Competition law and public procurement – one cannot do without the other or potentially diverging rules

Article summary The sustainable, green, digital era is well and truly upon us. Vast quantities of taxpayer’s money are set to be spent on all sorts of investments that meet EU and national policies. Public tenders and public procurement rules are in place to make sure that this money is spent in a non-discriminatory transparent way in a market where the level playing field is safeguarded as well. Contractors who fall short or have violated competition rules can and indeed in some cases, must be excluded from public tenders. At least until they have compensated for damage suffered and put in place systems to avoid similar mistakes being made. To ensure that the Community money is wisely spent and properly accounted for, the EU relies on the application of procurement rules. But what if there is a lack of competition in the marketplace or companies have colluded during the bidding process? Then both competition law and the procurement rules apply but not always in an aligned fashion with different authorities taking the lead. When advising on competition and procurement law, it is often necessary to consider the differences between the two areas of law and more particularly, the different consequences of their breach.  Even where the underlying activity is one and the same (bid rigging is the obvious one) the legal consequences that follow add considerable complexity to advising undertakings. This article discusses some of the ways in which these rules diverge and what legal counsel, lawyers and undertakings need to look out for.

When advising on competition and procurement law, it is often necessary to consider the differences between the two areas of law and more particularly, the different consequences of their breach. Even where the underlying activity is one and the same (bid rigging is the obvious one) the legal consequences that follow add considerable complexity to advising clients.

Banning corrupt companies from accessing public funds (also known as debarment) is considered an effective deterrent in terms of procurement. In markets where governments spend trillions on goods and services, few companies can afford being locked out of markets, even for short periods of time.

Successful deterrence is dependent on several factors and these include the chances of being caught and the consequences that follow. The detrimental effects of collusion on public finances may prove even greater in the aftermath of COVID as economic recovery depends greatly on the best possible use of public funds and investment in critical economic sectors. Misuse of spending, such as excessive amounts paid for works, supplies and services contracts, means less public funds for core state business, larger budget deficits, and a greater need for borrowing. This jeopardises financial stability and undermines recovery efforts.

Poised on the threshold of the largest injection of public funds in living memory, it is a good moment to reflect on how these two areas of law converge, diverge and intersect. The potential sanctions for breaching competition or procurement law (or both) are high[1], both financially, in terms of fines, potential damages actions and legal costs and commercially, through potential market exclusion and reputational damage. The timing of the Commission guidance on fighting collusion in public procurement and on the application of exclusion grounds (March 2021 - see 4 below) is noteworthy even if it falls somewhat short in terms of content.

1. Reliance on the competition rules to deter collusion

Breaches of competition law cover a wide spectrum of activities and can encompass everything from competitors agreeing to keep off each other’s turf, to price fixing in virtual chat rooms or the more traditional smoke-filled rooms. With fines of up to 10% of worldwide turnover, follow-on private damages actions, reputational damage and defence costs, getting a CEO’s attention is not difficult. To remain relevant, competition law must also evolve with the times. This is clearly evidenced in the recent €875 million ($1 billion) fine on five European car manufacturers for colluding to curb the use of emission cleaning technology in diesel cars over a period of 5 years. Daimler, as the leniency applicant, was awarded immunity from EU fines. In this case, the fines were considerably reduced on grounds of the novelty and the first application of competition law to the delay of innovation. Such reductions are unlikely to apply to similar cases in the future.

In countries where bid rigging is considered a criminal activity, enforcement by public prosecutors and the newly launched European Public Prosecutor Office (EPPO) are set to change the landscape considerably (see 5 below).

2. Reliance on the procurement rules to deter collusion

There are two sets of disqualification rules aimed at excluding bidders from participating in public tenders. In procurement law, these are referred to as mandatory and discretionary exclusions. The first set aimed at excluding any infringing party and these include criminal activities such as engaging in a criminal organisation, fraud, financing terrorists, money laundering, child labour and human trafficking. Mandatory exclusion rules which contracting authorities must apply and discretionary exclusion rules which remain within the remit of the contracting authority provided general EU principles of transparency, equal treatment and proportionality are met.

