Edited by Christopher Bovis
Chapter 3: Public contracts in public procurement regulation
The existence of a public contract is a precondition to the application of the public procurement Directives. Public procurement law has configured the meaning of a public contract. The determining factor of its nature is neither what and how it is described as a public contract in national laws, nor is the legal regime (public or private) that governs its terms and conditions, nor are the intentions of the parties. The crucial characteristics of a public contract, apart from the obvious written format requirement, are: (i) a pecuniary interest consideration given by a contracting authority; and (ii) in return of a work, product or service which is of direct economic benefit to the contracting authority. A functional application of the pecuniary interest consideration requirement by the Court brought in a variety of payment mechanisms such as direct or deferred payment by the contracting authority to the economic operator, commitment to lease-back an asset after its construction, asset swaps between the contracting authority and the economic operator or conferral to the economic operator of an exclusive right to collect third-party payments. In Köln Messe leasing and sub-leasing arrangements between the City of Cologne and Grundstücksgesellschaft Köln Messe for the construction and use for 30 years of four exhibition halls, ancillary buildings and relevant infrastructure were regarded as pecuniary interest considerations.
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