06-08-2020

Two judgements in quick succession: ECJ clarifies cooperation between municipalities




Without prior competitive bidding procedure, municipalities may provide services for each other only in exceptional cases. It is not sufficient for one municipality to entrust the other one to perform services and to pay for them. Public contracting authorities may only forgo a bidding procedure if they pursue a common strategy and actually work together. This was decided by the European Court of Justice (ECJ) on June 04, 2020 in a case from Rhineland-Palatinate relating to waste disposal (C-429/19). A municipal special-purpose association had waste treated by another administrative district, but should have put this service out to bidding on the market.
 
In its decision, the ECJ interprets an exception in public procurement provisions. It applied this exception for the first time almost exactly 11 years ago on the occasion of a similar situation in Northern Germany (June 09, 2009, C-480/06 “Stadtreinigung Hamburg”). Its judgement at the time remained the basis and standard for cooperation between municipalities and was incorporated into the revised EU Public Procurement Directive in 2014.
 
With its June 4, 2020 decision, the ECJ again expressed its view after only one week on the conditions under which public authorities may exchange services among themselves without an invitation to bid. Just on May 28., 2020 (C-796/18), the ECJ confirmed that public contracting authorities may in principle cooperate with regard to the operations control software of their professional fire brigades without an invitation to bid, provided that this does not favor any particular private company, see here.

“The two decisions provide clarity for public authorities. They may continue to cooperate without an award procedure if they observe the requirements,” Ute Jasper, Lawyer and Team Leader at Heuking Kühn Lüer Wojtek, was pleased to note. “This will enable municipalities in particular to better assess what needs to be done to implement planned cooperation in compliance with public procurement law without the need for bidding procedures,” added Kirstin van de Sande, Lawyer and representative of the City of Cologne in the appeal proceedings C-796/18.
 
The “Public Sector & Public Procurement” department has been one of the market leaders in public procurement law for years. Its lawyers hold top spots in German and international lawyer rankings. Since 1991, they have advised on awards, restructuring, large-scale projects, and cooperations in the public sector and have accompanied several hundred large-scale projects of federal, state, and local authorities and their subsidiaries with a total volume in excess of EUR 40 billion without any procedure having been successfully challenged to date.

Dr. Ute Jasper is one of the most renowned lawyers for procurement and infrastructure projects in the public sector. She advises federal and state ministries, municipalities, and businesses, particularly on innovative and complex projects. Ute Jasper is a Partner at the law firm of Heuking Kühn Lüer Wojtek and heads its “Public Sector & Public Procurement” department. For years, she has been ranked number 1 in Public Procurement Law in JUVE’s Handbook of Commercial Law Firms and according to “Law Firms in Germany,” is the “premier contact on the market” for infrastructure. In October 2016, she received the JUVE Award for Regulated Industries with her team.

Kirstin van de Sande, Partner, is a member of the “Public Sector & Public Procurement” practice group with a focus on designing and implementing complex public procurement procedures. She represents the public sector in review proceedings before public procurement chambers and higher regional courts.    

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