Good news and happy holidays

One more year, the time for the summer break has arrived. Thank you all for following the blog and for all the interactions we have had at conferences, workshops and training sessions during the academic year that just finished. Your continuous encouragement and support has helped me develop professionally and this has now been reflected in my promotion to Reader in Economic Law at the University of Bristol Law School from 1 August 2017. 

I will now take a break from blogging to celebrate the promotion, go on holidays and write up a couple of articles that require some concentration. I will return to blogging in the run up to the next academic year. I hope you will all have an enjoyable summer and hope to find you here in September.

All best wishes, Albert

ECJ confirms that procurement rules do not apply to allocation of airport space to groundhandling companies (C-701/15)

In its Judgment of 13 July 2017 in Malpensa Logistica Europa, C-701/15, EU:C:2017:545, the European Court of Justice (ECJ) has established that the 2004 Utilities Procurement Directive did not require conducting a public selection procedure prior to the allocation, including a temporary allocation, of areas within airports to be used for the provision of groundhandling services for which no remuneration is to be paid by the manager of the airport.

The reasoning of the Court is straightforward and considers that the allocation of space to groundhandling operators does not fall within the scope of the relevant public procurement rules because "the managing body responsible for Malpensa Airport did not acquire a service provided by the supplier in return for remuneration" (para 29). In my view, and as I discussed in relation to the Opinion of AG Campos in this case (discussed here) , this is the correct approach. Indeed, it is now clear that a procedure for the allocation of airport space to groundhandling operators authorised to provide services in that airport should not be covered by the utilities procurement directive (either the 2004 version, or the current 2014 version, or the 2014 concessions directive) because the body managing the airport is not procuring services from those companies when it takes the space allocation decision. 

In my view, the ECJ could have been clearer in establishing the error implicit in the Italian case law that originated the referral. Indeed, as presented by the referring court, "according to [Italian] national case-law, the exploitation of airport areas (geographical areas), including, therefore, internal areas, in connection with the activities usually performed by air carriers falls within the material scope of the rules governing [procurement in the] special sectors" (para 21), which led to the conclusion that "the provision of groundhandling services in airports, by the exploitation of geographical areas, also falls within the material scope of those rules" (para 22). In that regard, the ECJ could have clarified the multiple dimensions involved in an assessment of scope of coverage of the EU procurement rules (in the utilities or special sectors), which cannot be constrained to an assessment of the activities involved, but more importantly need to include an explicit consideration of the extent to which the contracting authority or entity is engaged in procurement (ie sourcing goods, services or works) or other types of (quasi-regualtory) activities.

In any case, given the simple functional criterion that derives from the Malpensa Logistica Europa Judgment, this is a welcome clarification.

ECJ allows contracting authorities to require performance bonds as selection criteria (C-76/16)

In its Judgment of 13 July 2017 in INGSTEEL and Metrostav, C-76/16, EU:C:2017:549, the European Court of Justice (ECJ) has followed the Opinion of AG Campos (discussed here) and accepted the use of financial guarantees (performance bonds) as economic selection criteria rather than as contract compliance clauses (which was the Commission's approach). The ECJ has also set some minimum requirements of proportionality in their assessment. The Judgment is based on the 2004 public procurement rules, but will be relevant in the context of the 2014 Directive as well.

In the case at hand, the tender documentation “required the participants in the tendering procedure to provide a statement from a Slovak bank or a Slovak branch office of a foreign bank confirming that it would grant them credit in the amount of at least EUR 3 000 000, a sum which should be available to them throughout the entire duration of the contract. That statement was to be in the form of a loan agreement or credit facility agreement and have been given by a person authorised to commit the bank in question” (C-76/16, para 16, please note that the description is not entirely coincidental with that of the AG Opinion, which did not refer to a 'loan agreement or credit facility', but rather to a 'guarantee ... to ensure performance of the contract'; however, the issue of the legal nature of the requirement may not have played a significant role in the ECJ's decision).

The disappointed tenderer did not provide such a bank statement, but rather "a statement, given by a bank, which contained information on the opening of a current-account credit facility for an amount exceeding EUR 5 000 000, and a sworn statement from the tenderer certifying that, if its bid was successful, it would have available in its current account, at the time of conclusion of the contract for works and throughout the period of performance of the contract, a minimum amount of EUR 3 000 000" (C-76/16, para 17).

The difference in the content of the bank statements is important because the core of the issue was that, as argued by the disappointed tenderer, it would have been "objectively impossible for it to satisfy the requirements relating to economic and financial standing set by the contracting authority in any other way, drawing on statements made by Slovak banks questioned by the latter to the effect that a binding undertaking to grant credit, such as that required by the contract notice, could be issued only after approval of the transaction covered by the credit and satisfaction of all the requirements laid down by the bank for the conclusion of a loan agreement" (C-76/16, para 18).

Taking the view that the unsuccessful tenderer had not satisfied the economic and financial standing requirements, the contracting authority decided to exclude it from the tendering procedure. The rejection was eventually challenged before the Supreme Court of the Slovak Republic, and the preliminary reference to the ECJ derives from a procedure mainly aimed at assessing (i) whether the contracting authority could introduce this requirement in compliance with the rules on economic and financial standing (Art 47(1)(a) and (4) Dir 2004/18); and (ii) whether the contracting authority should have accepted the documentation as alternative to the specified bank certificate (Art 47(5) Dir 2004/18). Only the first point deserves analysis, as the ECJ has left the second point completely open and referred it back for assessment by the domestic court.

It is also worth stressing that the Commission had challenged the approach of assessing performance bond requirements as selection criteria and submitted that: (i) the requirement for financial guarantees that had to be effective post-award should be assessed as a contract compliance clause under Art 26 Dir 2004/18 and, further, (ii) that given that such provision does not exhaustively govern the special conditions for performance, those conditions may be assessed in accordance with primary EU law. AG Campos rejected the Commission's approach and invited the ECJ to assess the requirement in the framework of economic selection criteria. The ECJ has now followed that approach and, after reiterating its case law on the setting of economic and financial selection criteria and the discretion that contracting authorities enjoy to that effect (paras 25-34), it has established that

35      As regards, first, the requirement expressly laid down in the contract notice that the financial guarantee should be provided ‘to ensure performance of the contract’, it appears ... that the contracting authority believed that that requirement was not satisfied since the credit granted to the tenderer, although exceeding the amount required by the contract notice, was a current-account credit facility that was not tied to performance of the contract.

