Reference : L'obligation de mise en concurrence et ses limites en droit européen
Dissertations and theses : Doctoral thesis
Law, criminology & political science : European & international law
L'obligation de mise en concurrence et ses limites en droit européen
[en] The obligation to call for competition and its limits under European law
Niedner, Laurent Jean Henri [University of Luxembourg > Faculty of Law, Economics and Finance (FDEF) > Law Research Unit]
University of Luxembourg, ​​Luxembourg
Docteur en Droit
Ergec, Rusen mailto
[en] call for tender ; call for competition ; procurement directives ; primary law of procurement ; State aid ; remedies directives ; effective judicial protection ; electronic procurement ; right to good administration ; principle of equal treatment ; overriding reasons of general interest ; Telaustria ; Teckal ; in house ; public contracts ; railway infrastructure capacity ; undertaking ; greenhouse gaz emission trading scheme ; internal electricity market ; internal natural gaz market ; postal services ; gaz emission allowances ; milk quota regime ; universal postal service provider ; electronic communications ; service concession ; public works concession ; principles of primary procurement law ; conformity of secondary legislation ; general procurement agreement ; competitive bidding ; cross-border interest ; abuse of dominant position ; transport services ; freedom of establishment ; free movement of services ; free movement of capital ; free movement of goods ; tariff quotas ; limited number of authorisations ; prospection, exploitation and production of hydrocarbons ; Altmark ; transparency ; adequate publicity ; services of general economic interest ; internal market ; scope of EU law ; concept of State ; auction ; auctioning ; autorisation ; competence of the European legislator ; functional interpretation ; advantage ; contracting authority ; body governed by public law ; proceduralization
[fr] droit primaire des marchés publics ; aide d'Etat ; directives recours ; protection juridictionnelle effective ; marchés publics électroniques ; principe de bonne administration ; principe d'égalité de traitement ; raisons impérieuses d'intérêt général ; Telaustria ; Teckal ; in house ; marché public ; capacité d'infrastructure ferroviaire ; entreprise ; système européen d'échange de quotas de gaz à effet de serre ; marché intérieur d'électricité ; marché intérieur du gaz naturel ; services postaux ; quotas d'émission de gaz à effet de serre ; quotas laitiers ; prestataire de service postal universel ; communications électroniques ; concession de services ; concession de travaux ; libre circulation des capitaux ; libre circulation des marchandises ; contingents tarifaires ; droit primaire de la mise en concurrence ; conformité du droit dérivé ; accord sur les marchés publics ; ouverture à la concurrence ; intérêt transfrontalier ; abus de position dominante ; services de transport public ; liberté d'établissement ; libre prestation de services ; transparence ; publicité adéquate ; services d'intérêt économique général ; marché intérieur ; champ d'application du droit européen ; notion d'Etat ; enchères ; interprétation fonctionnelle ; avantage ; ouverture à la concurrence ; autorisations en nombre limité ; régime d'autorisation ; Altmark ; compétence du législateur européen ; organisme de droit public ; pouvoir adjudicateur ; procéduralisation ; principe d'autonomie ; mise en concurrence ; appel d'offres ; directives marchés publics ; contrôle de conformité ; directive concessions ; dématérialisation des marchés publics ; prospection, exploitation et extraction d'hydrocarbures
[en] Although various pieces of European secondary law law use the terms "mise en concurrence" ("calling for competition" or "competitive tendering procedure") they provide no definition of the expression "obligation de mise en concurrence" ("obligation to call for competition"). At the very beginning, the author therefore defines what is meant thereby in his thesis, i.e. "a more or less formalized action which a public or a private person has to follow in order to provoke a competition or a contest between potentially interested persons that perform an economic activity, in order to grant an individual advantage to one or several of them".

