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The challenges of public procurement reform in the single market of the European Union

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Abstract

The evolution of public procurement law has been influenced by the case-law of the Court of Justice of the European Union which has been instrumental in developing the concepts of the public procurement acquis and in providing clarity and certainty to its decentralised application. The current reform agenda of public procurement is guided by the Court’s precedent which attempts to fuse the underlying principles of public procurement regulation with the fundamental EU Law principles. Public procurement is viewed by both EU Institutions and Member States as an instrument for growth and competitiveness in the light of the European 2020 Strategy.

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Notes

  1. See European Commission, Communication to the European Parliament, the Council, the Economic and Social Committee and the Committee of the Regions, Towards a Single Market Act, COM(2010) 608 final.

  2. See cases C-223/99 Agora Srl v Ente Autonomo Fiera Internazionale di Milano and C-260/99 Excelsior Snc di Pedrotti Runa & C v. Ente Autonomo Fiera Internazionale di Milano, [2001] ECR 3605; C-360/96, Gemeente Arnhem Gemeente Rheden v. BFI Holding BV, [1998] ECR 6821; C-44/96, Mannesmann Anlangenbau Austria AG et al. v. Strohal Rotationsdurck GesmbH, [1998] ECR 73.

  3. See Directive 2004/18, OJ L 134, 30.4.2004 and Directive 2004/17, OJ L 134, 30.4.2004.

  4. See case C-237/99 Commission v France [2001] ECR I-939; case C-470/99 Universale-Bau and Others [2002] ECR I-11617; case C-373/00 Adolf Truley [2003] ECR-193; case C-84/03, Commission v Spain; case C-44/96 Mannesmann Anlagenbau Austria, [1998] ECR I-73; case C-31/87 Beentjes [1988] ECR 4635; case C-360/96 BFI Holding [1998] ECR I-6821; case C-223/99, Agora Srl v Ente Autonomo Fiera Internazionale di Milano, and case C-260/99 Excelsior Snc di Pedrotti runa & C v. Ente Autonomo Fiera Internazionale di Milano, [2001] ECR 3605; case C-360/96, Gemeente Arnhem Gemeente Rheden v. BFI Holding BV, [1998] ECR 6821; case C-343/95 Diego Cali et Figli [1997] ECR 1-1547; case C-380/98 University of Cambridge [2000] ECR I-8035; case C-237/99 Commission v France [2001] ECR I-939; case C-26/03, Stadt Halle, RPL Recyclingpark Lochau GmbH v Arbeitsgemeinschaft Thermische Restabfall- und Energieverwertungsanlage TREA Leuna [2005] ECR I-1; case C-107/98 Teckal [1999] ECR I-8121; case C-18/01 Korhonen and Others [2003] ECR I-5321; case C-237/99 Commission v France (OPAC), [2001] ECR I-939.

  5. See case C-315/01, (GAT) and Österreichische Autobahnen und Schnellstraßen AG (ÖSAG), ECR [2003] I-6351; case C-21/03 and C-34/03, Fabricom SA v État Belge; case C-285/99 and case C-286/99 Lombardini and Mantovani [2001] ECR I-9233; case C-324/98 Telaustria and Telefonadress, [2000] ECR I-10745; case C-126/03, Commission v Germany, [2004] ECR I-11197; case C-176/98 Holst Italia [1999] ECR I-8607, paragraph 29; case C-399/98 Ordine degli Architetti and Others [2001] ECR I-5409, paragraph 92; case C-314/01 Siemens and ARGE Telekom & Partner [2004] ECR I-2549, paragraph 44; case C-57/01 Makedoniko Metro and Mikhaniki [2003] ECR I-1091.

  6. See case C-31/87, Gebroeders Beentjes B.V. v. State of Netherlands [1988] ECR 4635; case C-225/98, Commission v. French Republic (Nord-Pas-de-Calais), [2000] ECR 7445; case C-513/99, Concordia Bus Filandia Oy Ab v. Helsingin Kaupunki et HKL-Bussiliikenne, [2002] ECR 7213.

  7. See Article 1(9) of the Public Sector Directive and Article 2(1)(a) of the Utilities Directive.

  8. See Article 2(1)(b) of the Utilities Directive. Contracting authorities exercise dominant influence upon public undertakings when directly or indirectly, in relation to an undertaking, hold the majority of the undertaking’s subscribed capital, or control the majority of the votes attaching to shares issued by the undertaking, or can appoint more than half of the undertaking’s administrative, management or supervisory body.

