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Procedures for the award of public works contracts



Procedures

for the award of public works contracts




‘Are we obliged to procure in accordance with Directive 2004/18/EC?’

Just recently the European Court of Justice offered a clear and practical summary of the relevant jurisprudence and regulations.
 
 

Procedures for the award of public (works) contracts

 
In our capacity of (Public) Procurement Consultants we regularly receive enquiries whether Directive 2004/18/EC is applicable to specific contracts and more specific whether the contract constitutes a public works contract as defined in Article 1 sub 2a Directive or if the contract should be classified as a public supply contract / public service contract as laid down in Article 1 sub 2b respectively Article 1 sub 2c of the aforementioned Directive 2004/18/EC.
 
These enquiries are generally related to the applicable thresholds for the procedures for the award of contracts as laid down in Commission Regulation (EC) No 1177/2009 of 30 November 2009 and entered into force on the 1st of January 2010.
 
The main question therefore usually is: “Are we obliged to procure in accordance with Directive 2004/18/EC or are we allowed to apply the less stringent national procurement procedure?”
 
The main difficulty with regard to answering this question is that the vast majority of contracts contain elements which are not limited to solely work / supply / service contracts.
 
With regard to contracts which have clear elements of public work contracts we are able to advise our clientele based on various sources of jurisprudence, regulations and interpretative communications.
 
Just recently, 26th of May, the European Court of Justice (further: ‘ECJ’) has ruled in the case between the European Commission and the Kingdom of Spain. The judgement can be found through the following hyperlink:
http://curia.europa.eu/jurisp/cgi-bin/gettext.pl?where=2004%2F18&lang=en&num=79889473C19080306&doc=T&ouvert=T&seance=ARRET
 
Although the ECJ does not offer a groundbreaking view on the issue it does however provide us a very clear and practical summary of the relevant jurisprudence and the applicable regulations. I hereto refer to the paragraphs 88 to 91 of the judgement:

88      As regards the concept of ‘public works contracts’ within the meaning of Article 1(a) of Directive 93/37 and of Article 1(2)(b) of Directive 2004/18, it must be observed that it covers contracts for pecuniary interest, concluded in writing between one or more economic operators and one or more contracting authorities and having as their object either the execution, or both the design and execution, of works related to one of the activities referred to in Annex II to Directive 93/37 or Annex I to Directive 2004/18 or of a work defined in Article 1(c) of Directive 93/37 or Article 1(2)(b) of Directive 2004/18, or the execution, by whatever means, of a work corresponding to the requirements specified by the contracting authority.

89      In addition, it is clear from the 16th recital in the preamble to Directive 92/50 and from recital 10 in the preamble to Directive 2004/18, in conjunction with Article 1(a) of Directive 93/37 and Article 1(2)(b) of Directive 2004/18 respectively, that a contract can be deemed to be a ‘public works contract’ only if its subject-matter corresponds to the definition given in the preceding paragraph and that works which are incidental to, and not the subject‑matter of, the contract do not justify the contract’s qualification as a public works contract.

90      It is clear, moreover, from the case-law of the Court that, where a contract contains elements relating both to a public works contract and another type of contract, it is the main object of the contract which determines which body of European Union rules on public contracts is to be applied in principle (see, to that effect, Auroux and Others, paragraph 37).

91      That determination must be made in the light of the essential obligations which predominate and which, as such, characterise the transaction, as opposed to those which are only ancillary or supplementary in nature and are required by the very object of the contract (Case C‑412/04 Commission v Italy[2008] ECR I‑619, paragraph 49).

In the future a referral to and the application of the aforementioned paragraphs of Case C‑306/08 may suffice.
 
 
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