Mixed procurement involves tendering of contracts that involve elements of a different nature (works, services or supplies) or contracts covered by different sets of rules, and is one of the areas that is creating more difficulties in EU public procurement law, particularly as a result of the multiplication of EU Directives that regulate procurement processes in different sectors (utilities, defence) or specific types of contracts (concessions).
This creates complexity, at least where contracts are subjected to different sets of rules, and could have been avoided through a consolidation of all EU public procurement rules into a single Directive [as proposed by S Arrowsmith, 'Modernising the European Union’s Public Procurement Regime: a Blueprint for Real Simplicity and Flexibility' (2012) 21 Public Procurement Law Review 71–82]. However, and regrettably, that was not the chosen regulatory option and domestic governments and legislators have been left with a rather complex puzzle, which reg.4 on Mixed procurement of the Public Contracts Regulations 2015 (PCR2015) tries to sort out. It is interesting, though, that this regulation departs from the (even more complicated) drafting of Art 3 of Directive 2014/24, and tries to simplify the rules.
As reg.4 PCR2015 indicates, although not in the clearest terms, mixed procurement can involve contracts in which all of their elements are covered by the same set of rules [and, in this case, Part 2 PCR2015 itself, see reg.4(1)], or contracts which elements are covered by different sets of rules [such as the PCR2015 and rules on utilities procurement, see regs.4(2), 4(3) and 16, although there are other aspects covered in an even larger number of regulations]. The first case is easier to sort out, whereas the second one creates more difficulties. Moreover, in both cases, the several elements involved in the mixed procurement can be either objectively separable or not, and this should create even more regulatory choice or complexity-This point last point is controversial under the PCR2015, which seem to limit the issue of objective separation to cases in which the several elements of the contract are covered by different sets of rules; see reg.4(2) (see below).
(A) Regarding mixed contracts which have as their subject-matter different types of procurement all of which are covered by Part 2 PCR2015, reg.4(1) sets out two rules. The general rule in reg.4(1)(a) is that contracts "shall be awarded in accordance with the provisions applicable to the type of procurement that characterises the main subject-matter of the contract in question". Reg.4(1)(b) sets a special rule based on value for mixed contracts consisting (i) partly of social and other specific services (covered by Section 7) and partly of other services, or (ii) partly of services and partly of supplies, in which case "the main subject-matter shall be determined in accordance with which of the estimated values of the respective services, or of the respective services and supplies, is the highest". These rules are in line with the case law of the CJEU (see particularly Commission v Italy, C-412/04, EU:C:2008:102].
As briefly mentioned, this seems to impose an obligation of tendering a single contract for all elements of the mixed procurement, which may not necessarily be the best solution and definitely not necessarily the only option under Art 3 Dir 2014/24 (although it must be acknowledged that this is not very clear, particularly in view of the wording and position of art 3(6) dir 2014/24). In that regard, Rec (12) Dir 2014/24 seems to usefully shed some light by stressing that
In the case of mixed contracts which can be separated, contracting authorities are always free to award separate contracts for the separate parts of the mixed contract, in which case the provisions applicable to each separate part should be determined exclusively with respect to the characteristics of that specific contract. On the other hand, where contracting authorities choose to include other elements in the procurement, whatever their value and whatever the legal regime the added elements would otherwise have been subject to, the main principle should be that, where a contract should be awarded pursuant to the provisions of this Directive, if awarded on its own, then this Directive should continue to apply to the entire mixed contract (emphasis added).
On this point, it is important to note that, provided there is no intention to avoid the application of specific rules, contracting authorities should indeed be free to tender either as many discrete contracts as elements with a different nature, or a single contract for the mixed procurement (which would then be governed by the rules applicable to the main characteristic of the subject-matter). This would reflect an analogical application of the case law of the CJEU concerning anti-avoidance rules concerned with the value of contracts rather than the nature of their subject matter, where the CJEU has been clear in stressing that the possibility to divide or to group requirements should be led by technical and economical considerations [Commission v France, C-16/98, EU:C:2000:541 and Commission v Italy, C-412/04, EU:C:2008:102] and that, in any case, is not possible to group or divide requirements where that (is aimed to? or) results in the circumvention of (stricter) rules [Swoboda, C-411/00, EU:C:2002:660].
