Stadt Halle and RPL Recyclingpark Lochau GmbH v Arbeitsgemeinschaft Thermische Restabfall- und Energieverwertungsanlage TREA Leuna.
Date: 2005-01-11
15. RPL Lochau is a limited liability company set up in 1996. Of its capital, 75.1% is held by Stadtwerke Halle GmbH, whose sole shareholder Verwaltungsgesellschaft für Versorgungs- und Verkehrsbetriebe der Stadt Halle mbH is wholly owned by the City of Halle, and 24.9% by a private limited liability company. The national court describes RPL Lochau as a ‘semi-public company’ and notes that the allocation of the shareholdings in the company was not agreed in the company’s statutes until the end of 2001, when the award of the contract for carrying out the project at issue was envisaged.
26. That obligation is binding on contracting authorities with no distinction between public contracts awarded by them in order to fulfil their task of meeting needs in the public interest and those which are unrelated to that task (see, to that effect, Case C‑44/96 Mannesmann Anlagenbau Austria and Others  [1998] ECR I‑73, paragraph 32).
28. The wording of Article 1(1) of Directive 89/665 assumes, by using the words ‘as regards … procedures’, that every decision of a contracting authority falling under the Community rules in the field of public procurement and liable to infringe them is subject to the judicial review provided for in Article 2(1)(a) and (b) of that directive (see, to that effect, Case C‑92/00 HI  [2002] ECR I‑5553, paragraph 37, and Case C‑57/01 Makedoniko Metro and Mikhaniki  [2003] ECR I‑1091, paragraph 68). It thus refers generally to the decisions of a contracting authority without distinguishing between those decisions according to their content or time of adoption.
30. That broad meaning of the concept of a decision taken by a contracting authority is confirmed by the Court’s case-law. The Court has already held that Article 1(1) of Directive 89/665 does not lay down any restriction with regard to the nature and content of the decisions it refers to (Case C‑81/98 Alcatel Austria and Others  [1999] ECR I‑7671, paragraph 35). Nor may such a restriction be inferred from the wording of Article 2(1)(b) of that directive (see, to that effect, Alcatel Austria and Others , paragraph 32). Moreover, a restrictive interpretation of the concept of a decision amenable to review would be incompatible with the provision in Article 2(1)(a) of that directive which requires the Member States to make provision for interim relief procedures in relation to any decision taken by the contracting authorities ( HI , paragraph 49).
31. In line with this broad interpretation of the concept of a decision amenable to review, the Court has held that the contracting authority’s decision prior to the conclusion of the contract as to the tenderer to whom the contract will be awarded must in all cases be open to review, regardless of the possibility of obtaining an award of damages once the contract has been concluded ( Alcatel Austria and Others , paragraph 43).
33. In this respect, as the Advocate General observes in point 23 of her Opinion, the contracting authority’s decision not to initiate an award procedure may be regarded as the counterpart of its decision to terminate such a procedure. Where a contracting authority decides not to initiate an award procedure on the ground that the contract in question does not, in its opinion, fall within the scope of the relevant Community rules, such a decision constitutes the very first decision amenable to judicial review.
34. Having regard to that case-law and to the objectives, scheme and wording of Directive 89/665, and in order to preserve the effectiveness of that directive, it must be concluded that any act of a contracting authority adopted in relation to a public service contract within the material scope of Directive 92/50 and capable of producing legal effects constitutes a decision amenable to review within the meaning of Article 1(1) of Directive 89/665, regardless of whether that act is adopted outside a formal award procedure or as part of such a procedure.
36. On the basis of those considerations, the approach of the City of Halle – according to which Directive 89/665 does not require judicial protection outside a formal award procedure, and the contracting authority’s decision not to initiate such a procedure cannot be the subject of review, nor indeed can the decision as to whether a public contract falls within the scope of the relevant Community rules – should not be adopted.
37. The effect of that approach would be to make the application of the relevant Community rules optional, at the option of every contracting authority, even though that application is mandatory where the conditions of application are satisfied. Such an option could lead to the most serious breach of Community law in the field of public procurement on the part of a contracting authority. It would substantially reduce the effective and rapid judicial protection aimed at by Directive 89/665, and would interfere with the objectives pursued by Directive 92/50, namely the objectives of free movement of services and open and undistorted competition in this field in all the Member States.
38. As to the time from which such a possibility of review is open, it must be noted that no such time is formally laid down in Directive 89/665. However, having regard to that directive’s objective of effective and rapid judicial protection, in particular by interlocutory measures, it must be concluded that Article 1(1) of the directive does not authorise Member States to make the possibility of review subject to the fact that the public procurement procedure in question has formally reached a particular stage.
