Case C-412/04
Commission of the European Communities
v
Italian Republic
(Failure of a Member State to fulfil its obligations – Public works, supply and service contracts – Directives 92/50/EEC, 93/36/EEC, 93/37/EEC and 93/38/EEC – Transparency – Equal treatment – Contracts excluded from the scope of those directives on account of their value)
Summary of the Judgment
1. Actions for failure to fulfil obligations – Examination of merits by the Court – Situation to be taken into consideration – Situation on expiry of the period laid down in the reasoned opinion
(Art. 226 EC)
2. Approximation of laws – Procedures for the award of public services, supply and works contracts – Directives 92/50, 93/36 and 93/37 – Determination according to the main purpose of the contract – Mixed works, supply and service contracts – Supply or service contracts including ancillary works
(Council Directives 92/50, 93/36 and 93/37)
3. Approximation of laws – Procedures for the award of public works contracts – Directive 93/37 – Award of contracts
(Arts 43 EC and 49 EC; Council Directive 93/37)
4. Approximation of laws – Procedures for the award of public works contracts – Directive 93/37 – Scope
(Council Directive 93/37, Art. 6(1) and (3))
5. Approximation of laws – Procedures for the award of public service contracts and contracts in the water, energy, transport and telecommunications sectors – Directives 92/50 and 93/38 – Award of contracts
(Council Directives 92/50 and 93/38)
6. Procedure – Application initiating proceedings – Formal requirements
(Rules of Procedure of the Court of Justice, Art. 38(1)(c))
1. The question whether a Member State has failed to fulfil its obligations must be determined by reference to the situation obtaining in the Member State at the end of the period laid down in the reasoned opinion. In that connection, the adoption of laws, regulations or administrative provisions after the date on which that period expired cannot be taken into account.
(see paras 42-43)
2. A Member State which makes mixed works, supply and service contracts and supply or service contracts which include ancillary works if the works represent more than 50% of the total value of the relevant contract subject to the national rules on public works contracts fails to fulfil its obligations under Directive 92/50 coordinating procedures for the award of public service contracts, Directive 93/36 coordinating the procedures for the award of public supply contracts and Directive 93/37 coordinating the procedures for the award of public works contracts, as amended by Directive 97/52.
Where a contract contains both elements relating to a public works contract and elements relating to another type of contract, it is the main purpose of the contract that determines which Community directive on public procurement is to be applied in principle. In particular, therefore, the scope of Directive 93/37 is linked to the main purpose of the contract, which must be determined in an objective examination of the entire transaction to which the contract relates. The assessment must be made in the light of the essential obligations which predominate and which, as such, characterise the transaction, as opposed to those which are only ancillary or supplementary in nature and are required by the very purpose of the contract; the value of the various matters covered by the contract is, in that regard, just one criterion among others to be taken into account for the purposes of the assessment. Therefore, the value of the works cannot constitute the sole criterion capable of resulting in the application of the rules on public works contracts to a mixed contract, where those works are only ancillary, without infringing the requirements of Directive 93/97.
Furthermore, such national rules also fail to comply with the requirements of Directives 92/50 and 93/36, in so far as its application may result in certain mixed contracts falling outside the procedures provided for in those directives, namely those contracts where the works, although ancillary, represent more than 50% of the total value and the total value is below the threshold set by Directive 93/37 even though it reaches the thresholds adopted in Directives 92/50 and 93/36.
(see paras 47-49, 50-51, operative part 1)
3. The Community legislature expressly made a policy choice to exclude contracts under a certain threshold from the advertising regime which it introduced and therefore did not impose any specific obligation with respect to them. Where it is established that such a contract is of certain cross-border interest, the award, in the absence of any transparency, of that contract to an undertaking located in the same Member State as the contracting authority amounts to a difference in treatment to the detriment of undertakings which might be interested in the contract but which are located in other Member States. Unless it is justified by objective circumstances, such a difference in treatment, which, by excluding all undertakings located in another Member State, operates mainly to the detriment of the latter undertakings, amounts to indirect discrimination on the basis of nationality, prohibited under Articles 43 EC and 49 EC.
