(Failure of a Member State to fulfil obligations – Directive 2004/18/EC – Procedures for the award of public contracts – National legislation providing for a single procedure for the award of the contract defining needs and of the ensuing marché d’exécution – Compatibility with that directive)

Summary of the Judgment

Approximation of laws – Procedures for the award of contracts in the public works, public supply and public service sectors – Directive 2004/18 – Procedures for the award of public contracts – Application of a procedure not provided for in Article 28 of the Directive

(European Parliament and Council Directive 2004/18, Arts 2 and 28 to 31)

A Member State which adopts and keeps in force provisions which lay down a procedure for the award of marchés de definition (public contracts for designing the parameters, including the purpose, of a public works, supply or service contract) under which it is possible for the contracting authority to award a marché d’exécution (a public works, supply or service contract) to one of the holders of the initial marchés de définition by opening it to competition limited to those holders fails to fulfil its obligations under Articles 2 and 28 of Directive 2004/18 on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts.

Under Article 28, contracting authorities are required to award their public contracts by applying either the open or restricted procedure, or, in the specific circumstances expressly provided for in Article 29 of Directive 2004/18, the competitive dialogue or, in the further alternative, in the specific circumstances referred to expressly in Articles 30 and 31 thereof, a negotiated procedure. The award of public contracts by means of other procedures is not permitted by that directive.

Moreover, that procedure for the award of marchés de définition is not consistent with Article 2 of Directive 2004/18. The purpose of that procedure is to award two types of contracts, namely marchés de définition and marchés d’exécution, the latter being awarded after being opened to competition limited to the holders of the former alone. Accordingly, economic operators who might be interested in participating in marchés d’exécution, but who are not holders of one of the marchés de définition, are discriminated against in comparison with those holders, contrary to the principle of equality, which is laid down as a principle for the award of contracts in Article 2 of Directive 2004/18.

Moreover, both the principle of equal treatment and the obligation of transparency which flows from it require the subject-matter of each contract and the criteria governing its award to be clearly defined. In this respect, marchés de définition and marchés d’exécution appear by their nature to have different subject‑matters, namely, first, a study and design project in which the needs of the contracting authority are defined and, second, the actual provision of supplies, services or works defined in advance. In that procedure for the award of marchés de définition, there is no guarantee that, in all cases, the subject‑matter and award criteria of both marchés de définition and the marché d’exécution can be defined from the beginning of the procedure.

(see paras 29, 40-41, 43-45, operative part)

10 December 2009 (*)

(Failure of a Member State to fulfil obligations – Directive 2004/18/EC – Procedures for the award of public contracts – National legislation providing for a single procedure for the award of the contract defining needs and of the ensuing marché d’exécution – Compatibility with that directive)

In Case C‑299/08,

ACTION under Article 226 EC for failure to fulfil obligations, brought on 4 July 2008,

European Commission, represented initially by D. Kukovec and G. Rozet, and subsequently by G. Rozet and M. Konstantinidis, acting as Agents, with an address for service in Luxembourg,

applicant,

French Republic, represented by G. de Bergues, J.‑C. Gracia and J.‑S. Pilczer, acting as Agents,

defendant,

THE COURT (Third Chamber),

composed of J.N. Cunha Rodrigues (Rapporteur), President of the Second Chamber, acting as President of the Third Chamber, P. Lindh, A. Rosas, U. Lõhmus and A. Arabadjiev, Judges,

Advocate General: J. Mazák,

Registrar: R. Şereş, Administrator,

having regard to the written procedure and further to the hearing on 10 June 2009,

after hearing the Opinion of the Advocate General at the sitting on 22 September 2009,

gives the following

By its application, the Commission of the European Communities is asking the Court to declare that, by adopting and keeping in force Articles 73 and 74-IV of the Code des marchés publics (the Public Procurement Code) adopted by Decree No 2006-975 of 1 August 2006 (Official Journal of the French Republic of 4 August 2006, p. 11627), inasmuch as those provisions lay down a procedure for the award of so‑called marchés de definition (public contracts for designing the parameters, including the purpose, of a public works, supply or service contract) under which it is possible for the contracting authority to award a marché d’exécution (a public works, supply or service contract) to one of the holders of the initial marchés de définition without opening it afresh to competition or, at most, by opening it to competition limited to those holders, the French Republic has failed to fulfil its obligations under Articles 2, 28 and 31 of 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).

Legal context

Community legislation

Recital 3 in the preamble to Directive 2004/18 states:

‘Such [Community] coordinating provisions [of national procedures for the award of contracts] should comply as far as possible with current procedures and practices in each of the Member States.’

Article 2 of the Directive provides:

‘Contracting authorities shall treat economic operators equally and non‑discriminatorily and shall act in a transparent way.’

