European Commission calls on Austria to eliminate barriers to oversight in public procurement
On 25 January 2018 the Commission sent a formal summons to Austria to eliminate irregularities in national law limiting contractors’ rights to seek review of actions by authorities conducting public procurement procedures.
According to a Commission notice, the regulations in Austria require contractors to pursue a conciliation procedure before filing an appeal against actions by the contracting authority. The law in Austria also prevents complainants from requesting any effective interim measures during the conciliation procedure, and allows the contracting authority to conclude the contract after four weeks even if no settlement has been reached.
In the Commission’s view, these practices are contrary to the EU rules on application of review procedures for the award of public supply contracts and public works contracts under the Remedies Directive (89/665/EEC).
The functioning of appellate review systems in public procurement in the member states is the subject of a recent report by the Polish Public Procurement Law Association (SPZP). According to the report, under Austrian law filing an appeal against actions by a contracting authority does not prevent the contracting authority from going ahead and awarding the contract, unless the court of first instance grants the contractor’s application for interim relief and orders a stay of conclusion of the contract.
The SPZP report also points out that the statutory period for issuance of a ruling on public procurement matters by the first-instance authority in Austria is 6 weeks, but in practice rulings are often issued later than that. And, according to the report, national law in Austria does not provide for the possibility of challenging rulings issued in public procurement matters by the second-instance authority—a right enjoyed by both contracting authorities and contractors in the great majority of other member states. As in Austria, however, in Poland as well the parties have no right to challenge a ruling by the second-instance authority (i.e. the regional court), as the right to seek review of such a ruling is vested only in the president of the Public Procurement Office.
Austria has two months to respond to the Commission’s arguments. Otherwise, the Commission may continue the proceeding against Austria and issue a reasoned opinion in the case.
Mirella Lechna, legal adviser, Infrastructure, Transport, Public Procurement & PPP practice, Wardyński & Partners
