Opinion of the Advocate-General



Opinion of the Advocate-General

1. In this action for failure to fulfil obligations, the Commission seeks a declaration that, by reserving, in Article 4 of Law No 85‑704 of 12 July 1985 on public project contracting and its relationship to private project management, as amended by Law No 91‑662 of 13 July 1991, and by Law No 96-987 of 14 November 1996, (2) the task of delegated project contracting to an exhaustive list of legal persons under French law, the French Republic has failed to fulfil its obligations under Council Directive 92/50/EEC of 18 June 1992 relating to the coordination of procedures for the award of public service contracts (3) and, in particular, Articles 8 and 9 thereof, and under Article 49 EC.

2. This action enables the material scope of Directive 92/50 to be clarified, and, in particular, the definition of the term ‘contract’. Moreover, it concerns both compliance with that directive and the principle of freedom to provide services laid down in Article 49 EC, which makes it necessary to define the relationship between these two pieces of legislation.

I – Factual and legislative background

3. It must be noted at the outset that Article 4 of Law No 85-704, which is the subject of the present action, is in the process of being amended. Order No 2004‑566 of 17 June 2004 amends that article, by permitting authority henceforth to be delegated both to public bodies and to private persons. (4) The order creates an incompatibility between the role of agent and ‘any task of project management, execution of works or technical supervision relating to the work or works connected to the delegated authority’ in order to avoid conflicts of interest. (5) The incompatibility extends to any undertakings connected with the agent. A draft law aiming to ratify that order was laid before the Assemblée Nationale on 15 September 2004. However, the Court has consistently held that the failure to fulfil obligations must be assessed as at the end of the period of two months from the reasoned opinion, dated 27 June 2002. That is why in the rest of this Opinion I shall be referring to the French law as it was in force at that time.

4. Before explaining the respective positions of the French Republic and the Commission on these two issues, let me briefly set out the relevant national and Community law provisions.

5. Directive 92/50 coordinates the procedure for the award of public service contracts. It aims to ‘eliminate barriers to the freedom to provide services and therefore to protect the interests of economic operators established in a Member State who wish to offer goods or services to contracting authorities in another Member State’. (6) To achieve that aim, the Directive seeks to ‘ensure that undertakings from other Member States will be able to tender for contracts or bundles of contracts likely to be of interest to them for objective reasons relating to their value.’ (7) Under Directive 92/50 two categories of services, set out in Annexes IA and IB, are subject to different regimes. In accordance with Article 9 of the Directive, the rules applicable to the services listed in Annex IB are concerned only with a requirement for a definition of the technical specifications and the sending of a notice of the result of the award procedure. On the other hand, the services listed in Annex IA of the Directive are, in accordance with Article 8 thereof, subject to more extensive obligations: they must, for example, be subject to prior advertising in accordance with detailed procedures and fixed time‑limits.

6. The principle of freedom to provide services set out in Article 49 EC applies to all provisions of services, provided that they do not fall within the exceptions laid down in Articles 45 EC and 46 EC. Since Directive 92/50 applies only to the provision of services based on public contracts, (8) services carried out on other bases are only subject to the principle of freedom to provide services. Contracts not exceeding the financial thresholds defined in Article 13 of Directive 92/50 are also subject to Article 49 EC.

7. The Law which is the subject of these proceedings organises and regulates public project contracting. It applies to the execution of all construction or infrastructure projects, and to industrial plant intended for their operation where the contracting authorities are the State, public bodies or certain designated private bodies. (9) Within that framework, the contracting authority may enter into an agency contract in accordance with the provisions of that law.

8. The features of this type of contract are specified in Article 5 of Law No 85-704: ‘the relationship between the contracting authority and [the agent] shall be governed by an agreement, which shall be void unless it provides for: … the project which forms the subject‑matter of the agreement, the responsibilities entrusted to the agent, the terms under which the contracting authority shall certify completion of the agent’s tasks, the detailed arrangements for the agent’s remuneration, the penalties applicable to the agent in the event of breach of his obligations and the circumstances in which the agreement may be terminated; …’

9. Article 3 of that law then lists the responsibilities which the contracting authority may entrust to an agent:

‘– Defining the administrative and technical terms according to which the project will be worked up and executed;

– Preparing for the selection of the project manager, signature of the project management contract, after approval of the choice of the project manager by the contracting authority, and management of that contract;

– Approving the preliminary designs and agreements on the project;

– Preparing for the selection of the contractor, signature of the contract for the works, after approval of the choice of the contractor by the contracting authority, and management of that contract;

– Paying the remuneration for the project management and the works;

– Acceptance of the works, and carrying out any measures relating to the aforementioned responsibilities.’

10. Under Article 2 of that law, certain tasks are not eligible for delegation by the contracting authority. They include the general design of the work and the way that it is carried out.

