OPINION OF ADVOCATE GENERAL

POIARES MADURO

delivered on 8 September 2005 (1)

Joined Cases C-226/04 and C-228/04

La Cascina Soc. coop. arl,

Zilch Srl

v

Ministero della Difesa and Ministero dell’Economia e delle Finanze,

Pedus Service,

Cooperativa Italiana di Ristorazione Soc. coop. arl (CIR),

Istituto nazionale per l’assicurazione contro gli infortuni sul lavoro (INAIL)

and

Consorzio G.f.M.

v

Ministero della Difesa,

La Cascina Soc. coop. arl

(Reference for a preliminary ruling from the Tribunale amministrativo regionale del Lazio (Italy))

(Public contracts – Procedure for the award of public service contracts – Conditions governing the exclusion of a service provider – Subparagraphs (e) and (f) of the first paragraph of Article 29 of Directive 92/50/EEC – Failure to fulfil obligations relating to the payment of social security contributions and taxes)

1.        By two orders of 22 April 2004, the Tribunale Amministrativo Regionale del Lazio (Regional Administrative Court, Lazio) (Italy) referred to the Court of Justice two questions concerning the interpretation of subparagraphs (e) and (f) of the first paragraph of Article 29 of Council Directive 92/50/EEC of 18 June 1992 on the coordination of procedures for the award of public service contracts (OJ 1992 L 209, p. 1), under which service providers which have failed to fulfil their obligations in relation to the payment of social security contributions and taxes may be excluded from an invitation to tender. Since the questions submitted in the two orders for reference were identical, they were joined by order of the President of the Court of 30 June 2004.

I –  Facts, legislative framework and the questions referred

2.        La Cascina Soc. Coop. arl. (hereinafter ‘La Cascina’) and Zilch Srl (hereinafter ‘Zilch’), which had set up a temporary joint venture, and Consorzio G.f.M. (hereinafter ‘G.f.M.’), all of them companies established in Italy, took part in an accelerated restricted tendering procedure for contracts to supply restaurant services to bodies and departments of the Italian Ministry of Defence stationed in the national territory, organised by that Ministry in conjunction with the Ministry of Economy and Finance. The invitation to tender was divided into 16 lots and published in December 2002. The deadline for the receipt of requests to participate was 15 January 2003, and the deadline for the receipt of tenders 3 March 2003.

3.        By a decision of 4 December 2003, the contracting authority excluded La Cascina, Zilch and G.f.M. from taking part in the tendering procedure. In Case C‑226/04, La Cascina, the principal in the temporary joint venture, was not in compliance with its obligations to pay social security contributions for its employees for the period 1 January 2001 to 31 December 2002. Another company in the joint venture, Zilch, was excluded by the same decision, since it had failed to pay its taxes for different periods between 1997 and 2001. In Case C-228/04, there were alleged to have been irregularities on the part of G.f.M. regarding its obligations towards the Istituto nazionale per l’assicurazione contro gli infortuni sul lavoro (National Institute for insurance against accidents at work – hereinafter ‘INAIL’).

4.        The decision to exclude the companies was taken in accordance with Article 12(d) and (e) of Legislative Decree No 157 of 17 March 1995, as replaced by Legislative Decree No 65 of 25 February 2000, (2) which provides that: ‘competitors who are not in compliance in respect of obligations relating to the payment of social security contributions for employees, in accordance with Italian legislation or the legislation of the State in which they are established, shall be excluded from participating in competitions’.

5.        Both La Cascina and Zilch and G.f.M. applied to the Tribunale amministrativo regionale del Lazio, seeking to have the decision of 4 December 2003 excluding them annulled. La Cascina and G.f.M. claimed, among other things, that there had simply been a delay in making the payments at issue, which had been settled subsequently. Zilch challenged the communication sent to the contract-awarding authority by the Ufficio centrale fiscale (Central Tax Authority) and produced a certificate issued by the Ufficio periferico di Messina (Messina branch office) showing that, on 1 January 2003, Zilch had paid the taxes it owed. Zilch also pointed out that it had requested the application of a law providing for the regularisation of tax debts and had been allowed to pay in instalments.

6.        Before the national court, the contracting authority pointed out, however, that the fact that the applicant companies had met their obligations a posteriori did not mean that they had settled those obligations by the time the deadline for submitting their requests to participate in the invitation to tender had expired, that is to say 15 January 2003.

7.        The national court seised of the dispute noted that Article 12(d) and (e) of Legislative Decree No 157/1995 transposes into Italian law subparagraphs (e) and (f) of the first paragraph of Article 29 of Directive 92/50. According to the latter provision: ‘Any service provider may be excluded from participation in a contract who: … (e) has not fulfilled obligations relating to the payment of social security contributions in accordance with the legal provisions of the country in which he is established or with those of the country of the contracting authority; (f) has not fulfilled obligations relating to the payment of taxes in accordance with the legal provisions of the country of the contracting authority; … Where the contracting authority requires of the service provider proof that none of the cases quoted in (a), (b), (c), (e) or (f) applies to him, it shall accept as sufficient evidence: … for (e) or (f), a certificate issued by the competent authority in the Member State concerned.’

