the Community administration which now constitutes the 
Prodi Commission’s first priority.  Coming on the heels of the Echo scandal, the crisis 
involving the Leonardo TAO revealed just how unsuitable the traditional arrangements 
governing administrative subcontracting were and, in particular, the structural problems 
affecting the delegation, by contract, of certain administrative tasks to private bodies.  
The history of the TAOs can be divided into two eras:  before and after Agenor. 
 
If it is capable of displaying political determination, in the context of the budgetary 
procedure Parliament has every means of exerting strong pressure on the Commission, 
since it has the final say in any increase in staff resources adopted in Part A of the budget 
under Heading 5 of the financial perspective and, perhaps more importantly, the 
continued availability of certain administrative resources, as used by the TAOs, drawn 
from Part B of the budget containing operating appropriations.  Moreover, in this area, 
that of compliance with the principle of budgetary discipline and the confinement of the 
Commission’s administrative resources to the appropriate heading of the Financial 
Perspective, Parliament can be sure that its concerns will be shared by the Council. 
 
b. 
The Commission cannot ignore the intellectual logic underpinning the critical analyses of 
the current system 
Parliament’s traditional criticisms of the TAO system, to which the Community 
administration ordinarily responds with a mixture of scepticism and inaction, has now 
been backed up by the very severe attacks launched by the Committee of Independent 
Experts on the current arrangements for the contracting out of certain administrative 
tasks.  The Committee’s second report has not only called into question the TAO system 
in particular, but the arrangements governing Community subsidies in general. 
 
Although the Commission never seems to tire of fighting to safeguard the administrative 
and budgetary facilities it has managed to secure for itself in the past, there is every 
chance that it will react positively to the two-pronged attack by Parliament and the 
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Committee of Independent Experts.  It is all the more likely to do so because it is 
ultimately convinced of the need to abandon a conservative and defensive strategy and 
launch substantial reforms.  By way of an example, in his remarks on the Inspectorate-
General’s report Mr Steffen Smidt, who was at the time Director-General of DG IX, quite 
rightly sought to put the debate in context.  Writing in 1998, he saw a need to go beyond 
the simple issue of the TAOs in order to tackle that of the mismatch between the 
Commission’s current organisational structure and its management needs.  In future, the 
Commission should focus on the framing of policies and delegate to its external partners 
an increasing share of the work involved in their implementation.  One solution might be 
the development of a new generation of bodies established under Community law.  These 
new administrative structures, different in nature from the ‘agencies’ operating today, 
would be responsible for implementing programmes and projects, on the basis of 
instructions from the Commission but employing a more flexible management structure.  
A suggestion based on nothing more than a senior official’s personal views has now been 
taken up at political level.  At his hearing Mr Neil Kinnock, the Commission Vice-
President responsible for internal reform, emphasised the new College’s interest in this 
type of administrative innovation and its willingness to seek with Parliament a more 
precise and more satisfactory definition of the core functions which the Commission 
would not be able to delegate to outside bodies. 
 
The time is clearly ripe for a revamping of the Community administration.  Let us hope it 
is carried out on the basis of well-defined principles. 
 
 
 
 
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WORKING DOCUMENT No 11 
 
 

II. 
APPROACHES 
 
 
A new policy on the technical assistance offices (TAOs) must be posited on a new approach to 
administrative and technical externalisation based on three main approaches. 
 
A. 
Putting the issue of the TAOs in context 
 
1. 
The Commission’s subcontracting policy must be completely rethought 
 
The issue of the externalisation of certain administrative tasks can clearly not be reduced to a 
simple choice between two management models: on the one hand, direct administrative 
management by officials answerable to a public authority, and, on the other, private management 
carried out, on the basis of a contract, by bodies independent of the administration and 
employing staff recruited on private law contracts. The theoretical range of possibilities between 
these two extremes is characterised by differing combinations of four variables: the status of the 
staff employed, the degree of autonomy enjoyed by the co-contractor, the latter’s legal status and 
the arrangements governing the financial assistance provided by the Commission. 
Externalisation could be described as a kind of Jacob’s ladder stretching between the two 
extremes of centralised public management and privatisation. In order to be effective, it requires 
a tailored approach based on a detailed analysis of the objectives pursued and the corresponding 
resources required. 
 
It would thus be a serious error to follow the lead set by the guide and artificially focus the 
efforts to make the system more ethical and more rational solely on the reform of the TAOs. The 
TAOs fall into a legal and administrative category which is both ill defined and too restrictive:  
 

ill-defined in that the criteria used by the Commission to distinguish them from other 
contractors are largely artificial; 

too restrictive in that the TAOs maintain conventional contractual relations with the 
Community administration, so that any reform must embrace all these contractual 
practices. 
 
Focusing reform efforts on the TAOs alone would certainly prove counterproductive and almost 
inevitably lead, in a boomerang effect, to the increased use of externalised management methods 
regarded as less sensitive than the fully-fledged TAOs. It is subcontracting policy as a whole 
which must be the subject of a review, therefore. 
 
2. 
The criteria used by the Commission to define the TAOs are artificial 
 
The Commission has not succeeded in defining and determining the exact nature of a body 
which can barely be distinguished from the other categories of legal person with which the 
Community administration concludes contracts. The arbitrary nature of the criteria used in past 
years to characterise the TAOs is striking. Here are four examples: 
 
a. 
Duration. The definition excludes offices which conclude with the Commission 
contracts of less than one year’s duration, with the result that the rigorous provisions 
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laid down in the guide do not apply to them. The assumption seems to be that it is more 
difficult to waste public money when it is granted on an annual rather than a 
multiannual basis, clear evidence of excessive confidence in the virtues of the annuality 
of the budget. 
 
b. 
Externality. It has come to be regarded as a crucial criterion that TAO staff should work 
out of house, with the result that the physical location of the staff of bodies under 
contract has become one of the defining characteristics of a TAO. How strange it is that 
an institution which is itself spread over 53 separate sites should seek, in the era of 
teleworking, to erect a virtual barrier dividing those who work on its behalf. In the 
Commission nomenclature, freelance interpreters are regarded as working out of house, 
which would seem to prove that it is possible to be both out of house and in the booth, 
or ‘extra muros’ and ‘in camera’, at the same time! 
 
