Opinion of Mr Advocate General Lenz delivered on 6 February 1992. - Commission of the European Communities v Kingdom of Spain. - Directive 71/305/CEE - Awarding of public contracts - Advertising of contracts - Derogation in urgent cases. - Case C-24/91.



European Court reports 1992 Page I-01989



Opinion of the Advocate-General

++++

Mr President,

Members of the Court,

A - Introduction

1. In the present action for a declaration that the Kingdom of Spain has failed to fulfil its obligations under the Treaty, the Commission complains that the relevant provisions of Council Directive 71/305/EEC concerning the coordination of procedures for the award of public works contracts (1) were disregarded in the award of a building contract for extending the capacity of the Universidad Complutense, Madrid.

2. In early 1989, the university' s governing council awarded a contract for the extension and renovation of the Faculty of Political Science and Sociology and the School of Social Work by a private contract procedure.

3. The Spanish Government defends the course of action taken by the university authorities on the ground that the urgent nature of the work to be carried out meant that it was impossible to comply with the time-limits laid down in the directive. The funds necessary to initiate a tendering procedure were made available in January 1989. The architect in charge estimated the time required for the work at seven and a half months. Since the work had to be completed by the beginning of the 1989-1990 academic year on 1 October 1989, there was no time to lose. The factual circumstances met the conditions for the operation of the derogating provision in Article 9(d) of the directive, which allows authorities awarding contracts not to comply with the provisions of the directive "in so far as is strictly necessary when, for reasons of extreme urgency brought by events unforeseen by the authorities awarding contracts, the time limit laid down in other procedures cannot be kept".

4. The Commission takes the view that the conditions for the application of that derogating rule are not met. Even if it were accepted that there was an urgent need to award the contract, it would still have been possible to comply with the shorter form of the award procedure laid down in Article 15 of the directive.

5. The Commission, the applicant, claims that the Court should:

Declare that, inasmuch as the governing council of the Universidad Complutense, Madrid, decided to award contracts for works connected with the extension and renovation of the university' s Faculty of Political Science and Sociology and the School of Social Work by private contract, omitting thus to publish a notice of invitation to tender in the Official Journal of the European Communities, the Kingdom of Spain has failed to fulfil its obligations under Council Directive 71/305/EEC of 26 July 1971 concerning the coordination of procedures for the award of public works contracts, especially Article 9 and Articles 12 to 19 thereof; and

Order the Kingdom of Spain to pay the costs.

6. The Kingdom of Spain, the defendant, contends that the Court should:

dismiss the Commission' s application; and

order the Commission to pay the costs.

7. Reference is made to the Report for the Hearing for a fuller account of the facts of the case, the legal background and the submissions and arguments of the parties.

B - Opinion

1. Admissibility

8. Although the Spanish Government has not raised an objection of inadmissibility, a few preliminary considerations concerning the admissibility of the application are indicated.

9. In an action for failure to fulfil Treaty obligations, it is essential to establish whether the defendant State may be held responsible for the offending conduct. The problem arises in particular when the State uses the machinery of private law in carrying out its functions. In such cases the possibility of State influence must be established positively. (2)

10. The situation is different where the conduct of a primary State authority is concerned. The Member State is thus responsible, vis-à-vis the Community, for independent bodies even where there is no provision for direct Government intervention in specific areas of conduct.

11. A State university, even if independent from an organizational point of view, is as a rule a State institution. The type of "legal person governed by public law" chosen by the Member State when setting up the university is therefore not so very important. The State may therefore be held responsible, in the context of an action for failure to comply with Treaty obligations, for legal acts of the university.

12. That view is supported by the definition of the persons covered by Directive 71/305, in Article 1(b). Under that provision, "authorities awarding contracts" are to include "the State, regional or local authorities and the legal persons governed by public law specified in Annex I", which are, in Spain, "other corporate bodies subject to public rules for the award of contracts". (3) The fact of being subject to public contract award rules is in itself evidence that the awarding authority is a "public institution".

13. No doubts have been raised in the course of the action either as to the status of the university as a legal person governed by public law or as to the applicability of the directive, so we may proceed on the assumption that responsibility for the conduct complained of may be ascribed to the defendant Member State.

