Brussels, 24/01/2014 (Agence Europe) - Is it true that a supply contract between two public bodies which have no control over each other but are both subject to the scrutiny of the same public body and do most of their work for that public body must follow the public procurement proceedings as laid down in EU public procurement directive 2004/18/EC, or may they be exempt from the directive? In other words, can a “horizontal” contract be exempt from the directive?
European Court of Justice Advocate General Paolo Mengozzi explains this case in an opinion published on Thursday 23 January in case C-15/13. He was responding to questions raised by the Hamburg appeals court in Germany, which is dealing with a case in which a Hamburg public education institute, TUHH, granted a contract without a call for tender to Hochschul-Informations-System GmbH (HIS). Both organisations are controlled by the city of Hamburg. The contract was for the supply of a computer system in higher education, although another supplier, Datenlotsen Informationssysteme GmbH, was also hoping for the contract.
Advocate General Mengozzi says that the contract in question is like a public procurement contract and therefore should be subject to the public procurement process. It is not a “vertical internal operation” under Court of Justice case law (the Teckal ruling, C-107/98) that would exempt it from the public procurement proceedings since the city of Hamburg only has indirect control over the two parties, TUHH and HIS, and its control is not exclusive since Hamburg only owns 4.6% of the capital of HIS, the remainder being owned by the other German Länder and the German federation). The contract cannot, however, be considered as cooperation between two public bodies for the fulfilment of a task of public interest, which under Court of Justice case law (ruling C-480/06) would be exempt from the requirement to organise a call for tender. Mengozzi says that it might be considered that such cooperation indeed exists in so far as the work carried out by HIS, namely helping higher education establishments fulfil their role and is complementary to the teaching and research work of TUHH. The fact that the contract involves payments between the bodies under the terms of the contract might be a factor that argues against the exemption. (FG/transl.fl)