8.        Taking the view that such an interpretation might lead to unequal treatment of service providers and obstruct the procedure for the award of a contract, the Tribunale amministrativo regionale del Lazio decided to stay its proceedings and to refer the following questions to the Court for a preliminary ruling:

‘(1)      Must the Directive in question, as regards only the abovementioned provisions, be interpreted as meaning that, where the Community legislature employs the expression “has not fulfilled obligations relating to the payment of social security contributions in accordance with the legal provisions of the country in which he is established or with those of the country of the contracting authority” or “has not fulfilled obligations relating to the payment of taxes in accordance with the legal provisions of the country of the contracting authority”, the legislature intended to refer – solely and exclusively – to a situation in which the person concerned has – when the period prescribed for submitting requests to participate in a public tendering procedure expires (or in any event before the award of the contract) – fulfilled those obligations by paying in full and in time?

2)      Consequently, must the Italian national implementing measure [Article 12(d) and (e) of Legislative Decree No 157 of 17 March 1995] – in so far as, unlike the Community provision cited above, it allows the exclusion from tendering procedures of persons who “are not in compliance in respect of obligations relating to the payment of social security contributions for employees, in accordance with Italian legislation or the legislation of the State in which they are established” or who “are not in compliance in respect of obligations relating to the payment of taxes, in accordance with Italian legislation or the legislation of the State in which they are established” – be interpreted with reference solely to the failure – verifiable at the date mentioned above (the expiry of the period prescribed for submitting requests to participate or immediately before the award, even provisional, of the contract) – to fulfil those obligations, without any importance being attached to subsequent “regularisation” of their position?

3)      Or, conversely (if, in the light of the indications set out in question 2 above, the national measure is held not to be in harmony with the rationale and function of the Community provision), may the national legislature be regarded, in the light of the limitations to which it is subject for the purpose of giving effect to the Community rules contained in the Directive at issue, as being entitled to introduce the option of allowing the admission to a tendering procedure of persons who, although not “in compliance” when the period prescribed for participation in the procedure expires, nevertheless show that they can regularise their position (and have taken positive steps to do so) before the award of the contract?

4)      And, if the interpretation referred to in question 3 above is held to be workable – thus permitting the introduction of more flexible rules than would be allowed on a stricter interpretation of the “fulfilment” of obligations referred to by the Community legislature – do such rules conflict with fundamental Community principles, such as the principle of equal treatment for all citizens of the Union, or – with regard only to public tendering procedures – that of equal conditions for all persons who have applied for admission to such procedures?’

9.        La Cascina and Zilch, the Austrian and Italian Governments and the Commission of the European Communities submitted written statements in intervention to the Court. A hearing took place on 30 June 2005 during which La Cascina and Zilch, G.f.M., Pedus Service, the Italian Government and the Commission set out their positions.

10.      It should first be pointed out that in the context of Article 234 EC, the Court has no jurisdiction to rule on the interpretation of provisions of national laws or regulations or their conformity with Community law. (3) The questions referred by the national court must, therefore, be reformulated. The answers given will enable the national court to interpret the national transposing provision in a manner compatible with subparagraphs (e) and (f) of the first paragraph of Article 29 of Directive 92/50. In point of fact, ‘[t]he requirement for national law to be interpreted in conformity with Community law is inherent in the system of the [EC] Treaty, since it permits the national court, for the matters within its jurisdiction, to ensure the full effectiveness of Community law when it determines the dispute before it’. (4) That means that, in this case, although the specific procedures for excluding potential candidates have to be determined by the national law, (5) as the Commission points out in its written observations, it is nonetheless appropriate to provide the national court with an interpretation of subparagraphs (e) and (f) of the first paragraph of Article 29 of Directive 92/50.

11.      It would appear that the first and fourth questions concern the margin of discretion available to the national legislature when transposing Directive 92/50. More specifically, the first question raises two separate points of interpretation. The national court questions the effect of the difference in wording it has identified between the text of the directive and the way in which it has been transposed into the national law. It also raises the question whether the directive requires that the obligations cited in subparagraphs (e) and (f) of the first paragraph of Article 29 must be paid in full and in time. The principles of Community law the national court cites in its fourth question will be helpful in answering those two points. By its second and third questions, the referring court is seeking to establish the deadline by which a company taking part in an invitation to tender must prove that it has met its obligations in relation to tax and the payment of social security contributions. I shall begin by considering the significance of the difference in wording the national court has identified; then consider the interpretation to be given to the concept of having ‘fulfilled obligations’; and, finally, consider the time‑limit a company should be allowed in which to prove that it has met those obligations.

