Dr. Pedro Telles of Swansea University has been conducting a series of interviews, the Public Procurement Podcasts (PPP), supported by the British Academy Rising Star Engagement Awards, where he interviews leading academics, researchers and graduates who have an interesting viewpoint on aspects of public sector procurement. He recently spoke with Willem Janssen of Utrecht University on In-house contracts and public-public cooperation issues under Directive 2014/24/EU.
Willem Janssen is Lecturer and PhD Researcher at the Public Procurement Research Centre of Utrecht University and Twente University. His PhD researches “the influence of EU public procurement law on the performance of services by cooperating public authorities and the issues of regulating and enforcing the make-or-buy decision of public authorities.”
They start by outlining the doctrine within the Regulations of in-house contracts and public cooperation. Janssen points out the interesting angle that “… the basic notion of the EU public procurement rules is that they’re only applicable if a contracting authority awards a public contract to a separate entity. Now, this means that a contracting authority itself is always allowed to provide services with its own departments … this type of delivery falls outside the scope of EU public procurement law and outside of the treaties.”
So for example, an IT department of a public body or local authority developing and maintaining its own digital infrastructure. The question is: “how do these rules apply within the public sector when contracting authorities decide to work together for the delivery of their tasks? And this is, I think, where the in-house doctrine starts. It all begins with considering that there’s no express exemption for contracting authorities that want to provide services in cooperation with others.”
He explains how even if they qualify as a public contract, they can be exempt from a duty to tender, and goes on to give three of reasons why this would be, and these are explained in detail in the text. Telles clarifies that value for money is not one of the directives of the Directive, as such, “public-to-public cooperation contracts are not covered by public procurement law, because technically there’s not a contract being awarded, so not going to the market.”
And Janssen agrees, defining European-level directives as focusing on the internal market, but at a national level, these types of arrangement do exist and must be dealt with, but that they are limited to some extent in terms of what contracting authorities can do for society or how they organise their service provision.
Janssen explains why clarity is therefore very important: “… I think that has often lacked in practice … And this is I think why I also welcome the codification of the in-house doctrine in Article 12 which in itself should be seen as a milestone of EU public procurement law and all of this is even more relevant when we consider that we’ve seen a rise in the popularity in many EU member states of these type of cooperations which are often in the form of shared service centres or other types of cooperations.”
They then go on to discuss the directive 2014/24, the codification and why there are so many exemptions on Article 12. Janssen explains this was driven by a strong call from contracting authorities all over the EU who wanted more flexibility and space to provide services together.They then go on to discuss what has changed in terms of public-public cooperation between 2004 and 2014.
There is a lengthy discussion about accepting private capital in public-to-public cooperation contracts (under Article 12, Paragraph 3), which highlights the dilemma of the Court. Telles is on the side of rejecting private capital and raises some very important points about what happens when you start mixing public money with private, and Janssen finds this inconsistently represented in the directive.
Telles raises the question on how we solve the legal uncertainties arising from Article 12, Paragraph 4,. Janssen thinks this is the hardest of all the questions to answer, and to hear how he replies you can read the full transcript , which is a fascinating discussion, here on the Public Procurement Podcast website.