Circular IPPP 03/04

August 2004

Public Procurement Directives

Dear Manager,

I refer to the implementation of EU Directives on Public Procurement which regulate the award of contracts for public works, supplies and services.

New EU Public Procurement Directives

1. I wish to draw your attention to the fact that revised EU Directives are now in place, having been published in the EU Official Journal on the 30th April 2004. Of special interest to local authorities is Directive 2004/18/EC of the European Parliament and of the Council of 31st March 2004 on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts. On the same date, the European Parliament and Council also approved Directive 2004/17/EC (the Utilities Directive) which coordinates the procurement procedures of entities operating in the water, energy, transport and postal services sectors. The texts of the Directives may be accessed via the eTenders website:

Principles and Provisions of new Directives

2The Directives are based on the Treaty of Rome principles of freedom of movement of goods, freedom of establishment and freedom to provide services and to further principles derived therefrom including the principles of equal treatment, non-discrimination, mutual recognition, proportionality and transparency. The aim of the new Directives is the simplification and modernisation of public procurement Directives. The structure of the new Works, Supplies and Services Contracts Directive, known as the “Classical” Directive, involves the layout of provisions in logical sequence so as to mirror the procurement process, from defining the scope of the tender to the award of the contract.

3It should be noted that the new Directive clarifies how contracting authorities may contribute to the protection of the environment and the promotion of sustainable development while ensuring the possibility of obtaining the best value for money for their contracts. It also places electronic means of communication (e.g. eProcurement, eTenders) on equal footing with traditional means subject to confidentiality and data integrity being maintained.

Application of new Directives

4By virtue of their publication in the Official Journal, both Directives have come into force. However, it is not expected that they will be transposed into Irish Law until early to mid 2005. Until then, local authorities may continue to use the old Directives. If a local authority decides that it wishes to award a contract under the new Directives, it may do so, but it will be bound by all the provisions of the new Directives.

Green Procurement

5While the new Directives enshrine the provision enabling the inclusion of environmental criteria in the award of contracts, it should be noted that it is already open to local authorities to include criteria and specifications that promote environmental policies. The use of such criteria should, however, take account of the findings of the European Court of Justice in the Concordia Bus case (transport service contract for Helsinki) where the Court ruled that the use of environmental criteria in the award of the contract are permissible if the following conditions are met:

The criteria are linked to the subject matter of the contract;
They do not confer unrestricted freedom of choice;
They are specified in the tender notice or tender documents; and
They comply with EU principles, particularly non-discrimination.

6Thus, while specifications and criteria promoting environmental policies may be used, and may in some instances be obligatory under EU or national environmental law, local authorities should not use public procurement to pursue wider environmental ends.

A copy of the guidelines produced by the Department of Finance on environmental considerations in public procurement is enclosed for your information.

Department of Finance Guidelines

7In addition to these environmental guidelines, the Department of Finance has also prepared guidelines on procurement on foot of the publication of the new Directives. These and other procurement-related guidelines are available on the eTenders website – The guidelines emphasise the need for best practice in procurement to help achieve value for money in an expanding public procurement market. The Department of Finance has indicated that the eTenders website will be the principal means of disseminating procurement guidance in future.

Alcatel Case

8The European Commission has argued, based on a decision by the European Court in the case of Alcatel v the Austrian Government, that there should be a standstill period between the notification of tenderers of the outcome of a procurement exercise and the formal award of the contract. The purpose of this period to give time to tenderers, if they consider that the award process has been unfair or that their rights have been infringed, to make objection to the award of the contract under the Remedies Directive. It is advised therefore that unsuccessful bidders should be notified by letter of the outcome of tenders without delay and that a minimum standstill period of 14 days should be observed before the contract with the successful bidder is signed. This implies that any notification issued to the tenderer deemed successful during this interval must be provisional and not constitute a contractual arrangement. Tender documentation should include a statement indicating the need for an appropriate interval after the award decision is notified and before a formal contract is put in place. Further guidelines on this issue will be issued shortly by the Department of Finance.

Further Information

Enquiries arising out of this letter should be addressed to Vincent Coyne, Infrastructure/PPP Unit, telephone (01) 888 2582, e-mail .

Please note that, in line with Department of the Environment, Heritage and Local Government Circular CMU 1/2004 dated 30th January 2004, this Circular is also published on the Circulars SharePoint system. The address is:

For further help on using SharePoint you should refer to the Help section of the site, or contact your ICT Section, or email

Yours sincerely,

Vincent Coyne

Infrastructure and PPP Section