The background to the complaint

1. The complaint deals with alleged irregularities committed by the European Commission in the context of a multiple framework contract. A 'multiple framework contract' lays down the basic terms and conditions for a series of specific contracts for goods or services to be concluded during the duration of the multiple framework contract. In sum, if a person or company is successful in a tender for a multiple framework contract, the Commission can then enter into specific contracts for the provision of goods and/or services with that contractor. The Commission usually selects a number of successful contractors for any given multiple framework contract. These contractors are ranked by order of merit.

2. In 2008, the complainant signed a multiple framework contract (ENTR/06/69)[1] with the Commission for the provision of communication strategy advice and management advice, press and public relations services, editorial support, translation services, audio-visual services, graphic design and printing services, as well as web services for its Directorate-General for Enterprise and Industry (DG ENTR).

3. In 2009, DG ENTR requested the complainant to submit offers for three services: (a) the organisation of the Communication Campaign for the European SME Week 2010, (b) the organisation of the European Entrepreneurship Video Awards 2010 and (c) publication materials for the European SME Week. The complainant was informed that DG ENTR was also considering other offers received under another framework contract (DG COMM PO/2006-39/Dir.D, hereafter COMM/2006/39).

4. DG ENTR then informed the complainant that its offers for the European SME Week and the European Entrepreneurship Video Awards 2010 had not been selected. The complainant then turned to the Ombudsman.

The subject matter of the inquiry

5. The Ombudsman opened an inquiry into the following allegations and claims.

Allegations:

1. The Commission failed to comply with the provisions of Framework Contract ENTR/06/69, as well as the principles of equality of treatment between contractors and transparency, when it compared its offer with other contractors under another framework contract.

2. The Commission failed to reason its decision rejecting the complainant's offers in accordance with Article 18 of the European Code of Good Administrative Behaviour and Article 100 of the Financial Regulation.

3. The Commission did not act fairly and consistently and breached the complainant's legitimate expectations.

Claims:

1. The Commission should comply with the provisions of Framework Contract ENTR/06/69.

2. It should also reason its decision rejecting the complainant's offers.

3. It should act fairly and consistently and comply with the complainant's legitimate expectations.

The inquiry

6. On 15 January 2010, the complainant addressed his complaint to the Ombudsman. On 3 March 2010, the Ombudsman opened an inquiry and forwarded the complaint to the Commission, which sent its opinion to the Ombudsman on 12 August 2010. The opinion was forwarded to the complainant, who submitted its observations on 26 October 2010.

The Ombudsman's analysis and conclusions

A. Allegation of failure to comply with the provisions of Framework Contract ENTR/06/69, as well as the principles of equality of treatment and transparency, and related claim

Arguments presented to the Ombudsman

7. According to the complainant, if its offers were deemed inappropriate, the Commission should have asked the second selected contractor in multiple framework contract ENTR/06/69 to provide a price offer. However, the Commission asked other contractors selected under another framework contract to submit offers. This, it argued, was a breach of Framework Contract ENTR/06/69. It pointed out that the Commission compared offers which were not comparable, given that price grids and assessment evaluations differ from one framework contract to another.

8. According to the principle of equal treatment, at each phase of a procedure, each contractor should have the same opportunity[2] when preparing its offer. This implies that the same conditions should apply to each tenderer at the same time[3]. It argued that this principle was not followed in its case.

9. The complainant also argued that the principle of transparency was breached. Only after it had submitted its offer, did the complainant discover that DG ENTR had addressed identical requests to other contractors. Therefore, some essential information was not provided to the complainant.

10. In its opinion to the Ombudsman, the Commission explained that, when it first analysed its needs for the projects, it concluded that the framework contract which was best suited for the projects was Framework Contract COMM/2006/39. It then asked three tenderers under that Framework Contract to submit offers.

11. With a view to (a) ensuring the correct financial management of the projects, and (b) obtaining the best quality/price arrangement, the Commission then asked the complainant to submit offers under Framework Contract ENTR/06/69.

12. When the Commission received the offer under Framework Contract ENTR/06/69, it was able to verify that this offer only covered part of the services it needed for the projects. These services were also more expensive. It was then decided that Framework Contract COMM/2006/39 was indeed the most appropriate and offered the best quality/price for the projects. As a result, specific contracts were signed on the basis of that Framework Contract.

13. The Commission underlined that the complainant's offers and those of the tenderers under Framework Contract COMM/2006/39 were not subjected to a direct comparison and were not evaluated using identical evaluation criteria.

14. The Commission added that Framework Contract ENTR/06/69 does not preclude the possibility of using other existing framework contracts, nor does it ensure the exclusivity of all communication and information activities of the Commission to the contractors signing it.

