New Paper: "Exclusion of Economic Operators from Public Procurement Procedures. A Comparative View on Selected Jurisdictions"

I have uploaded a new paper on SSRN, entitled: 'Exclusion of Economic Operators from Public Procurement Procedures. A Comparative View on Selected Jurisdictions'. In this paper, I focus on issues that may be relevant for Member States transitioning from the exclusion rules under Directive 2004/18 towards those in Directive 2014/24. 

In the more elaborate terms of the abstract:

This chapter takes a comparative view on the rules applicable to the exclusion of economic operators from public procurement procedures covered by the EU rules. It focuses on seven Member States (France, Germany, Italy, Portugal, Romania, Spain and the United Kingdom) and in their law, administrative and judicial practice under the framework created by Directive 2004/18. When possible, the chapter also looks into the likely changes that the transposition of Directive 2014/24 will bring about, particularly in those of the covered jurisdictions that have been quicker to move towards its transposition (namely, France, the United Kingdom and, to some extent, Germany).

The chapter pays attention to both substantive and procedural issues regarding the exclusion of economic operators. Given that the 2004 framework was limited to substantive provisions (ie grounds for exclusion included in art 45 dir 2004/18), one would expect to see convergence on substantive issues, as well as a relatively high level of variety in both the procedural setting, the legal mechanisms and the actual practice of exclusion of economic operators. This chapter tests this intuition by looking in detail at several substantive and procedural regulatory choices adopted by the Member States, mostly under the 2004 framework. It then reflects on the implications of those findings for the implementation of the revised 2014 framework for the exclusion of economic operators from procurement procedures. The chapter submits that for discretion-oriented Member States the main challenges will revolve around compliance with the Charter of Fundamental Rights of the European Union, whereas for procedure-oriented Member States the challenges will lie in trying to gain advantage of the flexibility afforded by the new rules in Directive 2014/24, as well as to avoid liability for the imposition of unjustified requirements on economic operators.

As always, comments most welcome. The full citation of the paper is A Sanchez-Graells, 'Exclusion of Economic Operators from Public Procurement Procedures. A Comparative View on Selected Jurisdictions', in M Burgi & M Trybus (eds), Qualification, Exclusion and Selection in EU Procurements, vol. 7 European Procurement Law Series (Copenhagen, DJØF, 2016) forthc. Available at SSRN: http://ssrn.com/abstract=2739363.

The Legal Status of the Agreement of the Heads of State or Government (re Brexit)

By Dr Phil Syrpis, Reader in Law (University of Bristol Law School).

(c) http://arthur.co.uk/

On 19 February 2016, sometime well after breakfast, the members of the European Council reached an agreement concerning a new settlement for the United Kingdom within the EU. The Government was quick to proclaim that the UK’s ‘special status’ in ‘a reformed European Union’ amounts to ‘the best of both worlds’. David Cameron’s ‘hard-headed assessment’ is that the UK will be stronger, safer and better off by remaining inside this reformed European Union, and so he is recommending that the British people vote to ‘remain’ in the in-out referendum on 23 June.

The substance of the reforms, which focus on economic governance, competitiveness, sovereignty, and welfare and free movement, is and will continue to be much debated. This contribution instead focuses on a more technical question - the legal status of the deal – a subject which is now said to be creating ‘open warfare’ in the Tory party.

Let me attempt to distil the question. To do so I focus on one key aspect of the Agreement; the agreement to restrict the social benefits payable to migrants. In this area, there is pre-existing Court of Justice case law interpreting the provisions of the Treaties and the relevant secondary legislation. Many governments have argued that the case law goes too far, and that it creates threats to the sustainability of social security systems. This agreement amounts to a further attempt to limit the rights which will be available for migrants; specifically in the UK. It includes elements relating to the interpretation of current EU rules, and proposes changes to EU secondary legislation. The specific question I am addressing here is whether the Agreement will be successful in influencing the Court's interpretation of the Treaties; others have already commented on the extent to which we can be sure that the legislation (and future Treaty change) envisaged in various parts of the Agreement will be adopted.

The Heads of State or Government certainly appear to have intended to attach the greatest possible legal significance to their Agreement. They assert that ‘the content of the Decision is fully compatible with the Treaties’. Its intent is to clarify ‘certain questions of particular importance to the Member States so that such clarification will have to be taken into consideration as being an instrument for the interpretation of the Treaties’ (emphasis added). The UK Government is at pains to make the same point. In its White Paper it includes a section assuring us that the agreement is ‘legally-binding’ (see paras 2.128-2.145). It makes the points that the Agreement is legally binding under international law; and that it will be registered as a Treaty with the United Nations if the British people vote to remain in the EU. Most pertinently, it argues that agreements between Member States on the meaning of the EU Treaties are required to be taken into account by the Court of Justice when interpreting the Treaties in the future (here it refers to the Court’s judgment in Rottman). It also refers to a note by Professor Sir Alan Dashwood which suggests that there is nothing in the Agreement ‘likely to encounter the disapproval of the CJEU’, and no proposed amendments to EU legislation which would ‘run a serious risk of being struck down by the CJEU’.

I have written (in the 2015 Common Market Law Review) on the relationship between EU primary and secondary law, essentially asking a question which resonates with public lawyers – whether the adoption of secondary legislation is able to influence the Court's interpretation of the Treaties. I framed the discussion in the following way: ‘Most lawyers would, at first blush, assume that there is a simple hierarchical relationship between primary and secondary law, that primary law does and should take priority over secondary law, and that the adoption of secondary legislation should not affect the way in which primary law is interpreted. Political scientists on the other hand, might expect the passage of legislation to have a greater impact on the case law of the Court. The somewhat confused reality which this article exposes, illuminates the tensions between the judiciary and the legislature in the EU, and between what may be termed the “legal” or “political” nature of the EU’s constitutional settlement.’ My main conclusion was that ‘it is almost impossible to predict with any certainty what effect the passage of secondary legislation will have on the pre-existing case law of the Court on the interpretation of primary law’.

The issues raised by the Agreement are, notwithstanding the claims made for its status, similar to those raised by the passage of secondary legislation. The extent to which the political institutions are, and ought to be, able, to tie the hands of the Court remains a matter of acute academic controversy. I argue that the Court should be more responsive to the interventions of the political institutions; and that it ‘should strive to maintain clearer standards as regards not only the intensity of judicial review, but also the way in which its arsenal of interpretative strategies are deployed and combined’.

Any uncertainty of course plays into the hands of the ‘leave’ campaign. It is an unavoidable feature of all constitutional systems that it falls to courts to assess the legality of, and to interpret, the interventions of the political institutions with reference to constitutional texts; and so certainty is, for better or worse, unattainable. But, like Sir Alan Dashwood, I am confident that the Court will not attempt to unpick the Agreement of the Heads of State. In its case law relating to, for example, economic and monetary union and citizenship (most recently last week…), the Court has shown itself increasingly willing to embrace political reality and endorse the choices of the Member States in areas of high political salience. This Agreement represents an unambiguous attempt by the political institutions at the highest level to influence the Court’s interpretation of the Treaties. It is unusually clear and forthright. And while the legal obligation on the Court is indeed no stronger than an obligation to take the political signal ‘into account’, the mind of the Court should be concentrated. In its future case law, it will be faced with a stark choice – either choose an interpretation of the Treaties which is in conformity with the Agreement and endorse the new restrictions; or precipitate huge constitutional conflict within the EU by insisting on interpreting the Treaties in a manner antithetical to the Agreement. It only has one realistic choice. 

The saga of Mr Brouillard and the EU Courts (F-148/15, T-420/13, C-298/14 ... and C-590/15 P)

By Dr Andrea Gideon (NUS Singapore and University of Liverpool).

Mr Brouillard has indeed kept the EU Courts busy in the last couple of years. Apparently keen to find his dream job, this Belgian national legally trained in France applied to the Court as a lawyer-linguist in an EPSO competition, he tried to become a linguist for the Court of Justice of the European Union (the CJEU, or the Court) through another company tendering in a procurement procedure of the Court, and he applied to become a legal secretary at the Belgian Cour de Cassation.

Unfortunately for Mr Brouillard, he was rejected every time due to his vocational master’s degree by the University of Poitiers in France (which he received following completion of a correspondence course in law, economics and management, private law, lawyer-linguist specialism) not being deemed a sufficient qualification for the positions in question.

Mr Brouillard, determinedly, initiated proceedings against the decisions in each case [cases Brouillard v Commission (F-148/15, EU:F:2016:4, only in French), Brouillard v Court of Justice (T-420/13, EU:T:2015:633, only in French) and Brouillard (C‑298/14, EU:C:2015:652) respectively]. The ‘saga of Mr Brouillard’ brings to light some inconsistencies in the EU Courts’ approach to the assessment of (university) qualifications in different settings, which is the focus of this comment.  

F-148/15 Brouillard v Commission is still pending. So far only the interim measure applied for by Mr Brouillard that, while the case is pending, he would be allowed to the next stage of the concours has been rejected.

C‑298/14 Brouillard adopted a preliminary ruling in the case where Mr Brouillard challenged his rejection from the competitive procedure to become a legal secretary at the Belgian Cour de Cassation. The ruling of the CJEU in this case was in itself not very surprising. The Court reaffirmed that Article 45 TFEU applies to situations where a national of the Member State in question (here a Belgian national participating in a selective procedure in Belgium) seeks recognition of a qualification he has obtained abroad. Yet, the CJEU further stated that such a situation cannot fall under Article 45(4) TFEU since the person in question still is a national. The Court then set out that ‘legal secretary’ is not a regulated profession and, therefore, only Article 45 TFEU rather than Directive 2005/36/EC applies. Finally, the Court restated the principle in Vlassopoulou (C‑340/89, EU:C:1991:193) by deciding that

Article 45 TFEU must be interpreted as meaning that it precludes […] the selection board for a competition for recruitment […] from making […] participation contingent on the possession of diplomas required by the legislation of that Member State or the recognition of academic equivalence of a master’s degree awarded by the university of another Member State, without taking into consideration all of the diplomas, certificates and other qualifications, and the relevant professional experience of the person concerned, by comparing the professional qualifications attested by those qualifications with those required by that legislation (C-298/14, para 67, emphasis added).

Therefore, the CJEU indirectly (but quite clearly) required the Belgian court to remedy the rejection of Mr Brouillard from the selective process to become a legal secretary (or at the very least, to have his application reassessed) on the basis that his master’s degree was not the only relevant qualification.

Interestingly, though, the Court did not seem to like the taste of its own medicine when it came to Mr Brouillard’s intent to provide the Court services as a freelance lawyer linguist. Indeed, in its own procurement decision, the Court has not held itself to the standard expected of the Member States. Instead the Court required Mr Brouillard to be excluded from a tender for the provision of translation services for not having completed a full legal education of at least five years (his master's was only partially legal and included other content, such as linguistic training). Remarkably, the Court did so without checking if other qualifications and professional experiences could be regarded equivalent.

These issues emerged in T‑420/13 Brouillard v Court of Justice (i.e. the judgment on the challenge of that decision) where the General Court (GC) lengthily establishes that the master’s degree Mr Brouillard holds is in itself not equivalent to a full five year law study, without taking anything else into consideration (para 71 seq). The GC justifies this difference in approach by saying that none of the applicant’s arguments were able to demonstrate the existence of an obstacle to the freedom of workers or freedom of establishment and that therefore it is not appropriate to apply the Vlassopoulou case law. In particular, he had not been rejected because he graduated from a French university, but because his degree did not represent five years of (exclusively) legal study. In any event, an argument that additional qualifications had to be taken into account (à la C- 298/14 Brouillard) should also be dismissed because the Court did not have the information needed to examine equivalence through other qualifications and experiences (para 96).

Yet, national authorities seem to be held to a different standard because they still have to take other degrees and experiences into account cumulatively and offer the possibility of an equivalence test, without being able to say that they did not have the information or that the applicant did not prove a hindrance to his free movement rights. This seems to indicate an internal inconsistency in the Courts’ approach to fundamentally the same issues (how to recognise or give value to a specific university qualification) in different settings.

In the eyes of the GC, the difference potentially lies in the fact that T‑420/13 Brouillard concerned a procurement decision and not rules applicable to the general access to a profession, since it emphasises the fact that decisions on professional qualification are more complex for contracting authorities:

La comparaison des diplômes effectuée par le système de la directive 2005/36 étant réalisée aux fins de l’accès à certaines activités règlementées dans les différents États membres, une telle appréciation ne saurait être confondue avec l’appréciation complexe, par un pouvoir adjudicateur, de la valeur universitaire respective des titres obtenus dans les différents États membres, dans le but de garantir que les personnes qui seront engagées dans la prestation des services faisant l’objet du marché disposent de la capacité technique suffisante (T-420/13, para 81, emphasis added).

However, the Court omits to explain why this is more complicated for a contracting authority.

