The European Commission has announced the adoption of the new remedies directive. The new directive will amend the existing remedies directives and will introduce a mandatory standstill period between the contract award decision and the formality of entering into the contract. It also introduces provisions to render contracts ineffective if the standstill requirements are not met.
Following the European Parliament's approval of the new directive in June to amend the existing remedies directives for both public bodies and utilities, the European Commission announced on 15 November that the directive has now been adopted.
Charlie McCreevey, the Internal Market and Services Commissioner, said "I am pleased that this Directive has been adopted so rapidly. We need effective procedures for seeking review in all EU Member States in order to make sure that public contracts ultimately go to the company which has made the best offer. By strengthening national review procedures in line with this Directive, businesses will have stronger incentives to bid for public contracts anywhere in the EU".
The main purpose of the new directive is to address the lack of effective remedies against the illegal award of public contracts. In particular, it seeks to provide clarity on the principles laid down in the Alcatel judgment which established that Member States must provide a review procedure prior to the conclusion of the contract.
To implement this, the new directive requires contracting authorities to impose a mandatory 10 or 15 day standstill period (depending on whether notification is sent electronically/by fax or by post) between communication of the contract award decision to bidders and formally entering into the contract. This allows aggrieved third parties an opportunity to request the award decision to be set aside before the contract is formally awarded (instead of at that point being limited to damages).
If the standstill requirements are not met then the contract can be rendered ineffective. Although the consequences of this will be determined by national law, it could for example include the retroactive set aside of the concluded contract. Member States can though derogate from this, for example, where there are overriding reasons in the public interest not to set aside the contract. Where the contract is not to be set aside then alternative sanctions can be imposed for not complying with the standstill period. These include levying fines or shortening the duration of the contract.
In the UK, there is currently a 10 day mandatory standstill period which was introduced in 2006. The new remedies directive, however, provides a number of useful clarifications on the implementation of the standstill period, in particular, the consequences of not complying with the standstill period. For example, it is possible that contracts awarded in the absence of a standstill period may be set aside.
The European Commisison noted that the adopted directive will be published in the Official Journal soon and that Member States will have 24 months to implement its provisions into national law.