The Emergence of Trans-EU Collaborative Procurement: A 'Living Lab' for European Public Law

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I have uploaded a new working paper on SSRN: ‘The Emergence of Trans-EU Collaborative Procurement: A “Living Lab” for European Public Law’ (March 14, 2019) https://ssrn.com/abstract=3392228. Its abstract is as follows:

Trans-EU collaborative procurement is a fertile ‘living lab’ for the observation, theorisation and critical assessment of developments in European public law. This paper maps the emergence of this novel type of cross-border administrative collaboration and scrutinises the new rules of Directive 2014/24/EU, which evidence the tension between promoting economic co-operation across borders within the internal market and the concern to respect the Member States’ administrative autonomy. The paper critically assesses the EU legislative competence in this area, extracts consequences for balancing trans-EU collaboration with ‘mandatory public law requirements’ at Member State level and proposes minimum functional guarantees to be expected in the implementation of trans-EU collaborative procurement.

CJEU confirms its jurisdiction to review procurement decisions linked to EU's external action (C‑439/13 P)


In its Judgment in Elitaliana v Eulex Kosovo, C-439/13 P, EU:C:2015:341, the Court of Justice of the European Union (CJEU) has followed the Opinion of Advocate General Jääskinen (discussed here) and considered that it has jurisdiction to review procurement procedures conducted by external missions of the European Union as part of the Common foreign and security policy (CFSP) because they functionally fall within its competences linked to the execution of the EU budget.

The CJEU clearly indicated that, despite the fact that it does not, in principle, have jurisdiction with respect to the provisions relating to the CFSP or with respect to acts adopted on the basis of those provisions (para 41), any restrictions on its competence to interpret the EU Treaties needs to be narrowly construed and, consequently, it must assert jurisdiction when CFSP matters affect the EU budget. More specifically, the CJEU indicated that
47 ... it is not disputed that the Eulex Kosovo Mission is civilian in nature and that the expenditure relating to the helicopter-support service for the Eulex Kosovo Mission was to be allocated to the European Union budget.
48 Therefore, the measures at issue, whose annulment was sought on the basis of an infringement of the rules of EU public procurement law, related to the award of a public contract which gave rise to expenditure to be charged to the European Union budget. Accordingly, the contract at issue is subject to the provisions of the Financial Regulation.
49 Having regard to the specific circumstances of the present case, the scope of the limitation, by way of derogation, on the Court’s jurisdiction ... cannot be considered to be so extensive as to exclude the Court’s jurisdiction to interpret and apply the provisions of the Financial Regulation with regard to public procurement.
50 Consequently, the General Court and, in the case of an appeal, the Court of Justice have jurisdiction to hear this case (C-439/13 P, paras 47-50, emphasis added).
In my view, this is the correct decision. However, as indicated earlier (here), the question that remains open, then, is to what extent there is a need to revise the EU's Financial Regulation to include provisions on mixed civil-military/defence procurement along the lines of the regime foreseen in Directive 2009/81, so that compliance with the rules is not too burdensome for external missions, at least in their early stages. To be fair, running the external missions of the European Union is clearly challenging and procurement probably does not rank very high in the priorities of bodies and agents that need to make it happen. And, in those circumstances, it is fair to say that the regime for urgent procurement can still be rather limiting, particularly as challenges and protests are concerned. Hence, this may be an area that needs regulatory reform.

Other than that, and from the strict perspective of the scope of competence of the Union courts in the field of public procurement, it may also be a good occasion to rethink the role of the General Court and the CJEU as public procurement review bodies. In my opinion, developments such as the Elitaliana v Eulex Kosovo case point to the need to either create a specialized review chamber parallel to the EU Civil Service Tribunal, or to subject procurement review processes to alternative dispute resolution mechanisms. Maybe this is a second area in need of regulatory reform/institutional redesign.

AG Jääskinen confirms GC and CJEU jurisdiction to review procurement decisions linked to EU's external action: Time to rethink? (C‑439/13 P)

In his second Opinion of 21 May 2015 in case Elitaliana v Eulex Kosovo, C-439/13 P, EU:C:2015:341 (not available in EN), AG Jääskinen has submitted that the EU Courts have competence for the review of decisions awarding public contracts financed by the EU budget in the context of the EU's external action.

