Strasbourg, 18 April 2006

Dear Mr X,

On 23 and 25 December 2004, you lodged a complaint with the European Ombudsman against the European Parliament, on behalf of the company Y. Your complaint concerns the Parliament's decisions of 21 September, 13 and 15 October 2004 rejecting the bids you had submitted for a number of call for tenders.

On 16 March 2005, I informed the President of the Parliament of this complaint and asked him to submit an opinion. The Parliament sent me its opinion on 15 June 2005, which I forwarded to you with an invitation to make observations. On 28 July 2005, you sent me your observations.

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

THE COMPLAINT

The facts of the case according to the complainant are, in summary, as follows:

Complaint 3426/2004/JMA

On 22 and 30 November 2004, the complainant had first lodged a complaint with the Ombudsman against the European Parliament, which was registered under file number 3426/2004/JMA . The complaint concerned the Parliament's decisions of 21 September, 13 and 15 October 2004 rejecting the bids submitted by the complainant for a number of call for tenders.

In his complaint, the complainant explained that, in 2004, his firm submitted several bids for different calls for tenders involving translation work for the Parliament. Each of the bids had been sent in boxes closed with adhesive tape. On 21 September, 13 and 15 October 2004, the European Parliament informed the complainant that his bids had not been selected because they were not signed across the tape, and thus did not meet the requirements of Article 143 (3) of Commission Regulation No 2342/2002 of 23 December 2002, on the Financial Regulation applicable to the general budget of the European Communities (the implementing Regulation), which requires that, when using self-adhesive envelopes, tenderers should seal them with adhesive tape and sign across that tape. The complainant argued that the aforementioned provision was not applicable to his bids, since it should only apply to self-adhesive envelopes, and in his case, the bids had been sent in closed boxes. He also noted that the Parliament decisions to reject his bids did not include any reference to the existing means of redress.

By letter dated 5 November 2004, the complainant lodged an appeal with the Parliament, requesting that its decisions be reconsidered. On 24 November 2004, the Parliament services acknowledged receipt of the appeal, and informed the complainant that the responsible services would study it and inform his of the decision as soon as possible.

On 22 and 30 November 2004, the complainant lodged a complaint with the Ombudsman. Since, at that time, it appeared that the Parliament had not had the opportunity to complete its review of the complainant's appeal, the Ombudsman took the view that it could not be considered that the complaint had been preceded by the appropriate administrative approaches, as required by Art. 2 (4) of his Statute. The Ombudsman therefore declared the complaint inadmissible on 15 December 2004, and informed the complainant that he could renew his complaint should he consider that the Parliament's reply to his appeal was inadequate.

Complaint 287/2005/JMA

On 23 and 25 December 2004, the complainant wrote to the Ombudsman, explaining that, on 6 December 2004, the Parliament had formally replied to his appeal. In the letter, the Parliament confirmed its previous decision to exclude the complainant’s bids from the calls for tenders, on the grounds that the boxes within which his tenders had been sent were not signed, and therefore did not comply with the criteria set out in Article 143 (3) of the implementing Regulation.

The complainant repeated the allegations made in his previous complaints, and argued that the Parliament's decisions were unfair.

Taking into consideration the new evidence, the Ombudsman decided to register the complainant's letter as a new complaint (reference 287/2005/JMA), and to start an inquiry. The allegations on which the Ombudsman asked the Parliament to submit an opinion were the following:

The complainant alleges, in summary, that the Parliament's decisions of 21 September, 13 and 15 October 2004:

1. are based on an incorrect interpretation of Article 143 (3) of Commission Regulation No 2342/200, since his bids had not been submitted in self-adhesive envelopes, as explicitly referred to in that provision, but rather in closed boxes which had been sealed with tape;
2. did not refer to any available means of redress to contest the refusal.

The complainant therefore claims that the Parliament should reconsider its decision not to take into account the complainant's bids.

THE INQUIRY

The Parliament's opinion

In its opinion, the Parliament addressed separately each of the two allegations made by the complainant.

