Strasbourg, 10 March 2005

Dear Mr V. and Mr W.,

On 19 February 2004 and 24 March 2004, you made a complaint, on behalf of Mr X, manager of company Y (hereafter the complainant), to the European Ombudsman against the Commission, concerning the failure to pay an invoice in the framework of the final evaluation of a project in South Africa.

On 27 April 2004, I forwarded the complaint to the President of the Commission. The Commission sent its opinion on 22 June 2004 and on 15 July 2004, you informed me that the case could be considered as having been settled. On 25 August 2004, the Commission sent the Ombudsman proof that the payment concerned had been made.

I am writing now to confirm the results of the inquiries that have been made and to close the case formally.

THE COMPLAINT

The complaint was first lodged on 18 February 2004 by the manager of a company called Y. However, as supporting documents were missing, the Ombudsman’s services contacted the complainant and, on 29 March 2004, the legal advisers of the company sent the requested documents.

According to the complainant, the facts can be summarised as follows:

In 1998, the company carried out the mid-term evaluation of project Z in South Africa in the framework of a contract signed with the European Commission.

In June 2001, the Commission Delegation in South Africa contacted the company to carry out the final evaluation of Z. However, for this second mission, the company signed a contract with Z and not with the Commission. On 5 December 2001, the company submitted an invoice, including fees and reimbursable costs for an amount of EUR 10 336.67. However, Z was unable to pay the company for its services.

The complainant contacted both Z and the Commission's delegation on numerous occasions but without success. He then contacted the Europe Aid Co-operation Office (DG AIDCO).

On 11 December 2003, he received a reply from DG AIDCO. As the contract was signed between Z and the company, DG AIDCO considered that there was no legal ground for the Commission to pay the complainant, but undertook to make sure that Z would fulfil its commitments towards the complainant. This was later confirmed by a letter from the Commission dated 11 February 2004.

On 22 March 2004, following a trip to South Africa and discussions with the Commission's delegation, the complainant wrote again to DG AIDCO. He argued that the role of the Commission was the main cause of the problems that the complainant had encountered and that the Commission was therefore responsible. In particular, the complainant made the following points:

1) the Commission's delegation contacted the complainant for the final evaluation of Z. As it would have taken too long to sign a contract with the Commission, the Commission proposed that a contract be signed between Z and the company;

2) Z informed the Commission that it would be unable to pay for this mission. The Commission appeared to have offered to pay additional funds (EUR 25 000) to Z;

3) Z and the complainant signed the contract and the Delegation ordered the mission to begin;

4) the first invoice submitted by the company was paid by Z. The Commission did not pay the additional EUR 25 000, considering that Z had sufficient funds to pay for the whole mission;

5) a financial audit showed that Z did not have sufficient funds. The second invoice submitted by the complainant could not be paid.

This letter also informed the Commission that a complaint had been lodged with the European Ombudsman.

In summary, the complainant alleges that the Commission is responsible for the non-payment by Z of the complainant's invoice for EUR 10 336.67. The complainant claims payment of EUR 10 336.67, as well as interest for late payment. He also claims that internal administrative problems within the Commission, which seem to be the cause of the absence of payment, should be clarified.

THE INQUIRY

The Commission's opinion

In its opinion, the Commission made in summary the following points:

The Commission decided to grant an amount of EUR 3 163 499 to a non-governmental organisation called Z. The project was renewed several times and finally ended on 31 December 2001.

The Commission signed a contract with the complainant to carry out the mid-term evaluation of the project. A final evaluation, which had not originally been planned, was later considered to be necessary. However, the Commission could not renew the financing agreement for a fourth time. It was therefore decided to finance the evaluation via the fifth annual programme estimate and the Commission's services encouraged the complainant to sign a contract with Z. Despite some hesitation, the complainant accepted and the contract was signed on 5 January 2001. This was the only solution to proceed with the final evaluation. The complainant carried out the final evaluation, which was approved by all parties. However, there were accounting and eligibility problems with some expenditure submitted by Z to the Commission. Consequently the Commission refused to transfer funds to Z. Z did not pay the invoice sent by the complaint for a total amount of EUR 10 336.67.

Although the Commission did not sign a contract with the complainant, it acknowledges that it encouraged the complainant to sign a contract with Z. The competent services of the Commission tried to find a solution. However, the absence of contractual link with the complainant and the irregularities found prevented them from paying the complainant directly.

The Commission consequently decided to carry out an audit of the project. This audit revealed problems with the bookkeeping, showing that Z could be insolvent. For this reason, it is no longer possible for Z to fulfil its commitments to the complainant. The Commission contacted Z with a view to a debt transfer. Z agreed to this solution. To this end and exceptionally, Z will allow the Commission to pay the complainant directly on its behalf. This payment should take place on 30 June 2004.

On 25 August 2004, the Commission sent the Ombudsman proof of the payment.

The complainant's observations

No written observations were received from the complainant. However, on 15 July 2004, the complainant's legal advisers informed the Ombudsman that they considered the case as having been settled.

THE DECISION

1 Alleged Commission's responsibility for the non-payment of an invoice

1.1 In 1998, a company, called Y, carried out the mid-term evaluation of project Z in South Africa in the framework of a contract signed with the European Commission. In 2001, the company carried out the final evaluation of Z. However, for this second mission, the contract was signed with Z and not with the Commission. On 5 December 2001, the company submitted an invoice, which Z was unable to pay. The complainant, the manager of the company, alleges that the Commission is responsible for the non-payment by Z of the complainant's invoice for EUR 10 336.67. The complainant claims payment of EUR 10 336.67, as well as interest for late payment. He also claims that internal administrative problems within the Commission, which seem to be the cause of the absence of payment, should be clarified.

1.2 The Commission states that it signed a contract with the complainant to carry out the mid-term evaluation of Z. A final evaluation was also considered to be necessary, but, as the Commission could not renew the financing agreement for a fourth time, the Commission's services encouraged the complainant to sign a contract with Z. At the end of the evaluation, the complainant submitted an invoice for a total amount of EUR 10 336.67 to Z, which the latter did not pay. Following an audit carried out by the Commission, it appeared that it was no longer possible for Z to fulfil its commitments to the complainant. In conclusion, the Commission informed the Ombudsman that, following a debt transfer, the Commission would pay the complainant directly on 30 June 2004.

On 25 August 2004, the Commission sent the Ombudsman proof of the payment.

1.3 No written observations were received from the complainant. However, on 15 July 2004, the complainant's legal advisers informed the Ombudsman that they considered the case as having been settled.

2 Conclusion

It appears from the Commission's comments and the complainant's correspondence that the Commission has taken steps to settle the matter and has thereby satisfied the complainant. The Ombudsman therefore closes the case.

FURTHER REMARK

The Ombudsman takes note of the general claim of the complainant according to which internal administrative problems within the Commission, which seem to be the cause of the absence of payment, should be clarified. During the course of 2005, the Ombudsman will consider whether it would be useful to renew his earlier own-initiative inquiry on the problem of late payment(1).

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

Yours sincerely,

 

P. Nikiforos DIAMANDOUROS

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(1) Decision of the European Ombudsman in the own-initiative inquiry OI/5/99/(IJH)GG relating to the European Commission (http://www.ombudsman.europa.eu/decision/en/99oi5.htm).