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In its previous observation, the Committee noted the information supplied by the Government with regard to the scope of the Federal Act on the Award of Contracts (B Verg G) BGBI No. 462/1993. It also noted in its earlier observation, the comments of the Federal Chamber of Labour, according to which: (i) the criteria established for the conduct required of employers in connection with the award of public contracts are too narrow (only illegal employment of foreigners, non-payment of taxes and other levies and failure to meet levels of pay set out in collective agreements are penalized, but not the violation of other labour law provisions, such as the right to vacation); and (ii) mandatory penalties are laid down only for repeated violations of regulations governing the employment of foreigners, while for the other offences, the contract-awarding authorities are granted a broad discretion on the award of contracts.

The Government indicates in its communication that section 44, paragraph 1, item (4) of the Act gives no restrictive list of acts constituting "serious" misconduct, and that any breach of law may be grounds for elimination from tendering procedure. The Government further states, regarding the practical application, that the Federal Ministry of Economic Affairs has immediately eliminated from its adjudications companies which have prepared and submitted their tenders on a basis which does not meet the working conditions and social law standards in force, and that this has been applied to tenders from firms in the States undergoing reform and tenders involving substantial subcontracting of services to companies from those States (e.g. the conducting of chemical analyses).

The Committee notes this information. With reference to Article 5(1) of the Convention which calls for the application of adequate sanctions for failure to observe the labour clauses in public contracts, the Committee requests the Government to continue to supply information on the practical application of the provisions of the Act.