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    1. Introduction

    This report, prepared by the Secretariat of the Procurement Complaints Committee (PCC) of the European Investment Bank (EIB), provides an overview of the procurement complaints received and handled in the course of 2020, and of the work of the PCC and its Secretariat. It is the second annual report compiled and published on the PCC’s activity since the establishment of this Committee in late 2018.[1]

    In line with good practices of other international financial institutions (IFIs), project-related procurement complaints submitted to the EIB are handled by the PCC: a dedicated, independent and impartial committee, mandated to handle procurement complaints that challenge the Bank’s decision on project procurement procedures under an EIB-financed loan. This system ensures that the Bank handles project procurement complaints regarding EIB-financed projects effectively and independently. If the complainant is not satisfied with the Bank’s outcome or response, it is entitled to escalate its complaint to the European Ombudsman (EO) for alleged maladministration by the Bank.


    [1] The PCC Annual Report 2019 is available here.

    2. Brief overview of the EIB’s procurement complaints system

    PCC’s remit, work and composition

    The PCC is an independent Bank Committee with four voting and two non-voting members consisting of senior representatives of different directorates of the Bank. The PCC is chaired by the EIB’s Inspector General and assisted by a small Secretariat. The PCC’s Chairperson decides on the admissibility of procurement complaints, is in charge of directing and facilitating the work of the PCC and oversees the PCC Secretariat.

    Projects financed by the EIB must follow the Bank’s Guide to Procurement (September 2018), which includes the procurement complaints regime. Promoters are fully responsible for implementing projects financed by the Bank, and in particular all aspects of the procurement process, from drafting tender documents and awarding contracts through to implementing contracts. The involvement of the Bank is confined solely to verifying whether or not the conditions attached to its financing are met.

    For projects financed by the Bank within the European Union, it is the relevant national remedy mechanisms which provide appropriate safeguards, as all EU Member States are bound by EU procurement law and the Remedies Directives, which set minimum national review standards (for more information see this link).

    For projects financed by the Bank in non-EU countries,[2] the Bank uses a “non-objection” mechanism for approving procurement methods and outcomes. An important feature of the procurement complaints system is that the Bank requires project promoters to observe a standstill period, which is an intervening period of time between the decision to issue a non-objection to the procurement award and the signature of the contract.

    Complainants have the possibility of questioning a decision taken by the Bank (usually, but not limited to, a non-objection given by the Bank) for project procurement procedures financed under an EIB loan. The PCC may decide to either confirm or withdraw the non-objection already issued by the Bank. In the latter case, the Committee may also recommend excluding the project component from the financing of the Bank and/or undertaking any other contractual remedies.

    Complainants lodging procurement complaints may be “any party having or having had an interest in obtaining a particular contract and who has been or risks being harmed by an alleged infringement of the EIB’s Guide to Procurement”.


    [2] In countries outside the European Union, the Bank requires that the main mechanisms of the EU Directives on procurement be followed, with the necessary procedural adaptations (Section 1.1 of the Guide to Procurement for projects financed by the EIB (September 2018)).

    3. PCC complaints received during 2020

    In the course of 2020, the PCC received 31 procurement complaints, nearly a threefold increase compared to the 12 procurement complaints received in 2019. Of these, 20 were procurement complaints submitted prior to the Bank’s decision/non-objection.[3] Accordingly, these complaints were redirected by the PCC Secretariat to the Bank’s services in charge of the respective projects for further follow-up as per the Guide to Procurement; the majority of these complaints have already been followed up by the Bank’s services.

    The remaining 11 procurement complaints were submitted following the Bank’s non-objection to contract award (of which one complaint was submitted after contract signature).[4] In one case, the promoter cancelled the procurement process subject to the complaint and the PCC therefore did not review that complaint.

    The remaining 10 procurement complaints were reviewed and decided upon by the PCC. The PCC voted to uphold the Bank’s non-objection for eight out of these 10 complaints. For the complaint submitted after contract signature, the PCC decided that the complaint was ungrounded. In one case, the PCC voted to withdraw the Bank’s non-objection.

    More details on all 31 procurement complaints are provided in the table below, and in the following section.


    [3] Compared to eight procurement complaints submitted prior to the Bank’s decision/non-objection in the course of 2019 (see PCC Annual Report 2019).
    [4] Compared to four procurement complaints submitted following the Bank’s non-objection to contract award in the course of 2019, Id.

