Article 17
UPRO). (b) Meeting of the undertakings (Articles 5 et seq. UPR) (25) The meeting, called by the office, is chaired by an official from the office. The chairman checks whether all the undertakings present have signed the list stating that they agree to submit to the rules of the organization. Any undertaking which has not filled it in is excluded from the meeting (Article 5 UPR). The chairman draws up a record of the meeting which shows the decisions taken and the agreements concluded during it. In general, the undertakings attending the meeting decide by a simple majority. (26) (b) (1) Decision on whether to designate an entitled undertaking (Article 6.1 UPR) The chairman asks the meeting to decide whether to designate an entitled undertaking, i.e. the contractor which will alone be entitled to negotiate the contract with the client after the prices have been tendered. The decision is taken by simple majority including, in the case of the UPRR rules, at least 10 votes if there are more than 10 undertakings at the meeting, and unanimously if there are not more than 10 undertakings. In practice, an entitled undertaking appears to be designated in virtually all contracts where the tenders are considered to be comparable. (27) (b) (2) Comparing the cost elements of contracts (Article 6.3 UPRR, Article 6.2 UPRO) Once the decision has been taken to designate an entitled undertaking, discussion begins between the participants in order to establish on the basis of which technical and economic data prices should be compared, since an entitled undertaking can be designated only on the basis of comparable price tenders. The data include the various elements of the contract to be taken into consideration, the specifications of the contract documents, etc. On the basis of the outcome of this discussion, each of the participants of the meeting must fill in the form indicating what is known as a 'blank figure', which is 'the proposed price tender of a contractor'. (28) (b) (3) Handing in of the proposed price tenders (Article 6.4 and Article 7 UPR) The contractors attending the meeting must hand in to the chairman the form indicating their blank figure or proposed price tender. The chairman looks at the figures and ascertains the name of the contractor which submitted the lowest proposed tender figure. The meeting can then decide by a majority as described in recital (b) (1) above: - either to communicate all the proposed tender figures to all the participants, - or to communicate the figures (or only their order of succession and, possibly, the names of the corresponding undertakings) only to the undertaking submitting the lowest proposed tender figure, - or to let the chairman alone have knowledge of the figures (Article 7 UPR). Any participant who wishes, in respect of the same contract, to submit a price tender comprising an alternative proposal for certain products or construction processes is required to communicate the proposed price on the same form. He is required to make known his intention immediately after the handing in of the initial proposed tender figures, failing which he will be prohibited from submitting such alternative price tender. The meeting decides what action to take in response to this intention. It should be noted that the handing in of the proposed price tenders is not reserved for the only cases of comparable tenders. In all cases (including those in which tenders are not comparable) the proposed price tenders constitute one of the elements to be taken into account when calculating the calculation costs to be reimbursed. (29) (b) (4) Possibility of withdrawal (Article 10 UPR) After having been informed of the proposed tender figures of its competitors, each contractor attending the meeting has the right not to maintain its proposal. According to the UPRR, any such contractor can then either withdraw from the contract concerned, i.e. decide not to tender a price, or tender a higher price than the prices of its competitors. If it has presented the lowest proposed tender figure, it is prohibited from participating, in any manner whatsoever, in the carrying out of the building and construction project. Should it do so, the UPRO also provides for a fine amounting to a maximum of Hfl 25 000. (30) (b) (5) Preference (Article 11 UPR) Before being informed of the proposed tender figures of its competitors, each participant at the meeting has the right to ask for preference. If the meeting decides, unanimously, to give preference to the applicant, the contractor concerned will tender the lowest price, this being the price that would have been set for the contractor which submitted the lowest proposed tender figure. In setting the tender figures for the other participants, the order of succession of the initial proposed tender figures is maintained. For the contractor which submitted the lowest proposed tender figure, a figure is set which takes account of the preference granted to another participant. The meeting may make the granting of preference subject to conditions which, however, may not involve any financial compensation borne by the participant which obtains preference and payable to the other participants. The investigations carried out show that the number of cases in which the meeting has granted preference is small. (31) (b) (6) Price increases (Articles 12 to 14 UPRR; Articles 12, 15 and 16 UPRO) The final tender prices of the contractors concerned are the result of a concerted adjustment of the initial proposed tender figures consisting of the addition of certain