36      In this respect, it must be noted that a requirement to obtain a loan tied to performance of the contract is, objectively, a reasonable means of obtaining information on the economic ability of the tenderer to perform the contract successfully. As the European Commission noted, the grant of a loan is an appropriate means of establishing that the tenderer has at its disposal resources which it does not itself own and which are necessary for the performance of the contract (see, to that effect, judgment of 2 December 1999, Holst Italia, C‑176/98, EU:C:1999:593, paragraph 29). It is, however, once again for the referring court to confirm that the amount required in the contract notice is proportionate to the subject matter of the contract.

37      In respect, second, of the requirement, also laid down in the contract notice, regarding the grant of credit in a minimum amount of EUR 3 000 000 ‘for the period of performance of the contract (48 months)’, although, admittedly Article 47 of Directive 2004/18 does not expressly provide that the contracting authority may require a tenderer to have at its disposal the resources necessary for the performance of the contract throughout the duration of the performance of the contract, it must be noted, as the Advocate General observed in point 46 of his Opinion, that the contracting authority’s verification of the tenderer’s compliance with the economic and financial criteria in a tendering procedure, is intended to provide that authority with the assurance that the successful tenderer will indeed be able to use whatever resources it relies on throughout the period covered by the contract (see, to that effect, judgment of 14 January 2016, Ostas celtnieks, C‑234/14, EU:C:2016:6, paragraph 26 and the case-law cited).

38      Moreover, the continued availability of the amount required throughout the period of performance of the contract is a useful tool in assessing, in a tangible manner, the economic and financial standing of the tenderer with respect to its commitments. The proper performance of the contract is indeed intrinsically linked to whether the tenderer has the financial means for the execution of the contract.

39      Therefore, in the present case, the condition requiring the tenderer to have the funds available throughout the period of performance of the contract is appropriate for securing the objectives of Article 47(1) of Directive 2004/18.

40      However, it is for the national court to determine the relevance of the evidence provided by the tenderer for that purpose, in particular the contract opening a current-account credit facility.

41      It follows from the foregoing that the answer to the first question is that Article 47(1)(a) and (4) of Directive 2004/18 must be interpreted as meaning that a contracting authority may exclude a tenderer from a tender procedure on the ground that it does not fulfil the criterion regarding economic and financial standing laid down in the contract notice with respect to the provision of a statement given by a bank undertaking to grant credit in the amount specified in the contract notice and to guarantee that that amount will be available to the tenderer throughout the period of performance of the contract (C-76/16, paras 35-41, emphasis added).

In my view, and as I said in relation with the AG Opinion in this case, the analysis carried out by the ECJ is technically flawed. Put simply, the EU public procurement directives (both the 2004 and the 2014 generations) do not regulate the possibility for contracting authorities to demand financial guarantees from economic operators participating in tender procedures – neither tender/participation guarantees, nor performance/completion guarantees [see A Sanchez-Graells, Public Procurement and the EU Competition Rules, 2nd edn (Oxford, Hart, 2015) 326-7 & 425-6]. Such requirements are not regulated as part of the assessment of the economic operator’s economic and financial standing for selection purposes – which is designed as an information-based screening process, not as a phase where the contracting authority can secure financial rights for itself –and this is also not related to the conditions for the performance of the contract. Moreover, a reinterpretation of the selection rules on economic and financial standing (but also on professional or technical standing) that made them forward looking creates significant distortions in the system of EU public procurement law, as well as potentially make it impossible to assess.

The specific reasoning of the ECJ in this case supports the fact that an assessment of performance bonds as selection criteria is problematic. The ECJ has stressed that the two main reasons why it considers these requirements acceptable concern the fact that (i) "a requirement to obtain a loan tied to performance of the contract is, objectively, a reasonable means of obtaining information on the economic ability of the tenderer to perform the contract successfully" (para 36), and that "the continued availability of the amount required throughout the period of performance of the contract is a useful tool in assessing, in a tangible manner, the economic and financial standing of the tenderer with respect to its commitments. The proper performance of the contract is indeed intrinsically linked to whether the tenderer has the financial means for the execution of the contract" (para 38).

In the abstract and taken into account in their own terms, these statements may seem uncontroversial. However, the extent to which they reflect the nature of the requirement for a performance bond or financial guarantee can be doubted. The economic and financial standing of the contractor is assessed in general terms at selection stage and the contracting authority always run an implicit risk that the economic and financial standing of the contractor may change during the execution of the contract, in particular if this is of a long duration. Thus, the requirement of performance-related financial guarantees does not have an informative aim, but rather a risk management aim and possibly a cashflow management aim.

By requiring the contractor to have an available credit of 12% of the procurement value (€3mn for a €25.5mn contract), the contracting authority seems to want to cover risks of mis- or under-performance (possibly through the imposition of contractual penalties) and/or to anticipate that the contractor will always be making investments ahead of expected payments for partial completion of the works. In that case, the function of the requirement is not to allow the contracting authority to assess the undertaking's financial standing, but rather to have access to implicit finance for the project and/or to reduce the financial risk of the project for the authority itself. Moreover, it is not clear whether the funds have to be 'frozen' and available throughout the duration of the contract, or if the contractor can use them to perform the contract. In the second case, assuming that a credit of 12% (or any other value, except for an excess of 100%) ensures adequate performance of the contract is only partially justified because at some point in the execution of the contract, the 12% funds will be exhausted and, barring the existence of other sources of finance (including payments by the contracting authority), the very same issues that the financial guarantee is supposed to exclude would arise.