c. 
The nature of the beneficiary. This is a much more serious example of flawed logic, 
since it has long served as the basis for the Commission’s entire approach to the 
supervision of the TAOs and is confirmed by the guide. For many years, the prevailing 
principle has been that different arrangements should apply to TAOs depending on 
whether they act solely in the interests of the Commission, in the mutual interest of the 
Commission and the beneficiaries of its assistance or solely in the interests of those 
beneficiaries. In the first instance, staff expenditure is entered in Part A of the budget, 
but the establishment of the TAO is not contingent on the adoption of a legal basis, this 
being a decision covered by the Commission’s implementing powers. In the second 
instance, appropriations to cover staff expenditure are charged to Part B of the budget, 
but must be authorised by a legal basis, referred to specifically in the budget remarks 
and subject to a ceiling. Finally, in the third case, the TAO is regarded as an entirely 
different kind of body and the provisions of the guide do not apply. 
This hair-splitting is confusing. It is difficult to see the relevance of a criterion based on 
the identity of the beneficiary of Community assistance, since the ultimate purpose of 
that assistance can only be to benefit someone outside the institutions and taxpayers are 
just as interested in knowing that their money has been properly spent in the 
performance of administrative tasks than whether these directly or indirectly help the 
final beneficiary. Abandoning an approach based on uniform, consistent authorisation, 
assessment and supervision procedures is not the ideal response to the problem at hand. 
In fact, the only valid criterion, which is theoretically laid down in certain Commission 
documents, but which in practice tends to be ignored, is not that of the final beneficiary 
of the appropriations, but rather that of the Commission’s ultimate accountability for 
their use. In other words, it must be determined whether, if the TAO in question did not 
exist, the appropriations would be managed by the Commission, by the beneficiary of 
the programme or by a joint structure.  
 
d. 
The nature of the measure. TAOs are often defined with reference to the high degree of 
administrative complexity and integration of the service they are supposed to provide. 
In fact, the tasks delegated to outside bodies by means of contracts are above all highly 
varied. More often than not, they represent compromises between two key models:  
  -  The proconsular model. Here, the co-contractor plays the role of a subordinate  
 
administration, carrying out, on behalf of the Commission and subject to its in practice 
largely theoretical supervision, a set of integrated administrative tasks, including 
relations with the recipients of funding, the processing of applications and the 
preparation of decisions concerning the allocation of appropriations. 
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The ancillary model. Here, the co-contractor does not stand in for the administration, but 
supplies it with certain basic services or resources, whether material, intellectual or 
human, intended to enable it to carry out its task more effectively and at lower cost. The 
ancillary model is posited on the non-participation of the co-contractor in the decision-
making process, but in many cases requires its integration into the administrative 
machinery.  
 
Implementation of the ancillary model might therefore result in the handing over to 
outside bodies of whole areas of administrative work (security, chauffeurs, archiving, 
secretarial services, etc.) currently entrusted to administrative staff and give rise to 
reactions of frustration and opposition on their part. However, it is the proconsular model 
which most seriously calls into question the view which the Commission may take of its 
political and administrative responsibilities, since, unlike the proconsular system, it goes 
to the very heart of the decision-making system in the implementing sphere. 
 
3. 
All the Commission’s contract-related practices must be reformed. 
 
If the TAOs are defined as external bodies carrying out a set of technical and/or 
administrative assistance tasks, which may be integrated to a greater or lesser extent, on 
the basis of powers delegated by the Commission by contract, it becomes clear that it is 
not the nature of the TAO itself which characterises its relationship with the Community 
administration. As the second report of the Committee of Independent Experts strongly 
emphasises, what makes a contractor a TAO, and determines its remit, remuneration and 
powers, is a traditional contract for the provision of intellectual services of which the 
TAOs by no means have a monopoly. The fact that such contracts seek to delegate to 
outside bodies, whose legal status may vary very substantially, tasks involving a high 
degree of intellectual complexity and administrative integration should not blind us to the 
key point: the problems affecting the TAOs represent only the tip of the iceberg formed 
by all the Commission’s contract-related practices and it is these practices which must be 
reformed. 
 
In this connection, the second report of the Committee of Independent Experts contains 
valuable recommendations and opens up avenues which the Commission should explore 
without delay, whether this concerns the simplification and codification of public 
procurement law (Recommendation 1), clarification of the specific role of contracts as 
against other arrangements for the disbursement of public funds (Recommendation 3), 
the need for a distinction to be drawn between contracts and subsidies (Recommendation 
6), the need for systematic planning of intellectual service contracts (Recommendation 
8), the introduction of strict transparency rules applicable to contractors 
(Recommendation 9), the reform of the procedure for the consideration of matters by the 
ACPC (Recommendation 13), or, finally, the establishment of a central database of 
contracts and contractors (Recommendation 14).  
 
The aim of this document is not to set out a detailed, exhaustive list of the reforms 
required to place the Commission’s contract-related practices on a sound footing. 
However, it is incumbent on Parliament to draw the Commission’s attention to the 
administrative, political and moral necessity of such reforms, covering all the stages of 
the procedure: decision to conclude a contract, choice of award procedure, choice of 
contractor, funding and monitoring of the contract, etc. 
 
 
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B. 
Defining the tasks which must not be privatised 
 
The Commission has not yet provided a strict definition of the tasks whose management cannot 
be handed over to outside bodies.  The vagueness of the criteria set out in the various documents 
reflects the wish not to reduce the current operational scope of the TAOs.  The repeated allusions 
to ‘public authority’ or ‘public service’ tasks or ‘core functions’ which cannot be delegated to 
outside bodies remain worryingly imprecise.  Thus, as we have seen, the guide states that use can 
be made of TAOs if the departments concerned can show that the delegation of certain tasks is 
consistent with the objectives of sound financial management and the flexible management of 
programmes and measures.  This strange definition confuses means and ends and makes 
improved cost-effectiveness the sole criterion governing the subcontracting of tasks to an outside 
body. 
 
The guide refrains from providing an exhaustive list of the tasks which may be handed over to a 
TAO and, by way of illustration, merely describes some of those tasks, a description which is 
vague enough not to exclude any of the duties traditionally carried out by an administrative 
authority responsible for the implementation of a programme: identification and assessment of 
projects, organisation of tender procedures, ‘technical’ assessment of the proposals and bids, 
preparation of decisions concerning the award of subsidies and contracts, etc.  The carefully 
phrased remark to the effect that the Commission departments retain ‘responsibility’ for fixing 
the selection criteria and ‘sole decision-making power’ in respect of the award of contracts 
appears somewhat hypocritical, in that these services find themselves in a situation of complete 
technical dependence on a single body which has control over every stage in the implementation 
of the programme. 
 
