Important legal notice

61998C0380

European Court reports 2000 Page I-08035

Opinion of the Advocate-General

I - Introduction

II - Law

(1) Community law

For the purpose of this directive:

(b) "contracting authorities" shall be the State, regional or local authorities, bodies governed by public law, [or] associations formed by one or several of such authorities or bodies governed by public law;

A "body governed by public law" means any body:

- established for the specific purpose of meeting needs in the general interest, not having an industrial or commercial character, and

- having legal personality, and

- financed, for the most part, by the State, or regional or local authorities, or other bodies governed by public law, or subject to management supervision by those bodies, or having an administrative, managerial or supervisory board, more than half of whose members are appointed by the State, regional or local authorities or by other bodies governed by public law;

The lists of bodies and categories of bodies governed by public law which fulfil the criteria referred to in the second subparagraph are set out in Annex I. ...

(c) to (h) ....

4. That provision is largely identical to Article 1(b) of Council Directives 92/50/EEC of 18 June 1992 relating to the coordination of procedures for the award of public service contracts and 93/36/EEC of 14 June 1993 coordinating procedures for the award of public supply contracts.

5. As far as the United Kingdom is concerned, the list of bodies and categories of bodies governed by public law in Annex I includes universities and polytechnics, maintained schools and colleges.

6. The contents of Annex I may be changed in accordance with the procedure set out in Article 35 of Directive 93/37, according to which the Commission may amend the Annex in order to ensure as far as possible that it reflects the actual state of affairs.

(2) National legislation

7. The Community legislation was transposed into national law by the following measures:

- Directive 92/50 by the Public Services Contracts Regulations 1993 (S.I. 1993/3228)

- Directive 93/36 by the Public Supply Contracts Regulations 1995 (S.I. 1995/201)

- Directive 93/37 by the Public Works Contracts Regulations 1991 (S.I. 1991/2680).

III - Facts

10. On 17 January 1997, therefore, the Treasury suggested to the Commission that the following amendment be made with regard to universities: universities ... financed for the most part by other contracting authorities, thus restricting the circumstances in which the public procurement directives were applicable in the case of universities. The proposal has not yet been implemented by the Commission.

12. It was common ground in the main proceedings that most universities in the United Kingdom, in particular the University of Cambridge, were indeed established for the specific purpose of meeting needs in the general interest, not having an industrial or commercial character, and had legal personality; they were not, however, subject to management supervision by contracting authorities, and such bodies did not appoint more than half of the members of the administrative, managerial or supervisory boards of the universities. The only issue in this case, therefore, was whether the universities were financed, for the most part, by one or more contracting authorities.

13. In the order making the reference the national court states inter alia that universities in the United Kingdom are financed in different ways, not all of them receiving funds from contracting authorities. Funds are obtained from a variety of sources, and are provided for a variety of purposes and on various grounds; the way in which funds are obtained also varies.

14. The sources of financing for universities in the United Kingdom, including the applicant, mentioned by the national court include:

(b) Funds supplied by the Research Councils, which are likewise recognised to be contracting authorities, to the university on request by individual applicants wishing to conduct a research project in which the Research Councils themselves have no interest at stake, the monies going directly to the university. Grants are allocated to individual applicants on the basis of an appraisal of merit. If the applicant moves to another university, the funding will also move to the new university.

4. Various other sources of financing, such as the provision of residential accommodation and catering, as well as gifts and endowments.

15. The High Court of Justice appended to the reference for a preliminary ruling the following summary of sources of income from the accounts of the university (of Cambridge) for 1997 by percentage of total income:

Funding Council and Teacher Training Agency Grants 30

Academic Fees and Support Grants 14

Of which:

Home and EU students (including some self-supporting) 9

Overseas (non EU) students 5

Research Grants and Contracts 33

Of which:

Research Councils 14

Grants and contracts from other public and

private bodies 19

Other operating income 12

Of which:

Catering 1

Transferred from Local Examinations Syndicate 3

Health and Hospital authorities 2

Valued Added Tax Rebate 1

Other 5

Endowment Income and Interest Receivable 11

TOTAL 100

16. The national court considers that a proper understanding of the meaning of financed for the most part is decisive for determining whether a university is to be regarded as a contracting authority, and has therefore referred the following four questions to the Court of Justice for a preliminary ruling.