The Parliament explained that its decision was justified on the grounds that the complainant's tenders did not comply with the requirements set out in Article 143 (3) of the implementing Regulation, which, in the Parliament's view, were applicable to the tenders in question. The institution argued that that provision is aimed at maintaining the secrecy of tenders until they are opened at the tender-opening session. Given this general objective, the Parliament was of the view that the Community legislator could have hardly intended to limit the application of the rule to tenders sent in envelopes. The Parliament explained that the word "envelope" should be interpreted as referring to the container of a tender whatever form it might take (envelope, box, trunk). Accordingly, the opening committee and the authorising officer legitimately regarded the paper packaging containing the tenders as analogous to an envelope.

The Parliament further explained that, in its view, the reference to self-adhesive envelopes in Article 143 (3) of the implementing Regulation, includes any type of container in which a tender has been enclosed, the confidentiality of which cannot be guaranteed because it can easily be opened. In those cases, this provision requires that self-adhesive envelopes should be sealed with adhesive tape upon which the sender must have signed. The Parliament noted that, in this case, the wrapping paper containing the tenders could easily have been opened, and that the adhesive tape used to close it bore no authenticating sign identifying the bidder. Under these conditions, the secrecy of the complainant's tender could not have been ensured, since their contents could have been modified between dispatch and opening of the envelopes.

As regards the information to be given concerning the possibilities of appeal, the Parliament argued that, in the present state of the law, there is no legally binding provision prescribing the way in which the Community institutions are to behave in their relations with the public. The institution noted that, under Article 100.2 (1) of the Financial Regulation, the contracting authority has only to notify the candidates or bidders, whose applications or tenders are rejected, of the grounds on which the decision was taken. This provision, the Parliament stated, does not require that eliminated bidders should be informed of the possibilities for appeal.

The Parliament therefore concluded that, in this case, its services had correctly applied Article 143 (3) of the implementing Regulation, as well as the rules on the information to be given to bidders.

The complainant's observations

In his observations, the complainant repeated the allegations made in his complaint.

The complainant underlined that the Parliament had not taken into account in his case a number of generally applicable rules, such as those concerning good administration. He argued that Parliament’s interpretation of the relevant legal provision was innovative, and that bidders had not been informed of that interpretation in advance. In his view, the services in charge of the selection of bidders did not have the legal authority to make an independent interpretation of the applicable rules.

As regards the information on the means of appeal, the complainant argued that, although Article 100.2 of the Financial Regulation does not require the contracting authority to inform the eliminated bidders of the available possibilities of appeal, the European Parliament's letter of 21 September 2004 did provide him with a time frame for the lodging of an appeal against the decision. Furthermore, he pointed out that the Parliament's Code of Conduct states that if it is possible to appeal against a decision, that fact must be clearly stated, together with the full details required to enable an appeal to be lodged.

THE DECISION

1 Parliament's interpretation of Commission Regulation No 2342/2002

1.1 The complainant alleges that the European Parliament's decisions of 21 September, 13 and 15 October 2004 were based on an incorrect interpretation of Article 143 (3) of Commission Regulation No 2342/2002 (the implementing Regulation) , since his bids had not been submitted in self-adhesive envelopes, as explicitly referred to in that provision, but rather in boxes closed with adhesive tape.

The complainant argues that the above provision only applied to self-adhesive envelopes.

In his observations, the complainant argues that the Parliament services did not have the legal authority to make an innovative interpretation of the relevant legal provision, of which bidders had not been informed in advance.

1.2 The Parliament argues that its rejection of the complainant's tenders was justified on the grounds that they did not comply with the requirements set out in Article 143 (3) of the implementing Regulation, because the manner in which they had been sent did not guarantee the secrecy of their contents, to the extent that those contents could have been modified between dispatch and opening of the envelopes.

The Parliament takes the view that Article 143 (3) of the implementing Regulation was designed to maintain the secrecy of tenders until the time they are opened at the tender-opening session. Accordingly, the reference in that provision to self-adhesive envelopes should include any type of container in which a tender has been enclosed (envelope, box, trunk), the confidentiality of which cannot be guaranteed because it can easily be opened.