It is to the credit of the Vice-President of the new Commission that, at his hearing, he 
acknowledged the intellectual laziness of the Community administration, given its inability to 
produce a clear, binding definition of ‘core functions’, and that he asked Parliament to help him 
remedy the current lack of guiding principles.  This is a daunting task, since, as with the 
implementation of the subsidiarity principle, there is no way of drawing up a precise, relevant 
and exhaustive list of the tasks which must under all circumstances remain the direct 
responsibility of the Community administration.  Such decisions can be taken only on a case-by-
case basis, in the context of legislative and budgetary procedures.  However, on a case-by-case 
basis does not mean arbitrarily.  To our mind, the contracting out of administrative or technical 
duties to a body independent of the Commission must be prohibited in two clearly defined 
instances: if the delegated task involves the direct or indirect exercise of a discretionary power, 
or if the influence of market forces is not such as to ensure that the delegated task is 
implemented in an optimum manner. 
 
1. 
The direct or indirect exercise of a discretionary power 
 
In common with other Commission documents, the guide acknowledges that tasks involving the 
exercise of a discretionary power cannot be delegated to an outside body.  Agreement must now 
be reached on the actual substance of that principle and its implications.  Discretionary power is 
defined as the opposite of the requirement to comply with instructions.  It implies both the 
granting to the decision-maker of a degree of discretion and the idea that that discretion must 
take account of relevant political and moral considerations, rather than simply technical and 
financial criteria. 
The obvious temptation for the Community administration is to take the view that most of the 
decisions it is required to take, in particular those concerning the allocation of Community funds, 
its single most important direct management task, are specifically and solely based on legal 
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obligations and objective criteria.  It might conclude from this that the ‘core functions’ can be 
restricted without problem to the exercise by the College of a very small number of political or 
para-legal powers, such as the right to propose legislation and the budget, international 
negotiations, appointments to senior posts, decisions relating to competition and mergers and, 
taking things to the very limit, the allocation of Community funds.  Realistically, however, it 
must be acknowledged that this is not the case and that, never mind how strict, clear and binding 
the criteria governing public intervention laid down by the political authority are, the decisions 
taken by the administration at whatever level always involve, whether officially or tacitly, a 
considerable degree of political arbitration and, hence, arbitrariness. 
 
Prudence dictates, therefore, that the exercise of tasks which have a direct or indirect bearing on 
the process of allocating Community funds, such as the assessment of needs, the fixing of 
eligibility criteria, the processing of applications or the submission of proposals that subsidies be 
granted to particular individuals or bodies, should be reserved for administrative departments 
subordinate to a competent political authority.  Just as it seems right and proper to ask an 
external body to provide specific, specialist intellectual services designed to supply the 
administration with certain information it needs to take a decision, or technical services which 
have no bearing on the decision itself, under what is described above as the ancillary model, 
equally it seems dangerous to grant outside bodies decision-making responsibilities in 
connection with the implementation of programmes.  The Commission departments’ legitimate 
need for flexibility and autonomy in the performance of their implementing role must be met by 
means other than the contracting out of tasks to outside bodies (cf. D.3.).   
 
2. 
Tasks which cannot be regulated by the market 
 
The contracting out of certain administrative tasks to an outside body leads to the market 
replacing the hierarchical authority as the chief means of regulating the activity concerned.  The 
process of contracting out a task is based on the conviction that competitive forces will be more 
effective than any other means of regulation, and in particular the exercise of hierarchical 
authority within a public administration, in ensuring that optimum use is made of public funds 
and that the best cost-benefit ratio is obtained in connection with the service contracted out.  In 
other words, externalisation both entails a risk, inherent in the transfer of responsibility from the 
administrative authority to an independent body, and implies a hope, that of seeing the invisible 
hand of competition prove more effective than the all too visible and clumsy grip of the 
Community administration.  It is thus a wager whose outcome is uncertain. 
 
Any contracting out of administrative tasks to an external body in return for payment 
immediately brings with it a risk of financial problems, not because the co-contractor is 
necessarily dishonest, but simply because his responsibility as the head of a business or the 
manager of an independent body requires him to exploit the scope offered by the contract to 
maximise its profit or, at least, put its balance sheet firmly in the black, prompting him to divert 
into its coffers as high a proportion as possible of the appropriations made available. 
 
The procedure is simple:  all the co-contractor needs to do is to minimise the cost of the 
administrative service it provides by using inadequate numbers of poorly-skilled casualised staff, 
the inevitable consequence being that the quality of the service provided, and, in particular, the 
quality of the co-contractor’s relations with the public, suffers.  The risk here is the development 
of what one might term the ‘farmer general’ syndrome, named after the private individuals who, 
under the Ancien Régime in 18th century France, accumulated substantial fortunes by collecting 
royal taxes on behalf of the administration and, if one can put it this way, ‘at their own expense’. 
 This syndrome is by no means a thing of the past:  the Commission’s own analysis of the 
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conditions under which the first major aid programmes for the countries of Central and Eastern 
Europe and the former Soviet Union were implemented revealed that the consultants involved 
were sometimes raking off more than 50% of the budgets! 
How can the Community administration be protected against this risk?  The wide range of 
procedures involving audit, assessment or supervision by the Commission or other institutions, 
as provided for by the guide, must in itself be seen as paradoxical, in that its aim is none other 
than that of creating an exact equivalent of the hierarchical system which the contracting out of 
tasks to an outside body was specifically designed to do away with.  Once voluntarily 
abandoned, administrative responsibility cannot be recovered by means of outside supervision.  
The Commission cannot have its cake and eat it. 
 
