Cabinet d'avocats Vassiliki Papaioannou et Associes

Public procurement in Europe: Enforcement and Remedies

Butterworths, London, 1997

Summary :

DRAWING UP OF PUBLIC CONTRACTS PROCEDURE

• Works contracts
• Supplies contracts
• Public contracts for services
• Excluded areas

• Administrative remedies
• Judicial remedies

Cancellation of illegal acts

• Indemnification

Pre-contractual liability
Cancellation of the call for tenders or non approval of the awarding statement
Disqualification of a bidder during the call for tenders

• Interim measures

Notes

The Directive 89/665 on remedy procedures relating to public works and supplies contracts was introduced into Greek law at the same time as Directives 71/304, 78/305, 78/669 and 89/440 by Presidential Decree 23/93.(1) However, the decree merely mentions in its title Directive 89/665 but does not take up at all the rules enacted in the field of remedies but only those relating to the prerogative of control of the Commission of the European Communities on an infringement of the rules of European Community law.

Thus, the opportunity tenderers could have to seek cancellation of illegal decisions, payment of damages or the adoption of interim measures either to remedy the alleged violation or to prevent other attacks on the interests concerned must be reviewed from a national law point of view and according to the rights provided in that field of national law.

In the absence of a statutory instrument designed to systematise legal procedures with respect to public contracts, the analysis remains complicated, based on the principles derived from legal rules and case-law from the Council of State, Administrative Courts and Civil Courts.
It is necessary, before addressing the issue of remedies, to understand rules that govern the drawing up of public contracts and corresponding procedures. This is all the more important as remedies, under Greek law, depend upon the stage of the tendering process, a number of claims before an administrative jurisdiction being possible during the call for tender period.

DRAWING UP OF PUBLIC CONTRACTS PROCEDURE

Rules governing public contracts differ depending on whether they apply to public works, supplies or services contracts.

Works contracts

The most sophisticated legal system applies to the drawing up of public works contracts; rules have been enacted well before corresponding Community directives were adopted. Indeed from the end of the nineteenth century, Greece has developed a legal system applicable to public works. Indeed, according to Constantin Markakis, 'On 23 March 1894 was published the first decree on public works, which was a version of the French'. (2)

'More specifically, in the field of public works, the drawing up of a public works contract following a call for tenders seems to become for the time a general rule thanks to the specific provision of Art 1, para I of law 5367/1932 according to which all contracts relating to the execution of public works or supply of machines, equipment or goods relating to the performance of public works are awarded after a public call for tenders. (3)
At present, public works are governed by law 1418/1984, amended by law 2229/94 and by corresponding decrees 09/86 and 472/85 taken to implement it.

Pursuant to article 96, paragraph 7 of law 1892/90, amending article 2, paragraph 1 of law 1418/84 on public works, the latter applies to all the works ordered by 'public bodies'.

Pursuant to article 51 of law 1892/90, these public bodies are :

a) all the public services belonging to the Greek Government, and being represented by it,
b) any public legal entity,
c) any agency or company, either public or concessionaire, as well as any private legal entity granted a public character or having a public interest,
d) banks totally or partly belonging to Government,
e) any subsidiary of legal entities mentioned under (b) and (c) save firms of local communities.

The above-mentioned law provides for the possibility of extending by means of presidential decree the enforcement of law on public works to works ordered

• by agricultural co-operatives
• by private companies in which the Government participates or that are subsidised by it
• by public-orientated foundations not belonging to the public sector but whose purpose is closely related to the public interest.

In some other cases and in order to take into account different characteristics of some entities or some works, the law also provides for the possibility of excluding certain works from the scope of the law on public works by means of presidential decrees or ministerial orders.

The rules on settlement of contracts and the procedure of call for tenders provided by law 1418/84 apply to all public works, that is to say all the works performed by the above-mentioned bodies.