1.3 The Ombudsman has examined in detail the legal basis for the Parliament's actions in this case. The Ombudsman first notes that the Parliament has based its refusal of the complainant's tenders on the basis of its interpretation of Article 143 (3) of the implementing Regulation and that it justifies that interpretation on the need to guarantee the confidentiality of tenders . The Ombudsman also notes that the need to guarantee the confidentiality of tenders is a basic principle enshrined in the rules governing calls for tender, namely the EU Financial Regulation(1) as well as its implementing rules(2).

The general principle of the secrecy of tenders is set out, as follows, in Article 98 (1) of the EU Financial Regulation:

"The arrangements for submitting tenders shall ensure that there is genuine competition and that the contents of tenders remain confidential until they are all opened simultaneously."

This general principle has been developed in Article 143 of the implementing Regulation, which states that:

"1. Requests to participate shall be submitted by letter, fax or electronic mail; requests submitted by fax or electronic mail shall be confirmed by letter before expiry of the time-limits set in Articles 140 and 251.

2. [...]

3. In order to maintain secrecy and to avoid any difficulties where tenders are sent by letter, the invitation to tender must include the following provision: "Tenders must be submitted in a sealed envelope itself enclosed within a second sealed envelope. The inner envelope must bear, in addition to the name of the department to which it is addressed, as indicated in the invitation to tender, the words Invitation to tender — Not to be opened by the mail service. If self-adhesive envelopes are used, they must be sealed with adhesive tape and the sender must sign across that tape."

1.4 On the basis of the available information, it appears that, in this case, the complainant submitted his bids not within two separate envelopes, but rather in boxes, one enclosed within the other. Those boxes were not self-adhesive, but had been sealed with adhesive paper. None of them, however, bore any signature from the tenderer across the adhesive paper. The issue under dispute is therefore whether or not Parliament’s interpretation of the above provisions, which would lead to the exclusion of the complainant's bids, is correct.

In reviewing the Parliament's interpretation of the relevant rules, t he Ombudsman is mindful of the fact that the Community courts have recognised that every provision of Community law must be placed in its context and interpreted in the light of the provisions of Community law as a whole, regard being had to the objectives thereof.

1.5 The Ombudsman notes that a first question concerns the notion of a letter, and whether or not tenders may be sent in containers other than letters enclosed within an envelope. On the basis of paragraph 1 of Article 143 of the implementing Regulation, it could appear that all submissions have to be sent by letter. The Ombudsman considers, however, that a literal legal interpretation of the above rules whereby a letter would be defined exclusively as a written, typed, or printed communication sent in an envelope would result in the exclusion of submissions made within a box or a larger-type container, such a trunk. Given the nature of a tender procedure and the large number of documents likely to be included in a tender offer, such an interpretation may appear as unduly restrictive.

Taking into account the nature of the tender process, and the volume of documents generally included in a tender offer, t he Ombudsman finds it reasonable that the notion of letter be interpreted, as the Parliament did, in a comprehensive manner, so as to include submissions made by forms other than envelopes, such as boxes. Moreover, the Ombudsman notes that the opposite interpretation would not assist the complainant, who submitted his tenders in boxes.

1.6 The Ombudsman must consider now the Parliament's interpretation of the notion of self-adhesive envelope. Article 143 (3) of the implementing Regulation imposes on bidders who use self-adhesive envelopes the obligations both to seal the envelope with adhesive tape and to sign across the seal. It appears that the aim of this measure is to ensure that the general obligation of confidentially set out in both Article 98 (1) of the EU Financial Regulation and in the first sentence of Article 143 (3) of the implementing Regulation, is strictly applied to situations, such as the sending of a tender in a self-adhesive envelope, which, by their nature, do not guarantee that the contents of a tender will remain confidential until all tenders are all opened simultaneously.

In order to ensure a consistent application of the above principles, the Ombudsman finds it reasonable that similar requirements may be applied to situations other than the use of self-adhesive envelopes, in which, due to their nature, the contents of a tender can be tempered with. That may be the case for boxes closed with adhesive tape, such as the ones employed by the complainant, which may be potentially opened without visible trace, unless the adhesive tape is signed across.

