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Improper suggestions.The European Court and Commission found traditional tendering practices in The Netherlands to be illegal, but is it really necessary to harmonise all the rules in European countries? Lewd thoughts. There's a topic. The great English jurist Sir William Blackstone said in his commentaries on the laws of England, 1765: "the last offence I shall mention is that of open and notorious lewdness; either by frequenting houses of ill fame or some grossly scandalous and public indecency."
It was lewdness beyond lewdness; I was thinking about naughty ladies, naughty marijuana, naughty "arrangements" with other builders. But I wasn't fazed. Folks in The Netherlands seemed to approve. It works for their industry. Or rather, it worked until the European Commission stuck its oar in. It is talked about in Joseph Dalby's book EU Law for the Construction Industry, which I mentioned last week. In 1952, The Netherlands' building market organised itself into 28 associations, embracing 4000 building outfits. An umbrella association called the SPO covered the whole affair. Ordinary. Innocent. Eventually, the SPO brought in "uniform price rules". These embraced a procedure for competition between tendering contractors. It enabled any member association in the regions to choose a preferred bidder for a particular building project. All bidders would then compile a tender in the usual way. Then, they published their bids to each other. The bids would then be weighed up to see how to make the preferred bidder the most competitive. At the same time, the price was increased by a sum that enabled the preferred bidder to cover the other tenderers' bid costs. On top of that, a chunk of cash was added for the trade association. Naughty? No. The Netherlands government gave the thumbs up to these UPR tendering rules. But then someone invented European competition rules. These prohibit conduct that restricts competition. But if a country such as The Netherlands wants to play the game its way, surely it has sovereign power to do so? No. If you want to be a member of this Euro Club, you abide by Euro Club rules, don't you? The European Commission investigated the tendering arrangement and gave it the thumbs down. It fined the 28 trade associations 22.5 million ecu (£14.85m). No doubt with some umbrage in their Dutch breasts, they took the European Commission to the European Court. The court dismissed them. It decided that the rules infringed article 85(1) of the EC Treaty. Why? Because the treaty is all about the "common market". These Dutch rules restricted, or even prohibited, trade between member states. It was comfy for folk in The Netherlands but not for the competition over the border. It was, said the court, an artificial advantage over those outside the trade association. As for bumping up the price to cover the costs of poor old fellow builders and their trade association, this constituted price fixing and restricted competition. The mechanism affording a preference to one bidder constituted a sharing of the market to the detriment of the freedom enjoyed by consumers to choose their supplier. The court said it was not up to contractors to say who should have which contract, it was for the awarding party to reach a judgement. The court wouldn't have information passing between competitors. It expects genuine competition in the procurement process. Moreover, it expects no concerted practice liable to affect trade between states. The decision shows this European Union business at its best and at its worst. Yes, it must be right in a common market not to block someone from that market from bidding merely because of a domestic arrangement in one country. But most of the Dutch building industry is like ours. It is local folk working locally. We don't drag a concrete mixer across the Continent. The building game is not that mobile. So, the European Commission threw the baby out with the bathwater. And that is the problem with this EU malarkey. Faceless folk fathom rules on a macro level and overwhelm a sovereign power to decide for itself. Frightening. I don't really know whether ladies in shop windows or ganja across the counter or "arrangements" in construction is what you want, but The Netherlands does. Let it have its own lewd thoughts. EU Law for the Construction Industry by Joseph Dalby. £39.50, Blackwell Science. ISBN 0-632-04067-X CASE REPORTS Readers are invited to forward recent judgments for reporting in this column (with full acknowledgement) to: Tony Bingham, 3 Paper Buildings, Temple, London EC4Y 7EU. DX:007I LDE |
I
had some lewd thoughts when I was a lad. I was in the estimating department of a main
contractor. I got to thinking out loud. I asked the boss why we didn't get together with
other main contractors and come to an arrangement. He looked startled. "What
arrangement?" he asked. Well, how about the tendering main contractors all bumping up
the bid a fraction; then the winner could divvy up the wasted costs of tendering to the
losing contractors? He hit the roof. These were lewd, naughty, unprincipled thoughts. It
was almost as naughty as suggesting that ladies of ill fame might sit in the window of a
high-street shop; or that the local café in the high street might sell pot alongside its
cheese sandwiches ... like the Dutch.