Taxi fiasco costs EUR 120,000

Date: 14/01/1999

By Rory Watson

A SHORT telephone call from a European Parliament official to a Brussels-based taxi company has landed the EU institution with a bill for €120,000.

The penalty was levied by the European Union's Court of First Instance shortly before Christmas after it found that the phone call and a subsequent meeting with the Parliament's administration had sown legitimate expectations in the company's mind that it would be awarded a lucrative contract to ferry MEPs around Brussels.

On the basis of the call, the company, Embassy Limousines & Services, promptly went out and organised 36 cars, recruited and trained drivers, hired mobile phones and ran up other costs to prepare for a five-year contract which it did not receive.

The call to the company came in early December 1995. The firm was told it was the preferred choice of the Parliament's purchasing committee - which advises the institution on which tender offers to accept - to supply taxi services from the start of the following month.

But within a week, the firm was forced to react to speculation about its ability to provide a suitably high standard of service for the EU's elected representatives.

Although the institution's then director-general responsible for administration recommended that the contract be formally signed, the purchasing committee decided in May 1996 to annul the original call for tender.

It specified that the demand for professional chauffeurs with at least five years' experience, to ensure MEPs the best possible service, had not been met by any of the firms which had submitted tenders.

Angered at the decision, Embassy Limousines promptly took the Parliament to court demanding compensation of more than €525,000 for the costs it had incurred. Although the Court found in its favour, the judges drastically reduced the figure.

In its judgement, the Court ruled that the contract had not been completed since it had never been signed and that the Parliament was perfectly entitled to cancel the original tender call.

But it also ruled that the Parliament had to shoulder some responsibility since it had encouraged the taxi firm to take a greater commercial risk than someone submitting a tender normally would and had failed to inform it of significant changes in the selection procedure.