11. As is apparent from the abovecited provisions of the Law at issue in these proceedings, the responsibilities that the contracting authority may entrust to the agent are very broad. However, what constitutes the specific nature of the agency contract is the identity of the agent, which the contracting authority may select only from the exhaustively prescribed classes in Article 4 of the law in question:

‘(a) The legal persons referred to in Article 1(1) and (2) of this Law, excepting public undertakings engaged in health and social matters, which may act as agents only for other such undertakings;

(b) Legal persons of which at least half the capital is held, directly or through an intermediary, by the legal persons referred to in Article 1(1) and (2) and whose purpose is to render their assistance to the contracting authority, provided that they are not acting as project manager or contractor on behalf of a third party;

(c) The private bodies for low‑rent housing mentioned in Article L. 411‑2 of the Code de la construction et de l’habitation, but only for other low‑rent housing bodies and for projects linked to a subsidised housing operation;

(d) Local public/private partnership companies governed by Law No 83‑597 of 7 July 1983 on local public/private partnership companies;

(e) Public undertakings created under Article L. 321‑1 of the Code de l’urbanisme as well as urban land associations approved or formed automatically under Article L. 322‑1 et seq. of the Code de l’urbanisme;

(f) Companies formed under Article 9 of Law No 51‑592 of 24 May 1951 concerning the Treasury special accounts for 1951, as amended by Article 28 of Law No 62‑933 of 8 August 1962 supplementing the Law providing guidance concerning agriculture;

(g) Any public or private person to which is entrusted the creation of a concerted development area or a housing development …;

(h) Companies which enter into the contract prescribed in Article L. 222‑1 of the Code de la construction et de l’habitation for the execution of operations of urban restructuring of large estates and areas of rundown housing … .’

12. Agency contracts made pursuant to Law No 85-704 are not subject to the French Code des marchés publics (Code on Public Procurement). (10) The contracting authority is not obliged to go through the process of preliminary competitive tendering regarding its choice of agent. On the other hand, the agent itself is subject to the Code des marchés publics (11) in respect of any contracts it enters into on behalf of the contracting authority. The question which arises is whether agency contracts made pursuant to Law No 85-704 must be subject to the principles of putting out to competitive tender and of prior advertising which stem from Directive 92/50 and the provisions of the Treaty which relate to the freedom to provide services.

13. After having sent a letter requesting information to the French Republic on 31 May 2000, the Commission, not satisfied with the replies it received, sent France a letter of formal notice on 25 July 2001. As the replies sent by the French authorities did not convince the Commission, it sent a reasoned opinion on 27 June 2002. Although the French Republic announced the imminent repeal of the provisions in issue, the Commission chose to bring an action before the Court.

14. I should point out that the Commission’s complaints turn on two aspects. First, the agency contract as described by French legislation falls within the scope of Directive 92/50 and its conditions are incompatible with Articles 8 and 9 of that directive. Second, where Directive 92/50 is not applicable, Article 4 of the Law in question, in so far as it reserves agency contracts to certain legal persons, is not consistent with the provisions of the Treaty which relate to the freedom to provide services.

15. In so far as Directive 92/50 is applicable, I shall consider the question of compliance with that Directive. Subsequently, it will be necessary to establish whether Law No 85-704 is consistent with Article 49 EC, where the directive is not applicable.

II – Incompatibility of Law No 85-704 with Directive 92/50

16. In order to establish whether, as the Commission claims in its action, Article 4 of Law No 85-704 is incompatible with the provisions of Directive 92/50, we must first examine whether the situations covered by that law fall within the scope of the Directive.

A – The inclusion of agency contracts as defined by Law No 85‑704 within the scope of Directive 92/50

17. The parties disagree in essence on whether agency contracts as defined by Law No 85-704 fall within the material scope of Directive 92/50. The scope of that directive is defined in Article 1 thereof. Therefore, for the purpose of establishing whether there is any failure to fulfil obligations, I must first consider whether an agency contract as defined by Law No 85-704 fulfils the criteria of Article 1(a) of Directive 92/50.

18. According to the definition given under that provision, ‘ public service contracts shall mean contracts for pecuniary interest concluded in writing between a service provider and a contracting authority’. Those criteria appear to be satisfied in this case.

19. Firstly, contracting authorities, within the meaning of Article 1(b) of the Directive, 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.’ Bodies governed by public law are defined in the same article in a functional way as ‘any body established for the specific purpose of meeting needs in the general interest, not having an industrial or commercial character’ and controlled by the State, whether by a majority capital holding or by the power to appoint the management authorities of the body concerned. Under Article 1 of Law No 85-704, those who may perform the tasks of a contracting authority are the State and its public undertakings, local authorities, their public undertakings, public undertakings for new town planning, groups thereof and associations of different types of public undertaking. Agency contracts may also be made under Law No 85-704 by the private bodies mentioned in Article L. 64 of the Code de la sécurité sociale (Social Security Code) and consortia and federations thereof as well as private bodies for low-rent housing and public/private partnership companies, for rented accommodation subsidised by the State and provided by such bodies and companies. There is no doubt that these bodies are all contracting authorities within the meaning of Directive 92/50.

20. Secondly, it is apparent from Article 5 of Law No 85-704 that all agency contracts must be made in writing. The second condition set out in Article 1(a) of Directive 92/50 is therefore satisfied.