From that perspective, in my opinion, both the suitability and the proportionality of the requirement need to be taken into account. It should be assessed whether the contracting authority has made efforts to design the contract in a cashflow neutral way (including initial downpayments, for instance), or if there are any other ways in which the management of risk can be satisfactorily conducted without requiring performance bonds. This is something that the ECJ has not done, and it has simply referred the issue back to the domestic court, so that it assesses "the relevance of the evidence provided by the tenderer for [the purpose of having funds available throughout the period of performance of the contract], in particular the contract opening a current-account credit facility" (C-76/16, para 40).

The problem, in my view, is that the ECJ has implicitly accepted that the requirement is legitimate and that contracting authorities can require undertakings to have specific levels of funds available to them during the execution of the contract as a matter of qualitative selection. This can be problematic because the creation of imbalanced cashflows can exclude undertakings from competition for the contract (in particular, SMEs) and because contracting authorities are not necessarily in the best position to assess the financial arrangements that undertakings have put in place for their operations. Moreover, if this was the best way of assessing the undertakings' economic and financial standing, then qualitative selection could be limited to demanding performance guarantees (possibly of 100% of the value) rather than assessing the undertakings' financial documentation. There would be no need to assess annual turnover or any other indicators, as contracting authorities would be absolutely certain that the contract would be financed. However, this clearly seems excessive and, in any way, excessive as compared to the role and purpose of qualitative selection. As the ECJ stressed in the INGSTEEL Judgment, 

the requirements in terms of economic and financial standing must be objectively such as to provide information on such standing of an economic operator and must be adapted to the size of the contract concerned in that they constitute objectively a positive indication of the existence of a sufficient economic and financial basis for the performance of that contract, without, however, going beyond what is reasonably necessary for that purpose (C-76/16, para 33, emphasis added).

In my view, requirements of performance bonds or financial guarantees do not aim to obtain "positive indications" of the financial viability of the project, but rather "positive assurances" to that effect. In that regard, they do not relate to the general standing of the undertaking, but rather to the specific risk profile of the tender, and as such need to be assessed as contract performance clauses and under a strict proportionality test. The fact that the ECJ has taken a different analytical approach is, in my view, a lost opportunity.

New Paper on Extraterritoriality of EU Procurement Rules

I am presenting a paper on the extraterritoriality of EU public procurement rules at the research workshop "Extraterritoriality of EU Law & Human Rights after Lisbon: Scope and Boundaries", held at the Sussex European Institute on 13 & 14 July 2017.

The paper is entitled "An Ever-Changing Scope? The Expansive Boundaries of EU Public Procurement Rules, Extraterritoriality and the Court of Justice", and is available at SSRN: https://ssrn.com/abstract=3000256.

As the abstract indicates:

This paper looks at how the EU public procurement rules have shown a tendency to permanently expand their scope of application, both within and outside the EU. Inside the EU, the expansion has primarily resulted from blurred coverage boundaries and a creeping application outside their explicit scope. Outside the EU, the extraterritoriality has concerned scenarios such as the applicability of EU financial rules to procurement carried out as part of the EU’s external action in other areas (such as common foreign and security policy), or the regulatory transfer (or ‘export’) of EU procurement rules as part of trade deals—notably, the EU-Canada CETA, but also the EU-Ukraine DCFTA.

Concentrating solely on the ‘external’ dimension of the expansive scope of EU public procurement rules, in trying to explore some of the impacts of the extraterritorial effects of EU public procurement law on the legal and regulatory systems of third countries, this paper focuses on the implications that this expansion and extraterritoriality can have in terms of jurisdiction of the Court of Justice, as well as in terms of difficulties for the coordination of remedies systems in the area of public procurement. The paper concludes that the extraterritorial expansiveness of the EU’s public procurement rules is creating areas of potential legal uncertainty that deserve further analysis. Given the highly speculative nature of those scenarios at this stage, however, the paper does not attempt to provide any specific answers or tentative solutions to the issues it raises.

I intend to review the paper after the workshop and will appreciate any additional feedback that helps me improve it so, if you have the time and inclination to read the paper, please email me any comments to a.sanchez-graells@bristol.ac.uk, or feel free to post them in the comments section. Thank you in advance for any input.

Comments to Danish Draft Guidelines on Joint Tendering

The Danish Competition and Consumer Authority has published draft guidelines on joint bidding under competition law and invited comments by 1 September 2017. The following are the comments I have provided in the context of this public consultation. It will be interesting for me to see if the Authority takes any of these issues into account in the final version of its guidance.

The document provides a useful overview of the issues involved in an analysis of the compatibility of undertakings’ collaboration for the submission of joint tenders for public contracts with Article 101 TFEU (and domestic equivalents). The guidance is largely applicable to subcontracting arrangements as well, and it usefully incorporates recent examples of competition investigations in Scandinavian jurisdictions—with special attention given to the recent EFTA Ski Taxi Judgment.[1] It is particularly welcome that the Danish Competition and Consumer Authority has made the effort of publishing the guidelines in English, which can position them as an important point of reference in all EU/EEA jurisdictions after their official adoption.

The draft guidelines pivot centrally around the consideration of whether undertakings seeking to collaborate in the submission of a joint tender could bid independently for a given contract. That is, they follow the standard approach of considering that collaboration in the form of joint bidding (or subcontracting) is problematic where it reduces the level of competition that could otherwise exist for a public contract, unless it generates net efficiencies that are passed on to the contracting authority.[2] From that perspective, the draft guidelines send some useful clear messages, such as the need:

1. for undertakings to conduct objective self-assessments of their own capacity to individually perform the contract prior to engaging in discussions with potential consortium partners;
2. to tailor the analysis to the size and requirements of the lots in which a contract can be divided, rather than limiting the assessment to a holistic view in relation to the execution of the whole contract;
3. to carry out case-by-case assessments of that capacity and the ensuing warning against stable joint tendering arrangements that fail to meet the thresholds for the creation of a full functioning joint venture; and
4. to keep adequate records of those assessments for the purposes of enabling full and considerate responses to requests for information in the context of a competition investigation.

