REUTERS | Tobias Schwarz

Public procurement case digest (November 2015)

November’s case digest includes an ECJ ruling considering the scope of Article 26 of Directive 2004/18 in relation to contracting authorities requiring tenderers to provide declarations that they will pay staff a minimum hourly wage, and an Advocate General’s opinion on restrictions on the use of sub-contracting in public procurements.

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.

ECJ rules that tenderers can be required to provide declarations of minimum hourly wage (RegioPost GmbH & Co KG v Stadt Landau)

The ECJ has handed down its ruling on a preliminary reference from a German court on whether, in the context of a public procurement procedure, contracting authorities can require bidders to submit declarations stating that they will comply with national legislation on employment conditions for their employees (and sub-contractors) in the performance of the public contract, including an hourly minimum wage requirement.

The ECJ considered that Article 26 of Directive 2004/18 (which allows contracting authorities to lay down special conditions relating to the performance of a contract) does not preclude legislation of a member state regional entity that requires tenderers and their subcontractors to undertake, by means of a written declaration to be enclosed with their tender, to pay staff who are called upon to perform the services covered by the public contract in question a minimum wage laid down in that legislation. Such obligation constitutes a special condition in principle acceptable under Directive 2004/18, as it relates to the performance of the contract and concerns social considerations. The obligation is also transparent and non-discriminatory, and compatible with Directive 96/71 on the posting of workers.

The ECJ also considered that Article 26 of Directive 2004/18 does not preclude legislation that allows contracting authorities to exclude bidders who refuse to provide the declaration of compliance with the minimum hourly wage for workers who would perform the public contract in question.

General Court dismisses appeal against decision to reject tender due to failure to provide proof of authorisation under national legislation (Gruppo Servizi Associati SpA and Security Guardian’s Institute v European Parliament)

The General Court has dismissed an appeal against decisions of the European Parliament to reject bids of two companies from a tender. The two companies had, as a consortium, submitted a bid to provide fire security and external surveillance services at the Parliament’s buildings in Brussels. The tender specifications required that both companies hold an authorisation required under Belgian law for the provision of security services. However, only one of the companies had such an authorisation. Therefore, they were not awarded the contract, despite submitting the tender with the lowest price.

The General Court held that the Parliament had:

  • not breached the principle of proportionality in requiring that all tenderers held the Belgian authorisation.
  • Was entitled to require the highest standards of security and to rely on the guarantees in this regard provided by the authorisation.
  • Had been entitled to require that each of the companies within the consortium provide proof that they held the required authorisation.
  • Had not breached the principle of equal treatment or the principle of opening-up public procurement to the widest possible competition in imposing such a requirement.

In addition, the requirement that tenderers produce the authorisation did not constitute an unjustified restriction on the freedom to provide services.

Advocate General’s opinion on restrictions on use of sub-contracting in public procurement (Wrocław – Miasto na prawach powiatu v Minister Infrastruktury i Rozwoju, AG’s Opinion)

Advocate General Sharpston has given an opinion on questions referred from a Polish court on whether it is permissible under Directive 2004/18 to restrict a tenderer’s use of sub-contractors. In this case, the tender specifications provided that the tenderer was required to perform at least 25% of the works under the contract itself. The Advocate General concluded that such a restriction breached Directive 2004/18, as a contracting authority can not stipulate that the successful tenderer must perform part of the works (specified in abstract terms as a percentage) using its own resources.

The public works contract in this case benefited from EU financial assistance. The Advocate General concluded that a breach of the EU public procurement rules constituted an “irregularity” which required the competent national authority to impose a financial correction on the contracting authority. This was the case even if the irregularity did not result in any quantifiable loss to the EU Funds.


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