1. Introduction
This report, prepared by the Secretariat of the Procurement Complaints Committee (“PCC”, or “the Committee”) of the European Investment Bank (EIB or the Bank), provides an overview of the procurement complaints received and handled in the course of 2023, and of the work of the Committee and its Secretariat. It is the fifth annual report compiled and published on the Committee’s activity since its establishment in late 2018 [1].
In line with good practices of other international financial institutions, project-related procurement complaints submitted to the EIB are handled by the Committee, a specialised, independent and impartial committee mandated to handle procurement complaints that challenge the Bank’s decisions on project procurement procedures under an EIB-financed project outside the European Union. This system ensures that the EIB handles project procurement complaints regarding EIB-financed projects effectively and independently. If a complainant is not satisfied with the Bank’s outcome or response, they are entitled to escalate their complaint to the European Ombudsman alleging maladministration by the Bank.
[1] The Procurement Complaints Committee Annual Report 2022 is available here.
2. Brief overview of the EIB’s procurement complaints system
PCC’s remit, work and composition
The Procurement Complaints Committee is an independent Bank committee with four voting and two non-voting members, consisting of senior representatives of different directorates of the Bank.
It is chaired by the EIB’s Inspector General and assisted by a Secretariat. The chairperson decides upon the admissibility of procurement complaints, is in charge of directing and facilitating the work of the Committee, and oversees the Secretariat.
Promoters of projects financed by the EIB are required to follow the Bank’s Guide to Procurement (September 2018). This guide also describes the EIB’s procurement complaints processes. 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 to implementing contracts. The Bank’s involvement 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, the relevant national remedy mechanisms provide appropriate safeguards. This is done through the transposition by EU Member States of EU procurement law, in particular the Remedies Directives, which set minimum national review standards.
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 its promoters to observe a standstill period, which is the period between the decision to issue a non-objection to the award of a procurement contract and the signature of the contract.
Complainants may call into question a decision taken by the Bank (usually, but not limited to, a non-objection by the Bank) for project procurement procedures financed under an EIB project. The Committee may decide to either confirm or withdraw the non-objection already issued by the Bank. If it decides to withdraw the non-objection, it may also recommend excluding the project component from the Bank’s financing, 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 in 2023
Taxonomy of admissible procurement complaints and corresponding processes
As described in the Guide to Procurement, procurement complaints that challenge the Bank’s decision on project procurement procedures under an EIB-financed project are classified and handled as follows:
Procurement complaints lodged prior to the Bank’s decision (objection or non-objection)
Complaints lodged prior to the Bank’s decision are redirected by the PCC’s Secretariat to the Bank’s services in charge of the respective projects for further follow-up. The substance of such complaints is considered when the Bank decides on the non-objection to the contract award.
Procurement complaints lodged after the Bank’s non-objection to contract award and prior to the signature of contracts
Complaints submitted after the Bank has issued its non-objection to the contract award and during the standstill period are reviewed by the Committee, which examines the case to enable the Bank to take a final position on whether to confirm or withdraw the non-objection issued by the Bank. The submission of this type of complaint triggers the suspension of the Bank’s non-objection until the Committee has completed its review. Considering that the Bank is not a party to the procurement contract, it can only take decisions concerning the financing it provides to a given project or project component.
Procurement complaints lodged following the Bank’s non-objection to contract award and after the signature of contracts
For complaints received after the standstill period has expired and the respective procurement contracts have been signed, the Committee can no longer redress the procurement procedure. However, it examines such admissible complaints to decide whether the Bank should confirm or withdraw its financing of the contract.
According to the Guide to Procurement, the Bank’s decision is taken in less than 30 calendar days from the submission of the complaint. In complex cases, this deadline may be extended up to 60 calendar days.
In 2023, the Committee received 15 procurement complaints, compared to 18 in 2022 and 23 in 2021. Of these 15 complaints, 12 were procurement complaints submitted prior to the Bank’s decision/non-objection (compared to 13 such complaints in 2022). The PCC Secretariat redirected these complaints to the Bank’s services in charge of the relevant projects for further follow-up as per the Guide to Procurement.
The remaining three procurement complaints were submitted to the Committee following the Bank’s non-objection to a contract award. One of these complaints was superseded by events that occurred during the review process and was finally not reviewed by the PCC (despite having received the Bank’s non-objection, the promoter did not award the contract and re-ran part of the procedure, thus rendering the earlier non-objection invalid). The Committee therefore reviewed and decided upon two procurement complaints and voted to uphold the Bank’s non-objection in both cases.
More details on all 15 procurement complaints are provided in the table below, and in the following section.
i. PCC complaints by nature of allegation (Table 1)
|
Procurement complaints lodged prior to the Bank’s decision |
||
|
Complaint reference |
Country of project concerned |
Nature of allegation |
|
PCC/2023/01(PR) |
Ukraine |
Discriminatory technical specifications |
|
PCC/2023/02(PR) |
Niger |
Tender rejection in spite of timely submission by the stated closing date |
|
PCC/2023/03(PR) |
Ecuador |
Irregular cancellation of the procedure by the promoter |
|
PCC/2023/05(PR) |
Tunisia |
Irregular tender rejection |
|
PCC/2023/06(PR) |
Tunisia |
Consideration of price factor in the award criterion |
|
PCC/2023/07(PR) |
India |
Flawed tender disqualification as substantially non-responsive and non-compliance of tender submission |
|
PCC/2023/08(PR) |
Ukraine |
Allegations related to national preference |
|
PCC/2023/09(PR) |
North Macedonia |
Discriminatory technical specifications |
|
PCC/2023/11(PR) |
Egypt |
Discriminatory technical specifications – substandard technological requirements |
|
PCC/2023/12(PR) |
Montenegro |
Promoter's decision not to accept the offer due to exceeding the maximum budget available – failure to reply |
|
PCC/2023/13(PR) |
Ukraine |
Promoter's failure to reply |
|
PCC/2023/14(PR) |
Ukraine |
Allegations related to the timing of changes in the technical specifications |
|
Procurement complaints lodged after the Bank’s non-objection to contract award |
|
Complaint reference |
Country of project concerned |
Nature of allegation |
|
PCC/2023/04 |
Paraguay |
Queries submitted by the evaluation committee at the bid evaluation stage provided an economic advantage by prompting bidders to modify their prices |
|
PCC/2023/10 |
Ukraine |
Discrepancy between the prices read out at the tenders’ public (online) opening and those cited at the tenders opening record; abnormally low tender |
|
PCC/2023/15 |
Ukraine |
Allegations related to the winning tender’s compliance with the requirements of the procurement documents; lack of reply by the promoter |
ii. PCC complaints by sector
The following table shows a breakdown of the 15 procurement complaints received, by project sector.
