CELEX: 62003CJ0126
Failure of a Member State to fulfil its obligations
Directive 92/50/EEC
Public contracts
Waste transport services
Procedure without prior publication of a contract notice
Contract concluded by a contracting authority in relation to an economic activity subject to competition
Contract concluded by a contracting authority in order to be able to submit an offer in a tender procedure
Proof of the service provider's capabilities
Possibility of relying on the capabilities of a third party
Subcontracting
Consequences of a judgment finding a failure to fulfil an obligation

By its application, the Commission of the European Communities asks the Court to declare that, as the contract for the transport
of waste from discharge points in the region of Donauwald (Germany) to the Munich-North thermal power station was awarded
by the City of Munich (Germany) in breach of the procedural rules laid down in Article 8 of Council Directive 92/50/EEC of
18 June 1992 relating to the coordination of procedures for the award of public service contracts (OJ 1992 L 209, p. 1), read
in conjunction with Article 11(1) of that directive, the Federal Republic of Germany has failed to fulfil its obligations
under that directive.
Legal framwork
Article 1(a) of Directive 92/50 provides that ‘public service contracts’ are ‘contracts for pecuniary interest concluded in
writing between a service provider and a contracting authority’, to the exclusion of the contracts listed in points (i) to
(ix) of that provision.
Article (1)(b) of that directive states that ‘contracting authorities’ are ‘the State, regional or local authorities, bodies
governed by public law, associations formed by one or more of such authorities or bodies governed by public law’.
Article 8 of Directive 92/50 provides that ‘contracts which have as their object services listed in Annex I A shall be awarded
in accordance with the provisions of Titles III to VI’.
Article 11(1) of Directive 92/50 states that in awarding public service contracts, contracting authorities are to apply the
open, restricted or negotiated procedures defined in Article 1(d), (e) and (f), respectively, of the directive.
Facts and pre-litigation procedure
In 1997, the city of Munich, which operated the Munich-North thermal power station, concluded a contact with a private sector
undertaking, Rethmann Entsorgungswirtschaft GmbH & Co. KG (‘Rethmann’), under which it undertook  to entrust to Rethmannn
responsibility for the transport of waste from discharge points to that power station if the City of Munich was awarded the
waste disposal contract for the region of Donauwald (Germany) which had been the subject of an invitation to tender issued
by the Abfallwirtschaftsgesellschaft Donau-Wald mbH (‘AWG Donau-Wald’), to which the City of Munich had responded.
Having been awarded that contract, the City of Munich entrusted responsibility for the transport of waste to Rethmann pursuant
to the agreement concluded with that company, without, however, the transfer of that activity being the subject of an invitation
to tender under Directive 92/50.
Having given the Federal Republic of Germany an opportunity to submit observations in that regard, the Commission sent a reasoned
opinion to that Member State on 25 July 2001, in which it stated that the contract for the transport of waste from the discharge
points in the Donauwald region to the Munich-North thermal power station (‘the contract at issue’) should have been the subject
of an invitation to tender published in the
Official Journal of the European Communities
in accordance with Directive 92/50.  It invited the Member State to comply with its obligations under Community law within
two months of the reasoned opinion being notified. Following the reply by the German authorities of 30 October 2001, in which
they denied the infringement, the Commission brought the present action.
The action
The infringement
In support of its application, the Commission relies on a single complaint, alleging a breach of Article 8 of Directive 92/50,
read in conjunction with Article 11(1) of that directive, on the ground that the City of Munich failed to make the contract
at issue the subject of an invitation to tender.
It should be noted in that regard that under Article 8 of Directive 92/50, read in conjunction with Article 11(1) of that
directive, public contracts which have as their object services listed in Annex I A must be awarded in accordance with the
provisions of Titles III to VI of the directive, applying the open, restricted or negotiated procedures within the meaning
of the directive.
‘Public service contracts’ are defined in Article 1(a) of Directive 92/50 as being contracts for pecuniary interest concluded
in writing between a service provider and a contracting authority.
‘Contracting authorities’ are defined in Article 1(b) of Directive 92/50 as being ‘the State, regional or local authorities,
bodies governed by public law, associations formed by one or more of such authorities or bodies governed by public law’.
