JUDGMENT OF 22. 9. 1976 — CASE 10/76 COMMISSION v ITALY

In Case 10/76

THE COURT composed of: R. Lecourt, President, H. Kutscher and A. O'Keeffe, Presidents of Chambers, A. M. Donner, J. Mertens de Wilmars, P. Pescatore, M. Sørensen, A. J. Mackenzie Stuart and F. Capotorti, Judges, Advocate-General: G. Reischl Registrar: A. Van Houtte

gives the following

JUDGMENT

Facts

I — Facts and procedure

II — Conclusions of the parties

III — Submissions and arguments of the parties

Law

Costs

I —. Facts and procedure

1. On 26 July 1971 the Council of the European Communities adopted two Directives for attaining freedom of establishment and freedom to provide services in the matter of public works contracts. The first, No 71/304/EEC (OJ, English Special Edition 1971 (II), p. 678), implements, with regard to public works contracts, the principle of the prohibition of discrimination based on nationality in the matter of freedom to provide services. The second, No 71/305/EEC (OJ, English Special Edition 1971 (II), p. 682), provides for the coordination of national procedures for the award of public works contracts based on the following basic principles:

2. By a Law of 2 February 1973, the Italian legislature prescribed the Rules relating to the procedures for the award of public contracts by restricted invitation to tender (Norme sui procedimenti di gara negli appalte di opere pubbliche mediante licitazione privata, Gazzetta Ufficiale of 24 February 1973, No 51). The Commission took the view that this Law did not fulfil the objectives of Directive No 71/305/EEC and by a letter of 10 June 1974, pursuant to Article 169 of the EEC Treaty, invited the Italian Government to submit its observations within 30 days of receipt of the said letter.

II —. Conclusions of the parties

(a). declare that the Italian Republic has failed to fulfil its obligations under Council Directive No 71/305/EEC of 26 July 1971, concerning the coordination of procedures for the award of public works contracts;

(b). order the Italian Republic to pay the costs.

III —. Submissions and arguments of the parties

(a). whereas the directive applies to all procedures for the award of contracts, both open and restricted (Article 5), the Italian Law applies only to the procedure for award by restricted invitation to tender, termed licitazione privata;

(b). Article 29 (3) of Directive No 71/305/EEC provides for the progressive abolition of the Italian anonymous envelope procedure, but the Italian Law makes no mention of this subject;

(c). The second paragraph of Article 12 of the directive provides for the publication of notices of contracts in the Official Journal of the European Communities: the Italian Law limits itself (Article 7) to providing for the publication of notices in the Official Journal of the Italian Republic;

(d). In Articles 16 (d) and 17 (a) the directive lays down the obligation to indicate the time-limit for the completion of the works. The Italian Law makes no provision in this connexion;

(e). The criteria for qualitative selection, specified as essential in Articles 20, 24, 25 and 26 of the directive (vocational aptitude, financial and economic standing and technical knowledge or ability), which must be observed by the authority awarding contracts, are not mentioned in the Italian Law, which thus maintains the wide discretionary powers conferred on authorities awarding contracts by the previous provisions;

(f). Under the last paragraph of Article 15 of the directive, requests for participation and invitations to tender may be made by telegram, telex message or telephone. As the Italian Law makes no mention of this subject, the Commission is of the opinion that the prohibition on tendering by telegram is still in force in Italy;

(g). The time-limit fixed by authorities for receipt of requests to participate must not, according to the directive (first paragraph of Article 14) be less than twenty-one days from the date of sending the notice of contract; the Italian Law limits itself to providing a minimum time-limit of 10 days from the publication of the notice;

(h). The Italian Law does not lay down any obligation formulated in Article 29 (5) of Directive No 71/305/EEC to justify to the Advisory Committee the rejection of tenders considered to be too low.

1. By an application which was received at the Registry on 5 February 1976 the Commission has brought before the Court under Article 169 of the EEC Treaty an action seeking a declaration that the Italian Republic has failed to fulfil its obligations under Directive No 71/305/EEC of the Council of 26 July 1971 (OJ, English Special Edition, 1971 (II), p. 682).

2. In conjunction with Directive No 71/304/EEC of the same date concerning the abolition of restrictions on freedom to provide services in respect of public works contracts, Directive No 71/305/EEC seeks to coordinate the national procedures for the award of these contracts. Under Article 32 Member States were to adopt the measures necessary to comply with the directive within twelve months of its notification to them, which period expired on 29 July 1972.

3. Subsequent to this directive the Italian Republic adopted the Law of 2 February 1973 relating to the procedures for the award of public contracts by restricted invitation to tender (licitazione privata) the text of which was conveyed to the Commission on 16 August 1973.

4. In the first place it was claimed that the defendant had excluded from the scope of the Law procedures for the award of public works contracts other than by restricted invitation to tender.

5. Secondly, it was alleged that the defendant had not complied with Article 29 of the directive whereby the Italian anonymous envelope procedure had to be abolished by 29 July 1975 or 29 July 1979 according to the estimated value of the contract as the Italian Law of 2 February 1973 made no provision in this respect.

6. In addition, under Article 12 of the directive, authorities awarding contracts who wish to award a public works contract by open or restricted procedure must make their intention known by means of a notice published in the Official Journal of the Communities whereas the Italian Law limits itself to providing for the publication of a notice in the Official Journal of the Italian Republic.

7. The Italian Law does not contain the provisions referred to in Articles 14, 15, 16 and 17 of the directive concerning the time-limit for the receipt of requests to participate, the form required for tenders and the compulsory indication of the time-limit for the completion of the works put out to tender.

8. Finally, Articles 20, 24, 25 and 26 of the directive lay down the criteria for qualitative selection which allow certain undertakings to be excluded from participation in the contracts, while the Italian Law contains no provision to this effect and retains the wide discretion conferred on authorities awarding contracts by Article 89 of the Royal Decree of 23 May 1924.

9. The defendant did not contest the alleged failures and, on 5 July 1974, conveyed to the Commission a preliminary draft of a bill containing the Community rules in full.

10. The draft, which according to the Commission satisfies the essential requirements of the directive, was conveyed to the Italian Parliament on 13 August 1974 but has still not been adopted with the result that the measures intended to ensure the implementation of the directive are not yet in force at the date of this judgment.

11. Article 189 of the Treaty provides that a directive shall be binding, as to the result to be achieved, upon each Member State to which it is addressed but leaves to the national authorities the choice of form and methods.

12. The mandatory nature of directives entails the obligation for all Member States to comply with the time-limits contained therein in order that the implementation shall be achieved uniformly within the whole Community.

13. It follows that as the Italian Republic has failed to adopt, within the prescribed period, the measures necessary to comply with Directive No 71/305/EEC of the Council concerning the coordination of procedures for the award of public works contracts, it has failed to fulfil an obligation under the Treaty.

14. Under Article 69 (2) of the Rules of Procedure of the Court of Justice, the unsuccessful party shall be ordered to pay the costs.

On those grounds, THE COURT hereby rules:

1 As the Italian Republic has failed to adopt, within the prescribed period, the measures necessary to comply with Directive No 71/305/EEC of the Council concerning the coordination of procedures for the award of public works contracts, it has failed to fulfil an obligation under the Treaty.

2 The defendant shall pay the costs.