CJEU, 3rd chamber, March 17, 2011, No C-95/10

THE COURT (Third Chamber),

1 The present reference for a preliminary ruling concerns the interpretation of the relevant provisions of Directive 2004-18-EC of the European Parliament and of the Council of 31 March 2004 on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts (OJ 2004 L 134, p. 114).

2 The reference has been made in the context of a dispute between Strong Segurança SA ('Strong Segurança') and Município de Sintra (Sintra Municipal Council, Portugal) concerning the award of a contract for surveillance and security services for the installations of that municipality.

Legal context

The relevant provisions of Directive 2004-18

3 Recitals 18 and 19 in the preamble to Directive 2004-18 state:

'(18) The field of services is best delineated, for the purpose of applying the procedural rules of this Directive and for monitoring purposes, by subdividing it into categories corresponding to particular headings of a common classification and by bringing them together in two Annexes, II A and II B, according to the regime to which they are subject. As regards services in Annex II B, the relevant provisions of this Directive should be without prejudice to the application of Community rules specific to the services in question.

(19) As regards public service contracts, full application of this Directive should be limited, for a transitional period, to contracts where its provisions will permit the full potential for increased cross-frontier trade to be realised. Contracts for other services need to be monitored during this transitional period before a decision is taken on the full application of this Directive. In this respect, the mechanism for such monitoring needs to be defined. This mechanism should, at the same time, enable interested parties to have access to the relevant information.'

4 Under the terms of the first subparagraph of Article (1)(2)(d):

'"Public service contracts" are public contracts other than public works or supply contracts having as their object the provision of services referred to in Annex II.'

5 Article 2, entitled 'Principles of awarding contracts', provides:

'Contracting authorities shall treat economic operators equally and non-discriminatorily and shall act in a transparent way.'

6 Article 4, entitled 'Economic operators', provides in paragraph 2:

'Groups of economic operators may submit tenders or put themselves forward as candidates. In order to submit a tender or a request to participate, these groups may not be required by the contracting authorities to assume a specific legal form; however, the group selected may be required to do so when it has been awarded the contract, to the extent that this change is necessary for the satisfactory performance of the contract.'

7 Chapter III of Title II, entitled 'Arrangements for public service contracts', contains Articles 20 to 22.

8 Article 20, entitled 'Service contracts listed in Annex II A', provides:

'Contracts which have as their object services listed in Annex II A shall be awarded in accordance with Articles 23 to 55.'

9 Article 21, entitled 'Service contracts listed in Annex II B', is worded as follows:

'Contracts which have as their object services listed in Annex II B shall be subject solely to Article 23 and Article 35(4).'

10 Article 23, which features in Chapter IV entitled 'Specific rules governing specifications and contract documents', relates to the technical specifications that must be set out in contract documentation in order to afford equal access for tenderers and not to create unjustified obstacles to the opening-up of public procurement to competition, while Article 35(4), which features in Chapter VI entitled 'Rules on advertising and transparency', refers to the contracting authorities' obligations to give notice of the results of the contract award procedure.

11 The subject of Annex II B, Category 23, is 'Investigation and security services, ...'.

12 Article 47, entitled 'Economic and financial standing', provides in paragraph 2:

'An economic operator may, where appropriate and for a particular contract, rely on the capacities of other entities, regardless of the legal nature of the links which it has with them. It must in that case prove to the contracting authority that it will have at its disposal the resources necessary, for example, by producing an undertaking by those entities to that effect.'

13 Article 48, entitled 'Technical and/or professional ability', includes a paragraph 3, the content of which is substantially identical to that of Article 47(2).

14 Under Article 80(1), the Member States were required to bring into force the laws, regulations and administrative provisions necessary to comply with Directive 2004-18 no later than 31 January 2006 and forthwith to inform the European Commission thereof.

National legislation

15 Directive 2004-18 was transposed into Portuguese law by Decree-Law No 18-2008 of 29 January 2008 approving the Public Procurement Code (Código dos Contratos Públicos), which entered into force six months after its publication on that date.