One could potentially argue that professional recognition in order to gain access to a profession in another Member State on a more permanent basis makes it more proportionate to justify an extensive examination of the qualifications of an individual than the more temporary nature of a public contract. However, the Court has held a similar standard applicable in the area of freedom to provide services in the recent case X-Steuerberatungsgesellschaft (C-342/14, EU:C:2015:827). In this case a tax service company established in the UK with seats in the Netherlands and Belgium wanted to provide a tax consultancy service for a tax return to a German customer, but was hindered by the tax authorities since it had not been authorised under German law. The German law made authorisation dependent on certain qualifications. Service providers from other Member States could, however, seek such authorisation if they were providing temporal services in Germany, but only if that involved physical travel of the provider to Germany. In cases such as this, where only the service travelled, but neither the recipient nor the provider, this was not possible.

The Court thus established an infringement and, while regarding fear of tax evasion as well as consumer protection as legitimate justification grounds, it did not find this restriction proportionate here because there was no possibility of authorisation at all in such cases (i.e. did not provide any possibility of the qualification obtained by the providers to be ‘accorded its proper value and being duly taken into account’). In so far this case is following the Vlassopoulou case law despite it only concerning short term services. X-Steuerberatungsgesellschaft would thus lead any argument that the length of the services would justify a difference ad absurdum, since in this case the service provided was a single tax return.

Overall, it seems difficult to conceive why an examination of equivalence should be less burdensome for a national authority than for the Court (acting as a contracting authority), which, by its very nature as a European institution filled with lawyers from various Member States, seems in fact more likely to be able to assess equivalence of qualifications. Furthermore, on a more general level, one might just wonder why the Court does not use the opportunity to set a positive example by applying its own case law. However, the Court still has the opportunity to do just that because, not content with the General Court’s decision, Mr Brouillard has brought an appeal before the Court (case Brouillard v Court of Justice, C-590/15 P). And so the saga continues …

Interesting Procurement Paper (Li & Xu, 2016): A Blueprint for Variable Remuneration of Public Procurement Officers? A Warning against some types of Centralised Procurement?

I have just read the paper by D Z Li and M Xu, 'Competition in Procurement Auctions with Corruption' (February 2, 2016), which assesses an interesting scenario of competition in public procurement tenders where the person in charge of running the procedure (the procurement officer, or 'bureaucrat', in their terminology) can require bribes from winning bidders, and where those bribes can be proportionate to the final value of the contract awarded.

Their paper is interesting because it fleshes out the incentives that a bureaucrat that expects to obtain a rent at the end of the procedure has, both in terms of affecting the number of bidders (to reduce it), and the level of disclosure of information (to conceal information in order to cover the corrupt practice). My personal intuition is that their insights should be useful to consider non-corrupt scenarios involving buyer rents other than bribes and, in particular, the introduction of bonuses or other variable retribution mechanisms for public buyers, which could well create the same incentives (as discussed below). Moreover, I find the paper thought-provoking because (legitimate) kick-backs are used to finance the activities of central purchasing bodies, which raises issues of their impact on social welfare if they behave like individual bureaucrats would (as also discussed below).

The paper and its model

As they explain in their abstract:

We study the effects of corruption on equilibrium competition and social welfare in a public procurement auction. A bureaucrat runs the auction on behalf of the government. He invites firms into the auction at positive costs, and may request a bribe from the winning firm afterward[s]. We first show that, in the absence of corruption, the bureaucrat invites more firms than social optimum under quite standard assumptions. Secondly, the effects of corruption on competition and social welfare vary across different forms of bribery. In the case of fixed bribe, corruption has no effect on equilibrium competition, yet [it does] induce social welfare loss due to the distortion cost of increased public spending. In the case of proportional bribe, the corrupt bureaucrat will invite less firms into the auction, which may result in Pareto-improving allocation in equilibrium. Finally, we also show that information disclosure may consistently induce more firms to be invited, if compared with the case of no information disclosure, no matter [whether] there is corruption or not.

I find some of the assumptions and insights of their paper particularly thought-provoking. They (implicitly) base their model on the existence of an agency relationship between the bureaucrat and the government, as well as between the government and society at large [for discussion, see here and here and, in Spanish, here]. This makes the model interesting from the perspective of the social externalities that improperly designed public procurement models can create, particularly if they allow public buyers to pursue (self-serving) goals that do not align with promotion of social welfare.

In their paper, Li & Xu explain that 'the government is modelled as a government division ... who cares about its own procurement pay-off rather than the overall social welfare' (p. 2). This can lead to designing the procurement process in a manner that invites too many interested bidders because 'the optimal number of firms that maximizes the government's pay-off is larger than the efficient number of firms that maximizes social welfare' (ibid), and due to the fact that 'the government prefers [a] higher level of competition in the procurement process' than would be socially efficient (p. 3). The undesirability of the excessive number of bidders is mainly derived from the costs they incur in order to participate in the tender, which are wasted for all those that did not stand a real chance of winning the contract (or, indeed, for all except the winning bidder).

The main insight of their paper is that, while the existence of a fixed bribe hurts both the government and society at large due to the higher cost of procurement, the existence of a proportionate bribe may 'increase social welfare [by inducing an efficient number of firms, or just one firm, to be invited], yet it hurts the government, as the government prefers higher level of competition in the procurement process' because that reduces its (private) procurement cost and imposes the externality derived from excessive tendering costs assumed by the disappointed private bidders [for discussion on the absence of consideration of these costs in economic surveys supporting recent public procurement law reforms in the EU, see here].

Their insight is based, among other elements, on the 'standard assumption for procurement auctions that firms' cost distribution is of decreasing reversed hazard rate (DRHR)' (p. 1, for an explanation of the reversed hazard rate and how it operates, see here). As Li & Xu explain, 'The intuition behind this ... is that increasing competition will gradually squeeze out the expected rent of the winning firm. Furthermore, the expected rent converges to zero when the number of firms approaches to infinity'. Or, in very simple words, that the lower the number of bidders, the higher the expected rent by those that participate. That is what would allow bidders to tender less competitive prices when competitive pressure is reduced (ie less bidders are invited), which would also be in the interest of the bureaucrat expecting to receive a proportional bribe (a higher rent for the winning bidder carries a higher rent for the bureaucrat as well).

They also stress in clear terms that 'information disclosure will increase both the efficiency and the optimal number of firms in the procurement auction. The intuition is that, under information disclosure, firms' cost estimates become more heterogen[e]ous, and therefore, for [a] given number of firms, the auction becomes less competitive than before' (p. 13). Furthermore, 'under information disclosure, firms become more heterogen[e]ous in their cost estimates, and the winning rent, which [in their model] is the difference between the lowest and second lowest costs, may also get larger as well'. However, t'when a corrupt bureaucrat can control information release, it would be more difficult to detect corruption. As we know, information disclosure implies more firms to be invited into the auction, and corruption under the proportion[ate] bribe implies less firms to be invited. The combined effects of these two are mixed'. Overall, then, the implications of their findings seems to be that a corrupt bureaucrat will have mixed incentives on whether to reduce the volume of information disclosed in the tender process because more information may increase its own proportionate rent, but it will also trigger both more interest in the tender and more risk of detection of the corruption.

a blueprint for variable remuneration of procurement officers?

As mentioned, my intuition is that these insights can be useful to consider non-corrupt scenarios involving 'bureaucrat' rents other than bribes and, in particular, the introduction of bonuses or other variable retribution mechanisms for public buyers, which could well create the same incentives. My intuition is that, should the bureaucrat have a legal financial incentive to obtain a rent a the end of the tender, and should the existence of this rent not need to be hidden, it would have an incentive to pursue strategies that maximize social value (even if not necessarily government pay-offs) by disclosing information that reduces the number of potentially interested bidders for which the tender is not actually competitive. Moreover, the financial incentive could include an element of reverse proportionality, so that the bonus would be larger when the government pay-off is increased (ie when the total cost of the procurement is reduced as much as possible within the framework of the competition between the efficient number of bidders). If this is true, then, one of the main aspects that Member States should consider going forward would not only be linked to decisions on how to transpose and develop the rules for restricted procedures and for procurement procedures involving negotiations, but also linked to the establishment of appropriate systems of incentives for procurement officers (bureaucrats) to make the right choice of procedure and to conduct the tender in a way that is aligned with social welfare and with (intra)governmental pay-offs.

what implications for kick-back based central purchasing financing?

Central purchasing bodies (CPBs) can be financed in many ways, but a popular model is for them to receive kick-backs (in the form of rappels of fees) from suppliers included in the framework agreements and other contracts that CPBs manage. Those kick-backs are generally proportionate the value of the call-offs that end-user contracting authorities place with each supplier. In that case, the CPB is not in a different economic position than a procurement officer (bureaucrat) expecting to receive a proportionate rent (or bribe) at the end of the procurement process it runs. Therefore, it seems to me that one of the transferable insights of Li & Xu's paper is that CPBs will be structurally in a situation where they might as well aim to achieve the highest rent, which would require for them to reduce the number of bidders and (possibly, but not necessarily) the information disclosed at the outset of the procedure, so as to reduce the number of competitors and increase their expected rents--thus triggering higher kick-backs for the CPB. This would match well with the intuition that CPBs can become self-interested organisations in the way they run their framework agreements, and not pay excessive attention to the real interest of their principal (end-user contracting authorities) or society at large, particularly if the use of their services is mandatory (ie if they do not need to justify net advantages, at least for the end-user contracting authorities, in order to attract volume of orders).

If this intuition holds true, it would be interesting to look at the impact of the financing of CPBs through kick-backs in more detail, in order to assess whether this system of financial incentives and rewards fosters social welfare overall, or is only beneficial for the CPB (and/or, the government) at the expense of broader social interests. This would be particularly relevant if, as anecdotal evidence indicates, access to centralised procurement is difficult for most firms (and, in particular, SMEs), so that CPBs structurally reduce the number of bidders for their (large) contracts, which the model in the paper would suggest increases the rents for both the CPBs and the included suppliers, but imposes both direct costs on government (through higher procurement costs that could be achievable in alternative settings of increased competition within CPB procurement) and indirect social costs via externalities [for discussion of some of these economic issues, see here].

ERA Annual Conference on European Public Procurement Law 2016 (Trier, 14-15 April 2016)

The Academy of European Law (ERA) is organising its Annual Conference on European Public Procurement Law 2016, which will take place in Trier (Germany) on 14-15 April 2016. The conference will help practitioners keep abreast of the latest developments in law, policy and jurisprudence and discuss current challenging issues in EU public procurement law. 

I am thrilled to be joining a top-level roster of speakers, including

• Christopher Bovis, Professor HK Bevan Chair, Law School, University of Hull
• Dr Vera Eiró, Consultant, Linklaters; Professor, Catholic University and New University School of Law, Lisbon
• Pascal Friton, Principal Associate, Freshfields Bruckhaus Deringer, Berlin
• Nikolaos Korogiannakis, Managing Partner, G.S. Kostakopoulos & Associates, Brussels
• Dr Albert Sánchez Graells, Senior Lecturer, University of Bristol Law School; Member of the European Commission Stakeholder Expert Group on Public Procurement
• Katharina Vierlich, Deputy Head of Unit G2, DG GROW, European Commission, Brussels
• Michael Jürgen Werner, Partner, Norton Rose Fulbright, Brussels

Registration details and further information are available at the conference page.

A PLEA FOR A MORE NUANCED APPROACH THAN AG BOT'S to the INTERACTION BETWEEN ART 267 TFEU AND FUNDAMENTAL RIGHTS TO FAIR TRIAL AND PRESUMPTION OF INNOCENCE (C-614/14)

In his Opinion of 23 February 2016 in case Ognyanov (C-614/14, EU:C:2016:111, not available in English), Advocate General Bot addressed the question whether, regarding the content of a reference for a preliminary ruling, compliance with Articles 267 TFEU and 94 of the Rules of Procedure of the Court of Justice of the European Union (CJEU) by a domestic criminal court may impair the exercise of the rights guaranteed in Articles 47 (right to a fair trial) and 48 (presumption of innocence) of the Charter of Fundamental Rights of the European Union (CFR). AG Bot answers in the negative. He considers that a national rule that presumes that referring a case to the CJEU for a preliminary ruling is a breach of judicial impartiality, and therefore requires the referring criminal court to inhibit itself (and face disciplinary sanctions) upon having referred the case to the CJEU is contrary to EU law. In my view, AG Bot raises important points on the need to keep an effective level of judicial cooperation between the domestic courts and the CJEU, also when criminal matters are concerned. However, some parts of the reasoning in the Opinion are too formal and too heavy-handed in favour of the CJEU's monopoly of interpretation of EU law and the effectiveness of the preliminary reference mechanism, at the expense of a substantive assessment of the proper respect to the presumption of innocence guaranteed by Art 48 CFR. In my view, a more nuanced position would be preferable, even if it requires a revision of the rules of procedure of the CJEU in relation to preliminary references in criminal law matters.