II –  Analysis

A –    The significance of the difference in wording between subparagraphs (e) and (f) of the first paragraph of Article 29 of Directive 92/50 and the Italian implementing legislation

12.      The national court has identified a difference in wording between the text of Directive 92/50, which refers to any company which ‘has not fulfilled obligations’ in relation to taxation and the payment of social security contributions, and the expression used in the national legislation, which refers to companies which ‘are not in compliance with’ those same obligations. The national court takes the view that the obligation to be in compliance is broader than the obligation to fulfil obligations. In particular, the national court cites the possibility that a company may benefit from regularisation on the part of the tax authorities, which could have retroactive effect.

13.      I should first point out that Article 29 of Directive 92/50 gives Member States the option of providing for the grounds of exclusion listed therein. But the Member States are not bound to adopt those qualitative selection criteria. (6) The Italian Republic availed itself of that possibility by providing in its national legislation that companies which are not ‘in compliance’ with their obligations in relation to tax and the payment of social security contributions should be excluded.

14.      Secondly, although the national court centres its argument on the difference in wording it has identified between the national provision and the Community directive, that difference does not seem to be significant. In point of fact, a directive, by its very definition, determines the result to be achieved, whilst leaving it to the Member States to choose the method best suited to achieving that objective, as provided for by Article 249 EC. Furthermore, there is no difference in meaning between the expressions to be ‘in compliance with’ and to have ‘fulfilled’ statutory requirements, which, as the Italian Government correctly points out in its written observations, are used without distinction in the Community directives on public contracts, be it in the Italian or other language versions. (7)

15.      Consequently, the answer to the first question, as reformulated, must be that the expression to have ‘fulfilled obligations’ which appears in the text of Directive 92/50 may be construed as meaning to be ‘in compliance with its obligations’, as stated in the Italian transposing legislation, since both expressions mean the same.

B –    The concept of having ‘fulfilled obligations’ within the meaning of subparagraphs (e) and (f) of the first paragraph of Article 29 of Directive 92/50

16.      The national court raises three questions of interpretation which are linked: firstly, the effect of a delay in payment; secondly, the consequences of the authorities permitting payment in instalments; and, thirdly, the effect of lodging an administrative or judicial appeal challenging the existence of an obligation to make a payment or the amount of that payment.

1.      The effect of a delay in making payment

17.      The national court first raises the question whether subparagraphs (e) and (f) of the first paragraph of Article 29 of Directive 92/50 must be interpreted as requiring the payment of the obligations to which it refers ‘in full and in time’.

18.      In that connection, La Cascina claims that a mere delay in payment cannot result in exclusion. It advances two arguments on that point. On the one hand, it considers that the obligation to make payment referred to in Article 29 of Directive 92/50 is not directed towards the payment itself but towards all the activities preparatory to fulfilling the obligation to pay. An interpretation which is so clearly incompatible with the letter and spirit of the provision to be interpreted must be dismissed.

19.      La Cascina’s second argument merits more serious scrutiny. It contends that, in terms of the system, that is to say comparing the different grounds for exclusion listed in Directive 92/50, it is absurd to permit a company that is heavily indebted to take part in a tender, provided that it is not bankrupt, being wound up, having its affairs administered by the court or has not entered into an arrangement with creditors (Article 29(a) and (b) of the directive), while banning a company which is slightly indebted from taking part in that same tender, on the pretext that it has failed promptly to fulfil its obligations in relation to tax and social security contributions. La Cascina infers from this that a delay in making payment, which is not the same as non-payment, cannot result in exclusion under subparagraphs (e) and (f) of the first paragraph of Article 29 of Directive 92/50.

20.      First of all, while it is true that a systematic interpretation frequently enables the Court to clarify the meaning of a provision, I would point out that the interpretation La Cascina proposes is incompatible with the wording of the article in question.

21.      Secondly, La Cascina’s view that debts to the State or other public bodies by way of taxes or social security contributions and debts to other creditors have to be taken into account globally in determining whether a tenderer is solvent is incorrect, since it assumes that these two categories of debt are the same, and that is not the case.

22.      Finally, La Cascina’s argument cannot be endorsed since it is founded on an incorrect assessment of the objectives pursued by the qualitative selection criteria within the system of Directive 92/50. In that connection, the Court has already ruled in its judgment in Holst Italia (8) that ‘the criteria for qualitative selection laid down in Chapter 2 of Title VI of Directive 92/50 are designed solely to define the rules governing objective assessment of the standing of tenderers’. The fact is that the standing of tenderers does not depend exclusively on whether they are solvent. Indeed, the criteria applicable in relation to qualitative selection include criteria concerning the tenderer’s personal situation, its financial and economic standing and even its skills, its efficiency, its experience and its reliability. As the Italian Government rightly points out, the objective pursued by Article 29 of Directive 92/50 is precisely to guarantee the reliability of tenderers. (9)

23.      More specifically, subparagraphs (e) and (f) of the first paragraph of Article 29 encourage companies to pay their taxes and social security contributions. At the same time, that provision enables the contracting authority to award lucrative public contracts only to companies that have already paid these various taxes in order to protect the State’s interest as the collector of taxes.

