UK Application of EU and WTO Rules

OGC has responsibility for the domestic implementation and application of the EU and WTO procurement rules. This work includes:

• Implementing EU procurement Directives in the UK (Scotland has implemented the latest EU procurement Directives separately) by means of UK Regulations. OGC implemented the new EU  procurement Directives by the EU's deadline of 31 Jan 06. Implementation work involved consulting on the approach, drafting the texts and handling parliamentary requirements.
• Providing advice, guidance and training for contracting authorities to enable them to comply with UK procurement policy and the UK's legal framework.
• Coordinating responses to UK procurement infraction cases. These are complaints brought by the European Commission where it is believed that a contracting authority may not have met their legal obligations under the EU rules.

UK Procurement Infractions

OGC's Procurement Policy Division is responsible for coordinating responses to UK procurement infraction cases.

Infraction (or infringement) proceedings are the legal process by which the European Commission takes a Member State to the European Court of Justice (ECJ) for breach of its obligations under the EC Treaty. There are two types of infraction procedure brought by the Commission against Member States (named after the relevant article in the EC Treaty):

• Article 226 proceedings - the Commission initiates these usually when it receives a complaint that a Member State has failed to implement Community law correctly.
• Article 228 proceedings - the Commission may commence these if a Member State has failed to implement a previous ECJ ruling under Article 226.  If the ECJ finds against a Member State, it can impose a fine.

The Director General Internal Market (DG MARKT) of the European Commission is responsible for public procurement and has an enforcement unit with a Case Handler who manages infractions for their assigned member state. Upon receipt of a complaint about the UK, the Case Handler will investigate whether there appears to be a breach of community law. If he considers the case worth pursuing, he would then write to the UK via the United Kingdom Permanent Representation to the European Union (UKREP). UKREP acts as the UK embassy to the European institutions.

The Cabinet Office is the co-ordinator for all UK infractions. It will receive official notification from UKREP. Procurement infractions will be passed to OGC as the UK body responsible for these (with the exception of Scotland, where procurement infraction cases are handled by the Scottish Executive). OGC's Procurement Policy Division handles infractions cases, working closely with the OGC Legal Team. Often OGC receives advance warning of potential cases, since it is in regular contact with both the Commission and UKREP.

Pre-226 letter: This is an informal letter of enquiry about a possible 226 infraction.  They tend to only be used in response to a complaint from a member of the public, usually an aggrieved supplier, or Non-Governmental Organisation (NGO).  Consequently, they are more common for certain subjects, including public procurement.

226 letter: Also known as the letter of formal notice. This offers the Member State an opportunity to respond to an allegation that it is in breach of Community law. 

226 Reasoned Opinion: the Commission formally advises a Member State that it is in breach of its Treaty obligations and describes the rectifying action. The Member State is required to comply with its EC obligations - not only to reply to the reasoned opinion - within a given time limit.

An Article 226 Referral to ECJ: if the Member State fails to comply with a reasoned opinion within the prescribed period, the Commission will apply to the ECJ for a ruling that the Member State is in breach of the Treaty. In these Court proceedings the Commission can recommend to the ECJ that it should impose a penalty payment either as lump sum or daily fines on the Member State.

Pre-228 Letter: an informal opportunity to remedy the breach of Community law.  In the month following an Article 226 judgment against a Member State, the Commission would send a letter requesting information of the measures taken to put an end to the infringement. A response will be expected within a prescribed deadline.

228 Letter: the first formal step in the 228 process. The letter puts the Member State on formal notice that it has failed to comply with an ECJ judgment.

228 Reasoned Opinion: a formal determination by the Commission that the Member State has failed to comply with the ECJ judgment. The Member State is required to comply within a set period.

ECJ referral under article 228: in these Court proceedings the Commission can recommend to the ECJ that it should impose a penalty payment either a lump sum or daily fines on the Member State.

Outline of this process.