Given the complexity of the topic, however, there are some aspects of the draft guidelines that are less clear cut and where, in my opinion, there is scope for improvement and further clarification in the guidance finally adopted by the Authority. The assessment of relationships of potential competition in the context of restrictions of competition by object and the treatment of risk-driven collaborations deserve some careful consideration. These are issues that have spillover effects on the treatment of exchanges of information between undertakings considering bidding jointly for a public tender. This contribution addresses these three issues.

1. Treatment of potential competition

 The guidelines concentrate on the analysis of joint tendering by competitors and, implicitly, recognise that non-competing undertakings can freely cooperate in the context of public procurement (as in any other area of economic activity). This could be said explicitly, but there is no indication to the contrary in the draft guidelines. However, given the broad approach to the consideration of potential competition relationships between consortium members, and the assumption that joint bidding can be assessed as a restriction of competition by object because it involves price setting (following the EFTA Ski Taxi Judgement, above, in p. 20, box 2.11), the guidelines create some uncertainty.

On the one hand, because they indicate the possibility of joint tendering benefitting from block exemption regulations (BERs, see p. 30, para 3.2), despite the fact that price fixing is a hardcore restriction that excludes the applicability of the BERs. It would thus need to be clarified whether the Authority considers joint tendering as a restriction by object structurally involving price fixing or not, as well as the consequences of the position taken on this point. On the other hand, the guidelines create uncertainty because they do not address the tricky boundary issue of joint tendering by potential competitors as clearly as it would be possible.

The ambivalence or lack of clarity of the guidelines on this issue permeates the analysis and sometimes results in confusing expressions, such as the indication that chapter 3 assesses “the conditions that must be fulfilled for a consortium (including between competitors) to be exempted from the prohibition against agreements that restrict competition” (p. 23, introduction, emphasis added). Literally, this statement is incorrect, as joint bidding by consortia between non-competing undertakings does not run against the prohibition of Article 101(1) TFEU. In this case, it is possible that some word (such as “potential” competitors) is missing, but it is also possible that the guidelines are not too clearly set on the limits to the extension of the prohibition of Article 101(1) TFEU to (theoretically) potential competitors for a public contract.

This is an issue that has been recently discussed to some length,[3] and one which affects different aspects of the analysis under Article 101(1) and 101(3) TFEU that do not appear explicitly interconnected in the draft guidelines. In my view, there are two aspects that can be clarified.

First, the guidelines are not explicit in indicating how to carry out the analysis of an undertaking’s condition of potential competitor for a contract. There is just a mention to the effect that, in the assessment of “whether a company [rectius, undertaking] could [potentially] be able to bid individually, the Authority looks at whether this could constitute a sustainable economic strategy for the company (sic). This means firstly that a mere theoretical possibility of carrying out a contract is not enough; the possibility must be real and is shall include assessing that the offer must be profitable. The assessment shall be made on an objective basis” (p. 9, para 2.2).

This triggers two issues. One concerns the relevance of economic sustainability where the execution of a public contract is a one-off instance or involves a short to medium term project, where sustainability does not seem to raise particular issues or be the prime consideration. Another one concerns the assessment of profitability, in terms of the existence of economic incentives that justify potential additional investments, which requires a complex analysis of risk (discussed below 2). It seems clear that it is not sufficient to simply establish that an undertaking could have invested in additional resources to tender for the contract individually, but that it is necessary to establish that such investment was the rational economic decision to make under the circumstances (rather than engaging in a joint tender), which is always an ex post facto determination. In my opinion, great caution needs to be exercised here to avoid creating disincentives for joint tendering.

The guidelines could be improved by sketching, at the minimum, the circumstances in which the Authority would be willing to accept that an undertaking is justified in foregoing the potential investment to participate in the public tender, and the extent to which this can (and how it should) be documented. Logically, the same conditions need to justify a decision not to tender at all. If an undertaking is justified in not tendering (i.e., that is considered as the economically rational strategy), then it should also be justified in seeking collaboration. As mentioned below, this relates to an implicit duty to tender or else have a good rational for the tender hold-up, which seems more adequate for analysis under Article 102 TFEU than under Article 101(1) TFEU. In any case, difficult issues arise around any expectation or duty to participate in public tenders and the undertakings’ freedom to conduct a business under Art 16 of the EU Charter of Fundamental Rights, so careful consideration is necessary.

Second, the guidelines could be clearer in terms of the place for the establishment of counterfactual assessments. It seems that the guidelines do not consider the possibility of establishing an undertaking’s condition of potential competitor for a contract on the basis that it could have jointly tendered with undertaking(s) other than the one(s) it is eventually collaborating with. Such a possibility is only mentioned in relation with the assessment of the indispensability of an existing joint tendering agreement, where the draft guidelines indicate that, for an anticompetitive joint tender between (potential) competitors to be justified under Article 101(3) TFEU, “[t]here shall be no other economically viable and less restricting ways of achieving the efficiencies. This can be either in the form of bidding instead individually or forming a consortium with undertakings other than the ones in the current consortium” (p. 29, para 3.1.3, footnote omitted and emphasis added).

The fact that the existence of potential alternatives for collaboration is not use both to establish potential competition and the existence of potentially less restrictive forms of competition (ie, that it is not used both under an assessment of the Art 101(1) prohibition and the Art 101(3) exemption) should be welcome.

However, in my view, its use for the purposes of Art 101(3) is problematic. Once an undertaking has expressed its preference in collaborating with given consortium partner(s), it is difficult to accept the Authority’s role in second-guessing that an alternative collaboration would have been preferable (not only in competition terms, but also in business terms). The analysis of Art 101(3) TFEU should not involve this type of speculation, and it should suffice to establish that the joint bidders have not exceeded the limits required for the generation of the efficiencies derived from their agreement.

The possibility of having partnered with other undertakings seems to belong to the same logical plane as the decision not to partner with anyone (ie bid solo), or whether to tender at all. This is indicated in the draft guidelines itself themselves (see quote above), by linking the assessment of the undertaking’s ability to tender individually or to partner with other undertakings to do so. Those two decisions are equivalent in terms of establishing the undertaking’s condition of potential competitor for the contract, but they are not equally suitable for an assessment of whether less restrictive means existed, for the following reasons.