15. In its observations, the complainant argued that its offer was compared with offers submitted by other contractors under another Framework Contract. Furthermore, it had no knowledge at the time that the Commission sought other offers. This was, it argued, contrary to the provisions of Framework Contract ENTR/06/69.

16. The complainant repeated that the Commission could not compare offers made under different framework contracts. Therefore, it breached the principles of equality of treatment and transparency.

The Ombudsman's assessment

17. According to Article I.1.4 of Framework Contract ENTR/06/69 "[t]he contract does not confer on the Contractor any exclusive rights to provide the services described in Annex I to the Commission." The Commission was thus specifically entitled to procure the services falling within the scope of Framework Contract ENTR/06/69 from contractors other than those covered by Framework Contract ENTR/06/69. The Ombudsman concludes from the above that it was permissible to have a certain overlap between the scope of Framework Contract ENTR/06/69 and the scope of other framework contracts.

18. Further, the Ombudsman notes that the Commission can use any framework contract as the basis for entering into specific contracts for goods or services provided these goods or services fall within the scope of the framework contracts in question. The complainant has not argued that the services eventually procured by the Commission fell outside the scope of Framework Contract COMM/2006/39.

19. Given that the framework contract gave no exclusive rights to provide services, and given the overlap between different framework contracts, the Commission was clearly entitled to choose which framework contract was best suited to its needs. This implies that it was entitled to compare the pros and cons of using one framework contract (Framework Contract ENTR/06/69) with the pros and cons of using another (Framework Contract COMM/2006/39), with a view to choosing, in accordance with the principle of sound financial management, the framework contract which was most suited to its needs and which represented the best value for money.

20. The Ombudsman also notes that, at any time before the Commission commits itself to a specific contract, it has the discretion to re-evaluate its needs as regards the provision of goods and services. This implies that the Commission can at any time extend or narrow the range of goods and/or services it is seeking to procure. In the present case, the Commission did re-evaluate its needs after receiving the offer under Framework Contract ENTR/06/69. It then found that its re-evaluated needs went beyond the scope of Framework Contract ENTR/06/69. It thus correctly ceased to examine the offer under Framework Contract ENTR/06/69 and only examined offers made under (the broader) Framework Contract COMM/2006/39.

21. As regards the complainant's argument that the Commission breached the principle of transparency because it failed to inform it that it had asked other contractors to submit offers, the Ombudsman notes that the Commission did inform the complainant that it was considering offers under another framework contract. The Commission therefore complied with the principle of transparency.

22. In light of the above, the Ombudsman finds no maladministration by the Commission as regards this allegation. The related claim cannot therefore be sustained.

B. Allegation of failure to reason a decision rejecting the complainant's offers and related claim

Arguments presented to the Ombudsman

23. According to Article 18 of the European Code of Good Administrative Behaviour[4], as well as Article 100 of the Financial Regulation[5] and Article 149 of its Implementing Provisions[6], the contracting authority should (a) inform tenderers of the reasons why their offer was not selected and then (b) inform tenderers who submitted an admissible offer and who so request of the characteristics and relative merits of the selected offer, as well as the name of the selected tenderer.

24. On 17 November 2009, the complainant requested the characteristics and advantages of the selected offer, as well as the name of the selected tenderer. It also asked for the reasons why its offer had been rejected. According to the complainant, the Commission's reply dated 23 November 2009 did not reply to this request satisfactorily. In the complainant's view, contrary to the case-law of the Union courts[7] on the matter, the Commission's reply is short and vague. Accordingly, the complainant found it impossible to assess whether the Commission's choice was appropriate and whether it should launch legal proceedings.

25. Finally, the complainant argued that the Commission made a legal error when it stated that Article 100 of the Financial Regulation does not apply to framework contracts.

26. In its opinion to the Ombudsman, the Commission stated that, on 12 November 2009, it informed the complainant that its offers could not be accepted as they were not considered cost-effective in comparison with the proposals received from other contractors under a different framework contract.

27. On 23 November 2009, the Commission provided the complainant with additional information on the reasons for refusing its offers. As regards the offer for the European SME Week, the Commission pointed out that the complainant's offer lacked concrete details and did not correspond sufficiently to the service requested. Moreover, the creative approach in terms of video and scripts was weak. Therefore, in the Commission's view, it reasoned its decision in conformity with the terms of Framework Contract ENTR/06/69 and within the deadline of two months laid down in Article 18 of the European Code of Good Administrative Behaviour. The final decision was based on objective criteria, such as the respect of the request for services and the concrete details of the services offered by the contractors. It is up to the Commission to evaluate the creativity and quality of the videos and scripts proposed, taking into account the key elements and messages for communicating its SME policy.