According to Article 28 of the Directive:

‘In awarding their public contracts, contracting authorities shall apply the national procedures adjusted for the purposes of this Directive. They shall award these public contracts by applying the open or restricted procedure. In the specific circumstances expressly provided for in Article 29, contracting authorities may award their public contracts by means of the competitive dialogue. In the specific cases and circumstances referred to expressly in Articles 30 and 31, they may apply a negotiated procedure, with or without publication of the contract notice.’

Article 29 of Directive 2004/18, entitled ‘Competitive dialogue’, provides:

‘1. In the case of particularly complex contracts, Member States may provide that where contracting authorities consider that the use of the open or restricted procedure will not allow the award of the contract, the latter may make use of the competitive dialogue in accordance with this Article. A public contract shall be awarded on the sole basis of the award criterion for the most economically advantageous tender.

3. Contracting authorities shall open, with the candidates selected in accordance with the relevant provisions of Articles 44 to 52, a dialogue the aim of which shall be to identify and define the means best suited to satisfying their needs. They may discuss all aspects of the contract with the chosen candidates during this dialogue.

5. The contracting authority shall continue such dialogue until it can identify the solution or solutions, if necessary after comparing them, which are capable of meeting its needs.

6. Having declared that the dialogue is concluded and having so informed the participants, contracting authorities shall ask them to submit their final tenders on the basis of the solution or solutions presented and specified during the dialogue. These tenders shall contain all the elements required and necessary for the performance of the project.

7. Contracting authorities shall assess the tenders received on the basis of the award criteria laid down in the contract notice or the descriptive document and shall choose the most economically advantageous tender in accordance with Article 53.

Article 31 of Directive 2004/18 states:

‘Contracting authorities may award public contracts by a negotiated procedure without prior publication of a contract notice in the following cases:… for public service contracts, when the contract concerned follows a design contest and must, under the applicable rules, be awarded to the successful candidate or to one of the successful candidates; in the latter case, all successful candidates must be invited to participate in the negotiations; ...’

The first subparagraph of Article 80(1) of the Directive is worded as follows:

‘The Member States shall bring into force the laws, regulations and administrative provisions necessary to comply with this Directive no later than 31 January 2006. They shall forthwith inform the Commission thereof.’

The code des marchés publics (Public Procurement Code), in the version thereof resulting from Decree No 2004-15 of 7 January 2004 (Official Journal of the French Republic of 8 January 2004, p. 703), which entered into force on 10 January 2004, provided in the third paragraph of Article 73 as follows: ‘Provisions supplied under several marchés de définitions having the same subject‑matter, concluded upon completion of a single procedure and awarded simultaneously, may be awarded, without a further tendering process, to the supplier of the chosen solution. In such cases, the amount of the provisions to be compared with the thresholds takes account of the cost of the definition studies and the estimated amount of the marché d’exécution.’

The Public Procurement Code, as adopted by Decree No 2006‑975, which entered into force on 1 September 2006, contains inter alia the following provisions: ‘Article 73 If the public entity is unable to specify the aims and performances which the contract must meet, the techniques to be used, and the human and material resources required, it may resort to marchés de définition. The purpose of such contracts is to explore the possibilities and conditions for establishing a contract subsequently, if necessary through production of a model or demonstrator. They must also enable the price level of the provisions to be estimated and calculated, as well as the different phases of the performance schedule.

In the framework of a single procedure, contracts for the performance of services following several marchés de définition having the same subject-matter and awarded simultaneously are awarded after being opened to competition limited to the holders of the initial marchés de définition, in accordance with the following provisions:

1.The public contract notice defines the subject-matter of the marchés de définition awarded simultaneously and the subject-matter of the subsequent marché d’exécution;

2.The public contract notice defines the criteria for the selection of applications. Those criteria take into account the capacities and competences required of the candidates both for the marchés de définition and for the subsequent marché d’exécution;

3.The public contract notice defines the criteria for the selection of offers for the marchés de définition awarded simultaneously and the criteria for the selection of offers for the subsequent marché d’exécution;

4.The amount of the provisions to be compared with the thresholds takes account of the cost of the definition studies and the estimated amount of the marché d’exécution;

5.The number of marchés de définition awarded simultaneously in the framework of the present procedure may not be lower than three, subject to a sufficient number of candidates.

The contract or framework agreement is awarded by the tenders committee for the local authorities or after the opinion of the tenders committee for the State, for the public health bodies and the public social or medical-social bodies.’

Article 74

…

…’

The pre‑litigation procedure

10By letter of 18 October 2004, the Commission sent the French Republic a first letter of formal notice concerning Articles 73 and 74‑III of the Public Procurement Code, as amended by Decree No 2004-15. Following the amendment of those provisions by Decree No 2006-975, the Commission sent an additional letter of formal notice to that Member State on 15 December 2006.