price increases. These increases are intended to cover reimbursement of the costs of calculating the work estimates and a contribution to the operating costs of the trade organizations. It should be noted that the meeting may decide to raise the proposed tender figures by these increases, irrespective of its decision on the designation of an entitled undertaking. (32) (b) (6) Reimbursement of calculation costs (Article 12 UPR) The amount to be reimbursed for calculation costs - identical sum or percentage for each participant - is established at the meeting. The maximum figure for such amount is indicated as a maximum value or percentage in the price list annexed to the UPR rules and depends on the construction sector, contract value and the nature (standard or non-standard) of the contract documents. In the building sector, the maximum also depends on the nature (residential or non-residential) of the buildings and on the nature (maintenance, renovation, construction, etc.) of the work to be carried out. The value of the contract concerned is calculated on the basis of the average of the proposed tender figures which the contractors have submitted, weighted to take account of the number of participants and the spread between the proposed tender figures (average figure). The proposed tender figures are increased, where necessary, by an amount representing the value of materials to be supplied and work to be carried out by third parties. The value of such materials and work is established by the chairman of the meeting, following consultation of the contractors present at the meeting; the maximum value to be added to the average of the proposed tender figures is equal to the lowest proposed tender figure in the case of materials to be used by the contractor and equal to 25 % of the estimated real value in other cases, where the supplementary conditions concerning the simultaneousness of all the work are fulfilled. If the data required for establishing the average of the proposed tender figures are not available, the reimbursement of calculation costs is determined on the basis of the estimated value of the contract concerned or in a percentage of the lowest price tender. The amount thus established for reimbursing the calculation costs of each contractor participating in the meeting is multiplied by the number of such contractors. The maximum multiplication factor is 20 where the client has issued either a restricted invitation to tender or an open invitation to tender, without any limit as to the number of undertakings. The same ceiling applies in the case of invitations to tender to which NATO tender rules apply, provided that any foreign contractors invited to tender also participate in the meeting within the SPO organization. Where, within the framework of the carrying out of the work, other undertakings have already tendered their prices, the total amount of the reimbursement of calculation costs set for such tenderers or still to be set must also be added. (33) In the UPRR system, unless the meeting takes an express decision to the contrary, the increase in the proposed tender figures by way of reimbursement of calculation costs is always set at the maximum allowed. However, by the majority described in recital 26 above, the meeting may decide before the handing in of the proposed tender figures: - to forgo any increase, - to increase the proposed tender figures by a lower amount than the maximum amount permitted, - to leave the decision regarding such increase up to the contractor which submitted the lowest or next to lowest figure. In the UPRO system, in principle, the contractor which presented the lowest proposed tender figure decides on the increase. Any decision to forgo any increase by way of reimbursement of calculation costs must be taken by the meeting, before the handing in of the proposed tender figures. (34) (b) (6) (ii) Contribution to the operating costs of the trade organizations (Article 14 UPRR, Article 16 UPRO). The UPR rules also provide for an increase in the proposed tender figures by a maximum amount of 1,5 % of the lowest proposed tender figure to cover: - reimbursement of the costs of the office concerned (0,4 %), - the contribution to the SPO (0,1 %), - the contribution to a contractors organization (0,3 %) approved by the AVBB or the SPO, - the contribution for general purposes in the building and construction industry (0,7 %). (35) The office pays one quarter of the contribution for general purposes in the building and construction industry to a national foundation and three-quarters to a regional foundation (eight regional foundations, one for each office). These nine foundations were set up and are administered jointly by the AVBB and the SPO. The eight regional foundations are controlled by a standing committee in which the AVBB and the SPO cooperate (Commissie Aanbestedingswezen en Prijsvorming). The purposes of general interest include staff training, security measures, research and development, etc. The contribution to a contractors' organization may be channelled to various organizations such as the SPO and AVBB member organizations. (36) The increase in the proposed tender figures to cover reimbursement of the expenses of the office concerned and the contribution to the SPO is a general rule in the UPR system. The other contributions are decided on by the undertaking which submitted the lowest proposed tender figure. The increase by way of contribution to purposes of general interest in the building and construction industry is permitted only if the