It is clear, therefore, that the success of a policy of delegating certain tasks to outside bodies is 
entirely contingent on the ability of the market to exercise on co-contractors pressure which is 
sufficiently strong and consistent to force them not only to optimise their own management by 
curbing its administrative costs, but above all to provide the administration with high-quality 
services, even if this entails keeping their own remuneration within relatively strict bounds.  
However, the market can play its regulatory role only if full rein is given to competitive forces.  
This presupposes three things: 
 
a. 
A clear assessment in advance of the service to be contracted out.  Any tendering 
procedure is intrinsically flawed if the nature, scope and, therefore, cost of the service to 
be contracted out cannot be clearly and precisely defined.  However, the report of the 
Committee of Independent Experts notes that the lack of any such definition is a 
recurring feature of the intellectual service and administrative management contracts 
concluded by the Commission.  Only relatively simple services, such as maintenance, 
security, transport or even the production of technical studies or audit tasks, can be 
defined and assessed in advance in a relatively precise manner. 
 
b. 
The possibility of substituting one contractor for another.  The relative ease with which a 
contractor can be substituted for another is a key component of the system.  If the 
tendering procedure is to prove effective, it is not enough simply to comply with the 
wording of the rules.  It is also essential that the administration should not find itself 
forced to work permanently with the same partner and that it should thus be in a position 
to replace one outside partner with another, at no detriment to the service concerned.  
This implies not only that the appropriate tendering procedures should be complied with, 
but also, and this is a more subtle point, that the administrative and financial cost of 
replacing a co-contractor with another should not be prohibitive for the parties 
concerned.  Here again, the following rule applies:  the more complex and integrated the 
administrative and intellectual service concerned, the higher the cost of replacing one 
body by another.  It is higher for the Community administration, forced to place itself 
without warning in the hands of an inexperienced co-contractor and witness the 
dissipation of the store of knowledge and experience accumulated by the previous 
incumbent.  It is significant that after the ‘closure’ of the Agenor TAO, which was 
responsible for managing the Leonardo programme, the administration was compelled to 
retain the TAO staff, albeit now under the direct responsibility of the competent 
Commission departments.  In other words, the shortcomings displayed by the co-
contractor did not prompt the Commission to replace it with a new body, but instead to 
bring its staff in house. 
 
The cost of replacement may also be excessively high for the administration’s partner 
forced by the tender procedures and the need to establish the relevant infrastructure to 
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make an investment inflated in relative terms by the short life of the contract.  This points 
up the perverse impact of measures to introduce the systematic rotation of co-contractors, 
who are left demotivated, since they can be sure that they will not be judged on their 
merits, and forced to squeeze the maximum profit out of what can only be a short-term 
contract. 
 
Here again, the degree of sophistication of the services contracted out seems to be 
inversely proportional to the scope for competition among and the replacement of 
co-contractors.  If the administrative or intellectual service concerned is highly complex, 
the Community administration is left with a choice between an open-ended agreement 
with its favoured TAO, an arrangement which may be disguised to a greater or lesser 
extent, or costly disorganisation resulting from the sudden transfer of the work involved 
to a new partner.  In short, the TAO becomes a prison from which the administration can 
only escape by force, the price being substantial collateral damage.  Restricting the 
standard duration of contracts concluded with a TAO to a period of between 12 and 24 
months, as the guide does, makes little sense, since this principle of short-termism leaves 
the administration with a choice between the virtually automatic renewal of contracts or 
repeated, needlessly expensive terminations of those contracts. 
 
c. 
Ex post facto assessment.  The contractual relationship with the co-contractor, and the 
degree of autonomy which the latter enjoys as a result, are difficult to reconcile with the 
principle of continuous supervision by the Community administration responsible for 
monitoring the provision of the service.  In fact, they imply a kind of time-lag between 
the production of the good or the provision of the service concerned by the co-contractor 
on the basis of the autonomy granted to it by the contract, and the ex post facto scrutiny 
of the finished product which the administration must carry out. 
 
A simple comparison can be used to illustrate this point:  vis-à-vis its partner, the 
administration must be in the position of a customer in a restaurant who, in order to 
assess the establishment, has no need to inspect the kitchens or carry out a management 
audit, but can merely base his judgment on the dishes served and the bill to be paid.  Of 
course, in this scenario dishes, i.e. finished products, must actually be served to the 
customer, the Community administration, by its supplier, the private contractor.  If the 
service concerned is not clearly defined and is not easily subject to ex post facto 
assessment, the only way of determining whether the service provided by the outside 
contractor represents value for money is by means of continuous administrative scrutiny. 
 In keeping with the approach chosen by the guide, this entails calling into question the 
actual autonomy of the outside body through the systematic and unfair use of every 
imaginable undermining tactic.  Before concluding a contract with an independent body 
with a view to handing over to it a specific administrative or technical task, checks 
should be carried out to establish that the service delegated in this way will result in the 
submission of a ‘finished product’ which can be correctly assessed on an ex post facto 
basis without this generating excessive additional administrative costs.  Here again, only 
relatively basic services, such as those described as ‘ancillary’, fall into this category.  It 
is thus easy, through the use of a few well-chosen indicators, to conduct ex post facto 
checks on the quality of a maintenance, security or transport service, but much more 
difficult to establish, by any means other than continuous administrative scrutiny, the 
quality of the service provided by a TAO which is responsible for managing a complex 
administrative process involving the implementation of a programme, a process which in 
itself does not give rise to any clearly identifiable and easily assessable ‘output’. 
 
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In short, the Community administration must refrain from contracting out any task to an 
independent body if it is not able to answer ‘yes’ to each of the four following questions: 
 

is the service contracted out extraneous to the direct or indirect exercise of any form of 
policy-making or discretionary power in connection with the implementation of a 
Community policy? 

is it possible to conduct in advance a reliable and accurate assessment of the nature and 
cost of the service contracted out? 

can one contractor be replaced by another without adding to the cost or jeopardising the 
quality of the service concerned? 

does the service contracted out give rise to a ‘finished product’ which can be easily 
assessed on an ex post facto basis? 
 
Thus, all the parameters proposed to determine which administrative or technical tasks cannot be 
handed over to an outside body because they form part of the Community decision-making 
process or because they cannot be fully regulated by the market come together to exclude from 
the desirable scope of the subcontracting process the chief activity of the TAOs, i.e. the 
performance of complex and highly integrated administrative tasks.  Taking up the distinction 
drawn above, ancillary tasks can be contracted out to an external body, even if it is private, but 
proconsular tasks must remain a matter for the Community administration, performed by its 
services or externalised services. 
 