11As it was not satisfied with the French Republic’s replies, on 29 June 2007 the Commission sent a reasoned opinion to the French Republic, calling on it to take the measures necessary to comply with that opinion within two months of its receipt.

12Taking the view that that Member State’s replies to the reasoned opinion were not satisfactory, the Commission decided to bring the present action.

The action

Arguments of the parties

13The Commission claims that Articles 73 and 74-IV of the Public Procurement Code, as adopted by Decree No 2006-975, allow a contracting authority to award a marché d’exécution (a public works, supply or service contract) to one of the holders of the initial marchés de définition without opening it afresh to competition or, at most, by opening it to competition limited to those holders as soon as the conditions provided for in the third paragraph of Article 73 have been met. Those articles of the Public Procurement Code infringe the provisions of Directive 2004/18 by allowing a contract to be awarded on the basis of mutual agreement, or with limited competition, in situations not provided for by the Directive.

14The Commission maintains that marchés de définition as provided for by those national provisions do not make it possible, as a general rule, to establish at the outset, with sufficient precision, the subject-matter of the marché d’exécution, the criteria for selecting tenderers or those for awarding the contract in question. It follows that the procedure for the award of marchés de définition resulting from those provisions runs counter to the principle of transparency laid down in Article 2 of Directive 2004/18. That procedure creates a situation of legal uncertainty for both contracting authorities and operators.

15According to the Commission, the procedure for the award of marchés de définition is neither a competitive dialogue nor a framework agreement within the meaning of Articles 29 and 32 of Directive 2004/18. Nor is such a procedure a design contest under which it is possible, under certain conditions, to award the ensuing service contract on the basis of mutual agreement in accordance with Article 31(3) of the Directive.

16The French Republic claims that the national provisions in issue are not incompatible with Articles 2, 28 or 31 of Directive 2004/18. The latter, it argues, is a coordinating directive and does not lay down a uniform and exhaustive body of Community rules. Consequently, the fact that competition may be limited when the marchés d’exécution are being awarded is compatible with that directive. The procedure for the award of marchés de définition complies with the principles on the right of establishment and the freedom to provide services laid down by the EC Treaty and set out in Article 2 of that directive, since the Member States remain free to maintain or adopt substantive and procedural rules in regard to public contracts.

17That line of argument cannot be accepted. Whilst it is true that Directive 2004/18 does not seek to establish complete harmonisation of the rules governing public procurement in the Member States, the fact remains that the procedures for the award of public contracts that the Member States are permitted to use are listed exhaustively in Article 28 of that directive.

18Under Article 28, contracting authorities are required to award their public contracts by applying either the open or restricted procedure, or, in the specific circumstances expressly provided for in Article 29 of Directive 2004/18, the competitive dialogue or, in the further alternative, in the specific circumstances referred to expressly in Articles 30 and 31 thereof, a negotiated procedure. The award of public contracts by means of other procedures is not permitted by that directive.

19A different conclusion cannot be inferred from Joined Cases 27/86 to 29/86 CEI and Bellini [1987] ECR 3347.

20Admittedly, in the first sentence of paragraph 15 of that judgment, the Court held that Council Directive 71/305/EEC of 26 July 1971 concerning the coordination of procedures for the award of public works contracts (OJ, English Special Edition 1971 (II), p. 682) did not lay down a uniform and exhaustive body of Community rules. However, in the following sentence of that paragraph 15, the Court stated that, although Member States remained free to maintain or adopt substantive and procedural rules in regard to public contracts, they had to do so within the framework of the common rules contained in that directive.

21Furthermore, in paragraph 17 of CEI and Bellini, the Court made it clear that it was ruling in the light of the state of harmonisation of Community law at the time of delivery of its judgment. However, the second paragraph of Article 28 of Directive 2004/18, which had no equivalent in Directive 71/305, specifically lists the procedures which contracting authorities must apply in awarding their contracts.

22It follows that, in the framework of the common rules currently in force, Member States are no longer free to adopt award procedures other than those specified by Directive 2004/18.

23Accordingly, the French Republic’s arguments that it is possible for a Member State to adopt contract award procedures which are not provided for by Directive 2004/18, but which exhibit characteristics analogous to those of certain procedures referred to by that directive, must be rejected.

24However, it is necessary to examine the argument, put forward by the French Republic in the alternative, that the procedure for the award of marchés de définition set out in the Public Procurement Code can be regarded as constituting a variation on the competitive dialogue procedure.

20By its form of order, the Commission is asking the Court to declare that the French Republic has failed to fulfil its obligations under Articles 2, 28 and 31 of Directive 2004/18 by adopting and keeping in force Articles 73 and 74-IV of the Public Procurement Code adopted by Decree No 2006-975, inasmuch as those provisions lay down a procedure for the award of marchés de définition under which it is possible for a contracting authority to award a marché d’exécution to one of the holders of the initial marchés de définition ‘without opening it afresh to competition’ or, at most, by opening it to competition limited to those holders.