The case at hand concerns criminal law enforcement in Bulgaria, where a domestic rule concerning breaches of judicial impartiality could be interpreted so as to require a referring national court that has laid out the factual background and the law applicable to the case for the purposes of the reference to the CJEU, to inhibit itself from any further decisions in a criminal case (and face disciplinary action).

In particular, the dispute is about the 'EU law-compliant' interpretation of Art 29(2) of the Bulgarian Code of Criminal Procedure (BCCP), which  establishes that 'A judge ... may not be part of the court composition due to some other circumstances on account of which he/she may be considered biased or interested, directly or indirectly, in the outcome of the case'. In stylised terms, the argument is that, by laying out the relevant facts and the rules applicable thereto, the national court expresses a 'preliminary view' on the substance of the case. By doing so before the case is at deliberation phase, and then refraining from inhibiting itself from further decisions in the case, the criminal court would be breaching its duty of impartiality (which is a fundamental guarantee of the right to a fair trial) and the accused's right to the presumption of innocence.

In case this interpretation was accepted, this would create a significant issue of coordination of EU law and domestic criminal law in the Member States--which may well be an unresolved issue in the deepening of judicial cooperation in criminal matters in the EU, since there are no special rules for the purposes of a reference for a preliminary ruling in criminal law matters under Art 94 of the rules of procedure of the CJEU (as acknowledge by AG Bot in para 19). Thus, the case is important beyond the technical point concerning the current rules applicable to the content of references for a preliminary ruling and their effects in criminal law cases, and could easily be pointing out to the need to create such special rules.

In addressing the question referred by the Bulgarian court, AG Bot indeed acknowledges that the referral mechanism 'can create difficulties in situations requiring delicate handling by domestic courts of all jurisdiction and rank' (para 6, own translation from Spanish). However, he rejects that the referral of a case for a preliminary ruling can be interpreted as requiring the inhibition of the referring criminal court (much less the imposition of disciplinary sanctions). His arguments are based both on the need to facilitate judicial cooperation, and on the specific rules applicable to the preliminary reference procedure (para 7). More specifically, AG Bot submits to the CJEU that such a requirement for the inhibition of the referring criminal court would neutralise the effectiveness of Art 267 TFEU and would prevent (Bulgarian) criminal courts from referring cases for a preliminary ruling to the CJEU, which would encroach upon the prerogatives of the Court under Art 267 TFEU--most notably, its monopoly on the interpretation of EU law, which is an issue that comes up again and again in the area of enforcement of fundamental rights under EU law, as became clear in relation to Opinion 2/2013 on the accession of the EU to the ECHR (EU:C:2014:2454; see comments here, here and here).

AG Bot's point of departure is encapsulated in his consideration that 'case law and doctrine have sufficiently stressed that preliminary references are the cornerstone of the Union's judicial system, which exercise concerns the national courts' (para 36, own translation from Spanish). He further relies on Opinion 2/2013, where the CJEU stressed that 'by setting up a dialogue between one court and another, ... between the Court of Justice and the courts and tribunals of the Member States, [the preliminary ruling procedure] has the object of securing uniform interpretation of EU law ... thereby serving to ensure its consistency, its full effect and its autonomy as well as, ultimately, the particular nature of the law established by the Treaties' (para 176). Moreover, he stresses that the proper exercise of the possibility to refer cases to the CJEU for a preliminary ruling is an integral part of the right to a fair trial, as recognised by the European Court of Human Rights (ECtHR) in Dhabbi v Italy (No. 17120/09) (para 38 of AG Bot's Opinion).

All the ensuing analysis concerning the content of the factual and legal requirements of Art 267 TFEU and Art 94 of the rules of procedure (paras 41-72) rests fundamentally on the importance of the exposition of facts and the explanation of the applicable domestic law that the domestic court needs to provide the CJEU for the purposes of enabling the Court to provide a ruling on the proper interpretation of EU law as it relates to the relevant domestic rules. AG Bot stresses that there is no reason to apply different requirements in criminal matters as compared with civil or administrative law cases (para 66, although he offers no further elaboration or support for this position); and that, if anything, the imposition of higher thresholds of precision and motivation in criminal cases would be justified by the impact that the CJEU's ruling can have on the accused's freedom (para 68).

AG Bot proceeds to consider the arguments regarding the lack of impartiality derived from the 'preliminary view' expressed by the criminal court in the referral (paras 73-87). Remarkably, he stresses that '[i]t is clear from settled case law of the European Court of Human Rights that the mere fact that a judge adopts resolutions before the process can not justify by itself any reproaches regarding his impartiality. What should be assessed is the extent of the measures which have been adopted ... Consequently, although a preliminary question before the Court is a court decision, it is not least true that stating, in that context, the circumstances of fact and legal issues inherent to the case constitutes only a mere statement by the national court, which, furthermore, does not to carry out any legal characterisation' (para 83, references omitted, own translation from Spanish, emphasis added). AG Bot supports this argument with his view that, in the specific case, there is no reason to believe that the referring court is biased or partial. This reasoning is, however, problematic because it tries to address a substantive requirement (ie assessment of the extent of the measures) with a formal justification (that, formally, the description of the legal rules applicable to the case by the domestic court does not necessarily imply a definite legal characterisation of the facts of the case).

Moreover, when it comes to the arguments on a potential breach of the presumption of innocence (paras 88-104), the Opinion seems to get into a muddy road. It starts off by acknowledging that the adoption of any preliminary view on the guiltiness of the accused would infringe the right to the presumption of innocence (para 89) and that, consequently, the key element in an analysis of compliance with Art 48 CFR would be to determine whether, in the referral for a preliminary ruling, the domestic criminal court has indicated that it considers the accused guilty, without guilt being duly proven. In my view, this is indeed the proper framework for the analysis. However, AG Bot proceeds to stress that, in the specific circumstances of the case, the accused cannot benefit from the presumption of innocence because he had already been convicted (para 91).

He also indicates that '[i]n any case, we must not forget that the request for a preliminary ruling by a national court is only intended to obtain a correct interpretation of EU law--whereas determining, on the basis of this interpretation, if the accused is to be found innocent or guilty of the facts, is a task that can only result from the unique and personal appreciation of that [national] court' (para 92, own translation from Spanish). Then, he proceeds once more to arguments on the neutralisation or deactivation of the preliminary reference mechanism should domestic courts be forced to inhibit themselves (and face disciplinary sanctions) in case they referred cases to the CJEU (which is circular and returns to the initial points). AG concludes on this point that 'there is no doubt whatsoever that European Union law, and in particular Articles 267 TFEU and 94 of the Rules of Procedure, precludes national legislation ... which, if maintained, could very seriously affect the preliminary ruling mechanism and, with it, the cooperation established between the Court and national courts, and threaten the primacy of EU law' (para 103, own translation from Spanish).

I find this line of reasoning exceedingly formal because it creates an absolute separation between a view on the need of asking for the interpretation of specific legal provisions and the domestic court's position on the need or likelihood to apply that law to the case. Granted, not every instance in which a request is made necessarily indicates that the referring court has reached a decision on whether the rules will be applicable (as this may, in fact, be affected by the outcome of the CJEU's interpretative exercise). However, in my view, it cannot automatically be ruled out that by its nature the content of a reference for a preliminary ruling is inapt to contain an indication of bias by the referring court, or a breach of the presumption of innocence of the accused. Where that was apparent, and in order to properly protect the rights of the individuals affected by the procedure under the CFR, the CJEU shall engage in a substantive assessment to determine whether Art 48 CFR was at risk and, where warranted, include adequate safeguards when deciding on the preliminary ruling--such as, in specific instances, requiring the referring court to inhibit itself in favour of a different court.

Granted, the main difficulty is that there is no procedural avenue for this as Art 94 of the rules of procedure stands--which in my view seems to be more than a good reason to revisit the assumption that the same rules apply for civil/administrative and criminal references for a preliminary ruling (see para 66 of AG Bot's Opinion).

Beyond these issues, I find it troubling that AG Bot submits to the CJEU that it also needs to rule that a discretionary inhibition by the referring court should also be declared contrary to EU law. Specifically, when considering 'whether EU law prevents [the referring national court] from opting, in application of the national rule under dispute, to inhibit itself because that rule ensures a higher level of protection of fundamental rights of the individuals concerned' (para 113, own translation from Spanish), AG Bot argues considers that the question is actually whether 'European Union law precludes the national court's application of a national rule that has been declared contrary to EU law [by the CJEU]?' (para 114, own translation from Spanish). Of course, AG Bot considers that the answer is that EU law indeed prevents the referring court from relying on that rule to opt for discretionary inhibition. 

However, in my view, given that the domestic rule at stake is the fundamental rule for the disqualification of judges in criminal proceedings, this seems way too far fetched. In particular, because Art 29(2) BCCP establishes a general, open-ended standard to ensure judicial impartiality (see above), there seems to be no reasonable way to conclude that, even if the mere fact of having referred the case to the CJEU for a preliminary ruling does not necessarily trigger the application of Art 29(2) BCCP, its application should be completely excluded for the reasons discussed by AG Bot in his Opinion. More leeway is necessary for the referring court to exercise her own discretion and decide whether, all things considered, she is no longer in a position to make further decisions in the criminal process in an impartial way. Any other interpretation would be, in my submission, a breach not only of Article 48 CFR, but also of Article 6(1) of the European Convention on Human Rights, as it ensure the right to a 'fair and public hearing ... by an independent and impartial tribunal established by law'.

Therefore, overall, I would like to see the CJEU decide this case in a more nuanced way than AG Bot proposes. I do not hold very high hopes, though.

ANNOUNCING AN EVENT TO DISCUSS REGIOPOST AT LENGTH

As promised in previous posts, I am organising an event on the enforcement of labour standards in public procurement. Titled 'Public Procurement & Labour Standards–Reopening the Debate after RegioPost', it will take place at the University of Bristol Law School on 9 May 2016, as our celebration of Europe Day. Together with my colleagues, we have invited a panel of academics of the highest quality, including

• Prof Catherine Barnard, Professor of European Union Law, University of Cambridge
• Ms Nina Boeger, Senior Lecturer in Law, University of Bristol Law School and Director of Centre for Law and Enterprise
• Dr Richard Craven, Lecturer in Law, University of Leicester
• Prof Anne Davies, Professor of Law and Public Policy, University of Oxford
• Prof Michael Ford QC, Professor of Law University of Bristol Law School and Employment Silk of the Year 2015
• Dr Amy Ludlow, Lecturer in Law, University of Cambridge
• Prof Tonia Novitz, Professor of Labour Law University of Bristol Law School
• Dr Lisa Rodgers, Lecturer in Law, University of Leicester
• Dr Albert Sanchez-Graells, Senior Lecturer in Law University of Bristol Law School
• Ms Abby Semple, University of London/Birkbeck College & PriceWaterhouseCoopers
• Dr Phil Syrpis, Reader in Law University of Bristol Law School

Ultimately, the event aims to take stock of the recent developments resulting from the adoption of Directive 2014/24 and the Judgments of the Court of Justice of the European Union (CJEU) in Bundesdruckerei and RegioPost. Beyond getting to grips with legal updates, we aim to assess them, both from an EU and domestic UK law perspective. In particular, the event aims to invite leading academics to answer the following questions:

• How does the revised approach to the enforcement of labour standards in public procurement fit within the EU constitutional and internal market framework?
• What are the limits of the enforcement of labour standards under the new EU public procurement rules and, in particular, under Art 70 of Directive 2014/24? How do the CJEU Judgments in Bundesdruckerei and RegioPost affect the interpretation of the provision?
• What are the implications of these developments in the broader context of EU labour law? How does this relate to the implementation of the Posted Workers Enforcement Directive?
• What are the implications of these developments in the specific context of UK law? How can they impact on the interpretation and effectiveness of the Social Value Act 2012? How do they affect the design of procurements covered by the Public Contracts Regulations 2015?

I hope you can join us and contribute to these important debates. Please register for free here.

(c) by Denis Bocquet

Some recent indicators of public procurement in the EU

The European Commission has published some indicators on the evolution of public procurement in the EU up to December 2014 (most recent available data). There are two sets of indicators worth having a look at.

Public Procurement Performance

First, the Commission (DG Grow) has published indicators on public procurement performance in the Member States, which provide a comparative view of the countries' adherence to 'good procurement' as measured by 6 simplified indicators. Or, in other words, indicators aimed to measure 'the extent to which purchasers obtain good value for money'.  The creation of a single 'quick-look' indicator seems appealing. However, some attention to the way in which the indicator is calculated may raise issues as to its usefulness.

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Source: European Commission.

In that regard, it is worth mentioning that the Commission has created 6 discrete indicators: [1] One Bidder; [2] No Calls for Bids; [3] Aggregation; [4] Award Criteria; [5] Decision Speed; and [6] Reporting Quality (details available here). Interestingly, in order to construct the 'Overall Performance' indicator (used in the map above), the Commission uses a 'weighted average of all the performance indicators. Triple weight is given to most important indicators: One Bidder and No Calls for Bids.' Given this methodology, the Commission is careful to indicate that

Like all indicators, however, these indicators simplify reality. They are affected by country-specific factors such as the composition of procurement, the structure of the economies concerned, and the relationships between different tendering options, none of which are taken into account. Also, some aspects of public procurement are omitted entirely or covered only indirectly - for instance corruption, administrative burden and professionalism. Thus, although the Scoreboard provides very useful information, it gives only a partial view of EU countries' public procurement performance.

