The rule of law promotion through “deep” disciplines: the case of public procurement

This part of the analysis will zoom in on the rule of law dimension of the public procurement provisions under the EU RTAs. As compared to Parts 1-3 of this chapter, it will pay stronger attention to the EU’s strategies and policies in the previously mentioned fields to capture the dynamics of their evolution. Moreover, it will cover the rule of law standards in selected EU secondary law documents, since partner countries’ obligations under the relevant chapters of many RTAs are often limited to legislative approximation.

1. The opening of public procurement markets and the rule of law

According to the European Commission's DG "Growth” (n.d.), a considerable part of public investment is spent via public procurement, accounting for €2 trillion a

EU rule of law: the "regulation ” dimension 87 year - 14% of the EU’s GDP. Public procurement has also played a leading role in the “Europe 2020 Strategy for Smart, Sustainable and Inclusive Growth” as one of the key market instruments to promote growth.^[1] The key directions for the public procurement reform over the period 2014-2020 dealt with: (i) increasing the efficiency of public spending; (ii) facilitation of the SMEs’ participation in the public procurement process and (iii) “enabling procurers to make better use of public procurement in support of common societal goals”.

These directions of the evolution of the EU public procurement policy are complemented by the 2017 European Commission’s Public Procurement Strategy, featuring six EU policy priorities in the public procurement domain. In line with the EU commitment to “common societal goals”, the EU’s top priority is to “ensure wider uptake of innovative, green and social procurement”. This priority is to be achieved via streamlining the criteria of innovativeness and conduciveness to sustainable development into the process of making contract award decisions. Further policy priorities, distinguished by the Commission, include: (i) the professionalization of public buyers; (ii) increasing access to procurement markets for SMEs; (iii) promoting the digital transformation of procurement; (iv) improving transparency, integrity and data and (v) promoting the digital transformation of public procurement. Additionally, the Commission has prioritized transparency, integrity and data openness, including the creation of publicly available registers of contracts. It has also emphasized the evolution of the international public procurement in terms of the plurilateral Agreement on Government Procurement (GPA) and “deep” RTAs. As a general rule, public procurement provisions under the EU RTAs follow the UNCITRAL Model Law and the WTO GPA rules (Woolcock, 2008, p. 4).

The implementation of respective policy priorities and the coverage of respective issues in the RTAs requires a clear and elaborate legal framework. According to the Preamble to the Directive 2014/24/EU, the awarding of contracts by the Member States’ authorities or on their behalf shall follow the fundamental principles of the Single Market (i.e. free movement of goods, freedom of establishment and the freedom to provide services) and the principles of equal treatment, non-discrimination, mutual recognition and transparency. As stems from our previous insight into the scope of the EU concept of the rule of law in Chapter 1, these principles are consonant with the components of the umbrella rule of lawprinciple. Furthermore, the EU’s ambition to promote international public procurement in terms of the GPA and "deep" RTAs makes it topical to zoom in on the interplay between the international and domestic law in a partner country and its compliance with its international obligations. Nonetheless, the EU strategies and secondary legislation in question tends not to link public procurement and the rule of law as an umbrella concept. The following analysis of the rule of law standards across the public procurement chapters of the EU value-promoting will demonstrate the relevance of looking at the RTAs' public procurement chapters from the rule of law perspective.

2. SAAs with Western Balkans

Concluded in terms of the EU Enlargement policy, the SAAs with Western Balkans represent a crucial instrument of these countries' alignment to the EU acquis and progressive Single Market integration. For the time being, all the Western Balkans countries except Kosovo were granted a free trade area with the Union after the respective transitional periods, and are working further on the deepening of economic relations with the EU. Nevertheless, even the most recent SAAs between the EU and Western Balkans (e.g. the EU-Kosovo SAA [2015]) do not include separate chapters regarding "deep" disciplines. Therefore, public procurement and competition regulations are regulated in terms of the titles “Approximation of laws, law enforcement and competition rules’’.^[2] As it can be exemplified by the EU-Albania SAA, the legislative approximation obligations under the SAAs are marked by this dynamic nature so that partner countries are obliged to ensure the compatibility between their future legislation and the acquis f Providing for the consistency of the legal system and compliance with the legislation (inter alia through the dynamic approximation obligation), the SAA framework legislative approximation norms contribute to the legality’ and legal certainty dimensions of the rule of law.

