Procurement Complaints Activity of the EIB – Annual Report 2020

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.

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.

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.