Malta may soon end up before the European Court of Justice if it continues to disagree with the European Commission on the need to give “effective remedies” to disgruntled bidders for public contracts.

In a second warning letter sent in just a few months, Brussels insisted Malta should make its public procurement legislation more transparent in conformity with EU rules.

After failing to reply to a first warning letter issued a few months ago, the government said on Thursday it disagreed with the Commission.

The Commission argues that Malta’s public procurement legislation does not conform to the EU’s Remedies Directive (2007/66/EC). This sets out standards to ensure rapid and effective means of redress in cases where bidders consider that contracts have been awarded unfairly.

The Commission says open and transparent evaluation procedures on public procurement promote competition, offer better protection against corruption and enable taxpayers to benefit from more effective and better value goods and services.

Its “reasoned opinion” sent to Malta is the second stage of a three-pronged EU legal action process.

“If this directive is not properly and promptly implemented, there is a risk that bidders cannot efficiently challenge illegal contract awards,” the Commission says.

Maltese law “does not fully and correctly implement the directive,” particularly with regard to the review procedures for “utilities” sectors such as water, energy, transport and the postal sector.

“As far as the other sectors are concerned, a number of procedures relating to the ineffectiveness of contracts, sanctions and time limits are not completely and correctly transposed,” it notes.

However, the government dismisses the Commission’s claims, arguing that most of the provisions of the directive have already been incorporated into Maltese law. It made it clear it does not agree with Brussels on the need for further change in the crucial area of granting remedies to companies or individuals who complain after losing a bid.

Malta now has two months to tell the Commission what measures it will implement to ensure compliance. If it fails, the EU Executive might decide to take the island to court.