  9. See Article 2(3) of the Utilities Directive.

  10. See case C-44/96 Mannesmann Anlagenbau Austria and Others, [1998] ECR I-73, paragraphs 20 and 21; case C-470/99 Universale-Bau and Others [2002] ECR I-11617, paragraphs 51 to 53; case C-214/00 Commission v Spain [2003] ECR I-4667, paragraphs 52 and 53; and case C-283/00 Commission v Spain [2003] ECR I-11697, paragraph 69.

  11. An entity which is governed by private law but nevertheless meets all the requirements of bodies governed by public law is considered to be a contracting authority. The entity’s private law status does not constitute a criterion for precluding it from being classified as a contracting authority, and in particular as being incompatible with requirement of non-industrial or commercial character of the general interest needs which the body concerned satisfies, since these factors must be assessed individually and separately from the legal status of an entity. A private law-governed entity as contracting authority is also compatible with the concept of public undertakings, in accordance with the Utilities Directive. See case C-214/00 Commission v Spain [2003] ECR I-4667, paragraphs 54, 55 and 60; and case C-283/00 Commission v Spain [2003] ECR I-11697, paragraph 75.

  12. A limited company established, owned and managed by a regional authority meets a need in the general interest which has not a commercial or an industrial character, where it acquires services for the development of business and commercial activities on the territory of that regional authority. See case C-18/01, Arkkitehtuuritoimisto Riitta Korhonen Oy, Arkkitehtitoimisto Pentti Toivanen Oy, Rakennuttajatoimisto Vilho Tervomaa and Varkauden Taitotalo Oy, [2003] ECR I-5321 paragraphs 48 and 59; Case C-373/00, Adolf Truly, [2003] ECR-193, paragraph 66.

  13. Entities which have not been established for the specific purpose of meeting needs in the general interest, not having an industrial or commercial character, but which have subsequently taken responsibility for such needs are considered as bodies governed by public law, on condition that the assumption of responsibility for meeting those needs can be established objectively. See case C-470/99 Universale-Bau and Others [2002] ECR I-11617, paragraphs 51 to 53.

  14. A company governed by private law and legally distinct from a contracting authority, in which the contracting authority has a majority capital holding and exercises a certain control is considered as a contracting authority. See Case C-26/03, Stadt Halle, RPL Recyclingpark Lochau GmbH v. Arbeitsgemeinschaft Thermische Restabfall- und Energieverwertungsanlage TREA Leuna, [2005] ECR I-1.

  15. State controlled companies are contracting authorities as it is deemed unlikely that they bear the financial risks related to their activities, where the State would take all necessary measure to protect the financial viability of such entities. See case C-283/00, Commission v Spain, [2003] ECR I-11697. See also cases Adolf Truley, paragraph 42, and Korhonen, paragraphs 51 and 52.

  16. A sickness fund which was indirectly financed without any consideration in return by the state but received mandatory contributions set by law from employers and private individual members and had no discretion in setting the levels or conditions of contributions was considered as a body governed by public law. See Case C-300/07, Hans & Christophorus Oymanns GbR, Orthopädie Schuhtechnik, v. AOK Rheinland/Hamburg, [2009] ECR I-4779.

  17. See case C-44/96 Mannesmann Anlagenbau Austria and Others, [1998] ECR I-73, paragraphs 20 and 21; case C-470/99 Universale-Bau and Others [2002] ECR I-11617, paragraphs 51 to 53; case C-214/00 Commission v Spain [2003] ECR I-4667, paragraphs 52 and 53; and case C-283/00 Commission v Spain [2003] ECR I-11697, paragraph 69.

  18. See case C-44/96 Mannesmann Anlagenbau Austria, [1998] ECR I-73, paragraphs 17 to 35.

  19. See cases C-360/96, Gemeente Arnhem Gemeente Rheden v. BFI Holding BV, judgment of 10 November 1998; C-44/96, Mannesmann Anlangenbau Austria AG et al. v. Strohal Rotationsdurck GesmbH, judgment of 15 January 1998.

  20. See case C-18/01 Korhonen and Others [2003] ECR I-5321, paragraph 51.

  21. See case C-237/99, Commission v. France, case C-380/98, The Queen and H.M. Treasury, ex parte University of Cambridge, [2000] ECR I-8035; case C-107/98, Teckal Slr v Comune di Viano, [1999] ECR I-8121.

  22. See Joined Cases C-223/99 & C-260/99, Agora Srl v. Ente Autonomo Fiera Internazionale di Milano and Excelsior Snc di Pedrotti Runa & C v. Ente Autonomo Fiera Internazionale di Milano, [2001] ECR I-3605; also case C-18/01 Korhonen and Others [2003] ECR I-5321, paragraph 51.