C. 
Reorganising the externalisation process 
 
1. 
Determining the objectives of externalisation 
 
It is not enough to give a negative definition of the tasks which cannot properly be handed over 
to outside contractors by the Community administration.  What is needed is a clear philosophy 
determining the positive objectives which the Commission may legitimately be pursuing when it 
decides that a specific responsibility should not be exercised directly by its own departments.  
Only scrutiny of the promised benefits of the externalisation decision, the results of which 
should be clearly set out, in one form or another, in the legislative and/or budgetary acts defining 
and earmarking the appropriations for the Community measure, can determine whether 
externalisation is justified and point to the most appropriate arrangements. 
 
Without this being an exhaustive list, use of a particular form of externalisation can be regarded 
as legitimate if it meets one of the three following objectives: 
 
a. 
Flexibilisation.  By virtue of the fact that it involves outside staff, recruited on fixed-term 
private contracts, in the implementation of Community measures, externalisation can 
play a key role in flexibilising the Community administrative apparatus: 
 

Flexibilisation in terms of time, by making available to the Community, on a temporary 
basis, the human resources required to implement certain programmes.  However, the 
temporary nature of the programmes to be implemented must not constitute the sole 
criterion by which to judge need for flexibility, since, for example, the same regional or 
international development aid task may take the form of  a permanent programme 
requiring the use of established officials or a series of short-term multiannual 
programmes requiring regular changes in the posting of those established officials, but 
not necessarily successive waves of recruitment on short-term contracts.  In other words, 
it is not the temporary or permanent nature of the programme, but rather of the 
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Community task in connection with which that programme is implemented, which 
justifies or rules out the use of a more flexible staff policy. 
 

Geographical flexibilisation.  The same thinking, and the same restrictions, apply to the 
requirement for geographical flexibility.  The Community administration is perfectly 
justified in recruiting temporary staff on the spot in order to meet temporary needs in a 
very specific location.  However, this form of flexibilisation should not come to be used 
to offset the fundamental reluctance on the part of Commission staff to accept mobility 
and geographical redeployment, particularly as its convenience is made only more 
attractive by the fact that it is less costly and can be funded from operating 
appropriations. 
 
The opposition to internal redeployment among Commission staff makes it impossible to 
suppress the thought that subcontracting as a means of increasing flexibility too often 
represents the inevitable response to bureaucratic inertia, serving both to limit its 
drawbacks and perpetuate its existence:  paradoxically, external flexibility is one of the 
prerequisites for the survival of a bureaucratic, rigid system, in that it helps to offset the 
most striking problems it generates. 
 
In this connection, the comparative assessments of requirements intrinsic to the 
implementation of ‘activity-based budgeting’ should be rigorously used to identify 
sectors and departments which are over-staffed in relative terms and which should be the 
subject of energetic redeployment measures.  The rule which states that an official works 
where he or she is useful, and not where he or she wishes to work, is the legitimate 
counterpart to the tenure enjoyed by Community civil servants. 
 
 
In more general terms, efforts to seek greater management flexibility through the use of staff 
recruited under private law contracts must be conducted with a much greater degree of rigour 
than has hitherto been the case. In particular, the Community administration should: 
 

establish that savings can actually be achieved by means of subcontracting, at a time 
when the doubtful nature of some of these savings is coming to light. Taking over figures 
supplied by the Inspectorate-General, the report of the Committee of Independent Experts 
shows that the average cost of a TAO post is equivalent to that of an A5 official. 
Moreover, when it brought the duties and staff of the TAO Agenor, which was 
responsible for implementing the Leonardo programme, in house the Commission 
acknowledged that this generated a budget saving, funds which were immediately 
allocated to other programmes under global transfer 53/99; 
 

ensure that resources are tailored to real needs. The drive to flexibilise staff management 
can take various administrative forms, ranging from the direct recruitment by central 
Commission departments of staff under private law contracts, very much the most 
common practice judging by the figures in the Decode report, to the handing over of 
whole areas of administrative work to outside bodies such as the TAOs. This raises the 
legitimate question of whether the use of the extreme form of externalisation constituted 
by the TAOs is not specifically designed to camouflage the use of staff recruited under 
private law contracts to perform administrative tasks, the expression of a broader 
Commission policy of abandoning the exercise of its responsibilities. Firm action is 
needed to guard against the fundamentally perverse temptation to play with fire in this 
way. 
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b. 
Giving staff an increased sense of responsibility. The externalisation of an administrative 
task may be designed to give specific individuals a free hand in its implementation and 
thereby make them feel responsible for its management. It is at the forefront of 
broader-based moves to make administrative staff more aware of their management 
responsibilities, one of the key features being the introduction of 'activity-based 
budgeting'. This policy of giving individuals in a department or a legally autonomous 
body responsibility for administrative management no more necessitates the use of TAOs 
than does the objective of flexibilising staff management. It would be enough simply to 
delegate authority to bodies which are separate from the Commission's central 
departments, but which, as the report of the Committee of Independent Experts suggests, 
nevertheless have the basic features of an administrative department. In this connection, 
and despite the imbalance in the representation of the Commission and the Member 
States on the administrative board, the establishment of the Obnova agency for the 
reconstruction of Kosovo represents an interesting and promising initiative. In other 
words, it would be a mistake to confuse the externalisation of tasks with the privatisation 
of management. 
 
c. 
Involving outside partners. One of the most legitimate objectives of externalisation, and 
one of those least often mentioned, is the establishment of a structured legal framework 
for the performance of an administrative task involving various public partners. This 
requirement arises in connection with: 
 

the implementation of international development programmes which are essentially 
managed jointly by the Commission and one or more partner states; 
 

the implementation of Community programmes necessitating the involvement of the state 
on whose territory the measure concerned is carried out; 
 

the use of specialist scientific or economic staff, who, even if they were to be employed 
by the Community administration on a permanent basis, could properly exercise their 
responsibilities only by remaining outside the administration – one example being 
research activities which can be carried out only by fully-fledged members of the 
scientific community working for specialist bodies. Mention might also be made of 
promotional or advertising activities which can properly be performed only by 
professional bodies working on behalf of a wide range of clients, rather than exclusively 
for the Community administration. 
 
 
The externalisation arrangements will inevitably vary depending on whether the aim is to 
develop administrative machinery to be used jointly by several public partners or to 
delegate to an outside body a specific task in the broader context of a measure 
implemented by the Community administration. In the first instance, what is required is 
an administrative tool specifically designed for the purpose. In the second, it is enough 
simply to conclude a service contract with a specialist body. 
 