The dispute in the main proceedings and the questions referred for a preliminary ruling

16 By a notice published in the Official Journal of the European Union of 15 July 2008, the Sintra Municipal Council issued an international open invitation to tender for the procurement of surveillance and security services for the municipal installations for 2009 and 2010. That invitation to tender was subject to the terms of the specifications and the contract documents, and the contract was to be awarded on the basis of the criterion of the generally most economically advantageous tender.

17 Strong Segurança participated in this invitation to tender and submitted the documents necessary for that purpose. Furthermore, it annexed to its tender a comfort letter from the company Trivalor (SGPS) SA ('Trivalor') in which that company made the following declaration:

'By virtue of the relationship of total direct control (100%) between Trivalor and [Strong Segurança], Trivalor is responsible for the latter's obligations, in accordance with the Commercial Companies Code (Código das Sociedades Comerciais).

To that effect, we declare that we undertake:

- to guarantee that [Strong Segurança] has the necessary technical and financial means for the proper performance of the contractual obligations;

- to indemnify Sintra Municipal Council in full for any loss or damage suffered as a result of any impediment that may occur to prevent the proper performance of the contract, should it be awarded.'

18 The selection board initially favoured awarding the contract to Strong Segurança, as its tender had obtained the highest weighting. However, following the complaint made by a competitor, the selection board, basing itself on the contention that Strong Segurança was not authorised to report on the economic and financial standing of a third company such as Trivalor, revised its assessment and proposed that the contract be awarded to the competitor which had lodged the complaint. Sintra Municipal Council, at its meeting of 11 February 2009, approved this proposal and decided to award to that competitor the services for 2009 and 2010 covered by the invitation to tender.

19 The appeal by Strong Segurança against that decision was dismissed by the Tribunal Administrativo e Fiscal de Sintra (Administrative and Tax Court of Sintra), the ruling of which was upheld by a judgment of the Tribunal Central Administrativo Sul (Administrative Court of Appeal, South) of 10 September 2009. Strong Segurança thereupon brought an appeal against that judgment before the Supremo Tribunal Administrativo (Supreme Administrative Court).

20 The Supremo Tribunal Administrativo states that the central question which arises in this case is whether or not Article 47(2) of Directive 2004-18 is also applicable to the services referred to in Annex II B to that directive, such as those to which the procedure in the main proceedings relates. It points out, first, that that procedure had begun before the entry into force of Decree-Law No 18-2008 of 29 January 2008 and, second, that the period for transposition of the directive had already expired when the invitation to tender was issued.

21 Thus, the first issue that arises in this regard is that of the direct effect of Article 47(2) of Directive 2004-18. The national court takes the view that the first part of that provision is, in accordance with the case-law of the Court, sufficiently clear, precise and unconditional and, as such, leaves the Member States no option with regard to compliance. However, as to the second part of that provision, the national court expresses doubts, in so far as that part appears to leave the Member States with some discretionary power as to what is to be proved and as to what evidence may be required for the economic operator to demonstrate its economic and financial capacity to the contracting authority when it relies on the capacities of other entities.

22 The second issue raised in this case is that of the interpretation of Article 47(2) of Directive 2004-18, in relation to which the case-law of the Court provides no answer. The national court notes that a strictly literal interpretation of that provision would lead to the conclusion that it applies only to the service contracts referred to in Annex II A. It points out, however, that that would exclude, for service contracts referred to in Annex II B, the application of essential provisions of Directive 2004-18 such as, for example, those specifying the criteria for qualitative selection of candidates (Articles 45 to 52) and the contract award criteria (Articles 53 to 55).

23 Since it had doubts as to whether such an interpretation is indeed correct, and aware that it was ruling on the matter at final instance, the Supremo Tribunal Administrativo decided to stay the proceedings and to refer the following questions to the Court for a preliminary ruling:

'1. Is Article 47 of Directive 2004-18 ... directly applicable in the domestic legal order as from 31 January 2006, in the sense that it confers on individuals a right on which they can rely in proceedings against organs of the Portuguese authorities?

2. If so, is that principle applicable, despite the provision contained in Article 21 of that directive, to contracts which have as their object services referred to in Annex II B [to Directive 2004-18]?'