24.      It is quite clear that the grounds for exclusion listed in Article 29 of Directive 92/50 are not solely designed to guarantee that the service provider in question is solvent, which is the aim of Article 31 of that directive, but actually to prevent that person from benefiting from an unfair advantage in relation to his competitors for a contract by failing to pay taxes or social security contributions. The exclusion of companies which have not fulfilled their obligations in relation to the payment of social security contributions or taxes is therefore justified because of the risk that competitors would cease to have an equal opportunity were companies that were not in compliance with those statutory obligations able to participate in an invitation to tender.

25.      The principle that competitors must enjoy equal treatment underpins the law on public contracts, (10) making it possible to ensure that all potential competitors in a tender have the same opportunity when drawing up their applications to take part or their actual tenders. (11) The principle is specifically enshrined in Article 3(2) of Directive 92/50 which provides that ‘[c]ontracting authorities shall ensure that there is no discrimination between different service providers’.

26.      Consequently, Article 29 of Directive 92/50 must be interpreted as setting out a list of grounds resulting in the exclusion of competitors from taking part in a tender to safeguard the principle of equal treatment. That exclusion necessarily implies that a limit is placed on the parallel objective Directive 92/50 pursues, namely that of encouraging competition. (12) That limit is, however, inherent in the system of the directive which seeks to encourage competition between service providers only provided that competition takes place in compliance with the principle of equal treatment for candidates. (13)

27.      Since a competitor which has failed to fulfil its obligations in relation to tax or the payment of social security contributions is excluded to ensure that all tenderers are treated equally, there is no reason to make a distinction between non-payment and a delay in paying. In fact, if a company were able to rely on a delay in payment to avoid being excluded from taking part in a tender under subparagraphs (e) and (f) of the first paragraph of Article 29 of Directive 92/50, the application of that provision would be substantially curtailed. The evidence required under that provision is not that the company concerned intends to meet its statutory obligations at some later date – which would, moreover, be extremely difficult to prove – but that the obligations which have become due have actually been paid. (14) The non-discriminatory nature of the process of selecting service providers can be assured only by means of an objectively defined criterion. Consequently, the application of subparagraphs (e) and (f) of the first paragraph of Article 29 makes it necessary objectively to ascertain that the obligations to which it refers have actually been paid by the company in question.

2.      The consequences of debt payment by instalment

28.      Secondly, where it is established that a company has failed to fulfil its obligations within the meaning of subparagraphs (e) and (f) of the first paragraph of Article 29 of Directive 92/50, the national court questions what the effect will be if the authorities permit that company to pay by instalments. In that connection, the national court refers to judgment No 1114 of the Tribunale amministrativo regionale per la Puglia of 12 February 2004 which interpreted Article 12 of Legislative Decree No 157/1995 as applicable not only to companies which had evaded payment but also to companies which had simply not paid their contributions. However, companies benefiting from regularisation procedures allowing them extra time to pay or to pay by instalments and companies which had lodged administrative or judicial appeals and have yet to receive a final judgment could not be excluded under that article.

29.      It should first be pointed out that it is, in any event, the national law which determines the amount and deadline for payment of obligations relating to the payment of tax as well as social security contributions. However, and subject to the interpretation of its national law by the referring court, it would appear that once the tax authority or competent authority has agreed that the social security contributions a company owes can be paid in instalments, that company can no longer be deemed to be late in making payment.

30.      Furthermore, in the context of the application of subparagraphs (e) and (f) of the first paragraph of Article 29 of Directive 92/50, the burden of proof lies, as the Commission reminds us in its written observations, with the company wishing to take part in the tender. A company that has obtained permission from the authorities to pay the tax it owes in instalments, or – to use the expression the national court employs – which has regularised its situation vis-à-vis the tax authority, will receive a certificate from that authority stating that it has fulfilled its obligations within the meaning of Article 29 of Directive 92/50. (15)

3.      The effects of lodging an administrative or judicial appeal

31.      The last point raised by the referring court on the interpretation of subparagraphs (e) and (f) of the first paragraph of Article 29 of Directive 92/50 concerns circumstances in which a company has lodged an administrative or judicial appeal against a decision of the authority, contesting the amount of the social security contributions or the taxes which it owes. In this case, the file shows that La Cascina lodged administrative appeals by two letters dated 6 February 2002 and addressed to INAIL. The referring court cites on that point judgment No 890 of the Tribunale amministrativo regionale per l’Umbria of 30 November 2002 which found that since the company concerned had lodged an appeal against its tax assessment before the tax courts, it could not be excluded from taking part in the tender on the ground that it was not in compliance with its obligations relating to the payment of taxes. According to the referring court, the Consiglio di Stato has adopted that same stance. (16)

