JUDGMENT OF THE COURT (Sixth Chamber)

28 October 1999 (1)

(Public procurement — Procedure for the award of public supply and workscontracts — Review procedure)

In Case C-81/98,

REFERENCE to the Court under Article 177 of the EC Treaty (now Article 234EC) by the Bundesvergabeamt (Austria) for a preliminary ruling in the proceedingspending before that court between

Alcatel Austria AG and Others,

Siemens AG Österreich,

Sag-Schrack Anlagent echnik AG

and

Bundesministerium für Wissenschaft und Verkehr

on the interpretation of Council Directive 89/665/EEC of 21 December 1989 on thecoordination of the laws, regulations and administrative provisions relating to theapplication of review procedures to the award of public supply and public workscontracts (OJ 1989 L 395, p. 33),

THE COURT (Sixth Chamber),

composed of: P.J.G. Kapteyn (Rapporteur), acting as President of the Chamber,G. Hirsch and H. Ragnemalm, Judges,

Advocate General: J. Mischo,

Registrar: H.A. Rühl, Principal Administrator,

after considering the written observations submitted on behalf of:

—    Alcatel Austria AG and Others, by S. Köck and M. Oder, Rechtsanwälte,Vienna,

—    Siemens AG Österreich, by M. Breitenfeld, Rechtsanwalt, Vienna,

—    Bundesministerium für Wissenschaft und Verkehr, by W. Peschorn,Oberkommissär in the Finanzprokuratur,

—    the Austrian Government, by W. Okresek, Sektionschef in the FederalChancellor's Office, acting as Agent,

—    the Commission of the European Communities, by M. Nolin and B.Brandtner, of its Legal Service, acting as Agents, with R. Roniger, of theBrussels Bar,

—    the EFTA Surveillance Authority, by H. Óttarsdóttir, Officer, Legal andExecutive Affairs, EFTA Surveillance Authority, and T. Thomassen, SeniorOfficer, Goods Directorate, EFTA Surveillance Authority, acting as Agents,

having regard to the Report for the Hearing,

after hearing the oral observations of Siemens AG Österreich, represented byM. Breitenfeld, of the Bundesministerium für Wissenschaft und Verkehr,represented by W. Peschorn, of the Austrian Government, represented by M.Fruhmann of the Federal Chancellor's Office, acting as Agent, of the GermanGovernment, represented by W.-D. Plessing, Ministerialrat in the Federal Ministryof Finance, acting as Agent, of the United Kingdom Government, represented byM. Hoskins, Barrister, and of the Commission, represented by R. Roniger, at thehearing on 28 April 1999,

after hearing the Opinion of the Advocate General at the sitting on 10 June 1999,

gives the following

Judgment

1.

    By order of 3 March 1998, received at the Court on 25 March 1998, theBundesvergabeamt (Federal Procurement Office) referred for a preliminary rulingunder Article 177 of the EC Treaty (now Article 234 EC) three questions on theinterpretation of Council Directive 89/665/EEC of 21 December 1989 on thecoordination of the laws, regulations and administrative provisions relating to theapplication of review procedures to the award of public supply and public workscontracts (OJ 1989 L 395, p. 33).

2.

    The questions arose in a dispute between Alcatel Austria AG and Others, SiemensAG Österreich and Sag-Schrack Anlagentechnik AG on the one hand and theBundesministerium für Wissenschaft und Verkehr (Federal Ministry of Science andTransport, 'the Bundesministerium‘) on the other concerning the award of a publicsupply and works contract.

Legal background

Community law

3.

    Article 1 of Directive 89/665 provides:

'1. The Member States shall take the measures necessary to ensure that, as regardscontract award procedures falling within the scope of Directives 71/305/EEC and77/62/EEC, decisions taken by the contracting authorities may be reviewedeffectively and, in particular, as rapidly as possible in accordance with theconditions set out in the following Articles, and, in particular, Article 2(7) on thegrounds that such decisions have infringed Community law in the field of publicprocurement or national rules implementing that law.