IV - The questions referred

(a) awards or grants paid by one or more contracting authorities for the support of research work;

(b) consideration paid by one or more contracting authorities for the supply of services comprising research work;

(c) consideration paid by one or more contracting authorities for the supply of other services, such as consultancy or the organisation of conferences;

(d) student grants paid by local education authorities to universities in respect of tuition for named students.

4. Over what period should any calculation be made for determining whether a university is a "contracting authority" in respect of any particular procurement, and how are foreseeable or future changes to be taken into account?

17. The applicant, the United Kingdom, Netherlands and Austrian Governments, and the Commission took part in the written procedure and the French Government took part in the oral procedure. I shall come back to their observations.

V - Assessment

(1) Preliminary remarks

18. The first point to consider is whether the present reference to universities in the list for the United Kingdom in Annex I to Directive 93/37 or the proposed amendment to it has legal effect as regards this case.

(a) Observations submitted to the Court

19. The view taken by the Netherlands Government, and by the United Kingdom in the oral procedure, is that Annex I is purely declaratory. That is indicated, according to the Netherlands Government, both by Article 35 of Directive 93/37, which provides for a procedure for amending the lists, and from the Commission's answer of 16 June 1992 to written question No 1443/92.

(b) Opinion

21. The interpretation of Article 1(b), third indent, of the directive is therefore not to be influenced by Annex I to Directive 93/37.

(2) The first question

(a) Observations submitted to the Court

22. The applicant considers that the purpose of Directives 93/36, 93/37 and 92/50 is to impose special requirements on bodies in relation to which the State is in a position to exercise actual or potential control in the procedure for the award of public contracts. It relies in that respect on the case-law of the Court of Justice. The directives serve to prevent distortion of the single market. Where a body is not subject to such control, or where it is merely theoretical, the directives ought not to apply.

23. Whether such control is exercised or not must be ascertained in the applicant's view on the basis of quantitative and qualitative criteria. A body will not be one governed by public law solely because another contracting authority supplies it with a number of financial payments, since not every payment by the contracting authority gives it such control. The purpose of the funding should also be taken into account. The only payment to be regarded as financing by a contracting authority is that which is provided to enable the establishment to fulfil its basic purpose - in the case of a university, teaching and research - and which therefore also enables the contracting authority making the payment to exercise direct or indirect control over public procurement. In this argument the applicant relied at the hearing also on the fact that were a different and broader interpretation to be adopted, churches or religious organisations, for instance, parties, State-funded charitable organisations or State-run lotteries might likewise be taken to be bodies governed by public law if they derived income from public resources. In any event financing denotes payments made in order to enable the university to fulfil its basic purposes. Accordingly, financing for specific research projects or other types of contribution, such as endowments, fall outside the definition. Since, in addition, the sources of funding mentioned in Question 1(a) to (d) of the reference for a preliminary ruling do not provide the contracting authority with any control over public procurement, they are not to be regarded as financing within the meaning of the provision.

24. The United Kingdom Government considers that all funds provided by contracting authorities which serve to fulfil tasks in the sphere of education and thus to meet a need in the general interest fall within the concept of financing by a contracting authority. That does not include commercial payments by a contracting authority, which must thus be left out of account. As to the question whether a payment serves educational or commercial purposes, the judgment in Case 263/86 Belgian State v Humbel is a useful reference.

25. In addition, the United Kingdom Government submitted at the hearing that what ultimately counts is whether a service is provided free, that is to say without any claim for consideration, or as a result of public law duties or, by contrast, under a particular contractual obligation. It relies on the criterion laid down in Mannesmann of close dependency between the body and the contracting authority; in the case of payments which the body has so to speak earned for itself that element is absent. Such payments cannot therefore fall within the concept of financing by a contracting authority.