28. The Commission stated that Article 100 of the Financial Regulation refers to the reasons to be given when a contract is awarded following a procurement procedure. As this contract does not foresee a reopening of the competition, this article is not applicable. Under Framework Contract ENTR/06/69, the authorising officer is under no obligation to accept an offer. Also taking into account that the Commission decided not to address the second contractor under this framework contract, the reasons it provided were more than sufficient.

The Ombudsman's assessment

29. It is always good administration for the Commission to inform contractors upon request of the reasons why it rejected their offers.

30. As regards the present complaint, the Ombudsman notes that the Commission informed the complainant of the following reasons:

- in its letter dated 12 November 2009, it considered that the complainant's offers were not cost-effective in comparison with the proposals received by the Commission under another framework contract;

- in its e-mail of 23 November 2009, the Commission considered that certain details were missing in the offer for the European SME Week. It also held that the creative approach of the offer was weak in terms of visuals and video scripts. The proposals did not comply with the terms of reference and the price was too expensive. As regards the offer for the European Entrepreneurship Video Awards, the complainant's offer was too expensive.

31. The Ombudsman considers that, from the explanations provided by the Commission, the complainant was able to verify that the Commission had decided to use a different Framework Contract because the offers it received under Framework Contract ENTR/06/69 were inadequate and too expensive. He thus takes the view that the Commission adequately reasoned its decision to reject the complainant's offers. There is therefore no maladministration by the Commission as regards this allegation and the related claim.

C. Alleged failure to act fairly and consistently, alleged breach of the complainant's legitimate expectations and related claim

Arguments presented to the Ombudsman

32. The complainant argued that because it was awarded the framework contract, it could legitimately expect to be consulted first for all offers thereunder. It argued that the second contractor could only be consulted in the circumstances described by the framework contract. Thus, the Commission breached its obligation to act fairly under Article 11 of the European Code of Good Administrative Behaviour[8]. The complainant argued that the Commission did not act consistently because it did not apply the framework contract that it signed with the complainant. It also argued that the Commission breached the complainant's legitimate expectations.

33. In its opinion to the Ombudsman, the Commission explained that Framework Contract ENTR/06/69 does not preclude the possibility that the Commission may use other existing framework contracts, nor does it ensure that the contractors signing this Framework Contract will have exclusivity on all Commission communication and information activities linked to the Contract. Article I.1.4 of Framework Contract ENTR/06/69 states that the contract does not confer on the contractor an exclusive right to provide to the Commission the service described in Annex I. Furthermore, the request for an offer is only exploratory and does not imply a legal and financial commitment on the part of the Commission. This was clearly indicated in the invitation letter dated 28 August 2009, which stated the following: "please note that this request is only exploratory and does not imply a commitment on the part of the Commission to assign this service to you."

34. The Commission concluded that the complainant was given a fair and equal opportunity to submit an offer. It added that the Commission was under no obligation to request an offer under contract ENTR/06/69.

35. In its observations, the complainant argued that the requests were not all exploratory. He agreed that the letter dated 28 August 2009 includes a reservation. However, the letters dated 4 August 2009 and 17 September 2009 do not. By not specifying that the request did not imply a commitment on its part, the Commission breached the complainant's legitimate expectations.

The Ombudsman's assessment

36. The Ombudsman considers that the Commission did not breach the provisions of Framework Contract ENTR/06/69 because it did not ask other contractors to submit offers under that Framework Contract before requesting an offer from the complainant. However, as already stated above, the Commission was fully entitled to ask contractors under other applicable framework contracts to submit offers for the European SME Week 2010 and for the organisation of the European Entrepreneurship Video Awards (provided such services also fell under those framework contracts). Such requests served to assist the Commission in deciding which framework contract best met its needs.

37. As regards the complainant's argument that the Commission breached its legitimate expectations, the Ombudsman underlines that, according to the established case-law of the Union Courts, three conditions must be satisfied in order to claim entitlement to the protection of legitimate expectations. First, precise, unconditional and consistent assurances originating from authorised and reliable sources must have been given to the person concerned by the Union authorities. Second, those assurances must be such as to give rise to a legitimate expectation on the part of the person to whom they are addressed. Third, the assurances given must comply with the applicable rules[9].

38. According to Article I.1.2. of Framework Contract ENTR/06/69, "[s]ignature of the contract imposes no obligation on the Commission to purchase. Only implementation of the Contract through specific contracts or order forms is binding on the Commission". Further, according to Article I.1.4 of Framework Contract ENTR/06/69 "[t]he contract does not confer on the Contractor any exclusive rights to provide the services described in Annex I to the Commission". The Commission was thus specifically entitled to procure the services falling within the scope of Framework Contract ENTR/06/69 from contractors other than those contractors falling within Framework Contract ENTR/06/69. In sum, the fact that the complainant was awarded Framework Contract ENTR/06/69 did not create any legitimate expectation that it would also be awarded the European SME Week or the European Entrepreneurship Video Awards. Therefore, the third condition set out in paragraph 37 above is not met in the present case.