As regards public procurement per se, the SAAs recognize "the opening-up of the award of public contracts on the basis of non-discrimination and reciprocity, in particular in the WTO context, to be a desirable objective”. Based on this, the SAAs granted companies of the Western Balkan countries access to the EU public procurement market immediately from the date of the respective SAA's entry into force. Candidate countries can, however, benefit from a transitional period (typically up to five years) for conducting respective approximation activities. In this vein, the key sources of the rule of law standards to be transferred to the public procurement legislation of Candidate countries include the WTO’s Agreement on Government Procurement (GPA), aimed at the mutual

EU rule of law: the “regulation ” dimension 89 opening of public procurement markets, and the EU's secondary legislation on public procurement.

The GPA

Although all the SAAs refer to the WTO context with regard to the opening of the public procurement market, only Montenegro already joined the GPA, and Albania and Macedonia are presently negotiating their accession (WTO, 2020). Aiming to promote legal certainty amid the future market openings, the GPA introduced a range of common definitions of key procurement-related concepts such as "commercial goods and services”, “open tendering” and “technical specification” (WTO, 2014). In the legal certainty realm, the GPA puts an emphasis on the transparency of public procurement systems. In particular, pursuant to Art. VI( 1 ) GPA, each party is obliged to promptly publish laws, regulations and judicial decisions in the officially designated electronic or paper medium that is widely disseminated and accessible to the public. Art. VII GPA obliges procuring entities to publish notices of intended procurement in specifically designated media, specifying inter alia the detailed content of respective notices, as well as "readily accessible” summary notices. Art. XVI GPA provides for the transparency of procurement information following the award of contract. Furthermore, Art. VIII GPA contributes to the parties' observance of the equality and nondiscrimination standards through limiting the conditions of participating in procurement to those, “essential to ensure that a supplier has the legal and financial capacities and the commercial and technical abilities to undertake the relevant procurement”. The principles of fairness and impartiality of the procurement process is stipulated in Art. XV GPA. Importantly, Art. XVIII GPA obliges the parties to "provide timely, effective, transparent and non-discriminatory administrative or judicial review”, including the right to appeal. In sum, the GPA constitutes a crucial legal framework that incorporates numerous rule of law standards in the public procurement domain.

Legislative approximation

Alongside the GPA, a crucial source of the rule of law standards for the Candidate countries is represented by the acquis communautaire. EU Directives 2014/24/EU and 2014/23/EU on public procurement and the awarding of concession contracts, respectively, stipulate the principles of equal treatment, non-discrimination, proportionality’, legal certainty’ and transparency, and numerous mechanisms to implement them. This statement can be exemplified by the provisions of the Directive 2014/24/EU, aimed to ensure equal opportunities of tender participants

¹

Directive 2014/24/EU of the European Parliament and of the Council of 26 February 2014 on public procurement and repealing Directive 2004/18/EC, OJ L94 of 28 March 2014, Preamble; Directive 2014/23/EU of the European Parliament and of the Council of 26 February 2014 on the award of concession contacts, OIL 94 of 28 March 2014.

and the non-distortion of the competition, such as the norms on preliminary market consultations (Art. 40) and prior involvement of candidates and tenderers (Art. 41). The latter provision stipulates, inter alia, the authorities' obligations to communicate information, "exchanged in the context of or resulting from the involvement of the candidate or tenderer in the preparation of the procurement procedure’’.^[3] Naturally, the principles of equality and non-discrimination lie at the heart of the Directive’s provisions as regards the choice of participants and award of contracts (Section 3, Title I, Chapter 1). Art. 25 of the Directive 2014/24/ EU prohibits the design of the contract to unduly favour or disadvantage certain economic operators or certain works, supplies or services.

A distinct role in ensuring the observance of equality and non-discrimination principles belongs to new electronic techniques, such as electronic catalogues, enabling “the organization of information in a manner that is common to all the participating bidders and which lends itself to electronic treatment”. In turn, the transparency and traceability of the decision-making in public procurement are essential for "ensuring sound procedures, including efficiently fighting corruption and fraud”. The fulfillment of these principles is supported via the requirements to publish prior information notices as regards procurements (Art. 48), contract notices (Art. 49) and contract award notices (Art. 51, 53 ). In Art. 3, the Directive 2014/23/EU stipulates that the contracting authorities and contracting entities "shall act in a transparent and proportionate manner” and ensure the "transparency of the award procedure and of the performance of the contract”, especially with respect to balancing transparency and confidentiality requirements (Art. 28 of the Directive 2014/23/EU).