41. In the light of the foregoing, the answer to Question 1(a), (b) and (c) must be that Article 1(1) of Directive 89/665 must be interpreted as meaning that the obligation of the Member States to ensure that effective and rapid remedies are available against decisions taken by contracting authorities extends also to decisions taken outside a formal award procedure and decisions prior to a formal call for tenders, in particular the decision on whether a particular contract falls within the personal and material scope of Directive 92/50. That possibility of review is available to any person having or having had an interest in obtaining the contract in question who has been or risks being harmed by an alleged infringement, from the time when the contracting authority has expressed its will in a manner capable of producing legal effects. The Member States are not therefore authorised to make the possibility of review subject to the fact that the public procurement procedure in question has formally reached a particular stage.
Question 2(a) and (b)
44. On this point, the principal objective of the Community rules in the field of public procurement, as stated in connection with the answer to Question 1, should be recalled, namely the free movement of services and the opening-up to undistorted competition in all the Member States. That involves an obligation on all contracting authorities to apply the relevant Community rules where the conditions for such application are satisfied.
45. The obligation to apply the Community rules in such a case is confirmed by the fact that in Article 1(c) of Directive 92/50 the term ‘service provider’, that is, a tenderer for the purposes of the application of that directive, also includes ‘a public body, which offers services’ (see Case C‑94/99 ARGE  [2000] ECR I‑11037, paragraph 28).
46. Any exception to the application of that obligation must consequently be interpreted strictly. Thus the Court has held, concerning recourse to a negotiated procedure without the prior publication of a contract notice, that Article 11(3) of Directive 92/50, which provides for such a procedure, must, as a derogation from the rules intended to ensure the effectiveness of the rights conferred by the EC Treaty in relation to public service contracts, be interpreted strictly and that the burden of proving the existence of exceptional circumstances justifying the derogation lies on the person seeking to rely on those circumstances (Joined Cases C‑20/01 and C‑28/01 Commission  v Germany  [2003] ECR I‑3609, paragraph 58).
47. In the spirit of opening up public contracts to the widest possible competition, as the Community rules intend, the Court has held, with reference to Council Directive 93/36/EEC of 14 June 1993 coordinating procedures for the award of public supply contracts (OJ 1993 L 199, p. 1), that that directive is applicable in the case where a contracting authority plans to conclude a contract for pecuniary interest with an entity which is legally distinct from it, whether or not that entity is itself a contracting authority (Case C‑107/98 Teckal  [1999] ECR I‑8121, paragraphs 50 and 51). It is relevant to note that the other contracting party in that case was a consortium consisting of several contracting authorities, of which the contracting authority in question was also a member.
48. A public authority which is a contracting authority has the possibility of performing the tasks conferred on it in the public interest by using its own administrative, technical and other resources, without being obliged to call on outside entities not forming part of its own departments. In such a case, there can be no question of a contract for pecuniary interest concluded with an entity legally distinct from the contracting authority. There is therefore no need to apply the Community rules in the field of public procurement.
49. In accordance with the Court’s case-law, it is not excluded that there may be other circumstances in which a call for tenders is not mandatory, even though the other contracting party is an entity legally distinct from the contracting authority. That is the case where the public authority which is a contracting authority exercises over the separate entity concerned a control which is similar to that which it exercises over its own departments and that entity carries out the essential part of its activities with the controlling public authority or authorities (see, to that effect, Teckal , paragraph 50). It should be noted that, in the case cited, the distinct entity was wholly owned by public authorities. By contrast, the participation, even as a minority, of a private undertaking in the capital of a company in which the contracting authority in question is also a participant excludes in any event the possibility of that contracting authority exercising over that company a control similar to that which it exercises over its own departments.
50. In this respect, it must be observed, first, that the relationship between a public authority which is a contracting authority and its own departments is governed by considerations and requirements proper to the pursuit of objectives in the public interest. Any private capital investment in an undertaking, on the other hand, follows considerations proper to private interests and pursues objectives of a different kind.
51. Second, the award of a public contract to a semi-public company without calling for tenders would interfere with the objective of free and undistorted competition and the principle of equal treatment of the persons concerned, referred to in Directive 92/50, in particular in that such a procedure would offer a private undertaking with a capital presence in that undertaking an advantage over its competitors.
52. The answer to Question 2(a) and (b) must therefore be that, where a contracting authority intends to conclude a contract for pecuniary interest relating to services within the material scope of Directive 92/50 with a company legally distinct from it, in whose capital it has a holding together with one or more private undertakings, the public award procedures laid down by that directive must always be applied.