Judgment — ECLI:EU:C:2016:985
Date: 2016-12-21
Language of the case: German
Court formation: Third Chamber
Subject matter: Right of establishment;Approximation of laws;Freedom to provide services
Procedure: Reference for a preliminary ruling;Reference for a preliminary ruling - decision unnecessary
Origin: Germany

Summary — Judgment of the Court (Third Chamber), 21 December 2016 Approximation of laws — Procedures for the award of public works contracts, public supply contracts and public service contracts — Directive 2004/18 — Public contract — Definition – Agreement between two regional authorities – Legal instrument creating a new public-law entity and organising the transfer of powers and responsibilities for the performance of public tasks — Not included — Conditions — A matter for the national court to ascertain (Art. 4(2) TEU; European Parliament and Council Directive 2004/18, Art. 1(2)(a)) Article 1(2)(a) of Directive 2004/18 on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts must be interpreted as meaning that an agreement concluded by two regional authorities, on the basis of which they adopt constituent statutes forming a special-purpose association with legal personality governed by public law and transfer to that new public entity certain competences previously held by those authorities and henceforth belonging to that special-purpose association, does not constitute a ‘public contract’. The division of competences within a Member State benefits from the protection conferred by Article 4(2) TEU. That protection also concerns internal reorganisations of powers within a Member State, under which a previously competent authority is released from or relinquishes the obligation or power to perform a given public task, whereas another authority is henceforth entrusted with that obligation or power. Moreover, such a transfer of competence does not meet all of the conditions required to come within the definition of public contract. Only a contract concluded for pecuniary interest may constitute a public contract coming within the scope of Directive 2004/18, the pecuniary nature of the contract meaning that the contracting authority concluding a public contract receives a service which must be of direct economic benefit to that contracting authority. The synallagmatic nature of the contract is thus an essential element of a public contract. Moreover, irrespective of the fact that a decision on the allocation of public competences does not fall within the sphere of economic transactions, the very fact that a public authority is released from a competence with which it was previously entrusted by that self-same fact eliminates any economic interest in the accomplishment of the tasks associated with that competence. Consequently, the reassignment of resources used to perform the tasks associated with the competence, which are transferred by the authority that ceases to be competent to the authority that acquires competence, cannot be analysed as a payment of a price, but on the contrary is the logical — and even necessary — consequence of the voluntary transfer or imposed reallocation of that competence from the first authority to the second. Similarly, nor does the fact that the authority that takes the initiative to transfer a competence or decides on the reassignment of a competence undertakes to cover potential cost overruns in relation to revenues that may arise as a result of the exercise of that competence constitute remuneration. That is a guarantee intended for third parties, the necessity of which follows, in the present case, from the principle that a public authority cannot be sued in insolvency proceedings. The existence of such a principle itself follows from the internal organisation of a Member State. However, in order to be considered an internal organisation measure and, accordingly, come under the freedom of Member States guaranteed by Article 4(2) TEU, a transfer of competence between public authorities must meet certain conditions. Such a transfer of competences concerning the performance of public tasks exists only if it concerns both the responsibilities associated with the transferred competence and the powers that are the corollary thereof, so that the newly competent public authority has decision-making and financial autonomy, which it is for the referring court to verify. (see paras 40-47, 49, 55, operative part)