Court confirms advance effects of new EU procurement directives

Introduction
Decision
Comment

Introduction

As practitioners of public procurement law will already know, the transition period for the new EU directives on public procurement (ie, EU Directives 2014/23/EC, 2014/24/EC and 2014/25/EC) which entered into force in March 2014 will largely expire on April 18 2016. As the transition period aims to provide member states with sufficient time to align their national laws with the new directives, they cannot be accused of failing to transpose the directives before this deadline (Paragraph 102 of C-212/04a).

However, member states must refrain from taking measures that are likely to compromise the results prescribed in the new directives (C-129/06). In other words, even if the transition period has not yet expired, national courts must interpret national law in line with EU law. As such, some provisions in the directives may have advance effects (ie, before the transition period expires) where:

• they are sufficiently precise and clear;
• the directive leaves member states with no leeway with regard to implementation and thus obliges them to transpose the provisions into law; and
• national law does not explicitly preclude the provisions.

Decision

The Administrative Court of Lower Austria recently confirmed that certain provisions in the new directives have advance effects.

The case in question concerned the award of a service contract for mobile communication services. The court concluded that Article 26(4) of EU Directive 2014/24/EC – which outlines the grounds for choosing the negotiated procedure (ie, competitive procedure with negotiation) – must serve as the basis for interpreting the Procurement Act in relation to the negotiated procedure.(1) Article 26(4) covers additional situations not stipulated under EU Directive 2004/18/EC (and accordingly under the Procurement Act) in relation to the application of the negotiated procedure.

The court applied the effet utile principle (ie, that the interpretation of law that best guarantees the practical effect of existing EU law will prevail) to rule that the negotiated procedure set out in the Procurement Act must be interpreted in line with Article 26(4) of the directive. In particular, the court concluded that the application of the negotiated procedure was admissible, as the technical specifications could not be established with sufficient precision (with reference to the technical standard set out in Article 26(4)(a)(iv) of the directive).

Comment

Following the effet utile principle and the corresponding Austrian jurisprudence, it is clear that certain provisions in the directives are (by way of interpretation) indirectly applicable to member states – even though they have not yet been transposed into national law and the deadline has not yet expired.

As such, even if the full effect of the new directives is not felt until 2016, contracting authorities and bidders should consider certain mandatory rules and provisions set out in the new directives when applying existing regimes.

For further information on this topic please contact Johannes Stalzer at Schoenherr by telephone (+43 1 53 43 70) or email (j.stalzer@schoenherr.eu).The Schoenherr website can be accessed at www.schoenherr.eu.