Pursuant to that law, a public works contract may be awarded only after a call for tenders based on an open or restricted procedure. This rule has been laid down, as has already been indicated, well before the promulgation of the works Directive. The legislative decree 321/1969 article 86 is included in law 1418/84 which allows mutual agreement only in certain limited cases set out as follows :

(a) works requiring specific knowledge,
(b) works the cost of which do not exceed 150,000 drachmas,
(c) works that are performed in extremely urgent cases,
(d) if the previous call for tenders has failed, but only if 'the terms of the contract that has been drawn up do not differ significantly from those of the previous call for tenders, unless they are more favourable to the Government'.

Thus, even if the works and supplies Directives were not adopted by Greek law until 1993, Greek law had already adopted more restrictive rules in that field than those laid down by European law.

Indeed, law 1418/84 governing the contracts on public works makes the call for tender compulsory not only for public contracts in the strict sense but likewise for concessions of public works to which the same rules apply.

Generally speaking, as soon as a contract involves the building of a public work (ie classic public contract, concession of works or services) it is governed by the law on public works. (4) Like Belgium and Italy, Greece requires that bidders appear on professional lists called 'technical companies books'. Participation of foreign companies that are not registered on those national books (MEEP and MEK) is allowed by an order of the Minister of Public Works if they offer similar qualifications.

Bidders belonging to countries in which such books are kept are required to provide a certificate of registration that shows on which grounds the registration has been authorised. This certificate of registration constitutes a presumption that the bidder can perform works similar to those mentioned in the book.

Presidential decree 23/93 introducing the works Directive into Greek law adds that the bidders belonging to a country in which such professional books are not required cannot bid for the building of works more important than those they have already built in their country or in other countries of the Community.

The call for tenders under the open procedure is the most common and all companies meeting the required conditions can bid.

The restricted procedure is used in case of important works; at first, all companies which think they meet the required conditions can join in the prequalification stage; only the companies selected at this stage will be invited to bid by the Authority. It must be noted here that the works Directive (71/305 amended by Directive 89/440) has been adopted as such by Greek law, without any modification or adjustment, in that Presidential Decree 23/93 contains exactly the same rules as the Directive.

The call for tenders process is divided into two stages. The first is the submission of bids to the Call for Tenders Commission and the second the evaluation of those bids by the Awarding Commission.

Article 4 of Presidential Decree 609/85 provides that tenders are called 'on the basis of the relevant tender notice'; this legislative provision entitles the Contracting Authority to determine the requirements of the call for tenders. According to established case law of the Greek Council of State, the tender notice is statutory and is mandatory for bidders as well as the Contracting Authority. The consequence is that it is impossible for a bidder to withdraw once he has made a tender, which implies a tacit acceptance.

The law also provides that the awarding of the contract is done 'on the basis of the corresponding study'. But instead of carrying out the study, the Contracting Authority often calls for tenders in the framework of a system of Studies and Building of works' where both a technical tender (the study) and a financial tender are required.

The required documents as well as the financial and technical tenders are submitted by bidders in three sealed envelopes. As regards building studies, the Awarding Commission will examine and evaluate the technical tender. It is only when the technical tender is deemed to meet the required standards that the Commission will open and consider the financial tender.

The lowest bid is not the only criterion; the Commission must take into account 'all elements relating to the capacity and credibility of the applicant as well as the completion of works within a given time period'. It must be careful when rejecting the lowest bid on the grounds that it does not meet the other requirements; in this case, its decision must be justified because if it is not, the rejected applicant is entitled to request the cancellation of the call for tenders, citing the insufficient justification of the Commission's report.

In the field of restricted procedure, the pre-qualification Commission consisting of a maximum of seven members draws up the list of the pre-qualifying companies, and the process is afterwards identical to the one described below.

Supplies contracts

Public supplies contracts are governed by law 1977/88 as amended by law 2000/91. This legislation applies to supplies ordered by :

• the Greek Government
• local communities
• public legal entities
• public concessionaires companies and agencies including :

• state-owned banks, whether owned in their entirety or by majority holdings
• government-owned private legal entities
• companies linked to such legal entities
• consortia comprising one or several of the above-mentioned legal entities.