21. Thirdly, for the agency contract to be valid, Article 5 of the said Law provides for the agent to be remunerated. The agency contract for project contracting is therefore a contract for pecuniary interest.

22. Fourthly, the responsibilities entrusted to the agent, as described in Article 4 of the Law, seem to correspond to the provision of services.

23. In applying these criteria, it appears, on first analysis, that the agency contract within the meaning of French legislation is a public service contract for the purposes of Article 1(a) of Directive 92/50.

24. However, the French Republic puts forward two arguments against that classification. First of all, it submits that, in the light of its numerous specificities, the agency contract as defined under Law No 85-704 cannot be considered a public service contract. Moreover, it takes the view that the reasoning adopted by the Court in Ordine degli Architetti and Others , (12) which is applicable by analogy, means that the agency contract within the meaning of Law No 85-704 also falls outside the scope of Directive 92/50.

1. Does the agency contract for project contracting mean that there is a transfer of official authority?

25. The French Republic asserts that the agency contract for project contracting may be distinguished from a contract for the provision of services on several counts. The essence of the agency contract is the power it grants the agent to represent the contracting authority. An inseparable link binds this representative role to the other responsibilities devolved to the agent. Thus the agent is charged with a task of general interest and even has a power of co-decision making with the contracting authority. The terms of the relationship between the contracting authority and the agent are quite different from those under a contract of a commercial nature. These specificities considered together prevent an agency contract from being treated as a contract for the provision of services.

26. The Commission disputes each of the arguments put forward. It asserts that the fact that services are provided under an agency contract is not sufficient to make them fall outside the scope of Directive 92/50. Thus, agency contracts made between a lawyer and his client, for example, fall within the ambit of that directive, under point 21 of Annex IB thereto. Moreover, such an analysis is consistent with that put forward by the Conseil d’Etat in its judgment of 5 March 2003, (13) in which it held that a general and systematic exclusion of agency contracts from the French Code des marchés publics was not compatible with Directive 92/50. Finally, nor does the existence of considerations of general interest preclude classification as a public service contract within the meaning of the Directive, since such elements are very often present in contracts subject to the Directive. (14) Thus, none of the specificities put forward by the French Republic would appear to be capable of excluding the contract from the scope of Directive 92/50.

27. The first question to be resolved concerns the nature of the contract made between the contracting authority and its agent. Although in principle it is immaterial to ascertain which classification national law accords to a contract made between a contracting authority and a service provider for the purposes of classifying it under Community law, it is to be noted nevertheless that the Directive applies only to ‘contracts’ for services, excluding, inter alia, public service concessions.

28. Without claiming that the contractual relationship in issue is to be treated as a concession, (15) the French Republic maintains that there is nevertheless a transfer of the exercise of official authority, from the contracting authority to the agent. It thus attempts to establish a parallel between the case‑law on concessions and the line of reasoning which the Court might adopt concerning agency contracts for project contracting. Indeed, it is clear from an analysis of the case‑law that it is precisely such a transfer of official authority to the concession holder that makes it fall outside the scope of Directive 92/50. After setting out the Community case‑law on concessions, we shall see whether it is possible to transpose that case‑law to the agency contract in issue in this case.

29. Whereas concessions for public works are expressly subject to Council Directive 93/37/EEC of 14 June 1993 concerning the coordination of procedures for the award of public works contracts, (16) service concessions are not governed by Directive 92/50. It has been established that they are excluded from its scope. (17) Directive 2004/18/EC of the European Parliament and of the Council of 31 March 2004 on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts, (18) which replaces, inter alia, Directive 92/50, maintains this exclusion of service concessions from its scope.

30. The criterion for a concession, although not laid down by any legislative provisions, may be ascertained by comparison with the definition set out in Directive 93/37. (19) In its interpretative communication on concessions under Community law, (20) the Commission also seeks to work out a definition of this term and declares the existence of exploitation risk to be the determining factor. Directive 2004/18 eliminates all uncertainty in this regard, as it defines a service concession in Article 1(4) as ‘a contract of the same type as a public service contract except for the fact that the consideration for the provision of services consists either solely in the right to exploit the service or in this right together with payment.’

31. In BFI Holding , the Court held that a contract classified as a concession under national law, which concerned refuse collection, could fall within the scope of Directive 92/50. (21) Indeed, without concerning itself with the national law’s classification, the Court referred solely to the conditions laid down in Article 1 of Directive 92/50.

32. In his Opinion in Telaustria and Telefonadress , Advocate General Fennelly had suggested using first ‘the fact that the concessionaire itself must bear the principal … economic risk.’ (22) The fact that the concession contract is made for the benefit of third‑party users is a subsidiary criterion and, according to him, the requirement that the service ceded must be in the public interest ought to be disregarded. In that case, the Court did not rule on the precise scope of the term, while holding that a concession existed where ‘the consideration provided by the first undertaking to the second consists in the second obtaining the right to exploit for payment its own service’. (23)

33. When the Court was considering the Loto concession in Italy, (24) it held that, in the absence of any transfer of authority to the concessionaire, the concession had to be regarded as a contract subject to Council Directive 77/62/EEC of 21 December 1976 coordinating procedures for the award of public supply contracts. (25)

34. The criterion on remuneration of the concessionaire cannot be transposed to reasoning about agency contracts. Indeed, the right of exploitation cannot exist in connection with delegation of project contracting. On the other hand, let us check whether the agency contract effects a transfer of official authority from the contracting authority to the agent. This would be a sign that such a contract would in fact not be a contract for the purposes of Directive 92/50. On the contrary, in the absence of any such transfer, the argument submitted by the French Republic would have to be rejected.