  23. See Article 18 of the Public Sector Directive.

  24. However, Article 3 of the Public Sector Directive includes a non-discrimination clause for the cases of granting special or exclusive rights. Where a contracting authority grants special or exclusive rights to carry out a public service activity to an entity other than such a contracting authority, the act by which that right is granted must provide that, in respect of the supply contracts which it awards to third parties as part of its activities, the entity concerned must comply with the principle of non-discrimination on the basis of nationality.

  25. Types of contracts cover service contracts provided that at least 80 % of the average turnover of the affiliated undertaking with respect to services for the preceding three years derives from the provision of such services to undertakings with which it is affiliated; supplies contracts provided that at least 80 % of the average turnover of the affiliated undertaking with respect to supplies for the preceding three years derives from the provision of such supplies to undertakings with which it is affiliated; works contracts provided that at least 80 % of the average turnover of the affiliated undertaking with respect to works for the preceding three years derives from the provision of such works to undertakings with which it is affiliated.

  26. See Article 23(2)(a) of the Utilities Directive.

  27. See Article 23(2)(b) of the Utilities Directive.

  28. See Case C-26/03, Stadt Halle,RPL Recyclingpark Lochau GmbH v. Arbeitsgemeinschaft Thermische Restabfall- und Energieverwertungsanlage TREA Leuna, [2005] ECR I-1; paragraph 48.

  29. See Case C-295/05, Asociación Nacional de Empresas Forestales (Asemfo) v. Transformación Agraria SA (Tragsa) and Administración del Estado, [2007] ECR I-2999, paragraph 65.

  30. See Case C-480/06, Commission v. Germany, [2009] ECR I-4747.

  31. See case C-324/07, Coditel Brabant SA v Commune d’Uccle, Région de Bruxelles-Capitale, [2009] ECR I-8457.

  32. C-458/03 ParkingBrixen [2005] ECR I-8612 paragraph 65.

  33. See case C-340/04, Carbotermo SpA, Consorzio Alisei v Comune di Busto Arsizio, AGESP SpA, [2006] ECR I-4137.

  34. See C-340/04 Carbotermo and Consorzio Alisei, paragraph 37, and Case C-295/05 Asemfo [2007] ECR I-2999, paragraph 57.

  35. See case C-324/07, Coditel Brabant SA v Commune d’Uccle, Région de Bruxelles-Capitale, op.cit.

  36. See Parking Brixen, op.cit. paragraph 62.

  37. See Stadt Halle and RPL Lochau, paragraph 50.

  38. See Stadt Halle and RPL Lochau, paragraph 49.

  39. See case C-29/04, Commission v Austria, [2005] ECR I-563.

  40. See case C-410/04, Associazione Nazionale Autotrasporto Viaggiatori (ANAV) v Comune di Bari, AMTAB Servizio SpA, [2006] ECR, I-3303.

  41. See case C-29/04 Commission v Austria [2005] ECR I-, paragraph 48.

  42. Article 1(2)(a) of the Public Sector Directive.

  43. See Case C-536/07, Commission v. Germany, ECR I-10355. The case (Köln Messe) considered the conclusion of a contract between the City of Cologne and Grundstücksgesellschaft Köln Messe for the construction and use for 30 years of four exhibition halls including ancillary buildings and relevant infrastructure through complex lease-back arrangements without a prior call for tender.

  44. ibid.

  45. See case C-399/98 Ordine degli Architetti and Others [2001] ECR I-5409.

  46. See Case C-264/03, Commission v. France, [2005] ECR I-8831.

  47. See Case C-220/05, Jean Auroux and Others v. Commune de Roanne, [2007] ECR I-385. In Auroux, a dispute arose relating to a leisure centre in the French town of Roanne, the design and execution of which was entrusted to a semi-public urban development company without the prior issue of a call for tenders. The project had some specific features in as much as only certain parts of the proposed leisure centre, once constructed, were intended for the town itself, while other parts were to be disposed of by the urban development company directly to third parties, although the town was to contribute towards their financing, take over those parts not disposed of at the end of the project, and bear the full risk of any losses incurred.

  48. See Case C-451/08, Helmut Müller v. Bundesanstalt für Immobilienaufgaben, [2010] ECR I-2673. The case Helmut Muller concerned with whether the rules on public contracts and, more specifically, the rules on public works concessions apply when a public authority sold assets and land to the prospective buyer who, in the opinion of the local authority responsible for town planning, presented the best and most interesting plans for the use of the land and the construction of buildings.