In my opinion, this is a valuable first step towards developing performance indicators in public procurement. However, the 'qualitative policy judg[e]ment on what is good practice' behind some of the criteria is questionable. For instance, the rationale behind criterion [3] Aggregation is that 'Buying in bulk often leads to better prices and also offers an opportunity to exchange know-how. While not every type of purchase can benefit from aggregation, excessively low aggregation levels mean that an opportunity is probably being missed. Aggregation measures the proportion of procedures with more than one public buyer.'

This is by no means clear, given the difficulty in assessing the net economic effects of procurement aggregation [see A Sanchez-Graells and I Herrera Anchustegui, 'Impact of Public Procurement Aggregation on Competition: Risks, Rationale and Justification for the Rules in Directive 2014/24', in R Fernandez & P Valcarcel (eds), Centralizacion de compras publicas (Madrid, Civitas, 2016) 129-163]. Moreover, the reasons that led the Commission to give a positive value of the indicator when Member States aggregate 10% or more of their procurement expenditure seems completely arbitrary.

Ultimately, the use of such indicator may push Member States towards excessive aggregation of demand (particularly through procurement centralisation, see discussion on the UK CCS' strategy below), which seems to be a policy drive of the European Commission that may well create excessive difficulties [particularly when cross-border collaboration is involved, as discussed in A Sanchez-Graells, 'Collaborative Cross-Border Procurement in the EU: Future or Utopia?'].

Therefore, great care needs to be exercised to avoid creating indicators that may trigger specific policy options with doubtful beneficial net effects.

evolution of public procurement markets

Second, the Commission has also published raw indicators of the volume of procurement subjected to the EU rules in 2014. This serves to provide a broad overview of the evolution of EU public procurement markets in recent years. 

There are two results I find interesting. At a general level, the 'estimate of total general government public procurement expenditure (TGGPPE), excluding utilities and defence, was 1,931.5 billion euros in 2014, 2.7 % higher than in 2013, continuing the increased trend of recent years'. However, there are great national disparities that still reflect the effects of the economic crisis, with 'countries like Spain, Italy or Cyprus ... with their TGGPPE the minimum in the last four years'.

And, at a country level, I find it remarkable that, overall, the UK publishes larger contracts than the EU average (see graph below). This issue is linked to the discussion on aggregation above because, '[t]he concentration of procurement in large notices is outstanding in the UK, particularly in the procurement of services, where the UK alone accounts for 84 % of the total value procured at EU level in awards of more than 100 million euros' (emphasis added).

Source: European Commission. Graph represents the distribution of contract award notices in logarithmic scale in million Euros. The dashed-blue line represents EU distribution. 

Qualitatively, it is worth stressing that this is, at least in large part, the immediate result of the enormous framework agreements for services contracts tendered by the Crown Commercial Service (CCS) in recent years. However, this strategy has led to significant operative problems and the CCS is moving away from such large service frameworks, in favour of alternative procurement strategies. 

Also from a qualitative perspective, analysing this data would require to access details on whether these contracts are adequately split into lots, eg so as to ensure SME access to procurement markets in the UK. If not, this could be an indicator that UK markets are relatively more geared towards large suppliers than in the rest of the EU, which would be a worrying situation and definitely not in line with declared policy goals.

Therefore, once more, care needs to be exercised in the extrapolation of any policy implications derived from such high-level quantitative indicators.

UK High Court soon to rule on conflicts of interest under reg.24 PCR2015 (Art 24 Dir 2014/24) (Counted4 CIC v Sunderland City Council)

In its Judgment of 18 December 2015 in Counted4 Community Interest Company v Sunderland City Council [2015] EWHC 3898 (TCC) [*], Justice Carr decided the first request for the lift of the automatic suspension under regs. 95 and 96 of the Public Contracts Regulations 2015 (PCR2015) and decided to keep the suspension of the award until trial--thus departing from the general trend of lifts before the UK Courts. This aspect of the Judgment has been discussed abundantly (for example, see here), and whether it will actually reverse the generous approach of the UK courts to lifting the automatic Alcatel suspension remains unclear.

However, there is a second aspect of the case that I find more interesting. The case concerns the procurement of a services contract for substance misuse treatment and harm reduction services for substance users in Sunderland. Counted4 CIC is the incumbent supplier and has initially lost in its bid to renew the contract to Northumberland Tyne and Wear NHS Foundation Trust (NTW), which was the immediate previous provider before Counted4 CIC.

The primary claim of Counted4 CIC in its challenge of Sunderland CC 's decision to award the services contract to NTW is based on the alleged existence of a conflict of interest affecting one of the members of the evaluation team. In particular, Counted4 CIC challenges the participation of the person responsible for the administration of the current contract [Mr. S] in the evaluation of the new bids. The challenge is not made in abstracto, but based on the existence of a strained relationship between Counted4 CIC and the contract administrator [Mr. S], of which there seems to be sufficient (indiciary) proof on the file.

What I find interesting is the way in which Carr J frames the issue in the following terms:

[31] I am quite satisfied there is a serious issue to be tried on the conflict allegation. Regulation 24 is relatively new and there is no relevant authority on it to date. It provides :

"Conflicts of interest

24. (1) Contracting authorities shall take appropriate measures to effectively prevent, identify and remedy conflicts of interest arising in the conduct of procurement procedures so as to avoid any distortion of competition and to ensure equal treatment of all economic operators.

(2) For the purposes of paragraph (1), the concept of conflicts of interest shall at least cover any situation where relevant staff members have, directly or indirectly, a financial, economic or other personal interest which might be perceived to compromise their impartiality and independence in the context of the procurement procedure."

[32] In my judgment, it is properly arguable that the Defendant failed effectively to prevent, identify and remedy conflicts of interest in allowing [Mr. S] to be on the evaluation panel. "Other personal interest" can be directly or indirectly held. The phrase is very broad on its face and is clearly intended to add to the other conflicts identified, namely financial and economic. The Defendant submits that it is designed primarily at financial interest. That cannot be said to be certainly the case. The Claimant's case that "other personal interest" means anything pertaining to the relevant individual is arguable. It is arguable that [Mr. S]'s personal interest in protecting his professional reputation and/or role at the Defendant by awarding a new contract to someone other than the Claimant might be perceived to compromise [Mr. S]'s impartiality and independence. The issues with [Mr. S] appear to have been grave. [Mr. D, the Claimant's Chief Executive] states the difficulties were beyond normal managerial issues. [Mr. S] often became emotional. It is said that his failings were recognised. It is also now apparent that the Claimant's complaints about [Mr. S] led to an internal investigation into [Mr. S]'s performance, though the results of that investigation have not hitherto been disclosed by the Defendant.

This will probably be the first time in which Article 24 of Directive 2014/24, as transposed in reg.24 PCR2015 is interpreted in the European Union as a whole. Without disagreeing with this approach in principle, I think that the broad terms in which Carr J foresees a possible interpretation of the provision may not necessarily be the most straightforward (ie 'other personal interests' could relate to family, sentimental or equivalent situations, rather than professional concerns)--or, at least, it seems obvious that there will certainly be opposing views and an interest in adopting a narrow interpretation of the provision. Consequently, a referral to the Court of Justice of the European Union for a preliminary interpretation may well be warranted (if not on on this first instance, certainly on appeal).

Additionally, given that the case concerns procurement 'at the edges' of NHS procurement activity, it will be interesting to compare the decision in Counted4 Community Interest Company v Sunderland City Council in this judicial setting, with that recently adopted by the sector regulator Monitor in a recent case involving allegations of conflict of interest against members of the evaluation team; see its Investigation into New Devon CCG’s commissioning of community services for adults with complex care needs in eastern Devon: final report [Case CCD01/15, decided on 26 August 2015]. This is something that we will do at this event organised at the University of Bristol Law School on 23 June 2016, so do come along if you are interested on these issues (registration is free).

[*] I am grateful to P Somalis for bringing this case to my attention.

CJEU consolidates push for overcompliance with EU public procurement rules in the provision of public services (C-446/14)

In its Judgment of 18 February 2016 in Germany v Commission (Zweckverband Tierkörperbeseitigung), C-446/14 P, EU:C:2016:97 (only in German and French), the Court of Justice of the European Union (CJEU) has supported the approach of the General Court (GC) in the assessment of the Altmark (C-280/00, EU:C:2003:415) conditions for the analysis of State aid regarding a system of financial support for a service of general economic interest (SGEI) consisting in the maintenance of reserve animal disposal capacity in the case of epizootic in a public abattoir in the state of Rhineland-Palatinate in Germany.

This appeal was against the GC's Judgment in T-295/12 (EU:T:2014:675, which is discussed by P Nicolaides here), but the analysis of the CJEU was highly relevant for the pending appeal against the GC Judgment in T-309/12 (EU:T:2014:676, discussed here), which has now been abandoned by the appellant (the abattoir, now in liquidation). The intricacies of the case are quite complex, and points of detail are too specific to discuss now. However, there are some general issues to note in view of the CJEU's Germany v Commission (Zweckverband Tierkörperbeseitigung) Judgment. 

From the outset, it must be stressed that the CJEU is following the GC in a trend that may well be modifying the scope of the Altmark test in a way that pushes for overcompliance with the EU public procurement rules as the only effective way in which Member States can achieve legal certainty in the way they organise their SGEIs. This requires to take a long view on some of the arguments in the case.

The CJEU has generally been very clear that 'the four conditions set out in Altmark ... are distinct from one another, each pursuing its own finality' (para 31, own translation from French). In particular, it stressed that the first condition requires 'that the recipient undertaking must actually be required to discharge public service obligations and those obligations must be clearly defined for such compensation to escape the classification as State aid' (para 26, own translation from French), while the fourth condition determines that 'when the choice of the undertaking which is to discharge public service obligations, in a specific case, is not in the framework of a public procurement procedure, the level of compensation needed must be determined based on an analysis of the costs which a typical, well run, undertaking would have incurred in discharging those obligations, taking into account the relevant receipts and a reasonable profit for discharging those obligations' (para 29, own translation from French). In that regard, these would seem to require separate, independent assessments of each of the Altmark conditions.

In contrast, in the challenged decision, the GC had determined that

as part of the review of the question whether the fourth Altmark criterion ... is satisfied, there is certainly room to take into consideration the nature of the service in question and the circumstances of the case, and it is therefore possible that this criterion, which requires a comparison of the costs and revenues directly related to the provision of the SGEI, can not be applied strictly to the present case (see, that effect, case BUPA ea / Commission (T-289/03, EU:T:2008:29) paragraph 246). Indeed, the Court has already held that ... although the conditions set out in Altmark ... concern without distinction all sectors of the economy, their implementation must take into account the specificity of a certain sector and, given the particular nature of the SGEI mission in specific sectors, it should be flexible in the application of the Altmark judgment ... in relation to the spirit and purpose that led to the establishment of said conditions, so that they are suitable to the particular facts of the case (see case of 7 November 2012 CBI / Commission, T-137/10 (EU:T:2012:584) paragraphs 85 and 86, and the cases cited) (T-295/12, para 131, own translation from French).

This was criticised by Germany as a conflation of the first and fourth Altmark conditions, particularly because the analysis supported by these general remarks implied dismissing the existence of an SGEI in the specific case in Rhineland-Palatinate, and a general consideration of the costs incurred by undertakings active in the same sector in other German states that, however, may have been subjected to different public service obligations or where no SGEI may have existed at all (T-275/12, para 130). In Germany's submission, this would have led the GC to a tautological conclusion. 

The CJEU dismisses the argument on the following basis:

... the Court cannot be criticized for having reached a tautological conclusion that would have linked the lack of satisfaction of that fourth condition to a finding of lack of qualification of maintaining a reserve capacity as a service of general economic interest [first condition]. Indeed, as is clear from paragraph 130 of the judgment, the Court, first, discussed the situation in which the maintenance of a reserve capacity in case of an outbreak could have validly received such qualification [of SGEI] and on the other hand, felt that, given the obligations of the competent public authorities in all German states to eliminate the largest quantity of substances ... received during an outbreak [regardless of the way they organised the discharge of that public obligation, and regardless of whether they defined an equivalent SGEI], it was necessary to take into account the existing situation in other German states to determine the necessary level of compensation on the basis of an analysis of the costs which a typical undertaking, well run and adequately equipped, would have incurred in meeting the public service requirements (C-446/14 P, para 35, own translation from French).

Thus, the general conclusion of the CJEU is that the GC did not err in law by conflating the different conditions established in Altmark. 