Since, under Article 249 EC, directives are binding as to the result to be achieved upon each Member State to which they are addressed and since the Community legislature excluded certain contracts from the scope of Directive 93/37, in particular by laying down thresholds, the Member States are not required to adopt, in the legislation transposing that directive, provisions recalling the obligation to comply with Articles 43 EC and 49 EC, which is applicable only in the circumstances cited above. The fact that the national legislature did not adopt such provisions with respect to public contracts for infrastructure works executed by the holder of a building permit or an approved estate plan the value of which is below the threshold for application of Directive 93/37, for cases where the existence of a certain cross-border interest is established, does not call into question the applicability of Articles 43 EC and 49 EC to those contracts.
(see paras 65-68)
4. A Member State which authorises the direct award of works or a work to the holder of a building permit or an approved estate plan by providing for an award procedure which complies with the requirements of Directive 93/37 only, where the works are divided into several lots, if the estimated value of each of those lots, taken individually, exceeds the threshold for the application of the directive fails to fulfil its obligations under Directive 93/37 concerning the coordination of procedures for the award of public words contracts, as amended by Directive 97/52.
The fact that a provision of national law allowing direct execution by the holder of a building permit or an approved estate plan of infrastructure works which offset the whole or part of the contribution payable in respect of the permit forms part of a set of urban development regulations which are of a special nature and pursue a specific aim that is separate from Directive 93/37 is not sufficient to exclude the direct execution of works from the scope of the directive when the elements needed to bring it within the scope of the directive are present. Such execution must therefore be subject to the procedures provided for in Directive 93/37 where it satisfies the conditions contained therein for classification of a public works contract and, in particular, where the contractual element required in Article 1(a) thereof is present and the value of the work is equal to or higher than the threshold laid down in Article 6(1).
Furthermore, it is clear from Article 6(3) of Directive 93/37 that, where a work is subdivided into several lots, each one the subject of a contract, the value of each lot must be taken into account for the purpose of calculating the amount referred to in Article 6(1), which determines whether or not the directive is applicable to all the lots. In addition, under Article 6(4), no work or contract may be split up with the intention of avoiding the application of the directive. Therefore, if the agreement concluded between a private person who is the owner of development land and the municipal authority satisfies the criteria for the definition of a ‘public works contract’ within the meaning of Article 1(a) of Directive 93/37, the estimated value which must in principle be taken into account in order to ascertain whether the threshold set by the directive is attained and whether, therefore, the award of the contract must comply with the rules on advertising laid down therein, may be calculated solely by reference to the total value of the various works, by adding together the value of the various lots.
(see paras 70-74, operative part 1)
5. A Member State which allows, first, the supervision of works which is as a rule the responsibility of the technical departments of the contracting authorities, to the project designer and, second, the award of testing and of inspection tasks in respect of public works, to third parties featured on lists drawn up for that purpose by the Ministry of Public Works, without using the procedures relating to the opening of contracts up to competition fails to fulfil its obligations under Directive 92/50 on public service contracts and Directive 93/38 coordinating the procurement procedures for entities operating in the water, energy, transport and telecommunications sectors.
The only permitted exceptions to the application of Directives 92/50 and 93/38 are those which are exhaustively and expressly mentioned therein. Supervision and the inspection of works are included in Category No 12 of both Annex I A to Directive 92/50 and Annex XVI A to Directive 93/38. It is clear, first, from Article 8 of Directive 92/50 that contracts which have as their object services listed in Annex I A are to be awarded in particular in accordance with the provisions of Title III of that directive which concerns the choice of award procedures and, second, from Article 15 of Directive 93/38 that supply and works contracts and contracts which have as their object services listed in Annex XVI A are to be awarded in accordance with, inter alia, the provisions of Title IV of Directive 93/38, relating to award procedures. Therefore, in so far as contracts for the supervision of works must be awarded in accordance with the rules laid down by Directives 92/50 and 93/38, the direct award to the project designer infringes those directives as regards contracts which, having regard to their value, fall within the scope of the directives. Likewise, in so far as contracts for inspection works must be awarded in accordance with the rules laid down by Directives 92/50 and 93/38, the award to third parties infringes those directives as regards the contracts included in their scope.