Mandatory = Mandatory

Mandatory exclusion rules must be applied by all contracting authorities[2]. In addition, Member States are free to implement discretionary grounds as mandatory[3]. If this occurs, discretionary grounds are treated as mandatory grounds, automatically triggering exclusion[4]. The result however leads to differing approaches across Member States and a need for bidders to have a clear understanding of national measures triggering exclusion.

Prior to the 2014 Directive, tenderers who colluded could be excluded on the basis of Article 45(2) of Directive 2004/18, provided they had been convicted by final judgment for an offence related to their professional misconduct or were guilty of grave misconduct by any means that the contracting authority could demonstrate (including an infringement of competition). Arguments abounded as to what constituted “professional misconduct” and the evidence necessary to exclude on grounds of “grave misconduct”. With legal certainty elusive, the scope for lawyering out of trouble increased.

The 2014 Directive amended the exclusion rules and;

• Allowed for exclusion if the contracting authority found there was ‘sufficiently plausible indications’ that the tenderer entered into agreements aimed at distorting competition.
• Included the possibility for economic operators to invoke self-cleaning measures to attempt to avoid exclusion in cases where no final judgment had been issued. It is worth remembering how long competition investigations can take.
• Allowed the Member State to set the maximum duration of exclusion (other than where exclusion is set by final judgment, where the limit is no more than 5 years).

Self-cleaning

Criminal activities[5], professional misconduct and similar compliance breaches can render a candidate’s integrity questionable and therefore unsuitable to be awarded a public contract. Exclusion should not last indefinitely. By proving that they have adopted compliance measures remedying the consequences of their past behavior and preventing future misbehavior, companies that have been excluded have the possibility of demonstrating their trustworthiness. EU law sets out specific measures to be taken:

Article 57(6) of the 2014 Directive introduced the concept of “self-cleaning”, a somewhat awkward term (in English at least) that essentially describes measures taken by bidders to demonstrate their trustworthiness to contracting authorities, even though an exclusion ground applies to them[6]. For this purpose, EU law provides that the economic operator must prove that it has -

paid or undertaken to pay compensation in respect of any damage caused by the criminal offence or misconduct,

clarified the facts and circumstances in a comprehensive manner by actively collaborating with the investigating authorities,

and taken concrete technical, organisational and personnel measures that are appropriate to prevent further criminal offences or misconduct.

On January 14, 2021 in Case C‑387/19 RTS infra BVBA Aannemingsbedrijf Norré-Behaegel BVBA v Vlaams Gewest[7], the European Court of Justice held that the self-cleaning measures have direct effect and provided that tenderers can be required to provide proof of corrective measures at the time of their request to participate or tender if (i) this requirement is clearly, precisely and unequivocally provided for in the national legislation and (ii) if it is brought to the attention of the economic operators in the tender documents. The Court has thus provided clear guidance on whether or not economic operators should be pro-active in providing underlying evidence of self-cleaning measures. Tenderers should therefore carefully examine these before submitting their request to participate or tender[8].

Another important point to be considered is whether national legislation entrusts the assessment of the measures undertaken within “self-cleaning” to individual contracting authorities or whether it entrusts other, dedicated authorities (on a central or decentralized level) with that task. This introduces additional legal complexity when rolling out a compliance program[9].

3. Recent updated guidance from commission via notice

In March 2021, the Commission adopted guidance[10] on tools to fight collusion in public procurement and on how to apply the related exclusion rules. While this Notice clarifies some issues, it is limited by the fact that the Directive itself allows Member States to classify discretionary exclusion rules as mandatory. This means different rules in different countries and has resulted in national competition authorities (NCAs) being called on to assist in dealing with collusion on specific tenders as well as other questions on the operation of exclusion grounds. There have been a number of cases where contracting authorities have excluded economic operators on suspicion of collusion[11]. In a number of countries, exclusion grounds have also been considered before national courts.

Threshold for ‘sufficiently plausible indications’

The Notice identifies that the Directive offers no guidance on the interpretation of ‘sufficiently plausible’. This allows the contracting authority, unless national law provides otherwise, to include a bidder in the tender even if it considers that there are sufficiently plausible indications of anticompetitive conduct. This has been upheld by the Court.[12]

The Notice gives several examples of potential plausible indications, including evidence of a NCA investigation. It also lists a number of factors to assess, when examining tenders submitted, including the overall market behaviour of the EO, whether the text of any two or more tender documents contain the same typos or terms and the prices offered being excessively high or low. However, it also urges against jumping to conclusions.