32.      In its written observations, the Italian Government was of the view that not even the lodging of a judicial appeal disputing the amount of the taxes or social security contributions due should preclude a finding that the company in question has not fulfilled its obligations within the meaning of subparagraphs (e) and (f) of the first paragraph of Article 29 of Directive 92/50. However, at the hearing, that government conceded that if the appeal had been lodged before the application to take part in the tender was made, the effect could be to prevent the company from being excluded, provided that the contracting authority was informed of the existence of that appeal.

33.      The Commission also adopted a qualified position at the hearing, suggesting that a distinction be made between cases in which the applicant cites an administrative error on its part and those in which the taxpayer is simply asking the authority to exercise leniency. Permission to take part in the tender would be accorded in the first case only.

34.      La Cascina and Zilch, however, claim that respect for the right of defence, protected by Article 24 of the Italian Constitution, means that a company which has lodged a judicial or administrative appeal cannot be held not to be in compliance with its fiscal or social obligations.

35.      Community law, in this instance subparagraphs (e) and (f) of the first paragraph of Article 29 of Directive 92/50, merely provides for the exclusion of a company which has not fulfilled the obligations to which that article refers. It is, however, for the national legislation to determine the amount a company owes by way of taxes or social security contributions as well as the consequences, so far as its position vis-à-vis the authorities is concerned, of lodging an administrative or judicial appeal.

36.      It is undeniable that an appeal against a decision of the tax authority may have different effects in law depending on the national law in question. Whether or not the appeal has suspensory effect, for example, and the conditions determining whether the court allows it, vary from one legal system to another. (17) Consequently, the effect of the diversity of national legislations could be that some companies which have lodged an appeal will be allowed to take part in a tender, whereas others, taxed in a different Member State, will be excluded from that same tender because they are not considered to be in compliance with their fiscal and social obligations.

37.      However, since the lodging of an appeal corresponds to the exercise of a right, the automatic consequence should not be to exclude the applicant from all tenders, particularly since that action is not, in itself, likely to affect a company’s reliability, that being what subparagraphs (e) and (f) of the first paragraph of Article 29 of Directive 92/50 are seeking to ascertain. To exclude a company because it has lodged an appeal would be all the more inconvenient because if, on completion of the appeal proceedings, its appeal was allowed, its exclusion could be contested and result in the need for compensation. In some circumstances, annulling the decision to exclude could result in annulment of the award of the contract.

38.      But, if the automatic effect of simply lodging an appeal were that the appellant would have to be allowed to take part in the tender, the risk would be that companies would be encouraged to lodge appeals inappropriately or in order to delay matters. Furthermore, if, after it had won the contract, a company failed in its appeal, its competitors would have been disadvantaged but could not challenge the award procedure.

39.      Community law does not prescribe either one of those alternatives. In point of fact, Directive 92/50 accords the States a margin of discretion to assess whether or not companies which have lodged an appeal are in compliance with their tax obligations. That matter of fact is determined by the national legal system of origin of the companies wishing to tender, whereas the consequences for admission to the tender are established in accordance with the law of the contracting authority, provided that the right of defence and the principle of equal treatment between companies are observed. In that way, all of the potential participants in a tender are subject to uniform rules.

40.      The guarantees required for the exercise of the right of defence, as regards the lodging of an appeal, are a matter for the national law and the procedures it lays down, as applied by the national courts (as, for example, in this case, by the Consiglio di Stato), subject to the observance of Community law and in particular its fundamental principles. (18)

41.      The obligation to afford candidates equal treatment requires that the tax position of companies, determined by their national law of origin, must be recognised in exactly the same way in terms of the consequences for their admission to the tender. Consequently, the Italian legal system, which stipulates, in accordance with constitutional principles in particular, that companies which have lodged an appeal against a tax debt may not, on that ground, be prevented from taking part in a public tender, is compatible with the requirements of Community law, provided that the same rule applies to all participants in the tender that have lodged a similar appeal in another Member State.

42.      Consequently, subparagraphs (e) and (f) of the first paragraph of Article 29 of Directive 92/50 do not preclude a national rule or an interpretation of the national rules, according to which a company which has lodged an administrative or judicial appeal is deemed to have fulfilled its obligations until final judgment is handed down.

43.      In the light of the above considerations, the answer to the second question, as reformulated, should be that the concept of having ‘fulfilled obligations’ within the meaning of subparagraphs (e) and (f) of the first paragraph of Article 29 of Directive 92/50 must be interpreted as requiring actual payment of the obligations at issue, in the amount of and by the deadline as determined by the national law, and does not preclude a national rule or an interpretation of the national rules according to which a company which has lodged an administrative or judicial appeal is deemed to have fulfilled its obligations until final judgment is handed down.