Contracts drawn up by such entities must use the open or restricted call for tender procedure.
Mutual agreement is possible only in the following cases :

• in the case of irregular tenders, if all bidders are invited for negotiation and if initial requirements of the call for tenders are not significantly changed
• in the case where no bid at all or no relevant bid has been submitted in response to an open or restricted procedure, insofar as the initial requirements for the contract are not significantly modified and provided that a report is transmitted to the Commission
• when the products in question are manufactured solely for research, experiment, study or development purposes
• when due to their technical or artistic qualities or for reasons relating to the protection of exclusive rights, the manufacture or supply of products can only be fulfilled by a specified supplier
• if absolutely necessary, when a real emergency is due to events unforeseen by the Contracting Authorities, which is not consistent with time scales required by open, restricted or negotiated procedures
• for supplementary deliveries made by the first supplier with a view to the partial renewal of supplies or existing installations
• when the price of the goods does not exceed 200,000 ECU.

Public contracts for services

Directive 92/50 on public contracts for services has not yet been introduced into Greek law despite the fact that it should have been, by presidential decree, by July 1993.

At the present time, only one circular letter has been published, on 27 August 1993, in relation to the transposition of this Directive. However, it is not binding or enforceable. Thus, at present, no Greek legislation makes mandatory the call for tenders in the field of public contracts for services.

However, taking into account the case law of the European Court of Justice on the direct effect of directives and the requirement for Greece to include this Directive in its domestic law before July 1993, it is highly likely that public contracts will henceforth be governed by procedures provided for in the relevant directive, that is to say by means of call for tenders or competitions.

Excluded areas

Directive 90/531 on the award of contracts in the excluded areas must be introduced into Greek law before 1 January 1998. Thus Directive 92/13 on remedies for infringements relating to contracts reached in the excluded areas cannot be applied in Greece before that date. However, domestic provisions do not make any distinction between the various areas of works or supplies. Existing legislation applies to all of them.

[summary]

REMEDIES

The European Commission took French and Belgian laws as a model to ensure that its Directive 89/665 brought about a minimum matching of national remedy systems so that decisions made by Contracting Authorities in the Member States can at all stages of the procedure be subject to an efficient and quick remedy in case of infringement either of Community law in the field of public contracts or national rules transposing this law.

Under the Directive, there are three powers that Member States are required to confer for remedial proceedings of a judicial or administrative nature :

(a) to order as quickly as possible, by means of emergency interim proceedings, if necessary, measures aimed at either correcting the alleged violation or preventing other harm to the interests concerned, including suspension of the award procedure or suspension of the irregular decision,
(b) to cancel the illegal decision and discriminatory specifications appearing in the contract documents,
(c) to grant damages.

The Directive leaves it to Member States to define the procedure with respect to instituting proceedings to set aside a decision and to claim damages as well as appropriate remedial proceedings, while at the same time indicating that even these courts may have a judicial or administrative function. They are also entitled to decide on interim measures pending the outcome of an enquiry concerning the public interest.

It has already been noted that Greece did not transpose Directive 89/665, limiting itself to a mention of it in the title of the presidential decree on the application of Community directives applying to public contracts. Apart from that mention, no legislation has been enacted to organise a legal system of remedies and to give to the appropriate jurisdictions the powers provided for by the Directive in the field of interim measures, cancellation of illegal decisions and damages.

Indeed, we can say as a general rule that if domestic law is already in accordance with a directive, there is no necessity to take positive steps to include it: `The transposition of a directive does not necessarily require a legislative action'. (5)

Although Greece, like other Latin countries, has a rather elaborate system of administrative remedies at all stages of proceedings, it is true that the system of judicial guarantees offered by Greek law is not efficient enough and does not comply with the requirements of the Directive, more particularly concerning the possibility of interim measures and the speed of proceedings.

In the absence of an instrument incorporating the remedies Directive, the analysis of the administrative or judiciary remedies should be done on the basis of the legislation on public contracts and the case law of the Greek Civil and Administrative Courts.

Administrative remedies

Greek law allows and organises the lodging of a complaint at almost all the stages of procedure. The lodging of complaints is governed by article 20 of P.D. 609/85 which states that

'complaints can be lodged only by companies which participate in the call for tenders or have been excluded from it at any stage of the procedure. Complaints can only be lodged at the stages of pre-qualification, submission and checking of tenders and for reasons that appear during the corresponding stage ... The decision is made by the superior authority.'

