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In chapter I (Introduction), the authors explain why they addressed the issue of joint bidding in public procurement, namely consortia and structures enabling the achievement of similar economic goals(cooperation with so-called third parties and subcontractors), in the context of the premise for exclusion referred to in Article 57(4)(d) of Directive 2014/24/EU. This premise applies to the situation where the contracting authority has sufficiently plausible indications to conclude that the economic operator has entered into agreements with other economic operators aimed at distorting competition. The assessment of whether joint bidding in a particular case can constitute such an agreement (in particular in the meaning of Article 101 TFEU) creates difficulties for contracting authorities and bodies adjudicating in public procurement law and competition law, but primarily the contractors themselves. The authors also mention the methodology they applied when working on the book, which was largely based on the analysis of practical examples of cases settled in various EU Member States and EFTA countries, as well as on the analysis of selected legislative solutions.

1.01 As stated in the case-law of the CJEU, the objective of the procurement directives is to create conditions in which effective competition for public contracts takes place.1 Therefore, although the public procurement law and competition law historically appeared to be developing in a somewhat parallel manner and independently of each other, ‘[i]n their current state of development, both internal market rules (particularly those on public procurement) and competition law need each other if they are to continue contributing to the development of EU economic law’.2 Furthermore, as Albert Sánchez Graells rightly mentions, ‘both fields of law and practice are in permanent evolution and both have been the object of substantial modernisation efforts in recent years in the EU and elsewhere. This evolution and modernisation has led to a clear trend of convergence between both sets of regulations’.3 This trend is also noticeable in the rulings of the administrative and judicial authorities in public procurement law and competition law cases. However, connections between public procurement law and competition law do not appear to have been sufficiently analysed and written up or optimally and structurally consistently addressed in legislation.

1.02 In the European Commission’s document, Green Paper on the modernisation of EU public procurement policy towards a more efficient European procurement market of 2011, it was concluded that

[t]he first objective is to increase the efficiency of public spending. This includes on the one hand, the search for best possible procurement outcomes (best value for money). To achieve this aim, it is vital to generate the strongest possible competition for public contracts awarded in the internal market. Bidders must be given the opportunity to compete on a level playing field and distortions of competition must be avoided.4

Consequently, in the currently applicable Directive 2014/24/EU, an attempt was made to include regulations that have the objective of effectively enforcing competition rules in public procurement, primarily including combating collusion in public procurement. Apart from the general condition to date authorising the contracting authority to exclude a contractor from the public procurement procedure in situations in which it is able to demonstrate by appropriate means that the economic operator is guilty of grave professional misconduct, which renders its integrity questionable (Article 57(4)(c) of Directive 2014/24/EU and Article 45(2)(d) of Directive 2004/18/EC), one of the most important changes in this respect was the introduction of a separate, independent condition regarding the breach of competition law (Article 57(4)(d) of Directive 2014/24/EU).

1.03 According to this optional condition for exclusion, a contractor may be excluded ‘[w]here the contracting authority has sufficiently plausible indications to conclude that the economic operator has entered into agreements with other economic operators aimed at distorting competition’.5 There is no doubt that the fundamental objective of introducing this premise was to combat and sanction the conduct of the contractors commonly referred to as bid rigging.

1.04 Agreements concluded between contractors participating in public procurement procedures are penalised if their aim is to distort competition (horizontal bid rigging). Typical bid rigging involves market sharing (product or geographical) by determining in which procedures a given economic operator will compete and those in which it will not submit a bid, enabling a bid to be submitted by a competitor, or submitting a bid in such a way as to lead to the selection of the highest bid (less favourable for the contracting authority) submitted by a participant in the bid rigging. These types of bid rigging can, of course, take on different forms in each case. However, they all have one thing in common – entities participating in anti-competitive agreements are generally aware that they are acting unlawfully. Agreements of this type, clearly prohibited by the law, if they are discovered and proved, do not cause far-reaching interpretational problems for authorities ruling in public procurement cases, or for antitrust authorities and courts.

1.05 However, there is a second group of agreements between companies participating in public procurement procedures – entering into consortia and providing resources to a bidder as a so-called ‘third party’ or ‘ordinary’ subcontractor – which, as a rule and in the light of the public procurement regulations, are allowed (and are also very common in business). In certain situations, these agreements may transform into activities bearing the hallmarks of bid rigging and distortion of competition.

1.06 The boundary between agreements of this type being normal, legitimate market competition and agreements of the same type which constitute acts of unfair competition is very narrow and uncertain for the bidders themselves, for other market players, for contracting authorities and even for the bodies ruling in public procurement and competition cases. They therefore give rise to numerous interpretational difficulties and doubts of a legal nature, which are aggravated by the problem of synergies or absence thereof between public procurement and competition law.