The first part of the work deals with the regime of competitive tendering of the public procurement directives which the Court of Justice has considered "as a whole" to be the "core" of European law on public contracts. First, this part examins the development of the public procurement directives from 1971 on. The author shows that the puzzling evolution of the personal scope of the public procurement directives is guided by the personal scope of European primary law.
While considering the remedies directives, the author examines to what extent they introduce requirements beyond the principle of effective judicial protection. While some of their requirements obviously do so, the remedies directives however remain very far from standardizing the means of redress at national level. Due to the member States' judicial autonomy, the compelling force of EU primary law differs from one member State to another. The same applies within the scope of the remedies directives as they let the member States a large degree of autonomy.
The author then turns to examine the contribution of the procurement directives 2004/17/CE, 2004/18/CE and 2009/81/CE, their scope of application, as well as the concepts of public works concession and service concession. Various other questions are dealt with in the first part, such as the use of functional interpretation, the power of the European legislator to adopt regulations on public procurement and the impact of the Agreement on Government Procurement (GPA), the Revised GPA and other international agreements. At last the author explores the issue of electronic procurement and the Commission's proposals for replacing the public procurement directives 2004/17/CE and 2004/18/CE and its proposal concerning the award of concession contracts.

The second part of of the thesis focuses on primary public procurement law. After having described the origin of the obligation to call for competition under EU primary law which the Court of Justice derives from articles 49 and 56 TFEU as well as from the principles of equal treatment and non-discrimination on the grounds of nationality, the author strives to determine whether this obligation is well-founded. This examination brings to light that the rationale behind the requirement to call for competition under EU primary law is rather fragile. Amongst others, the author comes to the conclusion that the condition of a certain cross-border interest of each public contract individually as a condition for the application of the primary law obligation to call for competition lacks relevance
The author then reviews and examines other possible bases for an obligation to call for competition under EU primary law such as the right to good administration, the freedom of enterprise and the right to property, which are protected by the Charter of Fundamental Rights, and the rights guaranteed by the European Convention on Human Rights. Finally, it seems that only article 102 TFEU (abuse of a dominant position) could to a limited extent give rise to an obligation to call for competition. However, once a situation is governed by EU secondary law, it enters the scope of European law. Hence, the principles of equal treatment and of non-discrimination on the grounds of nationality apply even if a situation involves no cross-border interest. If the Court of justice's case law were followed consistently, these principes should lead to require calls for competition in a number of purely internal situations. According to the author, deducing as precise consequences as does the Court of justice from the principal of equal treatment and other fundemental principles can hardly be justified.
After that examination, the material rules of public procurement primary law stated by the Court of Justice and the General Court are successively reviewed.
The pages that follow are about the exceptions to the obligation to call for competition under the public procurement directives and under primary law, as for instance articles 51 and 52 TFEU, overriding reasons of general interest and article 106, paragraph 2, TFEU.
The author thereafter addresses the question whether primary law applies within the scope of secondary law. He comes to the conclusion that it does even when secondary law represents an exhaustive body of rules. Notwithstanding some ambiguous judgements of the Court of justice there is no support for the doctrine of priority of application of secondary law in the Court's case law.
In what follows, the author tries to answer the question whether, in order to stay consistent with the case law developed in the wake of Telaustria, the obligation to call for competition which the case law of the Court of Justice requires for public works, service and supply contracts ought to be extended to other operations (sale or lease of real estate, design contests outside the scope of the public procurement directives, employment contracts, subsidised contracts awarded by private entities outside the scope of the public procurement directives, grants, …).
The end of the second part deals with the personal scope of the primary law of public procurement which corresponds to that of EU primary law.

The rules concerning State aid are addressed in detail in the third part of the thesis. The examination in that part shows that the public procurement directives, the primary law of public procurement and the EU state aid rules apply cumulatively. The EU State aid rules require efficency when awarding public contracts. Nevertheless, in order to avoid the categorization as State aid, a call for competition is never formally required. The Commission however insists on calls for competition in order to declare certain aids compatible with the internal market.
Aids include by definition an advantage for their recipients. This remains true even though an aid has been authorised by the Commission pursuant to article 107, paragraphe 3, TFEU. Given the very broad scope the Court of Justice gives to the freedom of establishment and the free movement of services, aid measures give generally rise to obstacles to the freedom of establishment and the free movement of services. At the risk of rendering article 107, paragraph 3, TFEU unnecessary, the fact that an aid measure impedes the fundamental freedoms of the internal market should therefore not prevent the Commission to declare it compatible with the internal market. This applies in particular to aids consisting in the award of a public contract that is covered only by EU primary law. That solution seems however excluded for public contracts within the scope of the public procurement directives.
The Commission has adopted a broad concept of what is an "advantage" in the sense of the State aid rules. This leads the Commission to consider certain grants for environmental protection as State aid measures even though it may be difficult to dectect any kind of advantage. The Commission claims to control these measures in accordance with the rules of State aid control. On that occasion the Commission tends to make its consent subject to a call for competition in order to identify the projects that will be subsidized.
A broad approach of the concept of undertaking leads to class as State aid various public infrastructure investments insofar they do not satisfy the private investor test. The Commission tends to make its consent to these investments subject to calls for competition. Such is notably the case regarding public investments in broadband network facilities.