‘Tender concerned’

The Notice acknowledges that the Directive does not state that the collusion needs to relate to anticompetitive behaviour in this tender and therefore exclusion from another tender can be considered an indication of guilt. Decisions to exclude in other jurisdictions are not binding but may be considered. However, according to the Court, the decision of another contracting authority is not enough per se to exclude.[13] Further, a contracting authority is not bound to accept the tenderer if they were investigated in another instance and cleared.

Participation in leniency/immunity programme

The Notice states that participation in a previous leniency/immunity programme is not per se proof of innocence (settling a case does not include a commitment to refrain from future behaviour). Under competition law, both leniency and immunity applicants must contain an acknowledgment of infringement). But, competition law does not require that those involved in a cartel be excluded, this is where procurement law comes in.

The Notice distinguishes between leniency in the context of collusion in a tender, in which case the Member State can (in its transposing legislation) decide to exempt leniency applications from sanctions with regards to tenders, and leniency in the context of collusion in previous tenders. In the latter case, there is nothing in the Directive to allow Member States to introduce a presumption of reliability, as to do so would contradict the ‘self-cleaning’ measures, which should motivate companies to change.

The following are examples of exclusion rules which have been considered incompatible with EU law as contrary to general principles of proportionality, equal treatment and/or transparency.

• A national law which automatically excludes certain linked or affiliated economic operators from participating without allowing tenderers to demonstrate that their participation presented no real risk of jeopardising transparency and distorting competition.
• A national law that automatically excludes a permanent consortium and individual consortium members of that permanent consortium from participating in the same tender[14].
• Situations in which the discretionary grounds for exclusion were not clearly set out in advance by contracting authorities or not applied to all candidates[15].

A serious deficiency of the Notice is that it ignores the requirement to embed discretionary exclusions in the Member States’ administrative/public law system. This complicates matters as regards burden of proof, the duty to state reasons, the enforceability of exclusion grounds against other tenderers, and the very practical implications of potential compensation in the case of unlawful exclusion.

4. OLAF - The European anti-fraud office

Who is afraid of OLAF? Rather a lot of important people, as it turns out. The Santer Commission is best remembered in Brussels (somewhat unfairly perhaps) for its en masse resignation in March 1999 following corruption allegations[16]. An independent committee found that the legal framework for combating fraud against the financial interests of the European Communities was incoherent and incomplete. In its wake,[17] the Commission established the European Anti-Fraud Office – OLAF – to deter fraud, corruption, and other illegal activities detrimental to the financial interests of the Union.

OLAF’s primary deterrence instrument is its ability to conduct administrative investigations in the Union’s institutions, bodies, offices, and agencies (during internal investigations) and in the Member States (during external investigations)[18]. Initially, OLAF conducted its investigations under the overarching framework of Regulations 1073/1999 (covering the EC) and 1074/1999 (covering Euratom). After a series of lengthy negotiations and three legislative proposals,[19] Regulation 883/2013 replaced both of these Regulations.

Can companies be blacklisted at EU level?

One could perhaps expect the EU to place huge importance on having an effective blacklisting system in place. You might be surprised to discover that, at EU level, this whole process is still quite nascent and under refinement (in particular, as regards the establishment of the European Public Prosecutor’s Office (EPPO)). Back in 2016, the EU replaced its Early Warning System and Central Exclusion Database with an updated Early Detection and Exclusion System (EDES). However, a recent check on this public database reveals few entries.

The EU’s new authority for criminal cases

Unsurprisingly, reaching agreement on a system to tackle criminal matters at EU level was tortuous. The 2019 Commission Anti-Fraud Strategy (CAFS) aimed to improve the collection and analysis of fraud-related data (both at EU level and in the Member States) and reinforce anti-fraud governance across the Commission. OLAF’s CAFS activities form a very important element in the Multiannual Financial Framework (MFF) 2021–2017 (even before the COVID-19 pandemic derailed life as we know it).

