In its Judgment of 10 October 2013 in case C-94/12 Swm Costruzioni 2 and Mannocchi Luigino, the Court of Justice of the EU has followed the Opinion of AG Jääskinen (which I praised and supported here) and expanded its antiformalistic case law on the interpretation of the rules controlling participation and selection requirements in public procurement covered by the EU Directives. In my view, this Judgment is a (well-aimed?) depth charge against certification systems based on Article 52 of Directive 2004/18.
More specifically, the CJEU was presented with a request for a preliminary reference concerning the compatibility with EU law of an Italian provision applicable to all works contracts with a value in excess of 150,000 Euro, whereby undertakings that needed to 'team up' and rely on the abilities of other undertakings in order to tender for public works contracts could only do so on a one-to-one basis (ie main contractors were not allowed to build up a 'jigsaw' of qualifications provided by several subcontractors, but had to rely exclusively on the abilities of one subcontractor that was able to deliver the whole of the performance for that given category of works concerned).
Under the controversial Italian rule, "For works contracts, the tenderer may rely on the capacities of only one auxiliary undertaking for each qualification category. The invitation to tender may permit reliance on the capacity of more than one auxiliary undertaking having regard to the value of the contract or the special nature of the services to be provided" (emphasis added).
The CJEU rephrased the question referred by the Italian court and understood that, in essence, it had to rule wheter Articles 47(2) and 48(3) of Directive 2004/18 must be interpreted as precluding a national provision which prohibits, as a general rule, economic operators participating in a tendering procedure for a public works contract from relying on the capacities of more than one undertaking for the same qualification/certification category.
Interestingly, the CJEU spells out that its analysis is based on the final goal of maximising competition (in particular, by means of facilitating SME participation) and finds that:
33 […] it must be held that Directive 2004/18 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.
34 Such an interpretation is consistent with the objective pursued by the directives in this area of attaining the widest possible opening-up of public contracts to competition to the benefit not only of economic operators but also contracting authorities (see, to that effect, Case C‑305/08 CoNISMa [2009] ECR I‑12129, paragraph 37 and the case-law cited). In addition, as the Advocate General noted at points 33 and 37 of his Opinion, that interpretation also facilitates the involvement of small- and medium-sized undertakings in the contracts procurement market, an aim also pursued by Directive 2004/18, as stated in recital 32 thereof.
35 It is true that there may be works with special requirements necessitating a certain capacity which cannot be obtained by combining the capacities of more than one operator, which, individually, would be inadequate. In such circumstances, the contracting authority would be justified in requiring that the minimum capacity level concerned be achieved by a single economic operator or, where appropriate, by relying on a limited number of economic operators, in accordance with the second subparagraph of Article 44(2) of Directive 2004/18, as long as that requirement is related and proportionate to the subject-matter of the contract at issue.
36 However, since those circumstances constitute an exception, Directive 2004/18 precludes that requirement being made a general rule under national law, which is the effect of a provision such as [the controversial Italian provision] (C-94/12, paras 33-36, emphasis added).
In my view, the Swm Costruzioni Judgment should be welcome as it concerns the anti-formalistic and possibilistic interpretation of the rules on selection of contractors in Directive 2004/18--which are about to be modernised in the new procurement directive, also as 'teaming up' provisions are concerned (see my recent paper: "Exclusion, Qualitative Selection and Short-listing in the New Public Sector Procurement Directive").
Moreover, it is worth noting that the Judgment does (inadvertently? and) implicitly throw a depth charge against national certification systems. Taking the logic behind the Swm Costruzioni Judgment to its logical extremes, those certification systems should only be in place to cover those contracts where objective circumstances justify the need for the contracting authority to make sure that a single undertaking carry out a specific contract.
Certification systems, then, should only cover "works with special requirements necessitating a certain capacity which cannot be obtained by combining the capacities of more than one operator" as, otherwise, the whole certification system is completely superficial if the contracting authority must (as indeed it shall) accept any 'jigsaw' of (partial) certifications presented by a group of undertakings (or by an uncapable main contractor that enters into subcontract agreements) in order to prove that they have sufficient (aggregate) economic, technical and financial standing [something I advocated for in Sanchez Graells, Public Procurement and the EU Competition Rules (Oxford, Hart Publishing, 2011) 266-268].
Therefore, in my view, the Swm Costruzioni Judgment is actually raising a red flag and stressing that such requirements to be certified or included in the list of pre-approved contractors will ultimately only be compliant with EU law if the specific characteristics of the works to be tendered do justify the need for a single (or very limited number) of undertakings to carry out the project.
Now, this will be puzzling in many jurisdictions that strongly rely on certification systems and pre-approved lists of contractors fro all types (and almost all values) of works contracts, but the (implicit) message seems clear. Therefore, procurement authorities may be better off dismantling those existing systems altogether and bracing themselves (ie getting training and staffing themselves properly) for the revolution that the European Single Procurement Document (ESPD, effectively a set of self-declarations) is about to bring upon.