maximum amount of reimbursement for calculation expenses has been added to the proposed tender figures. (37) A look at the replies to the requests for information and at the documents examined during the inspections shows that the total amount of the abovementioned increases may, in extreme cases, be almost 20 % of the lowest tender price. The parties to which this Decision is addressed stated, in their joint reply to the Statement of Objections, that, in the period 1987 to 1988, the total amount of such increases averaged 3,1 % of the lowest tender price. (38) (b) (7) Concerted setting of the final price tenders (Article 15 UPRR, Article 17 UPRO) Once prices have been compared and the amounts of the increases referred to in recitals 31 to 37 above have been established, the final prices to be tendered to the client are set for each of the participants. The order of sequence of the final price tenders must match that of the initial proposed tender figures. The final price tenders are set by raising each proposed tender figure by the total of the amounts of the increases, though the proposed tender figures of all the participants, excepting the participants which have submitted the lowest and next to lowest proposed tender figures, must be increased only by an amount that will leave the order of sequence of the initial proposed tender figures unchanged. However, with the agreement of the participants which submitted the lowest and the next to lowest proposed tender figures, the final price tenders of the other participants may be reduced, provided that the order of sequence of the proposed tender figures is not altered, so that the price differences between the tenders submitted to the client do not appear excessive. If the meeting has granted preference to one of the participants, the final price tenders may be increased, by the chairman, after consulting the contractor granted preference and the contractor which submitted the lowest proposed tender figure, so that the price differences between the tenders submitted to the client ensure a preferential position for the contractor so designated by common agreement. It is also evident from the investigations that the setting of the final prices is not confined to the total price of the contract concerned. The prices relating to specific parts of the contract and unit prices are also set, where appropriate, taking account of the order of sequence of the proposed tender figures. In addition, the meeting decides, where appropriate, on other conditions of the transaction apart from the price and the elements which make it up. It is prohibited to submit to the client a price other than that established at the meeting under the procedure described above. (c) Protection of the entitled undertaking (Article 28 UPRR, Article 30 UPRO in conjunction with Article 5 of the Code of Honour) (39) Except in the case of non-simultaneous price tenders, the so-called 'entitled' undertaking is the contractor designated as such by the meeting or, where appropriate, by the office, after the prices have been tendered. In principle, such contractor is the one which submitted the lowest proposed tender figure, unless it withdraws or preference is granted (see recitals 29 and 30 above). The entitled undertaking is protected from any current or subsequent competition from other contractors participating in the UPR system in that it alone, once the official tender has been made, has the right to negotiate with the client regarding the contract concerned. (40) The other tenderers are prohibited from having any contact with the client regarding the work and/or the price tender (Article 28 UPRR and Article 30 UPRO in conjunction with Article 5 (2) of the Code of Honour). They can thus win the contract only by accepting it at the price which they tendered and in accordance with the contract documents. (41) In the case of non-simultaneous price tenders, the protection of the entitled undertaking also covers subsequent price tenders (Article 28 UPRR, Article 30 UPRO and the rules concerning non-simultaneous price tenders, in conjunction with Article 5 (3) of the Code of Honour). Contractors subsequently invited by a client to tender a price are prohibited from having any contact with the client regarding the work and/or tendering a price without the consent of the entitled undertaking or, should it refuse, of an ad hoc committee appointed by the office concerned. In principle, such protection is intended to prohibit any subsequent tendering of a price lower than the price tendered by the entitled undertaking. Nevertheless, if the subsequent envisaged price tender is substantially lower than the price tendered by the entitled undertaking, the ad hoc committee may take a positive decision. Such protection of the entitled undertaking lasts for two or five years (depending on the value of the contract concerned). (d) Paying over of the amounts of the price increases (Article 16 to 18 UPRR; Articles 13 and 18 to 20 UPRO) (42) In general, the amounts relating to reimbursement of calculation costs and to trade and organizational contributions are added uniformly to all price tenders. The cost is borne in full by the client in the total price for the work paid to the successful tenderer. These amounts are then paid over in part by the successful tenderer to the SPO office, generally by payment into a current account. The SPO office then in turn pays over the sums in the manner indicated below. (43) (d) (1) UPRR system (restricted procedure) The office pays over the amounts for each contract. When