Directive 2004/18 on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts provides that “[i]n awarding their public contracts, contracting authorities shall apply the national procedures adjusted for the purposes of this Directive. They shall award these public contracts by applying the open or restricted procedure” (Article 28). In other words, the award of such contracts should be preceded by a competitive tendering procedure. However, article 16(a) of Directive 2004/18 provides that this Directive shall not apply to public service contracts for “the acquisition or rental, by whatever financial means, of land, existing buildings or other immovable property or rights thereon […]”.
In its judgment of 22 April 2021, The Court of Justice had to determine if the contract at issue was a “public works contract” that should have been awarded following a competitive tendering procedure or fell within the exclusion provided by the Directive.
The contract concerned the conclusion by Wiener Wohnen (“the contracting authority”), a public body linked to the city of Vienna, with a private undertaking of a long-term lease of a building before it was built. To determine if this contract should be considered as a public works contract, the Court did not stop at its original qualification by the parties as a lease and analysed the main object of the contract.
In its judgment, the Court recalled that “where a contract contains both elements relating to a public works contract and elements relating to another type of contract, it is necessary to refer to the main object of that contract in order to determine its legal classification and the EU rules applicable”. The project at issue was originally qualified as a lease. However, on the date on which the contract was concluded, the works covered by the contract had not yet started. Consequently, the Court considered that, at that time, the object of the contract was the construction of buildings which were subsequently required to be handed over to the contracting authority under a lease.
In that regard, according to the Court’s case law, the exclusion provided by article 16(a) of the Directive could cover buildings that have not yet been built. Nevertheless, the contracting authority cannot rely on the exclusion when the execution of the planned works corresponds to the requirements specified by the contracting authority: “[s]uch is the case where that authority has taken measures to define the characteristics of the work or, at the very least, has had a decisive influence on its design”.
Therefore, the Court analysed if, in the present case, the contracting authority exercised a decisive influence on the design of the building and if the stipulations went beyond the usual requirements of a tenant concerning a building of that importance.
The Court considered that “the Commission has not established that the stipulations made by Wiener Wohnen, in its capacity as future tenant, called into question the use of the Gate 2 building as office premises by any tenants who might succeed that entity. Consequently, it must be held that the adjustments resulting from those stipulations do not exceed what a tenant may normally require”.
Finally, contrary to Advocate General Campos Sánchez-Bordona’s opinion, the Court ruled that “the Commission has not established to the requisite legal standard that, in so far as Wiener Wohnen directly awarded the contract of 25 May 2012 relating to the office building […], without carrying out a competitive tendering procedure and without providing the relevant notice, the Republic of Austria has failed to fulfil its obligations under Articles 2 and 28 and Article 35(2) of Directive 2004/18”.
This case shows that the Court’s analysis goes beyond the contract’s original qualification and that it examines whether the contracting authority has a decisive influence over the design and the conception of the building which exceeds that which a tenant may normally require.
Please contact Peter Teerlinck or Raluca Gherghinaru for more information about this case and/or for general legal advice relating to public procurement.