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Step 1: Make sure you’re Oracle. Are you Oracle? Good. You win.
That’s how Oracle won the €10m Oracle contract the EC offered Oracle this time last year.
It did so, according to the
Contract Award Notice
, “without a call for competition”. In other words, the EC simply gave the business to Oracle.
It did this not merely because the contract was called “BEA/Oracle — Oracle licences”, although that did make Oracle a bit of a shoe-in.
It won because Oracle was apparently the only IT company that could possibly do the work.
You may think that European competition law prevents contracts being handed out to great ugly software behemoths without opening the ring up for anyone who wants to give them a fair fight.
Oracle itself is all for fairness, particularly towards its EC cash cow. Perhaps it would justify why the €10m deal was done in secret? No, said an Oracle spokeswoman today:
“Oracle does not comment on the internal procurement procedures of its customers.”
It must be difficult for them. Deals done in secret create the impression that they might be hiding something embarrassing. The EC hasn’t published a justification for the deal either. Neither has it answered our request for one.
The EC does normally publish the
for its ICT tenders. Good thing too, considering the amount of public money it spends on them. But those deals it strikes without going to tender are
, even though they are the very deals most in need of closer examination.
Such deals as the Oracle contract (a framework agreement, to be specific) are permitted in European law. But only in exceptional circumstances, and with very clear justification that, were it ever to be challenged in court, would be interpreted very strictly.
“You can’t just say you are relying on these grounds because you feel like it. You really have to show good reason why you are not opening this for competition,” said a legal source close to the Commission, who preferred not to be named.
No room for manoeuver
This strict justification was one of two important rules the European Court of Justice established over these deals, he said. The other was that if anyone did challenge the deal, the burden of proof would lie with the contracting authority.
The Oracle contract award gives the stock justification for its secrecy, simply citing the rules that provide the justification. It has not provided the actual justification.
So the contract is for the “provision of Oracle licences, maintenance and Oracle highly specialised informatics services”. It cites Article 126 of the
European Financial Regulations
, giving “technical reasons” or “reasons connected with the protection of exclusive rights”. It doesn’t even say which it is.
This lack of public justification is intriguing to say the least. We might imagine in its place a world where companies like Oracle had their markets so tied up that public authorities had no choice but to buy their technology. Open standards hoped to break the mould. But we have been kept guessing over what gave Oracle the power to strike this deal. Until detailed justification of such arrangements is published routinely, companies like Oracle may be the only ones capable of fulfilling the requirements of contracts like the Oracle contract next time they are up for renewal.
Lawyers like Mark Henley, director of technology law Wragge & Co, are meantime not convinced there is a need for such a contract.
“The Commission ought to be procuring licences for database or ERP software having certain performance or functional characteristics,” he said, “rather than simply asking for Oracle licences.
“Identifying Oracle forecloses competition for all other database or ERP companies,” he added.
It is not as though there is any shortage of other ERP and database firms. Though if we get carried away with ourselves, we might imagine a world in which Oracle had bought them all.