C –    The time‑limit for furnishing evidence that the qualitative selection criteria have been respected

44.      The third question submitted to the Court concerns the time‑limit within which companies must furnish evidence that they meet the qualitative selection criteria set out in subparagraphs (e) and (f) of the first paragraph of Article 29 of Directive 92/50. Let me make the preliminary point here that, as the Austrian Government states in its written observations, that assessment must take place on a single date. Three possible dates could, therefore, a priori be selected: the expiry of the time‑limit for the request to participate; the expiry of the deadline to submit tenders or the point at which the contract is awarded.

45.      The Commission contends that the material date must be the time‑limit for applying to take part in the tender. As far as the Austrian Government is concerned, the service provider may furnish evidence that he has fulfilled his obligations in regard to tax and the payment of social security contributions until the deadline for the submission of tenders expires. However, La Cascina and Zilch claim that a company should be free to prove that it meets the qualitative selection criteria so long as the contract has yet to be provisionally awarded.

46.      It is settled case-law that the system for awarding public service contracts set in place by Directive 92/50 is structured around two phases: the first involves selecting the candidates who will be allowed to take part on the basis of their technical and financial standing and other qualitative criteria, and the second, evaluating the tenders submitted in accordance with the award criteria. (19) All of the directives relating to public contracts separate the award procedure into two phases in this way. (20)

47.      More often than not, the conceptual division of the procedure into two separate phases coincides with a time lapse between them. Initially, for example, the contracting authority will invite economic operators to register their interest in a tender within a specific time‑limit and to furnish the evidence that they meet the qualitative selection criteria that apply to the particular contract. When that initial phase is completed, those selected to tender will be set another deadline within which to submit a full tender. Finally, the contract will be definitively awarded in accordance with the previously established criteria for its award.

48.      Dividing the award procedure into two separate phases benefits both the contracting authority, which will consider only tenders from companies of proven standing, and the tenderers who will make the necessary effort to put together a tender only if their standing meets the requirements of the contracting authority.

49.      If the tender is organised in this way, companies can be allowed to furnish evidence that they meet the qualitative selection criteria only until the deadline for applying to take part in the tender expires. Indeed, extending the deadline beyond that date would have the practical effect of preventing the contracting authority from evaluating the capacity of companies to take part in the tender before it embarked on detailed examination of the tenders. (21)

50.      However, the award procedure may consist in just one phase without being in breach of Directive 92/50. In fact, the distinction between the selection criteria for economic operators and the contract award criteria does not require that those criteria should always be assessed at separate junctures. On the contrary, it is established in the abovementioned Beentjes and GAT judgments that ‘[e]ven though the directive does not rule out the possibility that examination of the tenderer’s suitability and the award of the contract may take place simultaneously, the two procedures are governed by different rules’. (22) It is clear from that case-law, which can be transposed to the interpretation of Directive 92/50, that the contracting authority is free to examine simultaneously whether candidates meet the qualitative selection criteria, giving them the right to tender, and the tenders themselves in the light of the contract award criteria.

51.      In that context, the evidence that the qualitative selection criteria are met could be furnished until the deadline for the submission of tenders expires. Indeed, if the contracting authority is to assess compliance with the selection criteria and the tenders submitted at one and the same time, there is no point in setting two different time‑limits for the submission of information concerning compliance with the selection criteria, on the one hand, and details of the tender submitted, on the other. However, evidence that the qualitative selection criteria are met will not be able to be furnished subsequently, since any further amendment to a company’s file after that deadline had expired would mean that candidates were no longer being treated equally. (23)

52.      Furthermore, were a company able to be permitted to prove that it met the qualitative selection criteria after the contract had been awarded, the two phases in the award procedure would cease to be distinct. As the Italian Government points out in that connection, there is also the risk that companies would not fulfil their tax obligations until they had learnt that the outcome of an award procedure was in their favour. But it would not be acceptable for companies to include their tax obligations in a cost-benefit analysis in that way and unduly delay settling their debts to the State.

53.      It follows from the foregoing that the answer to the third question, as reformulated, must be that a company may be allowed to furnish evidence that it has fulfilled the qualitative selection criteria applicable to a contract until the deadline for applying to take part in the tender expires, unless the contracting authority is examining compliance with the selection criteria and the candidates’ tenders simultaneously, in which case the material deadline will be the time‑limit set for the submission of tenders.

III –  Conclusion

54.      In the light of these considerations, I propose that the Court answer the questions referred for a preliminary ruling by the Tribunale amministrativo regionale del Lazio as follows:

1)      The expression to have ‘fulfilled obligations’ which appears in the text of Council Directive 92/50/EEC of 18 June 1992 on the coordination of procedures for the award of public service contracts may be construed as meaning to be ‘in compliance with its obligations’, as stated in the Italian transposing legislation, since both expressions mean the same.

