Supply Chain Council of European Union |

Procurement Update – November 2019

The Eversheds Sutherland Procurement team are pleased to introduce you to some of the procurement developments that have occurred in recent weeks. From the European Court of Justice providing guidance on what constitutes ‘serious or persistent deficiencies in the performance of a substantive requirement’ to the Irish Government’s publication of a new circular on ‘Promoting the use of Environmental and Social considerations’ in the context of public procurement, the following article will provide some insights into topical developments in the procurement sphere.

Case C 267/18, Delta Antrepriză de Construcţii şi Montaj

The European Court of Justice has for the first time provided guidance on what constitutes ‘serious or persistent deficiencies in the performance of a substantive requirement’ – a discretionary exclusion ground set out in Article 57(4)(g) of Directive 2014/24/EU (Public Sector Directive). The Court held that the subcontracting by an operator of works under a prior public contract with another public authority, decided upon without that authority’s authorisation and which led to the early termination of that contract, constituted a significant or persistent deficiency in the performance of a substantive requirement under that public contract, and was therefore capable of justifying the exclusion of the operator from a subsequent public procurement procedure conducted by a different public authority. However, that authority awarding the subsequent public contract must conduct its own evaluation of the integrity and reliability of the operator concerned and whether such subcontracting entailed breaking the relationship of trust with the operator in question. Before deciding on exclusion, that authority must also allow the operator concerned an opportunity to set out the corrective measures adopted by it further to the early termination of the prior public contract.

As this was the first time the ECJ have interpreted Article 57(4)(g), this decision presents invaluable clarification to contracting authorities in respect of a particular provision which will provide helpful guidance going forward in respect of exclusion decisions regarding unauthorised subcontracting by economic operators and the potential consequences of same.

Ocean Outdoor UK Limited v London Borough of Hammersmith and Fulham [2019] EWCA Civ 1642

In England, the Court of Appeal has affirmed a High Court decision that two leases for towers with advertising space were not service concession contracts under the Concession Contracts Regulations 2016. This case was the first time the English Courts were required to consider the definition of a concession under these Regulations which transpose the Concessions Directive 2014/23/EU in England, Wales and Northern Ireland. The Court of Appeal held that the leases were not service concession contracts, but were exempt land transactions.

The case provides useful guidance on what constitutes a concession and when damages can be awarded in procurement cases.

Irish Government takes steps to promote ‘green’ public procurement

Given the current focus on climate change and the need for positive action to mitigate its effects, the Irish Government’s publication of a new circular on Promoting the use of Environmental and Social Considerations in Public Procurement (Circular 20/2019) is timely. Demonstrating a commitment to promoting Green Public Procurement (or green purchasing) by asking Departments to consider the inclusion of green criteria in their procurement processes, the circular comes as part of the roll out of the Government’s Climate Action Plan.

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