With regard to complaints at the pre-qualification stage, the time period for submission is five days from the day of the prequalification statement.

With regard to complaints at the stage of submission of tenders, they must be laid before the President of the relevant Commission in a two day timeperiod from the notification of the Commission's decision.

It is to be noted that if the Call for Tenders Commission considers that the tenders do not meet the formal requirements, it returns to the applicant the sealed letters including his financial and technical tender without opening them.

If the bidder lodges a complaint within two days from the dismissal of his complaint for reasons of form, such as lack of documents, he has to annex the missing documents (such as police record or certificate indicating that the company is sound, etc). The tenders remain unopened until the announcement of the decision made as a result of the complaint.

The present legislation does not provide for the submission of a complaint at the time of the opening of financial tenders. This constitutes an important gap `which should be filled by courts by means of an extensive interpretation and enforcement of the general provisions governing remedies against administrative decisions'. (6)

Judicial remedies

Cancellation of illegal acts

The call for tenders comprises several successive steps, each one depending on the previous one and the last one incorporating all the previous acts so that they lose their independence.

The last step concerns the decision to approve or to reject the result of the call for tenders. According to the procedure, the Awarding Commission puts forward a number of bids, the acceptance of which by the relevant Contracting Authority will tie the parties in a binding contract.

Like other Latin countries, Greece has adopted the theory of detachable acts; acts are considered as detachable if they occurred before the conclusion of the contract and have as their objective that conclusion, for example the call for tenders notice, the acceptance of the result of the call for tenders, etc.

Concerning public contracts, Greek law makes a distinction between :

(a) acts before concluding a contract but aiming at its conclusion, such as the call for tender notice, the tendering process, etc,
(b) acts concerning interpretation, implementation or cancellation of the contract such as termination for breach, fixing of unit prices and so on.

Only acts of the first type are deemed detachable and can be subject to a request for their cancellation before the Council of State. The second category acts create administrative disputes within the competence of Administrative Courts. Moreover, third parties are entitled to request the cancellation of detachable acts, even after the conclusion of the contract.

The administrative act the cancellation of which is requested must be enforceable, which means it must entail a mandatory act or a default without any other proceedings or judicial decision. (7) Each party having an interest in bringing an action can petition to cancel an illegal decision before the Council of State in accordance with general provisions relating to the cancellation of administrative acts.

The interest in bringing an action can be exercised by any natural or legal person whose rights have been infringed in a real or legal situation which is protected by law. In particular, under decree 18/1989, article 47, concerning a petition to cancel a decision, the interest in bringing an action is justified when the contentious act has caused a material or moral prejudice to the petitioner and when he suffered this prejudice when he was in a well defined position recognised by rules of law (Council of State 4037/1979, 86/1988).

The interest in bringing an action has to exist concurrently :

(a) at the time of the promulgation of the contentious act,
(b) when the demand for cancellation is brought, ie when the petition has been lodged,
(c) when the case is pleaded (Council of State 2319/1984, 2865/1987, 2973/1989). (8)

Under established case law, the interest in bringing an action must be personal, direct and present, 'an interest in bringing an action which is to come or occasional or inaccurate, hoped or passed makes unacceptable the petition for cancellation.' (Council of State, 3564/1977, 2398/1980, 2449/1980). (9)

We can note immediately the difference between the interest in bringing an action as required by Greek law with respect to cancellation of a decision and the definition given by the Directive under the terms of which an interested person is 'any person having or having had an interest in obtaining a definite works or supplies public contract, and who has been or was in danger of being injured by an alleged violation.'

In Greek law, conditions for introducing proceedings to cancel a decision are more severe than those provided for in the Directive since in reality, under Greek law, only an existing prejudice can justify a demand for cancellation. In addition, we may note that generally speaking, the acceptance of this request will be examined in accordance with the legislation prevailing at the time of the promulgation of the contentious administrative act or at the time of the contentious default (decree 18/1989, article 77, paragraph 5). Moreover, the existence of an interest in bringing an action as well as all the conditions for acceptance are automatically reviewed by the Council of State (decision 2856/85).