The questions referred to the Court

The second question

24 By this question, which it is appropriate to consider first, the national court is asking whether Article 47(2) of Directive 2004-18 is also applicable to contracts which have as their object services referred to in Annex II B to that directive, notwithstanding the fact that such applicability is not apparent from the wording of the other relevant provisions of that directive, in particular Article 21 thereof.

25 In order to answer that question, it should be observed, at the outset, that the distinction between service contracts according to their classification into two separate categories was not introduced for the first time by Directive 2004-18. It already existed under Council Directive 92-50-EEC of 18 June 1992 relating to the coordination of procedures for the award of public service contracts (OJ 1992 L 209, p. 1), as codified and recast by Directive 2004-18.

26 It should be observed, next, that the distinction that must be made between service contracts depending on whether they are referred to in Annex II A or in Annex II B to Directive 2004-18 was already unambiguously referred to in the recitals to that directive.

27 Thus, recital 18 in the preamble to Directive 2004-18 states that, for the purpose of applying its rules, it is appropriate to subdivide the services into categories and to bring them together in two Annexes, II A and II B, according to the regime to which they are subject.

28 For its part, recital 19 in the preamble to Directive 2004-188 reflects the legislature's intention to limit the full application of that directive, for a transitional period, to service contracts where its provisions will permit the full potential for increased cross-frontier trade to be realised, those contracts being for the services referred to in Annex II A, and to monitor the other contracts, that is, those for services referred to in Annex II B, during that transitional period and before a decision is taken on the full application of Directive 2004-18 to those contracts.

29 That subdivision of the service contracts, referred to in the abovementioned recitals, is set out in greater detail in the provisions of Directive 2004-18.

30 Thus, Article 20 provides, for contracts having as their object the provision of services referred to in Annex II A, the practically full application of the provisions of that directive, whereas Article 21 refers to Articles 23 and 35(4) only and thus imposes, with regard to the contracts for services referred to in Annex II B, 'solely' the obligation of the contracting authorities concerning the technical specifications of such contracts, as well as their obligation to inform the Commission of the results of their procurement procedures.

31 Contrary to what Strong Segurança maintains, there is no indication from the wording of the provisions of Directive 2004-18, or from its spirit and general scheme, that the subdivision of the services into two categories is based on a distinction between the 'substantive' and 'procedural' provisions of that directive. Furthermore, as the Commission rightly points out, such a distinction would risk creating legal uncertainty with regard to the scope of the various provisions of that directive.

32 The division of arrangements for public service contracts into two separate categories according to the classification of services, brought about by the relevant rules of European Union law, is corroborated by the case-law of the Court.

33 Thus, the Court has held that the classification of the services in Annexes I A and I B to Directive 92-50 (which correspond, respectively, to Annexes II A and II B to Directive 2004-18) is in accordance with the system laid down by that directive, which envisages the application of the provisions of that directive on two levels (see, to that effect, Case C-411-00 Felix Swoboda [2002] ECR I-10567, paragraph 55).

34 The Court has also held, in the context of Directive 92-50, that, where the contracts concern services which fall under Annex I B, the contracting authorities are bound only by the obligations to define the technical specifications by reference to national standards implementing European standards, which must be given in the general or contractual documents relating to each contract, and to send a notice of the results of the award procedure to the OPOCE (Office for Official Publications of the European Communities) (see Case C-507-03 Commission v Ireland [2007] ECR I-9777, paragraph 24).

35 The Court has stated that the European Union legislature based itself on the assumption that contracts for the services referred to in Annex I B to Directive 92-50 are, in principle, in the light of their specific nature, not of sufficient cross-border interest to justify their award being subject to the conclusion of a tendering procedure intended to enable undertakings from other Member States to examine the contract notice and submit a tender (see, to that effect, Commission v Ireland, paragraph 25). However, the Court has held that even such contracts, where they have a certain cross-border interest, are subject to the general principles of transparency and equal treatment resulting from Articles 49 TFEU and 56 TFEU (see, to that effect, Commission v Ireland, paragraphs 26 and 29 to 31).

36 In light of the foregoing, it must be concluded that the system established by Directive 2004-18 does not directly create, for the Member States, the obligation to apply Article 47(2) of that directive also to the public service contracts referred to in Annex II B to that directive.