iii. PCC complaints by region of operation
The following table shows a breakdown of the 15 procurement complaints received, by region of operation [3].
[3] ACP and OCT: African, Caribbean and Pacific countries, and Overseas Countries and Territories.
4. Observations
a. Observations for 2023
As per Table 1, 12 out of 15 procurement complaints were submitted prior to the Bank’s decision (non-objection). This proportion is consistent with 2022 data (13 out of 18 procurement complaints). The number of complaints that were received after the Bank’s decision (three complaints) is similar to 2022 (five complaints).
In terms of sectors, a majority of complaints continues to concern projects related to transport and storage, which account for 67% (44% of complaints in 2022, 26% in 2021 and 38.7% in 2020), and water supply, sewerage, waste management and remediation activities, which account for 27% (consistent with 28% in 2022 and 31% in 2021). The breakdown of procurement complaints by sector does not raise concerns for any given sector.
In terms of regions of operation, most procurement complaints concerned projects in the EU Eastern Neighbourhood (six complaints or 40% of the complaints). This is consistent with 2021 data when most complaints were also related to projects in the EU Eastern Neighbourhood (seven complaints or 30%) while the number of complaints for projects in this region dropped to two procurement complaints in 2022. This change can be partly explained by fewer complaints from Ukraine in 2022 due to the outbreak of the war there. There were three complaints from Asia and Latin America or 20% of the complaints (four complaints or 22% in 2022), and three from the EU Southern Neighbourhood (two complaints or 11% in 2022) while procurement complaints from Enlargement Countries dropped from seven complaints in 2022 to two in 2023.
In terms of subject matter, no specific issue stood out. However, the most common allegations were related to discriminatory and/or flawed technical requirements.
Of the three complaints submitted to the Committee following the Bank’s non-objection to contract award, none of the complainants was based in the countries where the projects were located.
The PCC Secretariat also received two complaints regarding projects in an EU Member State (not registered by the Secretariat). In line with the EIB’s Guide to Procurement, projects in the European Union are implemented by the relevant contracting authorities and monitored by the Member States’ competent controlling bodies as they are subject to EU law. Therefore, in those cases, the Secretariat referred the complainant to the competent national remedy mechanism(s) and/or judicial bodies.
The response time for procurement complaints lodged after the Bank’s non-objection to contract award and prior to the signature of contracts was mostly in line with the Bank’s policy (Annex 8 to the Guide to Procurement for projects financed by the EIB providing for 30 days, with the possibility of that period being extended to 60 days). In one case, the reply was submitted after 57 days and, in the second case, after 75 days due to its complexity.
The PCC Secretariat always informs complainants that if they are not satisfied with the Bank’s response, they are entitled to escalate their complaint to the European Ombudsman alleging maladministration by the Bank. No complaints were escalated to the European Ombudsman in 2023.
Most complaints were submitted via the dedicated mailbox (procurementcomplaints@eib.org). The Committee appears to have become more widely known as the main entry point for potential procurement complainants via its website. The Committee’s privacy statement providing information on the handling of personal data in the context of its activities is also available on this website. This statement was developed in close cooperation with the Bank’s Data Protection Officer.
As in previous years, the PCC Secretariat received emails that were not necessarily related to project procurement at the EIB but may present issues falling within the mandates of the Inspectorate General’s Investigations Division (IG/IN) or the Complaints Mechanism (IG/CM). The Secretariat’s position within the Inspectorate General facilitates communication, cooperation, and the transfer of complaints to the Investigations Division concerning allegations of prohibited conduct and to the Complaints Mechanism for non-procurement-related complaints.
Building on lessons learned, the PCC Secretariat also continuously revisits the Committee’s internal process 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 in the case of procurement complaints lodged prior to the Bank’s decision.
b. Observations on the five first years of the Committee’s operation (2019–2023 period)
The Committee was established in late 2018; this 2023 annual report therefore provides an opportunity to present a review of its five years of operation. Since its establishment, the PCC has received and registered a total of 99 complaints; it has reviewed 25 of these 99 complaints and its responses were sent to the complainants within 58 days, on average (the time limit set by the Guide to Procurement is 30 days, with the possibility of that being extended to 60 days). While the time limit applies to each individual PCC response, the 2019–2023 average is in line with the time limit set by the Bank’s policy.
5. Outlook for 2024
For 2024, the PCC Secretariat will continue to revisit specific aspects of its procedures with a view to further improving the Committee’s way of working. Lessons learned during 2023 could help improve further the overall process in terms of time management, while maintaining a high-quality review standard.
The 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 applicable data protection rules, taking into account any developments in the legal framework.
March 2024