35. The difficulty in this case rests in the specific nature of the agency contract, under which the agent represents the principal. However, and this is why the French Republic’s argument based on this particularity cannot succeed, the agency contract for project contracting, as defined under Law No 85-704, is not only a contract under which the agent undertakes to represent the contracting authority. As may be seen from the list of the diverse responsibilities that may be entrusted to the agent, in accordance with Article 3 of the Law, the agent also provides assistance to the contracting authority. (26)

36. The French Republic submits that the two tasks performed by the agent are inseparable. However, the fact that Article 3 of Law No 85‑704 provides only an indicative list of the tasks that may be entrusted to an agent militates against the French Republic’s interpretation. According to that provision of the Law in question, the contracting authority may quite easily use a service provider to perform certain services and entrust only representative duties to the agent. On the other hand, it may entrust all the tasks listed in Article 3 of the Law to one person. The contracting authority’s freedom is curtailed only by Article 2 of the Law which forbids it from resiling from the task in its role as ‘primarily responsible for the project’. The fact that the contracting authority may choose which tasks it does or does not wish to entrust to the agent illustrates that it is entirely conceivable that the agent’s various tasks can be separated: on the one hand, those which relate to the provision of services and, on the other, those which include a role of representing the contracting authority.

37. Since it is possible to distinguish the two kinds of responsibilities entrusted to the agent, there is nothing to prevent those two categories of task from being subject to different rules. As regards the provision of services carried out under an agency contract for project contracting, they correspond to the concept of public service contracts within the meaning of Article 1(a) of Directive 92/50. Therefore, at least in so far as it involves a provision of services, an agency contract for project contracting concluded pursuant to Law No 85-704 will be subject to the rules of that directive.

38. Let me now analyse the second category of tasks entrusted to the agent, in order to determine whether they may fall outside the scope of the Directive in that they might correspond to a transfer of official authority. The agent represents the contracting authority in two situations: firstly, when the project management contract is signed and when the contract for works is signed and, secondly, when paying remuneration to the service providers and contractors engaged.

39. Although the agent is entitled to sign the project management contracts and the contracts for works on behalf of the contracting authority, it may do so only after having obtained its agreement. (27) In that situation there cannot be any genuine transfer of official authority, as the agent is not in a position to make autonomous decisions.

40. As regards paying their remuneration to the service providers and contractors, the finance is provided by the contracting authority, so that the agent does not have any freedom to act in that regard either. It merely advances funds, which are reimbursed to it by the contracting authority.

41. Thus, although the agent may carry out certain legal transactions on behalf of the contracting authority, it does not thereby have sufficient autonomy in the performance of its tasks to be able to be regarded as the beneficiary of a transfer of official authority. (28) Therefore, the argument put forward by the French Republic concerning the specific nature of the delegation of project contracting must be rejected and this contract must be subject, in its entirety, to the provisions of Directive 92/50.

2. The possible effect of the decision in Ordine degli Architetti and Others

42. The French Republic asserts that the reasoning in Ordine degli Architetti and Others is applicable by analogy and it has the effect of excluding all agency contracts from the scope of the directives relating to public contracts. In this case, an Italian court had referred a question to the Court for a preliminary ruling on the compatibility with Community law of national legislation which provided that an applicant for a building permit may be partly or wholly exempt from payment of a contribution due as a result of the grant of building permission, in return for direct execution of infrastructure works (such as residential streets, parking areas, or networks for the distribution of gas.)

43. After having analysed the execution of such works as falling within the ambit of Directive 93/37, the Court declared that national legislation such as that at issue was incompatible with that directive in cases where the value of the work in question exceeds the ceiling fixed by that directive. (29) In other words, the Court considers that the contract made between the municipality and the landowner seeking a building permit falls within the scope of the Directive. Before arriving at that conclusion, the Court gives a proviso at paragraph 100 of the judgment: ‘That does not mean that, in cases concerning the execution of infrastructure works, the Directive is complied with only if the municipal authorities themselves apply the award-of-contract procedures laid down therein. The Directive would still be given full effect if the national legislation allowed the municipal authorities to require the developer holding the building permit, under the agreements concluded with them, to carry out the work contracted for in accordance with the procedures laid down in the Directive so as to discharge their own obligations under the Directive. In such a case, the developer must be regarded, by virtue of the agreements concluded with the municipality exempting him from the infrastructure contribution in return for the execution of public infrastructure works, as the holder of an express mandate granted by the municipality for the construction of that work. Article 3(4) of the Directive expressly allows for the possibility of the rules concerning publicity to be applied by persons other than the contracting authority in cases where public works are contracted out.’

