EU LEGISLATION
Internal Market Resilience
Regulation (EU) 2024/2747 establishing a framework of measures related to an internal market emergency and to resilience of the internal market comes into effect from 28 November 2024 and applies from 29 May 2026. The Regulation establishes measures to effectively anticipate, prepare for and respond to the impact of crises on the internal market, including rules on public procurement during the internal market vigilance and emergency modes. Title V provides for:
- public procurement by the Commission on behalf of or in the name of Member States during an internal market vigilance mode or an internal market emergency mode,
- joint procurement during internal market vigilance and internal market emergency modes, and
- procurement by the Member States during the internal market emergency mode.
The Regulation is part of a suite of measures which also includes Regulation (EU) 2024/2748 and Directive (EU) 2024/2749 as regards emergency procedures for the conformity assessment, presumption of conformity, adoption of common specifications and market surveillance due to an internal market emergency.
EU CASELAW
Modifications: Serious failure of Concessionaire
In C-683/22, an Italian contracting authority sued a motorway concessionaire, following collapse of the bridge in Genoa, for serious failure to fulfil obligations to maintain and preserve the motorway network. The parties reached a settlement agreement which included transfer of control of the concessionaire to a development bank and investors acceptable to that bank.
When the settlement agreement was challenged, the Italian Court referred questions to the CJEU, noting that the awarding authority had not formally examined compliance with the Concessions Directive of the modification.
Article 43(1) and (2) of the Directive provides for cases where concessions may be modified without a new award procedure. Article 43(5) requires a new award procedure for modifications other than those provided for in Article 43(1) and (2).
The Court considered that the EU intended to ensure that contracting authorities can exclude economic operators regarded as unreliable (Article 38(7)(c)). There was nothing to prevent the contracting authority from imposing particularly high requirements for the suitability and reliability of concessionaires. It followed that the contracting authority was required, before modifying a concession requiring the organisation of a new award procedure under Article 43(5), to examine the suitability of candidates.
However, if the modification fell within Article 43(1) or (2), the only limb requiring verification of the reliability of the concessionaire was Article 43(1)(d)(ii), which provides that, where a new concession replaces the initial concessionaire as a consequence of universal or partial succession into the position of the initial concessionaire, following corporate restructuring, the new concessionaire must fulfil the criteria for qualitative selection initially established.
Two questions arose. First, does the Directive prevent legislation under which a contracting authority can modify a concession without organising a new concession award procedure and without setting out why the authority considered it was not required to organise such a procedure? The CJEU ruled that Article 43, in conjunction with the general principle of sound administration, does not prevent such legislation provided the modification does not fall under Article 43(5) and the contracting authority has set out the reasons why it considered that it was not required to organise a new procedure.
Second, does the Directive prevent legislation under which the contracting authority can modify a concession during its term without having assessed the reliability of a concessionaire, where that concessionaire has committed a serious failure to fulfil its obligations or is suspected of having done so? The CJEU ruled that Article 43 does not prevent legislation under which the contracting authority can modify a concession without having assessed the reliability of the concessionaire, where that modification is not caught by either Article 43(1)(d)(ii), or Article 43(5). It is for each Member State to determine the rules allowing a contracting authority to react when the concessionaire has committed a serious failure to fulfil its obligations or is suspected to have done so, which calls into question its reliability.
Operators from non-EU countries
C-652/22 concerned proceedings taken in Croatia by a company governed by Turkish law, in respect of a procedure governed by the Utilities Directive.
The CJEU dismissed the application for a preliminary ruling as inadmissible. Though the EU has an Association Agreement with Turkey, Turkey is not a party to the GPA or any other agreement conferring on Turkish economic operators the right to participate in public procurement procedures in the EU on an equal footing with EU economic operators.
The right to submit a tender does not extend to economic operators of third countries which have not concluded a relevant international agreement with the EU. EU law does not prevent such economic operators from participating in a public procurement procedure, but it does prevent them from being able to rely on the Directive to require that their tender be treated equally to those of tenderers from Member States or third countries with relevant international agreements. It prevents them from challenging the decision to award the contract. The question of access of economic operators of non-EU countries falls within an area in which the EU has exclusive competence, so national authorities cannot apply national provisions transposing the Directive to economic operators from countries that have not concluded a relevant international agreement with the EU. A press release is available here.
Public Contracts
C-513/23 concerned a decision by the Slovak Ministry of Education to conclude, without a competitive procedure, a memorandum with an undertaking defining the conditions for the award of a grant to construct the national stadium, and the conditions for that construction. Several legal proceedings are pending concerning the grant agreement or the undertaking to purchase. The Slovak Court referred questions for preliminary ruling relating to: (a) the definition of "public works contracts" in the previous iteration of the Public Contracts Directive (which is similar to the current definition), and (b) whether the definition prevents the contracting authority raising a plea of nullity ex tunc, that is that the undertaking to purchase was invalid from the outset. The CJEU ruled as follows.
- A collection of agreements binding a Member State to an economic operator and including a grant agreement and an undertaking to purchase, concluded with a view to building a football stadium, constitutes a "public works contract", where that collection of agreements creates reciprocal obligations between that State and the economic operator, which include the obligation to construct the stadium in accordance with the conditions specified by that State and a unilateral option in favour of that economic operator corresponding to an obligation on the part of the State to purchase that stadium, and grants the economic operator State aid recognised by the Commission as being compatible with the internal market.
- The CJEU noted that the Remedies Directive does not seek to establish remedies for the benefit of contracting authorities, and a plea of nullity raised by a contracting authority does not fall within the scope of the Remedies Directive. However, the Remedies Directive does not prevent the application of national legislation which provides that a contract concluded in breach of the rules on public procurement is to be declared null and void from the outset, provided that, in the case of a "public contract", the legislation complies with EU law, including the general principles of EU law.
Technical Specifications
Case C-513/23 concerned a decision to reduce funding available to a Municipality after it had awarded contracts, on grounds which included that the procedure had not been conducted in accordance with legislation transposing Article 42 of the Public Contracts Directive. The legislation provided that any technical specification of a public contract made by reference to a standard must be supplemented by the words 'or equivalent'. The Municipality sought annulment of the decision and the Bulgarian Court referred a question for preliminary ruling.
The CJEU ruled that Article 42(3)(b) of the Directive does not prevent national legislation which requires contracting authorities to add the words 'or equivalent' in all cases where technical specifications contained in procurement documents are formulated by reference to national standards transposing European standards.
This article contains a general summary of developments and is not a complete or definitive statement of the law. Specific legal advice should be obtained where appropriate.