21It is appropriate to examine the alleged failure to fulfil obligations under Article 31 of Directive 2004/18. According to the Commission, that failure stems from the fact that the procedure for the award of marchés de définition allows contracts to be awarded on the basis of mutual agreement in circumstances which are not provided for by point 3 of Article 31 of the Directive.

22In this respect, it is settled case‑law that the question whether a Member State has failed to fulfil obligations must be determined by reference to the situation prevailing in that Member State at the end of the period laid down in the reasoned opinion (see, inter alia, Case C‑64/01 Commission v Greece [2002] ECR I-2523, paragraph 7, and Case C‑456/05 Commission v Germany [2007] ECR I-10517, paragraph 15).

23It is common ground that the version of Article 73 of the Public Procurement Code resulting from Decree No 2004-15 which allowed marchés d’exécution to be awarded ‘without a further tendering process’ was no longer in force on the date of expiry of the two-month period laid down in the reasoned opinion. On that date, that version of Article 73 had been replaced by a new version resulting from Decree No 2006‑975.

24It is clear from the wording of the third paragraph of Article 73 of the Public Procurement Code, as adopted by Decree No 2006-975, that marchés d’exécution are awarded solely ‘after being opened to competition limited to the holders of the initial marchés de définition’. On the date on which the period laid down in the reasoned opinion expired, marchés d’exécution were thus not awarded by means of the negotiated procedure within the meaning of point 3 of Article 31 of Directive 2004/18.

25It follows that the Commission’s action must be dismissed in so far as it seeks a declaration by the Court that the procedure for the award of marchés de définition allows a contracting authority to award a marché d’exécution to one of the holders of the initial marchés de définition ‘without opening it afresh to competition’ and in so far as it claims that there has been a failure to fulfil obligations under Article 31 of that directive.

26The action does, however, retain a purpose in so far as the Commission complains that the French Republic has failed in its obligations under Articles 2 and 28 of Directive 2004/18 by adopting and keeping in force Articles 73 and 74-IV of the Public Procurement Code adopted by Decree No 2006-975, inasmuch as those provisions lay down a procedure for the award of marchés de définition under which it is possible for the contracting authority to award a marché d’exécution to one of the holders of the initial marchés de définition by opening it to competition limited to those holders.

27In its statement in defence, the French Republic submits that Directive 2004/18 is only a coordinating directive, which leaves Member States free to maintain or adopt rules in regard to public contracts other than those provided for by that directive.

28That line of argument cannot be accepted. Whilst it is true that Directive 2004/18 does not seek to establish complete harmonisation of the rules governing public procurement in the Member States, the fact remains that the procedures for the award of public contracts that the Member States are permitted to use are listed exhaustively in Article 28 of that directive.

29Under Article 28, contracting authorities are required to award their public contracts by applying either the open or restricted procedure, or, in the specific circumstances expressly provided for in Article 29 of Directive 2004/18, the competitive dialogue or, in the further alternative, in the specific circumstances referred to expressly in Articles 30 and 31 thereof, a negotiated procedure. The award of public contracts by means of other procedures is not permitted by that directive.

30A different conclusion cannot be inferred from Joined Cases 27/86 to 29/86 CEI and Bellini [1987] ECR 3347.

31Admittedly, in the first sentence of paragraph 15 of that judgment, the Court held that Council Directive 71/305/EEC of 26 July 1971 concerning the coordination of procedures for the award of public works contracts (OJ, English Special Edition 1971 (II), p. 682) did not lay down a uniform and exhaustive body of Community rules. However, in the following sentence of that paragraph 15, the Court stated that, although Member States remained free to maintain or adopt substantive and procedural rules in regard to public contracts, they had to do so within the framework of the common rules contained in that directive.

32Furthermore, in paragraph 17 of CEI and Bellini, the Court made it clear that it was ruling in the light of the state of harmonisation of Community law at the time of delivery of its judgment. However, the second paragraph of Article 28 of Directive 2004/18, which had no equivalent in Directive 71/305, specifically lists the procedures which contracting authorities must apply in awarding their contracts.

33It follows that, in the framework of the common rules currently in force, Member States are no longer free to adopt award procedures other than those specified by Directive 2004/18.

34Accordingly, the French Republic’s arguments that it is possible for a Member State to adopt contract award procedures which are not provided for by Directive 2004/18, but which exhibit characteristics analogous to those of certain procedures referred to by that directive, must be rejected.

35However, it is necessary to examine the argument, put forward by the French Republic in the alternative, that the procedure for the award of marchés de définition set out in the Public Procurement Code can be regarded as constituting a variation on the competitive dialogue procedure.