Decision of the European Ombudsman on complaint 130/98/OV against the European Commission

Dear Mrs J.,
On 26 January 1998, you made a complaint to the European Ombudsman on behalf of the European Foundation for Osteoporosis (EFFO) alleging maladministration by DG XXIII in a call for proposals procedure (96/C 246/15).
On 23 April 1998, I forwarded the complaint to the President of the European Commission. The Commission sent its opinion on 23 July 1998 and I forwarded it to you with an invitation to make observations, if you so wished. You did not submit any observations on the Commission's opinion.
I am writing now to let you know the result of the inquiries that have been made.

THE COMPLAINT

According to the complainant, the relevant facts were as follows:
On 13 December 1996, the European Foundation for Osteoporosis (EFFO, hereafter "the complainant"), submitted an application in response to the Call for proposals - 96/C246/15 issued by the European Commission (DG XXIII) under its CMAF (Action in Favour of Cooperatives, Mutual Societies, Associations and Foundations) programme.
The complainant received no further information from DG XXIII about the outcome of its application until 24 August 1997, when the Commission placed an announcement in the Official Journal stating that the programme had been cancelled. However, no reasons were given for this cancellation. The complainant was officially informed of the cancellation by letter of DG XXIII dated 18 August 1997. Later, further to Parliamentary Question H-01717/97 of October 1997, MEP Mrs. J found out that the Call for proposals had been cancelled because the programme had never received the authorisation from the Council of Ministers and therefore missed a budget. The complainant, who had contacted itself the Commission in March and June 1997 for information on the outcome of its application, was never informed about these developments. Also, DG XXIII's reply to the complainant stated that its application failed to meet the criteria of the 12 programmes finally approved for financing, but the complainant was never informed of those criteria.
For those reasons, MEP Mrs J. complained on 26 January 1998 on behalf of the complainant to the Ombudsman, raising seven points to be answered by the Commission, which can be summarised as follows: 1) The first allegation concerns the fact that the Commission had advertised a Call for proposals which had no clear Council approval. 2) The second allegation concerns the fact that the programme was only cancelled in July 1997. 3) The third allegation concerns the failure to inform the complainant about the fact that the programme was still subject to Council approval and about this the subsequent developments, as well the delay (from 24 July to 18 August 1997) in informing about the cancellation. 4) Finally, the fact that the complainant was not informed about the reasons of the cancelation and about the fact that its application failed to meet the criteria of the programme despite the numerous contacts it made with the Commission.

THE INQUIRY

The Commission's opinion
The Commission in its opinion stated that it understood that the cancellation of the call for proposals had caused disappointment, but that it did not share the view of maladministration. The Commission recalled the background and the legal situation of the case:
The Call for proposals was published on 24 August 1996 (OJ 1996 C 246/15) and was intended to co-finance from the budget line on social economy (heading B5-321 of the 1997 Budget) projects in which cooperatives, mutual societies, associations and foundations (CMAFs) were involved. These projects had to respect the principles laid down in the Commission's proposal for a multi-annual (1994-1996) work programme for CMAFs. This proposal, approved by the Commission on 17 February 1994, was submitted to the Council for adoption of a decision. The legal basis for this decision would be Article 235 of the EC Treaty, which requires unanimity. The Call for proposals was linked to the draft programme, which the Commission believed would be adopted on time. However, by the end of 1996, the proposal failed to obtain the general consensus. Following the publication of the Call for proposals, DG XXIII had received 173 requests for financing by 31 December 1996. An inter-department group which examined.the projects during the first months of 1997, selected 22 projects according to the criteria set out in the Call for proposals and the commentary of budget line B5-321 for the year 1997.
In the meantime however, further to the Order of the President of the Court of Justice of 24 September 1996 in joined cases C-239/96 R and C-240/96 R (UK v. Commission, application for interim measures)(1), the expenditure by the Commission on social exclusion and poverty, not based on acts adopted by the Council, was put in question. Given this legal uncertainty, the Commission decided that it would withdraw its proposal for a programme, to which the Call for proposals referred. On 29 July 1997 it took the formal decision to cancel the Call for proposals and to withdraw its draft programme. However, the Commission decided to take into account the results of the evaluation carried out by the inter-department group so that the work completed up to that date by both the candidates and the Commission services would be usefully turned out. It therefore decided to co-finance a limited number of projects (12 from the 22) which had been selected from the 173 submitted in the context of the Call for proposals. The proposal of the complainant however was not considered eligible under the criteria of the Call for proposals.
The decision to co-finance the 12 projects was taken on basis of the Commission's Communication of 6 July 1994 to the Budgetary Authority concerning legal bases and maximum amounts (SEC (94) 1106 final). The selected projects were "non-significant and pilot projects" within the meaning of the 1994 Communication. On 18 August 1997, DG XXIII sent a letter to all candidates whose project had not been selected in order to inform them about the situation. Against this background, the Commission gave the next explanations for the different points raised by Mrs J. MEP:
As regards the first allegation that the Commission published a Call for proposals which was not approved by the Council, the Commission observed that it believed that, in accordance with normal practice, the programme would have been adopted and that the action for financing projects would have been continued through the next budgetary year. This position was reinforced by the fact that the Budgetary Authority decided that appropriations should be given for the social economy line for 1997 on the same grounds as it had been during the previous years.
As regards the second allegation concerning the late cancellation of the programme, the Commission observed that it withdrew the project only in July 1997 after it became clear that there was no chance even for a late adoption of the programme.
As regards the alleged failure of information and the alleged delay, the Commission first stated that the Official Journal notice clearly mentioned that the programme was still a proposal to be adopted by the Council. This way of proceeding was in accordance with the practice at the time for carrying out preparatory actions and innovative projects. The Commission further observed that DG XXIII decided, until all legal problems were sorted out in July 1997, not to prepare preliminary replies to individual enquiries before that date. Therefore the Commission could not give a clear answer to the complainant in March or June 1997. The Commission further stated that if informed the applicants as soon as possible after the decision had been taken, i.e. 12 working days after 29 July 1997, which is not an unreasonable delay.
As regards alleged failure to inform about the reasons of the cancellation, the Commission observed that, since the cancellation of the proposal for a programme was essentially a technical question unrelated to the merits of the applications, it decided that a standard letter which did not go into the complex legal and political reasons for cancelling the programme was most appropriate. Finally, as regards the allegation that the complainant was never informed that its application failed to meet the criteria of the programme, the Commission answered that it is normal practice to inform applicants only when the final decision is taken and not at each stage of the selection procedure.
The complainant's observations
The complainant did not submit any written observations. However, in a telephone conversation with the Ombudsman's office, the representative of the complainant stated that it was not satisfied with the answers given to their complaint.

