June was a relatively quiet month for public procurement case law. Top of the bill was the ECJ considering (and rejecting) an attempt to extend the Teckal in-house exception to cover joint ventures between public authorities and charities.
Please feel free to submit a comment below or send us an Ask query if you have any views on the cases covered or think that we have missed a case that should be brought to the attention of public procurement practitioners.
Charity ownership precludes in-house exception applying (Centro Hospitalar de Setúbal EPE and Serviço de Utilização Comum dos Hospitais (SUCH) v Eurest (Portugal) – Sociedade Europeia de Restaurantes Lda (Case C‑574/12))
The ECJ has handed down a ruling on the application of the in-house exception. The case concerned the direct award of a contract by a Portuguese hospital to a non-profit institution, whose members were both public authorities and private social solidarity institutions (charities).
The ECJ concluded that where the contractor under a public contract is a non-profit association which, at the time of the award of the contract, has as partners not only public sector entities but also private social solidarity institutions carrying out non-profit activities, the requirement for “similar control” in the in-house exception is not met. Therefore, Directive 2004/18 applies to the award of contracts to such a contractor by a partner contracting authority. This is true regardless of the fact that the private partners are in the minority.
While the arguments for increasing charity involvement in the delivery of public services are strong, particularly from a policy point of view, this case is a reminder that the public procurement regime is not swayed by such issues. The ECJ highlighted that the in-house exception is based on an approach whereby the public authority can be regarded as using its own resources to accomplish its public interest tasks. In this case the private partners were pursuing interests and objectives which, however positive they may be from a social point of view, were different in nature from the public interest objectives pursued by the awarding authorities. It is difficult to see how the position will ever be viewed differently by the ECJ.
Successful tenderer had not unfairly benefited from insider knowledge of ex-Commission employee (Communicaid Group Ltd v European Commission (Case T‑4/13))
The General Court has dismissed an appeal by an unsuccessful bidder in a procurement procedure organised by the European Commission for a framework contract for the provision of language-training services. The General Court held that the Commission had complied with its legal obligations to provide reasons for its decisions. The General Court also held that the claimant had not established a breach of the principles of equal treatment, non-discrimination or transparency by virtue of the fact that an individual who had previously worked at the Commission was employed by the successful tenderer. Further, the General Court wholly rejected claims that the Commission’s evaluation committee had used criteria that were not stated in the technical specifications and had committed manifest errors in its assessment of the tenders.