The EPPO[20] is the EU’s first independent and decentralised prosecution office and has the power to investigate, prosecute and bring to judgment crimes against the EU budget, such as fraud, corruption or serious cross-border VAT fraud. It began operations in June 2021 with 22[21] EU countries participating. While the EPPO is responsible for criminal investigations, OLAF continues its administrative investigations into irregularities and fraud affecting the EU's financial interests in all EU countries. Some time will be required before one can fairly evaluate the success of the EPPO.

5. EU institutions and exclusion

The important distinction between “to blacklist” and to include a blacklisted clause

The term blacklisting means different things in the context of procurement and competition law. In competition law, backlisted clauses are those that are considered to breach competition law if included in certain types of agreements, for example resale price maintenance in supply agreements and price fixing, non-compete or no poaching clauses in agreements between competitors. Unless justified by particular circumstances (a rarity), such clauses are generally considered void and unenforceable if included and may give rise to other risks such as investigations by competition authorities, fines of up to 10% of a company’s worldwide turnover and private damages actions. To add to potential confusion, the term blacklist has also been used to describe a boycott, which is also regarded as a serious infringement of the competition rules.

As Article 57 of the Directive only refers to agreements, whereas Article 101 of the TFEU includes both agreements and concerted practices, some confusion has arisen as to whether involvement in concerted practices could be covered by the exclusion ground. Recital 101 of the Directive specifically includes a breach of competition rules as “grave professional misconduct” for the purposes of the Directive. However, the degree of certainty required is unclear. For collusion, the contracting authority needs only ‘sufficiently plausible indications’ to exclude on this ground. The Notice states that it is up to the contracting authority to decide which ground to invoke, and notes that nothing in the Directive excludes a Member State from allowing exclusion on more than one ground. Not exactly helpful.

Follow my lead?

The current rules on exclusion that apply to EU institutions are found in Article 136 of the Financial Regulation. They provide that the responsible authorising officer shall (i.e. mandatory) exclude a person or entity[22] referred to in Article 135(2) from participating in award procedures governed by the Financial Regulation where that entity is in an "exclusion situation". This caused a recent flurry in the banking sector when several banks were “briefly excluded” from participating in individual syndicated transactions (a €20 billion new debt-issuance program) while the Commission examined whether they had taken the necessary remedial measures to terminate cartel operations in the bond and currency markets.

Public blacklists (exclusions from tendering)

The Commission operates a warning system[23], designed to protect the financial interests of the Union and inter alia to provide a mechanism to exclude bidders that fall into one of the exclusion situations set out in Article 136(1)[24].

One of the grounds for exclusion in Article 136(1)(c) of the Financial Regulation is where a person or entity is guilty of grave professional misconduct, including in particular entering into agreement with other persons or entities with the aim of distorting competition[25]. Under this ground, a final judgment or a final administrative decision is required[26].

Publication of exclusion decisions

After the decision on exclusion and/or financial penalty has been taken in the cases referred to under points (c) to (h) of Article 136(1) of the Financial Regulation, and in order to reinforce their deterrent effect, the Commission publishes on its internet site the relevant information relating to the exclusion decision (subject to a decision of the authorising officer under Article 140 of the Financial Regulation). Special provisions apply if this content includes personal data.[27]

Thus, once an entity is listed, it must be excluded from tenders governed by the Financial Regulation. However, there are important procedures to be applied, including rights of the defence, before an entity can be placed on this system. These include the right to challenge such a decision before the General Court.

In Vossloh Laeis[28] which concerned the application of the utilities rules rather than the Financial Regulation but are similar in effect, the General Court considered the aftermath of an investigation into bid rigging practices by the Bundeskartellamt (German national competition authority), which fined Vossloh Laeis €3.5 million in 2016. Stadwerke München, a utility covered by Directive 2014/25/EU, sought to exclude Vossloh Laeis from its qualification system because of its participation in the cartel.

