CJEU offers further clarification on rules for reliance on third party capacities and the possibility to impose restrictions thereof(C-324/14)

 In its Judgment of 7 April 2016 in PARTNER Apelski Dariusz, C-324/14, EU:C:2016:214, the Court of Justice of the European Union (CJEU) has provided further clarification on the rules applicable to reliance on third party capacities under Directive 2004/18 (for previous case law, see here), but also included references to the new rules in Directive 2014/24 that merit some close analysis.

In the case at hand, the contracting authority rejected a tenderers' decision to rely on the technical capacity of a third party despite having submitted a commitment by that third party to make its capacity available to the main tenderer for the period of execution of the contract -- thus meeting the (formal and substantive?) requirement in Art 48(3) Dir 2004/18, and also in Art 63(1) Dir 2014/24.

The key issue for the assessment of whether the way in which the cooperation foreseen between the main tenderer and the third party was acceptable rested on the fact that the third party (PUM) 'made its capacities available to Partner [the main tenderer], in particular, its consulting services including, among others, training for Partner’s employees and help to resolve any problems which might arise at the performance stage of the contract. Partner also stated that, for the purposes of the performance of the contract that cooperation was to be governed by a contract between the two undertakings' (C-324/14, para 23). The contracting authority was dissatisfied because 'it took the view that PUM’s knowledge and experience could not be made available without the personal, actual participation of that company in the performance of the contract at issue' (ibid, para 25, emphasis added). This decision implied Partner's exclusion from the tender procedure, which gave rise to the challenge.

After reiterating its general case law on the possibility to rely on third party capacities for the purposes of participating in a public tender (paras 33-35), the CJEU stressed that

36 ... the fact that, under Article 48(3) of Directive 2004/18, an economic operator may rely on the resources of other entities ‘where appropriate’ cannot be interpreted as the referring court, in particular, appears to suggest, as meaning that it is only exceptionally that such an operator may rely on the resources of third party entities.
37 That being said, it must be stated, first, that, although it is free to establish links with the entities on whose resources it relies, and to choose the legal nature of those links, the tenderer is nonetheless required to produce evidence that it actually has available to it the resources of those entities or undertakings, which it does not itself own, and which are necessary for the performance of the contract (see to that effect, judgment in Holst Italia, C‑176/98, EU:C:1999:593, paragraph 29 and the case-law cited).
38 Thus, in accordance with Articles 47(2) and 48(3) of Directive 2004/18, a tenderer may not rely on the resources of other entities in order to satisfy in a purely formal manner the conditions required by the contracting authority (C-324/14, paras 36-38, emphasis added).

This seems to establish a proper general principle that requires a substantive assessment of the relationship between the main tenderer and third parties [for discussion, see A Sanchez-Graells, Public Procurement and the EU Competition Rules, 2nd edn (Oxford, Hart, 2015) 315 and ff]. Beyond that, the CJEU continued to note that

39 Second, ...the provisions of Directive 2004/18 do not preclude the exercise of the right established in Articles 47(2) and 48(3) thereof from being limited in exceptional circumstances (see, to that effect, judgment in Swm Costruzioni 2 and Mannocchi Luigino, C‑94/12, EU:C:2013:646, paragraph 36).
40 It is conceivable that there may be works with special requirements necessitating a certain capacity which cannot be obtained by combining the capacities of more than one operator, which, individually, would be inadequate. In such circumstances, the contracting authority would be justified in requiring that the minimum capacity level concerned be achieved by a single economic operator or, where appropriate, by relying on a limited number of economic operators, in accordance with the second subparagraph of Article 44(2) of Directive 2004/18, as long as that requirement is related and proportionate to the subject matter of the contract at issue (judgment in Swm Costruzioni 2 and Mannocchi Luigino, C‑94/12, EU:C:2013:646, paragraph 35).
41 Likewise, it is conceivable that, in specific circumstances, having regard to the nature and objectives of a particular contract, the capacities of a third party entity, which are necessary for the performance of a particular contract, cannot be transferred to the tenderer. Accordingly, in such circumstances, the tenderer may rely on those capacities only if the third party entity directly and personally participates in the performance of the contract concerned (C-324/14, paras 39-41, emphasis added).

This is interesting because this line of reasoning explicitly endorses the changes introduced by Art 63(1) Dir 2014/24, which establishes that '[w]ith regard to criteria relating to ... the relevant professional experience, economic operators may ... only rely on the capacities of other entities where the latter will perform the works or services for which these capacities are required'. Therefore, the Judgment in Partner is relevant because it anticipates the interpretation of the future rules [for discussion, see A Sanchez-Graells & GS Olykke, 'Under the political science magnifying glass: reformation or deformation of the EU public procurement rules in 2014?', in ibid (eds), Reformation or Deformation of the EU Public Procurement Rules in 2014 (Cheltenham, Edward Elgar Publishing, 2016) forthcoming].

Looking closer at the assessment of the CJEU under the circumstances of the case, it is worth stressing that

42 ... the referring court expresses doubts as to whether PUM’s capacities may genuinely be transferred to Partner so that the resources necessary for the performance of the contract at issue in the main proceedings may be placed at Partner’s disposal ..., given the fact that the resources in that case are made available simply by providing consultation and training services, without any direct participation by PUM in the performance of that contract.
43 In that connection, it must be observed that the public contract at issue in the main proceedings ... is for the comprehensive mechanical cleansing of the roadways of Warsaw in winter and summer for four consecutive years.
44 In particular, as regards winter cleansing, it is apparent ... that that service requires specific skills and a detailed knowledge of the topography of the city of Warsaw and, above all, the ability to react immediately in order to attain specific maintenance standards for the roadways within a specific period.
45 Furthermore, that service is based on the use of specific technology requiring a level of experience and a high degree of skill in using it, which alone enables the contract at issue in the main proceedings to be performed properly while avoiding dangerous consequences for road traffic.
46 In those circumstances, the actual performance of such a contract requires the involvement of experienced staff who, inter alia, by directly observing the state of the surface of the roadways and carrying out on-the-spot tests are able to anticipate or, in any event, respond appropriately to the specific needs of that contract.
47 Taking account of the subject matter of the contract at issue in the main proceedings and its objectives, it is conceivable that PUM’s proposed involvement, consisting simply in the provision of consultation and training services, cannot be regarded as sufficient in order to guarantee that Partner would have at its disposal the resources necessary for the performance of that contract ... (C-324/14, paras 42-47, emphasis added).

I find these considerations very relevant because it seems that the CJEU is willing to engage in a substantive analysis, but not necessarily subject it to a strict proportionality test. In any case, contracting authorities willing to request tenderers or third parties on which they rely to carry out certain activities directly will be well advised to make this particularly clear in the tender documentation, not least if they also want to complement this substantive requirement with additional rules on liability, as foreseen in Art 63(2) Dir 2014/24.