Regulation 75 – Publication of notices

Commentary

Regulation 75 PCR2015 defines the rules regarding the publication of notices for contracts awarded under the “light touch regime” introduced by Regulation 74. These rules cover both ex ante and ex post transparency and all notices have to comply with the rules of Regulation 51 ie, be sent in electronic format to the EU Publications Office.

Paragraph 1 provides contracting authorities with two different ex ante publication options. First, they can advertise via a contract notice with all the information contained in Annex H Part 5 of the Directive 2014/24/EU. Second, they can put out a prior information notice which contains the specific types of services to be procured and containing the information from Part I of Annex V of the Directive 2014/24/EU. Furthermore, such PIN notice is to be published “continuously” (???) and it needs to indicate that no further publication will be done afterwards and that interested parties are invited to express their interest in writing. From the drafting of the paragraph, it appears that if a PIN notice is used then the contracting authority is precluded from making a call for competition via a regular contract notice and are bound to proceed with only the economic operators which put themselves forward.

As recognised by Regulation 75(2) PCR2015, contracting authorities can dispense with these requirements where a negotiated procedure without prior publication could have been used in accordance with Regulation 32 PCR2015. In our view, the two cases that are more likely to trigger controversy are the use of Regulation 32(2)(b) PCR2015 whereby contracting authorities may be tempted to argue that particular social or special services can be provided “only by a particular economic operator” particularly under Regulation 32(2)(b)(iii) PCR2015 on the basis of “the protection of exclusive rights“, such as an act of entrustment, licence or authorisation to provide certain services; as well as regulation 32(9) PCR2015 for the award of new services which repeat similar ones, which would try to cover a clear renewal of an expiring contract as an extension of the previous contract.

The first argument could be devised in situations where (local) contracting authorities intend to keep the provision on social or other special services local/in hands of the incumbent. In that regard, the authorities could be tempted to argue that the existence of a de facto local monopoly requires them to award the contract directly and without publicity because there is no alternative provider in the market. This would simply be a misunderstanding of the applicable rules and cannot be accepted. It is worth stressing that the CJEU has permanently stressed the strict requirements that control decisions to proceed to the direct award of contracts under this ‘non-procedure’, which are subject to a strict assessment of whether the contracting authority “acted diligently and whether it could legitimately hold that the conditions [for recourse to this procedure] were in fact satisfied” [Fastweb, C-19/13, EU:C:2014:2194 50]. Consequently, there is no doubt that this procedure must be understood as exceptional [C-292/07 Commission v Belgium [2009] I-59 106].

In a refined form, the (local) contracting authority may try to justify the direct award on the basis of any sort of “exclusive right” they can see as being held by the local provider. In that regard, the case law of the CJEU as to what constitutes an exclusive or special right will gain significant prominence. For discussion in relation to utilities rules under Directive 2014/25/EU, see T Kotsonis, “The 2014 Utilities Directive of the EU: codification, flexibilisation and other misdemeanours” (2014) 23 (4) Public Procurement Law Review 169-187, and will likely result in the conclusion that the local provider does not hold an exclusive right that merits protection for the purposes of excluding competition in the award of the contract. 

It is also worth stressing that the granting of such exclusive or special rights should have complied with fundamentally the same requirements in their award, which may make reliance on the apparent exclusivity equally illegal under EU law, please see GS Ølykke, “Is the granting of special and exclusive rights subject to the principles applicable to the award of concessions? Recent developments in case law and their implications for one of the last sanctuaries for protectionism” (2014) 23 (1) Public Procurement Law Review 1-20. Moreover, contracting authorities need to keep in mind the very high threshold imposed by the last caveat of Regulation 32(2)(b) PCR2015, which stresses that recourse to direct award under the argument of protection of exclusive rights can only take place “where no reasonable alternative or substitute exists and the absence of competition is not the result of an artificial narrowing down of the parameters of the procurement“.

The second argument, based on the direct award of a contract for new services which repeat similar ones under Regulation 32(9) PCR2015 could be particularly tempting on a “second round” of award initially based on the reservation allowed for under Regulation 77 PCR2015 (CROSSREF). The scenario would be as follows: a (local) contracting authority awards a “reserved contract” to a preferred non-profit qualifying organisation under regulation 77 PCR2015. The contract is for 3 years  and Regulation 77(4) and foresees the possibility to resort to the additional services clause under regulation 32(9) PCR2015–which in itself, and strictly speaking, may not be a breach of Regulation 77(4) PCR2015, but this promises to be highly contentious due to the exceptional nature of the reservation rules. 

When the first 3-year period is over, the contracting authority effectively resorts to the possibility to directly award a contract for the same/similar services for another 3 years [or three times, consecutively, for 1 year, or any other combination of contract durations up to the 3 year limit established in Regulation 32(12) PCR2015. This would be a circumvention of the exceptional circumstances that are covered by Regulation 77 PCR2015 and would amount to an infringement of Regulation 18(2) PCR2015 / Article 18(1) Dir 2014/24/EU.

Consequently, overall, it is worth stressing that the reference to Regulation 32 PCR2015 and the possibility to enter into directly-awarded contracts for social and special services should fundamentally be disregarded by contracting authorities if they want to avoid risks of legal challenge, unless very clear grounds exist and they can make sure that the lack of competition in the market / existence of exclusive rights is not a situation they created themselves (in contravention of EU law).

Post-award transparency is also given additional flexibility. Generally speaking, the award of a contract for services covered by Regulation 74 PCR2015 triggers the obligation to make known the results of the procurement procedure by means of a contract award notice, which shall contain the information referred to in part J of Annex V to Directive 2014/24/EU (Regulation 75(3)) and be sent for publication in compliance with Regulation 51 PCR2015 (Regulation 75(5) PCR2015). Contracting authorities may, however, group such notices on a quarterly basis, in which case they shall send the grouped notices within 30 days of the end of each quarter (Regulation 75(4) PCR2015). Our hunch is that quarterly publication will become the norm, which is not a bad thing.

 

Last modified: December 5, 2016 by Pedro Telles

75.—(1) Contracting authorities intending to award a public contract for the services referred to in regulation 74 shall make known their intention by any of the following means:—

(a)by means of a contract notice, which shall contain the information referred to in part H of Annex V to the Public Contracts Directive; or

(b)by means of a prior information notice, which shall—

(i)be published continuously,

(ii)contain the information set out in part I of Annex V to the Public Contracts Directive,

(iii)refer specifically to the types of services that will be the subject-matter of the contracts to be awarded, and

(iv)indicate that the contracts will be awarded without further publication and invite interested economic operators to express their interest in writing.

(2) Paragraph (1) shall not apply where a negotiated procedure without prior publication could have been used, in accordance with regulation 32, for the award of a public service contract.

(3) Contracting authorities that have awarded a public contract for the services referred to in regulation 74 shall make known the results of the procurement procedure by means of a contract award notice, which shall contain the information referred to in part J of Annex V to the Public Contracts Directive.

(4) Contracting authorities may group contract award notices on a quarterly basis, in which case they shall comply with paragraph (5) by sending the grouped notices within 30 days of the end of each quarter.

(5) Contracting authorities shall send the notices referred to in this regulation for publication in accordance with regulation 51.