(see paras 84-85, 89-93, operative part 1)
6. It is clear from Article 38(1)(c) of the Rules of Procedure of the Court of Justice and from the case-law relating to that provision, that an application must state the subject-matter of the proceedings and a summary of the pleas in law on which the application is based, and that that statement must be sufficiently clear and precise to enable the defendant to prepare his defence and the Court to rule on the application. It is therefore necessary for the essential points of law and of fact on which a case is based to be indicated coherently and intelligibly in the application itself and for the heads of claim to be set out unambiguously so that the Court does not rule ultra petita or indeed fail to rule on an objection.
(see para. 103)
JUDGMENT OF THE COURT (Second Chamber)
21 February 2008 (*)
(Failure of a Member State to fulfil its obligations – Public works, supply and service contracts – Directives 92/50/EEC, 93/36/EEC, 93/37/EEC and 93/38/EEC – Transparency – Equal treatment – Contracts excluded from the scope of those directives on account of their value)
In Case C‑412/04,
ACTION under Article 226 EC for failure to fulfil obligations, brought on 24 September 2004,
Commission of the European Communities, represented by X. Lewis and K. Wiedner, acting as Agents, and G. Bambara, avvocato, with an address for service in Luxembourg,
applicant,
v
Italian Republic, represented by I.M. Braguglia, acting as Agent, and M. Fiorilli, avvocato dello Stato, with an address for service in Luxembourg,
defendant,
supported by:
French Republic, represented by G. de Bergues, acting as Agent,
Kingdom of the Netherlands, represented by H.G. Sevenster and M. de Grave, acting as Agents,
Republic of Finland, represented by A. Guimaraes-Purokoski, acting as Agent, with an address for service in Luxembourg,
interveners,
THE COURT (Second Chamber),
composed of C.W.A. Timmermans, President of the Chamber, L. Bay Larsen, K. Schiemann, J. Makarczyk (Rapporteur), and J.-C. Bonichot, Judges,
Advocate General: D. Ruiz-Jarabo Colomer,
Registrar: R. Grass,
having regard to the written procedure,
after hearing the Opinion of the Advocate General at the sitting on 8 November 2006,
gives the following
Judgment
1 By its action, the Commission of the European Communities seeks a declaration from the Court that, by adopting the provisions contained in:
– Articles 2(1) and (5), 17(12), 27(2), 30(6a), 37b and 37c(1) of Law No 109 of 11 February 1994 – Framework Law on public works (legge quadro in materia di lavori pubblici) (Ordinary Supplement to the GURI No 41 of 19 February 1994), as amended by Law No 166 of 1 August 2002 (Ordinary Supplement to the GURI No 181 of 3 August 2002) (‘Law No 109/1994’),
– Article 28(4) of Law No 109/1994, read in conjunction with Article 188 of Presidential Decree No 554 of 21 December 1999 implementing the Framework Law on public works of 11 February 1994 (No 109) and its successive amendments (regolamento di attuazione della legge quadro in materia di lavori pubblici 11 febbraio 1994, n. 109, e successive modificazioni) (Ordinary Supplement to the GURI No 98 of 28 April 2000) (‘DPR No 554/1999’), and Article 3(3) of Legislative Decree No 157 of 17 March 1995 implementing Directive 92/50/EEC on public service contracts (attuazione della direttiva 92/50/CEE in materia di appalti pubblici di servizi) (Ordinary Supplement to the GURI No 104 of 6 May 1995) (‘Legislative Decree No 157/1995’),
the Italian Republic has failed to fulfil its obligations under Council Directive 92/50/EEC of 18 June 1992 relating to the coordination of procedures for the award of public service contracts (OJ 1992 L 209, p. 1), Council Directive 93/36/EEC of 14 June 1993 coordinating procedures for the award of public supply contracts (OJ 1993 L 199, p. 1), Council Directive 93/37/EEC of 14 June 1993 concerning the coordination of procedures for the award of public works contracts (OJ 1993 L 199, p. 54) as amended by European Parliament and Council Directive 97/52/EC of 13 October 1997 (OJ 1997 L 328, p. 1) (‘Directive 93/37’), Council Directive 93/38/EEC of 14 June 1993 coordinating the procurement procedures of entities operating in the water, energy, transport and telecommunications sectors (OJ 1993 L 199, p. 84), and Articles 43 EC and 49 EC and the principles of transparency and equal treatment which are the corollary to them.