26. For those reasons, the United Kingdom Government maintains, payments such as those mentioned in Question 1(b) and (c) are purely commercial and therefore to be excluded from the concept of financing by a contracting authority. Payments to the university such as those mentioned in Question 1(a) would fall within the definition, however, even if they were coupled to an application made by an individual applicant. They are ultimately intended to provide the universities with the means to achieve educational and academic aims. Payments by contracting authorities to a university towards tuition fees as described in Question 1(d) also constitute such financing, since they provide the body with the means of fulfilling the task it has in the general interest, even if they are made for specific named students.

27. The Netherlands Government observes that the three criteria set out in Article 1(b), third indent, of the directives, namely financing provided primarily by the State, State supervision and influence in staff appointments, are to be interpreted in the light of the judgment in Mannesmann as close dependency on the State or contracting authorities.

28. It follows that in order to answer the question whether financing by a contracting authority or some other form of contribution is present a distinction must be drawn between financial support and true consideration. Only in the case of the former is the criterion of close dependency fulfilled. The same criterion is used in Article 1(a)(ix) of Directive 92/50, according to which the directive applies only where the payment does not constitute consideration. In the case of Question 1(b) and (c), therefore, it must be ascertained whether what is involved is consideration earned in the marketplace or a financial subsidy. Consequently, payments made in connection with commercial activities will as a rule fall outside the concept of financing by a contracting authority.

29. The Austrian Government refers in suggesting an interpretation to the history of the concept of the contracting authority. The three criteria in Article 1(b), third indent, describe bodies which participate in economic life without being exposed to market forces. Accordingly, the expression financed for the most part by a contracting authority should be given a broad interpretation. It covers all forms of valuable payment containing an element of subsidy made to a body by a contracting authority. The only exception is if the body is obtaining consideration for services offered on the market in competition with other bodies or undertakings, the amount of the consideration being governed by the market itself.

30. Likewise, the French Government observed at the hearing that for the purposes of determining whether there is financing by a contracting authority it is necessary to distinguish between payments made in the general interest and those having the character of consideration for the provision of services. Consequently, of the payments listed in Question 1, those having the character of such consideration must be excluded from the concept of financing by a contracting authority.

31. The Commission also refers to the purpose of the directives, which is to prevent disturbance of the free movement of goods and services. The provision is intended to cover bodies which owing to their close dependency on the State or contracting authorities are not subject to market forces as are others. The decision in Mannesmann has made it clear that the alternative conditions referred to in Article 1(b), third indent, relate to close dependency on the contracting authority. There is such dependency, if only indirect, where financing comes for the most part from a contracting authority. At the hearing the Commission pointed out that even in commercial relationships there may be close dependency. That is taken entirely into account in the purpose of the directives, since even when a contracting authority is acting as a contractual partner it may have a very strong position of influence.

32. The Commission is therefore of the opinion that in the assessment, which must be based on the criterion of close dependency, in principle all payments made by a contracting authority must be taken into account. No distinction should be made according to the activities which form the purpose of the payment, since it is not the purpose of the directive to distinguish between activities in the general interest and other work. In the view of the Commission research awards to particular persons also constitute income for the university and are destined for the purposes of the university. Similarly, payments towards tuition fees for students are intended to provide funds for the university. Any distinction between the types of funding listed in Question 1(a) to (d) is not compatible with the purpose of the directives and would be most difficult in practice to apply.

(b) Opinion

33. The first question to be asked is, what considerations led to the adoption of Article 1(b), third indent, of the directives and what consequences do they have for the interpretation of the concept of financing by the State, or regional or local authorities, or other bodies governed by public law (which I will also call for the sake of simplicity public financing).