Where two potential competitors team up, then it can be argued that none of the restrictions was necessary at all and thus the assessment under Article 101(3) TFEU must fail. Conversely, where the agreement is between undertakings that would not have been potential competitors by themselves, the fact that a theoretically superior joint bidding arrangement could be conceived is irrelevant because the analysis under Article 101(3) TFEU must be limited to whether the arrangement in place generates efficiencies by the least restrictive means concerning the undertakings involved in the consortium. Considerations concerning third parties should be limited to an assessment of the fourth condition, concerning the consortium’s ability to eliminate competition for the contract—or, eventually, issues concerning infringements of Article 102 TFEU by the tenderer that could have participated solo and rather decided to ‘grab’ a partner that could have been strategic for a third party.

Therefore, it would seem more appropriate to move the assessment of the counterfactual consisting in the potential teaming with third party undertakings to the analysis of Art 101(1) TFEU with the sole purpose of establishing whether the joint tendering agreement is anticompetitive to begin with. In that setting, the circumstances in which a theoretically potential collaboration that is foregone is anticompetitive should also be clarified (as mentioned above) and, in my view, the clarification should be that such theoretical third arrangement is irrelevant.

Overall, taken together, these two issues point towards the need for more clarity in the guidelines concerning the assessment of situations where an undertaking is considered a potential competitor for a given public contract because it could have tendered for it (either individually, or in collaboration with third parties) but rather decides to team up with another potential competitor. As mentioned above, this seems to fit the framework of the rules applicable to a tender hold-up, which could be functionally assimilated to refusals to deal. In my view, developing the draft guidelines along these lines would improve them.

2. Treatment of risk-driven collaborations

The second main area where the draft guidelines could benefit from some clarification concerns the treatment of risk assessments carried out by undertakings considering the possibility to tender for a contract (either at all, or as part of a given consortium).

The first issue concerning risk-assessments that could be clarified is the extent to which they will actually be taken into account by the Authority. It seems contradictory or, at least confusing, that the draft guidelines indicate that “risk spreading is an element of the overall assessment of whether an undertaking can complete a contract on its own or whether it is objectively necessary to work with one or more undertakings” (p. 10, para 2.2) and at the same time that “[i]t will be difficult for a competition authority to make an ex post objective assessment of the risk taking on a contract … In this context, the issue of risk spreading will not necessarily be considered as an element when the Danish Competition and Consumer Authority assesses an undertaking’s capacity” (p. 11, same para). I find this difficult to understand and can see how the undertakings to which the draft guidelines are addressed may be confused. More clarity on the conditions in which the Authority will use or not internal documentation concerning risk-assessments would be desirable.

A second issue concerns the extent to which simultaneous tendering for different public contracts and their impact on the undertaking’s productive capacity features in the analysis. The draft guidelines usefully include a section on the analysis of the undertaking’s available capacity to undertake a contract and they recognise that, in some circumstances, foreseeable (recurring) commitments can be taken into account to establish that an undertaking does not have sufficient capacity to individually participate in a tender (pp. 14-15, para 2.2.4).

However, the guidelines do not seem to take into due consideration that undertakings active in procurement markets may (regularly) be tendering simultaneously for various contracts, which prospects of award are difficult to establish. In these cases, it is possible that a prudent business strategy requires the reservation of certain capacity in case the undertaking is successful in all of the simultaneous tenders (and this includes tenders which process of evaluation is live at the time of preparing the next tender), or at least a mitigation of that risk via cooperation with third parties (either by forming consortia, or through subcontracting).

Given the relevance (and, I would say, practical prevalence) of this circumstance, it would be desirable that the guidelines addressed it explicitly. Not only due to its impact on the assessment of the condition of potential competitor for a contract under Article 101(1) TFEU, but also due to the relevance that the draft guidelines give to this issue in terms of exemption under Article 101(3) TFEU (p. 26, para 3.1.1.1). In that regard, the guidelines indicate that “[i]n many cases, the risk of taking on a specific contract cannot in itself justify that companies shall not be considered competitors with regards to the contract. In such cases, risk considerations will only determine that the agreement is lawful under the competition rules if risk diversification leads to or contributes to companies submitting a better bid together than they would have been able to individually”. However, it could be that sometimes a joint bid is the only bid that potential competitors are willing to consider because their second best option is not a solo tender, but rather to withhold a tender for a contract that, if awarded, could tip them over their maximum capacity. In my view, more nuance could be introduced in relation with this aspect.

A third issue concerning risk assessment relates to the relevance given in the draft guidelines to the consortium’s expectation of competition for the contract. It is not clear to me why it would be relevant or adequate to consider that “[i]f a consortium that (sic) for instance participates in a public call for tenders where there are many participants and therefore there is effective competition for the contract, there will be greater likelihood that efficiencies are passed on to consumers in terms of lower offer price than if the consortium expects for example only another participant in the call for tenders” (p. 28, para 3.1.2). I find this inconsistent with economic theory. What is important to test the consortium’s incentives to tender aggressively (or the constraints to a limit pricing strategy) is whether they anticipate any (including only one) tender by an equally or more efficient tenderer. And, in any case, I struggle to envisage a legal test that could determine the extent to which the consortium was anticipating more or less competition for the contract. In that regard, I think that this element of risk management / strategic bidding should be clarified in the final version of the guidelines.

3. Spillover effects on exchanges of information

Given the issues surrounding the assessment of risk and the uncertainties concerning the effectiveness of using risk assessments to exclude the consideration of potential competitors of the consortium members or the existence of acceptable efficiencies in their joint tendering, the way in which the illegality of information exchanges is presented could constitute a significant disincentive for undertakings considering joint participation in public tenders.

In particular, the dissuasive effect can derive from the drafting of the paragraph that indicates that “[i]f it turns out that the undertakings that have considered entering into a consortium will themselves be able to bid for the contract and, thus, they are competitors, the information exchange that has taken place, will in fact constitute information exchange between competitors. This will be a criminal offence if the information is sensitive from a competition perspective. It is therefore important that each undertaking clarifies beforehand whether it can complete the contract individually and thus whether the undertakings are competitors” (p. 31, para 4.1, emphasis added).