2. Member States shall ensure that there is no discrimination between undertakingsclaiming injury in the context of a procedure for the award of a contract as a resultof the distinction made by this Directive between national rules implementingCommunity law and other national rules.

3. The Member States shall ensure that the review procedures are available, underdetailed rules which the Member States may establish, at least to any person havingor having had an interest in obtaining a particular public supply or public workscontract and who has been or risks being harmed by an alleged infringement. Inparticular, the Member States may require that the person seeking the review musthave previously notified the contracting authority of the alleged infringement andof his intention to seek review.‘

4.

    Article 2(1) of Directive 89/665 provides:

'The Member States shall ensure that the measures taken concerning the reviewprocedures specified in Article 1 include provision for the powers to:

(a)    take, at the earliest opportunity and by way of interlocutory procedures,interim measures with the aim of correcting the alleged infringement orpreventing further damage to the interests concerned, including measuresto suspend or to ensure the suspension of the procedure for the award ofa public contract or the implementation of any decision taken by thecontracting authority;

(b)    either set aside or ensure the setting aside of decisions taken unlawfully,including the removal of discriminatory technical, economic or financialspecifications in the invitation to tender, the contract documents or in anyother document relating to the contract award procedure;

(c)    ...‘.

5.

    Article 2(6) of Directive 89/665 states:

'The effects of the exercise of the powers referred to in paragraph 1 on a contractconcluded subsequent to its award shall be determined by national law.

Furthermore, except where a decision must be set aside prior to the award ofdamages, a Member State may provide that, after the conclusion of a contractfollowing its award, the powers of the body responsible for the review proceduresshall be limited to awarding damages to any person harmed by an infringement.‘

Austrian law

6.

    In Austria public procurement is governed, with regard to the Federal State, by theBundesvergabegesetz (Federal Procurement Law, BGBl. No 462/1993, 'theBVergG‘), in the version prior to the 1997 amendments (BGBl. No 776/1996).

7.

    Paragraph 9, point 14, thereof defines the award as the declaration made to thetenderer, accepting his tender.

8.

    Under Paragraph 41(1), the contractual relationship between the authority and thetenderer comes into being, within the period allowed for making the award, whenthe tenderer receives notification of the acceptance of his offer.

9.

    Under Paragraph 91(2), the Bundesvergabeamt may, up to the time the award ismade, adopt interim measures and set aside unlawful decisions of the awarding

department of the contracting authority for the purpose of removing infringementsof the BVergG and of the regulations made thereunder.

10.

    Paragraph 91(3) provides that, once the contract has been awarded, theBundesvergabeamt has power to determine that as a result of an infringement ofthe BVergG or of the regulations made thereunder the award was not made to thetenderer making the best offer.

11.

    Paragraph 94 provides inter alia:

'1.    The Bundesvergabeamt must set aside by way of a decision, taking intoaccount the opinion of the Conciliation Committee in the case, any decision of thecontracting authority in an award procedure which

(1)    is contrary to the provisions of this Federal Law or its implementingregulations and

(2)    significantly affects the outcome of the award procedure.

...‘.

Facts

12.

    On 23 May 1996, the Bundesministerium published an invitation to tender for thesupply, installation and demonstration of all the hardware and software componentsof an electronic system for automatic data transmission to be installed on Austrianmotorways.

.

13.

    The invitation to tender was issued in accordance with the open procedureprovided for in Council Directive 93/36/EEC of 14 June 1993 coordinatingprocedures for the award of public supply contracts (OJ 1993 L 199, p. 1).

14.

    On 5 September 1996 the contract in question was awarded to Kapsch AG and itwas signed on the same day. The other tenderers, who learned of the contractthrough the press, applied between 10 and 22 September 1996 to theBundesvergabeamt for review.

15.

