OPINION OF MRS ADVOCATE GENERAL ROZÈS

DELIVERED ON 29 OCTOBER 1981 (*1)

Mr President,

Members of the Court,

I —

The German undertaking, H. P. Gauff [hereinafter referred to as “GaufP”], which specializes in the field of transport and hydraulic installations, has since 1965 carried on business in the African States associated with the European Economic Community. It has participated in particular in the implementation of various projects financed by the European Development Funds set up by the two Yaounde Conventions of 1964 and 1969.

Since about 1973 it was excluded from invitations to tender or from mutual agreement contracts for the provision of services under those conventions, and, since 1975, under the two ACPEEC Conventions of Lomé of 1975 and 1979.

The manager of the undertaking, Helmut P. Gauff, sent a request on 13 January 1976 to the Director General of the Directorate General for Development and Cooperation of the Commission of the European Communities to be placed on the “list of approved suppliers” in order to participate in an award procedure in Zaire.

By a letter of 9 February 1976 the Director General refused that offer of services, adding that he did not think it necessary to explain to Helmut Gauff the reasons for this.

Gauff renewed its request on 3 December 1976 but received the reply, again from the Director General, that the procedure for the selection of consultancy bureaux working on projects for the European Development Fund within the framework of the Convention of Lomé of 1975 differed from that previously existing within the framework of the Convention of Yaounde of 1969.

Since Gauff found that it continued to be excluded it sent a formal request through its lawyer, on 21 April 1980, to the Director General of the Directorate General for Development asking him to inform it whether or not it was again considered eligible for and could be permitted to participate in carrying out projects financed by the various European Development Funds.

The Director General of the Legal Department of the Commission replied that it was not possible to give it that assurance.

Different reasons were given at various times for the refusal of Gauff's request. After the uniformative reply of 9 February 1976 the request of the undertaking is said to have been transmitted to the “competent department for this field” (reply of 22 December 1976) and, finally, it was said that “the selection of candidates is made from case to case, having regard to all circumstances” (reply of 20 June 1980).

In fact there was a single reason underlying the refusal with which Gauff met. In an aide-memoire drawn up on 22 December 1977 the Director General of the Directorate for Development, who had a meeting on 12 December 1977 with two representatives of the undertaking at their request, had explained to them that “all the decisions concerning the award of contracts were taken case by case on the basis of specific criteria which are laid down by the financial regulation and are binding on the Commission”. However, the Director General also made it clear to his interlocutors that “so long as the persons in charge of the Gauff undertaking are the same as those who were in charge at the time when the undertaking corrupted an official of the Commission” the undertaking would be excluded from public contracts financed by the European Development Funds.

Gauff was well aware of that reason since its lawyer wrote, in his letter to the Director General of 21 April 1980, before discussing whether the reason was well founded: “my client appears to be excluded because of an incident which took place in 1968 involving a former employee of the Commission. It appears that this person left the Commission in 1975 following disciplinary proceedings. It seems that he was charged with having agreed in 1968, in his capacity as an official of the Commission, to pass on, on behalf of Gauff, commissions and other sums of money to high-ranking Africans”.

These are circumstances of fact on the basis of which Gauff requests the Court, by an application lodged on 25 August 1980:

—To declare the Commission's decision that the applicant is not eligible to participate in procedures of invitations to tender or for the award of mutual agreement contracts concerning the provision of public services and financed by the European Development Fund to be void;

—In the alternative, to declare that the defendant is bound to inform the applicant whether or not it is eligible to participate;

—To order the Commission to pay DM 1 by way of damages.

II —

Several problems arise, and first of all on the matter of formal status. Does the letter addressed to Gauff on 20 June 1980 by the Director General of the Legal Department constitute a measure adopted by the competent authority? There are grounds for doubting this. It should further be observed that Gauff is not asking for a declaration that a decision rejecting a tender submitted by it in response to a specific invitation to tender, as was the case in January 1976, is void.

