Decision of the European Ombudsman on complaint 2673/2004/PB against the European Commission

Strasbourg, 18 October 2005

Dear Mr B.,

On 6 September 2004, you made a complaint to the European Ombudsman concerning Call for Proposals - Enlargement 2004, aimed at civil society and public SECTOR bodies in the European Union, Reference number: APESC 2004/EU-2.

On 30 September 2004, you sent me a copy of a proposal that you had submitted to the Commission.

On 11 October 2004, I forwarded the complaint to the President of the European Commission.

On 22 November 2004, you submitted an additional allegation. On 13 December 2004, I asked the Commission to respond to this additional allegation in its opinion on your complaint. I informed you accordingly on that same date.

The Commission sent its opinion on 23 February 2005. I forwarded it to you with an invitation to make observations, which you sent on 29 March 2005.

I am writing now to let you know the results of the inquiries that have been made.

I apologise for the length of time it has taken to carry out these inquiries.

THE COMPLAINT

The complainant, a German citizen living in the Czech Republic, belongs to a local group of television and film producers, journalists, script writers, animators, computer programmers and IT experts. He had requested the Commission for information on the possibility of submitting a proposal in response to Call for Proposals - Enlargement 2004, aimed at civil society and public SECTOR bodies in the European Union, Reference number: APESC 2004/EU-2. The general objective of the call was the dissemination of information to the general public and awareness-raising in relation to the following:

1. the implications and consequences of the accession to the European Union of ten new Member States,
2. the issues that arise as a result of the accession negotiations in progress with Bulgaria and Rumania and the candidacies of Turkey and Croatia,
3. the implications of enlargement for the external relations of the EU with other European and non-European countries.

DG Enlargement informed the complainant that it was a long-standing administrative practice to exclude profit-making entities from the kind of programme here concerned, and "[i]n so far as it concerns resources that are provided by the European tax-payer, it would not appear appropriate to support private companies that are competing with other companies. On the contrary, it would be contrary to free competition to give subsidies to (individual) private companies in discrimination against others in the market".

In subsequent communications to the Commission, the complainant contested the practice and the arguments referred to above. He received no replies.

On 6 September 2004, the complainant made a complaint to the European Ombudsman. He argued that the administrative practice referred to by DG Enlargement was contrary to free competition and that the practice in fact defied the written objectives referred to in the call for proposals by excluding important and relevant expertise held by private operators. He thus considered a) that DG Enlargement had wrongly decided to exclude his group from the call for proposals, and b) that the "administrative practice" of excluding profit-making entities from the kind of calls here concerned was wrong.

The deadline for the submission of proposals was 30 September 2004. In the hope that the Commission might change its view on the matter, the complainant submitted a proposal to the Commission on 25 September 2004 and forwarded a copy of it to the Ombudsman on 30 September 2004.

On 22 November 2004, the complainant submitted an additional allegation, stating that the Commission had failed to acknowledge receipt of, or to otherwise respond to, his group's proposal. The Ombudsman decided to ask the Commission to respond to this additional allegation in its opinion on the complaint.

Thus, the allegations made by the complainant were the following:

1. DG Enlargement had wrongly decided to exclude his group from the call for proposals referred to above.
2. The "administrative practice" of excluding profit-making entities from the kind of calls here concerned was wrong.
3. The Commission had failed to acknowledge receipt of, or to otherwise respond to, his group's proposal.

The complainant claimed that his group's proposal should be considered admissible for the call for proposals.

THE INQUIRY

The Commission's opinion

In its opinion, the Commission made the following comments:

First allegation

The proposal submitted by the complainant had been rejected for the following reasons:

1. the proposal had not been submitted on the compulsory application form;
2. the documents in the proposal had not been signed;
3. the complainant's group was a profit-making entity (the call expressly stated that the applicant should be "non-profit making", Part III, 7, third indent);
4. the documents submitted with the proposal did not contain the required information;
5. it was not clear from the proposal that aid was actually applied for; instead, the documents submitted contained various comments as to how the aims described in the call for proposals could be achieved.