the contractor begins carrying out the work, it receives an invoice from the office relating to the total amount of the reimbursement of calculation costs and trade contributions agreed at the meeting, minus: - the amount for reimbursement of its own calculation expenses, - a 10 % discount for settlement within the deadlines laid down. (The discount is 15 % for payment of the contribution intended for expenses in the general interest in the building and construction industry within the deadlines laid down.) The amount received by the office in respect of reimbursement of calculation costs is then allocated as follows: - 3 % for a 'guarantee fund' account intended, inter alia, to reimburse participants in the SPO organization which have tendered for a contract subsequently awarded to an 'outsider'. The amount of this reimbursement is limited to 30 % of the reimbursement of calculation costs decided at the meeting, with a maximum of Hfl 5 000, - the rest is divided equally among the other tenderers. The amounts received by the office in respect of trade and organizational contributions are passed on to the organizations referred to above in recitals 34 and 35. (44) (d) (2) UPRO system (open procedure) In the UPRO system, the payment of reimbursement for calculation expenses is carried out per calendar year as follows: the contractors which have obtained contracts put out to open tender pay the amounts due to the 'calculation cash' account kept by the office concerned. They obtain points in accordance with the arrangements indicated in the tables in Annex III to the UPR rules, the number of points obtained being established on the basis of the value of the contract concerned. The office pays a maximum amount of Hfl 2 500 per year from the account to each contractor which participated in one or more meetings organized within the framework of the UPRO, provided that the contractor obtained one or more contracts falling within the scope of the UPR rules, whose value is at least equal to the total value of the element of the contract(s) which was/were the subject of the meeting(s) concerned. (45) The office also pays the total amount of the reimbursement of calculation costs to the contractor which presented the lowest proposed tender figure at a meeting concerning a contract covered by the UPRO, if an 'outsider' obtained the contract and provided that the proposed tender figure of the contractor concerned is lower than the price tendered by the outsider. (46) Lastly, the balance of the calculation cash account remaining after deduction of the abovementioned amounts is paid to the participants which, in accordance with the provisions of the UPRO rules, obtained contracts put out to open tender during the year. The amount due to each of them is established on the basis of the points awarded during the year. As regards the payment and passing on of the amounts in respect of trade and organizational contributions, there is no difference between the UPRR and UPRO rules. (e) Monitoring of compliance with the obligations deriving from the UPR rules (47) Infringement of the provisions of the UPR rules constitutes an infringement of the Code of Honour (Article 29 UPRR and Article 31 UPRO in conjunction with Article 9 of the Code of Honour), the text of which was adopted by the SPO General Assembly on 3 June 1980. The penalties provided for in the Code of Honour range from a warning to fines of up to Hfl 100 000, which amount can be raised to 15 % of the estimated value of the construction project in question. (48) Infringements of the Code of Honour are examined by the Stichting Berechtingsinstituut Erecode Bouwbedrijf, where a supervisory committee hands down a decision that may be appealed against before an appeals committee. The procedural rules are contained in the Berechtingsreglement Erecode Bouwbedrijf. Complaints may be lodged with the supervisory committee by the undertakings bound by the Code of Honour, the SPO and its member organizations. The offices referred to in recital 9 above are mandated, on a case-by-case basis, by such member organizations to lodge complaints in their name. (f) Behaviour of the SPO vis-à-vis non-participating contractors (49) The UPR rules provide for a system of exchange of information between undertakings governed by them allowing the participants to respond effectively to and resist any pressure from outside competitors. (50) (a) At the meeting, the participating contractors are provided with information supplied either by the office or by one or more of them. This is, firstly, information communicated pursuant to the Code of Honour. The Code of Honour, like the UPR rules, requires the SPO office to be notified of any intention to tender a price. However, the Code of Honour does not require participation at a meeting within the SPO, prior to the tendering procedure (except in the case of non-simultaneous price tenders). The Code of Honour binds not only SPO member undertakings, but also undertakings which, though not belonging to an SPO member organization, belong to an AVBB member association. Thus, the meeting is aware of any participation in a given tender procedure by a contractor which is bound only by the Code of Honour and which does not wish to participate in the meeting. However, in the case of non-simultaneous price tenders, such contractor is required to participate in the SPO meeting. The information is, secondly, information which the undertakings participating in the SPO have obtained themselves and subsequently communicate to the office, with their