The Fundamental Principles Drawn from the Court of Justice of the European Union in the Field of Public Procurement and Concessions
| Author | Teaching assist. Catalin-Silviu Sararu, PhD |
| Position | The Bucharest Academy of Economic Studies |
The law of the European Union has had, since the creation of the three Communities, an economic logic, aiming to create a single market and promote free competition between markets and services (Vlachos, 2001, p. 222; Alexandru, 2008, p. 865-873). Creating an internal market has involved and creating a competitive and non-discriminatory market in the field of public contracts.
Currently, the EU legislative framework in the field of public contracts has three directions (Cartou, Clergerie, Gruber, Rambaud, 2000, p. 307):
- regulation by general rules of procedures for the award of public contracts (public procurement contracts and, partly, concessions). Law draws a distinction between public contracts for the supply of goods, the provision of services and execution of works (Mathijsen, 2002, p. 448). These contracts are currently covered by Directive 2004/18/EC on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts1;
- regulation of a separate area with exceptional character, depart from general rules presented at the first point, that the procurement procedures of entities operating in the water, energy, transport and postal services sectors. These contracts are currently covered by Directive 2004/17/EC coordinating the procurement procedures of entities operating in the water, energy, transport and postal services sectors2.
- regulating procedures for the review when it violated EU law on the award of public contracts. Currently this is achieved by Council Directive 89/665/EEC on the coordination of the laws, regulations and administrative provisions relating to the application of review procedures to the award of public supply and public works contracts3 and Council Directive 92/13/EEC coordinating the laws, regulations and administrative provisions relating to the application of Community (now Union) rules on the procurement procedures of entities operating in the water, energy, transport and telecommunications sectors4.
Court of Justice of the European Union has an important role in the interpretation and uniform application in all 27 Member States of legislation on public contracts.
The Court of Justice of the European Union shall include the Court of Justice, the General Court and specialised courts under art. 19 (1) of the Treaty on European Union (TEU)5. Court aims to ensure compliance with EU law in the interpretation and uniform application of Treaties which governed the creation of the European Communities and then the European Union. At the request of the Union institutions, a State or private persons directly concerned, the Court may cancel the provisions of the Commission, Council of EU or national governments which would be incompatible with the founding Treaties (now the Treaty on European Union and the Treaty on the Functioning of the European Union6).
With an experience of almost 60 years, the EU Court of Justice has established by case-law, the guidelines (principles) which the Member States should take into account in the application of European Union law (Alexandru, 2008, p. 879).
In the field of public procurement contracts and concessions, the EU Court of Justice concluded a few principles which contribute to the uniform interpretation and application of the provisions of EU directives governing public contracts. These principles derive an essential role, as the sole criterion for reporting, in public contracts are not subject to rules of Directives 2004/18/EC and 2004/17/EC (with a value lower than the threshold specified in Art. 7 of Directive 2004/18/CE and art. 16 of Directive 2004/17/EC or is expressly excluded as happens, for example, if the concession of services7) or are only partially subject to their (the public works concession regulated by art. 56-65 in Directive 2004/18/EC). Court of Justice of the European Union stated that these contracts, which are totally or partially excluded from the scope of EU Directives in the field of public contracts, are required, however, to respect the fundamental principles of constituent Treaties relating to: the free movement of goods (Article 34 of the Treaty on the Functioning of the European Union - ex Article 28 of the Treaty establishing the European Community - TEC), the right of establishment (Article 49 of the Treaty on the Functioning of the European Union - ex Article 43 TEC), the freedom to provide services (Article 56 of the Treaty on the Functioning of the European Union - ex Article 49 TEC), prohibition of discrimination on grounds of nationality (Article 18 of the Treaty on the Functioning of the European Union - ex Article 12 TCE), transparency, proportionality and mutual recognition (Case C-59/00, Bent Mousten Vestergaard, point 20; Case T-258/06, Germany/Commission, point 113 ff.; Brown, 2007, p. 84-87). Court clearly stated in many decisions, willingness to appreciate all public contracts in relation to fundamental freedoms recognized and guaranteed by the EC Treaty (now the Treaty on the Functioning of the European Union), subjecting their minimum obligations prior to advertising, organizing effective competition and fairness of procedures (Grove-Valdeyron, 2008, p. 404).
In other cases-law Court has decided that the standards derived from the EC Treaty (now the Treaty on the Functioning of the European Union) apply only to contract awards having a sufficient connection with the functioning of the EU Internal Market (Case C-458/03, Parching Brixen, point 49; Case C-231/03, Coname, points 16-19; Kotschy, 2005, p. 845-853; Idot, 2005, p.23-24; Brown, 2006, p. 40-47; Nicolella, 2006, p.30). In this regard, the Court considered that in individual cases, "because of special circumstances, such as a very modest economic interest at stake", a contract award would be of no interest to economic operators located in other Member States. In such a case, "the effects on the fundamental freedoms are ... to be regarded as too uncertain and indirect" to warrant the application of standards derived from primary Union law.
The Commission Interpretative Communication of 2006 indicates that it is the responsibility of the individual contracting entities to decide whether an intended contract award might potentially be of interest to economic operators located in other Member States. In the view of the Commission, this decision has to be based on an evaluation of the individual circumstances of the case, such as the subject- matter of the contract, its estimated value, the specifics of the sector concerned (size and structure of the market, commercial practices etc.) and the geographic location of the place of performance. If the contracting entity comes to the conclusion that the contract in question is relevant to the Internal Market, it has to award it in conformity with the basic standards derived from Union law.
When the Commission becomes aware of a potential violation of the basic standards for the award of public contracts not covered by the Public Procurement Directives, it will assess the Internal Market relevance of the contract in question in the light of the individual circumstances of each case. Infringement proceedings under Article 258 of the Treaty on the Functioning of the European Union (ex Article 226 TEC) will be opened only in cases where this appears appropriate in view of the gravity of the infringement and its impact on the Internal Market.
The Court of Justice of the European Union stated that the obligation of transparency consists in ensuring, for the benefit of any potential tenderer, a degree of advertising sufficient to enable the services market to be opened up to competition and the impartiality of the procedures to be reviewed (Case C-324/98, Telaustria, point 62; Case C-458/03, Parking Brixen, point 49; Case T-258/06, Germany/Commission, point 109; Dischendorfer, 2001, p. 57-63). A transparent and objective approach to procurement procedures requires that all participants must be able to know the applicable rules in advance (the award criteria to be satisfied by the tenders and the relative importance of those criteria) and must have the certainty that these rules apply to everybody in the same way (Case T-258/06, Germany/Commission, point 109; Case C-87/94, Commission/Belgium, points 88 and 89; Case C-470/99, Universale-Bau and others, point 99). The role of this principle is to afford all tenderers equality of opportunity in formulating the terms of their applications to...
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