Merits of the application

14. The works contract in issue, with a value of PTA 430 256 250, falls in principle, under Article 7, within the scope of the directive. The fact that the threshold value for the applicability of the directive was increased by Directive 89/440 from ECU 1 000 000 to ECU 5 000 000 is of no consequence in the present action, since that increase did not take effect until after the events in issue.

15. Since it may be assumed that the directive is in principle applicable, the question arises whether there are sufficient grounds to justify a derogation from the provisions governing the award of contracts. Because the directive itself not only sets out, in Article 9, the circumstances in which a derogation is possible but also offers, with the accelerated procedure, a course of action for exceptional circumstances, any departure from the general rules on publication must be confined within the limits laid down by the directive for derogations.

16. The Commission takes the view that, since the funds were made available without difficulty in January 1989, the university could have initiated the tendering procedure earlier. The Spanish Government denies that view, and points out that a tendering procedure cannot be initiated until the relevant budget heading has been definitively confirmed in the Budget Law. The parties differ strongly in their views concerning the measures which would, depending on the circumstances, have at least cleared the way for an earlier award of the contract.

17. From this point on, I wish to base my consideration on the most favourable version of the facts for the defendant Member State, so I shall assume here that the tendering procedure could not have been initiated until the funds had been definitively made available.

18. It has not been possible conclusively to ascertain the exact date on which the funds were made available. The earliest point of reference is 9 February 1989, when the governing council of the Universidad Complutense gave its approval for the building work in issue to be carried out. The question whether any delay occurred between the date on which the funds were definitively made available and the meeting of the governing council on 9 February 1989 must remain open.

19. Since the derogating provision of Article 9(d) of the directive, which may be relevant, is applicable only when, for the reasons specified therein, "the time limit laid down in other procedures cannot be kept", it must first be determined whether the directive makes provision for an appropriate response.

20. The Commission has pointed out that the accelerated procedure under Article 15 of the directive could have been used. Under the restricted procedure, the time limits for the invitation to tender would then have been as follows: the notice in the Official Journal of the European Communities would have had to be published, in accordance with Article 12 of the directive, not later than five days after the date of dispatch. The time limit for the receipt of requests to participate would then have been twelve days under Article 15 of the directive, again calculated from the date of dispatch of the notice, so that it would not have been necessary to add the five-day time limit for publication to those twelve days. Under the restricted accelerated procedure, there is a further time limit for the receipt of tenders of ten days from the date of the invitation to tender. At least 22 days must therefore be allowed from the date of dispatch of the notice to the Official Journal of the European Communities to the final date for the receipt of tenders. A slight delay may occur because the request to submit a tender is dispatched after the period allowed for the submission of a request to participate.

21. The question whether the procedure thus described really enables outside tenderers to participate may be left undecided. In any event, from a purely arithmetical point of view, the accelerated procedure could have been applied in the present case.

22. The governing council of the university decided on 9 February 1989, a Thursday, to have the work carried out. The principal' s office could then without difficulty on the following Friday, 10 February 1989, have initiated the measures necessary for the publication of the invitation to tender and if necessary complied with any further administrative requirements.

23. In fact, it was not until 27 February, two and a half weeks after the governing council' s decision, that the principal' s office took its decision and ordered publication. The Spanish Government has not been able to give any convincing explanation for that two-and-a-half-week delay. Mention has been made of administrative technicalities, but no more detailed explanation has been forthcoming.

24. In a case where speed is of the essence it must be possible to make advance allowance for administrative technicalities in such a way that they do not engender further delay. Thus, if it could be confidently expected that the funds would shortly be made available in the Budget Law - and even the date on which the Budget Law would be adopted was foreseeable - then administrative preparations for the tender procedure could have been made, even though it could not yet formally be initiated.

25. The report of the head of the design office, to be found in Annex IV to the reply, concerning the urgent nature of the work could quite clearly have been obtained before the governing council reached its decision - it was not necessary to wait until 12 February 1989.

26. If we now assume that there was no further delay in dealing with matters after the decision of 9 February 1989, and even if 10, 11 and 12 February are also disregarded, the 22-day period necessary for the completion of the accelerated procedure would have expired on 6 March 1989, the very day on which the actual time-limit for the receipt of tenders pursuant to the announcement of 27 February 1989 did expire. It cannot therefore be claimed that compliance with the procedure laid down in the directive would have led to any delay in carrying out the work.

