Judges K Jürimäe, D Šváby (Rapporteur), S Rodin, N Piçarra
Advocate General M Campos Sánchez-Bordona
A Romanian municipality awarded a public works contract (“contract No 1”) to a consortium of which the claimant economic operator was lead contractor (“Consortium No 1”). The municipality terminated that contract early on the ground that Consortium No 1 had used a subcontractor without the municipality’s prior authorisation. The municipality then lodged a report (“the report”) stating that that contract had been terminated early on account of misconduct by Consortium No 1 and that that early termination caused the municipality significant losses. Subsequently, the defendant Romanian contracting authority initiated an open public procurement procedure for a different public works contract, in the context of which, a second consortium, formed by the claimant and two other economic operators (“Consortium No 2”) submitted a tender. The contracting authority became aware of the report and requested clarification from the municipality and from the claimant. In light of the replies received, the contracting authority concluded that the claimant had failed to show that the report had been suspended or annulled. The claimant requested the contracting authority to revoke the exclusion decision and proceed to a fresh assessment of the documents and of the tender submitted by Consortium No 2. Subsequently, after receiving no response, the claimant brought proceedings against the contracting authority before a Romanian court, disputing the authority’s right to exclude it from the procurement procedure relating to the second public works contract, on the basis of the early termination decision in relation to contract No 1. It argued that such termination, on the ground that part of the works had been subcontracted without the contacting authority’s prior authorisation, amounted to a minor irregularity, not a breach of a principal obligation of the contract. Consequently, such an irregularity could only lead to an economic operator being excluded in exceptional circumstances, in accordance with recital (101) of Parliament and Council Directive 2014/24/EU. Article 57(4) of the Directive provided that contracting authorities could exclude any economic operator from participation in a procurement procedure in a number of situations including, under sub-paragraph (g), where the economic operator had shown significant or persistent deficiencies in the performance of a substantive requirement under, inter alia, a prior public contract which led to early termination of that prior contract. Since it noted that the Court of Justice of the European Union had not previously interpreted article 57(4)(g) of the Directive, the Romanian court stayed the proceedings and referred to the Court of Justice for a preliminary ruling a question on its interpretation.
On the reference —
Held, as was clear from the wording of article 57(4) of Parliament and Council Directive 2014/24/EU, the EU legislature intended to confer on the contracting authority, alone, the task of assessing whether a candidate or tenderer had to be excluded from a public procurement procedure during the stage of selecting the tenderers. Further, a contracting authority could not automatically infer, from the decision of another contracting authority to terminate a prior public contract early on the ground that the successful tenderer had subcontracted part of the works without its prior authorisation, that significant or persistent deficiencies, within the meaning of article 57(4)(g), had been committed by that successful tenderer in the performance of a substantive requirement under that public contract. It was for the contracting authority to carry out its own evaluation of the economic operator’s conduct covered by the early termination by examining whether that operator was responsible for significant or persistent deficiencies in the performance of a substantive requirement imposed on it under that contract, those deficiencies being such as to break the relationship of trust with the economic operator in question. In the present case, since the early termination of contract No 1 had been formally determined, it was for Consortium No 2 to inform the contracting authority of its situation and it ought to have provided, at the outset, all the information that could prove that the characterisation as subcontracting was mistaken, so that it had not failed to fulfil its obligations in the context of contract No 1, or that the failure to obtain the contracting authority’s authorisation in the context of the prior public contract constituted only a minor irregularity. Such information could have been mentioned in the standard form for the European Single Procurement Document, annexed to Implementing Regulation 2016/7. Accordingly, the subcontracting, by an economic operator, of part of the works under a prior public contract, decided upon without the contracting authority’s authorisation and which led to the early termination of that contract, constituted a significant or persistent deficiency shown in the performance of a substantive requirement under that public contract, within the meaning of article 57(4)(g) of Directive 2014/24, and was therefore capable of justifying that economic operator being excluded from participation in a subsequent public procurement procedure if, after conducting its own evaluation of the integrity and reliability of the economic operator concerned by the early termination of the prior public contract, the contracting authority which organised that subsequent procurement procedure considered that such subcontracting entailed breaking the relationship of trust with the economic operator in question. Before deciding such an exclusion, the contracting authority had, however, in accordance with article 57(6) of that Directive to allow that economic operator the opportunity to set out the corrective measures adopted by it further to the early termination of the prior public contract (judgment, paras 28, 29, 30, 36–38, operative part).
IG Iacob, RE Cîrlig, I Cojocaru, AM Abrudan and I Macovei for the claimant.
C-R Canţăr, RI Haţieganu and L Liţu, agents, for the Romanian Government.
M Fruhmann, agent, for the Austrian Government.
A Biolan, P Ondrůšek and L Haasbeek, agents, for the European Commission.