According to the European Court of Justice (ECJ), emergency and rescue transport services are not connected with the exercise of official authority and therefore not exempt from applicability of the Public Procurement Directive (2004/18/EC).
These exemptions must be interpreted so that their scope is limited to what is strictly necessary in order to safeguard the interests which they allow member states to protect. The fact that such services contribute to the protection of public health is not sufficient for there to be a connection with the exercise of official authority.
Through its decision, the ECJ brought to a halt the practice followed by local and regional authorities in Germany of awarding contracts for rescue transport services without applying transparent contract award procedures.
Through its decision of 29 April 2010 (C-160/08; the ECJ Judgment) the ECJ introduced more competition in the German and European ambulance market. This came after the Commission had received a number of complaints about awards for public ambulance services and qualified patient transport services.
The complainants stated that the public procurement rules had been breached by failing to publish contract notices at the EU level and that the contracts had not been awarded in a transparent way.
The conflict has been simmering since 2006 when emergency medical service providers from outside Germany (including from Austria) complained about non-transparent award procedures.
The question of whether ambulance services are to be awarded by means of a formal public procurement procedure has kept the courts busy over the last years. The courts ruled both on concessions and the tender model for the supply of public emergency ambulance and qualified patient transport services.
In this respect, the ECJ pronounced in the ECJ Judgment the obligation to award tender contracts for the supply of public emergency ambulance by means of a procurement procedure. However, a decision of the ECJ with regard to concessions is still pending.
Concession model and tender model
Tenders concerning public emergency services usually cover emergency ambulance and qualified patient transport services. In the field of public emergency services, the local authorities, in their capacity as the authorities responsible for organising those services, conclude contracts with providers of such services to the entire population of the area within their remit.
Payment for the services in question is made either directly to the tenderer in accordance with the tender model (the only one to which the aforementioned ruling relates) or in the form of charges levied directly by the contractor on patients or sickness funds, in accordance with the concession model. Most public authorities (mainly local) have opted for the concession model.
Public procurement procedures for the tender model
Until 2008, pursuant to the German case law, there was no obligation to observe public procurement procedures. A decision of the German Federal Court of Justice (BGH) dated 1 December 2008 revived the case law ruling that ambulance services must be awarded by means of public procurement procedures. Otherwise, according to the BGH, German competition law had to stipulate explicitly that ambulance services are exempt from the public procurement law.
This decision was approved by the ECJ Judgment and deviated from the opinion that ambulance services are rendered in the exercise of official authority. Pursuant to the ECJ Judgment, no connection can be seen between the exercise of official authority and the emergency vehicle drivers' right of way or the use of flashing blue lights and sirens, which is within the competence of the police and judicial authorities. It follows from this, the court concluded, that Articles 51 and 62 TFEU were not applicable to the activities at issue in the case.
Public procurement procedures for the concession model
So far the application of the public procurement procedures for the concession model for ambulance services has not been determined. Advocate General Mazák stated on 9 September 2010 in the case C-274/09 that the lack of direct compensation by the public authority which awarded the respective service can be seen as an adequate criteria for the qualification as a service concession within the meaning of the Directive 2004/18/EC; thus, this Directive does not apply to service concessions as defined. The decision of the ECJ in that case is pending. If the ECJ recognises the existence of a service concession, the public authorities will in future be able to choose between public procurement procedures or not when tendering ambulance services. That this will ensure transparency and competition is to be doubted.
This article was originally published in the schoenherr roadmap`11 - if you would like to receive a complimentary copy of this publication, please visit: http://www.schoenherr.eu/roadmap.
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