44. The Commission and the French Republic interpret that passage in different ways.

45. The French Republic infers a general theory about agency from that paragraph. (30) According to its suggested interpretation of the paragraph, in order for the provisions of Directive 93/37 or Directive 92/50 to be complied with, it is sufficient that the agent itself be subject to those directives. Law No 85-704 is therefore consistent with Community law, since it makes contracts made by the agent subject to the same obligations as if the contracting authority made them. (31)

46. The Commission attempts to identify the differences between the main proceedings and those which gave rise to the judgment in Ordine degli Architetti and Others . Firstly, it points out that different directives are in issue. Then, it notes that, in a situation such as that in Ordine degli Architetti and Others , the municipality may not choose its agent, which is necessarily the paying party with the building permit. Finally, the contract made between a municipality and the landowner applying for a building permit provides only for the deduction of a charge due in return for infrastructure works, and not some other provision of services carried out for the benefit of the municipality.

47. In the light of these considerations, it seems to me that the judgment in Ordine degli Architetti and Others cannot be interpreted in the way suggested by the French Republic. Indeed, as the Commission explains, provided that the works contracts entered into by the landowner are subject to the requirements of Directive 93/37, the effectiveness of that directive is maintained. (32) To put it another way, for compliance with the objectives of Directive 93/37, it is immater ial whether the contracting authority obliged to put out to competitive tender is the municipality or the landowner applying for the building permit.

48. If it were accepted, by analogy, that the contract for the provision of services made between the contracting authority and the agent was able to fall outside the ambit of Directive 92/50, this would go against the effectiveness of that directive. Indeed, in contrast to the situation considered by the Court in Ordine degli Architetti and Others , a distinction must be made between, on the one hand, the representative tasks such as the signing of contracts on behalf of the contracting authority and, on the other, services performed for pecuniary interest by the agent for the contracting authority. Any application of Ordine degli Architetti and Others could relate only to the first of those tasks. If there were a transfer of official authority from the contracting authority to the agent, then it might be considered that applying Directive 92/50 to the agent alone would be sufficient to ensure the effectiveness of the legislation. On the other hand, in respect of provisions of services carried out for the benefit of a contracting authority, the mere fact that they are carried out under an agency contract cannot prevent their being subject to that Directive.

49. As regards the representative activities of the agent, in the absence of any transfer of official authority, these activities must be treated as provisions of services. Moreover, in so far as a contracting authority may entrust to a service provider, under a public contract and not by way of agency, tasks of assistance identical to those which might be carried out by an agent, there can be no doubt that Directive 92/50 applies to the agency contract for project contracting. It is established that the classification of a contract under national law cannot have the effect of circumventing the applicability of Community law. It is thus apparent that Directive 92/50 is applicable to provisions of services performed by the agent for the contracting authority, and the classification of that contractual relationship under national law has no bearing whatsoever.

50. In any event, and as will be seen more clearly in the third section, even when an agency contract as defined by French legislation does not fall within the scope of the Directive, it remains subject to the requirements relating to the freedom to provide services.

B – The incompatibility of Article 4 of Law No 85-704 with Directive 92/50

51. Where the agency contract within the meaning of Law No 85‑704 falls within the scope of Directive 92/50, we must see whether the French legislation is compatible with that directive. Article 4 of Law No 85-704, which is the subject of these proceedings, reserves the role of agent to exhaustively listed categories of public persons under French law.

52. This appears to be clearly inconsistent with the aim of Directive 92/50 to grant equal access for all service providers to public procurement. (33) As the Court held, with regard to Council Directive 71/305/EEC of 26 July 1971 concerning the coordination of procedures for the award of public works contracts, (34) ‘although the directive makes no express mention of the principle of equal treatment of tenderers, the duty to observe that principle lies at the very heart of the directive’ (35) The same assertion applies to Directive 92/50. Article 4 of Law No 85‑704 is thus clearly inconsistent with the principle of equal treatment of tenderers by virtue of the fact that it reserves exclusively to certain classes of public‑law legal persons the benefit of agency contracts for project contracting.

53. Moreover, Law No 85-704 does not require any prior competitive tendering for the conferment of an agency contract, so that the contracting authority is completely free in its choice, within the class of public persons referred to in Article 4 of that Law, even if the value of the services concerned exceeds the ceiling laid down by Article 13 of Directive 92/50.

54. As pointed out above, the requirements regarding competitive tendering and prior advertising differ, depending on whether the services rendered to the contracting authority are listed in Annex IA or IB to Directive 92/50. Whether a service belongs to category IA or IB therefore affects which rules apply to it. Contracts which relate to services listed in Annex IB are subject to lesser obligations than those which relate to services covered by Annex IA. Where the contract is a mixed one, Article 10 of Directive 92/50 provides: ‘[c]ontracts which have as their object services listed in both Annexes IA and IB shall be awarded in accordance with the provisions of Titles III to VI where the value of the services listed in Annex IA is greater than the value of the services listed in Annex IB. Where this is not the case, they shall be awarded in accordance with Articles 14 and 16.’