Reverting to the various detachable acts comprising a call for tenders, we must indicate that according to the case law of the Council of State, any company that has participated in the call for tenders without challenging the legality of the terms of the call for tenders notice is not entitled afterwards to request the cancellation of this notice as it is considered to have tacitly recognised its legality. Indeed Greek law recognises the principle that tacit or express acceptance of an administrative act precludes the participating party from challenging its validity (State Council 432/1983, 3547/1987, 2836/1987, 3306/1991).

Under established case law, the call for tenders notice is a statutory act which binds bidders as well as the Contracting Authority (Athens Administrative Court of Appeal 2555/1987). On the other hand, the injured bidder can request the cancellation of subsequent administrative acts, including the approval of the choice of the Awarding Commission by the Minister or its refusal by the Administration.

Furthermore, the Directive authorises the Review Bodies to remove the technical, economic or discriminatory details included in the call for tenders documents, in the specifications or in any other document relating to the procedure of drawing up the relevant contract. But in Greek law, when we are faced with detachable administrative acts, their cancellation is possible according to the process described above. However, if details are included in the specifications which are not enforceable, a request to annul is not permitted, only a claim for compensation from the plaintiff on the basis of the precontractual liability of the Contracting Authority (see heading 'Indemnification', below) is admissible.

More often, the circumstances surrounding the call for tenders that the Council of State cancels, either for illegality or for insufficiency of reasoning, are either the Minister's approval of the bidder as proposed by the Awarding Commission or the refusal of the authority to approve the choice of the Commission. When the cancellation is pronounced for insufficiency of reasoning, the Contracting Authority has to take the same decision again but on a better reasoning. (10)

The cancellation of the decision of the Awarding Commission, of the acceptance by the Minister or its refusal by the relevant Minister can also be pronounced for illegality. This is the case when supplies offered by the bidder do not correspond to the call for tenders standards (Council of State 1325/1976) or when the awarding decision is made by an incompetent Authority (by the Chief District Officer instead of the Director of technical services of a district when the works have been ordered by the 'prefecture', Council of State 3175/1987).

The request to annul the decision must be made within a 60-day period plus 30 extra days if the applicants live abroad as of the date of the publishing or notification of the act. This request can be lodged only against enforceable acts arising from Administrative Authorities or public legal entities (decree 18/1989, article 45).

In reality, even after the cancellation of the contentious act, the petitioner will be granted only damages since the proceedings before the Council of State extend over one to three years and no interim measures are provided for.

Indemnification

Pursuant to the Directive, any person having or having had an interest in signing a specific public contract for supplies or works and who is or may be injured by an alleged violation is entitled to claim damages.

In Greek law, the civil liability of the Government is ruled by sections 105 and 106 of the introductory law to the Civil Code which provides that indemnification can be claimed when an illegal act or a default is made by a Government body or public legal entities in the execution of their duties save if the act or the default has been imposed by public interests. (11)

Anybody having suffered damage can claim for indemnification before the Administrative Court in accordance with law no 1406.83, section 1, paragraph 2. The judgment issued by the Administrative Court is subject to appeal but even the decision given by the Administrative Court of Appeal is not enforceable against the Government, which executes only decisions issued by the Council of State. Given the length of proceedings before those three jurisdictions ie two to four years, the payment of the indemnity occurs very often nine to ten years after.

Claim for indemnification independent from the other remedies (such as a request to annul) can be brought in an autonomous way. When considering the case, Administrative Courts can review the legality of the administrative act or the default subject of course to a res judicata decision issued by the Council of State after a request to annul. Thus the annulment of the illegal act is not a pre-requisite to a claim for indemnification.

Damages may be awarded to :

(a) the bidder having suffered from a pre-contractual fault from a Government body
(b) the bidder illegally excluded from the call for tenders for content and form reasons
(c) the provisional successful bidder who has not been in a position to conclude the contract because of the cancellation of the call for tenders or because of the lack of approval of the awarding statement by the Contracting Authority.

Pre-contractual liability

With respect to public contracts, Greek law distinguishes between the precontractual liability of the Contracting Authority and the contractual liability.