notification, or to participating competitors at the meeting. The information gathered during the investigations indicates that, in a number of specific cases, participating contractors or the SPO office have tried to get outsiders to participate on an ad hoc basis in the SPO. In addition, the records of a large number of meetings show that the contractors not wishing to participate in an open tendering procedure inform the office accordingly. (51) (b) On the basis of such exchanges of information, the UPR rules allow flexible and effective protection against the risks of competition from outsiders. Such protection may consist in dispensing with the designation of an entitled undertaking and/or a restriction in, or indeed the waiving of, the increases in the proposed tender figures. In addition, the exchanges of information enable the participants at the meeting to take the risks of outside competition into consideration in establishing their proposed tender figures. The investigation carried out in this case and in particular analysis of the replies to questions C.1(d) and (e) of the requests for information sent to the offices on 14 November 1988 show that such conduct resulted in success against tenders by outsiders in at least 80 % of cases (this percentage differs from sector to sector). (g) The rules concerning non-simultaneous price tenders (52) As indicated in recital 41 above, protection of the entitled undertaking also extends to subsequent price tenders, for a period of two or five years depending on the value of the contract. In such cases, the status of entitled undertaking does not necessarily result from a decision by the meeting or by the office (see recital 39 above). Such status may result from the fact that the first tenderer - bound by the UPR rules or bound only by the Code of Honour -, after having communicated its intention of tendering a price and at the time of tendering its price, did not have any knowledge of competing tenders. (53) In that case, the meeting organized by the relevant office serves only, in accordance with the procedure prescribed, to enable the first (entitled) contractor to agree to or refuse subsequent price tenders and, where appropriate, to set the price increases and the final prices themselves. If, because of differences between the characteristics of the contract, as defined and described by the client, it is not possible to compare or to make comparable the original price tender (by the entitled undertaking) and the subsequent price tenders, the tendering of such subsequent prices remains prohibited. In so far as the price tenders are comparable, or have been made comparable, each subsequent price tender requires the express assent of the entitled undertaking, which is free to agree to or refuse them. However, if the entitled undertaking does not participate in the meeting or expressly waives its rights and obligations under the UPR rules, this is deemed to constitute implicit assent to subsequent price tenders by other contractors. According to the parties to which this Decision is addressed, in their joint reply to the Statement of Objections, the application of these rules resulted in only 10,5 % of cases in the protection of the first tenderer against subsequent lower price tenders. (54) The obligation to participate in the meeting referred to in paragraph 53 applies to contractors bound by the UPR rules and to contractors bound only by the Code of Honour. However, the latter are not necessarily properly informed of the UPR rules of procedure, to which the Code of Honour makes only general reference. (h) The rules concerning price tenders for subcontracted work (55) Where the main contractors participating in an invitation to tender in turn put out to tender certain parts of the contract, these rules are applicable in so far as the subcontractors invited to tender are bound by the UPR rules and provided that they tender their prices before the main contractor tenders its price. Where the main contractor invites price tenders after it has itself tendered its own price, the UPR rules and the rules concerning non-simultaneous price tenders are fully applicable. (56) The subcontractors are required to communicate to the relevant office their intention to tender a price and the price tendered. The office organizes a meeting of such subcontractors only after it is informed of the result of the tender procedure in which the main contractors are participating. Only subcontractors which have tendered a price to the main contractor which obtained the contract are invited to participate in the meeting. During the meeting, the entitled subcontractor is designated on the basis of the price tenders communicated to the office, provided that they are comparable. (57) The price tender by a subcontractor bound by the UPR rules must include an amount equivalent to 3 % of the price tendered to cover the increases referred to in recitals 31 to 37 above. If such subcontractor wins the relevant part of the contract and if it is apparent that it is the only tenderer, it must pay the office an amount equivalent to 0,5 % of its price tender, to cover the costs of the office (0,4 %) and the contribution to the SPO (0,1 %). If, on the other hand, such subcontractor wins the contract in competition with other subcontractors invited by the main contractor concerned, it must, in addition, pay the office an amount equivalent to a maximum of 2,5 % of its price tender, to cover the reimbursement of the calculation costs of the other participating subcontractors. (58) These