1.07 The authors of the book therefore wish to concentrate on agreements of this type (consortia and agreements having effects similar to consortia) between companies participating in public procurement procedures and to attempt to indicate the grounds for separating behaviour constituting permitted business practice from agreements restricting competition. For participants of the public procurement market, a description of the rules and an indication of the prerequisites that an economic operator intending to use these mechanisms should follow seems to be a necessary element of the decision-making process in this respect.

1.08 According to the authors, a comprehensive look at the matter from the point of view of not only the general rules of European Union law (particularly Article 101 of the TFEU) and Directive 2014/24/EU, but also how they are applied and interpreted (by authorities ruling in public procurement cases and by antitrust authorities and courts) in selected Member States enables the presentation of the prerequisites that economic operators should consider when deciding on how to compete for a public contract. On the other hand, the study should also be compulsory reading for contracting authorities, review bodies ruling in public procurement cases and antitrust institutions.

1.09 The issues raised in this book will be analysed practically, with real examples and case-law (in both public procurement and antitrust cases) of both EU and domestic courts, as well as the competent administrative authorities. The individual situations and their legal assessments were described exclusively on the basis of the cited administrative decisions or judgments from various EU/EFTA Member States. In principle, the authors did not analyse the source materials that were assessed by the competent authorities in the individual cases. Some of the decisions or judgments described were still not final at the time of writing. However, the objective of the authors, when extensively describing specific situations in individual cases was to show the reader the circumstances which the authorities and courts ruling on the public procurement and competition law cases considered to be of relevance to the assessment of the agreements on joint bidding for a contract which were legal or, on the contrary, which infringed competition. The authors have also tried to demonstrate that the interpretation of the regulations constituting the implementation of Article 57(4)(d) of Directive 2014/24/EU and Article 101 of the TFEU into national law can significantly differ not only in individual EU/EFTA Member States, but also between authorities and courts ruling in public procurement cases and the antitrust authorities. Therefore, the assessment of similar situations can lead to differentiated results. A difficult task for contracting authorities is also mentioned in which specific facts and their legal consequences should first be assessed, for which the contracting authorities probably do not have adequate tools.

1.10 The choice of examples (cases) described in the book had the objective of illustrating the legal issues described in it as well as possible. Therefore, this is certainly not a full set of such cases that are considered in the case-law of the individual EU/EFTA Member States. Furthermore, it would almost certainly be methodologically desirable to compare how a given case was assessed by individual contracting authorities and then by the procurement courts and, in parallel, administrative and judicial antitrust authorities. However, it was not possible to make such a comparison. This is because, on the one hand, there are no publicly available databases describing such cases. On the other hand, some cases are only assessed by the procurement authorities and are not dealt with by the antitrust authorities, or vice versa. There is also a huge disproportion between the duration of the proceedings in public procurement cases and cases pending before the antitrust authorities, which significantly hinders or even prevents the analysis of the same case from both points of view (and has significant legal consequences, to which the authors refer in the book).

1.11 Considerations about the criminal law effects of agreements on joint bidding for public contracts in the form of bid rigging are beyond the scope of the book. The authors decided to focus on the relationship between the public procurement regulations and the provisions of competition law with respect to such agreements.

1.12 The authors of this book have been practitioners for years, actively advising contractors and contracting authorities on public procurement matters. The starting point for the considerations about agreements on joint bidding for public contracts is, therefore, the procurement legislation analysed in the context of and in combination with the provisions of competition law and not vice versa. Article 57(4)(d) of Directive 2014/24/EU, namely the discretionary premise for exclusion mentioned above regarding bid rigging, and Article 57(6) and (7) of Directive 2014/24/EU constitute the central points of the considerations, because these provisions are of fundamental importance to the assessment of the procurement consequences of a possible infringement of competition law.

1.13 The considerations about the significance and possible interpretations of the premise for exclusion from Article 57(4)(d) of Directive 2014/24/EU in the context of Article 101 of the TFEU were preceded by what the authors consider to be the necessary reflection on the concept of the discretionary grounds for exclusion referred to in that Directive. This is because it transpires that the very understanding of this concept differs in individual EU Member States, which is directly reflected in the way these conditions are applied. Chapter 2 of the book is devoted to this matter.

1.14 All the concepts and components of the premise for exclusion referred to in Article 57(4)(d) of Directive 2014/24/EU have been analysed in Chapter 3. The authors also attempted to interpret this premise in a manner that would be consistent and systemically compliant with competition law (the concepts used in it, as well as the objectives pursued by these regulations).

1.15 Chapter 4 is a logical consequence of the considerations contained in Chapter 3. This is because, in it, the authors try to answer the question of whether and to what extent the doctrine of the SEU (single economic unit), which is consolidated and extensively described in competition law, should also apply in public procurement in the context of the grounds for exclusion referred to in Article 57(4)(d) of Directive 2014/24/EU.

