Possible management strategies in light of Jean Auroux v Roanne

Rebecca ReesPartner

Trowers & Hamlins LLP

29th September 2009

Outline

■ Structure a land transaction■ Delegated compliance by the developer

partner■ Negotiated procedure without competition

Practical management strategies

“Land deals”■ Split the works and transfer of land and

tender the public works contract■ Contract for the transfer of an interest in land■ Regulation 6(2)(e): general exclusions -

“for the acquisition of land, including existing buildings and other structures…”

■ In any event, definition of “public works contract” is unlikely to cover pure land transfers (either acquisition of disposal)

“Land deals”

■ Other techniques to consider:■ “Flensberg” structure:

No contractual obligation to deliver works, but sanction (re-purchase) if the developer does not

Commission did not view this as a sufficient sanction that could give rise to a legal obligation to execute the works

■ Argue that works are purely incidental to the main purpose (transfer of land): What is the “main object” of the contract (“but for …”) is this really available after Auroux??

Delegated compliance

■ Require the developer to undertake an EU compliant process for the appointment of its supply-chain

■ Suggested in La Scala (C399/98): “the Directive would still be given full effect if the

national legislation allowed the [CA] to require the developer [to comply with the Directive’s procedures]

Delegated compliance

■ But: Munich waste cases: (C-20/01 and C-28/01)- two public contracts require two procedures (either in accordance with the procurement regulations or Treaty principles).

■ Is the developer performing works or services for the contracting authority/ is there an “entrustment” of works?

Negotiated procedure without competition

■ Procurement remains covered by the Directive

■ Regulation 14(1)(a)(ii): “A CA may use the negotiated procedure without prior

publication of a contract notice in the case of a public contract when, for technical or artistic reasons, or for reasons connect with the protection of exclusive rights, the public contract may be awarded only to a particular economic operator”

Negotiated procedure without competition

■ Narrow view: protection of exclusive rights is akin to intellectual property rights and the ownership of land is not comparable and cannot be capable of representing an exclusive right

■ Wider view: ownership of land (or the control of it) can amount to such rights

■ Quedlinburg (IP/09/437 – March 2009) Commission: “the mere ownership of the land on which public works

are carried out does not automatically confer to the land owner an exclusive position justifying the direct award of the works contract”

Negotiated procedure without competition

■ Technical reasons■ C-385/02 (Commission v Italy)■ Interpreted restrictively ■ Not satisfied because the package of works is

“complex and difficult”

■ What about CPO/interposing procurement steps in order to consider alternatives?