rules mean in practice that a subcontractor invited to submit a single tender must increase its tender systematically by 3 % so that, if the main contractor decides to invite other subcontractors to tender for the same contract, it can make the payments provided for. The rules also mean that the reimbursement of calculation costs applies only to subcontractors which have tendered their prices to the main contractor which successfully bid for the contract. (59) It is evident from the investigations carried out by the Commission that, in the road marking sector, which is a sector characterized by subcontracting, the SPO suspended the rules concerning price tendering for subcontracting for the period from 1 August 1988 to 1 August 1989 and decided to apply the UPRR rules instead. (i) Treatment of private contracts (single tendering procedure) (Article 16.1.d UPRR) (60) In principle, private contracts do not involve any concerted coordination within the SPO. Nevertheless, any contractor participating in the UPR system which is consulted by a client on a direct basis must notify the SPO office of its intention to respond to the consultation and to tender a price. If the client does not subsequently consult any other contractor, the contract is considered by the SPO to be a genuinely private contract and is not subject to any further rules. If, however, the client subsequently consults one or more other contractors, the rules on non-simultaneous price tenders apply. Where such rules can no longer be applied because the contract has already been awarded, the contractor carrying out the work must pay the office an amount equivalent to a maximum of 3 % of the value of the contract obtained, by way of reimbursement of calculation costs and trade and organizational contributions (Article 16.1.d UPRR). (61) As a result, a contractor invited to make a single tender must increase its tender systematically by 3 % so that, if the client decides to invite other firms to tender, it can subsequently make the payment provided for by the rules and regulations. E. THE SITUATION BEFORE 1 APRIL 1987 (62) Before 1 April 1987, the date on which the current UPR rules entered into force, the SPO member organizations applied their own price regulating rules. The implementation of such rules was ensured, directly or indirectly, by each member organization itself. The UPR rules adopted by the SPO on 9 October 1986 and effective as from 1 April 1987 are clearly the continuation of similar rules (known as price rules) established within 29 sectoral and national or regional building and construction associations, each in respect of the relevant sector and region. The structure and content of these various rules had been standardized and approved by the SPO since 1973. However, the rules prior to the UPR rules currently in force differed from the UPR rules in certain essential respects, the main ones of which are described below. (63) (a) The previous rules provided for a procedure known as 'counter notification'. The office communicated to the notifying contractor the names of the other undertakings which had notified their intention of tendering a price for the same contract. The UPR rules currently in force expressly prohibit such communication. Nevertheless, if so requested, the office will provide notification of the number of such other interested undertakings, which are invited to participate in the meeting. (64) (b) The previous rules provided for the possibility of 'improving' and 'correcting' prices. The 'improvement' of the price meant increasing the lowest proposed tender figure on the basis of a very detailed and complex calculation. The 'correction' of the price meant increasing all the proposed tender figures with the aim of maintaining 'a reasonable price level'. The amount obtained through such increase was to be used for general purposes in the building and construction industry. The UPR rules currently in force no longer provide for the possibility of improving prices. Price correction has been replaced as a source of financing by the system of trade and organizational contributions. (65) (c) The preference mechanism provided for in the previous rules resulted in an increase in the prices of all the participants. The proposed tender figure submitted by the contractor having preference formed the basis of a detailed and complex calculation used to establish an amended proposed tender figure. The amended proposed tender figure was deemed to be the lowest proposed tender figure, and the initial tender figures submitted by the other undertakings had to be increased accordingly. F. STATE MEASURES AND PRACTICES (66) The Royal Decree of 29 December 1986 adopted pursuant to Article 10 of the Law on Economic Competition, brought into force on 1 April 1987 for a period of five years and published in the Staatsblad (Dutch Official Journal) No 676 of 30 December 1986, was intended to restrict or prohibit certain provisions in the previous rules that were deemed to restrict competition. However, the Royal Decree leaves intact the key provisions of such previous rules, as incorporated in the UPR rules currently in force. (67) The Ministerial Decree of 2 June 1986 (Staatscourant No 118 of 24 June 1986) lays down the Uniform Aanbestedingsreglement (hereinafter referred to as the 'UAR') brought into force on 1 November 1986 and replacing a previous regulation dating from 21 December 1971. The purpose of the UAR is to lay down the procedures to be followed by the public contracting authorities in the awarding of contracts.