34. The purpose of the directives on the coordination of procedures for the award of public contracts is to remove the risk of considerations other than economic ones influencing the award of public contracts. Bodies which are not subject to the laws of the marketplace are prevented by the directives from giving preference in the award of such contracts to an applicant or tenderer favoured by them. That was what the Court of Justice decided with regard to the directives concerned in this case, Directive 92/50 in BFI Holding and Directive 93/37 in Mannesmann; see also the Opinion of Advocate General Léger in that case, and, with reference to an earlier directive, Directive 71/305/EEC, in Case 31/87.

35. That the notion of a contracting authority is thus to be given a broad meaning based on function, in order to ensure the effectiveness in practice of the principles of the free movement of goods and services, has been confirmed by the Court of Justice on a number of occasions regarding the legal form of the body or the provisions governing it.

36. As regards the determination whether the conditions for a body to be regarded as one governed by public law are satisfied, the Court of Justice described in Mannesmann the three alternative conditions laid down in Article 1(b), third indent, of the directives, which include that of being primarily public-financed, as representing close dependency of the body on the State, a local or regional authority, or other bodies governed by public law. The provision thus defines, according to the Court of Justice, the three manifestations of a body governed by public law as three variants of close dependency on another contracting authority.

37. It is true that in Connemara Machine Turf and Commission v Ireland the Court held that it was necessary, as regards the existence of a contracting authority in Ireland, for there to be control over the award of public supply contracts (and it was also regarded as sufficient for that control to be indirect, that is to say, not expressly provided for). That is what the applicant argues for in this case, too. Those principles, however, are not applicable to this case because the directive at issue in that case, Directive 77/62/EEC, itself imposed the requirement of State control over public supply contracts by means of a reference to the annex in respect of the relevant Member State, which in that case was Ireland.

39. It is clear that the directives are based on a functional approach, which requires a broad interpretation. In special cases, however, as the Netherlands and Austrian Governments accept, and the United Kingdom also essentially accepts, a teleological approach may be justified. If the funding provided by a contracting authority cannot give rise to, or reinforce, any particular dependency, the purpose of the directives no longer serves to justify the inclusion of such funding as public financing, a concept intended precisely to cover only cases where there is a special link between the body and the contracting authority.

40. It is therefore necessary also to clarify the meaning of financing in order to be able to conclude that there is close dependency between the recipient and the provider of the payment. As the Commission also rightly observes, such dependency exists in the case of public financing only indirectly. As a result, it is not possible to regard every payment from public sources automatically as public financing, which only covers funding which does not constitute payment for a particular consideration, that is to say, which amounts to a financial subsidy to fund or support the general activities of the establishment in question.

41. Funding such as that mentioned in Question 1(a), in the form of grants in support of research, must therefore be regarded as public financing. Even if the actual recipient is not the establishment itself, but a person supplying services as part of the university, it is nevertheless financing which benefits the establishment as a whole. Precisely in this case there is one of the relationships defined by the directive, there being close dependency between the university and the contracting authority providing the finance.

42. It is questionable, however, whether that extends, in accordance with the principles set out above, to the payments referred to Question 1(b) and (c). The purpose of the payment, the criterion suggested by the United Kingdom Government inter alia, is not sufficient to determine whether public financing includes consideration paid by a contracting authority for services provided by the university under contract. In Humbel the Court decided that teaching services did not fall within the scope of services for the purposes of Articles 59 and 60 of the EC Treaty (now Articles 49 EC and 50 EC). However, the Court distinguished between the case where there was economic consideration for a service and that where payment was made for the fulfilment by the State of an obligation incumbent upon it in the social, cultural and educational sphere. The reason for that given by the Court was that the protection which freedom to provide services was designed to afford did not extend to the latter sphere. The question whether a payment falls in this case under the heading of public financing cannot be answered on that basis, however, since the protection which the directives are designed to afford (described above) is one entirely different to that afforded by freedom to provide services. The fact is that the nature of the payment as consideration raises precisely the question whether it is possible for there to be close dependency even where the service provided by the establishment nevertheless serves purposes which are in the general interest. That criterion makes it more difficult, moreover, to draw the distinction, since activities which are in the general interest, that is to say, in the case of a university, education and research services, may overlap with activities of a commercial character, as Question 1(b) shows.