I disagree with the CJEU because, even if the conditions 'are distinct from one another, each pursuing its own finality', the logic in their application to a same set of factual circumstances requires that, once the scope of the economic activity that the Member State claims is an SGEI is properly established for the purposes of the judicial review (and regardless of whether the first condition is upheld or not in terms of whether those obligations are clearly defined), the analysis of the fourth condition (ie either procurement of that 'alleged' SGEI or analysis of the costs of a notional well-run undertaking providing that 'alleged' SGEI) needs to remain within that context.

Otherwise, the assessment of the notional, well-run undertaking's cost structure outside of the remit of the 'alleged' SGEI under dispute comes to basically neutralise the second alternative test in the fourth condition of Altmark by allowing the Commission and the GC (and ultimately the CJEU) to find any other comparator they deem to be sufficiently close to that economic activity, which nullifies the economic concept of the notional, well-run competitor. Immediately, this pushes Member States to try to avoid in this types of assessment, which can only be done by resorting to (certain types of) public procurement procedures under the first test in the fourth Altmark condition [for discussion, see A Sanchez-Graells, 'The Commission’s Modernization Agenda for Procurement and SGEI', in E Szyszczak & J van de Gronden (eds) Financing Services of General Economic Interest: Reform and Modernization, Legal Issues of Services of General Interest Series (The Hague, TMC Asser Press / Springer, 2012) 161-181]. 

This may well be cornering Member States in an impossible situation where, regardless of the way they conceive and delineate an SGEI [which they have exclusive competence to do, under Art 14 TFEU and Protocol No (26) therewith, and, currently, reminded in the provisions of Article 1(4) of Directive 2014/24], an assessment of the fourth Altmark condition only allows them to operate with sufficient legal certainty if they contract out the provision of that service in a way that complies with the EU public procurement rules (and not all of them, at that). This is certainly not a desirable outcome and, once more, the developments supported by the CJEU require a fundamental rethinking of the coordination of State aid and public procurement rules, in particular in the area of SGEIs [for discussion, particularly in the setting of procurement challenges, see A Sanchez-Graells, 'Enforcement of State Aid Rules for Services of General Economic Interest before Public Procurement Review Bodies and Courts' (2014) 10(1) Competition Law Review 3-34].

Collaborative Cross-Border Procurement in the EU: Future or Utopia?

I have uploaded a new paper on SSRN, which I will be presenting at the workshop on ‘Collaborative Efficiency in Government: The Trend, The Implications’ during the forthcoming ECPR Joint Sessions, Scuola Superior Sant’Anna and University of Pisa, 24-28 April 2016. 

The paper is entitled 'Collaborative Cross-Border Procurement in the EU: Future or Utopia?' and, in short, tries to conceptualise and look critically at the immensely complex legal issues that Directive 2014/24 has left unresolved. In order to conceptualise the political, economic and legal issues, I use a theoretical scenario that looks like this (so maybe it needs to be read with pen and paper, apologies!):

As the abstract explains in more detail:

Collaborative public procurement has been gaining traction in recent years and could be considered at the spearhead of public procurement reform and innovation. The 2014 reform of the EU public procurement rules (mainly Directive 2014/24) has expanded the tool-kit available to contracting authorities willing to engage in joint or centralised procurement activities, and in particularly in cross-border procurement collaboration. In a push forward, and as part of the Strategy for a deeper and fairer single market in its larger context, the European Commission is developing a policy to facilitate and promote cross-border collaborative public procurement in the European Union.

This paper adopts a sceptical approach and critically assesses the political, economic and in particular legal factors that can facilitate or block such development. To do so, it focuses on a case study based on a theoretical scenario of cross-border collaboration between centralised purchasing bodies in different EU Member States. The paper ultimately aims to establish a blueprint for future legal research in this area, in particular regarding the emergence of trans-EU public law.

This is an area where much more thoughtful legal research is needed, and I intend to do so in a paper I am just starting on the 'The emergence of trans-EU public law. Public procurement as a case study'. For now, though, the exploratory paper is out and comments would be most welcome!

The full paper is available: A Sanchez-Graells, Collaborative Cross-Border Procurement in the EU: Future or Utopia? (February 18, 2016). Available at SSRN: http://ssrn.com/abstract=2734123.

Interesting paper on resistance to collaborative/centralised public procurement (Mason & Meehan: 2016)

I have just read the paper C Mason & J Meehan, ‘Collaborative public procurement: institutional explanations of legitimised resistance’ (2016) 22 Journal of Purchasing & Supply Management, forthcoming [a draft preliminary version of the paper is available on SSRN: http://ssrn.com/abstract=2152740]. 

The paper focuses on the very operational and subjective reasons that can lead practitioners involved in collaborative or centralised procurement to resist the roll-out of these innovative procurement strategies. I found their findings regarding financial reporting implications and job security particularly relevant because they bring home a reality bite that we need to incorporate into legal research if we are worried about the effectiveness of the rules we create.

In the rather more technical terms of the abstract:

The paper explores the barriers to regional collaborative public procurement. It reports the results of an empirical study of five public sector authorities in the emergency services sector in the UK. Exploring the barriers to collaborative procurement through the lens of institutional theory we frame the inter- and intra-organizational strategic resistant responses to isomorphic pressures. The study took a multi-stakeholder approach involving 70 individuals spanning budget holders, operational managers, procurement, and finance across 30 spend workstreams. The results show that operational barriers to collaborative procurement persist at national, regional, organizational and individual levels. While these barriers are used overtly as the rational defence, covert strategic responses of institutional logics, protectionism and symbolic tick-boxing legitimize stakeholder resistance to numerous isomorphic forces and further entrench the operational barriers. The findings contribute to an understanding of choice mechanisms in public procurement research by exploring where, and why, tensions and conflicts occur in collaborative public procurement strategies, both within, and between, organizations. The study contributes to, and addresses a central issue in institutional theory: identifying the social processes embedded in rational decision-making processes. By focusing on different internal stakeholder perceptions and their motivations, we add to current thinking on how organizations create internal power and agency structures through institutional logics to legitimize their actions. The results highlight the criticality of understanding underpinning motivation in behaviour in institutional theory and the links between operational and strategic processes. From an applied perspective, the research highlights that failure to provide sufficient evidence while applying pressure at a political level leads to tick-box approaches to collaborative procurement risking long-term damage and sub-optimized performance.

It is definitely well worth a read. 

Announcing event on public procurement, competition, conflicts of interest and NHS commissioning (Bristol, 23.06.16)

(c) Dominic Lipinski/PA, via Guardian.

I am organising the event "Taking stock of NHS governance after the 2013 reforms: Public procurement, competition and conflicts of interest in NHS commissioning". It will be held by the University of Bristol Law School on 23 June 2016 in the interesting premises of OpenSpace, with the generous sponsorship of PolicyBristol and Bevan Brittan. Registration is now open here.

This event has two main objectives. First, it intends to bring together Clinical Commissioning Groups (CCGs), NHS Trusts, legal practitioners and academics, so that we can collectively take stock of this aspect of the new NHS governance framework almost 3 years after its adoption. Secondly, and more specifically, it aims to explore issues of interaction between public procurement and competition rules in relation to potential conflicts of interest in NHS commissioning. This exploration should allow for the emergence of some initial lessons-learned, as well as help shape research agendas in this area of public governance, which will undoubtedly gain relevance over the coming years.

The panel of academic and practitioner experts that will participate in the event include:

• Mr Robert Breedon (Wragge Lawrence Graham & Co)
• Ms Sarah Carr (Bristol Clinical Commissioning Group)
• Ms Mary Guy (University of East Anglia)
• Ms Alena Kozakova (Frontier Economics)
• Dr Okeoghene Odudu (University of Cambridge)
• Mr David Owens (Bevan Brittan)
• Dr Albert Sanchez-Graells (University of Bristol)
• Mr Andrew Taylor (Aldwych Partners)

Through interaction of experts and participants, in particular, the event aims to:

1. Assess how the sectoral rules created by the National Health Service (Procurement, Patient Choice and. Competition) (No. 2) Regulations 2013 compare with general regimes applicable to conflicts of interest under public procurement and competition law.
2. Explore the implications for CCGs and NHS Trusts of any potential discrepancies between the sectoral regime and general public procurement and competition rules, with a particular focus on the remedies that can be enforced against them, which in turn determine their operational risks and potential liabilities.
3. Assess the need for any further reforms of the system once the Public Contracts Regulations 2015 become applicable to health care sector in April 2016.

Thus, this event aims to clarify the current and future public procurement and competition law constraints on NHS commissioning activities, as well as to facilitate knowledge exchange between CCGs, NHS Trusts, academics and legal practitioners in this field of economic law of increasing relevance.

The event is divided in two parts. The morning sessions, consisting presentations be leading academics and solicitors, are open to all, and in particular to academics, PhD students and legal practitioners. The afternoon sessions are reserved for a workshop on practical issues and future challenges is reserved to CCG and NHS Trust members only. This workshop follows up on the discussions held in the morning sessions. It is intended to provide a time for CCG and NHS Trust practitioners to brainstorm and exchange ideas on the main practical issues and future challenges for NHS Commissioning under the combined application of2013 Regulations 2013 and the PCR 2015 to the tendering of NHS contracts.

Overall, then, this event aims to facilitate knowledge exchange between CCGs, NHS Trusts, academics and legal practitioners in this field of economic law of increasing relevance. If you are interested, please register here. For further details, please contact me: a.sanchez-graells@bristol.ac.uk.

General Court forced to engage in 'law & language' analysis... Everything is relative... (T-722/14)

In its Judgment of 4 February 2016, PRIMA v Commission, T-722/14, EU:T:2016:61 (not available in English), the General Court (GC) was required to address a tricky (not to say risible) argument based on the language versions of the different rules applicable to procurement procedures carried out by the EU Institutions and, in particular, linguistic divergences in some versions of the Financial Regulation and its Implementing Regulation. 

In short, a Bulgarian disappointed tenderer complained that, despite having been debriefed by the European Commission as contracting authority on the reasons for the award of the contract to a different tenderer, it had not received an explicit detailed account of the 'relative advantages' of the chosen tender. The argument ultimately rested on the fact that

in Bulgarian, which is the language of the proceedings, the term "сравнителните предимства" ("sravnitelnite predimstva", that is to say "comparative advantages") is used in the Financial Regulation, while the term "относителните предимства" ("otnocitelnite predimstva", that is to say "relative advantages") is used in the Implementing Regulation; while in other languages​​, the terms used are "relative advantages", as in French or English, or the term "advantages", as in German or Italian. ... in several other languages, depending on whether it is contained in the Financial Regulation or the Implementing Regulation, the reference is to either the term "advantages" or the terms "relative advantages" (T-722/14, para 26, own translation from French).

The issue, in the end, is whether having been given reasons of the advantages of the tender chosen for the award of the contract suffices to meet the requirements to indicate relative advantages or comparative advantages in the debriefing documentation (I am not kidding...). The GC's analysisis as follows:

31 For the purposes of this interpretation, it is necessary to consider the various language versions of Article 113, paragraph 2, first paragraph, of the Financial Regulation and Article 161, paragraph 3, third paragraph, of the Implementing Regulation. These show some formal heterogeneity ...: in French, the terms "relative advantages" ["avantages relatifs"] are in both provisions. The English language version uses the same adjective in the Financial Regulation (relative advantages) and the Implementing Regulation (relative merits). In many other languages, the adjective "relative" is used in only one of those acts: in Spanish, in the Implementing Regulation (ventajas relativas), in Dutch, in the Financial Regulation (relatieve voordelen) and in Swedish, in the Implementing Regulation (relativa fördelar[na]). Several language versions only mention the term "advantages": it is, in particular, the German version (Vorteile), Spanish - for the Financial Regulation - (ventajas), Italian (vantaggi), and the Netherlands - for the Implementing Regulation - (voordelen). It should be added that the Swedish version of the Financial Regulation uses the relative proposition "fördelar som kännetecknar" (advantages that characterize). As for the Bulgarian versions of these acts, they use two different adjectives that have been mentioned in paragraph 26 above.

33 ... it is necessary to engage in both a literal and teleological interpretation of the term "advantages" as used, depending on the several cases, alone, or with the adjectives "relative" or "comparative".

34 From a literal point of view, it is essential to emphasize that the noun "advantage" in fact, is sufficient in itself. There can be no advantage other than within the framework of or, at least, in the context of a comparison. The expression "comparative advantages", used in the Bulgarian version of the Financial Regulation is redundant, and the language versions that only utilise the word "advantage" seem therefore legally more rigorous. The notion of relative advantages could, in turn, be of some use if the adjective "relative" could be opposed to the adjective "absolute". Nevertheless, it is clear that there is no "absolute advantage" in connection with the award of a public contract to the best bidder, which necessarily implies, firstly, the use of a range of criteria and, secondly, the lack of a systematic correspondence between the offer of the lowest price and contract award. Therefore it is necessary to interpret the adjective "relative" in its meaning signifying that "which exists only in relation to something else" or "which is not independent". This leads to the conclusion that, ultimately, there is no semantic divergence between the language versions set out in paragraph 31 above, so that the objective of a uniform interpretation of Union acts with different language versions is achieved in this case (see, to that effect, Judgments of 29 April 2010, M e.a., C-340/08, ECR, EU:C:2010:232, paragraph 44, and 26 April 2012, Able UK, C- 225/11, ECR, EU:C:2012:252, paragraph 13 and the case law cited therein).