    On 18 September 1996, the Bundesvergabeamt dismissed the applications for interim measures to suspend performance of the contract on the ground that,pursuant to Paragraph 91(2) of the BVergG, once an award is made it no longerhas power to make interim orders. A complaint was lodged against that decisionwith the Verfassungsgerichtshof (Constitutional Court).

16.

    Pursuant to Paragraph 91(3) of the BVergG, the Bundesvergabeamt determined,by decision of 4 April 1997, that various breaches of the BVergG had occurred andbrought the review procedure to an end.

17.

    The decision of the Bundesvergabeamt of 18 September 1996 was set aside by theVerfassungsgerichtshof.

18.

    In view of that judgment, the Bundesvergabeamt reopened the procedureterminated on 4 April 1997 in order to examine the merits, and on 18 August 1997made an order provisionally prohibiting the contracting authority from furtherperformance of the contract concluded on 5 September 1996.

19.

    The Republic of Austria lodged a complaint against that order before theVerfassungsgerichtshof which, by order of 10 October 1997, gave suspensive effectto the complaint, with the result that the interim measure adopted by theBundesvergabeamt on 18 August 1997 was provisionally inoperative.

20.

    In its order for reference, the Bundesvergabeamt states that the BVergG does notdeal separately with the public law and private law aspects in the procedure for theaward of contracts. Rather, the contracting authority participates in the procedureexclusively as a bearer of private rights, which means that the State as contractingauthority employs the rules, forms and methods of civil law. Under Paragraph 41(1)of the BVergG, the contractual relationship between the authority and the tenderercomes into being, within the period allowed for making the award, when thetenderer receives notification of the acceptance of his offer.

21.

    Consequently, the national court states, the award and the conclusion of thecontract in Austria do not as a rule formally occur at the same time. The decisionof the contracting authority as to the party with whom it wishes to contract isnormally made before it is incorporated in writing, and the decision on its own isnot sufficient to create the contract, since the tenderer must at the very leastreceive notice of that decision; in practice, however, the contracting authority'sdecision as to whom to award the contract is one taken internally without, underAustrian law, any public manifestation thereof. Accordingly, from the outsider'spoint of view the declaration of the award and the conclusion of the contract occurtogether, since, as a rule, the outsider does not have and cannot have, at any ratelegally, any knowledge of the internal decision of the contracting authority. Theaward decision itself, that is to say the decision of the contracting authority as tothe party with whom it wishes to contract, is not open to challenge. The point intime at which the award is made is of decisive importance for the review procedurebefore the Bundesvergabeamt.

22.

    The national court states that under Paragraph 91(2) of the BVergG theBundesvergabeamt has power up to the time the award is made to adopt interimmeasures and to set aside unlawful decisions of the awarding department of thecontracting authority for the purpose of removing infringements of the BVergG and

of the regulations made thereunder. After the award has been made, it merely haspower to determine that as a result of an infringement of the BVergG or of theregulations made thereunder the award was not made to the tenderer making thebest offer. In the case of culpable infringement of the BVergG by agents of anawarding body, Paragraph 98(1) thereof provides that compensation is payable tothe unsuccessful candidate or tenderer by the contracting authority to which theconduct of those agents is attributable.

23.

    Lastly, the national court notes that, under Paragraph 102(2) of the BVergG, aclaim for compensation before the ordinary courts in such a case is admissible onlyif there has been a prior determination by the Bundesvergabeamt within themeaning of Paragraph 91(3). Irrespective of Paragraph 91(3), the courts and theparties to the procedure before the Bundesvergabeamt are bound by thatdetermination. It is evident from the structure of the review procedure that, inrespect of the area covered by the BVergG, the Austrian federal legislature hasopted under Article 2(6) of Directive 89/665/EEC to limit the remedy to an awardof damages.

Questions referred for a preliminary ruling

24.

