REUTERS | Mike Blake

Public procurement case digest (May 2015)

May’s case digest includes an ECJ ruling on the meaning of a service concession under Directive 2004/18, and an Advocate General’s opinion on the time limits for bringing an action under the Remedies Directive.

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 on meaning of a service concession (Kansaneläkelaitos v Suomen Palvelutaskit ry, Oulum Taksipalvelut Oy and Turun Seudeun Invataksit ry)

In this case, the European Court of Justice (ECJ) considered whether an arrangement where a contracting authority reimbursed part of the cost of a service prevented that arrangement from being classed as a service concession.

Finnish law provides for reimbursement of taxi expenses linked to medical treatment for people assured under the Finnish social security system. The Kansaneläkelaitos (the Finnish social security office) entered into a framework agreement with the Finnish taxi union, whereby local social security offices designated one local taxi company for each area to serve as the central reservation number and entered into agreements with them for electronic compensation for the part of the taxi fares covered by the Kansaneläkelaitos, with the assured patients being required to pay the amounts not covered directly to the taxi driver. For taxis taken that did not go through the central reservation number, the assured patient was required to pay the full fare and seek reimbursement directly from the Kansaneläkelaitos.

There was no call for tenders and the contracts were awarded directly. The Finnish Tribunal of Economic Affairs considered that the framework agreement between the Kansaneläkelaitos and the Finnish taxi union as well as the local contracts providing for direct electronic compensation through a central reservation system formed a single agreement which should have been qualified as a service concession under Article 5(6) of the Finnish law implementing Directive 2004/18.

The Finnish Supreme Administrative Court referred the following questions to the ECJ:

  • Does a service concession extend to a complex arrangement which includes the payment of reimbursements within the authority’s organisational responsibility in the form of a direct reimbursement scheme and at the same time a system of booking journeys which is not within the authority’s responsibility?
  • What significance should be attached to the indirect consequence of the scheme that the purpose of the booking system is to reduce the transport costs payable from public funds by the Kansaneläkelaitos?

The ECJ stated that it was settled case law that, when the agreed method of remuneration consists in the right for the provider to exploit the service it is providing, that method of remuneration means that the provider takes the risk of operating the services in question. While that risk may be very limited, it is necessary for classification as a service concession that the contracting authority transfer to the concession holder all or, at least, a significant share of the risk which it faces.

In this case, the ECJ observed that the taxi companies were exposed to the risk of non-payment of the contributions which were paid directly to the taxi drivers and that they were also responsible for the management of the contracts with the individual taxi drivers. However, the ECJ stated that it is for the national court to assess whether there has been a transfer of all, or a significant share, of the risk faced by the contracting authority.

Advocate General opinion on whether Italian court fees relating to review procedures for public contracts are compatible with EU law  (Orizzonte Salute – Studio Infermieristico Associato v Azienda Pubblica di Servizi alla persona ‘San Valentino’ – Città di Levico Terme and others (AG’s Opinion))

Advocate General Jaaskinen has handed down an opinion on a preliminary reference brought by an Italian court asking whether the Italian court fees payable for the review procedures applicable to public contracts are compatible with EU law.

The Advocate General considered that Directive 89/665, interpreted in the light of Article 47 of the Charter of Fundamental Rights (Charter) and the principles of equivalence and effectiveness, did not preclude provisions of national law which set out a scale of standard court fees applicable only in administrative proceedings relating to public procurement – provided that the level of the court fee did not constitute a barrier to the access to a court or render exercise of public procurement judicial review rights excessively difficult.

However, where several and cumulative courts fees are levied in judicial proceedings, in which an undertaking challenges the legality of a single contract award procedure, this will only be acceptable if justified under the principle of proportionality set out in Article 52(1) of the Charter. This is to be assessed by the national referring court.

Advocate General opinion on time limit for bringing procurement action (MedEval – Qualitäts-, Leistungs- und Struktur-Evaluierung im Gesundheitswesen GmbH v Bundesvergabeamt (AG’s opinion))

Advocate General Kokott has given her opinion on a reference from an Austrian court on the time limits for bringing an action under Directive 89/665 (the Remedies Directive).

The Advocate General considered that Article 2f(2) of Directive 89/665 should be interpreted as precluding national legislation which provides that an application for a declaration of an infringement of public procurement law must be made within six months of the conclusion of the contract, if the declaration of an infringement of public procurement law is a precondition not only of annulling the contract but also of bringing a claim for damages.

The Advocate General considered that the Austrian legislation was too stringent and that the time limits for applying for a declaration (required before an applicant can seek damages) cannot begin to run until the interested party becomes, or ought to have become, aware that the contract had been awarded.

Ombudsman finds no maladministration in evaluation of tender by European External Action Service (Decision of the European Ombudsman closing the inquiry into complaint 150/2015/DK against the European External Action Service)

The European Ombudsman has published a decision on a complaint in relation to the evaluation of a tender by a Delegation of the European External Action Service. The Ombudsman noted that selection boards enjoy a wide margin of discretion in assessing tenders. Their decisions are only subject to review if they are affected by a manifest error of assessment. The Ombudsman found that the complainant had not shown that the Delegation had made any manifest error of assessment in its evaluation of the complainant’s tender, for example, it had been unable to point to where its tender had contained the information that the evaluators had identified as missing or lacking in detail. Therefore, the Ombudsman concluded that there had been no maladministration by the Delegation.

Practical Law Practical Law Public Sector

Leave a Reply

Your email address will not be published. Required fields are marked *