Legal background
Community law
2 Directives 92/50, 93/36, 93/37 and 93/38 were adopted in pursuance of the establishment of the internal market, defined as an area without internal frontiers in which the free movement of goods, persons, services and capital is ensured. The directives sought to eliminate practices that restrict competition in general and participation in public contracts by other Member States’ nationals, in order to implement inter alia the freedom of establishment and freedom to provide services enshrined in Articles 43 EC and 49 EC respectively.
3 The 16th recital in the preamble to Directive 92/50 states that public service contracts may from time to time include some works, and that it results from Council Directive 71/305/EEC of 26 July 1971 concerning the co-ordination of procedures for the award of public works contracts (OJ, English Special Edition 1971 (II), p. 682) that, for a contract to be a public works contract, its object must be the achievement of a work. In so far as those works are ancillary rather than the object of the contract, they do not justify treating the contract as a public works contract.
4 It is clear from Article 8 of Directive 92/50 that public contracts which have as their object services listed in Annex I A to that directive are to be awarded in accordance with the provisions of Titles III to VI thereof. Title III concerns the choice of award procedures and rules governing design contests.
5 Category No 12 of Annex I A to Directive 92/50 mentions, inter alia, architectural services; engineering services; urban planning and landscape architectural services; related scientific and technical consulting services; and technical testing and analysis services.
6 According to Article 15 of Directive 93/38, contracts which have as their object services listed in Annex XVI A thereto are to be awarded in accordance with the provisions of Titles III, IV and V. Title IV concerns procedures for the award of contracts.
7 Category No 12 of Annex XVI A is identical to Category No 12 in Annex I A to Directive 92/50.
8 Under Article 1(a) of Directive 93/37, ‘“public works contracts” are contracts for pecuniary interest concluded in writing between a contractor and a contracting authority as defined in [Article 1(b)], which have as their object either the execution, or both the execution and design, of works related to one of the activities referred to in Annex II or a work defined in [Article 1(c)], or the execution, by whatever means, of a work corresponding to the requirements specified by the contracting authority’.
9 Article 6(1) of Directive 93/37 sets out its scope with regard to the estimated value of the various public works contracts covered. It is clear from Article 6(3) that where a work is subdivided into several lots, each one the subject of a contract, the value of each lot must be taken into account for the purpose of calculating the amount referred to in Article 6(1) and, where the aggregate value of the lots is not less than that amount, the provisions of Article 6(1) are to apply in principle to all lots.
National law
10 Public works contracts are regulated by Law No 109/1994, implemented by DPR No 554/1999.
11 According to Article 2(1) of Law No 109/1994, public works, if they are awarded by the persons referred to in Article 2(2), are defined as construction, demolition, restoration, restructuring, refurbishment and maintenance of works and installations. Article 2(1) extends the scope of Law No 109/1994 to mixed works, supply and service contracts and to supply or service contracts which include ancillary works the estimated value of which exceeds 50% of the total value of the relevant contract.
12 Article 3(3) of Legislative Decree No 157/1995 provides that, in the case of mixed works and of service contracts and of service contracts which include ancillary works, the provisions of Law No 109/1994 are applicable if the works represent more than 50% of the total value of the relevant contract.
13 Article 2(5) of Law No 109/1994 excludes from the Law’s scope works carried out directly by private persons which are set off against contributions payable in respect of building permits and works arising from the obligations set out Article 28(5) of Law No 1150 of 17 August 1942 on town planning (legge urbanistica) (GURI No 244 of 16 October 1942), as amended (‘Law No 1150/1942’). Article 2(5) also excludes from the Law’s scope works which are analogous to those mentioned above. Article 2(5) states that if the value of the works, assessed individually, exceeds the Community threshold the contract must be awarded by the private person in accordance with the procedures prescribed by Directive 93/37.
14 In that regard, it is apparent from Articles 1 and 31 of Law No 1150/1942, and from Articles 3 and 11 of Law No 10 of 28 January 1977 laying down rules on the suitability of land for development (norme in materia di edificabilità dei suoli) (GURI No 27 of 29 January 1977) as amended (‘Law No 10/1977’), that the holder of a permit may execute infrastructure works himself and offset the whole or part of the cost against the charges due.
