The Lithuanian Government has received a formal reasoned opinion over the allegedly wrongful use of the negotiated procedure in relation to a works contract for Lithuanian Railways (LR) for the modernisation of the railway radio communication system. LR initially launched an open call for tender for the award of the contract but disqualified the two offers it received on the grounds of incompatibility with the technical requirements specified in the tender documents. LR believed it met the grounds in the procurement rules to resort to the negotiated procedure without call for competition for the award of the contract. The European Commission however has taken the view that the offers that LR received could not be regarded as unsuitable to meet their requirements and therefore it could not legitimately resort to the negotiated procedure. One of the reasons this contract is so sensitive is that the EU Cohesion Fund is providing much of the funding for the project. If the matter cannot be resolved, it may be referred to the European Court of Justice.