39. The Ombudsman concludes that there is no maladministration by the Commission as regards this allegation and the related claim.

D. Conclusions

On the basis of his inquiry into this complaint, the Ombudsman closes it with the following conclusion:

There has been no maladministration by the Commission.

The complainant and the Commission will be informed of this decision.

 

P. Nikiforos Diamandouros

Done in Strasbourg on 29 July 2011

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[1] The framework contract is entitled "Multiple framework contract in support of communication and information activities" (OJ 2007/S 114-139875).

[2] Case T-160/03 AFCon Management Consultants v Commission [2005] ECR II-981, paragraph 75; Case T-332/03 ESN v Commission [2008] ECR II-32, paragraph 122.

[3] Case T-332/03 ESN v Commission, cited above, paragraph 125.

[4] Article 18 of the European Code of Good Administrative Behaviour states the following:

"1. Every decision of the Institution which may adversely affect the rights or interests of a private person shall state the grounds on which it is based by indicating clearly the relevant facts and the legal basis of the decision.

2. The official shall avoid making decisions which are based on brief or vague grounds or which do not contain individual reasoning.

3. If it is not possible, because of the large number of persons concerned by similar decisions, to communicate in detail the grounds of the decision and where standard replies are therefore made, the official shall guarantee that he subsequently provides the citizen who expressly requests it with an individual reasoning."

[5] Article 100(2) of the Financial Regulation states the following: "The contracting authority shall notify all candidates or tenderers whose applications or tenders are rejected of the grounds on which the decision was taken, and all tenderers whose tenders are admissible and who make a request in writing of the characteristics and relative advantages of the successful tender and the name of the tenderer to whom the contract is awarded.

However, certain details need not be disclosed where disclosure would hinder application of the law, would be contrary to the public interest or would harm the legitimate business interests of public or private undertakings or could distort fair competition between those undertakings."

[6] Article 149 of the Implementing Provisions states the following: "1. The contracting authorities shall as soon as possible inform candidates and tenderers of decisions reached concerning the award of the contract or framework contract or admission to a dynamic purchasing system, including the grounds for any decision not to award a contract or framework contract, or set up a dynamic purchasing system, for which there has been competitive tendering or to recommence the procedure.

2. The contracting authority shall, within not more than fifteen calendar days from the date on which a written request is received, communicate the information provided for in Article 100(2) of the Financial Regulation.

3. In the case of contracts awarded by the Community institutions on their own account, with a value equal to or more than the thresholds referred to in Article 158 and which are not excluded from the scope of Directive 2004/18/EC, the contracting authority shall inform all unsuccessful tenderers or candidates, simultaneously and individually, by mail and fax or e-mail, that their application or tender has not been accepted at either of the following stages:

(a) shortly after decisions have been taken on the basis of exclusion and selection criteria and before the award decision, in procurement procedures organised in two separate stages,

(b) as regards the award decisions and decisions to reject offers, as soon as possible after the award decision and within the following week at the latest.

In each case, the contracting authority shall indicate the reasons why the tender or application has not been accepted and the available legal remedies.

Unsuccessful tenderers or candidates may request additional information about the reasons for their rejection in writing by mail, fax or email, and all tenderers who have put in an admissible tender may obtain information about the characteristics and relative merits of the tender accepted and the name of the successful tenderer, without prejudice to the second subparagraph of Article 100(2) of the Financial Regulation. The contracting authority shall reply within no more than fifteen calendar days from receipt of the request."

[7] Joined Cases T-376/05 and T-383/05 TEA-CEGOS v Commission [2006] ECR II-205, paragraph 48; Case T-272/06 Evropaïki Dynamiki v Court of Justice [2008] ECR II-169, paragraphs 42 and 56; Case T-89/07 Car Solutions v Parliament [2009], judgment of 20 May 2009, not yet reported, paragraph 74; Case T-437/05 Brink Security Luxembourg SA v Commission [2009] ECR II-3233, paragraph 170.

[8] Article 11 of the European Code of Good Administrative Behaviour states the following: "The official shall act impartially, fairly and reasonably."

[9] See Case T-203/97 Forvass v Commission [1999] ECR-SC I-A-129 and II-705, paragraph 70; Case T-199/01 G v Commission [2002] ECR-SC I-A-217 and II-1085, paragraph 38; Case T-347/03 Branco v Commission, paragraph 102.