15 In addition to public works contracts, Law No 109/1994 regulates certain public service contracts.
16 Thus, Article 17(12) of Law No 109/1994 authorises the awarding entities to award public service contracts for the design and supervision of works the estimated value of which is less than EUR 100 000, through the person responsible for the procedure, to persons referred to in Article 17(1)(d) to (g) who are trusted by the awarding entities, after verifying the professional experience and professional capacity of the persons selected and stating reasons for that choice.
17 Under Article 27(2) of Law No 109/1994, if the contracting authorities cannot assume responsibility for the supervision of the works, they must entrust the supervision, in the following order, to other public authorities, to the project designer for the purposes of Article 17(4) of the Law, or to other persons selected pursuant to the procedures prescribed by national legislation transposing the relevant Community provisions.
18 Under Article 28(4) of Law No 109/1994, testing is to be entrusted to one, two or three highly qualified technicians expert in the particular field concerned, by reference to the type, complexity and value of the works. The technicians are to be selected by the contracting authorities from their own organisations unless a lack of staff is established and certified by the person responsible for the procedure.
19 Article 30(6a) of Law No 109/1994 offers the same possibility as regards inspection which is generally entrusted to the technical departments of the awarding entities or to the supervisory bodies referred to in Article 30(6a)(a).
20 Furthermore, it is apparent from Article 188(1), (3), (8), (9), (11), (12) and (13) of DPR No 554/1999 that within 30 days from the completion of the works, or from the date of handing over of the works where testing is on-going, the awarding entity is to entrust the inspection of the works to its staff, by reference to the type, category, complexity and value of the works and on the basis of pre-established criteria.
21 If the staff do not meet the requirements stipulated, external specialists included in lists drawn up by the Ministry of Public Works and by the regions and autonomous provinces are to be called upon.
22 In the absence of such lists, the awarding entities may, in their discretion, award the inspection of works to persons who possess, in any event, the requisite qualifications and satisfy the requisite conditions.
23 Articles 37a to 37c of Law No 109/1994 govern the award of contracts for public works financed wholly or partly by private persons.
24 Article 37a permits private persons to submit proposals for public works or works in the public interest to the awarding entities and to conclude the corresponding contracts providing for the financing and management of those works.
25 Article 37b sets out the procedure for selecting the promoter. It provides that the contracting authorities are to evaluate the feasibility of the proposals submitted having regard to various aspects: construction, town planning, environment, quality of the design, functionality, the use to which the works will be put, public access, the return, management and maintenance costs, the duration of the concession, time-limits for carrying out the works, the applicable charges and the method for updating them, the economic value of the plans, and the content of the draft agreement. The contracting authorities must establish that no factors exist which would preclude the proposals from being carried out and, after examining and comparing the latter and hearing representations from any promoters who so request, they are to indicate whether a proposal is in the public interest.
26 In that case, under Article 37c of Law No 109/1994, a restricted procedure is opened in order to obtain two further offers. The concession is then awarded under a negotiated procedure in which the proposal of the promoter initially selected and the other offers are examined. During the course of the procedure, the promoter may adapt his proposal to the offer considered by the contracting authority to be the most suitable. If he does so he will be awarded the concession.
Pre-litigation procedure
27 Having received complaints about the effects of Law No 109/1994 in its original version, the Commission monitored the procedure for the adoption of the draft law intended to amend it.
28 Following the adoption of Law No 166 of 1 August 2002 amending Law No 109/1994, the Commission sent a letter of formal notice to the Italian Republic on 19 December 2002 stating that, in its view, a number of provisions of Law No 109/1994 were still incompatible with Community law.
29 By letter of 26 June 2003, the Italian Republic agreed with most of the objections put forward by the Commission and informed it of its consequent intention to amend the legislation in force.
30 However, as the Italian Republic failed to make the amendments indicated, on 15 October 2003 the Commission sent the Italian Republic a reasoned opinion calling on it to take the measures necessary to comply with that opinion within two months of its notification.
31 Taking the view that the position adopted by the Italian Republic in a letter of 22 April 2004 was unsatisfactory, the Commission brought the present proceedings pursuant to the second paragraph of Article 226 EC.