In the fourth part, the author examines a variety of secondary legislation imposing calls for competition other than the public procurement directives.
These texts cover a wide range of areas and provide for competitive awards of various form and diverse content.
Sometimes a requirement for competitive tendering is overtly expressed. At other times, it is implicit, indirect or just inchoate. Some advantages are awarded without a genuine competition or without any competition at all. Directive 2012/34/CE establishing a single European railway area for instance sets principles for the allocation of "infrastructure capacity" (i.e the right to use a railway network). It does not employ such terms as "calling for competition". Where the infrastructure capacity is insufficient it has to be allocated in a fair and non discriminatory manner. The fee for using the railway network cannot be used as an award criterion. In some areas, competition in terms of price is the very basis of the system. This is true for the greenhouse gas emissions trading scheme. It happens that competitive assignment occurs incidentally and in a non compulsory way as in the case of the milk quota regime. In other cases, e.g. certain situations covered by the internal electricity market regime, the system excludes calls for competition whereas they should be required according to primary procurement law principles. Under still other circumstances, i.e. the award of public service contracts for public passenger transport services, competitive tendering only needs to be strictly complied with after a transitional period. This can hardly be reconciled with the principles of primary procurement law.
In some cases the rules in place are such, for example when awarding the universal postal service, that it seems doubtful that a competitive bidding following objective and transparent criteria is really possible.
The European greenhouse gas emissions trading scheme relies on auctions for the allocation of gaz emission authorisations. At first, it does so to a limited extent. Such authorisations, called "allowances", are freely transferable. Thus a reallocation of allowances according to market mechanismes is made possible. The author sheds light on some major inconsistencies of the greenhouse gas emission trading scheme. The late deadline for surrendering allowances gives rise for several years to a surplus of allowances over the greenhouse gas emissions considered in the scheme. On the other hand, the costs for same amounts of greenhouse gas emitted at the same time may vary. This gives rise to a problem of equality. The author comes to the conclusion that the scheme has little capacity to reach the objective of reducing greenhouse gas emissions at least cost to the economy.
The designation of the universal postal service providers implies to lay down rules as to how the net cost of the universal service is to be calculated, as well as to define appropriate award criteria. These steps face considerable difficulties.
A similar situation can be found in other areas such as electronic communications and electricity or natural gas transmission or distribution systems. In the latter case, the risk of a change of transmission or distribution tariffs due to decisions of national regulatory authorities leaves the competitors in the dark on a crucial point.
The legislation regarding the internal electricity market and the internal gaz market puts the transmission and distribution system operators in a position very similar to that of service or public works concession holders. In some cases the principles which underlie these schemes exclude competitive tendering as required by primary procurement law. The networks being freely transferable, ownership of networks and hence, in principle, their operators are determined by private market mechanismes mainly through the level of the proposed sales price. This is not consistent with the principles of primary procurement law stated by the Court of Justice (advertising requirements, award criteria linked to the subject matter of the contract, ...) . Neither does it seem compatible with these principles that the development of the networks belongs automatically to the transmission and distribution system operators.
The assessment of conformity of secondary legislation with primary law is less strict than the conformity assessment of national law. The Court of Justice has allowed the European legislator a wide margin of discretion when establishing the internal market and seems to have tacitely acknowledged a form of conformity presumption of secondary law. Save in exceptional cases, it seems unlikely that the Court will put into question secondary law regimes differing from primary law procurement rules. Thus, the European legislator may adopt such solutions without incurring major legal risks.

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