35 The contracting authority is only required to inform the unsuccessful tenderer having made a request in writing for additional information of which advantages the offer of the successful tenderer had in relation to his (T-722/14, paras 31-35, own translation from French).

The GC could have dispensed with all this linguistic analysis, particularly because, after engaging with the teleological analysis (para 36), it concludes that 'given the constraints, primarily of time, inherent in public procurement procedures, it is sufficient for the contracting authority to forward to the unsuccessful tenderer, in addition to the name of the awardee, the respective scores of their offers under each of the award criteria and the comments underpinning those ratings, so as to allow said tenderer to understand what were the strengths and weaknesses of its offer and how the awardee's offer supplanted (sic?) his' (para 37, own translation from French). 

In my view, all of this is an unfortunate exercise in futility, because the GC insists in a line of case law that imposes excessive transparency in public procurement debriefing processes, allows disappointed tenderers excessive detail of the winning bid and, in the long run, not only creates risks for the competitive tension for future contracts, but also runs important risks of technical levelling and undue constraint on bidders' choices [see A Sanchez-Graells, 'The Difficult Balance between Transparency and Competition in Public Procurement: Some Recent Trends in the Case Law of the European Courts and a Look at the New Directives' (November 2013)]. Everything is relative...

Creating reliable econometric models of the CJEU case law: a response to criticisms (by Arrebola, Mauricio & Jimenez)

One of the most satisfactory activities in academia is to engage in debate and discussion. Only by subjecting ideas to tough scrutiny can we advance in our knowledge. Thus, I am extremely pleased that Carlos Arrebola, Julia Mauricio and Hector Jimenez have reacted so quickly to my criticism of their recent paper (here) and come back with a thoughtful and forceful rebuttal. I am posting it below. You will see that there are important points of disagreement that will probably require two (or more) follow-up studies in the future. Seems like I need to brush up my econometrics...

Creating reliable econometric models of the CJEU case law:
a response to Sanchez-Graells’ criticisms

by Carlos Arrebola, Julia Mauricio and Hector Jimenez

In a recent study, we used econometric methodology to quantify the degree of influence of the Advocate General on the Court of Justice. Based on data collected from 20 years of actions for annulment, we concluded that the Court is 67% more likely to annul an act if the Advocate General suggests so in her opinion. In a post last Tuesday, Sanchez-Graells examined our paper. As he said, our conclusion is ‘bold [...] and controversial [for its] implications’, and as such it should be subject to ‘tough scrutiny’. We most definitely agree on both the importance of our claim and the need to test it rigorously. As we stated in our paper, if the conclusions are true, the role of the Advocate General within the Court might need to be reconsidered in order to secure judicial independence.

However, Sanchez-Graells voiced several criticisms regarding our econometric model that prevent him from accepting the validity of our results. We greatly welcome the debate, and appreciate the comments in his post, although we ultimately disagree. While we acknowledge that quantitative methodology is not perfect, we argue that our results are a reliable estimation of the influence of the Advocate General (hereinafter, “AG”) on the Court. If not in the specific number of 67% increased probability of a judicial outcome, our results are at least an indication that the influence relationship is positive, as it is shown by the six different econometric models estimated in our study. In the spirit of discussion and debate of this blog, we address Sanchez-Graells’ criticisms along with several other factors that, in our opinion, should have been taken into account when assessing our paper’s reliability.

1. The impossibility of using Randomised Controlled Trials

In his post, Sanchez-Graells suggests that we were too quick to discard the possibility of testing the hypothesis of the influence of the AG on the Court using Randomised Controlled Trials (“RCTs”). For a layperson, RCTs are the type of scientific methodology used in many areas of science to study causality. One of the main examples where RCTs are used is medicine. In order to prove the validity of a new drug, several groups of patients with similar features are randomly selected. Normally, one of those groups would be the control group. The control group would receive a placebo, instead of the actual drug. In this way, the researchers can easily infer whether the health outcome is caused only by the drug. If both the group taking the placebo and the group taking the drug had the same reaction, it would be clear that some external factor other than the drug had caused it. If, on the other hand, the group taking the drug and the placebo group reacted differently (for example, in the case of an illness, if the group taking the drug was the only one to recover), it could be said with certain confidence that the drug caused the recovery.

In our paper, we suggested that RCTs are not a possibility because it would require using the Court of Justice as a laboratory, experimenting with cases, judges and AGs. Nevertheless, Sanchez-Graells argued that we should have considered those cases in which the AG does not participate as our “control group”. This is a misconception about how RCTs are designed. A vital feature in the design of RCTs is making sure that the observations that included in the sample are randomly drawn. This is because, ideally, you would like every observation to be identical, so that the only factor that affects it is the treatment that you are examining in the experiment. In the case of medicine-related RCTs, you want patients with the same characteristics, symptoms, etc., so that whatever happens after taking the drug can only be traced back to the drug. In our study, we would need the same case to be repeated several times, with the same legal problem to be solved by the same judges, having access to the same amount of precedent, lawyers with the same ability to plead cases, etc. Only having that could we then observe what would happen if we took the element of the Advocate General out of the equation. However, cases are never the same. Unlike illnesses, where patients tend to have the same symptoms, cases are much more complex. Legal problems rarely have the same surrounding circumstances.

So, if we followed Sanchez-Graells’ suggestion, we would be ignoring a set of external factors that actually affect the outcome of a case. We would be wrongly attributing it to the Advocate General’s intervention, when actually it could be something else. That is, if we had two cases, one with an AG’s opinion, and one without, in which the Court reached different results, we could not say that the Advocate General caused that different result. It could be that the case had different facts, and that is why the Court decided differently. Or, it could well be that the judges were presented with different arguments by the parties, and it was the lawyers, and not the AGs, who persuaded the Court. Furthermore, Sanchez-Graells’ suggestion is unfeasible because there is a clear bias. As he explained, the cases in which the CJEU considers that there are not going to be problematic legal issues, they decide not to have an AG opinion. It means that from the very beginning of the case they are sensing that it might have an easy or clear legal solution. In other words, Sanchez-Graells is suggesting that we compare in our analysis a simple cold, with a more complicated condition, such as cancer, and that we can thus establish whether radiotherapy has any impact on health. The outcome to such a query would have a misleading result, because the colds would have a rate of recovery close to 100%, whether the cancer would be lower. However, that would not tell us anything about the effectiveness of radiotherapy. In the same way, if a case deals with unproblematic legal issues, the opinion of the AG will probably not do much to affect the Court, because the Court would have come to that conclusion by itself without any external influence. We cannot simply compare those two scenarios without losing information. After all, there would not be any “random” selection of groups, clearly not fulfilling the requirements to conduct a RCT.

For that reason, the only way to approximately estimate causality is to use regressions, in which you can account for as many variables as possible that may influence the Court, including the Advocate General, and including variables that will account for how easy it is to solve a case or clear a case is. That way we will know the exact magnitude of the variable AG on the Court.

2. Designing a reliable regression

Once we establish that the most accurate measure is a regression model accounting for variables that affect the outcome of the Court, the difficulty arises in deciding which variables to include and how to code them. It is in this respect that we think Sanchez-Graells raises his most valid criticism of our study. We acknowledge that our variables are not perfect. We will never be able to establish causality without a shadow of a doubt. This is simply because, as we said, we will always miss variables that affect the case that we will not be able to track, codify and insert in our database. Taking this to an extreme and absurd example, we will never be able to verify whether the judge in the deliberating room had a headache and wanted to go home soon, rushing her decision. However, the fact that we will always miss variables does not mean that our model cannot be reliable. We still include a number of important variables that can explain a substantial amount of what goes on in the courtroom. There are different ways in econometrics to determine the extent to which a model, albeit missing variables, is an accurate depiction of reality. For our study, these measures suggest that the model is indeed reliable. We will come back to this in a moment.

Another aspect of coding variables is, as Sanchez-Graells comments, the oversimplification. In our study, we used actions for annulment, where the outcomes of a case can be (i) annulment, (ii) partial annulment, (iii) dismissal of the case, or (iv) inadmissibility of the case. We decided to simplify this variable by looking only at whether the Court decided to annul (in any of its forms) or not. But, the oversimplification is necessary to make it more reliable, because in order to have a dataset capable of yielding significant results, we need to have a representative sample. In our case, we only had data for a very small number of partial annulments. Including them as a separate variable from total annulment would have only created “noise” in our model, making the results less significant, statistically speaking.

Sanchez-Graells especially criticises our grouping of dismissal and inadmissibility cases together, because he says that dismissing a case and declaring it inadmissible are very different things. However, that discussion in his post is unnecessary, because as he himself notes later on, our results ‘cannot be interpreted regarding inverse AG recommendations (ie recommendations to inadmit/dismiss)’. Our results are only relevant for decisions to annul or partially annul; we do not make any claim about other type of cases, which Sanchez-Graells also criticises.

However, the fact that we decided to look at the question in terms of what happens if the AG suggests to annul the act, rather than if she suggests to dismiss it or declare it inadmissible, does not affect the reliability of our results. In fact, the only thing that Sanchez-Graells is postulating is a new hypothesis. He is saying that, in his opinion, we would have got other results if we had constructed the model differently. That is a point that we cannot falsify without fiddling for a few more weeks with our data in the econometrics software. But, we invite people, and we ourselves may do it in the future, to carry out other studies, with the same or different data to check that the results are not affected if we look at things in a different way; by, for example, looking at what happens if the AG suggests dismissal, or what happens if we gather data from other periods of time. Nonetheless, the reliability of the results that we presented is a separate issue.

So, if we have acknowledged that we are not going to be able to include every variable, and that our data is only a sample, why are we confident in our results? In the paper we explain it more technically, but, basically, there are econometric measures that indicate that the model that we have created is accurate when the estimation that we get from the model is compared with actual data from reality. That is the reason why we know it is a fairly reliable model.

3. Final caveat

Whilst reading Sanchez-Graells’ words, we could not avoid feeling something we felt many times before. Lawyers are more comfortable sticking to arguing with words.  We feel somehow threatened by this terra incognita called econometrics. There seems to be a certain reticence to attempting to use mathematics to help us in our enquiries. It is worth saying that we are not accusing Sanchez-Graells of not wanting to engage with quantitative methodology. In fact, we know that he has used some statistics previously, and we would not expect a “more economic approach” type of person to disregard this evidence-based methodology.

We want to end this post with a final note about quantitative methodology. We want to say that although judicial proceedings and legal arguments cannot always be equated to numbers, and other methodologies are extremely valuable to legal research questions, quantitative analysis can help elucidate complex legal questions. As many other subjects in social sciences did before us, statistics can become a tool at the service of legal researchers. In this sense, it is worth reminding the readers that, a few centuries ago, economics was equally a merely discursive subject, and anyone who has read the Wealth of Nations can be a witness to that.  But, now, economics and mathematics cannot be separated. Therefore, we would encourage researchers to embrace statistics and econometrics, and see how they can help with their enquiries. Quantitative analysis tries to be evidence-based and objective. Therefore, anyone who believes in the benefits of science will prefer a claim based on quantitative methodology to a hypothesis made, to follow the words of Sanchez-Graells, on the basis of ‘anecdotal impression’.

Excellent @E15Initiative Think Piece on Competition, Corruption and Trade dimensions of Public Procurement Regulation (Anderson, Kovacic and Müller: 2016)

The E15Initiative jointly implemented by the International Centre for Trade and Sustainable Development (ICTSD) and the World Economic Forum aims to generate strategic analysis and recommendations for government, business, and civil society geared towards strengthening the global trade and investment system for sustainable development. One of their great initiatives is to publish 'think pieces' to stimulate a more informed debate about how trade policy and institutions can best be adapted to the highly interconnected global economy of the 21st century.