It is possible that this dissuasion is mitigated by introducing more clarity concerning aspects of risk assessment identified above, in particular concerning the possibility of having teamed up with third parties and the assessment of potential capacity constraints. Otherwise, it could be advisable to provide more detail of the circumstances in which such exchange of information could lead to a prosecution.

In that regard, it would also be necessary to avoid statements that could be potentially misleading. In particular, in my view, it would be necessary to reconsider the indication that seeking legal advice could reduce the likelihood of an investigation or prosecution, not least because that could potentially run contrary to the interpretation of Article 101 TFEU by the Court of Justice of the European Union in its Schenker Judgment,[4] where it clearly indicated that “legal advice given by a lawyer cannot, in any event, form the basis of a legitimate expectation on the part of an undertaking that its conduct does not infringe Article 101 TFEU or will not give rise to the imposition of a fine”.[5]

_______________________

[1] For discussion, see here and A Sanchez-Graells, “Ski Taxi: Joint Bidding in Procurement as Price-Fixing?” (2017) 8(6) Journal of European Competition Law & Practice, forthcoming, available at https://academic.oup.com/jeclap/article-lookup/doi/10.1093/jeclap/lpx043, last accessed 07/07/2017.

[2] This is, in my view, the right general approach. See A Sanchez-Graells, Public procurement and the EU competition rules, 2nd edn (Oxford, Hart, 2015) 336-340.

[3] E.g. see here, here, C Thomas, “Two Bids or not to Bid? An Exploration of the Legality of Joint Bidding and Subcontracting Under EU Competition Law” (2015) 6(9) Journal of European Competition Law & Practice 629-638; C Ritter, Joint Tendering Under EU Competition Law (February 1, 2017), available at https://ssrn.com/abstract=2909572, last accessed 07/07/2017; and most recently, and with a consolidation of all previous debates, I Herrera Anchustegui, “Joint Bidding and Object Restrictions of Competition: The EFTA Court’s Take in the ‘Taxi Case’” (2017) European Competition & Regulatory Law Review (CoRe) 174-179, available at https://ssrn.com/abstract=2966374, last accessed 07/07/2017.

[4] Judgment of 18 June 2013 in Schenker & Co. and Others, C-681/11, EU:C:2013:404.

[5] Idem, para 41.

Comments on draft Catalan regional law on public procurement

I had the honour of being invited by the Catalan Parliament's Commission on Economy and Public Finances to submit comments to the draft Catalan regional law on urgent public procurement measures. These may be of limited interest and are written in Catalan (so not very accessible), but I thought I would post them here anyway. The full text of the draft law to which the comments refer is accessible here.

A LA MESA DE LA COMISSIÓ D’ECONOMIA I HISENDA

 APORTACIONS PER ESCRIT EN RELACIÓ AL PROJECTE DE LLEI DE
MESURES URGENTS EN MATÈRIA DE CONTRACTACIÓ PÚBLICA (tram. 200-00009/11)

Distingits membres de la Comissió d’Economia i Hisenda del Parlament de Catalunya,

Els agraeixo l’oportunitat de presentar observacions en relació al projecte de llei de mesures urgents en matèria de contractació pública.

Com a nota preliminar, voldria aclarir que la perspectiva d’aquesta aportació és la del dret europeu de contractació pública i, per tant, la major part de les meves observacions tendeixen a analitzar el contingut del projecte de llei amb l’objectiu d’assegurar el compliment de la normativa de la Unió. En concret les meves observacions es limiten a la compatibilitat amb la Directiva 2014/23/UE, de 26 de febrer de 2014, relativa a l’adjudicació dels contractes de concessió i amb la Directiva 2014/24/UE, de 26 de febrer de 2014, sobre contractació pública. Per tant, qüestions d’interacció entre el projecte de llei catalana i la futura llei estatal de contractes del sector públic – actualment en tramitació parlamentària al Congrés dels Diputats – queden al marge d’aquestes aportacions.

Addicionalment, cal tenir en compte que aquestes observacions no pretenen oferir una visió exhaustiva del projecte de llei, ans es limiten a aquelles qüestions problemàtiques on, en la meva opinió, aquesta Comissió hauria de plantejar-se la necessitat d’introduir canvis i esmenes al projecte de llei.

Sotmeto a la seva consideració les següents observacions:

01. Preàmbul

El preàmbul conté una afirmació incorrecta que cal aclarir, sobretot per la rellevància que es dona a aquesta afirmació en termes de la necessitat d’aprovar una llei de mesures urgents. En concret, és incorrecte indicar que l’aprovació de la Directiva 2014/24/UE ha produït una “reducció dels supòsits en què es pot utilitzar el procediment negociat sense publicitat que es deriva de l’aplicació directa dels articles 26 i 32 de la Directiva 2014/24/UE i que, si bé d’una banda aporta més transparència als procediments de contractació, de l’altra obliga a recórrer a procediments més llargs i complexos amb un impacte substancial en la tramitació dels procediments de licitació que impedeix, en un termini relativament breu de temps, fer front a la contractació de serveis públics.”

En aquest sentit, cal tenir en compte que el contingut material de l’article 31 de l’anterior Directiva 2004/18/CE, regulador dels supòsits en què és legítim recórrer a l’adjudicació directa de contractes, s’ha traslladat íntegrament a la Directiva 2014/24/EU, però no únicament als articles 26 i 32, sinó també a l’article 72, en relació a l’adjudicació directa de contractes per entregues addicionals. Més clarament, el supòsit de l’antic article 31(4)(a) de la Directiva 2004/18/EC (entregues addicionals resultants de necessitats imprevisibles de l’administració, fins a un 50% del valor original del contracte) té correlació directa amb el supòsit del nou article 72(1)(b) de la Directiva 2014/24/UE (que només ha alterat la redacció de les condicions aplicables a aquest supòsit). Per tant, les consideracions basades en el caràcter aparentment més restrictiu de la nova normativa de la Unió no estan justificades per un canvi real de dret substantiu i, en la meva opinió, això s’ha de reflectir adequadament en el preàmbul del projecte de llei.