The relevance of the cartel for Stadwerke München was not merely theoretical as it had been a victim of the anticompetitive practices carried out by Vossloh Laeis. This led Stadwerke München to seek compensation in damages from Vossloh Laeis in civil litigation, as well as to exclude it from its list of approved contractors. The Court considered that the contracting authority could request evidence of the cartel proceedings (Vossloh Laeis did not want to provide evidence to the party suing it for damages) unless the facts or circumstances followed sufficiently clearly from other documents provided by the bidder, in particular from the decision establishing the infringement of the competition rules. This solution was also justified[29] (particularly as the existence of conduct restrictive of competition may be regarded as proved only after the adoption of such a decision, which legally classifies the facts to that effect).

Where EU funds are involved, the ultimate remedy – our money back please

When it comes to EU financed programmes (full/partial), the consequences of breaching the procurement rules may be felt long after the contract has been signed, the building built and/or the services provided. And yes, it is possible to have the entire funding clawed back due to lack of compliance with procurement rules. Remember those grant funding provisions that obliged you to keep records for [x] number of years? There is a reason for that. It’s called an audit.

Red flags can be anywhere (even a robot might be sent looking) and so obvious issues (such as justifications for single source tenders, extensions of contracts, contractor changes) need to be fully reasoned at the time the decisions are taken (external Counsel support can be useful), not with hindsight.

For consultants, project managers, finance and accounts, a procurement audit is the equivalent of a competition dawn raid. The only way to survive is to ensure that from the very outset of the project, the procedure, record-keeping and procurement rules are fully complied with. And fully, really does mean fully. With audits running years after completion, those in charge at the time may be a few career hops down the line. So, project managers need to be drilled on ensuring that all records are scrupulously kept in a manner that allows for (relatively painless) retrieval.

6. Conclusion

Competition and procurement law intersect and overlap but they remain distinct areas of law, with different legal and policy objectives as well as quite different consequences, remedies and sanctions. While the 2009 OECD guidelines clearly inspired collusion prevention and detection measures, national competition authorities (primarily responsible for carrying out such policies) have stepped up the pace with helplines for reporting cases, awareness training and advice on the use of technology to assist in detection. While this article highlights a few of these issues, there are many more that may need to be taken into account, depending on the particular facts of the case.

Hefty fines are now being imposed by national competition authorities for bid rigging activities (e.g. Spanish fines of €127.3 million for sharing public contracts in rail signaling and €61.2 million for bid rigging in roadworks €5.76 million for bid rigging in the supply of radiopharmaceuticals to hospitals, French fines of €435,000 for bid rigging in a public tender for building maintenance in the city of Lille, German fines totalling €110 million for bid rigging in construction contracts) as well as large Commission fines (€992 million - lifts and elevators (2007), €875.189 million - on German car manufacturers for limiting technology (colluding rather than competing to supply the best clean emission technology 2021). Private damages actions are on the rise. Is the tide beginning to turn?
With competition violations clearly included as grounds for exclusion from public tendering since 2014, the risk of non-compliance has increased. At the same time, there has been a proliferation of national leniency programs running alongside the Commission’s leniency programme. As most countries have entrusted the task of exclusion to individual contracting authorities, the potential of different approaches to exclusion across the EU adds to the challenge and complexity of advising clients across different jurisdictions. 

[1] Spanish fines of €127.3 million for sharing public contracts in rail signaling (CNMC Decision of 29 September 2021, S/DC/0614/17) and €61.2 million for bid rigging in roadworks (CNMC Decision of 17 August 2021, S/0013/19) €5.76 million for bid rigging in the supply of radiopharmaceuticals to hospitals (CNMC Decision of 2 February 2021, S/0644/18), French fines of €435,000 for bid rigging in a public tender for building maintenance in the city of Lille (Autorité de la Concurrence Decision of 4 March 2021, 21-D-05), German fines totalling €110 million for bid rigging in construction contracts (Bundeskartellamt Decision of 27 March 2020, B11-21/14) as well as large Commission fines (€992 million - lifts and elevators – EC Decision of 21 February 2007, C. COMP/E-1/38.823), €875.189 million - on German car manufacturers for limiting technology (colluding rather than competing to supply the best clean emission technology 2021, EC Decision of 8 July 2021, AT.40178).