Doctrine and case law deem that provisions of the Civil Code relating to the role and the importance of the parties' consent when concluding the contract must also apply to public contracts since these contracts derive from the consent of two contracting parties.

On the other hand, it is deemed that the public contract differs from the private contract at the stage of its implementation, when the public contractor's prerogatives appear. These upset the balance between both contractors and give the contract its public character.

On the basis of this reasoning, the rules governing precontractual liability apply to the call for tenders and more generally speaking to the stage before the conclusion of the contract by virtue of sections 197 and 198 of the Civil Code, whereas liability concerning the implementation or the termination of the contract is governed by section 7, paragraph 2 of law 1418/1984 on public works. We will see hereafter that the indemnity granted on the basis of the pre-contractual liability of the Contracting Authority includes real prejudice and loss of profit whereas in the field of contractual liability, the defendant is only ordered to compensate for the real prejudice.

In the case of public contracts, concluded after a call for tenders, publishing the call for tenders notice is an invitation to enter into negotiations and thus opens the pre-contractual stage. (12) Bids constitute proposals for the conclusion of the relevant contract. Finally, the tendering process leading to the conclusion of the contract is the acceptance of the bid and therefore of the proposal.

Therefore, all the stages of the procedure, from the publishing of the call for tenders notice to the conclusion of the contract, are governed by sections 197 and 198 of the Civil Code on the precontractual liability.

Given this liability, the Contracting Authority has an obligation to inform, defined by case-law as the obligation 'to give the contractor information and clarifications on the the content of the contract including those that may affect the contractor's decision' (Athens Administrative Court of Appeal decision no 247/1947, 1837/1987, 922/1988, Komotini Administrative Court of Appeal, decision no 45/1988).

So it has been held that the defendant is liable for mistakes or omissions in the call for tenders documents (Athens Administrative Court of Appeal, decision 2892/1987) and that the successful tenderer having to perform works under less favourable conditions than those which would have been agreed by contract if he had been aware, when concluding the contract, of everything, can claim compensation. The most usual case is an under-estimate of the cost of the works resulting from inaccurate information provided by the Government services.

According to established case law concerning such cases, compensation for the prejudice must cover the difference between the income resulting from the implementation of the contract and the income which the contractor would have earned had the contract been concluded without error on the part of the contracting authority. In accordance with section 298, paragraph 2 of the Greek Civil Code, the patrimony situation which would have prevailed if no mistake had been made is assessed 'in the light of normal conditions or specific circumstances including preparatory steps' taken by the claimant.

The prejudice can be proved by any means including witnesses (decision no 16898/1979 of Athens High Court).

Cancellation of the call for tenders or non approval of the awarding statement

In this second category of claims for compensation, a tenderer, although making a lower bid, failed to conclude a contract with the Government services, either because of the cancellation of the call for tenders or because of the nonapproval by the Contracting Authority of the choice of the Awarding Commission.

Two judgments of fundamental importance given by the High Court of Athens and by the Administrative Court of Appeal of Crete are a good example. (13)

In the first case, the applicant, who had made the lowest bid, was temporarily awarded the contract of public works but the Minister of Public Works subsequently cancelled the call for tenders on the grounds that there was no real competition; his decision set aside by the Council of State for illegal reasoning whereas in the meantime, works were subject to a new call for tenders and awarded to another bidder.

By a second Order, the Minister of Public Works cancelled a new call for tenders but this second Order was again cancelled by the Council of State. The High Court granted the applicant an indemnification equal to the loss of profit generated by the illegal behaviour of the Authority on the basis of the profit that the applicant could have expected `given normal developments, particular circumstances and including preparatory measures it had taken'.

In the second of the two cases, the relevant Contracting Authority had not approved the choice of the joint venture by the Awarding Commission in its statement and decided on a new call for tenders following which another bidder was accepted.

Upon the request of the claimant, the Council of State set aside the decision and the claimant claimed for compensation on the grounds of the non-approval of the statement of the Awarding Commision which excluded it from concluding the contract even though it was the lowest bidder.