02. Article 3. Càlcul del valor estimat de les concessions

La metodologia de càlcul del valor estimat de les concessions i, en concret, la regla general de l’article 3.1 del projecte de llei es desvia de la regla prevista per l’article 8(2) de la Directiva 2014/23/UE. Aquesta darrera norma preveu que el valor d’un futur contracte de concessió serà equivalent al volum de negoci estimat de la futura empresa concessionària durant la durada total del contracte, excloent-ne exclusivament l’IVA. En canvi, l’article 3.1 del projecte de llei preveu la possibilitat d’excloure, no només l’IVA, sinó també “qualsevol altre tribut que fos d’aplicació”. Aquesta desviació respecte la norma europea és molt rellevant, sobretot si dona peu a interpretacions encaminades a permetre l’exclusió de l’impost de societats, però també en el supòsit de descomptar altres impostos, com ara els relacionats amb la propietat d’immobles, o altres tributs locals, directes o indirectes. Per tant, l’article 3.1 s’ha de modificar per suprimir aquest esment final, de manera que indiqui que “... el valor estimat del contracte es calcula en base al volum de negoci estimat de la futura empresa concessionària, com a conseqüència de l’adjudicació de la concessió, excloent-ne l’IVA”.

De manera similar, l’article 3.2 del projecte de llei es desvia de la regla prevista per l’article 8(3) de la Directiva 2014/23/UE, ja que la llista de criteris que, com a mínim, s’han de tenir en compte per determinar el valor estimat de les concessions es incomplerta. Per tant, l’Article 3.2 del projecte de llei s’ha de modificar, de manera que estableixi que:

“... ha de tenir en compte, com a mínim:

 – El valor de les possibles modificacions i les pròrrogues.

– Les rendes procedents de l’abonament de les tarifes i qualssevol multes per part dels usuaris, quan no siguin tarifes, taxes o preus públics recaptats a compte i per ingressar a l’òrgan contractant.

– Els pagaments, subvencions o avantatges financers que s’abonin a l’empresa concessionària, per part de l’òrgan de contractació, de qualsevol altra administració o ens públics, o de tercers, derivats de la concessió, incloent-hi qualsevol compensació pel compliment d’obligacions de servei públic i subvencions a la inversió pública.

– Les rendes derivades de la venda o arrendament de qualsevol bé o actiu que formi part de la concessió.

– El valor de tots els béns, subministraments i serveis que l’òrgan de contractació posi a disposició de l’empresa concessionària, sempre que siguin necessaris per a la prestació del servei o l’execució de les obres.

– Les primes o pagaments als candidats o empreses licitadores.”

03. Article 4. Documentació acreditativa del compliment de requisits de capacitat i solvència

Convindria completar la regulació d’aquest article en dos sentits. D’una banda, a efectes de garantir el compliment de la obligació creada per l’article 59(4) segon paràgraf de la Directiva 2014/24/UE, cal aclarir de manera expressa l’obligació dels òrgans de contractació de demanar, abans de l’adjudicació del contracte, que la empresa seleccionada com a futura contractista presenti documentació actualitzada que demostri la veracitat i correcció del contingut de la declaració responsable. D’altra banda, convé establir un període adequat per a la presentació d’aquesta documentació, així com les conseqüències derivades de la falta de presentació, que haurien d’assegurar la desqualificació de l’empresa afectada i l’adjudicació del contracte a la següent empresa en ordre de valoració de les ofertes rebudes.

04. Article 6. Valoració de les proposicions

En relació a l’article 6.2 del projecte de llei, cal prendre en consideració que els criteris que s’indiquen per a la valoració del cicle de vida no són suficients per donar efectivitat a la possibilitat prevista per l’article 68 de la Directiva 2014/24/UE. En el seu cas, conforme a l’article 68(2) d’aquesta norma, la valoració del cicle de vida s’ha de dur a terme conforme a una metodologia pre-establerta que ha de complir totes i cadascuna de les següents condicions:

(A) Es basa en criteris objectivament verificables i no discriminatoris. En particular, quan no s'hagi establert per a una aplicació repetida o contínua, no ha d'afavorir o desavantatjar indegudament qualsevol operador econòmic;

(B) És accessible a totes les parts interessades;

(C) Les dades requerides per a l’aplicació de la metodologia es poden proporcionar amb un esforç raonable per part d'operadors econòmics normalment diligents, inclosos els operadors econòmics de països tercers que formen part de l’acord de l’Organització Mundial del Comerç sobre Contractació Pública Governamental o altres acords internacionals pels quals la Unió Europea estigui vinculada.

Com a mínim, això s’hauria d’incloure expressament en un nou apartat de l’article 6 del projecte de llei.

05. Article 8. Mesures de gestió eficient en la tramitació

Hi ha tres qüestions específiques del règim de gestió eficient que poden esdevenir problemàtiques.

D’una banda, en relació a l’apartat d), és difícil preveure que el requisit d’inscripció obligatòria no limiti la concurrència. Per tant, no sembla adient que es creï la possibilitat d’exigir aquesta inscripció amb caràcter absolut. Convé tenir en compte que, tot i que aquest règim sigui aplicable a contractes de valor inferior als llindars comunitaris, si un contracte té interès comunitari el requisit d’inscripció obligatòria pot resultar contrari al dret europeu. Per tant, proposo que es consideri la supressió d’aquest apartat.

D’altra banda, convé tenir en compte que la revelació excessiva d’informació pot afavorir la col·lusió entre empreses competidores per contractes públics. Per tant, en línia amb allò previst per l’article 55(3) de la Directiva 2014/24/UE, és adient incloure a continuació del tercer paràgraf de l’apartat f) que:

“Durant la fase pública i, en general, en relació amb tota la informació inclosa a l’expedient, la mesa de contractació i altres departaments de l’òrgan de contractació han de garantir la protecció d’informació confidencial i assegurar que no es revela informació que pugui impedir l'aplicació de la llei o la revelació de la qual, de qualsevol altra manera, sigui contrària a l'interès públic, perjudiqui els interessos comercials legítims d'un operador econòmic en particular, ja sigui públic o privat, o pugui afectar la competència efectiva entre operadors econòmics.”