One of these first think pieces is Anderson, Kovacic and Müller, Promoting Competition and Deterring Corruption in Public Procurement Markets: Synergies with Trade Liberalisation (Feb 2016). In this well-thought and persuasive piece, the authors expand on their previous thoughts in this area [“Ensuring integrity and competition in public procurement markets: a dual challenge for good governance,” in Arrowsmith & Anderson (eds), The WTO Regime on Government Procurement: Challenge and Reform (Cambridge University Press, 2011) 681-718] and make a compelling case for the careful integration and balancing of competition, corruption and trade considerations in public procurement regulation. Their abstract is as follows:

Efficient and effective government procurement markets are critical to economic growth, development, and the welfare of citizens. Yet, two very serious challenges bear on the performance of these markets: (i) ensuring integrity in the procurement process (preventing corruption on the part of public officials); and (ii) promoting effective competition among suppliers. Typically, these challenges are viewed as separate and distinct: the former (corruption) is treated primarily as a principal-agent problem in which the official (the “agent”) enriches himself/herself at the expense of the government or the public (the “principal”); while the latter (promoting competition) involves preventing collusive practices among potential suppliers and removing barriers that impede participation in relevant markets. This think-piece demonstrates that these two problems often overlap, for example where public officials are paid to turn a blind eye to collusive tendering schemes or to release information that facilitates collusion. As well, while transparency requirements are often central to efforts to eradicate corruption, such measures can, if not properly tailored, facilitate collusion and thereby undermine efforts to strengthen competition. Thus, careful coordination of measures to deter corruption and to foster competition is needed. Further, the think-piece argues that participation in the WTO Agreement on Government Procurement (GPA), or in similar regional arrangements, can play an important role both in promoting competition and in deterring corruption. The GPA enhances possibilities for healthy competition in relevant markets through participation by foreign-based or affiliated contractors. It helps to prevent corruption by requiring adherence to appropriate (tailored) transparency measures, and by exposing procurement activities to checks and balances including domestic review (“bid protest” or “remedy”) systems and international scrutiny.

Focusing on my pet topic of transparency in public procurement regulation and how this can affect competition in markets where public procurement is an important demand component, I am thrilled to read that Anderson, Kovacic and Müller stress that:

... increasingly, some challenges in the design of appropriate levels of transparency at the different stages of the procurement process have been recognised in both the procurement and competition communities. The OECD (2007) points out that: 

Governments need to find an adequate balance between the objectives of ensuring transparency, providing equal opportunities for bidders, and other concerns, in particular efficiency. The drive for transparency must therefore be tempered by making transparent what sufficiently enables corruption control. 

Indeed ... certain kinds of transparency measures can clearly facilitate collusion and, consequently, are problematic from a competition policy point of view (Marshalland Marx 2012; Sanchez Graells 2015A). While, for example, there may be no way around the need for publication of award criteria and technical specifications in public procurement if responsive tenders are to be solicited, their usefulness as tools for facilitating inter-supplier agreement needs to be recognised. Similarly, the publication of procurement outcomes, while enabling monitoring by the public as the “principal,” can also serve cartel participants in policing anti-competitive agreements and thereby enhancing cartel stability. Sanchez Graells (2015B) discusses specific possible concerns regarding transparency measures that may be associated with centralised procurement registers. 

A further complication is that optimal transparency levels may differ from country to country. “Solutions” that are potentially workable in some contexts may be highly problematic in others. For example, in jurisdictions where outright corruption problems are believed to be minimal, some lessening of transparency measures might be considered, for the sake of preventing collusion. On the other hand, in economies where corruption is rampant, any lessening of transparency measures may be a recipe for disaster. This explains why the very high priority that is given to transparency in public procurement processes in some countries in Eastern Europe may, in fact, be appropriate notwithstanding possible collusion facilitation concerns, at least as an interim measure. In any case, as explained below, both competition law enforcement and competition advocacy are clearly part of the solution (pp.9-10).

Of course, I am really thankful that they picked up on some of my recent research and I hope that their think piece will help disseminate these insights, which I consider extremely important for the proper design of public procurement rules in a way that is socially advantageous [for further discussion, see A Sanchez-Graells, 'The Difficult Balance between Transparency and Competition in Public Procurement: Some Recent Trends in the Case Law of the European Courts and a Look at the New Directives' (November 2013)].

Some thoughts on the European Commission's revised proposal for regulation on third-country access to public procurement

The European Commission has recently published a revised version of the proposed regulation on the access of third-country goods and services to the Union’s internal market in public procurement and procedures supporting negotiations on access of Union goods and services to the public procurement markets of third countries [for discussion of the initial proposal and its implications, see K Dawar, 'The Proposed "Buy European" Procurement Regulation: An Analysis'].

As the Commission stresses, nothing in the revision of the instrument has altered the fact that

The new Instrument would allow the Commission to initiate public investigations in cases of alleged discrimination of EU companies in procurement markets. In case such an investigation would find discriminatory restrictions vis-à-vis EU goods, services and/or suppliers, the Commission will invite the country concerned to consult on the opening of its procurement market. Such consultations can also take place in the form of negotiations on an international agreement. As a last resort, the Commission could, after consultation with EU Member States, apply the new tool. This means that bids consisting of goods and services from the country concerned would, while compared to other bids, be considered as offering a higher price than the one they have put forward, thus providing European and non-targeted countries' goods and services a competitive advantage. To avoid the application of this tool, third countries have only to stop such discriminatory practices (see press release).

This is clearly an instrument of trade policy and, in my view, it is not much more than the stick the Commission is trying to get itself to be able to reinforce its push for international procurement agreements (notably, the GPA) in case some trading partners are not persuaded by the carrot of having enhanced access to the EU market. I am sceptical about the likely effectiveness of the instrument, or whether it actually adds anything in terms of the EU's external foreign (trade) policy, other than the possibility of imposing compliance with retaliatory trade measures internally, on Member States that may have different views, or simply want to benefit from cheaper or more competitive offers coming from blacklisted countries with which their 'own domestic' suppliers do not trade intensely. Oddly, the proposed regulation may have more teeth from this internal perspective than outwardly. 

What troubles me is the possibility that this trade instrument, if approved and implemented, triggers litigation from foreign non-GPA covered litigants in three fronts. First, regarding investment protection claims against the EU and its Member States by tenderers from countries that find themselves unable to continue tendering for contracts in the internal market due to the Commission's imposition of retaliatory measures under the proposed regulation. Second, regarding challenges in front of the Court of Justice of the European Union on the basis of Art 263(4)III TFEU and the negative impact that the European Commission's decision to blacklist countries create [in a similar fashion as recent cases such as Council v Manufacturing Support & Procurement Kala Naft, C-348/12 P, EU:C:2013:776], which will trigger disputes as to the locus standi of these companies. And third, regarding litigation in front of the national courts, both if the foreign companies are subjected to the price discrimination mechanisms or, counter-intuitively, even if they are not.

Overall, I am not sure that it is a good idea for the European Commission to be pushing for an instrument that is very likely to judicialize trade disputes. At the same time, if the instrument is as ineffective as I am inclined to think, maybe those risks are simply theoretical and not worth worrying after all. Which strengthens the doubts about the utility of the instrument even further...

The difficulties in an econometric analysis of CJEU case law -- a propos Arrebola, Mauricio & Jiménez Portilla (2016)

Carlos Arrebola and Ana Julia Mauricio (PhD students at the University of Cambridge), together with  Héctor Jiménez Portilla (of the Overseas Development Institute (ODI)) have published an interesting and thought-provoking  paper (*) where they try to measure the influence of the Advocate General (AG) on the Court of Justice of the European Union (CJEU) [for a short summary of their paper, see here]. This is an area where EU law scholars have been struggling to find an objective way to measure/prove/dimiss any claim of AG influence over the CJEU--as Arrebola et al clearly stress in their excellent literature review.

In a nutshell, Arrebola et al claim that their 'findings suggest that the CJEU is approximately 67 percent more likely to annul an act (or part of it) if the AG advises the Court to annul than if it advises the Court to dismiss the case or declare it inadmissible. In their view, these results raise several questions as regards judicial independence and the relevance of the figure of the Advocate General, providing a grounded basis for future discussions and judicial reform.'

Their claim is as intuitively appealing as it is bold (and controversial, in terms of the implications they derive) and, in my view, it deserves a tough scrutiny of the way they reached this conclusion. The following are some of the doubts that I have had while reading the paper, which I am limiting to the three main doubts I am struggling with. Overall, these doubts leave me with the impression that, unfortunately, the paper does not actually deliver on its main goal of contributing 'to a more comprehensive understanding of the role of the Advocate General in the makeup of the Court of Justice of the European Union'.

Their model in a nutshell

Let me frame my doubts in an stylised summary of their econometric model. In short, they have looked at 'data from 20 years of actions for annulment procedures before the Court of Justice. Every case from January 1994 to January 2014 has been included, with the exception of appeals from the General Court and those cases that do not have an AG opinion. We collected a total of 285 observations. For these cases, we have examined the behaviour of the Court and the Advocate General as regards to their decision to annul or not to annul the legal act in question' (p. 15). 

They have coded these cases to examine the relationship between two main variables: the recommendation of the AG and the final decision of the CJEU. There are other variables they take into account, but those do not affect my analysis, so I am sticking to the two main variables for simplicity of argument. They explain why they have chosen annulment cases in the following terms: 'we have created two dichotomous (also called dummy or binary) variables: ECJannulment and AGannulment. ECJannulment is the one that we have considered as the dependent variable. It takes the value of 1 if the Court decided to annul or partially annul an act, and 0 if it dismissed the case or deemed it inadmissible. AGannulment is the variable that we have considered independent. It takes the value of 1 if the Advocate General issued an opinion recommending the Court to annul or partially annul an act, and 0 if it recommended dismissing the case or declaring it inadmissible' (p. 15). 

With this information, they have run a 'probit model [which] is a regression that explains the predicted probability of the dependent variable adopting the value 1. In our case, it outputs the predicted probability of the Court annulling an act, subject to the value given to the other variables included. Therefore, the probit model provides a simple way to interpret the results in terms of predicted probability from 0 to 1. Instead, if we had chosen a linear regression model, the result would not be enclosed between 0 and 1, making the interpretation impossible, as it could yield some predicted probabilities to be negative or above the unit' (p. 25). This is what allows them to reach their main finding that 'when the Advocate General recommends annulment, the Court is 67 per cent more likely to annul' (p. 30).

My main doubts

Firstly, I am not sure that the model the authors use is the best suited to the analysis of such a complex issue as the influence of the AG on the CJEU. One of the reasons (probably the main reason) why the authors decide to use a probit model is that they consider that it is not possible to establish a group of annulment cases that can work as a control (ie what they call the impossibility of conducting a randomised controlled trial). They consider that this would be the best way to avoid selection bias, but that in their study 'it is not possible to create a randomised controlled trial to define the causal effect of the AG opinion on the Court of Justice. This would require having the ability to design empirical experiments using the Court of Justice as a laboratory, which is unfeasible in practice' (p. 13, with more details in fn 54).

I disagree with their view about the impossibility to use a randomised controlled trial. There is a group of annulment procedures where no AG Opinion was submitted, and this could be used as a control group. It is important to note that, according to the Statute of the CJEU, '[w]here it considers that the case raises no new point of law, the Court may decide, after hearing the Advocate General, that the case shall be determined without a submission from the Advocate General' [Art 20(5)]. 

This is organised according to the Rules of Procedure of the CJEU, according to which 'The preliminary report shall contain proposals as to whether particular measures of organisation of procedure, measures of inquiry or, if appropriate, requests to the referring court or tribunal for clarification should be undertaken, and as to the formation to which the case should be assigned. It shall also contain the Judge-Rapporteur’s proposals, if any, as to whether to dispense with a hearing and as to whether to dispense with an Opinion of the Advocate General pursuant to the fifth paragraph of Article 20 of the Statute. The Court shall decide, after hearing the Advocate General, what action to take on the proposals of the Judge-Rapporteur' [Art 59(2) and (3)].

Therefore, the annulment cases where there is no AG Opinion are an important instrument for potential control tests. These cases only come to be decided without an AG Opinion because both the CJEU (rectius, the Judge-Rapporteur) and the AG agreed that the case raised no new point of law. Thus, there is no indication that the AG can influence the CJEU on any other point than the existence or not of new issues to be considered. Admittedly, there could already be scope for some indication of the AG (and the CJEU's) position on the substance of the case in this first judgement. However, I would think that running controls on the basis of these cases could be useful.

In these cases, the CJEU (at least formally), decided whether to admit or dismiss, annul (totally or partially) the case without submission of the AG. If there was a significant divergence of the probability of annulment between these two groups of cases, the argument that the author's raise in the paper would be strengthened. On the contrary, if the CJEU showed the same likelihood of annulling/dismissing regardless of the existence or not of an AG Opinion, the claim would be significantly weakened. I do not imagine this to the ultimate test for the arguments raised in the paper, but I would see it as an important one.

Secondly, I am skeptical of the way in which the authors simplify the setting for annulment procedures. They construct them as binary: that is, the only options available to the AG and the CJEU are to either declare the case inadmissible/dismiss it (0) or annul the provision in question totally/partially (1). I understand the need to simplify decisions to annul grouping together full and partial annulments (which they explain in p. 17). I remain unconvinced by their arguments regarding declarations of inadmissibility and dismissals. They simply indicate that 'inadmissibility and dismissal are sometimes used as interchangeable terms, although technically the substance of the case is not analysed in cases of inadmissibility, whilst it is in cases that are dismissed' (p. 17). However, they do not consider this a major issue and proceed with the grouping of both types of results as a single outcome of the case.