Nevertheless, even though the reply of 20 June 1980 only confirms, with new arguments, a factual situation, that situation exists. A general and permanent exclusion is applied to Gauff and the Director General considered in his aide-memoire of 22 December 1977 that the alteration of the legal structure of the applicant's business, which was changed in 1970 from a one-man firm [Einzelfirma] into a limited partnership [Kommanditgesellschaft], made no difference to the actual exercise of managerial power in the undertaking. That constitutes a statement of attitude clearly imputable to the Commission which, moreover, it has adopted in its pleadings.

This situation adversely affects Gauff whenever a procedure for the award of a contract by mutual agreement or on invitation to tender is initiated in which it might compete with a hope of success were it not for the complaint against it. Gauff thus has an interest in obtaining clarification of its legal position (judgment of 17 March 1971 in Case 47/70 Kschwendt [1971] ECR 257).

III —

The restricted invitation to tender and mutual agreement contracts are the usual procedures for the award of those contracts for services (studies, technical assistance and supervision of works) which constitute the very objects of the Gauff undertaking. They appear more appropriate to the provision of services which constitute a very special type of provision.

The restricted invitation to tender is open only to candidates which the “contracting authority” decides to consult, possibly after a preselection procedure decided inter alia on the particular nature or importance of the services to be carried out. In drawing up the restricted list the Commission and the ACP State concerned cooperate closely. Even though it is for the ACP State receiving the aid ultimately to choose from the “restricted list” the undertaking with which it intends to conclude the contract entry on that list is a necessary condition for winning the contract in question and the award of the contract must be approved by the chief authorizing officer of the European Development Fund who, from the beginning, has been the Director General of the Directorate for Development.

The contract is designated “a mutual agreement contract” where the “contracting authority” enters freely into such discussions as it may consider useful and allots the contract to the undertaking or supplier whom it has chosen. In this case the list of candidates selected in advance is drawn up by the Commission alone.

By definition such procedures confer upon the Commission a wider discretion than in the case of invitations to tender which entail a public invitation to compete. The Court of Justice must respect the discretion which the contracting authority must have in order to safeguard the general interest. Nevertheless it has jurisdiction to review the judgment of the departments of the Commission in order to decide whether there is any misuse of powers or a serious and manifest error of judgment (judgment of 23 November 1978 in Case 56/77 Agence Européenne d'Intérims [1978] ECR 2223, paragraph 20 of the decision).

It is therefore appropriate to consider, within those limits, whether the submissions and arguments of Gauff are well founded.

(1)

The ambiguity of the refusal to deal with Gauff, and the delay in issuing it, do not as such constitute grounds for a declaration that the refusal is void since the Commission has given a clear explanation of the reasons for it.

(2)

Like the detailed arrangements provided for under Articles 22 and 26 of Protocol No 2 annexed to the first Lomé Convention of 1975, the general clauses and conditions applicable to the award and execution of public works contracts financed by the Fund set up under the second Lomé Convention of 1979 (Article 131) have not yet been adopted. Consequently the strict legal position is that the award of technical assistance contracts concluded after 1 March 1980 is still governed by Articles 24 to 27 of Protocol No 2 of the first of these Conventions. Although the discretion enjoyed by the Commission is wider in the case of contracts based on restricted invitations to tender and a fortiori in the case of mutual agreement contracts, it may nevertheless be admitted, as Gauff argues, that the grounds for withdrawal of rights laid down in Article 22 (2) of the General Clauses and Conditions Applicable to the Award and Execution of Public Works and Supply Contracts financed under the second Yaounde Convention and Article 17 of the draft of the General Clauses and Conditions of Public Service Contracts financed under the first Lomé Convention apply by analogy. According to Gauff, the sole ground for exclusion which most closely resembles its case, namely that provided for in Article 22 (2) (d) of the General Clauses and Conditions Applicable to the Award and Execution of Public Works and Supply Contracts financed by the European Development Fund (rendered applicable by Regulation No 282/72 of the Council of 31 January 1972), is not applicable to it since it has not been “convicted, under a final judgment, of any offence affecting [its] professional conduct”.