     

    i.  PCC complaints by complainant concerns

    Complaint reference Country of project concerned Nature of allegation
    Procurement complaints lodged prior to the Bank’s decision
    PCC/2020/01 Tunisia Allegations with respect to the nature of selection criteria/technical and professional capacity; lack of level playing field
    PCC/2020/02 Bosnia and Herzegovina Allegations with respect to compliance with the selection criteria; lack of level playing field
    PCC/2020/03 Bosnia and Herzegovina Allegations with respect to compliance with the selection criteria; lack of level playing field
    PCC/2020/06 Paraguay Allegations with respect to the technical relevance of requirements regarding manufacturing experience; procurement review mechanisms were not included in the tender documents
    PCC/2020/08 Serbia Allegations with respect to intellectual property rights infringement and ensuing erroneous choice of procurement procedure
    PCC/2020/09 Ukraine Allegations with respect to the non-extension of the deadline for the submission of tenders
    PCC/2020/12 Argentina Allegations with respect to the winning tender’s technical and economic-financial capacity for meeting the qualifications required
    PCC/2020/13 Bosnia and Herzegovina Allegations with respect to deficient technical specifications/qualification requirements
    PCC/2020/14 Bosnia and Herzegovina Allegations with respect to the site visit by prospective tenderers (as part of the procurement procedure)
    PCC/2020/16 Bosnia and Herzegovina Allegations with respect to the correct application of the award criterion
    PCC/2020/17 Ukraine Allegations with respect to the nature of selection criteria/technical and professional capacity
    PCC/2020/19 Belarus Allegations with respect to the nature of selection criteria/technical and professional capacity
    PCC/2020/20 Belarus Allegations with respect to the nature of selection criteria/technical and professional capacity
    PCC/2020/21 Belarus Allegations with respect to the nature of selection criteria/technical and professional capacity
    PCC/2020/22 Ukraine Allegations with respect to discriminatory technical requirements
    PCC/2020/24 Angola Allegations with respect to scoring the technical offer and timing of the evaluation
    PCC/2020/25 India Allegations with respect to missing independent verification of the winning tender’s credentials
    PCC/2020/26 Ukraine Allegations with respect to (improper) access to the tender documentation and information provided to potential tenderers
    PCC/2020/27 Serbia Allegations with respect to discriminatory qualification requirements
    PCC/2020/31 Ukraine Allegations with respect to breaches of the principles of non-discrimination and equal treatment of tenderers

    Procurement complaints lodged after the Bank’s non-objection to contract award

    PCC/2020/04 Turkey Allegations with respect to the compliance of the winning tenderer’s bid security with the procurement documents
    PCC/2020/05 Tunisia Allegations with respect to default termination
    PCC/2020/07 Ethiopia Allegations with respect to the consistency of the evaluation procedure conclusions with the technical requirements and evaluation criterion
    PCC/2020/10 Moldova Allegations with respect to unfair competition and the tender validity period
    PCC/2020/11 Benin Allegations with respect to compliance with deadlines and formal requirements stipulated in the procurement documents. Allegations with respect to conflict of interest and abnormally low tenders
    PCC/2020/15 Ukraine Allegations with respect to the application of the award criteria. Allegations with respect to compliance with minimum technical requirements – non-compliance with the standstill period and with formal submission requirements – price of the winning tender
    PCC/2020/18 Turkey Allegations with respect to the currency of the winning tender
    PCC/2020/23 Serbia Allegations with respect to technical non-compliance and technical equivalence (alternative acceptable technical solutions)
    PCC/2020/28 Georgia

    Allegations with respect to compliance of the winning tender with the procurement documents and with the maximum budget. Allegations with respect to the promoter’s evaluation

    PCC/2020/29 Ethiopia Allegations with respect to the disruptive effect of competitor’s repeated challenges
    PCC/2020/30 Ukraine Allegations with respect to the responsiveness of the winning tender to mandatory technical requirements and to abnormally low price

    ii.   PCC complaints by project business sector

    The following chart shows a breakdown of the 31 procurement complaints by business sector

    iii.  PCC complaints by region of operation

    The following chart shows a breakdown of the 31 procurement complaints by region of operation.