2)      The concept of having ‘fulfilled obligations’ within the meaning of subparagraphs (e) and (f) of the first paragraph of Article 29 of Directive 92/50 must be interpreted as requiring actual payment of the obligations at issue, the amount of and deadline for which is determined by the national law, and does not preclude a national rule or an interpretation of the national rules according to which a company which has lodged an administrative or judicial appeal is deemed to have fulfilled its obligations until final judgment is handed down.

3)      A company may be allowed to furnish evidence that it has fulfilled the qualitative selection criteria applicable to a contract, in accordance with subparagraphs (e) and (f) of the first paragraph of Article 29 of Directive 92/50 until the deadline for applying to take part in the tender expires, unless the contracting authority is examining compliance with the selection criteria and the candidates’ tenders simultaneously, in which case the material deadline will be the time‑limit set for the submission of tenders.

---

1 – Original language: Portuguese.

---

2 – Decrees published in GURI No 104 of 6 May 1995 and GURI No 70 of 24 March 2000 respectively (hereinafter ‘Decree No 157/1995’).

---

3 – See, for example, Case C-57/01 Makedoniko Metroand Mikhaniki [2003] ECR I‑1091, paragraph 55 and the case-law cited therein.

---

4 – Case C-397/01 Pfeiffer [2004] ECR I‑0000, paragraph 114. The need for a compatible interpretation was originally based in part on Article 10 EC: Case 14/83 Von Colson and Kamann [1984] ECR 1891, paragraph 26: ‘However, the Member States’ obligation arising from a directive to achieve the result envisaged by the directive and their duty under Article [10] of the Treaty to take all appropriate measures, whether general or particular, to ensure the fulfilment of that obligation, is binding on all the authorities of a Member State including, for matters within their jurisdiction, the courts’; Case C-106/89 Marleasing [1990] ECR I-4135, paragraph 8. See, on this subject, S. Prechal, Directives in EC Law, 2^nd edition, Oxford, 2005.

---

5 – As regards Council Directive 93/37/EEC of 14 June 1993 concerning the coordination of procedures for the award of public works contracts (OJ 1993 L 199, p. 54), as amended by Commission Directive 2001/78/EC of 13 September 2001 (OJ 2001 L 285, p. 1, hereinafter ‘Directive 93/37’), see Case C-470/99 Universale-Bau [2002] ECR I-11617, paragraph 88: ‘'[t]he title of Directive 93/37 and the second recital in its preamble show that its aim is simply to coordinate national procedures for the award of public works contracts, although it does not lay down a complete system of Community rules on the matter (Joined Cases C-285/99 and C‑286/99 Lombardini and Mantovani [2001] ECR I-9233, paragraph 33)’.

---

6 – Article 29 of Directive 92/50 in fact provides that: ‘… may be excluded …’ (my italics).

---

7 – As far as public works contracts are concerned, the equivalent of subparagraphs (e) and (f) of the first paragraph of Article 29 of Directive 92/50 is Article 24(e) and (f) of Directive 93/37 The Italian version of the latter employs the expression ‘che non sia in regola’; the French ‘qui n’est pas en règle’; the Spanish ‘que no esté al corriente’; the Portuguese ‘não tenham cumprido’; the English ‘has not fulfilled’ and the German ‘nicht erfüllt haben’. Article 20(1)(e) and (f) of Council Directive 93/36/EEC of 14 June 1993 coordinating procedures for the award of public supply contracts (OJ 1993 L 199, p. 1), last amended by Directive 2001/78 also employs the expression ‘qui n’est pas en règle’ in the French version, while the Italian opts for the expression ‘non abbia adempiuto’ and the Portuguese ‘não tenham cumprido’. Article 45(2)(e) and (f) of Directive 2004/18/EC of the European Parliament and of the Council of 31 March 2004 on the coordination of procedures for the award of public work contracts, public supply contracts and public service contracts (OJ 2004 L 134, p. 114) is significant, since its purpose is to consolidate the provisions in force in the raft of directives, including Directives 92/50 and 93/37. The French version employs the expression ‘qui n’est pas en règle’, the Italian ‘che non sia in regola’, the Spanish ‘que no esté al corriente’, the Portuguese ‘não tenham cumprido’, the English ‘has not fulfilled’ and the German version ‘nicht erfüllt haben’.

---

8 – Case C-176/98 [1999] ECR I-8607, paragraph 25.

---

9 – In that connection, see point 26 of the Opinion of Advocate General Léger in Holst Italia, cited in footnote 8 above, according to which the aim of the qualitative selection criteria is also to protect the interests of the contracting authority.

