Public Procurements Seminar Trier, 15-16 July 2019 Recent CJEU Case Law: core notions and principles & exceptions Michael Juergen Werner [AD/2019/05] With financial support from the Justice Programme of the European Union
Agenda 1. Legal framework • Recent CJEU case law: • Scope of application • Exemptions from the scope • Application of TFEU general principles 2. Applicability 3. Tender process • Recent CJEU case law • Characteristics of procedure type • Obligations of contracting authorities • Exclusion of tenderers 2
Legal framework Focus on legislation at the European Union level
Introduction When realizing a public procurement project following legislation has to be observed: 1. EU primary legislation 2. EU secondary legislation 3. National legal framework 4
EU primary legislation • Unlike competition law & state aid law, there are no explicit provisions on public procurement in the Treaty on the Functioning of the EU ( TFEU ) • Procurement rules are derived from the TFEU on the “four freedoms”, in particular those relating to free movement of goods (Art. 34 TFEU) and freedom to provide services (Art. 56 TFEU) / freedom of establishment (Art. 59 TFEU). 5
EU primary legislation (contd) • Freedom of establishment, Art. 49 TFEU • Freedom of services, Art. 56 TFEU • Non-discrimination, Art. 18 TFEU • Principles of transparency, equal treatment, proportionality and mutual recognition have to be observed, see Arts. 49 and 56 TFEU. 6
EU secondary legislation • EU Procurement law • EU State Aid law • EU Competition law 7
Four different regimes Public regime (Directive 2014/24/EU) • Governmental and other public bodies Utilities regime (Directive 2015/25/EU) • Water, energy, transport and post Concession regime (Directive 2014/23/EU) • Award of concessions, covering both concessions awarded by entities that are subject to the public regime, and concessions awarded by entities that are subject to the utilities regime Defence and security contract (Directive 2009/81/EC) 8
Recent ECJ case law Re four sectoral Directives
Case C-465/17 Falck Rettungsdienste (contd) Issue: when do ambulance services fall outside the Public Contracts Dir.? ECJ held: • there is an exclusion and an exception to the exclusion in Article 10(H) of Directive 2014/24. • Exclusion: • from the scope of the usual rules on public procurement, public contracts for services relating to civil defence, civil protection and danger prevention, subject to two conditions: (1) those services correspond to the Common Procurement Vocabulary codes referred to in that provision; and (2) they are provided by non-profit organisations or associations. • inextricably linked to the existence of an emergency service. • Exception: • exclusion not apply to patient transport ambulance services, covered by the simplified regime for public procurement laid down in Arts. 74 to 77 of Directive 2014/24. • clear from Art. 10(h) of Dir. 2014/24, read in light of recital 28 thereof, that the exclusion from the public procurement rules laid down in that provision in favour of danger prevention services only benefits certain emergency services provided by non-profit organisations or associations and that it must not go beyond what is strictly necessary. 10
Case C-465/17 Falck Rettungsdienste ECJ also concluded in relation to Article 10(h) of Directive 2014/24: • the exclusion from the application of the public procurement rules covers the care of patients in an emergency situation in a rescue vehicle by an emergency worker/paramedic provided that it is in fact undertaken by personnel properly trained in first aid and it is provided to a patient whose state of health is at risk of deterioration during that transport. • It precludes public aid associations recognised in national law as civil protection and defence associations from being regarded as non-profit organisations or associations insofar as, under national law, recognition as having public aid association status is not subject to not having a profit-making purpose and • organisations or associations whose purpose is to undertake social tasks, which have no commercial purpose and which reinvest any profits in order to achieve the objective of that organisation or association, constitute non-profit organisations or associations within the meaning of that provision 11
Case C-388/17 Konkurrens- verket v SJ AB • Issue: • Does the Utilities Directive apply to passenger transport suppliers operating on a fixed network? • Swedish NCA’s argument: • SJ AB involved in activities relating to the provision or operation of networks […] in the field of transport by railway in accordance with the Utilities Directive • Article 5(1) Utilities Directive: " network " exists where the transport services are provided under operating conditions laid down by a competent authority of a Member State, such as conditions on the routes to be served , the capacity to be made available or the frequency of the service • Infrastructure Manager appointed pursuant to the Re-cast Rail Package (Directive 2012/34): obligation to put together a national network statement setting out the general rules, deadlines, procedures & criteria for charging & capacity allocation schemes on the rail network satisfied above definitions 12
Case C-388/17 Konkurrens- verket v SJ AB (contd) ECJ held: • A train operator with some freedom to determine how it provides its transport services but bound by systems dictating train paths and any conditions relating to them so no real autonomy • SJ AB's argument based on semantics & does not take into account the purpose of the Utilities rules. • Above conclusion also corroborated by the historical development of the Utilities Directives: • Article 5(1) picks up the wording of the previous Utilities Directive, which introduced bus services into the Utilities rules, and required wording to clarify that a network exists even where no physical structure exists. • By doing so, the EU did not intend to limit the scope of the Directive to the extent that it applied to physical networks. 13
Case C-264/18 P.M. and Others v Ministerraad Issue: • Exemption of certain legal and arbitration services from Dir. 2014/24 ECJ held: • there were no factors affecting the validity of Articles 10(c) and (d)(i), (ii) and (v) of Directive 2014/24 because those provisions were not adopted in breach of the principle of subsidiarity and had been excluded from the scope of Directive 2014/24. • Recital 24 of Dir. 2014/24: providers of arbitration & conciliation services covered by Art. 10(c) selected in a manner not governed by procurement rules, they were not comparable with other services within that directive and could be excluded without infringing the principle of equal treatment. • Re legal services covered by Arts. 10(d)(i) and (ii), recital 25 recognised that provider selection could not be governed by procurement rules because they were characterised by strict confidentiality where the lawyers were selected because of their unique abilities. It was, therefore, appropriate to exclude those services from the scope of Dir. 2014/24. 14
Case C-260/17 Anodiki Services EPE Issues: • Exemption for certain employment contracts but reliance upon such exemption subject to judicial review ECJ held: • notion of ‘employment contracts’, referred to in Art. 10(g) of Dir. 2014/24, covers fixed-term, individual labour contracts concluded with persons selected on the basis of objective criteria, such as the duration of unemployment, previous experience and the number of minor dependent children they have. • The provisions of Dir. 2014/24, Arts. 49 and 56 TFEU, principles of equal treatment, transparency and proportionality, and Arts. 16 and 52 of the EU Charter of Fundamental Rights do not apply to a public authority’s decision to make use of employment contracts such as the above in order to perform certain tasks falling within its public interest obligations. • A contracting authority’s decision to rely on above exemption based on belief that those contracts do not fall within the scope of Dir. 89/665 may be challenged under that provision by an economic operator with an interest in participating in a public procurement procedure with the same purpose as those contracts and who considers that those contracts do fall within the scope of that directive. 15
Case C-124/17 Vossloh Laeis GmbH Issue: • Exclusion from procurement due to cartel participation ECJ held: • Where an economic operator engaged in conduct falling within the ground for exclusion in Art. 57(4)(d) of Dir. 2014/24 & penalised by a competent authority, the maximum period of exclusion calculated from the date of that authority’s decision. • It is lawful for Member States, under Art. 80 of Dir. 2014/25 read in conjunction with Art. 57(6) of Dir. 2014/24, to require a bidder, who is potentially subject to exclusion, to confirm the details of any offences or misconduct to a contracting authority to prove the re- establishment of its reliability, although only to the extent strictly necessary. 16
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