Finalment, en relació amb l’apartat i), convé considerar l’oportunitat de preveure expressament que qualsevol queixa contra la decisió d’adjudicació que s’interposi durant el període de 5 dies suspendrà la possibilitat de formalitzar el contracte en tant no s’hagi resolt la disputa.

06. Article 9. Causes de modificació dels contractes

Aquest article crea un règim excessivament simplificat en relació a l’article 72 de la Directiva 2014/24/UE. Es tracta d’un article que introdueix desviacions rellevants respecte al règim comunitari i que, a la vegada, crea confusió a causa de l’apartat 3, que fa una referència total al règim del dret de la Unió. Convindria un replantejament complet d’aquest article i seria recomanable transposar, sense canvis, el text literal de l’article 72 de la Directiva 2014/24/EU. En defecte d’aquesta solució, com a mínim s’haurien de fer els següents canvis:

a)   L’article 9.1 s’ha de modificar per garantir la seva compatibilitat amb l’article 72(1)(b) de la Directiva 2014/24/EU, per tal que estableixi que “Els contractes es podran modificar quan sigui necessari perquè calgui realitzar prestacions addicionals que hagin esdevingut necessàries, no estiguin previstes en el contracte original i que únicament pugui portar a terme el contractista original per raons econòmiques o tècniques, o perquè una nova adjudicació pugui generar inconvenients significatius, com ara requisits d'intercanviabilitat o interoperabilitat amb equips, serveis o instal·lacions existents obtingudes en virtut de la contractació inicial, o un augment substancial de costos per a l’Administració. En qualsevol cas, el límit màxim global d’una modificació per aquesta causa serà del 50% del valor inicial del contracte. Quan es facin diverses modificacions successives, aquesta limitació s'aplicarà al valor de cada modificació.”

b)   L’article 9.2 s’ha de modificar per garantir la seva compatibilitat amb l’article 72(1)(a) i (d) de la Directiva 2014/24/EU, que no preveu la possibilitat de modificar el contracte només pel fet de que es produeixi una cessió. Per tant, cal canviar el tenor literal de l’article per tal que indiqui que: “La successió en la persona del contractista per fusió, absorció, escissió, aportació o transmissió d’empresa o branca d’activitat, així com la revisió de preus en cas que, en aquest darrer supòsit, s’admetin en els plecs, s’hauran de tramitar com a modificació de contracte.”

07. Disposicions addicionals

Tinc dubtes de compatibilitat amb el dret europeu de la regulació de les “formules no contractuals de gestió de serveis socials” prevista en les disposicions addicionals. Els dubtes principals estan en relació amb (i) l’assumpció que aquestes “fórmules no contractuals” no són contractes públics a efectes de la normativa de la Unió, (ii) la preferència que es pretén crear per a entitats sense ànim de lucre, i (iii) la delegació reglamentària de la vigència màxima d’aquestes fórmules. Les principals raons pels meus dubtes són les següents:

(i)      L’estructura d’aquest sistema d’autorització + concert correspon, a efectes de la definició de contractació pública prevista per l’article 1(2) de la Directiva 2014/24/UE, a una fórmula contractual que, per tant, s’ha de regir per la totalitat d’aquestes normes (com indico després). La jurisprudència del Tribunal de Justícia ja s’ha ocupat de la interpretació d’aquest concepte de contractació pública (‘procurement’) en la Sentència de 2 de juny de 2016 en el cas Falk Pharma, C-410/14, EU:C:2016:399. Allí el Tribunal va establir que llevat dels casos on la selecció del proveïdor no depengui de l’elecció de l’administració pública, aquesta mena de sistemes de conveni s’han de sotmetre a la normativa de la Directiva 2014/24/UE. Per tant, llevat que els pacients i beneficiaris dels serveis tinguin una llibertat total per a l’elecció del proveïdor de serveis, no és possible considerar el sistema creat per les disposicions addicionals com a “fórmules no contractuals” a efectes de compliment amb la normativa de la Unió.

(ii)    La creació de preferències per l’adjudicació de contractes públics a entitats sense ànim de lucre és, en general, contrària al dret de la Unió. Així ho va establir el Tribunal de Justícia a la Sentència d’11 de desembre de 2014 al cas Azienda sanitaria locale n. 5 «Spezzino» and Others, C-113/13, EU:C:2014:2440, on només va admetre la creació d’aquesta mena de preferències quan el marc constitucional de l’Estat membre en qüestió així ho permeti (com era el cas d’Itàlia). En la meva opinió, la Constitució espanyola de 1978 no ofereix aquesta possibilitat i, per tant, la creació d’una tal preferència vulnera el dret comunitari.

(iii)   La durada màxima dels contractes ha d’ésser establerta a nivell de llei. Addicionalment, ja que el sistema previst és, com a mínim, funcionalment equivalent als acords marcs de l’article 33 de la Directiva 2014/24/EU, la seva durada màxima no pot excedir els quatre anys.

Amb caràcter més general, em sembla que el projecte de llei no pren en consideració les particularitats de règim jurídic que els articles 74 a 77 de la Directiva 2014/24/UE estableixen per a aquesta mena de serveis socials i especials, que permetrien la creació d’un sistema de reserva de contractes de durada màxima de tres anys per a entitats sense ànim de lucre. En definitiva, em sembla que els objectius de política social implícits en el sistema previst a les disposicions addicionals es pot fer compatible amb el dret de la Unió, però no de la forma establerta. Si fos d’interès per a aquesta Comissió, i amb temps i finançament adequats, podria contribuir amb una contra-proposta detallada.

Agraint-los novament l’oportunitat de presentar aquestes consideracions, quedo a la seva disposició.

3 de juliol de 2017