55. In this case, and without needing to determine which procedure ought to apply to the agency contract for project contracting, it is sufficient to observe that the law under scrutiny does not lay down any procedure for competitive tendering by agents. Thus, whether the provision of services entrusted to him falls within Annex IA or Annex IB, Law No 85-704 is not compatible with Articles 8 and 9 of Directive 92/50.

56. Even if the classification of the services performed by the agent has little effect in the light of the incompatibility of the national legislation with Directive 92/50, clarification is required, as the parties hold opposing views. (36) The French Republic claims, in the alternative, that the services performed by the agent are in essence legal services, as referred to in point 21 of Annex IB to Directive 92/50, and, to a lesser extent, administrative tasks, such as preparing the competitive tendering and contract award procedures and accountancy matters, which come under category 27 (other services) of the same Annex. The Commission takes the view that the agent mainly provides architectural and engineering services, listed in point 12 of Annex IA. According to the Commission, the agent’s purely representative tasks can fall within point 27 of Annex IB of Directive 92/50, entitled ‘Other services’.

57. On reading Article 3 of Law No 85-704, cited in point 9 of this Opinion, which describes the tasks which may be conferred on the agent, it seems difficult to assert, as the Commission does, that the tasks entrusted to the agent consist only in architectural planning or engineering services listed in category 12 of Annex IA, even if ‘defining the administrative and technical terms according to which the project will be worked up and executed’ (37) as well as ‘acceptance of the works’ (38) appear to fall within this category. In that respect this must be considered on a case-by-case basis. Under Article 10 of Directive 92/50, the contracting authority will be in a position to establish which rules are applicable to the agency contract for project contracting in question, as it does not seem possible to subject them all to the same regime, given the variety in the subject‑matter of such contracts. (39)

58. In the light of these considerations, Article 4 of the Law in question is incompatible with Articles 8 and 9 of Directive 92/50. (40) In cases where the Directive does not apply, it remains to be determined whether Article 4 of Law No 85-704 is consistent with the principle of the freedom to provide services.

III – The incompatibility of Article 4 of Law No 85-704 with Article 49 EC

59. The question may well be asked what the point is of applying both the Treaty articles relating to freedom to provide services and freedom of establishment and the directives governing public contracts, in this case Directive 92/50. However, in respect of all the public contracts which fall outside the scope of the directives, the Treaty provisions on free movement may of course apply. (41) Likewise, contracts outside the scope of Directive 92/50, such as concession contracts, are still subject to the general rules of the Treaty. (42) Thus, in respect of the situation where the agency contract for project contracting fell short of the financial thresholds of Directive 92/50, (43) or if it were covered by an exception to that directive, it must be determined whether Article 4 of the Law in question is consistent with Article 49 EC.

60. According to the French Republic, Article 49 EC does not apply to this case, as the agent does not provide any services. Unlike a service provider, the agent takes part in a task of general interest, acts in a representative role on behalf of a public person and is the beneficiary of a transfer of responsibilities together with a power to make decisions.

61. As explained above, it does not appear that there is anything preventing the tasks carried out by the agent from being classified as provisions of services.

62. Moreover, the French Republic reiterates its line of argument based on Ordine degli Architetti and Others and considers that its legislation is consistent with Article 49 EC provided that the agent is subject to the rules governing public contracts in respect of the contracts he enters into on behalf of the contracting authority.

63. The French Republic’s interpretation of that judgment is not convincing. Indeed, as explained above, the agent does not simply make contracts on behalf of the contracting authority, but also performs numerous remunerated services for him. The Commission’s criticisms relate exclusively to the contractual relationship in which the agent is in fact a service provider. The judgment in Ordine degli Architetti and Others envisages only agency in the strict sense, that is, the situation where the agent acts merely on behalf of the person he represents. Moreover, at no point does that judgment exclude an agency contract from being classified as a provision of services. As soon as the agent also acts as a service provider it is, as such, subject to Article 49 EC.

64. Reserving the right to enter into agency contracts for project contracting to certain public-law legal persons under Article 4 of Law No 85-704 constitutes a restriction on freedom to provide services. Although the provision in question does not make express reference to the nationality of authorised service providers, it is, in fact, practically impossible for an undertaking from another Member State to obtain the legal status of a legal person governed by French public law. (44)

65. Furthermore, even if it were possible for a foreign undertaking to belong to one of the categories of legal persons cited in Article 4 of the Law in question, to require a foreign undertaking to change its legal status in order to be able to provide the services in question would be contrary to the principle of freedom to provide services. As Advocate General Lenz made clear in point 22 of his Opinion in Commission v Italy , (45) ‘[e]ntrepreneurial freedom, which Article 59 is specifically intended to protect, implies that such a step should not be necessary.’

66. In short, Article 4 of Law No 85-704 constitutes a restriction on freedom to provide services in that it has the effect of reserving to service providers of French nationality the contracts relating to the services listed in Article 3 of that law.