2. 
Broadening the range of externalisation instruments 
 
a. 
Tailoring externalisation strategies. As we have seen, effective administrative 
management is posited on the implementation of a tailored externalisation strategy. 
Administrative policy must not amount to a simple choice between direct management by 
established officials in the Commission’s central departments and the handing over of 
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whole areas of administrative work to an independent body using staff recruited under 
private law contracts. The range of possible solutions between these two extremes 
includes the following: 
 

direct management by established officials from the Community administration working 
in the Commission’s central departments; 

direct management in the same framework, but with some staff recruited on private law 
contracts; 

management by administrative bodies which are autonomous but headed by 
representatives of the Community administration and whose staff consists in full or in 
part of established officials; 

management by administrative bodies run, in various configurations, by representatives 
of the Community administration and of other public authorities, Member States or 
partner states of the Union; 

management by bodies separate from the Community administration acting as the 
administration’s private contractor and using staff recruited solely on private law 
contracts. 
Any rigorously conducted externalisation policy involves an analysis of the comparative 
merits of the various forms of management available, taking into account the range and 
nature of the objectives to be achieved. However, the existing administrative instruments 
cannot cover the full range of models outlined above, so that new instruments are 
required. 
 
b. 
Creating new administrative instruments. Under the present Community administrative 
system, no Community body combines the four following characteristics: 
 

the legal autonomy of the implementing body, which presupposes that it should 
have legal personality; 
 
-    indirect Commission responsibility for the body in question, entailing 
administrative supervision provided by Commission officials and the presence, on 
the body’s management board, of representatives of the Commission; those 
representatives should be in a majority if the body in question has the task of 
implementing a policy in respect of which operational responsibility rests solely 
with the Commission; 
 
-    the possible inclusion on the body’s management board of representatives of 
certain partners, in particular states which are the European Union’s partners in 
development aid programmes, and qualified individuals; 
 
-    up to 75% of the body’s executive staff recruited on private law contracts.  
 
The establishment of administrative bodies with these four characteristics must be a 
priority for the Community administration. These bodies might well be termed 
Decentralised Implementation Units (DIUs) in order to avoid the ambiguities inherent in 
the term ‘agency’, which suggests an existing type of body differing from the DIUs in the 
following key respect: the presence of large numbers of representatives of the Member 
States on the agencies’ management boards, a presence which, in the case of the DIUs, 
would represent a breach of the budgetary implementing powers conferred on the 
Commission by Article 274 of the Treaty. 
Such bodies would deal with all the programmes and measures whose implementation 
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would benefit from being externalised, but in cases where this cannot be done on the 
basis of a private law contract concluded with an outside body on the grounds that the 
twin conditions referred to above (B.1.2.) – no involvement in the exercise of a 
discretionary power, possibility of genuine regulation by the market – cannot be met. In 
practice, the establishment of such bodies would no doubt be contingent on the adoption 
of a framework regulation requiring the agreement of the Council. 
 
Contrary to what is sometimes claimed, this new administrative instrument should not 
give rise to the creation of large numbers of posts. If the numbers of staff currently used 
by the TAOs are put at 1 000 persons per year, and given that some 25% of the total staff 
complement of the future DIUs will be drawn from the Community administration, it can 
be seen that the Commission will have to earmark some 250 members of staff to 
supervise the DIUs. It should be borne in mind that some 2 500 posts were created 
between 1992 and 1997, that the number of vacant posts in the Commission amounts to 
almost 700 and, finally, that a fair number of staff in the Commission’s central 
departments are already responsible for monitoring programmes and supervising the 
TAOs. 
 
3. 
Ensuring budgetary transparency 
 
a. 
Bringing an end to the funding of administrative expenditure from operating 
appropriations.  The policy of subcontracting administrative tasks, as reflected in the use 
of the TAOs, plays the same role today as the mini-budgets did in the past: it seeks to 
ensure that administrative expenditure can be funded from operating appropriations.  This 
practice is unacceptable.  It represents a breach of the Financial Regulation, which 
carefully divided the budget into two strictly separate parts, Part A for administrative 
expenditure and Part B for operating expenditure.  It pays no heed to the interinstitutional 
agreement and the financial perspective, since it results in the funding under all headings 
of expenditure which should be dealt with solely under Heading 5.  Finally, it disregards 
the requirements of democratic transparency, in that citizen-taxpayers, and their 
parliamentary representatives, are deprived of any fair and accurate assessment of the 
share of the budget which is actually devoted to the operation of the administrative 
institutions.  It is astonishing that such a serious and lasting breach of the current rules 
should have been tolerated for so long by the two arms of the budgetary authority. 
 
b. 
Reforming the budget nomenclature.  Any genuine reform of the budget nomenclature 
entails changes to the Financial Regulation, a cumbersome procedure requiring the 
unanimous agreement of the Member States.  A distinction must therefore be drawn 
between measures which can be carried out under the existing regulatory framework and 
those which require changes to that framework. 
 
As regards the former, the Commission should include in the documents submitted to the 
budgetary authority a volume setting out a cross-referenced survey of expenditure for the 
financial year classified by nature (operating expenditure, itself divided into staff 
expenditure and other operating expenditure) and by purpose, i.e. by policy.  This 
presentation, which would provide a breakdown of the appropriations in Chapter A-70 of 
the budget, would be consistent with the amendment to the nomenclature adopted by 
Parliament at the first reading of the 2000 budget and which seeks to enter operating 
appropriations used for administrative purposes under a separate heading deliberately 
entitled BA.  Logically speaking, this reclassification should have clear implications for 
the financial perspective: all the administrative expenditure should appear under Heading 
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5, even if this entails raising the ceiling for that heading. 
 
Ultimately, in keeping with the recommendations of the Committee of Independent 
Experts (recommendation 2.4.4 of the second report), the entire budget nomenclature 
should be revamped.  The aim would be to bring an end to the archaic and rigid division 
of expenditure between Parts A and B of the budget and take the opportunity offered by 
the establishment of ‘activity-based budgeting’ to introduce a cross-referenced 
double-entry nomenclature which puts the classification of appropriations by nature and 
purpose on a systematic, official footing. 
 
c. 
Guaranteeing the powers of the legislative authority and the budgetary authority.  The 
revision of the nomenclature will ensure that budgetary decisions are more transparent 
than at present, but the requirements of democracy do not stop there.  If the legislative 
authority, in the context of the procedure for the adoption of texts and programmes, and 
the budgetary authority, in the context of the budget procedure, are to play their 
respective roles to the full, the Commission should inform the Council and Parliament 
systematically and in detail of the arrangements it proposes to make to implement 
Community acts and programmes.  Thus the financial statement accompanying 
Commission proposals should include a set of administrative information specifying the 
implementing method or methods chosen by the Commission, the staff complement 
required, the legal status of the various categories of staff used and, finally, the volume of 
appropriations required for management purposes.  This administrative statement, 
updated annually by the Commission, would be annexed to the documents forwarded to 
the budgetary authority as part of the annual procedure. 
 