Second allegation

With regard to the complainant's second allegation, the Commission explained that excluding profit-making entities from the call had not been a question of "administrative practice". Rather, the decision to exclude profit-making entities was based on a number of specific considerations. In the first place, EU financial aid may not result in the realisation of profit by the recipients of EU aid. The risk of the realisation of profit was greater in the case of private profit-making entities than in the case of members of the civil society. Second, the civil society offers a multiplication effect, which was considered useful for the programme here concerned. Third, information on the EU enlargement distributed by civil society actors that work in the public interest can be expected to be more credible for citizens than information distributed by profit-making entities.

The Commission explained that the content of the call for proposals had been the subject of extensive consultation within its services.

The Commission furthermore pointed out that the call had only given rise to the present complaint. The call covered all 25 Member States, and 576 proposals had been submitted. In the context of previous calls, in 2002 and 2003, for which identical admissibility conditions had been used, not a single complaint had been made.

Third allegation

The Commission stated that in the light of the large number of applications received (576), it had decided not to send out acknowledgements of receipt.

The complainant's observations

In his observations, the complainant maintained his allegation and expressed strong disagreement with the three reasons given by the Commission for excluding profit-making entities from the call.

As regards his third allegation, the complainant asked how it was possible that 576 applicants "who have worked for months on their proposals" were not shown the courtesy of an acknowledgement of receipt.

THE DECISION

1 Allegedly unjustified exclusion from call

1.1 The complainant, a German citizen living in the Czech Republic, belongs to a local group of television and film producers, journalists, script writers, animators, computer programmers and IT experts. He had requested the Commission for information on the possibility of submitting a proposal in response to Call for Proposals - Enlargement 2004, aimed at civil society and public SECTOR bodies in the European Union, Reference number: APESC 2004/EU-2. The general objective of the call was the dissemination of information to the general public and awareness-raising in relation to the following: a) the implications and consequences of the accession to the European Union of ten new Member States, b) the issues that arise as a result of the accession negotiations in progress with Bulgaria and Rumania and the candidacies of Turkey and Croatia, c) the implications of enlargement for the external relations of the EU with other European and non-European countries. In reply to an email sent to the Commission's Directorate General for Enlargement, the complainant had been informed that it was a long-standing administrative practice to exclude profit-making entities from the kind of programme here concerned, and that his group would therefore not fulfil the eligibility criteria. On 6 September 2004, the complainant wrote to the European Ombudsman arguing that the administrative practice referred to by DG Enlargement was contrary to free competition and that the practice in fact defied the written objectives referred to in the call for proposals by excluding important and relevant expertise held by private operators. In the hope that the Commission might change its view on the matter, the complainant nevertheless submitted a proposal to the Commission on 25 September 2004.

1.2 The complainant alleged that the Commission's DG Enlargement had wrongly decided to exclude his group from the call for proposals referred to above.

1.3 In its opinion, the Commission stated that the proposal submitted by the complainant had been rejected for the following reasons:

1. the proposal had not been submitted on the compulsory application form;
2. the documents in the proposal had not been signed;
3. the complainant's group was a profit-making entity (the call expressly stated that the applicant should be "non-profit making", Part III, 7, third indent);
4. the documents submitted with the proposal did not contain the required information;
5. it was not clear from the proposal that aid was actually applied for; instead, the documents submitted contained various comments as to how the aims described in the call for proposals could be achieved.

1.4 In his observations, the complainant did not dispute these alleged shortcomings in his group's proposal.

1.5 The Ombudsman has carefully examined the call for proposals here concerned. In the light of the conditions set out therein, and the facts referred to by the Commission, the Ombudsman considers that the Commission's decision to declare the proposal inadmissible appears to have been justified. There has accordingly been no maladministration regarding this aspect of the case.

1.6 In the light of this finding, the Ombudsman does not consider it necessary to examine the complainant's claim that his group's proposal should be considered admissible for the call for proposals.

2 Allegedly wrong decision to exclude profit-making entities

2.1 The complainant alleged that the "administrative practice" of excluding profit-making entities from the kind of calls here concerned was wrong.

2.2 The Commission explained that excluding profit-making entities from the call had not been a question of "administrative practice". Rather, the decision to exclude profit-making entities was based on a number of specific considerations. In the first place, EU financial aid may not result in the realisation of profit by the recipients of EU aid. The risk of the realisation of profit was greater in the case of private profit-making entities than in the case of members of the civil society. Second, the civil society offers a multiplication effect, which was considered useful for the programme here concerned. Third, information on the EU enlargement distributed by civil society actors that work in the public interest is more credible for citizens than information distributed by profit-making entities.

