European law — Urban planning — Public body selling land on which purchaser intending to carry out works corresponding to municipal planning objectives – Whether purchaser awarded public works contract — Ruling sought on concept of public works contracts — Preliminary ruling made
The respondent was the owner of the Wittekind barracks in Germany. The town council decided to undertake feasibility studies for an urban planning project with a view to returning the land o civilian use. The respondent subsequently indicated that it intended to sell the barracks.
The respondent called for tenders for the sale of the property. The appellant property development company submitted a tender offer of EUR 400, 000, which it increased to EUR 1m. Another property development company (S) submitted a tender offer of EUR 2.5m. The respondent’s experts had valued the land at EUR 2.33m.
The respondent preferred S’s tender on urban-development grounds, taking the view that it would make the town more attractive and informed the municipal authorities. The authorities also favoured S’s project and embarked on drawing up a corresponding building plan for the area. The respondent, with the concurrence of the municipality, sold the barracks to S, whic h was entered in the land register as owner.
The appellant brought an action before the Vergabekammer (the body dealing with first instance public procurement cases). It claimed that: (i) the saleo f the barracks was subject to the public procurement law; (ii) public procurement rules had not been followed; and (iii) the sales contract was void because it had not been kept properly informed in its capacity as a potential purchaser. The Vergabekammer dismissed the action as inadmissible because S had not been awarded a works contract.
The appellant appealed to the Higher Regional Court claiming that S was to be regarded as being on the verge of obtaining a works contract in the form of a works concession. The court applied to the European Court of Justice (ECJ) for a preliminary ruling on the concept of “public works contracts”, within the meaning of article 1(2)(b) of Council Directive 2004/18/EC, on the co-ordination of procedures for the award of public works contracts, public supply contracts and public service contracts.
Held: A preliminary ruling was made.
The concept of “public works contracts” within article 1(2)(b) did not require that the works that were the subject of the contract be materially or physically carried out for the contracting authority, provided that they were carried out for that authority’s immediate economic benefit. The latter condition was not satisfied by the contracting authority exercising its regulatory urban-planning powers.
The definition of “public works” contract in article 1(2)(a) was based on the premise that the contractor undertook to carry out the service set out in the contract in return for consideration. By concluding a public works contract, the contractor undertook to carry out the works that formed the subject of the contract, whether by itself or using subcontractors. Accordingly, the concept of “public works contracts” required that the contractor assume a direct or indirect obligation to carry out the works and that that obligation be legally enforceable in accordance with the procedural rules laid down by national law: Auroux v Commune de Roanne C-220/05 [2007] All ER (EC) 918 considered.
Furthermore, the “requirements specified by the contracting authority”, within the meaning of the third variant set out in article 1(2)(b), could not be established by the mere fact that a public authority had examined building plans or had taken a decision in the exercise of its regulatory urban-planning powers. In order to establish that a contracting authority had specified its requirements within the meaning of article 1(2)(b), the authority must have taken measures to define the type of work or, at least, have had a decisive influence on its design.
In the instant case, there was no public works concession within the meaning of article 1(3). The provisions of the directive did not apply to a situation in which one public authority sold land to an undertaking, even though another public authority intended to award a works contract in respect of that land but had not yet formally decided to award it.
O Grübbel (Rechtsanwalt) appeared for the appellant; S Hertwig (Rechtsanwalt) appeared for the respondent; J Lauenroth (Rechtsanwalt) appeared for the intervening party; M Lumma and J Möller (acting as agents) appeared for the German Government; G de Bergues and J-S Pilczer (acting as agents) appeared for the French Government; G Fiengo (avvocato dello Stato) appeared for the Italian Government; C Wissels and Y de Vries (acting as agents) appeared for the Dutch Government; E Riedl and M Fruhmann (acting as agents) appeared for the Austrian Government; G Wilms and C Zadra (acting as agents) appeared for the Commission of the European Communities.
Eileen O’Grady, barrister