4. 
Rationalising and streamlining the management and supervision of externalised activities 
 
a. 
Rejecting the bureaucratic excesses of the guide 
 
As things stand, relations between the TAOs, with their supposed legal autonomy, and the 
Community administration responsible for supervising them are deeply unhealthy.  In this 
connection, a reading of the guide published in July 1999 is edifying:  whilst virtuously 
proclaiming the need to integrate into the cost of the service contracted out to a TAO the 
expenses incurred in connection with the tendering, supervision and assessment of the work of 
the body in question, the guide sounds an all-out attack on the TAOs in general.  Admittedly, the 
proposed introduction of certain ethical rules concerning incompatibilities, conflicts of interest 
and confidentiality is in itself very welcome, and the rules could usefully be extended to cover 
all service contracts concluded by the Commission, even those involving co-contractors which 
do not fall into the very select category of fully-fledged TAOs.  However, the extremely 
cumbersome nature of the administrative procedure laid down by the Commission document is 
striking.  That procedure begins with a cost-effectiveness analysis.  However, the more complex 
and less well-defined the service to be contracted out is, the more cumbersome, involved and, 
therefore, costly that analysis will prove to be.  As the Community administration seems to have 
a horror of simplicity, the guide stipulates that the analysis may be carried out jointly by the 
managing department in the directorate or the directorate-general department responsible for 
resources, involving, ‘if possible’, the department carrying out the assessment.  For good 
measure, the proposal to use a TAO is to be made contingent on an opinion delivered by the 
TAO monitoring agency assessing the accuracy of the cost-effectiveness analysis.  Before a start 
has even been made on the implementation of a procedure theoretically designed to save 
taxpayers’ money, no fewer than three assessments, which may very well turn out to be lengthy 
and costly if they are properly conducted, must be carried out by three separate administrative 
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departments. 
 
Far from allowing the TAO, once it has been established, to carry out its work and then judging 
the results at the appropriate juncture, the Commission regards it as essential, with a view to 
ensuring that it retains control over the use of TAOs and the tasks contracted out to them, to set 
up in the managing service a system to monitor and scrutinise all their activities.  After giving 
three separate departments responsibility for a priori assessment, the Commission is now making 
two responsible for management, on the basis of a strange division of responsibilities:  
implementation on the one hand, monitoring on the other!  Moreover, supervision accounts for a 
significant proportion of the co-contractor’s activities, it being required, for example, to supply a 
regular statement of the costs relating to the various types of service with a view to the 
establishment of comparable unit costs. The thinking behind this provision is easy to understand, 
particularly as the inquiry into the TAOs by the Inspectorate-General revealed up to fivefold 
differences in the cost of the staff used by these bodies, without these differences necessarily 
reflecting disparities in structure.  However, given management arrangements of this kind, just 
how much is left of the principle of autonomy which theoretically justifies the decision to 
conclude a contract! 
Moreover, duplication is not a strong enough term, since the guide provides for a plethora of 
checks.  Not only does the Community administration, which seems to be as distrustful of itself 
as it is of others, organise the entire range of in-house checks – managing department, TAO 
monitoring agency, financial control with a ‘nucleus of expertise’, it also recommends 
systematic and regular external audits of the work of the TAOs, not counting, of course, the 
monitoring by the Court of Auditors and the entirely legitimate scrutiny by Parliament in the 
context of the discharge procedure. 
 
In truth, instead of reducing administrative costs, an administrative system which seeks in this 
way to contract out a substantial number of tasks without being prepared – or in a position – to 
allow contractors a free hand will perversely tend to multiply those costs threefold, since it is 
posited on the presence, alongside the person who performs the work, of two additional types of 
employee, the first of whom would have the task of assessing the work performed and the second 
the task of reacting to that assessment – and this overly optimistic hypothesis assumes that we 
are dealing with a Commission assessment unit. In this connection, a reading of the guide is 
enough to leave any well-intentioned person who is keen to see the Commission demonstrate a 
modicum of administrative efficiency dizzy with the implications. In realistic terms, the guide 
offers a choice between the disastrous paralysis which would be the inevitable result of its own 
implementation and, a more probable and less democratic scenario, the de facto circumvention 
of these provisions by an administration which is accustomed to transforming into a simple 
formal exercise compliance with those procedures and constraints which it regards as 
excessively strict. 
 
b. 
Doing away with the paranoia characterising relations between the Community 
administration and the TAOs 
 
The contradictory requirements of autonomy and supervision thus gradually gave rise to a 
relationship akin to paranoia between the administration and the TAOs, precisely because the 
activities contracted out to the latter were very ill-suited to regulation by the market as 
understood in point II.B.2. It is as if the Community administration was seeking, by means of a 
constant process of awkward and pernickety supervision, to forestall potential abuses of their 
autonomy by TAOs and found itself forced to play cat and mouse with its contractors. The 
combination of declared contractual autonomy and the inability of the market to regulate 
contractors’ activities satisfactorily, exacerbated by Parliament’s keenness to monitor and 
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punish, has given rise to a relationship between the Community administration and its partners 
which is fundamentally distrustful, prompting an astonishing proliferation of supervisory and 
assessment measures. 
 
The only solution is to restrict the contracting out of administrative work to external bodies to 
those tasks which can be regulated by the market in the manner we have outlined above and to 
impose on all remaining activities a form of regulation, based on the regular exercise of 
hierarchical authority and the more sporadic exercise of supervisory power, consistent with any 
properly organised administration. This presupposes two things: 
 

the establishment of the Decentralised Implementation Units (DIUs) referred to above, 
which must have genuine management autonomy whilst being subject, through their 
management structures, to Commission supervision; the latter must monitor the services 
contracted out so effectively that the checks can be made less frequent and less 
time-consuming for the persons monitored. 
 