43. In the same way, it is not possible to apply by analogy the principles developed by the Court of Justice in BFI Holding. In that case the Court decided, with regard to Article 1(b), second subparagraph, first indent, of Directive 92/50, that the fact that services were also supplied by private undertakings or could be supplied by them did not prevent a task from being one that was in the general interest. At first sight, the judgment might be taken to indicate that a distinction between commercial and other services cannot be made in the case of public financing under the third indent, either. However, the three cumulative criteria for defining a body governed by public law raise quite different issues. The separate issue raised here is whether particular payments to a body which was undoubtedly established for the purpose of meeting needs in the general interest are to be regarded as public financing.

44. If one is to be guided by the purpose of the directives and by the question whether close dependency between university and contracting authority is created or reinforced, the answer must be that it is not public financing if the combined effect of the service and the consideration paid is that the contracting authority has an economic interest in obtaining the service which goes beyond support for the needs to be served in the general interest. There can only be close dependency if the purpose of the payment is to support the tasks of an establishment and to aid it for that purpose. That can only be the case if a service provided by the establishment under contract is at the same time an activity which is performed in the general interest or which serves academic purposes.

45. As a rule such dependency does not arise precisely where an establishment receives payment as consideration for an activity which it offers in the same way as an undertaking operating on the market independently in competition with private undertakings and on the basis of a specific agreement for the supply of services. That is because the establishment acquires its entitlement to payment on a reciprocal basis. The services are supplied on request in the interest of the establishment, as in the case of research for specific purposes, consultancy or the organisation of conferences. The right to obtain services is therefore not based on the decision of principle to support the establishment in its duties, but is rather a contractual entitlement.

46. A business relationship of that type can, of course, give rise to dependency, but that dependency is not of the same kind as that which arises from the mere provision of support. The dependency between business partners, even where one is technically a contracting authority, is not close dependency for the purposes of the directives, since in the case of freely negotiated contracts performance by both parties takes the form of do ut des. Any other approach to this question would lead to the paradoxical result that even a private undertaking conducting most of its business with contracting authorities would be a contracting authority for the purposes of the procurement directives.

47. Since the payments referred to in Question 1(b) and (c) are made in respect of a claim based on an autonomous contractual foundation and do not therefore create close dependency on a contracting authority within the meaning of the directive, they do not constitute public financing.

48. The last question to be discussed in this regard is whether tuition fees, as described in Question 1(d), paid by the contracting authority to a university for named students may be counted as public financing.

49. It is true that such payments also constitute a social measure for individual students, for whom it represents a grant towards the sometimes very high tuition fees. Nevertheless, it constitutes a reliable source of income for the establishment from public funds, which accrue to the university. The test for whether there is dependency is that the establishment obtains support from the contracting authority, for which, moreover, there is no contractual consideration. Accordingly, a contribution such as that referred to in Question 1(d) falls within the concept of public financing.

Naturally that excludes tuition fees paid by the student himself from private means, which do not involve any contribution from a contracting authority. Likewise excluded are funds provided from abroad by way of grants or other forms of support for students.

(3) The second question

51. The second question seeks to know how the expression for the most part in Article 1 of the directives is to be understood.

(a) Observations submitted to the Court

52. The applicant considers that in view of its position on the first question it is not necessary to answer the second. Solely in the alternative, it submits that the expression for the most part should be interpreted not on the basis of purely quantitative criteria but rather on the basis of qualitative criteria, with the result that only financing which confers on the payer control over procurement decisions is to be included. In any event, as regards the quantitative aspect, the test cannot be a purely mathematical one: there must be a predominant amount of such financing, which, in the applicant's view, can only be present where the financing amounts to at least three-quarters of the total.

53. The Netherlands, Austrian and United Kingdom Governments, together with the Commission, consider rather that for the most part must be taken to have its natural meaning of over 50%. The French Government supported that view at the hearing.