The Court acceded to its claim pursuant to section 105 of the introductory law to the Civil Code and rejected the implementation of section 8 paragraph 4 of statutory order 724/79 providing that 'if the call for tenders is cancelled or is not approved for any reason, no bidder can claim for compensation'. It found that even if no compensation can be claimed in case of cancellation or non-approval of the call for tenders for a legal reason, this is not true when the reason is illegal. The indemnity granted included the expenses for final studies, loss of profit and moral prejudice.

Disqualification of a bidder during the call for tenders

The disqualification of a bidder during the call for tenders makes it difficult for him to claim subsequently, in his demand for compensation, that he would have been awarded the contract. In such a case, a claim for compensation is based on the illegality of the exclusion and the prejudice consists in the impossibility of being awarded the contract.

If the claimant has been disqualified after the evaluation of bids (thus for a reason of content and not of form), he must establish that without this illegal disqualification, he would have been in a position to conclude the contract, ie he has to establish a link of causation between the Government Services' fault and his disqualification. On the other hand, if the bid was disqualified before being open, ie for a reason of form, the claimant cannot maintain that the contract would have been awarded to him since his bid was not even known[ to allow this to happen; in that case, the claimant must establish a link of causation between the Government Services' fault and the impossibility for him to have his bid examined by the Awarding Commission.

In both cases, it is difficult to establish a link of causation between the fault and the potential damage and the Greek Administrative Judge is reluctant to acknowledge the existence of such a link of causation or to acknowledge a prejudice which he considers not proven (Decision no 114/94 of Patras Administrative Court).

The demand for compensation is very often dismissed while the illegality of the disqualification is acknowledged by the Court. However, the claimant should at least be indemnified for his losses and for his real prejudice resulting from expenses incurred for the preparation of the bid.

Interim measures

Greek law does not provide for interim protective measures protecting the disqualified bidder which would aim at suspending the contracting procedure and enable the bidder illegally disqualified to join in again.

However, Directive 89/665 imposes on Member States an obligation to take without delay and through emergency proceedings interim measures to remedy the alleged violation or prevent other damages, including measures designed to suspend the challenged public works contracting procedure or the implementation of any decision made by the Contracting Authority. It has already been said that this Directive has not been introduced into Greek law but it does have a direct effect even in the absence of corresponding rules in the domestic law.

As has already been noted, the position of the Council of State's Commission for suspensive measures (Epitropi Anastolon) is different since this Commission finds that 'the Commission for suspensive measures examines whether the suspension of the implementation of the challenged act is appropriate but is not bound by Article 2 of Directive 89/665 of the European Communities and is not obliged to decide such a suspension. (14)

Legislation on the operation and prerogatives of the Council of State (Presidential Decree 18/1989) requires that the act the suspension of which is requested leads to direct, hardly irremediable or remediable damages. If the damages are financial, which is the most common case in the field of public contracts, according to established case law, these damages are said to be remediable and there is therefore no reason for suspending the act.

Furthermore, the suspension of a decision can be requested only in the course of a demand to annul before the Council of State; Administrative Tribunals and Courts are competent only with respect to compensation claims following an illegal administrative act and do not have, in such a case, the power to order interim measures.

In addition to this, a suspension of the proceedings or the implementation of the challenged act cannot be ordered by the Council of State (Epitropi Anastolon) if the public interest so required. If it is ordered, the suspension of implementation is mandatory for the Government Services, which are not entitled to promulgate another administrative act to replace the first one or `to counteract the suspensive effect' (Council of State, decision 2044/88). (15)

Given the difficulty of obtaining interim measures and the length of proceedings for cancelling an administrative act before the Council of State, the bidder injured by a violation will be entitled only to an indemnity.

CONCLUSION

It is true that remedies provided for by Greek law do not meet the requirements of the Directive. Interim measures are almost impossible to take.

Moreover, although Greek legislation provides for remedies with respect to the cancellation of illegal administrative acts and indemnification, illegal specifications cannot be set aside because they are not enforceable.

Rules relating to the existence of a legal interest in bringing an action are particularly restrictive, notwithstanding that the Directive gives standing to any person who risks being harmed by an infringement of the Regime.

Moreover, proceedings are neither fast nor efficient; very often, works are performed before a decision is made on the validity of the call for tenders.