The provisions as to judicial review are contained the Council Directive 89/665/EC of 21 December 1989. The Directive obliges the EU Member States to ensure the possibility of the review of contracting authorities' decisions, as rapidly as possible, on the basis of the respective decisions' infringing Community law (and now EU law) or national rules implementing that law. According to the Directive, EU Member States shall extend the judicial independence requirement to the administrative bodies, responsible for considering public procurement cases. Additionally, given the limitedness of subjects, capable of submitting a claim under the Directive 89/665/EC, para 122 of the Preamble to the Directive 2014/24/EU grants “citizens, concerned stakeholders, organized or not, and other persons and bodies” an opportunity to indicate the possible violations of the Directive 2014/24/EU, without directly referring to their right to judicial review.

In sum, the liberalization of the Western Balkan counties’ public procurement envisages the promotion of numerous rule of law principles, such as legal certainty, equality and non-discrimination, transparency, the right to judicial review and the relationship between domestic and international law through legislative approximation and the promotion of international standards.

3. DCFTAs with Eastern Neighbours

In contrast to the SAAs, the DCFTAs with “associated” Eastern Neighbours contain distinct “Public Procurement” chapters.^[4] According to the DCFTAs, the party shall eventually grant Neighbours’ companies “the treatment no less favourable than that accorded to EU Party companies”. Therefore, the DCFTAs’ "Public Procurement” chapters are regarded as "an unprecedented example of the integration of a non-EEA-Member into the EU Single Market”.

Legislative approximation

Similar to the SAAs, legislative approximation represents the key mechanism through which the EU promotes the rule of law in the public procurement domain in the Neighbourhood. In substantive terms, this means the adherence to multiple rule of law standards, such as legal certainty, traceability and transparency, equality and non-discrimination, the right to judicial review and judicial independence. In implementation terms, the gradual legislative approximation framework provided for in the DCFTA "Public Procurement” chapters shall be regarded as more ambitious as compared to SAAs for three reasons.

First, the DCFTAs’ “Public Procurement” chapters contain their own gradual legislative approximation clause; it provides, inter alia, for the development of comprehensive roadmaps to guide the approximation of Neighbours' legislation to acquis communautaire in the public procurement domain. Second, the central novelty of the DCFTAs is market access conditionality, immediately linked to legislative approximation. The key reason for introducing market access conditionality into the DCFTA "Public Procurement” chapters deals with the Union being “cautious” to open up its public procurement market “for a third country with a less developed economy and economic capacity than the EEA country” (Van der Loo, 2016, p. 308). Hence, the decision to proceed with the subsequent phase of the market opening shall be based on the assessment of the quality of the adopted legislation and its implementation, conducted by the Association Committee in its

Trade Configuration.^[5] Following the last phase of the gradual approximation, the parties shall consider the complete mutual liberalization of public procurement markets. Third, the quality of the legislative approximation process is reinforced by its dynamic nature and the partner countries’ obligation to “take due account” of the CJEU case law and implemented measures adopted by the Commission in terms of the legislative approximation.

Basic standards

In contrast to the SAAs with Western Balkans, the DCFTAs with Eastern Neighbours stipulate in detail basic standards that touch upon various dimensions of the rule of law. Aiming to promote competition and "to allow any interested economic operator to have appropriate access to information regarding the intended procurement”, the publication standards contribute to the equality, non-discrimination, transparency and impartiality standards. Their interconnectedness can be exemplified by Art. 151(5) of the EU-Ukraine AA, stipulating that impartiality shall be "ensured especially by the non-discriminatory description of the subjectmatter of the contract, equal access for all economic operators, appropriate timelimits and a transparent and objective approach”.

The principles of transparency and non-discrimination are also emphasized with regard to the cases when the contracting entities are allowed to invite a limited number of applicants to submit an offer or apply the qualification system. Importantly, basic standards require the parties to ensure the transparency of the contract award per se, based on the respective tender criteria and applicable procedural rights. Moreover, basic standards under the DCFTA offer "any person, having or having had an interest in obtaining a particular contract and who has been or risks being harmed by an alleged infringement” the right to effective and impartial judicial review. With this, the judicial protection clauses under the AAs are inextricably linked to the "Review and Appeal” clauses under the DCFTAs that oblige the parties to establish or maintain courts or other independent tribunals "for the purposes of the prompt review and, where warranted, correction of administrative action in areas covered by this agreement”.