The difficulty I have with this strategy is that the rules on admissibility/inadmissibility are procedural in nature and they set up a first filter for cases to come to a full analysis. It can also be argued that they are much simpler than the rules applicable to the potential annulment of the challenged provisions, which depend on much more complex assessments of both procedural and substantive EU law. Thus, grouping decisions on (procedural) inadmissibility with those on dismissal of the annulment claim after a full analysis seems to create a significant conceptual problem. At this point, it may be worth stressing that the authors had mentioned that 

we have decided to estimate regressions including other variables that could potentially be biasing the results if we only looked at what the Advocate General said and whether the Court followed the Advocate General’s position. In particular, one of the bias factors is the clarity of the law in a given case. For example, the Court and the Advocate General could reach the same result in a case not because the Court decided to follow the AG opinion, but because the law was clear on what the outcome should be, and there was no room for different interpretations. Therefore, not accounting for the clarity of the case could overestimate our measure of the influence of the Advocate General (pp. 14-15, emphasis added). 

My problem is that the authors seems to have forgotten to include this very bias-check in the way they have constructed their variables. By grouping (relatively simpler) procedural checks with (relatively more complex) full assessments, they have created a variable that is very hard to reconcile with reality outside of their model.

Thirdly, even within the context of their model, I am not sure what to make of their results. Their findings indicate that, when the AG recommends the annulment of an act, the CJEU is almost 67 per cent more likely to annul the act than if the AG had not proposed its annulment (ie, had she advocated for either inadmissibility or dismissal). I have trouble interpreting this number due to the conceptual issue mentioned above (ie, conflation of inadmission and dismissal), which makes the recommendation of the AG (as coded) ambiguous. This makes me wary of the claim that 'even if the number of 67 per cent of increased probability is called into question, it is difficult to deny that there is some level of influence' of the AG on the CJEU (p. 34, emphasis added), and that 'our analysis shows that there is some component in the making of a decision that is simply attributed to what the Advocate General recommended' (p. 35, emphasis added).

From the numbers in the paper, I have been unable to work out the effect that an AG recommendation to inadmit/dismiss has on the CJEU's willingness to do so. Intuitively, I would expect that, if by itself the Opinion of the AG is such a relevant factor as the paper claims, then the CJEU should also be more inclined to inadmit/dismiss when the AG submitted such a recommendation. However, in that case, I would not necessarily find the causal explanation between the AG recommendation and the CJEU's decision persuasive. An alternative interpretation not linked to the influence of the AG over the CJEU would need to be dispelled: ie the zeal with which the CJEU keeps control of its docket. The intuition would be that the CJEU may be engaged in an interpretation of inadmissibility rules that prevents a floodgate of claims, which could well override whatever position the AG decides to take. In my personal opinion, and based on anecdotal impression, this is what has been happening regarding annulment procedures promoted by unprivileged applicants (with all the issues that the Plaumann, UPA, Inuit, saga have created; see here).

In the end, the difficulty I have is that their results do not necessarily make a lot of intuitive sense because they cannot (or at least not immediately) be interpreted regarding inverse AG recommendations (ie recommendations to inadmit/dismiss) and their effect on the CJEU. Somehow, there seems to be an implicit assumption that 'influence' of the AG is stronger if it prompts the CJEU to annul than if it prompts the CJEU to inadmit/dismiss. If all of this is incorrect, then my only residual criticism is that the paper could have been made more accessible for non-statisticians.

Conclusion

Overall, I remain unconvinced that the results of Arrebola et al significantly contribute 'to a more comprehensive understanding of the role of the Advocate General in the makeup of the Court of Justice of the European Union'. Thus, I am not prepared to engage with the implications in terms of judicial independence and potential (further) reform of the CJEU that they draw (pp. 34-38). Given the disagreement with their methodology and the diversity of views as to how to interpret their results, I have contacted Carlos Arrebola and offered him to reply to my criticisms in a guest post. He has kindly accepted. Keep an eye out for it in the coming days.

(*) The full reference for the paper is: C Arrebola, AJ Mauricio and H Jiménez Portilla, 'An Econometric Analysis of the Influence of the Advocate General on the Court of Justice of the European Union' (January 12, 2016). Cambridge Journal of Comparative and International Law, Vol. 5, No. 1, Forthcoming; University of Cambridge Faculty of Law Research Paper No. 3/2016. Available at SSRN: http://ssrn.com/abstract=2714259.

CJEU pushes for flexibility for teaming agreements under EU public procurement rules: what implications for the interpretation of Arts 19 & 63 Dir 2014/24? (C-234/14)

In its Judgment of 14 January 2016 in Ostas celtnieks, C-234/14, EU:C:2016:6, the Court of Justice of the European Union (CJEU) stressed the flexibility that the EU public procurement rules on teaming and reliance on third party capacity impose on contracting authorities. 

In the case at hand, the Latvian municipality of Talsi had approved tender documents requiring tenderers relying on the capacities of other contractors to 'mention all those contractors and provide evidence that it has the necessary resources at its disposal. If that tenderer is to be awarded the contract, it must have concluded a cooperation agreement with the contractors concerned before the award and forwarded this to the contracting authority'. One of the main obligations under such agreement would have been to include 'a clause stipulating that each party is to be jointly and severally liable for the performance of the contract'.  The requirement for a pre-award agreement was challenged.

In an unsurprising decision, the CJEU stressed that the relevant rules (then Arts 47 and 48 Dir 2004/18), precluded a contracting authority from imposing on a tenderer which relies on the capacities of other entities the obligation, before the contract is awarded, to conclude a cooperation agreement with those entities or to form a partnership with them. Indeed, the CJEU recalled that it is settled case law that 'Articles 47(2) and 48(3) of Directive 2004/18 recognise the right of every economic operator to rely, for a particular contract, upon the capacities of other entities, "regardless of the nature of the links which it has with them", provided that it proves to the contracting authority that it will have at its disposal the resources necessary for the performance of the contract' (para 23, with reference to Swm Construzioni, C-94/12, EU:C:2013:646; see here). The CJEU stressed that such 'interpretation ... is consistent with the aim of the widest possible opening-up of public contracts to competition pursued by the relevant directives to the benefit not only of economic operators but also of contracting authorities. In addition, that interpretation also facilitates the involvement of small- and medium-sized undertakings in the contracts procurement market' (para 24).

This was clearly set out in the pre-existing case law of the CJEU and therefore, hardly deserves any comment. However, in proceeding with its reasoning, the Court engaged in a clarification that can raise significant doubts as to the interpretation of the new rules on teaming and group bidding in Arts 19 and 63 of Dir 2014/24. The CJEU stressed that 'the tenderer is free to choose ...the legal nature of the links it intends to establish with the other entities on whose capacities it relies in order to perform a particular contract and, on the other, the type of proof of the existence of those links' (para 28, emphasis added). 

On the basis of this freedom of organisation recognised by the CJEU (which rings of the freedom to conduct a business under Art 16 of the EUCFR, even if it is not mentioned), the CJEU determined that '[i]n the present case, ... the contracting authority requires a tenderer ... which relies on the capacities of other entities for the performance of the contract concerned, to establish links of a precise legal nature with those entities, so that only those particular links are capable, in the eyes of the contracting authority, of proving that the contract does in fact have the resources necessary to perform that contract ... a rule such as that ... of the tender specifications manifestly deprives the provisions of Articles 47(2) and 48(3) of Directive 2004/28 of their effectiveness' (paras 30 and 33, emphasis added).

The reason I find the Judgment in Ostas celtnieks troubling for the interpretation of Arts 19  and 63 of Dir 2014/24 is that, going beyond the requirements and limits of Arts 47 and 48 Dir 2004/18, a new provision in Art 63 Dir 2014/24 now establishes that despite the fact that groups of economic operators, including temporary associations, may participate in procurement procedures and they shall not be required by contracting authorities to have a specific legal form in order to submit a tender or a request to participate [Art 19(2)],  and that contracting authorities may require groups of economic operators to assume a specific legal form only once they have been awarded the contract, and to the extent that such a change is necessary for the satisfactory performance of the contract [Art 19(3)], Art 63(1) in fine Dir 2014/24 foresees that '[w]here an economic operator relies on the capacities of other entities with regard to criteria relating to economic and financial standing, the contracting authority may require that the economic operator and those entities be jointly liable for the execution of the contract.'

In view of the Judgment in Ostas celtnieks, it seems clear that either the enforcement of Art 63 Dir 2014/24 will require a change of tack in the development of the flexible case law applicable to teaming agreements, or Art 63 Dir 2014/24 will trigger a potential nightmare of legal discussion about the limits of the possibility to request assurances to guarantee that the economic operator and those entities on which financial and economic capacities it relies be jointly liable for the execution of the contract, while not forcing it to 'establish links of a precise legal nature with those entities, so that only those particular links are capable, in the eyes of the contracting authority, of proving that the contract does in fact have the resources necessary to perform that contract'.

This builds up on my previous criticism of the liability requirement created by Art 63 Dir 2014/24, which was along different lines:

... the ... requirement of joint liability for the execution of the contract can make it very difficult to reach subcontracting agreements or similar arrangements for the reliance on third parties for the partial execution of a minor part of the contract. Moreover, it can result in complicated structures of side letters of indemnity that raise the legal costs linked to participation. In my opinion, in relation to both requirements, the contracting entity should be satisfied with the liability of the main contractor and, if need be, ‘self-protect’ through requirements for adequate professional risk indemnity insurance under article 58(3) of Directive 2014/24. Therefore, a pro-competitive interpretation of these rules requires subjecting their use to very strict proportionality tests in order to avoid unnecessary restrictions of the ability of tenderers to rely on third party capacities in ways that fall short of teaming and bidding jointly for contracts [ A Sanchez Graells, Public procurement and the EU competition rules, 2nd edn (Oxford, Hart, 2015) 317-18].

In my view, the Judgment in Ostas celtnieks strengthens the argument for a very exceptional use of Art 63(1) in fine Dir 2014/24 by contracting authorities.

Some thoughts on the principle of competition's direct and indirect effects in public procurement from 18 April 2016

It was a pleasure to speak at Upphandlings Dagarna 2016 in Stockholm on the principle of competition enacted in Article 18(1) of Directive 2014/24 and Article 36(1) of Directive 2014/25 [for background reading, see here]. The recording of the livestreaming is available here (starts at 1:30, main remarks after 8:00).

One of the issues that featured prominently in the discussions with my panellists is the legal value of the principle under EU law, and how to make it effective in case Member States do not transpose it (or are late in the transposition, which will certainly be a common situation for a while). 

In my view, and in simplified terms, there are two main routes that EU law provides for the enforcement of the principle regardless of the transposition decisions the Member States adopt. Firstly, the principle can be given direct effect. And, secondly (and probably with greater practical relevance), the principle must be given indirect effect. I develop these ideas for the enforcement of the principle of competition, particularly through indirect effect or interpretation conforme, in Public Procurement and the EU Competition Rules, 2nd edn (Oxford, Hart, 2015) 215-227, available here.

Direct effect can be given to the presumption in Art 18(1) Dir 2014/24 / Art 36(1) Dir 2014/25 that 'Competition shall be considered to be artificially narrowed where the design of the procurement is made with the intention of unduly favouring or disadvantaging certain economic operators'. In my view, this provision sets out a clear, precise and unconditional individual right for candidates and tenderers not to be unduly disadvantaged, which therefore meets the requirements for direct effect as per Van Duyn (C-41/74, EU:C:1974:133). It will be particularly relevant to coordinate any legal claims with the clear push for effectiveness of the EU public procurement rules in the Remedies Directive.

Indirect effect must be given to the broad principle of competition in Art 18(1) Dir 2014/24 / Art 36(1) Dir 2014/25 that 'The design of the procurement shall not be made with the intention ... of artificially narrowing competition.' This is not only a clear general principle of EU law (which could also engage Mangold, C-144/04, EU:C:2005:709), but a fundamental pillar of the procurement system and, in particular, of the system created by the 2014 new public procurement Directives. The Commission could not have stressed this more clearly in the recent strategy for the Upgrade of the Single Market, where it highlighted that 'In 2014, the EU adopted a major overhaul of the EU procurement framework .... This was aimed at making public procurement more efficient and strategic, fulfilling the principles of transparency and competition to the benefit of both public purchasers and economic operators, in particular SMEs' (emphasis added). Overall, the obvious and pervasive pro-competitive orientation of the 2014 Directives and the explicit consolidation of the principle of competition triggers an obligation to interpret any domestic procurement rules in light of the principle of competition under as per Von Colson (C-14/83, EU:C:1984:153).

In short, even if Member States did not transpose (in time, or at all) the principle of competition in Art 18(1) Dir 2014/24 / Art 36(1) Dir 2014/25, EU law requires national administrative bodies, review bodies and courts to give it full effectiveness, both under  the direct and indirect effect doctrines. This obligation kicks in on 18 April 2016 at the latest (although arguments for an already existing obligation to do so have been on the table since, at least, 2011). This is likely to spur an initial wave of litigation likely to result in references to the CJEU for clarification of the content, meaning and extent of the principle of competition. I for one will keep a close look at these developments.