  49. See case C-59/00, Bent Mousten Vestergaard and Spøttrup Boligselskab, [2001] ECR I-9505.

  50. See case C-324/98 Telaustria and Telefonadress [2000] ECR I-10745, paragraph 60.

  51. See case C-6/05, Medipac-Kazantzidis AE v Venizelio-Pananio (PE.S.Y. KRITIS), [2007] ECR I-4557.

  52. See case C-324/98 Telaustria and Telefonadress [2000] ECR I-10745, paragraphs 60 and 61; Case C-231/03 Coname [2005] ECR I-7287, paragraphs 16 and 17, and Case C-458/03 Parking Brixen [2005] ECR I-8585, paragraphs 46 to 48.

  53. See Joined Cases C-147 & 148/06, SECAP SpA and Santorso Soc. coop. arl, [2008] ECR I-3565; see Case C-412/04, Commission v. Italy, [2008] ECR I-619, para 65.

  54. See case C-59/00 Vestergaard [2001] ECR I-9505, paragraph 19.

  55. See case C-412/04 Commission v Italy [2008] ECR I-0000, paragraph 65.

  56. See Telaustria and Telefonadress, paragraph 60; the order in Vestergaard, paragraphs 20 and 21; Case C-264/03 Commission v France [2005] ECR I-8831, paragraph 32; and Case C-6/05 Medipac-Kazantzidis [2007] ECR I-4557, paragraph 33.

  57. See case C-507/03 Commission v Ireland [2007] ECR I-0000, paragraph 29.

  58. See case C-231/03 Coname [2005] ECR I-7287, paragraph 20.

  59. See case C-79/01 Payroll and Others [2002] ECR I-8923, paragraph 26; Case C-442/02 CaixaBank France [2004] ECR I-8961, paragraphs 12 and 13; and Case C-452/04 Fidium Finanz [2006] ECR I-9521, paragraph 46.

  60. Case C-220/06, Asociación Profesional de Empresas de Reparto y Manipulado de Correspondencia v Administración General del Estado, [2007] ECR I-12175.

  61. See case C-59/00 Vestergaard [2001] ECR I-9505, paragraph 19.

  62. Case C-264/03 Commission v France [2005] ECR I-8831, paragraph 32.

  63. See, by analogy, case C-458/03 Parking Brixen [2005] ECR I-8585, paragraph 48, and case C-410/04 ANAV [2006] ECR I-3303, paragraph 20.

  64. See Parking Brixen, paragraph 49, and ANAV, paragraph 21.

  65. See Parking Brixen, paragraph 50, and ANAV, paragraph 22.

  66. See Case C-507/03, Commission v. Ireland (An Post), [2007] ECR I-9777.

  67. See Case C-324/98, Telaustria and Telefonadress, [2000] ECR I-10745, paragraphs 60 and 61, and case C-231/03 Coname [2005] ECR I-7287, paragraph 17.

  68. See Case C-29/04, Consorzio Aziende Metano (Coname). v. Comune di Cingia de’Botti, [2005] ECR I-7287, paragraph 19.

  69. See case C-380/98 University of Cambridge [2000] ECR I-8035, paragraph 16; Case C-19/00 SIAC Construction [2001] ECR I-7725, paragraph 32.

  70. See case C-382/05 Commission v Italy [2007] ECR I-6657, paragraph 34, and case C-437/07 Commission v Italy [2008] ECR I-0000, paragraph 29; see also Commission Interpretative Communication on Concessions under Community Law (OJ 2000 C 121, p. 2).

  71. See Case C-206/08, WAZV.Gotha v. Eurawasser Aufbereitungs, [2009] ECR I-8377.

  72. See case C-231/03, Consorzio Aziende Metano (Coname) v Comune di Cingia de’ Botti, op.cit.

  73. See case C-324/98 Telaustria and Telefonadress [2000] ECR I-10745, paragraph 60, and case C-231/03 Coname [2005] ECR I-0000, paragraph 16.

  74. See Case C-3/88 Commission v Italy [1989] ECR 4035, paragraph 8.

  75. See Case 810/79 Überschär [1980] ECR 2747, paragraph 16.

  76. See case C-87/94 Commission v Belgium [1996] ECR I-2043, paragraphs 33 and 54.

  77. See Case C-324/98, Telaustria and Telefonadress, [2000] ECR I-10745, paragraphs 61 and 62.

  78. See Bovis [1].

  79. See the Utilities Directive 2004/17, OJ 2004, L 134/1.

  80. See case C-37/92 Vanacker and Lesage [1993] ECR I-4947, paragraph 9; Case C-324/99 DaimlerChrysler [2001] ECR I-9897, paragraph 32; and case C-322/01 Deutscher Apothekerverband [2003] ECR I-14887, paragraph 64.