37 With regard to the Commission's contention that the general principle of 'effective competition' specific to Directive 2004-18 could lead to such an obligation, it must be noted that, whereas effective competition constitutes the essential objective of that directive, that objective, as important as it is, cannot lead to an interpretation that is contrary to the clear terms of the directive, which do not mention Article 47(2) thereof as being among the provisions which the contracting authorities are obliged to apply when awarding contracts concerning the services referred to in Annex II B to that directive.

38 However, in accordance with the abovementioned case-law, it remains to be considered whether, where such a contract has a certain cross-border interest - this being a matter which it is for the national court to determine -, particularly having regard to the fact that, in the main proceedings, an invitation to tender had been published in the Official Journal of the European Union, an obligation such as that set out in Article 47(2) of Directive 2004-18 may result from the application of the general principles of transparency and equal treatment.

39 With regard, firstly, to the principle of transparency, it must be stated that this principle is not infringed if an obligation such as that laid down by Article 47(2) of Directive 2004-18 is not imposed on the contracting authority in respect of a contract which has as its object services referred to in Annex II B to that directive. Indeed, the fact that an economic operator cannot rely on the economic and financial capacities of other entities has no connection with the transparency of the contract award procedure. It should be observed, moreover, that the application of Articles 23 and 35(4) of Directive 2004-18 during the contract award procedures relating to such 'non-priority' services is also intended to ensure the degree of transparency that corresponds to the specific nature of those contracts.

40 Nor, it should be noted, can the principle of equal treatment lead to the imposition of an obligation, such as that laid down by Article 47(2) of Directive 2004-18, at the time of the award of the service contracts listed in Annex II B, notwithstanding the distinction drawn by that directive.

41 The absence of such an obligation cannot give rise to any discrimination, direct or indirect, on the basis of nationality or place of establishment.

42 It should be noted that such a broad approach to the applicability of the principle of equal treatment could lead to the application, to the service contracts referred to in Annex II B to Directive 2004-18, of other essential provisions of that directive, for example, as the national court observes, provisions which establish the qualitative criteria for the selection of candidates (Articles 45 to 52) as well as the contract award criteria (Articles 53 to 55). That would involve the risk of rendering entirely ineffective the distinction drawn by Directive 2004-18 between the services of Annexes II A and II B, as well as the application of that directive on two levels, under the terms used by the case-law of the Court.

43 Furthermore, according to the case-law of the Court, the contracts relating to the services listed in Annex II B to Directive 2004-18 are specific in nature (Commission v Ireland, paragraph 25). Thus, at least some of those services have particular characteristics that would justify the contracting authority taking into account, on a personalised and specific basis, the individual bid presented by the candidates. This is the case, for example, for 'legal services', 'personnel placement and supply services', 'education and vocational education services' or 'investigation and security services'.

44 Consequently, the general principles of transparency and equal treatment do not impose on the contracting authorities an obligation, such as that laid down by Article 47(2) of Directive 2004-18, for contracts concerning the services set out in Annex II B to that directive.

45 However, the scope of Directive 2004-18 is determined, as is clear from recital 19 in its preamble, by a progressive approach taken by the European Union legislature which, admittedly, during the transition period mentioned in that recital does not require the application of Article 47(2) when awarding contracts such as those at issue in the main proceedings, but which does not prohibit a Member State and, possibly, a contracting authority, from requiring the application of the abovementioned provision to such contracts in, respectively, its legislation and the documents relating to the contract.

46 In the light of the foregoing, the answer to the second question is that Directive 2004-18 does not create the obligation, for Member States, to apply Article 47(2) of that directive also to contracts which have as their object services referred to in Annex II B thereto. However, that directive does not preclude Member States and, possibly, contracting authorities from providing for such application in, respectively, their legislation and the documents relating to the contract.

The first question

47 In the light of the answer given to the second question, there is no need to answer the first question.

Costs

48 Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.

On those grounds, the Court (Third Chamber) hereby rules:

Directive 2004-18-EC of the European Parliament and of the Council of 31 March 2004 on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts does not create the obligation, for Member States, to apply Article 47(2) of that directive also to contracts which have as their object services referred to in Annex II B thereto. However, that directive does not preclude Member States and, possibly, contracting authorities from providing for such application in, respectively, their legislation and the documents relating to the contract.