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Public procurement deal in COREPER a trade union success
As we reported previously, the EFBWW together with UNI-Europa, EFFAT and the Belgian trade unions organised a day of action on 28 May 2013 to support their demand for enhanced and more socially oriented public procurement regulations in the ongoing trialogue negotiations. The delegation also had meetings with the European Commission at that time.

The final compromise and the deal struck on 10 July between the Council and the Parliament seem to have taken into account the major trade union demands. The current directive from 2004 only gives the possibility of laying down social criteria for the performance of contracts, whilst Article 15.2 of the proposed directive states:

“Member States shall take appropriate measures to ensure that in the performance of public contracts economic operators comply with applicable obligations in the fields of environmental, social and labour law established by Union law, national law, collective agreements or by the international environmental, social and labour law provisions listed in Annex XI”

In the corresponding recital 14c it is clear that the provisions of environmental, social and labour law that are to be taken into account are those “that apply at the place where the works are executed or the services provided”. Here it is also stated that this “should in no way prevent the application of terms and conditions which are more favourable to workers.”

Recital 14c also states that the measures should be applied in accordance with the Posting of Workers Directive (PWD) “with a view to ensure equal treatment”. The latter part could be seen as somewhat contradictory given the Rüffert judgment handed down by the CJEU in 2008. The Rüffert judgment referred back to the PWD and ruled out the criterion laid down in the law of the German federal state of Lower Saxony on the award of public contracts – i.e. that public contracts should be awarded only if collective agreements are respected –being used if the collective agreements in question had not been made generally binding in the whole of Germany. With the Laval and Rüffert judgments the CJEU embarked on an interpretation of the PWD that made the minimum conditions laid down in the directive also maximum conditions – i.e. the “floor became the ceiling”. It is clear that the Public Procurement Directive will not – directly or indirectly – “revise the PWD”, but the reference to equal treatment in the proposed text is an interesting development that may have future consequences also for the possibility of providing equal treatment to foreign posted workers on the basis of the host country’s conditions. According to 14c of the proposed new directive, the measures should be undertaken “in a way that ensures equal treatment and does not discriminate directly or indirectly against economic operators and workers from other Member States”.

If the obligations in the field of social and labour law are not complied with, the contracting authorities shall reject a tender (e.g. an “abnormally low tender”). For abnormally low tenders the contract authorities shall require the economic operators to explain the prices and costs proposed, e.g. in relation to the observance of the provisions of social and labour law (14f, Articles 54-69).

The proposed directive introduces the concept of the “most economically advantageous tender” to be used for awarding contracts, abolishing the criteria based solely on lowest costs. Article 66.2 states that the most economically advantageous tender shall be identified “using a cost-effectiveness approach, such as life-cycle costing in accordance with article 67, and may include the best price-quality ratio, which shall be assessed on the basis of criteria including qualitative, environmental and/or social aspects ….”

The trade union demand for a mandatory mechanism for joint and several liability associated with the economic operator being awarded the contract is not included in the proposed directive. However, a transparency mechanism regarding subcontractors involved is introduced. Article 71.5 obliges public authorities to disclose names, contact details and legal representatives of the subcontractors involved. The main contractor shall, moreover, notify the contracting authority of any changes to the chain of subcontractors.

Related pages about:
EU Legislation Construction
Posting of Workers