Case C-575/10: Action brought on 9 December 2010 — European Commission v Republic of Hungary
Date: 2010-12-09
Institutions: Court of Justice
Subjects: European Commission, Hungary, action for failure to fulfil an obligation, award of contract, public contract








C_2011072EN.01000601.xml










5.3.2011   


EN


Official Journal of the European Union


C 72/6





Action brought on 9 December 2010 — European Commission v Republic of Hungary
(Case C-575/10)
2011/C 72/09
Language of the case: Hungarian

Parties


Applicant(s): European Commission (represented by: D. Kukovec and A. Sipos, Agents)

Defendant(s): Republic of Hungary

Form of order sought







—


Declare that the Republic of Hungary has failed to fulfil its obligations under Articles 47(2) and 48(3) of Directive 2004/18/EC, (1) and Article 54(5) and (6) of Directive 2004/17/EC, (2) by failing to ensure that, in public procurement procedures, economic operators may, in a specific case, rely on the capacity of other entities, whatever the legal nature of the link between itself and those entities.










—


order Republic of Hungary to pay the costs.





Pleas in law and main arguments

Both Directive 2004/17 and Directive 2004/18 allow tenderers in public procurement procedures to rely on the capacity of other entities to demonstrate their suitability and the satisfaction of the selection criteria whatever the legal nature of the link between itself and those entities.
In the view of the Commission, Hungarian rules which, in the case of certain suitability criteria, allow tenderers to use the resources of other entities which are not directly participating in the performance of the contract only if they have a controlling share in such entities do not comply with those provisions of the Directives. Thus, in the case of entities which do not participate as subcontractors in the performance of the contract, the contested national rules impose an additional requirement to be met to allow the tenderer to rely on the capacity of such entities in the public procurement procedure.
The provisions of the Directives are unequivocal: without requiring the entities which provide the resources to be directly involved in the performance of the contract, they require the national legislation to guarantee the possibility of relying on the resources of such entities, whatever the legal nature of the link between the tenderer and those entities. The sole requirement is that the tenderer be able to demonstrate to the awarding authority that it will actually have the resources necessary for the performance of the contract.
However, the Commission goes on to argue that the Hungarian rules at issue restrict the possibilities open to tenderers in this regard, so that, in practice, they have no option but to involve in the contract as subcontractors those entities which have such resources, unless, from the outset, they have a controlling share in such entities.
The Commission asserts that the national rules at issue cannot be justified by the objective of eliminating practices intended to evade the public procurement rules, because that objective cannot be relied on to justify a provision contrary to European Union law on public procurement which disproportionately restricts the rights and procedural obligations arising from the Directives. Of course, it is open to the Member States, within the limits imposed by the Directives, to decide the manner in which the tenderers must demonstrate that they actually will have the resources of other entities, but they must do so without making a distinction on the basis of the legal nature of the legal links with such entities.
The Commission rejects the argument of the Republic of Hungary that an entity which does not participate in the performance of the contract cannot demonstrate that it meets the minimum selection criteria which consist in being able actually to provide the necessary resources at the time of performance of the contract. In that connection, the Commission points out that Article 48(3) of Directive 1004/18/EC expressly provides that the tenderer may prove that it will have the resources of other entities at its disposal ‘by producing an undertaking by those entities to place the necessary resources at the disposal of the economic operator’. Thus, an entity which contributes its resources may prove that it has the resources which it must provide at the time of the performance of the contract, without being required to participate directly in the performance of the contract.
The Commission points out, finally, that the disputed national rules may discriminate against foreign tenderers. Although the relevant Hungarian legislation applies to all tenderers, in practice it limits the possibility of participating in tender procedures for foreign tenderers in particular. In general, such tenderers do not have at their disposal, in the place of performance of the contract, all the resources necessary for performance, since, in public procurement procedures, they are obliged to have recourse, more frequently than Hungarian tenderers, to the capacities of local economic operators who are independent of them.


(1)  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 (OJ 2004 L 134, p. 114).

(2)  Directive 2004/17/EC of the European Parliament and of the Council of 31 March 2004 coordinating the procurement procedures of entities operating in the water, energy, transport and postal services sectors (OJ 2004 L 134, p. 1).