    In those circumstances, the Bundesvergabeamt decided to stay proceedings andrefer the following questions to the Court for a preliminary ruling:

'1.    When implementing Directive 89/665/EEC, are Member States required byArticle 2(6) thereof to ensure that the contracting authority's decision priorto the conclusion of the contract as to the bidder in a tender procedure withwhich, in the light of the procedure's results, it will conclude the contract(i.e. the award decision) is in any event open to a procedure whereby anapplicant may have that decision annulled if the relevant conditions are met,notwithstanding the possibility once the contract has been concluded ofrestricting the legal effects of the review procedure to an award ofdamages?

2.    If Question 1 is answered in the affirmative:

    Is the obligation described in Question 1 sufficiently clear and precise toconfer on individuals the right to a review corresponding to therequirements of Article 1 of Directive 89/665/EEC, in which the nationalcourt must in any event be able to adopt interim measures within themeaning of Article 2(1)(a) and (b) of that directive and to annul thecontracting authority's award decision, and the right to rely in proceedingson that obligation as against a Member State?

3.    If Question 2 is answered in the affirmative:

    Is the obligation described under Question 1 also sufficiently clear andprecise to mean that in such a procedure the national court must disregardcontrary provisions of national law which would prevent the court fromfulfilling that obligation, and must fulfil that obligation directly as part ofCommunity law even if national law lacks any basis on which to act?‘

Admissibility

25.

    The Bundesministerium and the Austrian Government contend that, in so far asthe contract has already been performed in its entirety, there is in reality no longera dispute in the main proceedings. The answer to the questions raised will thereforebe irrelevant, since the applicants in the main proceedings can only obtain damagesat this stage, the award of which is in any case provided for under the BVergG.

26.

    Although the Commission has expressed doubts as to the admissibility of thequestions referred to the Court, it considers that a ruling by the Court could havean effect on subsequent developments in the main case, in particular because thelevel of any damages payable to the applicants in the main proceedings could beaffected by the answer to the questions raised, and that the answer to the firstquestion could mean that the contract or the award decision must be set aside,which would then make it necessary to deal with the second and third questions.

27.

    In the order for reference, the national court stated that, under domestic law, thequestion arose whether it was entitled or even required under Community law toset aside its decision of 4 April 1997 terminating the first award procedure on theground that the contract had not been awarded to the tenderer which had madethe best offer. In the light of that procedural issue, the questions referred to theCourt for a preliminary ruling would remain pertinent even if the award procedurein question had in the meantime been settled.

28.

    In the circumstances, it must be held that as the answer to the questions raised mayaffect the outcome of the dispute in the main proceedings the questions areadmissible.

First question

29.

    By its first question, the national court is asking essentially whether the combinedprovisions of Article 2(1)(a) and (b) and the second subparagraph of Article 2(6)of Directive 89/665 must be interpreted as meaning that the Member States arerequired to ensure that the contracting authority's decision, prior to the conclusionof the contract, as to the bidder in a tender procedure with which it will concludethe contract is in all cases open to review in a procedure whereby an applicant mayhave that decision set aside if the relevant conditions are met, regardless of the

possibility, once the contract has been concluded, of obtaining an award ofdamages.

30.

    Article 2(1) of Directive 89/665 lists the measures to be taken concerning thereview procedures which the Member States must make available in national law.According to Article 2(1)(a), they must include provision for the adoption ofinterim measures by way of interlocutory procedures. Article 2(1)(b) refers to thepossibility of setting aside or ensuring the setting aside of decisions takenunlawfully, and Article 2(1)(c) concerns the award of damages.

31.

    It is common ground that Article 2(1)(b) of Directive 89/665 does not define thedecisions taken unlawfully which a party may ask to have set aside. The Communitylegislature confined itself to stating that such decisions include those containingdiscriminatory technical, economic or financial specifications in the documentsrelating to the contract award procedure in question.

32.

    Nothing in Article 2(1)(b) of Directive 89/665 indicates that an unlawful decisionawarding a public contract does not fall within the category of decisions takenunlawfully in respect of which application may be made to have them set aside.

33.

