Saturday, 27 December 2008

EU procurement: Exclusive rights and non-discrimination

When a contracting authority (a body governed by public law) grants a special or exclusive right to carry out a public service activity to another entity, which is not a contracting authority, the latter must comply with the principle of non-discrimination on the basis of nationality.

The EC (EU) Procurement Directive 2004/18/EC tries to ensure this through Article 3. The act by which the special or exclusive right is granted shall provide that the entity complies with the principle of non-discrimination on the basis of nationality, when it awards contracts to third parties as part of its activities:


Article 3
Granting of special or exclusive rights: non-discrimination clause

Where a contracting authority grants special or exclusive rights to carry out a public service activity to an entity other than such a contracting authority, the act by which that right is granted shall provide that, in respect of the supply contracts which it awards to third parties as part of its activities, the entity concerned must comply with the principle of non-discrimination on the basis of nationality.


***


ECJ Case C-275/98.


In the Case C-275/98 Unitron Scandinavia A/S and 3-S A/S, Danske Svineproducenters Serviceselskab v Ministeriet for Fødevarer, Landbrug og Fiskeri, the ECJ’s preliminary ruling based on the old Directive 93/36 neatly laid out two principles. The tendering procedures need not apply, but the principle of non-discrimination on grounds of nationality cannot be interpreted restrictively (and it implies an obligation of transparency):


30 A systematic interpretation of that provision therefore shows that the contracting authority is not required to demand that the body in question comply with the tendering procedures laid down by Directive 93/36.
31 It should be noted, however, that the principle of non-discrimination on grounds of nationality cannot be interpreted restrictively. It implies, in particular, an obligation of transparency in order to enable the contracting authority to satisfy itself that it has been complied with.



Ralf Grahn