2.3 In his observations, t he complainant maintained his allegation and expressed strong disagreement with the Commission's three reasons for excluding profit-making entities from the call.

2.4 The institutions of the European Union enjoy a wide discretion in laying down the selection criteria and other conditions in calls for proposals. The Ombudsman can, however, examine whether the institutions have acted within the limits of that discretion.

2.5 With regard to the Commission's first consideration - i.e., that there would be a greater risk of profit being made in the case of profit-making entities - the Ombudsman first points out that it was legitimate of the Commission to decide that the programme should not result in the realisation of profit by the recipients of the EU funds. However, this aim could presumably also have been attained by way of an express condition in the grant agreements concerned. The Commission's concern therefore seems to be based on the presumption that profit-making entities would be less likely to respect the conditions of the grant agreement than civil society actors. The Ombudsman has doubts as to whether such a presumption would in fact be justified. However, in the light of the finding in paragraph 2.6 below, the Ombudsman does not consider it necessary to inquire further into that issue in the present case.

2.6 With regard to the second and third considerations set out by the Commission, these essentially concern the advantages likely to derive by focussing the programme on civil society actors working in the public interest. The advantages referred to are, first, the multiplication effect of civil society and, second, the expectation that information will be perceived to be more credible when given by civil society actors than by profit-making entities. It does not appear to have been unreasonable of the Commission to consider that these advantages could be best obtained by focussing on civil society actors. In the Ombudsman's view, the complainant has therefore not established that the Commission acted beyond the boundaries of its discretionary powers when it decided to exclude profit-making entities from the call here concerned. There has therefore been no maladministration regarding this aspect of the case.

3 Alleged failure to acknowledge receipt

3 .1 The complainant alleged that the Commission had failed to acknowledge receipt of, or to otherwise respond to, his group's proposal.

3.2 In its opinion, t he Commission stated that in the light of the large number of applications received (576), it had decided not to send out acknowledgements of receipt.

3.3 In his observations, the complainant asked how it was possible that 576 applicants were not shown the courtesy of an acknowledgement of receipt.

3.4 It appears from the Commission's opinion that it understood the complainant's allegation essentially to concern the lack of an acknowledgement of receipt. The complainant's observations appeared to confirm this understanding of the allegation, which has therefore been examined accordingly.

3.5 According to good administrative practice, receipt of written communications requiring a reply should be acknowledged, unless a substantive reply can be made within a short period of time(1). In the present case, the complainant had, at the time when he submitted the allegation here concerned, received neither an acknowledgement of receipt nor a substantive reply. The Commission explained that the high number of proposals submitted in response to the call for proposals had led it to conclude that no acknowledgement of receipt should be sent. However, given the technical possibilities of preparing responses for a large number of proposals, the Ombudsman does not consider that the number of proposals in this case could reasonably justify the Commission's decision not to send an acknowledgement of receipt. The failure to send an acknowledgement of receipt was therefore an instance of maladministration, and the Ombudsman makes a critical remark below.

4 Conclusion

On the basis of the Ombudsman's inquiries into this complaint, it is necessary to make the following critical remark:

According to good administrative practice, receipt of written communications requiring a reply should be acknowledged, unless a substantive reply can be made within a short period of time. In the present case, the complainant had, at the time when he submitted the allegation here concerned, received neither an acknowledgement of receipt nor a substantive reply. The Commission explained that the high number of proposals submitted in response to the call for proposals had led it to conclude that no acknowledgement of receipt should be sent. However, given the technical possibilities of preparing responses for a large number of proposals, the Ombudsman does not consider that the number of proposals in this case could reasonably justify the Commission's decision not to send an acknowledgement of receipt. The failure to send an acknowledgement of receipt was therefore an instance of maladministration.

The President of the European Commission will also be informed of this decision.

Yours sincerely,

 

P. Nikiforos DIAMANDOUROS

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(1) Cf. Article 14 of the "European Code of Good Administrative Practice" proposed by the European Ombudsman and endorsed by the European Parliament (http://www.ombudsman.europa.eu/code/en/default.htm).