Regulation 9 – Public contracts awarded, and design contests organised, pursuant to international rules

Commentary

Regulation 9 establishes an exemption for public contracts awarded, and design contests organised, pursuant to international rules. Although it follows very closely the drafting of Article 9 of Directive 2014/24/EU, the drafting style is slightly changed. For example, whereas Article 9 excludes those contracts from the application of the whole Directive, Regulation 9 only excludes the application of Part 2. Although Part 2 contains the substantive rules (and is epigraphed “Rules Implementing the Public Contracts Directive”), at least the definitions included in Regulation 2 belong to Part 1 and as such not included in this exclusion. As the substantive rules are all in Part 2 and we need to interpret national law in accordance with EU Law, this does not appear to be a major problem.

The regulation creates three specific rules. Firstly, it creates space for compliance with international law obligations, which can become more and more relevant in the immediate future as the EU exercises its external relations powers.

Secondly, it creates a specific criterion that money rules, so that procurement funded by international organisations or international funders is subjected to their procurement processes (this can, however, create difficulties in the integration of rules where the international organisation/funder relies on domestic procedures for all or part of the procurement process, which could create a spiral of cross-referrals). 

Thirdly, it allows for negotiated solutions to mix-funded projects, where the international organisations/funders only provide part of the funds. In this case, it seems logical to require that the applicable rules are at least subjected to requirements of equivalence and effectiveness, so as to avoid infringement of general Treaty rules and the general principles of public procurement (see Article 18 of Directive 2014/24/EU and Regulation 18 PCR2015). 

Finally, Regulation 9(4) PCR2015 and art 9(3) of Directive 2014/24/EU introduce an (unnecessary) cross-referral to the rules applicable to defence and security procurement for those cases in which the specific “international” procurement concerns goods, works or services covered by the special rules (see Regulation 17 PCR2015 and Article 17 Directive 2014/24/EU). This is a topic where Dr Baudouin Heuninckx has expertly written on repeated occasions (see “Applicable Law to the Procurement of International Organisations in Europe” (2011) 20(4) Public Procurement Law Review 103-22, as well as his Private Contribution to the Commission Green Paper on the modernisation of EU public procurement policy (2011)), so it is worth re-reading his proposals for improvement of the previous rules.

In our view, even if the 2014 rules now implemented by the PCR2015 have created some clarity (cf Article 15 of Directive 2004/18/EC), there still seems to be room for clarification as to the concepts of “international organisation” or “international financing institution”, as well for the introduction of a safeguard clause in case the procedures to be followed under other rules create a gap in scope of coverage or result in otherwise undesirable protectionism or direct award of contracts. However, these are issues that deserve separate analysis and do not affect the PCR2015 exclusively, so they are saved for some other time.

Last modified: July 4, 2016 by Pedro Telles

9.—(1) This Part does not apply to public contracts, or design contests, which the contracting authority is obliged to award or organise in accordance with procurement procedures which are different from those laid down by this Part and are established by any of the following:—

(a) a legal instrument creating international law obligations, such as an international agreement, concluded in conformity with the Treaties, between a member State and one or more third countries (or subdivisions of such countries) and covering works, supplies or services intended for the joint implementation or exploitation of a project by its signatories;

(b) an international organisation.

(2) This Part does not apply to public contracts, or design contests, which the contracting authority awards or organises in accordance with procurement rules provided by an international organisation or international financing institution where the public contracts or design contests concerned are fully financed by that organisation or institution.

(3) In the case of public contracts, or design contests, co-financed for the most part by an international organisation or international financing institution, the parties shall agree on applicable procurement procedures.

(4) In the case of contracts and design contests involving defence or security aspects which are awarded or organised pursuant to international rules, regulation 17 applies instead of paragraphs (1) to (3) of this regulation.