A recent decision from the European Court of Justice (ECJ) in joined cases C-155/19 and 156/19 concerns the definition of public law bodies, which alongside state and regional authorities is the second category of entities covered by the so-called classical sector public procurement directive (2014/24/EU).
The definition includes cumulative requirements as regards general interest activities, legal personality and public dominance. The public dominance needs to measure up to either of three alternative criteria, out of which two concerns degree of public financing or leadership and the third relates to public management supervision. The purpose of the management supervision criterion is evidently to capture cases where such supervision can be expected to influence contracting behaviour to the same extent as public financing and leadership.
The concept of public law bodies aims at covering the very different manners of organising public sector activities throughout EU. The concept turned out to be quite a challenge for many EU candidate countries in their law approximation process not least because of the vagueness of terms like “general interest” and has in general required extensive guidance for practitioners.
The recent case concerned a negotiated procedure organised by the Italian Football Federation (FIGC) for the award of a contract for various services. A complaint was made against the procedure based on the contention that FIGC is a body governed by public law and should, therefore, have complied with the EU public procurement rules. Questions were submitted to ECJ for preliminary ruling concerning especially two criteria, namely whether FIGC was established for the specific purpose of meeting general interest needs and was subject to public management supervision.
I will in the following focus on the management supervision criterion, concerning which ECJ case-law is surprisingly scarce and where the ECJ decision provides important clarification and guidance. It was already clear from existing practice that a certain level of active control is required and that for example a mere ex post review of accounts would not be sufficient[1]. In the present case the ECJ is for each type of supervisory powers of the umbrella organisation exemplifying what active control should entail. Here are a few examples:
A power to audit would according to existing practice only be sufficient if the audit also included examination of business activities and inspection of business premises. The present case sets the bar higher by requiring that the audit should include an actual right of intervention in day-to-day management, for example a right to veto specific decisions.
Powers to regulate and instruct should go beyond general levels of policy-making and allow very detailed management rules and the power to impose specific courses of action on management. Grey areas will occur in the frequent cases where supervisory competences for the sake of convenience are formulated broadly and thus in principle allowing concrete interventions. In such cases the actual practicing of the competences by the public supervisory body will need to be examined; the need for a concrete approach was a point highlighted in the present case.
Another example concerns the power to approve the statutes of the entity. Such power should go further than merely reactively checking that such statutes comply with legislation and principles of relevance. There should be a possibility to change existing competences and procedures of the management and also in this manner interfere directly in details of daily management.
The case includes a number of other examples which taken together provides valuable guidance for practitioners. The increased requirements to the intensity of management supervision may well in different member states trigger a review of the public law status of entities without public financing or leadership, which have hitherto been considered as covered by the public procurement rules simply based on the sole fact of public management supervision.
[1] See especially C-373/00, Adolph Truley.