Ultimately, the DCFTA “Public Procurement” chapters uphold an array of closely intertwined rule of law standards, such as equality and non-discrimination, transparency, authorities' impartiality and the right to judicial review through basic standards, legislative approximation and market access conditionality clauses.

4. EU-CARIFORUM EPA

As it was noted in Chapter 2, the EPAs were to a great extent adopted with a view to increase the flexibility of the EU-ACP relations. Hence, the EU-CARIFORUM EPA is a single EPAthat contains an in-detail “Public Procurement” chapter, whose contents follow the voluntary UNCITRAL Model Law and the GPA (Woolcock, 2008, p. 4)

Similar to the SAAs and the DCFTAs, the objectives-related clause of the EU-CARIFORUM EPA links “transparent competitive tendering” to economic development, emphasizing the “special situation of the economies of CARIFORUM states”.^[6] In this way, the Agreement creates links the EU-CARIFORUM liberalization of public procurement markets and to the partner countries’ development-related needs. Such a link is consonant with the GPA’s provisions, directed at giving “special consideration to the development, financial and trade needs and circumstances of developing and least developed countries” (WTO, 2014, Art. V). This includes price preference programmes and lingering transitional periods before market liberalization, whose application is, however, conditional on a countiy’s observance of the transparency and non-discrimination standards. Moreover, the observance of the non-discrimination principle serves as a cornerstone of the facilitation of regional integration - a critical umbrella objective behind the EPAs. At the same time, both the desired economic development and regional integration-related effects of the EPA are being deterred by the fact that the provisions of the public procurement chapter apply solely to the procuring entities, listed in the respective Annex to the EPA and the procurements above the thresholds, established by this Annex.

The central provision as to transparency and non-discrimination is contained in Art. 168(1) of the EU-CARIFORUM EPA, requiring the parties and signatory states to the EPA to “promptly publish any law, regulation, judicial decision and administrative ruling of general application and procedures, regarding procurement, covered by this Chapter, as well as individual procurement opportunities”. The publications are to be made in the appropriate sources, determined by the EPA, and specifically designated electronic media. The provision in question encompasses, inter alia, the legal certainty dimension that requires the parties to “promptly publish in the same manner” the modifications to these measures of general applications. Moreover, to reinforce the transparency and non-discrimination standards, Art. 168(2) EPA obliges the parties and signatory states to ensure that their “procuring entities provide for effective dissemination of tendering opportunities”, including the set-up and maintenance of an appropriate online facility to meet the above requirements. Furthermore, the principle of transparency (also in conjunction with non-discrimination and fairness) is reflected in the PA’s provisions on the opening of tenders and awarding of contracts (Art. 176) and the information on contract award (Art. 177). In addition, the principles of transparency and nondiscrimination are upheld by the fact that procuring entities are obliged to inform eliminated suppliers about the reasons for the rejection of their tenders and comparative advantages of tenders, submitted by successful suppliers.^[7]

The principle of equality and non-discrimination perse is reflected in Art. 173 and 174 of the EU-CARIFORUM EPA that concern technical specifications and qualifications of suppliers, respectively. To ensure the equality between eligible suppliers, procuring entities shall be prevented from prescribing technical specifications that “refer to a particular trade mark or trade name, patent, copyright, design or type, specific origin, producer or supplier”. Moreover, procuring entities “shall ensure that any conditions and criteria for participating in a public contract award procedure are made known in advance in the notice of intended procurement or tender documents”. Such criteria have to be limited to those needed to ensure that a supplier is capable of executing the contract in question, and encompass solely the financial, commercial and technical abilities of a supplier. Subsequently, in view of the legal certainty, equality and nondiscrimination standards, a supplier’s elimination from the negotiations is only possible in accordance with the evaluation criteria, stipulated in the procurement notice or tender documentation.

