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Anjum Shabbir
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30th January 2020
Competition & State Aid Internal Market

Horizontal cooperation between contracting authorities: covered by the EU’s public procurement rules?

In ISE v Stadt Köln (C‑762/18), Land Berlin transferred software to the City of Cologne to manage interventions by its fire service through an incident control centre, and also concluded a cooperation agreement with that authority.

Yesterday, Advocate General Campos Sanchez-Bordona delivered his Opinion to the CJEU on how to answer questions posed by the Higher Regional Court of Düsseldorf (Oberlandesgericht Düsseldorf) in that case, on whether the above is a ‘contract’ under Article 12(4) of the Public Procurement Directive, which would mean it is not covered by EU public procurement rules.

The AG finds that this is a contract within the meaning of Article 12(4) of that Directive, because albeit free, the software will inevitably be updated and developed, and will be very valuable.

He also considers that there is a ‘cooperation’ in this case, and ‘objectives in common’, despite the contracting authorities providing separate fire services in different locations, on their own account and for a related rather than direct public service. He approaches ‘cooperation’ flexibly, and notes that services can be provided by each entity with support from the other or in a coordinated way.

However, he states that the related activity must be essential to performance in the public service – which he finds is the case for the facts in question, as the software is essential for optimum management of operations carried out by the respective public services.

On the last condition of Article 12(4), he defers the finding of an advantageous position arising from the situation for the national authorities to determine, and cautions that a tender should be drawn up carefully.

The AG advises the Court to consider therefore that the conditions of Article 12(4) have been met.

On the final condition of Article 12(4), that the horizontal cooperation must not infringe EU competition rules by leading to an advantageous position for the authorities concerned on the market, the AG is brief – the referring court must verify whether such an advantage exists.

The Opinion is available on the Court of Justice’s website and can be accessed here.

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