(B) Regarding mixed contracts which have as their subject-matter procurement covered by Part 2 PCR2015 and procurement not covered thereby, reg.4(2) PCR2015 sets out two different rules depending on whether the parts are separable or not, and closely follows the rules in art 3 Dir 2014/24. Reg.4(2)(b) clarifies that "where the different parts of a given contract are objectively not separable, the applicable legal regime shall be determined on the basis of the main subject-matter of that contract". On the contrary, where the the different parts of a given contract are objectively separable, contracting authorities have a choice. Firstly, if the contracting authority opts to tender separate contracts, "the decision as to which legal regime applies to any one of such separate contracts shall be taken on the basis of the characteristics of the separate part concerned". And, secondly, where contracting authorities choose to award a single contract, the ensuing mixed contract shall be tenderer under Part 2 of the PCR2015 "irrespective of the value of the parts that would otherwise fall under a different legal regime, and of which legal regime those parts would otherwise have been subject to". This is in line with Directive 2014/24 and does not seem to create specific issues.
Finally, reg. 4(3) excludes the applicability of the previous rules where part of a given contract is covered by Article 346 of TFEU or the Defence and Security Regulations, in which case regulation 16 applies instead of paragraph (1) or (2) (see brief comment on issues raised by the multiple references to Art 346 TFEU regarding reg.3 here).
It is important to stress that, taken together, the rules included in reg.4 PCR2015 omit two cases covered in art 3(4) and 3(5) Dir 2014/24. On the one hand, reg.4 does not address the coordination with the rules on the award of concessions under art 3(4) Dir 2014/24, according to which "mixed contracts containing elements of supply, works and
service contracts and of concessions ... shall be
awarded in accordance with this Directive, provided that the estimated
value of the part of the contract which constitutes a contract covered
by this Directive ... is equal to
or greater than the relevant threshold". My interpretation is that the need for a separate regulation of this case can be avoided if the interpretation of reg.4(2)(a) is such that mixed contracts involving elements of concession are always awarded under Part 2 of the PCR2015, regardless of the value of the non-concession elements. That would not result in a breach of EU law because it would result in "over-compliance" (given that the rules under Dir 2014/24 are much more stringent than those under Dir 2014/23). Any other interpretation of the rules under reg.4(2) PCR2015 would create risks of non-compliance.
On its part, Art 3(5) Dir 2014/24 determines that "[i]n the case of contracts which have as their subject both procurement
covered by this Directive and procurement for the pursuit of an activity
which is subject to Directive 2014/25/EU, the applicable rules shall ... be determined pursuant to
Articles 5 and 6 of Directive 2014/25/EU." Again, the need to include this case can also be avoided following the same reasoning as above. Particularly in view of the very significant similarity of Arts 5 and 6 Dir 2014/25 with the functional criteria included in Art 3 Dir 2014/24 and, more specifically, the special rule under Art 6(1) in fine Dir 2014/25, whereby "[t]he choice between awarding a single contract or awarding a number of
separate contracts shall not, however, be made with the objective of
excluding the contract or contracts from the scope of application either
of this Directive or, where applicable, Directive 2014/24/EU or
Hence, in my view, reg.4 PCR2015 has effectively managed to simplify the rules under Art 3 Dir 2014/24 and avoids the unnecessary regulation of cases covered by its general criteria--and, particularly, by the rules of reg.4(2), which needs to be interpreted in view of its vis attractiva. The only point where a more flexible approach should be adopted regards the interpretation of reg.4(1) PCR2015, which should not prevent the application of the "severability" option where all parts of mixed contracts are covered by its Part 2.
Pedro's comments, and some disagreement regarding reg.4(1) are available here.