Source: http://www.howtocrackanut.com/blog/2015/05/reliance-on-capacities-of-other.html
Timestamp: 2019-04-24 18:54:48+00:00

Document:
Reg.63 of the Public Contracts Regulations 2015 (PCR2015) determines the requirements applicable to economic agents willing to rely on the capacities of other entities in order to participate in tenders for public contracts, and transposes the equivalent rules under Article 63 of Directive 2014/24. See Pedro's complementary comments here.
Reliance on the capacities of other entities is an issue recently discussed by the CJEU in Swm Costruzioni 2 and Mannocchi Luigino (C-94/12, EU:C:2013:646, see discussion here), where the CJEU clearly stressed that the EU regime 'permits the combining of the capacities of more than one economic operator for the purpose of satisfying the minimum capacity requirements set by the contracting authority, provided that the candidate or tenderer relying on the capacities of one or more other entities proves to that authority that it will actually have at its disposal the resources of those entities necessary for the execution of the contract' (para 33).
This resonates with reg.63(1) PCR2015, according to which an economic operator may, where appropriate and for a particular contract, rely on the economic and financial standing and technical and professional ability of other entities, regardless of the legal nature of the links which it has with them. Consequently, this facilitative approach needs to inform the interpretation of reg.63 PCR2015 / Art 63 Dir 2014/24.
The following are comments relating to Art 63 Dir 2014/24, but they apply equally to reg.63 PCR2015. A fuller version is available at: A Sanchez Graells, 'Exclusion, Qualitative Selection and Short-listing', in F Lichère, R Caranta & S Treumer (eds), Modernising Public Procurement. The New Directive, vol. 6 European Procurement Law Series (Copenhagen, DJØF, 2014) 97-129.
Article 63 of Dir 2014/24 maintains the functional approach in Directive 2004/18 and consolidates the rules on reliance on the capacities of other entities scattered in Arts 47(2), 47(3), 48(3) and 48(4) of that Directive. It continues to make it clear that, as long as it is appropriate for a particular contract, any economic operator can ‘rely on the capacities of other entities, regardless of the legal nature of the links which it has with them’ to which aim it ‘it shall prove to the contracting authority that it will have at its disposal the resources necessary, for example, by producing a commitment by those entities to that effect’. Equally and under the same conditions, ‘a group of economic operators […] may rely on the capacities of participants in the group or of other entities’. However, the new Directive goes beyond these general rules and imposes more specific (and restrictive) criteria concerning reliance on other operators for certain requirements.
Firstly, with regard to criteria relating to the educational and professional qualifications or to the relevant professional experience, economic operators may only rely on the capacities of other entities where the latter will perform the works or services for which these capacities are required.
Thirdly, Member States may provide that in the case of works contracts, service contracts and siting or installation operations in the context of a supply contract, contracting authorities may require that certain critical tasks be performed directly by the tenderer itself or, where the tender is submitted by a group of economic operators, by a participant in that group.
Finally, where an economic operator relies on the capacities of other entities with regard to criteria relating to economic and financial standing, the contracting authority may require that the economic operator and those entities be jointly liable for the execution of the contract.
In my view, the first two additions are sensible and aim to prevent instances where reliance on third party capabilities is merely formal. However, the same cannot be said from the other two requirements. On the one hand, there is no good reason to require that the conduct of critical tasks be carried out by the main contractor, given that it is already assuming full liability for such tasks. Imposing a requirement that the task is actually carried out by the main contractor can have the effect of excluding other tenderers that could actually fulfill the contract relying on the capabilities of third parties and, consequently, runs contrary to the functional approach in the current Directive, goes beyond the terms of Art 19 of Dir 2014/24 and, ultimately, of the case law of the CJEU on teaming and joint bidding.
On the other hand, and on a related note, the last requirement of joint liability for the execution of the contract can make it very difficult to reach subcontracting agreements or similar arrangements for the reliance on third parties for the partial execution of a minor part of the contract. Moreover, it can result in complicated structures of side letters of indemnity that raise the legal costs linked to participation. In my opinion, in relation with both requirements, the contracting entity should be satisfied with the liability of the main contractor and, if need be, ‘self-protect’ through requirements for adequate professional risk indemnity insurance under Art 58(3) of Dir 2014/24.
 Interestingly, Article 19 of Dir 2014/24 provides specific rules for groups of operators.
 Indeed, it only requires that ‘in the case of public service and public works contracts as well as public supply contracts covering in addition services or siting and installation operations, legal persons may be required to indicate, in the tender or the request to participate, the names and relevant professional qualifications of the staff to be responsible for the performance of the contract in question’.
 A Sanchez Graells, Public Procurement and the EU Competition Rules, 2nd edn (Oxford, Hart, 2015) 336-340.

References: CJEU 
 CJEU 
 Art 63
 Art 63
 Art 19
 CJEU 
 Art 58