67. Since the fact that Law No 85-704 is inconsistent with Article 49 EC is established, it is necessary to consider whether the first paragraph of Article 45 EC applies, which provides that ‘[t]he provisions of this Chapter shall not apply, so far as any given Member State is concerned, to activities which in that State are connected, even occasionally, with the exercise of official authority.’ The Commission considers the application of that exception, and then rejects it. Having pointed out that that exception must be interpreted strictly as applying to ‘activities … which in themselves involve a direct and specific connection with the exercise of official authority,’ (46) the Commission states that the tasks entrusted to the agent are essentially technical in nature, which does not correspond to that definition.

68. As regards the activities in which the agent represents the contracting authority, such as the signing of the project management and works contracts, and the remuneration of contractors and service providers, the Commission also considers that Article 45 EC is inapplicable. The signing of the contracts is subject to the contracting authority’s agreement, so that, according to the Commission, it cannot be considered that there is actually any delegation of official authority to the agent. Nor does paying remuneration to the contractors and service providers constitute the exercise of official authority by the agent, since the finances are provided by the contracting authority.

69. As demonstrated above, the agent does not take part in any exercise of official authority, whether the tasks entrusted to him are those of assistance or representation. Therefore, the exception provided for in Article 45 EC does not apply to it. (47)

70. Nor does the exception laid down in Article 46 EC apply, since the French Republic has not put forward any justification relating to public policy, public security or public health.

IV – Conclusion

71. In the light of the foregoing, I propose that the Court declare that the French Republic has failed to fulfil its obligations under Council Directive 92/50/EEC of 18 June 1992 relating to the coordination of procedures for the award of public service contracts, and in particular Articles 8 and 9 thereof, and under Article 49 EC, by reserving, in Article 4 of Law No 85-704 of 12 July 1985 on public project contracting and its relationship to private project management, as amended by Law No 91-662 of 13 July 1991 and Law No 96-987 of 14 July 1996, the task of delegated project contracting to an exhaustive list of legal persons under French law.

(1) .

(2) – Respectively JORF of 13 July 1985, p. 7914, of 19 July 1991, p. 9524, and of 15 November 1996, p. 16656, hereinafter referred to as ‘Law No 85-704’.

(3) – OJ 1992 L 209, p. 1.

(4) – JORF No 141 of 19 June 2004.

(5) – Such an incompatibility was provided for only with regard to the agents listed in Article 4, second indent, of the Law in its earlier version.

(6) – Case C-360/96 BFI Holding [1998] ECR I‑6821, paragraph 41.

(7) – Case C-16/98 Commission v France [2000] ECR I‑8315, paragraph 44. The case concerned Council Directive 93/38/EEC of 14 June 1993 corordinating the procurement procedures of entities operating in the water, energy, transport and telecommunications sectors (OJ 1993 L 199, p. 84).

(8) – Eighth recital in the preamble to Directive 92/50.

(9) – Article 1 of Law No 85-704: ‘the contracting authorities are (1) The State or its public undertakings; (2) Local authorities, their public undertakings, public undertakings for new town planning created under Article L. 321‑1 of the Code de l’urbanisme (Town Planning Code), groups thereof and associations of different types of public undertaking, referred to in Article L. 166-1 of the Code des communes (Municipal Code); (3) The private bodies mentioned in Article L. 64 of the Code de la sécurité sociale (Social Security Code), and consortia and federations thereof; (4) The private bodies for low‑rent housing, mentioned in Article L. 411‑2 of the Code de la construction et de l’habitation (Building and Housing Code), and public/private partnership companies, for rented accommodation subsidised by the State and provided by such bodies and companies.’

(10) – This stemmed from Article 3(7) of the Code des marchés publics, enacted by Decree No 2001-210 of 7 March 2001 on the Code des marchés publics (JORF of 8 March 2001, p. 3700). On that subject, see Richer, L, Le contrat de mandat au risque du droit administratif, CJEG 1999, p. 127. It should be noted that this provision was annulled by a decision of the Conseil d’Etat (France) of 8 March 2003. The Code des marchés publics enacted by Decree No 2004-15 of 7 January 2004 (JORF of 8 January 2004, p. 703) takes into account that annulment: from then on, agency contracts are subject to the Code.

(11) – Article 4, last paragraph, of Law No 85-704.

(12) – Case C-399/98 Ordine degli Architetti and Others [2001] ECR I-5409.

(13) – Case No 233372, Union nationale des services publics et industriels et commerciaux and Others.

(14) – See, in that regard, Case 3/88 Commission v Italy [1989] ECR 4035.

(15) – Note that different types of contracts for the delegation of public service which exist under French law may be treated as concessions under Community law. The term concession is wider under Community law than in French law.

(16) – Article 3 of Directive 93/37 (OJ 1993 L 199, p. 54), most recently amended by Commission Directive 2001/78/EEC of 13 September 2001 amending Annex IV to Council Directive 93/36/EEC, Annexes IV, V and VI to Council Directive 93/37/EEC, Annexes III and IV to Council Directive 92/50/EEC, as amended by Directive 97/52/EC, and Annexes XII to XV, XVII and XVIII to Council Directive 93/38/EEC, as amended by Directive 98/4/EC (Directive on the use of standard forms in the publication of public contract notices) (OJ 2001 L 285, p. 1).

