12 May 2006 | Anusha Bradley
Unsuccessful bidders for public-sector tenders should be given greater opportunity to contest award decisions, the European Commission has said.
It has suggested that changes should be made to the EC procurement directives, which were introduced into UK law on 31 January this year.
The proposal would require public authorities to wait up to 10 days - known as a "standstill period" - before concluding a contract following the announcement of the award.
The 10-day standstill period is currently used in only a few member states, including the UK, Germany and Austria. But the EC is proposing to make it obligatory for all members.
"This would give rejected bidders the opportunity to start an effective and swift review of procedure at a time when any unfair decisions could still be corrected," the EC said in a statement.
The proposed rule would apply to contracts awarded following a tendering procedure and those awarded directly to a single bidder.
If made obligatory, it is hoped it will create stronger incentives for businesses within member countries to bid for contracts anywhere in the EU.
Charlie McCreevy, the EC's internal market and services commissioner, said improving bidders' rights will mean better protection for firms, more competition and better value for money.
"If a public authority does make an unfair decision, businesses need to have the opportunity to challenge the decision while it can still be corrected, no matter where the public authority is based," she said in a statement.
The change has been proposed because it was found the existing "remedies directive" - which ensures that review procedures are available to anyone seeking public contracts - do not always work. This is because some public contracts are awarded in a non-transparent and non-competitive manner to a single bidder.
"Even though the practice of illegal direct awards of public contracts is still widespread today and constitutes a serious breach of EU law in the field of public procurement, most member states have not tackled this problem in their national laws," the EC added.
In addition, it was found that public authorities often "raced" to conclude a contract, which prevented rejected firms from applying solutions proposed in the remedies directive.