  81. See case C-231/03 Coname [2005] ECR I-7287, paragraph 16, and case C-264/03 Commission v France [2005] ECR I-8831, paragraph 32.

  82. See case 45/87 Commission v Ireland [1988] ECR I-4929, paragraph 27, where the Court held that the inclusion in the contract specification of a clause stipulating exclusively the use of national specifications infringe Article 30 EC; Case C-243/89 Commission v Denmark (Storebælt) [1993] ECR I-3353, where the Court found that contract clauses concerning preference to national specifications and nominated sub-contractors infringe Articles 30, 48 and 59 EC; Case C-158/03 Commission v Spain, and Case C-234/03 Contse and Others [2005] ECR I-9315, where the content of tendering specifications, and in particular sub-criteria for the award of contracts ran contrary to Article 49 EC; Case C-92/00 HI [2002] ECR I-5553, paragraph 42, where the Court ruled that contracting authorities’ decisions are subject to fundamental rules of Community law, and in particular to the principles on the right of establishment and the freedom to provide services; Case C-244/02 Kauppatalo Hansel Oy [2003] ECR I-12139, paragraphs 31 and 33, where the Court confirmed the principle under which primary law is to be taken into account in a supplemental capacity for evaluating the effectiveness of the public procurement Directives; Case C-57/01 Makedoniko Metro and Mihaniki [2003] ECR I-1091, paragraph 69, where the Court held that even if the Community directives on public procurement do not contain specifically applicable provisions, the general principles of Community law … govern procedures for the award of public contracts; Case C-275/98 Unitron Scandinavia and 3-S [1999] ECR I-8291, paragraph 30 et seq, where the Court held that Community law principles such as the principles of transparency and the prohibition of discrimination on grounds of nationality must embrace the remit of the public procurement Directives.

  83. See joined cases C-117/76 and C-16/77 Ruckdeschel and Others [1977] ECR 1753, paragraph 7.

  84. See joined cases 201/85 and 202/85 Klensch and Others [1986] ECR 3477, paragraph 9, and case C-442/00 Rodríguez Caballero [2002] ECR I-11915, paragraph 32.

  85. See case C-243/89 Commission v Denmark [1993] ECR I-3353, paragraphs 37 to 39, and case C-87/94 Commission v Belgium [1996] ECR I-2043, in particular paragraphs 51 to 56. See also case C-496/99 P Commission v CAS Succhi di Frutta [2004] ECR I-3801, paragraph 108.

  86. See case C-324/98 Telaustria and Telefonadress, [2000] ECR I-10745.

  87. See case C-458/03 Parking Brixen [2005] ECR I-8612.

  88. See European Commission Interpretative Communication on the Community Law applicable to contract awards not or not fully subject to the provisions of the Public Procurement Directives, OJ, 2006, C 179/02.

  89. See European Commission, Communication to the European Parliament, the Council, the Economic and Social Committee and the Committee of the Regions, Towards a Single Market Act, COM(2010) 608 final.

  90. See European Commission, Communication, Europe 2020, A strategy for smart, sustainable and inclusive growth, 3.3.2010, COM(2010) 2020 final.

  91. See European Commission, Guide to the application of the European Union rules on state aid, public procurement and the internal market to services of general economic interest, and in particular to social services of general interest, 7.12.2010, SEC(2010) 1545 final. See European Commission, Buying Social: A Guide to Taking Account of Social Considerations in Public Procurement, SEC(2010) 1258, final.

  92. See Directive 2006/123/EC of the European Parliament and of the Council of 12 December 2006 on services in the internal market (OJ L 376, 27.12.2006, p. 36).

References

  1. Bovis, C.: The state, competition and public services. In: Birkinshaw, P.J., Varney, M. (eds.) The European Union Legal Order after Lisbon, pp. 138–153. Kluwer, Biggleswade (2010)

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  1. Law School, University of Hull, Cottingham Road, Hull, HU6 7RX, UK

    Christopher H. Bovis

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This article is based on a presentation given at the Annual Conference on European Public Procurement Law, organised by ERA 11–12 October 2012 in Trier.

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Bovis, C.H. The challenges of public procurement reform in the single market of the European Union. ERA Forum 14, 35–57 (2013). https://doi.org/10.1007/s12027-013-0286-z

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