27. Consideration of the conditions for the application of the derogation under Article 9(d) is therefore only of academic interest. Article 9(d) of the directive makes it a condition that "for reasons of extreme urgency brought by events unforeseen by the authorities awarding contracts, the time limit laid down in other procedures cannot be kept". In my Opinion in Case 199/85 I took the view that a strict interpretation is in principle necessary, and that the conditions of that paragraph must all be satisfied. (4) Therefore, if any one of the material criteria is not met, then the derogating provision cannot apply. Even though in Case 199/85 the situation as regards the urgent nature of the work was different from that in the present case, that makes no difference to the validity of the abstract interpretation of the provision.

28. In its judgment in that case, the Court ruled on the interpretation of Article 9(d), holding that the derogation was to be interpreted strictly. (5)

29. It may well be that at the beginning of 1989 the increase in the number of students compared to the limited space available was seen as an urgent and compelling reason to take steps to expand capacity. But the number of new enrolments was not a sudden and unforeseeable occurrence which took the university by surprise and obliged it to take immediate steps. It may be accepted that a steady increase in student numbers will lead at a given moment to an untenable situation. Such developments are, however, in no way unpredictable. Nor can the precise number of new enrolments be the determining factor, since slight fluctuations are unlikely either to improve or significantly to aggravate the overall situation. In February 1989, moreover, the new enrolments for the 1989-1990 academic year had not yet been registered. That would not be done until July 1989, so that at the beginning of the calendar year any calculations concerning new entries could be made only on the basis of estimates. As far as the increasing gravity of the situation is concerned, therefore, there can be no question of events unforeseen by the authority awarding the contract.

30. As regards the appropriation of the funds, it should be stressed that a tendering procedure cannot be implemented until the funds have been definitively made available. Nevertheless, the funds allocated to the contract in the supplementary budget by the Budget Law did not constitute an unforeseeable event either, so that the university authorities - faced with a difficult situation - were under a clear duty to make careful preparation and deal with the matter without undue delay.

31. In that connection, the Spanish Government has claimed that the allocation of the funds need not necessarily be classed as an unforeseeable event, but in the present case as unforeseen. Only when the event actually took place was it possible to attach any consequences thereto.

32. It must first be pointed out in that regard that such an interpretation of Article 9(d) of the directive is contradicted by the wording of the provision. It also runs contrary to the aim of the measure, which is to establish an objective standard for the applicability of the derogation. The criterion of foreseeability is a standard measure for the degree of care incumbent on an authority awarding a contract in the event of aggravating circumstances. The authority is therefore released from its duty to ensure compliance with the provisions of the directive only if the events in question are objectively unforeseeable.

33. It follows from all the foregoing that the university authorities' misconduct as regards their obligations under Directive 71/305 has been established. Judgment must therefore be given against the defendant Member State in accordance with the application.

C - Conclusion

34. I propose that the Court should:

1. Declare that, inasmuch as the governing council of the Universidad Complutense, Madrid, decided to award contracts for works connected with the extension and renovation of the university' s Faculty of Political Science and Sociology and the School of Social Work by private contract, the Kingdom of Spain has failed to fulfil its obligations under Council Directive 71/305/EEC of 26 July 1971 concerning the coordination of procedures for the award of public works contracts; and

2. Order the Kingdom of Spain to pay the costs of the proceedings.

(*) Original language: German.

(1) - Council Directive of 26 July 1971 (OJ, English Special Edition 1971 (II), p. 682), amended by Council Directive 89/440/EEC of 18 July 1989 (OJ 1989 L 210, p. 1) which in particular raised the threshold value from which contracts are subject to the directive from ECU 1 000 000 to ECU 5 000 000.

(2) - See Case 249/81 Commission v Ireland [1982] ECR 4005, Case 222/82 Apple and Pear Development Council v Lewis [1983] ECR 4083 and the judgment of 11 July 1991 in Case C-247/89 Commission v Portugal, not yet published, especially point 15 et seq. of the Opinion.

(3) - Directive 71/305 as completed by the Act of Accession of Spain.

(4) - Case 199/85 Commission v Italy [1987] ECR 1039, point 36 of the Opinion at p. 1054.

(5) - Case 199/85, cited above, paragraph 14.