Article 17 of the draft of the General Clauses and Conditions of Public Services financed under the first Lomé Convention substantially repeats the wording of the said Article 22, adding the case of persons with regard to whom a decision is taken as of right temporarily or permanently excluding them [from the award of contracts] as a sanction for nonperformance of a contract for studies or technical assistance.

According to Gauff, the analogy must stop there. Since it has not been convicted under a final judgment following adversary proceedings it may not be excluded permanently.

The Commission replies that Gauff has not been convicted under a final judgment because, in the present state of Community law, the Commission was not, and still is not, empowered to rely, in regard to its own officials, upon the provisions of criminal law which in the Federal Republic of Germany enable the public authorities to suppress the active corruption of their officials. The Commission has indeed prepared a draft Treaty with that in view which was published in the Official Journal of the European Communities on 22 September 1976 but no treaty has as yet been concluded.

It is common ground that in March 1973 the Commission was informed by the German revenue authorities that a check carried out on Gauff's premises had disclosed that during the years 1967 and 1968 Gauff had paid a sum of DM 88000 to an official of the Directorate General for Development who was in charge of the preparation, implementation and technical control of projects financed by the European Development Fund. Gauff stated in the course of that check that part of the sum (DM 50000) was paid by ordinary cheque and that a further part was paid by way of transfer to the account of the wife of the official in question.

On the basis of that information the Commission opened in March 1975 disciplinary proceedings against the official as a result of which he was removed from his post. The Commission invited Gauff to testify in the procedure but it preferred not to do so.

Before the Court Gauff explained that the official in question was a personal friend and compatriot of Helmut P. Gauff and that was why he was contacted by the undertaking, and not by reason of his capacity as an official responsible for awarding contracts financed by the Community Funds. The “commission” which had been paid to him had merely “passed through” his hands and furthermore the German revenue authorities fully acknowledge that the payment of such “commissions” was deductible for tax purposes.

Whatever may be the value of these explanations I consider that the Commission may not permit such sums to be handled by one of its officials whose work is precisely in the field of contracts even though he is a friend and compatriot of a person who in fact directs the undertaking which has applied for the award of a contract and which the official is assisting. The procedure was certainly neither customary nor without danger since the German revenue authorities notified the Commission of it through the Permanent Representation of the Federal Republic of Germany. The refusal of Gauff to testify in the disciplinary proceedings instituted against the official is understandable but it may not now raise a complaint that it was not heard. I accordingly consider that the Commission was entitled to refuse to invite Gauff to participate in the invitations to tender.

(3)

I observe moreover that the ground for exclusion is expressly adopted by the Council Directive of 26 July 1971 concerning the coordination of procedures for the award of public works contracts and by the Council Directive of 21 December 1976 coordinating procedures for the award of public supply contracts. Article 23 of the former directive and Article 20 of the latter provide that

Any contractor or supplier may be excluded from participation in the contract who:

has been guilty of grave professional misconduct proven by any means which the authorities awarding contracts can justify;

The rules laid down in regard to the award of public works or supply contracts in the Member States must also apply to public service contracts, concluded by mutual agreement or on the basis of an invitation to tender, financed by the European Development Funds. I should observe that no timelimit applies to such a ground for exclusion.

(4)In those circumstances, the treatment accorded to Gauff constitutes neither discrimination in relation to other tenderers nor a misuse of powers.

IV —

The outcome of the claim for damages submitted by Gauff depends on whether its exclusion was well founded.

I have said that the exclusion appeared to me to be justified. The behaviour of certain officials of the Commission which is alleged to have caused the damage (adverse effect on the applicant's business standing and loss of opportunities) in respect of which the applicant claims purely nominal compensation is denied by the Commission. In any event I do not think that the certainty of the damage and the causal relationship between the damage and the behaviour has been established.

I am accordingly of the opinion that the application should be dismissed and that Gauff should be ordered to pay the costs.

*

(<span class="note"> <a id="t-ECRCJ1982ENA.0300081901-E0001" href="#c-ECRCJ1982ENA.0300081901-E0001">1</a> </span>) Translated from the French.