|
Understanding the aggregation rules under the
Public Contract Regulations 2015
Aggregation Rules under the
Public Contracts Regulations 2015 (PCR15) are sometimes perplexing
and can cause confusion among experts and practitioners alike.
However, it is very important that they are fully understood and
applied to ensure that the contracting authority (CA) is fulfilling
its regulatory compliance as well as its operational efficiency.
Hamburg Exemption not available when delivering
services under contract
In the case of Remondis
GmbH v Abfallzweckverband Rhein-Mosel-Eifel (C‑429/19)
ECLI:EU:C:2020:436, the ECJ provided further clarification on the
so called “Hamburg” exemption under Article 12(4)(a) of Directive
2014/24.
Three German district and
town councils established a special purpose entity, which was
responsible for the performance of certain waste disposal services
that they each had to perform. The association was itself a
contracting authority. The tasks entrusted to the association
included the placement of certain waste into landfill, after the
waste had undergone specialist treatment. The association
contracted 80% of its waste disposal operations to the private
sector, and 20% to another district council (Neuwied). Neuwied was
itself a contracting authority which was also obliged to perform
the same waste disposal services as the three councils, but which
also operated its own specialist waste treatment plant.
It was the contract between
the association and Neuwied that was the subject of the dispute.
The contract permitted the association to use Neuwied’s plant for
the treatment of some (20%) of the waste supplied to it by the
three councils. The treated waste was then taken back by the
association to be placed into landfill. The contract required the
association to pay Neuwied a fee based on the quantity of waste it
treated. The fee covered costs only, and contained no profit
margin. The value of the contract was around €1m per year.
The case provides a clear
and helpful summary of the court’s view on the scope of the
exemption. The court explained that: “a cooperation agreement presupposes
that the public sector entities which intend to conclude such an
agreement establish jointly their needs and the solutions to be
adopted. The court had no difficulty in concluding that the
contract in this case was a contract for services in exchange for
payment, which did not disclose any form of genuine and effective
co-operation.
This case re-emphasises
that where one contracting authority delivers services to another
under a contract, then it will not benefit from the hamburg
co-operation exemption under Reg 12(7) PCR15.
Cooperation established
for ancillary services
In C-796/18 ISE v Stadt
Köln, the European Court of Justice considered in detail for the
first time application of Reg 12 PCR15 cooperation exemption –
often referred to as the “Hamburg” exemption.
Two German contracting
authorities “Land Berlin” and “Stadt Köln”, responsible for
the provision of firefighting services in their respective areas
entered into two agreements.
The first involved Land
Berlin who used fire incident control room software called “IGNIS
Plus”, which it transferred to Koln, free of charge and for an
indefinite period. When it subsequently acquired the IGNIS Plus
software from a private company, SSC, it also entered into a
cooperation arrangements related to the transfer and development of
the IGNIS Plus software. The arrangement required each authority to
make available to the other any future developments of the
software, free of charge.
In order to further develop
and support the software, Stadt Köln launched a public tender for
further software development and support services. ISE which was a
competitor claimed that the arrangement between the two public
bodies was actually an award of a public contract without
competition and the purchase of the software by Land Berlin was
structured so that only SSC, could undertake subsequent software development
and maintenance.
The ECJ concluded that the arrangement was a public contract for
the purposes of the public-public cooperation exemption. The ECJ
considered whether the public-public cooperation exemption applies
where the cooperating authorities do not jointly deliver public
services and the co-operation relates only to services ancillary to
the public service which the authorities deliver.
The ECJ confirmed that
cooperation between contracting authorities requires shared common
objectives, not necessarily the joint delivery of common services.
Furthermore, as long as the ancillary services contributed to the
effective fulfilment of a relevant public services of the
cooperating contracting authorities, the exemption would apply.
Finally the court confirmed that cooperation between authorities is
subject to the equal treatment principle so that it must not have
the effect of placing a private undertaking in a position of
advantage vis-à-vis its market competitors.
Procurement Time Limits Strictly Applied
In Riverside Truck Rental
Ltd v Lancashire County Council [2020] EWHC 1018 (TCC) the High
Court confirmed the strict application of the rules governing the
time limits for bringing a claim for breach of the Public
Contracts Regulations 2015, or in the Administrative Court by way
of a claim for judicial review.
The Claim concerned an
allegation that the Council had acted unlawfully in
disqualifying the Claimant from a tender procedure, for the award
of a contract for the provision of lease and maintenance services
for a waste transport fleet of vehicles, on the ground that the
Claimant’s tender did not comply with the mandatory technical
specifications set out in the tender documentation (did not provide
standing height for the cab driver, as had been stipulated in the
tender documentation).
Timeline
· Tender
process advertised in OJEU - 19th September 2019.
· Claimant
informed tender not technically compliant – 29 November 2019
· The Claimant
began proceedings for breach PCR15 and judicial review - 24
January 2020, outside the thirty-day time limit permitted by
regulation 92(2) PCR15.
The Court ruled that the
starting point under Reg 91 and 92 is that an economic operator
that “suffers, or risks suffering, loss or damage” in consequence
of a breach, must commence proceedings within 30 days of the date
when the economic operator first “knew or ought to have known that
grounds for starting the proceedings had arisen”.
Whilst the Court under Reg
92 (4) have the power to extend the relevant time limits when it
“considers there is a good reason for doing so”, this had to be considered
in the light of the policy considerations underlying the strict
time limits imposed in the Regulations and the facts of the case.
The Judge ruled that none
of the matters set out by the Claimant ((i) the fact that time
expired during the Christmas vacation period; (ii) that the
Claimant acted reasonably in spending the first week of the 30 day
period seeking to explore alternatives to litigation; (iii) that
until 10th January 2020 it did not have all of the information that
enabled it to fully formulate its claim under the 2015 Regulations
and “decide that it was worthwhile bringing this challenge”; and
(iv) that it acted reasonably promptly after it received the
pricing information on 10th January 2010) amounted of itself to a
good reason for extending time.
The reality was that the
Claimant failed to start the Procurement Claim in time because it
adopted a mistaken view of the appropriate line of challenge and of
the applicable time limits and because it was not minded to
commence proceedings until it knew whether or not it would have
been the successful tenderer if it had not been excluded because
until then there was a prospect that the proceedings would not be
worthwhile commercially.
The case also clarified
that time limits for judicial review challenges would also be
treated in a similar manner and claimants, whether in ignorance or
not, will not be permitted to avoid the strict time limits imposed
by the EU public procurement regime by issuing a claim for judicial
review in the Administrative Court, under CPR rule 54, rather than
a civil claim for breach of regulation 91 in the High Court.
|