54. The United Kingdom Government argues that if the financing provided by the contracting authority exceeds 50%, there should be control over the use of those funds by the financing body. That is the approach taken in Article 2(1) of Directive 93/37, according to which the directive extends to contracting authorities who subsidise by more than 50% a contract awarded by a different body.

55. The Netherlands Government considers that that approach is also justified on systematic grounds, since there is another instance in Article 1(b), third indent, of the directives where a simple majority is determinative: where more than half the members of an administrative, managerial or supervisory board are appointed by the board there is assumed to be dependency. In addition, the definition of a public undertaking in Article 1(2) of Directive 93/38/EEC, and the definition of an affiliated undertaking in the third subparagraph of Article 3(4) of Directive 93/37 and in Article 1(3) of Directive 93/38 can also be referred to for comparison, each of them employing the criterion of more than half.

56. The Commission considers that taking the expression to mean more than 50% is a simple test to apply and also follows logically from the fact that the assessment is based on only two aspects, financing from contracting authorities and financing from other sources.

(b) Opinion

57. The ordinary meaning of the words for the most part suggests that they should be interpreted as referring to an arithmetical more, that is to say over half or more than 50%. Even if the words are not considered to be unequivocal in that respect, any interpretation such as that suggested by the applicant, for instance depending on funds of a particular sort, would not meet the purpose of the provision. It must be borne in mind that close dependency, with the corresponding possibility of influence, might arise in certain circumstances even where the financing is less than 50%, if it comes as a single contribution among a large number of smaller amounts. A qualitative approach is therefore not an appropriate one for determining the meaning of for the most part because of the many imponderables it raises. The possibility need not be discussed here, since all that is necessary is to establish the meaning of for the most part. What is required is a practical interpretation which satisfies the purpose of the provision.

58. We can also refer to the definition in Article 1(2) of Directive 93/38, in which public undertaking is defined inter alia as an undertaking in which the State owns, directly or indirectly, at least half of the capital. If that quantitative criterion is what makes an undertaking a public undertaking, it must certainly apply to a body governed by public law, when determining the conditions under which financing is to be regarded as for the most part public.

(4) The third question

59. The issue of what contributions fall within the concept of financing by a contracting authority has already been dealt with in connection with the first question. The third question posed by the national court, namely what funds are to be included in the calculation, should therefore not be understood as meaning what kind of funds should be taken into account in calculating the public financing, but as asking what is to be the basis for calculating the whole financing. In other words, it asks how to define the total income, of which the funds provided by public financing are to constitute the most part.

(a) Observations submitted to the Court

60. The applicant and the United Kingdom Government argue that the calculation should cover all income. The French Government supported that view at the hearing.

(b) Opinion

61. In referring to financing for the most part from public funds, Article 1(b), third indent, implies that the institution can obtain funds at least partly from other sources without forfeiting its identity as a contracting authority. Any reliable assessment of the proportion of public financing when considering the economy of the institution as a whole must take account of all funding in the assessment of its income. Consequently, in order to calculate the total income (100%) of which over 50% is to be public financing, all resources accruing to the institution must be taken into account.

(5) The fourth question

62. Since universities' financing may vary from year to year, the national court seeks by means of the fourth question to know what period should be used as the basis for deciding whether an institution is to be classed as a body governed by public law, and how foreseeable or future changes in funding are to be taken into account.

(a) Observations submitted to the Court

63. The applicant suggests that the relevant time is the time of the contract award procedure.

64. The United Kingdom Government submits that for practical reasons it should occur a priori at the time of the award procedure. It refers to the possibility of taking interim measures under Directive 89/665/EEC, which would have no purpose if the status of an institution as being a body governed by public law were only to be made at a later date. At the hearing it suggested that the assessment could be a yearly one. Bodies wishing to award a contract must be able to determine the situation on the basis of the information available to them at that time, which would include figures from past years as well as a reasonable estimate of the duration of the contract and the funds already committed. The element of prognosis is one which is to be found in the three directives.