Accordingly, Article 8 of Directive 92/50, read in conjunction with Article 1(a) and (b) and Article 11(1) of the directive,
provides that, where contracts for pecuniary interest concluded in writing between a service provider and a regional or local
authority have as their object the services listed in Annex I A to the directive, they must be the subject of an open, restricted
or negotiated procedure within the meaning of that directive.
In the present case, it must be held that the contract at issue is a public contract for the purposes of Articles 8 and 11
of Directive 92/50, and that that contract should have been awarded in accordance with Titles III to VI of that directive.
The contract concluded between the City of Munich and Rethmann, under which that company undertook to transport waste from
the discharge points in the Donauwald region to the Munich-North thermal power station, relates to a service covered by Annex
I A to the directive and provided by an undertaking to a regional or local authority. It is accordingly a contract for pecuniary
interest concluded in writing between a service provider and a contracting authority.
In that regard, the arguments relied on by the German Government to show that the contract at issue is not a public contract
for the purposes of Articles 8 and 11 of Directive 92/50 cannot be accepted.
First of all, the German Government maintains that the City of Munich is not, in relation to the contract at issue, a ‘contracting
authority’ for the purposes of Article 1(b) of Directive 92/50 and that the contract is not a ‘public contract’ for the purposes
of Article 1(a) of the directive. According to that government, the contract does not fall within the scope of activities
in the general interest of the City of Munich, but comprises an independent economic activity, which is clearly distinct and
subject to competition, that is to say the operation of the Munich‑North thermal power station.
It must be answered in that regard that, under Article 1(b) of Directive 92/50, regional or local authorities are, by definition,
contracting authorities. It is clear from case-law that Article 1(a) of the directive makes no distinction between public
contracts awarded by a contracting authority for the purposes of fulfilling its task of meeting needs in the general interest
and those which are unrelated to that task (see, by way of analogy, in relation to Council Directive 93/37/EEC of 14 June
1993 concerning the coordination of procedures for the awarding of public works contracts (OJ 1993 L 199, p. 54), Case C-44/96
Mannesmann Anlagenbau Austria and Others
[1998] ECR I-73, paragraph 32). It is likewise irrelevant that the contracting authority intends to operate as a provider
of services itself and that the contract in question aims, in that context, to subcontract a part of the activities to a third
party. It is conceivable that the decision of the contracting authority as to the choice of that third party will be based
on considerations that are not economic ones. It follows that, whatever the nature and context of the contract at issue may
be, it constitutes a ‘public contract’ within the meaning of Article 1(a) of Directive 92/50.
As regards the argument that the activity of transporting waste carried on by Rethmann would, in the end result, be the subject
of two invitations to tender, it is sufficient to observe that that activity is the subject of two separate public contracts,
that is to say the one awarded by the City of Munich and the one, concerning more generally the disposal of waste in the Donauwald
region, awarded by AWG Donau-Wald, each of which required to be the subject of an invitation to tender, and that the application
of Directive 92/50 thus has the result that the service provided by Rethmann required to be the subject of two successive
invitations to tender.
As regards the argument that there was no use of public resources of the City of Munich in the present case, it must be held
that use of that kind is not a factor that determines whether or not there is a public contract for the purposes of Articles
8 and 11 of Directive 92/50.
The German Government also submits that, inasmuch as it was awarded for the purpose of resale to third parties, the contract
at issue is excluded from the scope of Directive 92/50 by reason of Article 1(a)(ii) of that directive, read in conjunction
with Article 7 of Council Directive 93/38/EEC of 14 June 1993 coordinating the procurement procedures of entities operating
in the water, energy, transport and telecommunications sectors (OJ 1993 L 199, p. 84). In that regard, as the Advocate General
observes at point 34 of his Opinion, it must be held that Article 1(a)(ii) of Directive 92/50 excludes from its scope contracts
awarded in the fields covered by Directive 93/38, because the Community legislature wished those contracts to be covered only
by Directive 93/38. The exception laid down in Article 7 of Directive 93/38 would therefore apply only if the contract at
issue fell within the scope of that directive. Inasmuch as that contract does not come within the activities referred to in
Article 2(2) of Directive 93/38, the exception laid down in Article 7 of that directive cannot apply in the present case.