In the case at hand, the challenge concerned the award of a services contract for helicopter emergency medical services [transportation] and air ambulance services tendered by the European Union Rule of Law Mission in Kosovo (Eulex Kosovo), which is the largest civilian mission ever launched by the European Union under the Common Security and Defence Policy (CSDP) by means of Joint Action 2008/124 (as amended).

AG Jääskinen's Opinion could not be clearer in stressing that "insofar as it relates to public contracts awarded in the context of the external action of the European Union, [the challenge] certainly comes within the scope of the budgetary provisions of EU law", which makes the General Court and the Court of Justice of the European Union competent. I fully agree with his view.

The point of departure that the AG takes is to stress that, under what is now Article 41 TEU, CSDP missions "are funded by the Member States based on their gross national product (GNP) when it comes to military operations, while civil and military expenses are borne by the European Union" (para 38, own translation). And, more specifically, that Art 16 of Joint Action 2008/124 determines that "all the costs of Eulex Kosovo are managed in accordance with the rules and procedures applicable to the general budget of the European Union" (para 39, own translation). Consequently, the "jurisdiction of the Court of Justice follows from the budgetary commitment made by the Union and the adoption of decisions that aim to ensure its implementation within the framework of the functions exercised by entities established pursuant to the acts of the CFSP" (para 41, own translation). 

This leads AG Jääskinen to reject the arguments against the CJEU's jurisdiction based on the "extraneousness" of public procurement rules to the CFSP/CSDP (as submitted by the Commission), or the "political gravitas" of CFSP/CSDP acts, which would require the CJEU to refrain from exercising jurisdiction (as submitted by Eulex Kosovo).

In his Opinion, the AG stresses that there is no doubt whatsoever about the applicability of the relevant EU financial regulation to the contracts awarded in the execution of CSDP missions, in as far as they are financed by the EU Budget--as clearly indicated in the practical guide on contracting procedures applying to all EU external actions financed from the EU general budget and the European Development Fund published by the European Commission (see  2014 version).

At this point, the AG examines the only exception to the previous rules, stressing that
although the jurisdiction of the General Court and the Court of Justice to hear the dispute over public contracts awarded in the context of the external action of the Union has been established, the conclusion of such contracts could however escape the jurisdiction of the Union courts if the contracts include military action. Indeed ... in the light of Article 41 TEU, operations that have an impact on the fields of the military or defense are borne by the budgets of Member States, unless the Council decides otherwise. However, with regard to public procurement of a civil nature, the competence of the Court is indisputable (para 60, own translation).
In view of all the above, AG Jääskinen concludes that: "the courts of the European Union cannot avoid future disputes concerning the insufficient protection of the rights of individuals in the context of external action. Thus, the debate on the status of missions and their personnel, to the extent that they benefit from privileges and immunities, must be accompanied by the provision to individuals of legal means to challenge the acts of the missions that affect their rights and obligations" (para 66, own translation).

The question that remains open, then, is to what extent there is a need to revise the EU's Financial  Regulation to include provisions on mixed civil-military/defence procurement along the lines of the regime foreseen in Directive 2009/81, so that compliance with the rules is not too burdensome for CSDP missions, at least in their early stages. To be fair, running the CSDP missions is clearly challenging and procurement probably does not rank very high in the priorities of bodies and agents that need to make it happen. And, in those circumstances, it is fair to say that the regime for urgent procurement can still be rather limiting, particularly as challenges and protests are concerned. Hence, this may be an area that needs regulatory reform.

Other than that, and from the strict perspective of the scope of competence of the Union courts in the field of public procurement, it may also be a good occasion to rethink the role of the General Court and the CJEU as public procurement review bodies. In my opinion, developments such as the Elitaliana v Eulex Kosovo case (if the CJEU follows AG Jääskinen, of course) point to the need to either create a specialized review chamber parallel to the EU Civil Service Tribunal, or to subject procurement review processes to alternative dispute resolution mechanisms. Maybe this is a second area in need of regulatory reform/institutional redesign.