[2] These are set out in Article 57(1) of the EU Directive 2014/24/EU A contracting authority must exclude a bidder consortium where it has established or is otherwise aware of it having been the subject of a conviction under any of the listed grounds in Article 57(1).  This extends to situations where an individual is a member of the consortium (admin, management, supervisory) or has powers of representation decision or control over it.

[3] This follows from Article 57(4) of EU Directive 2014/24/EU which reads “Contracting authorities may exclude or may be required by Member States to exclude from participation in a procurement procedure any economic operator in any of the following situations:…”

[4] Article 57 paragraph 4, Directive 2014/24/EU.

[5] Article 6(2) and (3) of the European Convention on Human Rights, provides:

"2. Everyone charged with a criminal offence shall be presumed innocent until proved guilty according to law.

3. Everyone charged with a criminal offence has the following minimum rights:

(a) to be informed promptly, in a language which he understands and in detail, of the nature and cause of the accusation against him;

(b) to have adequate time and facilities for the preparation of his defence;

(c) to defend himself in person or through legal assistance of his own choosing or, if he has not sufficient means to pay for legal assistance, to be given it free when the interests of justice so require;

(d) to examine or have examined witnesses against him and to obtain the attendance and examination of witnesses on his behalf under the same conditions as witnesses against him;

(e) to have the free assistance of an interpreter if he cannot understand or speak the language used in court."

[6] The measures taken by the economic operators must be evaluated taking into account the gravity and particular circumstances of the criminal offence or misconduct. Where the measures are considered to be insufficient, the economic operator shall receive a statement of the reasons for that decision.

[7] ECLI:EU:C:2021:13.

[8] See also C-395/18, Tim SpA - Direzione e coordinamento Vivendi SA v Consip SpA and Ministero dell'Economia e delle Finanze ECLI:EU:C:2020:58 “Self-cleaning” should also be permitted if it is not the economic operator that is liable to be excluded from the procedure, but their intended subcontractor, indicated in the economic operator’s submitted bid.

[9] In Germany, self-cleaning measures by companies blacklisted in the newly introduced “Competition Register” (essentially a central public procurement debarment register administered by the German Federal Cartel Office (Bundeskartellamt) may be evaluated by the Federal Cartel Office. If the Federal Cartel Office determines that the measures are sufficient, the company will be taken off the Register and the determination that the company has regained its reliability is binding on all German contracting authorities.

[10] Notice on tools to fight collusion in public procurement and on guidance on how to apply the related exclusion ground 15th March 2021 C(2021) 1631.

[11] Case C-124/17, Vossloh Laeis GmbH v Stadtwerke München GmbH, ECLI:EU:C:2018:855.  For a useful overview of self-cleaning across a number of EU Member States, see Denton’s 2021 Guide to Self-Cleaning in European Public Procurement Procedures.

[12] See judgment in Case C‑267/18 Delta Antrepriză ECLI:EU:C:2019:826.

[13] See judgment in Case C‑267/18 Delta Antrepriză ECLI:EU:C:2019:826.

[14] In C-376/08 Serrantoni, the law in question prohibited members of a permanent consortium and individual consortium members from participating in the same tendering procedure. The effect of the national law was to automatically exclude permanent consortia and their members from participating in certain award procedures. The permanent consortia were treated differently under the law than other joint working arrangements between economic operators. The CJEU ruled that automatic exclusion applying to a single type of consortium did not constitute equal treatment and that even if the exclusion were applied without distinction, a provision that required automatic exclusion would be incompatible with the principle of proportionality. The CJEU was also of the view that a provision of this kind was likely to have a dissuasive effect on economic operators from other Member States and impede the freedom of establishment and the freedom to provide services. The national legislation was incompatible with EU law.

[15] In C-27/15 Pippo Pizzo, the CJEU confirmed that the grounds for exclusion must be clearly defined in advance and made public, in particular the obligations of tenderers. This clear definition ensures that tenderers know exactly the procedural requirements and that the same requirements apply to all candidates. The principle of equal treatment and the obligation of transparency prevents the exclusion of an economic operator from a procedure for the award of a public contract as a result of the economic operator’s non-compliance with an obligation that does not expressly arise from the documents relating to that procedure or from the national law in force, but from an interpretation of that law and those documents and from the incorporation of provisions into those documents by the national authorities or administrative courts.