1.16 In Chapter 5, the authors extensively describe joint bidding for a public contract in the form of a consortium, starting with a description, on the one hand, of the various forms of consortia operating in business practice and, on the other, referring to legal and business factors that encourage entrepreneurs to conclude consortium agreements. These same factors that affect the decision to jointly bid for a public contract are then (or can be) taken into account by the authorities assessing the legality of the concluded agreements. This chapter also contains a number of practical examples of consortium agreements that have given rise to doubts and have been verified in procurement procedures or by antitrust authorities.

1.17 Chapter 6 is devoted to structures that have similar economic effects as consortia, although, based on other legal mechanisms, namely the contractor’s cooperation with entities providing it with their capacity, which is necessary for bidding for contracts (so-called ‘third parties’), and with subcontractors. Particular attention has been devoted to the so-called ‘third parties’, as Directive 2014/24/EU contains completely new solutions that apply to them, which give rise to a number of interpretational doubts.

1.18 To a large extent, Chapter 7 is a summary of Chapters 5 and 6, as it applies to continuous arrangements (bid rigging). A characteristic feature of agreements of this type is the use by entities concluding them, in the long term, of all known and acceptable legal structures (consortia, the use of so-called ‘third parties’ and subcontracting) in a manner that enables them to implement arrangements at the given moment constituting the basic plan (subject) of the anti-competitive agreement.

1.19 The consequence of discovering bid rigging and the materialisation of the premise referred to in Article 57(4)(d) of Directive 2014/24/EU should be exclusion from public procurement procedures, unless the economic operator who participated in the collusion conducts effective self-cleaning, thereby regaining the status of a reliable contractor and the right to participate in the public procurement market in EU and EFTA Member States. However, it could be argued that the provisions on the method of calculating the period of exclusion in which this condition should apply and, in principle, its initial moment, may not have been sufficiently thought out by the EU lawmakers, and, therefore, also by the lawmakers of the individual EU/EFTA Member States. The interpretational doubts related to this matter are so far-reaching that the authors believe they could cause some legal uncertainty for players on the market, as well as the ruling authorities, and therefore create a threat of failing to pursue the objectives that were related to the adoption of these provisions. Similar doubts apply to the institution of self-cleaning, although, in principle, in this case, these are mainly concerns about its reality and effectiveness in the context of the lack of sufficient tools that contracting authorities have for assessing the processes taking place at the enterprises of the contractors. Therefore, the question arises of whether the system in which individual contracting authorities make decisions about whether to exclude contractors from the public procurement procedure (and therefore the self-cleaning they conduct) is optimal. The authors of this book attempted to tackle these issues in the last chapter, Chapter 8.

1.20 We hope that this proprietary choice of issues that are discussed in connection with joint bidding for a public contract contributes to further discussions on and analyses of bid rigging in the form of consortium agreements, providing capacity or subcontracting.

1   Case C-138/08 Hochtief AG and Linde-Kca-Dresden GmbH v Közbeszerzések Tanácsa Közbeszerzési Döntőbizottság [2009] ECLI:EU:C:2009:627, para 47 and the case-law cited there: see Case C-27/98 Metalmeccanica Fracasso SpA and Leitschutz Handels- und Montage GmbH v Amt der Salzburger Landesregierung für den Bundesminister für wirtschaftliche Angelegenheiten [1999] ECLI:EU:C:1999:420, para 26; Joined Cases C-285/99 and C-286/99 Impresa Lombardini SpA – Impresa Generale di Costruzioni v ANAS – Ente nazionale per le strade and Società Italiana per Condotte d'Acqua SpA (C-285/99) and Impresa Ing. Mantovani SpA v ANAS – Ente nazionale per le strade and Ditta Paolo Bregoli (C-286/99) [2001] ECLI:EU:C:2001:640, para 34;Case C-470/99 Universale-Bau AG, Bietergemeinschaft: 1) Hinteregger & Söhne Bauges.m.b.H. Salzburg, 2)ÖSTÜ-STETTIN Hoch- und Tiefbau GmbH v Entsorgungsbetriebe Simmering GmbH [2002]ECLI:EU:C:2002:746, para 89; Case C-247/02 Sintesi SpA v Autorità per la Vigilanza sui Lavori Pubblici [2004] ECLI:EU:C:2004:399, para 35.

2   Albert Sánchez Graells, Public Procurement and the EU Competition Rules (2nd edition, Hart Publishing Ltd 2015), part one, chapter I, p 4.

3   Ibid, part one, chapter I, p 5.

4   European Commission, Green Paper on the modernisation of EU public procurement policy towards a more efficient European procurement market (COM(2011) 15 final, Brussels, 27/1/2011), p 4.

5   Directive 2014/24/EU of the European Parliament and of the Council of 26 February 2014 on public procurement and repealing Directive 2004/18/EC, Art 57(4)(d).