EC publishes guidance on applying procurement law to public-public cooperation

The European Commission has issued guidance on the application of EU procurement law to relations between contracting authorities or so-called “public-public cooperation”.

The Commission Staff Working Paper acknowledged that “currently, contracting authorities wishing to cooperate often find it difficult to distinguish when the EU Public Procurement Directives apply and when they do not”.

The Working Paper is the Commission’s response to demands for information about the legal implications of the judgments of the European Court of Justice in this area. It covers:

• The general principle: EU public procurement law applies to contracts between contracting authorities
• Public tasks performed by own resources – public-public co-operation which can fall outside the scope of EU public procurement rules
• An overview of the different concepts developed in the case law
• Cooperation via separate legal entities: institutionalised/vertical cooperation, in-house case law
• Holding of the capital of an in-house entity
• The first Teckal criterion: the necessary control over the in-house entity (organisational dependence)
• The second Teckal criterion: the essential part of the in-house entity’s activities has to be confined to the tasks conferred by the controlling entity/entities (economic dependence)
• Additional open questions regarding in-house scenarios
• Non-institutionalised/horizontal co-operation to jointly fulfil public tasks
• The substantial characteristics of horizontal cooperation among contracting authorities falling outside the EU public procurement rules
• Distinguishing genuine ‘cooperation’ from a normal public contract
• Possible restrictions regarding activities on the commercial market
• Public task performed by external resources – other public-public relations: the redistribution of competences between public authorities; the non-contractual attribution of tasks; the relation between public procurement rules and certain exclusive rights; and the relationship between contracting authorities in the context of joint or central purchasing agreements.

The Working Paper is described as an “indicative document” of the Commission services and so “cannot be considered to be in any way binding on this institution”. The interpretation of EU law is ultimately the role of the ECJ, it pointed out.

A copy of the guidance can be downloaded here.