The German Government also argues that it would have been impossible in practice to award the contract at issue in accordance
with Titles III to VI of Directive 92/50, inasmuch as, in order to demonstrate its technical capability for the purposes of
Article 32(2)(c) and (h) of that directive when the invitation to tender was issued by AWG Donau‑Wald, the City of Munich
needed to communicate the name of its subcontractor at the time its offer was lodged. In that regard it is true that a service
provider which, with a view to being admitted to participate in a tendering procedure, intends to rely on the resources of
entities or undertakings with which it is directly or indirectly linked must establish that it actually has available to it
the resources of those entities or undertakings which are necessary for the performance of the contract but which it does
not itself own (see, to that effect, Case C-176/98
Holst Italia
[1999] ECR I-8607, paragraph 29; Case C-399/98
Ordine degli Architetti and Others
[2001] ECR I-5409, paragraph 92; and Case C-314/01
Siemens and ARGE Telekom & Partner
[2004] ECR I‑0000, paragraph 44). However, in the present case, it would in any event have been possible for the City of
Munich to undertake an accelerated restricted procedure under Article 20 of Directive 92/50 between the issuing of the invitation
to tender and the lodging of its offer.
The German Government maintains that the contract at issue could, by reason of Article 11(3)(d) of Directive 92/50, have been
awarded using a negotiated procedure without prior publication of a contract notice. It should be pointed out in that regard
that, as a derogation from the rules intended to ensure the effectiveness of the rights conferred by the EC Treaty in relation
to public service contracts, Article 11(3)(d) of Directive 92/50 must be interpreted strictly and that the burden of proving
the existence of exceptional circumstances justifying a derogation lies on the person seeking to rely on those circumstances
(see Joined Cases C-20/01 and C-28/01
Commission
v
Germany
[2003] ECR I-3609, paragraph 58). The application of Article 11(3) of the directive is thus subject to three cumulative conditions.
It requires the existence of an unforeseeable event, extreme urgency rendering the observance of time-limits laid down by
other procedures impossible, and a causal link between the unforeseeable event and the extreme urgency resulting therefrom
(see, in relation to Council Directive 71/305/EEC of 26 July 1971 concerning the coordination of procedures for the award
of public works contracts (OJ, English Special Edition 1971 (II), p. 682), Case C-107/92
Commission
v
Italy
[1993] ECR I-4655, paragraph 12, and Case C-318/94
Commission
v
Germany
[1996] ECR I-1949, paragraph 14). In the present case, as was held in paragraph 22 of this judgment, it would have been possible
for the City of Munich to undertake an accelerated restricted procedure (see, in relation to Directive 71/305, Case C-24/91
Commission
v
Spain
[1992] ECR I-1989, paragraph 14, and
Commission
v
Italy,
paragraph 13). It follows that the Federal Republic of Germany has not shown that a situation of extreme urgency existed.
In the light of the above, it must be held that, as the contract for the transport of waste from the discharge points in the
Donauwald region to the Munich-North thermal power station was awarded by the City of Munich in breach of the procedural rules
laid down in Article 8 of Directive 92/50, read in conjunction with Article 11(1) of that directive, the Federal Republic
of Germany has failed to fulfil its obligations under that directive.
The consequences of a judgment finding a failure to fulfil obligations
The German Government submits that, should there be a finding of failure to fulfil obligations, the Federal Republic of Germany
would not be obliged to terminate the contract which has already been entered into.
In that regard, it is sufficient to reply that while, in proceedings for failure to fulfil obligations under Article 226 EC,
the Court is only required to find that a provision of Community law has been infringed, it is clear from Article 228(1) EC
that the Member State concerned is required to take the measures necessary to comply with the judgment of the Court.
Costs
Under Article 69(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been
applied for in the successful party’s pleadings. Since the Commission has applied for costs and the Federal Republic of Germany
has been unsuccessful, the latter must be ordered to pay the costs.
On those grounds, the Court (First Chamber) hereby:
1.
Declares that, as the contract for the transport of waste from the discharge points in the Donauwald region to the Munich-North
thermal power station was awarded by the City of Munich in breach of the procedural rules laid down in Article 8 of Council
Directive 92/50/EEC of 18 June 1992 relating to the coordination of procedures for the award of public service contracts,
read in conjunction with Article 11(1) of that directive, the Federal Republic of Germany has failed to fulfil its obligations
under that directive;
2.
Orders the Federal Republic of Germany to pay the costs.
Signatures.
–
Language of the case: German.