A crucial feature of the EU-CARIFORUM EPA “Public Procurement” chapter is constituted by the provisions on “bid challenges”, encompassing numerous rule of law standards. Pursuant to Art. 179(1) of the EPA, “the parties and the Signatory CARIFORUM States shall provide transparent, timely, impartial and effective procedures enabling suppliers to challenge domestic measures implementing this Chapter”. In turn, to ensure the appropriate protection of suppliers’ rights, each party or signatory state to the EU-CARIFORUM EPA is required to “establish, identify or designate at least one impartial administrative or judicial authority”, independent of procuring entities, to consider respective challenges. There requirements are, however, less profound than the ones under the “Transparency” chapters of the DCFTAs that immediately require “associated” Neighbours to conduct in-depth judicial reforms in line with the independence and impartiality dimensions of the rale of law.

Alongside basic standards, the “Public Procurement” chapter under the EU-CARIFORUM EPA promotes the observance of the rale of law thr ough the cooperation clause. It provides, inter alia, for the creation of an online facility, aimed at disseminating information on tendering opportunities and facilitate the companies’ awareness about the public procurement process. In contrast to the SAAs

EU rule of law: the “regulation ” dimension 95 and the DCFTAs, respectively, the EU-CARIFORUM EPA neither contains references to the GPA nor the legislative approximation clauses. The lack of direct references to the GPA is “compensated” by the inclusion of detailed basic standards that follow the formulations of the GPA and the voluntary UNCITRAL Model Law. The absence of a legislative approximation clause can be, in turn, explained by the ACP countries’ geographical remoteness from the EU and the fact that the EU seeks to promote integration within the region, rather than the partner countries’ integration into the Single Market.

• [1] European Commission, Europe 2020. A Strategy for Smart, Sustainable and Inclusive Growth, COM (2010) 2020 final of 3 March 2010. 2 Directive 2014/24/EU of the Etiropean Parliament and of the Council of 26 February 2014 on public procurement and repealing Directive 2004/18/EC, OJL94 of 28 March 2014. 3 Etiropean Commission, Communication to the Etiropean Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions: Making Public Procurement Work in and for Europe, COM (2017) 572 final of 3 October 2017. 4 Ibid. 5 Ibid. 6 Directive 2014/24/EU of the European Parliament and of the Council of 26 February 2014 on public procurement and repealing Directive 2004/18/EC, OJL94 of 28 March 2014, Preamble.
• [2] See, for instance, EU-Albania SAA, Title VI. 2 Ibid., AW. 70. 3 Ibid., Art.74(4). 4 ZW, Art. 74(2). 5 2W.,Art.74(3).
• [3] Directive 2014/24/EU of the European Parliament and of the Council of 26 February 2014 on public procurement and repealing Directive 2004/18/EC, OJL94 of 28 March 2014, Preamble. 2 Ibid. 3 Ibid. 4 Ibid. 5 Council Directive 89/665/EEC of 21 December 1989 on the coordination of the laws, regulations and administrative provisions relating to the application of review procedures to the award of public supply and public works contracts, OJ L 395 of 30 December 1989. 6 Directive 2014/24/EU of the European Parliament and of the Council of 26 February 2014 on public procurement and repealing Directive 2004/18/EC, OJ L94 of 28 March 2014.
• [4] EU-UkraineAA, Title IV, Chapter 8; EU-Moldova AA, Title IV, Chapter 8; EU-Georgia AA, Title IV, Chapter 8. 2 E.g. EU-UkrameAA, Art. 154(3). 3 European Commission, Proposal for a Council Decision on the signing, on behalf of the European Union, and provisional application of the Association Agreement between the European Union and its Member States, of the one pair, and Ukraine, of the other part, COM (2013)289 of 15 May 2013. 4 See the previous analysis of the rule of law standards, embedded into the Directive 2014/24/EU of 26 February 2014 and Directive 2014/23/EU, OIL 94 of 28 March 2014. 5 See, for instance, EU-Moldova AA, Art.273.
• [5] Ibid., Alt.274. 2 Ibid. 3 Ibid., Alt.273(2). 4 EU-UkraineAA,Ait,151(l),Ait.l51(2)(b). 5 ÄiJ.,Ait.l51(ll). 6 Äirf.,Ait.l51(14). 7 Äirf.,Art.l51(15). 8 Äirf.,Art.360(l).
• [6] EU-CARIFORUM EPA, Art. 165. 2 Ibid., Ait.167(1). 3 ÆW.,Art.l68(l). 4 Ibid.
• [7] Ibid., Ait. 177(2). 2 Ibid., Ait. 173(5). 3 ZW