    As is clear from the first and second recitals in the preamble to Directive 89/665,the directive reinforces existing arrangements at both national and Community levelfor ensuring effective application of Community directives on the award of publiccontracts, in particular at the stage where infringements can still be rectified (CaseC-433/93 Commission v Germany [1995] ECR I-2303, paragraph 23).

34.

    In that regard, Article 1(1) of Directive 89/665 requires the Member States toestablish effective review procedures that are as rapid as possible to ensurecompliance with Community directives on public procurement.

35.

    It is clear from that provision that the subject-matter of those review procedureswill be decisions taken by the contracting authorities, on the ground that theyinfringe Community law on public procurement or the national rules transposingit; the provision does not, however, lay down any restriction with regard to thenature and content of those decisions.

36.

    The Bundesministerium and the Austrian Government contend, essentially, that theorganisation of the procedure before the Bundesvergabeamt, whereby once acontract has been concluded the decision of a contracting authority may bechallenged only in so far as the unlawful nature of the decision has resulted indamage to the party seeking review in national proceedings, and whereby theprocedure is to be limited to easing the conditions for the award of damages by theordinary courts, complies with Article 2(6) of Directive 89/665.

37.

    As the Advocate General observed in points 36 and 37 of his Opinion, it is clearfrom the actual wording of Article 2(6) of Directive 89/665 that the limitation ofreview procedures provided for therein applies only after the conclusion of thecontract following the awarding decision. Directive 89/665 thus draws a distinctionbetween the stage prior to the conclusion of the contract, to which Article 2(1)applies, and the stage subsequent to its conclusion, in respect of which a MemberState may, according to the second subparagraph of Article 2(6), provide that thepowers of the body responsible for the review procedures are to be limited toawarding damages to any person harmed by an infringement.

38.

    Moreover, the interpretation proposed by the Bundesministerium and the AustrianGovernment might lead to the systematic removal of the most important decisionof the contracting authority, that is to say the award of the contract, from thepurview of the measures which, under Article 2(1) of Directive 89/665, must betaken concerning the review procedures referred to in Article 1, therebyundermining the purpose of Directive 89/665 which, as noted in paragraph 34 ofthis judgment, is to establish effective and rapid procedures to review unlawfuldecisions of the contracting authority at a stage where infringements may still berectified.

39.

    The Austrian Government also contends that if Directive 89/665 must beinterpreted as drawing a distinction between the decision awarding a contract andthe conclusion of that contract, the directive fails to specify in any way what timeshould elapse between the two stages. The United Kingdom Government indicatedat the hearing that no time should be fixed since there are different types of awardprocedure.

40.

    The argument based on the lack of an intervening period between the decisionawarding a contract and the conclusion of the contract is irrelevant. The fact thatthere is no express provision in that connection cannot justify interpreting Directive89/665 in such a way as to remove decisions awarding public contractssystematically from the purview of the measures which, according to Article 2(1)of Directive 89/665, must be taken concerning the review procedures referred toin Article 1.

41.

    With regard to the time which must elapse between the decision awarding acontract and its conclusion, the United Kingdom Government also states that nosuch time is specified in Directive 93/36 and that the directive's provisions, asArticles 7, 9 and 10 thereof show, are exhaustive.

42.

    All that need be stated in that regard, as the Advocate General noted in points 70and 71 of his Opinion, is that those provisions correspond to the equivalentprovisions in the directives which preceded Directive 89/665, the first recital in thepreamble to which states that they 'do not contain any specific provision ensuringtheir effective application‘.

43.

    It follows from those considerations that the combined provisions of Article 2(1)(a)and (b) and the second subparagraph of Article 2(6) of Directive 89/665 are to beinterpreted as meaning that the Member States are required to ensure that thecontracting authority's decision prior to the conclusion of the contract as to thebidder in a tender procedure with which it will conclude the contract is in all casesopen to review in a procedure whereby an applicant may have that decision setaside if the relevant conditions are met, notwithstanding the possibility, once thecontract has been concluded, of obtaining an award of damages.