1.7 In view of the above findings, the Ombudsman considers that Parliament correctly interpreted the above rules and that it was therefore entitled to apply them so as to exclude the complainant's tenders. The Ombudsman notes that, in its reply to the complainant as well as in its reply to this inquiry, the Parliament has offered a detailed explanation of its reasons to exclude the complainant's tenders. These explanations appear to provide an adequate statement for the position taken by the institution. The Ombudsman recalls, however, that the highest authority on the interpretation of Community law is the Court of Justice.

The Ombudsman therefore finds that there is no evidence of maladministration in relation to this aspect of the case.

2 Parliament's failure to indicate potential means of appeal

2.1 The complainant alleges that the Parliament's decisions of 21 September, 13 and 15 October 2004 did not refer to any available means of redress to contest the refusal.

In his observations, the complainant alludes to the Parliament's Code of Conduct, which states that if it is possible to appeal against a decision, that fact must be clearly stated, together with the full details required to enable an appeal to be lodged.

2.2 The Parliament argues that, in the present state of the law, there is no legally binding provision prescribing the way in which the Community institutions are to behave in their relations with the public, and that there is no obligation to inform bidders of the possibilities for appeals under Article 100.2 (1) of the Financial Regulation.

2.3 The Ombudsman recalls that on 11 March 2002, the Parliament enacted a Code of Conduct, which lays down, among others, a set of obligations of its officials and other servants towards the public(3).

Part III of the Code concerning Relations with Citizens, includes a Section A regarding Administrative Openness. Article 6 of ·Section A, Part III of the Code states that:

"If it is possible to appeal against a decision, that fact must be clearly stated, together with the full details required to enable an appeal to be lodged."

2.4 The Ombudsman has carefully reviewed the available information. It appears that all the letters which the Parliament sent the complainant on 21 September, 13 and 15 October 2004 informing him of the rejection of his tenders included the following sentence concerning appeals:

"Any request for information you may make and any reply from us will have neither the purpose nor the effect of suspending the deadline for lodging an appeal against this decision, which is two months from the date of this letter."

The Ombudsman notes that the Parliament's letter of 6 December 2004 confirming the rejection of the complainant's bids does not contain any reference pertaining to appeals.

2.5 The Ombudsman is aware that, as the Parliament has pointed out, the Financial Regulation is silent as regards the means of appeal available to tenderers. Nevertheless, principles of good administration, including information about appeals, are of general application, and there is no indication that the Community legislator intended that the relevant provisions of the Financial Regulation concerning information to tenderers should exclude the general principle of good administration concerning the provision of information about possibilities of appeal.

2.6 The Ombudsman finds that, in its letters rejecting the complainant's tenders, the Parliament did not furnish the complainant with any relevant information which may have enabled him to lodge an appeal against those decisions. By not providing those details on the available means to appeal its decisions, the Parliament failed to abide by its own Code of Conduct. This constitutes an instance of maladministration. A critical remark will therefore be addressed to the Parliament.

3 Reconsideration of the complainant's bids

3.1 The complainant claims that that the Parliament should reconsider its decision not to take his bids into account.

3.2 Taking into consideration the above findings in point 1.5, the Ombudsman finds no basis to sustain the complainant's claim.

4 Conclusion

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

The Ombudsman finds that, in its letters rejecting the complainant's tenders, the Parliament did not furnish the complainant with any relevant information which may have enabled him to lodge an appeal against those decisions. By not providing those details on the available means to appeal its decisions, the Parliament failed to abide by its own Code of Conduct. This constitutes an instance of maladministration.

Given that these 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 therefore closes the case.

The President of the Parliament will also be informed of this decision.

Yours sincerely,

 

P. Nikiforos DIAMANDOUROS

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(1) Council Regulation (EC, Euratom) No 1605/2002 of 25 June 2002 on the Financial Regulation applicable to the general budget of the European Communities; OJ L 248, 16/09/2002 p. 1.

(2) Commission Regulation (EC, Euratom) No 2342/2002 of 23 December 2002 laying down detailed rules for the implementation of Council Regulation (EC, Euratom) No 1605/2002 on the Financial Regulation applicable to the general budget of the European Communities; OJ L 357, 31/12/2002 p. 1.

(3) "Obligations of officials and servants of the European Parliament - Code of Conduct"; PV BUR 11.03.2002/ANNEX.