[16] Financial management report by a Committee of Independent Experts, convened by the European Parliament.

[17] In October 1999, the European Parliament and the Council adopted Regulation 1073/1999 which transformed the Unité de Coordination de la Lutte Anti-Fraude (UCLAF) into the European Anti-Fraud Office (OLAF), with a hybrid nature as an investigative office and policy service of the Commission.

[18] See recital 4 and Art. 2(1) and 2(2) of Commission Decision (EC, ECSC, Euratom) 1999/352 establishing the European Anti-Fraud Office (OLAF) [1999] O.J. L 136, 20.

[19] The first proposal, tabled by the European Commission in 2004, was presented in two documents: (i) European Commission, “Proposal for a Regulation of the European Parliament and of the Council amending Regulation (EC) 1073/1999 concerning investigations conducted by the European Anti-Fraud Office (OLAF)”, COM(2004) 103 final and (ii) European Commission, “Proposal for a Council Regulation amending Regulation (Euratom) 1074/1999 concerning investigations conducted by the European Anti-Fraud Office (OLAF)”, COM(2004) 104 final. In 2006, a second proposal followed: “Proposal for a Regulation of the European Parliament and of the Council amending Regulation (EC) 1073/1999 concerning investigations conducted by the European Anti-Fraud Office (OLAF)”, COM(2006) 244 final. The 2006 proposal was modified in 2011: “Amended Proposal for a Regulation of the European Parliament and of the Council amending Regulation (EC) 1073/1999 concerning investigations conducted by the European Anti-Fraud Office (OLAF) and repealing regulation (Euratom) 1074/1999”, COM(2011) 135 final. The modified 2011 proposal constituted the basis for Regulation 883/2013.

[20] Council Regulation (EU) 2017/193

[21] Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Estonia, Finland, France, Germany, Greece, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Portugal, Romania, Slovakia, Spain and Slovenia. This is based on enhanced cooperation. The working relationship between OLAF and the EPPO was recently signed off (July 2021) between Ville Itälä (OLAF Director-General) and Laura Kӧvesi (European Chief Prosecutor).

[22] These, in turn, include participants in a tender process and entities on whose capacity the candidate or tenderer intends to rely or subcontractors of a contractor.

[23] See Article 135 of the Financial Regulation.

[24] A new system was required following a General Court ruling in 2015 (Case T-320/09 Planet AE v. Commission, 22 April 2015) that the earlier legislation lacked the appropriate legal basis. Regulation No 2015/1929 entered into force on 1 January 2016. This Regulation included new grounds for exclusion under Article 106(1) while Article 108 expressly provides that the European Commission is responsible for setting up and managing the central database for the exchange of the early detection and exclusion information. These provisions have been taken over in the 2018 Financial Regulation that repealed Regulation 2015/1929.

[25] See Article 136 (1) (c)(ii) of the Financial Regulation.

[26] In the absence of final judgment or final administrative decision as well as in cases referred to in points (c), (d), (f), (g) and (h) of paragraph 1 of Article 136 of the Financial Regulation (i.e. following checks, audits or investigations by OLAF etc.), consortium members must be excluded (on the basis of a preliminary classification in law of a conduct referred to in those points, having regard to other established facts or other findings contained in the recommendation of the panel referred to in Article 135(2)  - per Article 136(2) of the Financial Regulation.

[27] Where personal data are concerned, the authorising officer responsible must, in accordance with Regulation (EC) No 45/2001, inform the person or entity concerned, as referred to in Article 135(2) of the Financial Regulation, of their rights under the applicable data protection rules and of the procedures available for exercising those rights. See in this regard Case 2016-0864 Early detection and exclusion system database, Prior Checking Opinion of the European Data Protection Supervisor dated 4 Oct 2017.

[28] C-124/17 Vossloh Laeis GmbH v Stadtwerke München GmbH, ECLI:EU:C:2018:855.

[29] See Advocate General’s Opinion, C-124/17, Vossloh Laeis GmbH v Stadtwerke München GmbH, paragraphs 83 to 85 ECLI:EU:C:2018:316.