It is true that Greece must take the necessary steps to ensure that decisions made by the Contracting Authority can be subject to efficient remedies, including the possibility of interim measures designed to suspend contracting procedures in cases of reported violation.

The judicial power of Administrative Courts should then be extended in order to enable them to order, as civil courts do, interim measures including the power to suspend, for a short time, proceedings or the implementation of the contentious act, pending the decision of the Council of State on a request for its cancellation. It is obvious that the length of the proceedings of cancellation should also be reduced.

Moreover, any illegal administrative act should be able to be cancelled in the field of public contracts, including those concluded by private entities for which only civil courts have jurisdiction whereas they have no power to set aside any administrative act.

Therefore, all disputes relating to public contracts should be submitted to administrative courts, whether concluded by public or private persons.

Finally, administrative proceedings should be accelerated since we must keep in mind that even in the field of compensation, before the Administrative Court, the Administrative Court of Appeal and the Council of State, the injured party must at present wait for about ten years before being entitled to receive its indemnity.

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Notes

(1) The presidential decree mentions in its title Directive 78/669 at the same time as the other directives which have to be transposed although it has been abolished by Article 1 of Directive 89/440. [back]

(2) Paper given at the 4th Congress of the administrative judges in Athens on 7-9 November 1994. [back]

(3) Markakis, Constantin On the taxation of toll camels - an attempt to understand the romantic age of public works in Greece (not yet published). [back]

(4) This rule has been confirmed by law 2050/91 which recalled that concerning a concession contract, public works will be executed in accordance with the public works legislation whereas the contract of services supplied by the concessionaire in the framework of the contract will be governed by the principle of free consent. [back]

(5) Court of Justice, 23 May 1985, quoted by Flamme, Maurice 'Le point sur le contentieux', Revue du Marché unique européen 3/93. [back]

(6) Tzika-Hatzopoulou, Alice, Building of Public Works (4th edn.), Athens - Edition Papasotiriou (1994). [back]

(7) The above-mentioned rule is illustrated in a judgment of the Council of State (no 3306/91) where the relief sought was the cancellation (a)of a decision of the awarding Commission accepting a bidder's petition brought before an administrative tribunal and validating its financial proposal, (b) of a subsequent decision of the Awarding Commission rejecting another petition brought by the same bidder, and (c) of a decision approving the awarding of the works to the said bidder. The Council of State said that only the last decision was enforceable 'having completed the call for tenders procedure after having incorporated the two last decisions'. [back]

(8) Decisions quoted by Spiliotopoulos, E, Public Law (5th edn). Athens - Komotini, Sakoulas Editions (1991). [back]

(9) Spiliotopoulos, E, op cit. [back]

(10) I will quote for example a decision of fundamental importance of the Council of State, no 2468/1982, with respect to a case in which one of the bidders had requested the cancellation of a Ministerial decision approving the choice by the Awarding Commission of the company Control Data Greece Inc for the supply of computers to the Greek Customs, as well as the decision of the Awarding Commission.
The Finance Minister's decision to accept Control Data Greece Inc was initially set aside by the Council of State for inadequate reasoning, the Awarding Commission having chosen the second lowest bid, because of the quality of its products but without relevant grounds; following this cancellation, the Awarding Commission has suggested the same bidder again and the Minister has once more accepted this choice. The Council of State having once more deemed that this new decision was also insufficiently reasoned, the matter was referred again to the Awarding Commission 'for further evaluation with respect to reasoning'. [back]

(11) Pavlopoulos, P, Civil Liability of the Stare. Athens - Komotini Editions Sakoulas (1989). [back]

(12) Georgiadis, A and Pavlopoulos, P, 'The liability from negotiations in the frame of public contracts', Nomico Vima 1987, Volume 35, pp 701-706. [back]

(13) Quoted by Moukiou, Chryssoula, 'Commentaries of the decision no 114/94 of the Administrative Tribunal of Patras', Public Works Case Law, Part 2, 901/13. [back]

(14) Judgment quoted by Chryssoula Moukiou, op cit.
Decision no 736/94 of the Commission for suspensive measures quoted by Chryssoula Moukiou, op cit. [back]

(15) Spiliotopoulos, E, op cit. [back]
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