Second and third questions

44.

    By its second and third questions, which may be examined together, the nationalcourt is asking essentially whether Article 2(1)(a) and (b) of Directive 89/665 mustbe interpreted to the effect that, where that provision has not been fully transposedinto national law, the bodies in the Member States having power to review publicprocurement procedures may also hear applications under the conditions laid downin that provision.

45.

    Paragraph 91(2) of the BVergG provides that the Bundesvergabeamt may examinethe legality of award procedures and decisions within the ambit of the BVergG; thenational legislature has thereby fulfilled its obligation to make provision for review,as the Advocate General observed at point 90 of his Opinion.

46.

    However, as the national court indicated in its order (see paragraphs 20 to 22 ofthis judgment), the contracting authority's decision as to whom to award thecontract is one taken internally without, under Austrian law, any publicmanifestation thereof.

47.

    The explanations given in the order for reference show that the State, ascontracting authority, employs the rules, forms and methods of civil law in theaward procedure, so that the award of a public contract is effected by theconclusion of a contract between that authority and the tenderer.

48.

    Since the announcement of the award of a contract and its conclusion in practiceoccur together, in such a system there is no administrative law measure of whichthe persons concerned can acquire knowledge and which may be the subject of anapplication to have it set aside as provided for in Article 2(1)(b).

49.

    In such circumstances, where it is doubtful that the national court is in a positionto give effect to the right of individuals to obtain review in matters concerningpublic procurement under the conditions set out in Directive 89/665, in particularArticle 2(1)(a) and (b), it is useful to recall that, if national provisions cannot beinterpreted in a manner consistent with Directive 89/665, those concerned may seekcompensation, under the appropriate procedures in national law, for the damage

suffered by reason of the failure to transpose a directive within the prescribedperiod (see, in particular, Joined Cases C-178/94, C-179/94 and C-188/94 toC-190/94 Dillenkofer and Others [1996] ECR I-4845).

50.

    Consequently, the answer to the second and third questions must be that Article2(1)(a) and (b) of Directive 89/665 cannot be interpreted to the effect that, evenwhere there is no award decision which may be the subject of an application tohave it set aside, the bodies in the Member States having power to review publicprocurement procedures may hear applications under the conditions laid down inthat provision.

Costs

51.

    The costs incurred by the Austrian, German and United Kingdom Governments,by the Commission of the European Communities and by the EFTA SurveillanceAuthority, which have submitted observations to the Court, are not recoverable.Since these proceedings are, for the parties to the main proceedings, a step in theproceedings pending before the national court, the decision on costs is a matter forthat court.

On those grounds,

THE COURT (Sixth Chamber),

in answer to the questions referred to it by the Bundesvergabeamt by order of 3March 1998, hereby rules:

1.    The combined provisions of Article 2(1)(a) and (b) and the secondsubparagraph of Article 2(6) of Council Directive 89/665/EEC of 21December 1989 on the coordination of the laws, regulations andadministrative provisions relating to the application of review proceduresto the award of public supply and public works contracts must beinterpreted as meaning that the Member States are required to ensure thatthe contracting authority's decision prior to the conclusion of the contractas to the bidder in a tender procedure with which it will conclude thecontract is in all cases open to review in a procedure whereby an applicantmay have that decision set aside if the relevant conditions are met,notwithstanding the possibility, once the contract has been concluded, ofobtaining an award of damages.

2.    Article 2(1)(a) and (b) of Directive 89/665 cannot be interpreted to theeffect that, even where there is no award decision which may be the subjectof an application to have it set aside, the bodies in the Member States

having power to review public procurement procedures may hearapplications under the conditions laid down in that provision.

KapteynHirsch Ragnemalm

Delivered in open court in Luxembourg on 28 October 1999.

R. Grass

J.C. Moitinho de Almeida

Registrar

President of the Sixth Chamber

1: Language of the case: German.