    4. Observations

    Virtually two-thirds of procurement complaints (that is 20 out of 31 or 64.6%) were submitted prior to the Bank’s decision (non-objection) as per the table in section 3.i of this report, which is consistent with the 2019 data (where eight out of 12 or 66.7% were submitted prior to the Bank’s decision).

    In terms of business sectors, most complaints concerned procurement under projects related to transportation and storage (38.7% in 2020 compared to 33.3% in 2019). Complaints for projects related to water supply; sewerage, waste management and remediation activities increased from 8.3% in 2019 to 35.5% in 2020. Complaints concerning procurement under electricity, gas, steam and air conditioning supply projects decreased from 41.67% in 2019 to 16.1% in 2020. The proportion of procurement complaints by business sector does not raise any particular concerns for a given sector, even when considering the changes between 2019 and 2020.

    In terms of the regions of operation for projects subject to procurement complaints, the majority were in the Enlargement countries and the EU Eastern Neighbourhood (35.5% for each of these regions), followed by Sub-Saharan Africa, the Caribbean and the Pacific, which amounted to 12.9%. Overall, this is consistent with the 2019 data, where 25% of the complaints were for projects in the Enlargement countries, 25% for projects in the EU Eastern Neighbourhood and 16.7% for projects in Sub-Saharan Africa.

    In terms of subject matter, while complaints did not typically revolve around a specific issue, the allegations were of unequal treatment, discriminatory requirements, flawed technical evaluation or selection in relation to technical requirements and professional/technical capacity levels, conflicts of interest and allegations in relation to abnormally low tenders. In one case, the complainant alleged abusive termination of its procurement contract by the promoter.

    The complainants that submitted the 11 complaints reviewed by the PCC were mainly based in the project countries (with two exceptions), while the winning bidders of these 10 procurement procedures were from other countries inside and outside the European Union. There was a diverse range of complainants in terms of nationality/country of origin.

    The response time for procurement complaints lodged after the Bank’s non-objection to contract award and prior to the signature of contracts was in line with the Bank’s policy (Annex 8 to the Guide to Procurement for projects financed by the EIB). Complainants received the PCC’s reply and decision in less than 60 days with one exception only (a complaint referring to events dating back to 2014, which complicated this complaint’s review during the second quarter of 2020).

    No complaints have been escalated to the European Ombudsman. In the course of 2020, one complainant sought clarifications regarding the PCC’s decision, which the PCC Chairperson provided in writing.

    Most of the procurement complaints were submitted directly to the dedicated PCC mailbox (procurementcomplaints@eib.org), with fewer complaints received through different channels. This indicates that interested parties know how to approach the PCC and that the Committee’s existence is more widely known after two full years of operation. The new PCC website, which was created and went live during the first quarter of 2020, gives an overview and information on the PCC but also serves as an entry point for prospective complainants, which has increased the visibility of the PCC.

    The PCC’s new website also includes a privacy notice, which addresses data protection issues in the context of its activities and those of the PCC Secretariat. These were assessed in close cooperation with the Bank’s Data Protection Officer; the work done has aligned the PCC’s overall operations with EU law and best practice.

    The PCC Secretariat also receives a number of emails that are not necessarily related to project procurement at the EIB but that may present issues falling within the mandates of the Investigations Division (IG/IN) or the Complaints Mechanism (IG/CM). The PCC Secretariat’s position within the Inspectorate General facilitates communication and cooperation as well as the transfer of complaints to IG/IN concerning fraud and IG/CM for complaints regarding maladministration.

    Finally, the PCC Secretariat has centralised all processing and internal communication requirements and practices related to the Committee process from its Secretariat’s standpoint, to ensure that all procurement complaints are administered in an efficient manner throughout the process life cycle and that complainants receive timely answers from the PCC. The Secretariat also monitors whether the EIB services concerned take the necessary follow-up action.

    5. PCC’s outreach and activity outlook for 2021

    For 2021, a continued systematic engagement with internal and external stakeholders to increase the awareness of the procurement complaints system at the EIB is planned. The PCC Secretariat will be updating its internal processes continually by drawing on lessons learnt from procurement complaints handling and from its contact with stakeholders within the Bank to increase the efficiency of complaints handling.

    The PCC Secretariat will continue to work with the Bank’s Data Protection Officer to ensure that the Committee’s and the Secretariat’s work remain compliant with the evolving legal framework and practice regarding personal data processing.