THE DECISION

1 The advertisement of a Call for proposals based on a programme which had still not been approved by the Council
1.1 The first allegation concerns the fact that the Commission invited applications for a programme that had still no Council approval. The Commission observed that it believed in good faith that the programme would have been adopted on time, and that this position was reinforced by the fact that the Budgetary Authority decided that appropriations should be given for the budget line on social economy (B5-321) for 1997 on the same grounds as it had been during the previous years.
1.2 The Ombudsman notes that the Commission's proposal for a Council Decision relating to a multi-annual work programme for CMAFs was sent to the Council on 17 February 1994. The Call for proposals, which was based on this draft programme, was published on 24 August 1996. It appears that, at that time, the Commission believed that the programme would be adopted by the Council. This information is confirmed by the fact the Call for proposals itself clearly mentioned in footnote (1) that the European Parliament, as well as the Economic and Social Committee had given a favourable opinion at their respective plenary sessions, but that the examination of the proposal by the Council was not complete. This way of proceeding was also in accordance with the practice for carrying out preparatory actions and innovative projects. The Ombudsman therefore considers that the publication of the Call for proposals 96/C246/15 on a date when the Commission was still waiting for its draft programme to be adopted by the Council, did not constitute an instance of maladministration.
2 The alleged late cancellation of the programme in July 1997
2.1 As regards the alleged late cancellation of the programme, the Commission stated that it withdrew its programme only in July 1997 when it became clear that there was no chance even for a late adoption by the Council. The Commission also stated that it had decided to take into account the results of the evaluation of the applications, in order to usefully turn out the work carried out until that date.
2.2 Principles of good administrative behaviour require that the Commission avoids unnecessary delay in its action, or provides a reasonable explanation when such a delay occurs. In the present case, it appears from both the Commission's comments as from the answer given to Parliamentary Question E-3169/97(2) that the draft programme had not been endorsed by the Council by the end of 1996. Moreover, legal uncertainty had risen in September 1996 when, further to the Order of the President of the Court of Justice in joined cases C-239/96 R and C-240/96 R, the expenditure on social exclusion and poverty by the Commission, not based on acts adopted by the Council of Ministers, was put in question. In those circumstances, the Ombudsman considers that the Commission's argument related to a chance for an even late adoption by the Council, is difficult to sustain.
2.3 For those reasons, the Ombudsman considers that the Commission did not provide an acceptable and consistent explanation to justify why it only withdrew its programme on 29 July 1997, when already by the end of the year 1996, i.e. 34 months after the draft programme had been sent to the Council, it was clear that the programme had not been endorsed. The Commission's failure to avoid a delay in its decision to withdraw the programme and to cancel the Call for proposals therefore constitutes an instance of maladministration.
3 The alleged failure of information about the various aspects of the Call for proposals
3.1 As regards the allegation that the Commission did not inform the applicants that the programme was still subject to Council approval, the Commission answered by referring to the notice of the Official Journal. The Ombudsman notes that the notice which announced the Call for proposals indeed mentioned that the examination of the proposal by the Council was not complete. The allegation that the applicants were not informed about this can thus not be retained.
3.2 As regards the alleged delay in informing the complainant about the cancellation of the programme and about the previous developments which lead to that cancellation, the Commission stated that it took the formal decision to cancel the programme on 29 July 1997 and informed the applicants on 18 August 1997. The Commission added that, until the final decision was taken, it was not possible to prepare preliminary replies to individual inquiries. Therefore the Commission could not give a clear answer to the complainant in March or June 1997.
3.3 Principles of good administration require that the Commission keeps persons informed about the evolution of the file which concerns them and indicates the new legal or factual elements in that file. In the present case it appears that, at no time since December 1996, when the Commission's draft programme was not approved by the Council and when legal uncertainty had risen further to the Order of the President of the Court of Justice of 24 September 1996, the complainant was informed about those elements. This failure of information therefore constitutes an instance of maladministration.
4 The alleged failure to give reasons for the cancellation
4.1 The complainant alleged that the Commission did not communicate the reason of the cancellation of the programme and did not inform earlier that its application did not meet the criteria of the programme. The Commission observed that a standard letter which did not go into the complex legal and political reasons for cancelling the programme was considered most appropriate.
4.2 As regards this allegation, the Ombudsman notes that the complainant was at different stages in the procedure informed both that its application failed to meet the criteria of the programme, and that the programme had been cancelled. The Ombudsman considers that this contradictory information given to the complainant is due only to the confused legal situation which the Commission created by having cancelled the Call for proposals but, at the same time, having selected and co-financed 12 projects which had been presented under the cancelled Call.
4.3 According to the principles of good administrative behaviour, the Commission should be consistent in its administrative action and with the decisions it takes. The cancellation of a Call for proposals means that this Call is void and cannot have any legal effect anymore. In the present case, it appears that, by a formal notice published in the Official Journal C 233 of 1 August 1997, the Commission announced that the Call for proposals was cancelled.
4.4 For those reasons, the Ombudsman considers that, by having cancelled the Call for proposals 96/C246/15 on 29 July 1997, and having subsequently co-financed 12 projects which were presented and selected under that cancelled Call, the Commission failed to act consistently. Similarly, by having informed the complainant that the reason why its application was not accepted was the cancellation of the Call for proposals, there where in reality 12 projects had received funding further to that Call, the Commission failed to act consistently. Those facts therefore constitute instances of maladministration.
5 Conclusion
On the basis of the European Ombudsman's inquiries into this complaint, it appears necessary to make the following critical remarks:

Principles of good administrative behaviour require that the Commission avoids unnecessary delay in its action, or provides a reasonable explanation when such a delay occurs. The Ombudsman considers that the Commission did not provide an acceptable and consistent explanation to justify why it only withdrew its programme on 29 July 1997, when already by the end of the year 1996, i.e. 34 months after the draft programme had been sent to the Council, it was clear that the programme had not been endorsed. The Commission's failure to avoid a delay in its decision to withdraw the programme and to cancel the Call for proposals therefore constitutes an instance of maladministration.

The same principles require that the Commission keeps persons informed about the evolution of the file which concerns them and indicates the new legal or factual elements in that file. In the present case it appears that, at no time since December 1996, when the Commission's draft programme was not approved by the Council and when legal uncertainty had risen further to the Order of the President of the Court of Justice, the complainant was informed about those elements. This failure of information therefore constitutes an instance of maladministration.

According to the principles of good administrative behaviour, the Commission should be consistent in its administrative action and with the decisions it takes. The Ombudsman therefore considers that, by having cancelled the Call for proposals 96/C246/15 on 29 July 1997, and having subsequently co-financed 12 projects which were presented and selected under that cancelled Call, the Commission failed to act consistently. Similarly, by having informed the complainant that the reason why its application was not accepted was the cancellation of the Call for proposals, there where in reality 12 projects had received funding further to that Call, the Commission failed to act consistently. Those facts therefore constitute instances of maladministration.

Similarly, by having informed the complainant that the reason why its application was not accepted was the cancellation of the Call for proposals, there where in reality 12 projects had received funding further to that Call, the Commission failed to act consistently. Those facts therefore constitute instances of maladministration.

Given that those aspects of the case concern procedures relating to specific events in the past, it is not appropriate to pursue a friendly settlement of the matter. The Ombudsman has therefore decided to close the case.
The President of the European Commission will also be informed of this decision.
Yours sincerely,
Jacob SÖDERMAN

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(1) Joined cases C-239/96 R and C-240/96 R, United Kingdom v. Commission, 1996 ECR I-4475.

(2) Written Question No. 3169/97 by Raymonde DURY to the Commission, OJ 1998 C 196/2.