(17) – Case C-324/98 Teleaustria and Telefonadress [2000] ECR I‑10745, paragraph 48, and Order in Case C-358/00 Buchhandler-Vereiningung [2002] ECR I-4685, paragraphs 27 and 28.

(18) – OJ 2004 L 134, p. 114. Indeed, Article 17 of this directive states that ‘this Directive shall not apply to service concessions’.

(19) – Article 1(d) of Directive 93/37 defines a public works concession as ‘a contract of the same type as that indicated in (a) [that is, public works contracts] except for the fact that the consideration for the works to be carried out consists either solely in the right to exploit the construction or in this right together with payment’.

(20) – OJ 2000 C 121, p. 2.

(21) – Case cited above. Advocate General La Pergola had analysed the situation differently: ‘[t]o sum up, I consider that there is no “third party” element, that is to say no essential distinction between ARA and the two municipalities, in the present case. What is involved here is a form of inter-departmental delegation that remains within the administrative ambit of the municipalities. In assigning the activities in question to ARA, the municipalities had absolutely no intention of privatising the functions they themselves had previously performed in this sector. In short, I take the view that the relationship between the municipalities and ARA cannot be regarded as a contract within the meaning of the Directive’ (point 38 of the Opinion).

(22) – Opinion delivered on 18 May 2000 in Teleaustria and Telefonadress , point 30.

(23) – Teleaustria and Telefonadress , paragraph 58.

(24) – Case C-272/91 Commission v Italy [1994] ECR I-1409, paragraph 24.

(25) – OJ 1977 L 13, p. 1, amended by Council Directive 88/295/EEC of 22 March 1988 amending Directive 77/62 and repealing certain provisions of Directive 80/767/EEC (OJ 1988 L 127, p. 1).

(26) – For example defining the administrative and technical terms according to which the the project will be worked up and executed, or the management of contracts for project management or works.

(27) – Note that the agent, on the other hand, cannot oppose a decision taken by the contracting authority.

(28) – On the lack of autonomy of an approved commissioner in relation to the Insurance Inspectorate, see Case C-42/92 Thijssen [1993] ECR I-4047, paragraphs 20 to 22. See, also, Cases 3/88 and C‑272/91 Commission v Italy .

(29) – Ordine degli Architetti and Others , paragraph 103.

(30) – At the hearing the French Republic added that Directive 2004/18 took up this theory about agency in Article 11 by applying it to central purchasing bodies.

(31) – Article 4, last subparagraph, Law No 85-704.

(32) – Of course, a different conclusion would be reached if the landowner applying for a building permit were not subject to the obligations of the Directive for contracts he makes with contractors, because then the Directive would not apply at all, even where the buildings to be constructed are ‘public works’ within the meaning of the Directive.

(33) – See, in particular, the 20th recital in the preamble to the Directive.

(34) – OJ, English Special Edition 1971(II), p. 682.

(35) – Case C-243/89 Commission v Denmark [1993] ECR I‑3353, paragraph 33. See also point 18 of the Opinion of Advocate General Tesauro in that case: ‘[o]n that point, it is hardly necessary to point out that, where a public contract falls to be awarded, it is precisely because the procedure is a competition that it must be ensured that all those who take part have an equal chance: otherwise, it would no longer be a public tendering procedure but private bargaining. In sum, equal treatment underlies any set of rules governing procedures for the award of public contracts since it is the very essence of such procedures’.

(36) – Moreover, this question carries implications concerning the consistency with Directive 92/50 of Law No 85-704, as amended by Order No 2004-566.

(37) – Article 3, first indent, of Law No 85-704.

(38) – Article 3, sixth indent, of Law No 85-704.

(39) – Case C-411/00 Felix Swoboda [2002] ECR I‑10567.

(40) – In this regard, it should be noted that, under Article 2(2) of the French Code des marchés publics, as adopted by Decree No 2004-15, ‘contracts made under an agency agreement granted by one of the public entities referred to in 10 of this Article’ are subject to the provisions of that code.

(41) – Joined Cases 27/86 to 29/86 CEI and Others [1987] ECR 3347, paragraph 15, and order in Case C‑59/00 Vestergaard [2001] ECR I‑9505, paragraphs 19 to 21.

(42) – Case C-108/98 RI.SAN [1999] ECR I-5219, paragraph 20, and Teleaustria and Telefonadress , paragraph 60. See also Cassia, P. Contrats publics et principe communautaire d’égalité de traitement , RTDEur. 2002, p. 413.

(43) – Article 7 of Directive 92/50.

(44) – Cases 3/88 and C-272/91, Commission v Italy , cited above. On the subject of free movement of goods, the Court follows the same reasoning: Case C‑21/88 Du Pont de Nemours Italiana [1990] ECR I–889. On that subject, see also the study by R. Noguellou ‘La délégation de maîtrise d’ouvrage publique face au droit communautaire: un conflit latent’ in Problèmes actuels de droit communautaire LGDJ, 1998.

(45) – Case C-360/89 Commission v Italy [1992] ECR I-3401 .

(46) – Case 3/88 Commission v Italy .

(47) – On this point, see the case-law cited in note 27.