65. The Austrian Government considers that the assessment must be made for given periods, and suggests an annual approach, since contracting authorities draw up their budgets annually. Reference might be made to the calendar, accounting or budgetary year. That would also be appropriate in view of the fact that a yearly assessment is also made in other cases (Article 7(6) and the notification provisions in Article 15(1) of Directive 92/50).

66. The Commission takes the view that Article 15(1) of Directive 92/50 and Article 9(1) of Directive 93/36 indicate that contracting authorities retain their status for 12 months. Whether a body is a contracting authority or not may thus change from one budgetary year to another. Accordingly, it suggests that the determination be made annually on the basis of anticipated sources of finance for the coming budgetary year.

67. The Netherlands Government considers that the assessment should be made rather on structural lines, since any other approach would be incompatible with the principle of legal certainty.

68. The French Government supported that view at the hearing. The difficulties of application and the considerable uncertainty which would arise particularly in the case of more lengthy award procedures could only be overcome by adopting a structural approach. Any other approach might have the result of making the status of the body vary in the course of the award procedure purely as a result of temporary and short-term changes in funding.

(b) Opinion

69. That the fundamental general principle of legal certainty in Community law applies when classifying financing was upheld by the Court of Justice in Mannesmann. The principle requires that provisions be clear and their application foreseeable by all those concerned. Accordingly, the application of objective and transparent criteria for determining the status of a body as being one governed by public law must be decisive.

70. Determining status on the basis of structural elements would admittedly have the advantage of legal certainty and clarity; it would not, however, enable actual or future variations in funding to be taken into account. Isolated instances of public funding, for example for building projects, would then be disregarded, contrary to the intention of the directive.

71. Taking the time of the procurement procedure as the time at which status is to be determined likewise does not necessarily reflect longer-term, and thus actual, financing. It would also open the way to manipulation.

72. Annual reassessment of their status, by contrast, might not offer the foreseeability required by the principle of legal certainty, since the status of the institution could change from year to year depending on the sources of its financing.

73. On the other hand, the basis for making the abovementioned calculations must be certain, correct and transparent. It ought therefore to be reasonable to do it on an annual basis in any event; not for a year in the past calculated from the time of the procurement procedure, however, but for the budgetary year in which the contract is awarded. For reasons of legal certainty and protection of tenderers that should be expanded, however, in order to ensure that in the course of the procurement procedure the establishment retains until completion of the contract the status it had at the time of the award procedure, even if the contract extends over a period of more than a budgetary year in the course of which the institution's financing changes.

74. The new assessment of the financing for the purposes of determining the establishment's status is only to be undertaken within a budgetary year (also to prevent manipulation) in the case of significant changes in funding which have already occurred or in the case of foreseeable future changes.

VI - Conclusion

75. In the light of those considerations I suggest the following answers to the questions which have been referred for a preliminary ruling:

(1) The expression financed for the most part by one or more contracting authorities in Article 1 of Council Directives 92/50/EEC, 93/37/EEC and 93/36/EEC covers in principle all funding provided by the State, regional or local authorities, or other bodies governed by public law to a body for the purpose of providing financial support for that body. Payments made by a contracting authority as consideration for services offered on competitive conditions by the body in the context of a reciprocal contract do not constitute public financing for the purpose of the directives.

(a) Research grants made by one or more contracting authorities to support research are covered by the expression financing by one or more contracting authorities.

(b) Payments made by one or more contracting authorities under a specific contract for the supply of services as consideration for the supply of services or for research work, and

(c) for the supply of other services, such as consultancy or the organisation of conferences, do not constitute financing by one or more contracting authorities.

(d) Student grants paid by local education authorities to universities in respect of tuition for named students constitute financing by one or more contracting authorities.

(2) For the most part means more than 50%.

(3) Whether financing is for the most part is determined on the basis of all funds accruing to the body.

(4) Whether a body is to be regarded as one governed by public law is to be determined on the basis of the budgetary year of the procurement procedure. The status should be reviewed if there are significant changes in the way in which the body is financed during the budgetary year.