The planning of supervisory activities by the Commission’s departments. The 
concentration of supervisory power in a single department is no doubt unrealistic, given 
the variety of administrative or political units with the independent authority to act in this 
area: in their individual areas of responsibility, OLAF, the Court of Auditors and 
Parliament’s Committee on Budgetary Control all have good reason to take an interest at 
a given juncture in a specific aspect of administrative work. Nevertheless, the 
Commission’s departments should organise themselves in such a way as to prevent the 
dispersal of administrative monitoring instruments and the uncontrolled proliferation of 
bodies exercising fragmented authority. 
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WORKING DOCUMENT No 12 
 
CONCLUSION: TIMETABLE 
 
 
At the first reading of the budget for the 2000 financial year Parliament adopted Amendment 
3117 laying down a very strict and very ambitious timetable for the reforms to be carried out by 
the Commission in connection with the preparation and implementation of that budget. Initially 
drawn up in July, this timetable has since been the subject of a number of exchanges of views 
with the Commission, which has drawn attention to the administrative and political problems it 
would face in meeting within the relevant time-limits all the conditions laid down by the 
amendment. Some of these problems stem from the Commission’s own reluctance to act: for 
example, it refused to take any steps to carry out a survey of its staff requirements, as requested 
by Parliament in March when adopting its budget guidelines. Other problems, however, would 
seem to be outside the Commission’s control. For example, the establishment of the 
Decentralised Implementation Units, which are intended to supersede the TAOs, no doubt calls 
for the adoption of a framework regulation necessitating the implementation of a relatively 
complicated legislative procedure and the Council’s political agreement. In one way or another, 
the arrangements for the dismantling of the TAOs will inevitably be affected. By the same token, 
the vitally needed reform of the Financial Regulation will only be achieved by means of a long, 
complex and laborious legislative process involving all three institutions. Finally, it is clear that 
some of the proposed reforms, such as those of the Commission’s contract-related practices, 
form part of a broader administrative strategy which the budget procedure cannot pre-empt.  
 
Nevertheless, a few fine words from the Commission will not be enough to persuade Parliament, 
in the context of the second reading of the budget, to release the appropriations entered in the 
reserve at first reading. Bureaucratic inertia is a ubiquitous phenomenon and the consistently 
vigorous nature of the Community administration’s opposition to the reform of the TAOs 
demonstrate that it is only with a heavy heart that the Commission will abandon practices which, 
however unhealthy, have become vital to its administrative arrangements. 
 
Although the timetable laid down by Amendment 3117 should be ‘interpreted intelligently’, it 
cannot be called into question during the second reading of the budget. By the same token, 
although the rapporteur for the budget is loath to propose to his colleagues that sums be placed in 
the reserve in volumes and for periods which are such as to jeopardise the proper implementation 
of the appropriations adopted, he does not intend to deprive himself, at second reading, of a 
tactic which is all the more justified because the uncertainties regarding the nature and speed of 
the administrative reform under way make it difficult to determine the volume of financial 
resources which will be required during the 2000 financial year. 
 
The timetable adopted by Parliament in Amendment 3117 made provision for the following: 
 
A. Before the second reading of the budget 
 
1. 
The adoption of a decision of principle banning any further delegation of administrative 
tasks to bodies independent of the Commission; 
2. 
The submission of a timetable for the dismantling of the existing TAOs by 15 November 
2000. 
 
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The Commission has drawn attention to two types of problem in connection with the 
implementation of such a timetable: 
 

problems linked to the existence of contracts expiring after 15 November 2000. 
 
It would no doubt be unfair to demand the early termination of contracts concluded 
before 23 March, the date on which the EP adopted the budget guidelines, and whose 
duration does not exceed two years. The situation is very different, however, with regard 
to contracts concluded after 23 March 1999 in complete disregard of the budget 
guidelines laid down by Parliament and the call for the dismantling of the existing TAOs: 
it is now up to the Commission to repair the damage caused by its disrespectful treatment 
of the budgetary authority and bring its contractual links with the bodies concerned to an 
end by the date laid down in Amendment 3117. 
 
 
As regards the contracts concluded before 23 March 1999 and due to expire after 2001, 
their systematic termination during 2001 should be negotiated before September 2000. 
 

Problems linked to the time needed to adopt a framework regulation providing for the 
establishment of new administrative instruments, described in this document as 
Decentralised Implementation Units and intended to take over the role played by the 
TAOs in the implementation of certain Community programmes. Although Parliament is 
well aware of the cumbersome nature of the Community decision-making process, it 
cannot accept that this pretext should be used to justify the maintenance of the status quo. 
As things stand, there is nothing to prevent the Commission from drawing on its 
experience and prior to the adoption of the 2001 budget, administrative arrangements for 
its departments which enable it to carry out, on the basis of supervision by officials from 
the relevant directorates-general and with the assistance of some of the staff recruited 
under private law contracts by the TAOs, the tasks currently performed by the latter. 
Indeed, the reverse is true: this administrative experiment would serve as a full-blown 
test of the advantages and, possibly, drawbacks of decentralised administrative 
management of Community policies involving a mix of officials and outside staff. 
 
3. 
The drafting and publication of a report proposing changes to the presentation of budget 
headings in accordance with the principles outlined in II.C.3. 
 
4. 
A Commission undertaking to submit before 15 February 2000 a report on its staff 
priorities and its real staff requirements. 
 
B. 
Before 15 April 2000 
 
1. 
Submission of a list of services hitherto performed by the Commission and which could 
be performed more cheaply on the basis of privatised management. In the course of its 
dialogue with Parliament the Commission pointed out that the drafting and submission of 
such a list would provoke adverse reactions within the administration. The rapporteur on 
the budget can only acknowledge that this warning is justified and state that, in making 
its request, Parliament chiefly wished to show that its criticism of the TAOs did not rule 
out the use of other forms of externalisation when justified. 
 
2. 
The adoption of a formal decision on and a timetable for the establishment of the 
Decentralised Implementation Units. Since a framework regulation is required, it goes 
without saying that this will entail the adoption by the College of a formal proposal and 
that the timetable can only be indicative in nature, even if the time needed by the 
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institutions to establish this new administrative tool can under no circumstances be used 
as a pretext to justify the continued use of administrative and technical assistance, in its 
current form, beyond the deadlines laid down in point II.A.2. 
     
 
 
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Document Outline