---

10 – Case C-275/98 Unitron Scandinavia and 3-S [1999] ECR, paragraph 31; Case C-94/99 ARGE [2000] ECR I-11037, paragraph 24; Case C-324/98 Telaustria and Telefonadress [2000] ECR I-10745, paragraph 61; Case C-92/00 HI [2002] ECR I-5553, paragraph 45, and Case C-315/01 GAT [2003] ECR I-6351, paragraph 73. For a résumé of earlier and settled case-law on this issue, see points 20 and 21 of the Opinion of Advocate General Tizzano in the abovementioned HI. See also recital (2) of the preamble to Directive 2004/18, according to which ‘[t]he award of contracts concluded in the Member States on behalf of the State, regional or local authorities and other bodies governed by public law entities, is subject to the respect of the principles of the Treaty and in particular the principle of freedom of movement of goods, the principle of freedom of establishment and the principle of freedom to provide services and to the principles deriving therefrom, such as the principle of equal treatment, the principle of non-discrimination, the principle of mutual recognition, the principle of proportionality and the principle of transparency’.

---

11 – Concerning Directive 93/37, Universale-Bau, cited in footnote 5 above, paragraph 93.

---

12 – That aim is laid down in the 20th recital of the preamble of Directive 92/50, according to which ‘to eliminate practices that restrict competition in general and participation by other Member States’ nationals in particular, it is necessary to improve the access of service providers to procedures for the award of contracts’. That aim is also set out in Article 13(5) of that directive, according to which ‘[i]n any event, the number of candidates invited to participate shall be sufficient to ensure genuine competition’, and in the second subparagraph of Article 27(2), according to which ‘[i]n any event, the number of candidates invited to tender shall be sufficient to ensure genuine competition’. As regards Directive 93/37, see also Case C-247/02 Sintesi [2004] ECR I‑0000, paragraph 35.

---

13 – P. Cassia, ‘Contrats publics et principe communautaire d’égalité de traitement’, RTDE, 2002, p. 413 (p. 420), according to which: ‘le principe communautaire d’égalité contribue à assurer le développement d’une concurrence effective dans l’attribution et l’exécution des contrats publics’ (‘The Community principle of equal treatment helps to ensure that effective competition is fostered in the award and implementation of public contracts’.)

---

14 – Moreover, because the payment of social security obligations and taxes is periodic in nature, approved service providers on official lists cannot benefit from a presumption that they meet the qualitative selection criteria listed in subparagraphs (e) and (f) of the first paragraph of Article 29, as is clear from the first and second subparagraphs of Article 35(3).

---

15 – If the request to pay the tax or social security contributions owed in instalments has yet to be approved by the authority at the material time when the company is required to prove that it has fulfilled those obligations, it will not logically be able to be considered to be in compliance with Article 29 of Directive 92/50.

---

16 – Decision No 7836 of the Vth Chamber of 1 December 2003. Attached at annex 3 of La Cascina’s written observations to the Court.

---

17 – If the national law confers suspensory effect on the lodging of an appeal, the company which has lodged that appeal will have to be deemed to have fulfilled its obligations, within the meaning of subparagraphs (e) and (f) of the first paragraph of Article 29 of Directive 92/50 until a judgment with the force of res judicata has been delivered in regard to its claim. However, if the obligation to make payment is not suspended under the national law, the applicant will still be required to meet its obligations to make payment to comply with subparagraphs (e) and (f) of the first paragraph of Article 29, subject to the possibility of a subsequent refund. There are, of course, other possibilities – the obligation to make payment may, for example, be suspended, provided the company provides a guarantee.

---

18 – Case C-60/92 Otto [1993] ECR I-5683, paragraph 14.

---

19 – Case 31/87 Beentjes [1988] ECR 4635, paragraph 15, according to which ‘the examination of the suitability of contractors to carry out the contracts to be awarded and the awarding of the contract are two different operations in the procedure for the award of a public works contract’. See also the Opinion of Advocate General Darmon in that same case, at point 36, in which he states that ‘[t]he directive thus draws a clear distinction between the criteria for checking the suitability of a contractor, which concern the qualities of the contractor as such, and those for awarding the contract, which relate to the qualities of the service which he offers, of the work which he proposes to carry out’. See also GAT cited in footnote 10 above, paragraph 59.

---

20 – System common to all the directives on public contracts and retained in Directive 2004/18. Aricle 45 of that directive lists again the qualitative criteria to which economic operators tendering for a contract may be subject.

---

21 – However, it is open to the contracting authority to establish that a company fails to meet the qualitative selection criteria until the point at which the contract is awarded.

---

22 – Beentjes, cited in footnote 19 above, paragraph 16, and GAT, cited in footnote 10 above, paragraph 60.

---

23 – See, by analogy, Makedoniko Metro and Mikhaniki, cited above, in which Directive 93/37 is interpreted as not precluding the prohibition, under the national legislation, of changes to the composition of a joint venture participating in a tender for a public contract after the tenders have been submitted.