32 By order of the President of the Court of 6 April 2005, the French Republic, the Kingdom of the Netherlands and the Republic of Finland were granted leave to intervene in support of the form of order sought by the Italian Republic. Only the Kingdom of the Netherlands and the Republic of Finland submitted statements in intervention.
The action
33 This action is based on six complaints.
The first complaint
34 The first complaint concerns the rules on mixed contracts as set out in Law No 109/1994.
35 It is clear from Article 2(1) of Law No 109/1994, which is intended to define the notion of public works, that the Law covers the construction, demolition, restoration, restructuring, refurbishment and maintenance of works and installations where they are awarded by the persons referred to in Article 2(2). Article 2(1) states that mixed works, supply and services contracts and supply or service contracts which include ancillary works, are subject to the provisions of Law No 109/1994 if the works represent more than 50% of the total value of the relevant contract.
36 Likewise, Article 3(3) of Legislative Decree No 157/1995 provides that, in the case of mixed works and service contracts and service contracts which include ancillary works, the provisions of Law No 109/1994 are applicable if the works represent more than 50% of the total value of the relevant contract.
Arguments of the parties
37 The Commission submits that the legal rules applicable to mixed contracts must depend on the main purpose of the contract as determined inter alia, but not exclusively, by the value of the various matters covered by the contract.
38 In that connection, the Commission claims that, by making those contracts in which the works are the most important element from an economic point of view but are nevertheless incidental to the other matters covered by the contract subject to the rules on public works contracts, the Italian legislation has the effect of removing many service and supply contracts the estimated value of which exceeds the thresholds for the application of Directives 92/50 and 93/36 but which is less than that for Directive 93/37 from the application of the relevant Community legislation.
39 The Italian Republic replies that pending the amendment of the national legislation concerned, undertaken in response to the Commission’s objections, the Ministry of Infrastructure and Transport adopted Circular No 2316 of 18 December 2003 laying down rules for mixed public works, supply and service contracts (disciplina dei contratti misti negli appalti pubblici di lavori, forniture e servizi) (GURI No 79 of 3 April 2004, p. 26), by which the contracting authorities were called on to comply with the principle that, when dealing with a mixed contract, its main purpose must be taken into account in determining the applicable legislation, so that the economic aspect would no longer be predominant in that respect.
40 Law No 62 of 18 April 2005 laying down measures for the implementation of obligations arising from Italy’s membership of the European Communities – Community Law 2004 (dispozioni per l'adempimento di obblighi derivanti dall’apparteneza dell’Italia alle Communità europee, Legge comunitaria 2004) (Ordinary Supplement to the GURI No 96 of 27 April 2005) (‘Community Law 2004’) ratified that approach.
41 The Republic of Finland takes the view that the economic value is a decisive factor in determining the main purpose of the contract, and such an approach should be excluded only in exceptional circumstances, namely where use of the criterion of economic value is intended to prevent the application of Community law.
Findings of the Court
42 According to settled case-law, the question whether a Member State has failed to fulfil its obligations must be determined by reference to the situation obtaining in the Member State at the end of the period laid down in the reasoned opinion (see, inter alia, Case C-114/02 Commission v France [2003] ECR I-3783, paragraph 9, and Case C-433/03 Commission v Germany [2005] ECR I-6985, paragraph 32).
43 The adoption of laws, regulations or administrative provisions after the date on which that period expired cannot be taken into account.
44 Accordingly it is with regard to the legislation in force on 15 December 2003, the date on which the two month period prescribed in the reasoned opinion of 15 October 2003 expired, that it must be decided whether the Italian Republic committed the infringement alleged in this complaint, given that at that date neither the circular referred to in paragraph 39 of this judgment nor the national legislation cited in paragraph 40 had been adopted.
45 ‘Public works contracts’ as defined in Article 1(a) of Directive 93/37 means contracts for pecuniary interest concluded in writing between a contractor and a contracting authority as defined in Article 1(b), which have as their object either the execution, or both the execution and design, of works related to one of the activities referred to in Annex II to Directive 93/37 or a work defined in Article 1(c), or the execution, by whatever means, of a work corresponding to the requirements specified by the contracting authority.
46 Furthermore, it follows from the 16th recital in the preamble to Directive 92/50, read in conjunction with Article 1(a) of Directive 93/37, that a contract may be regarded as a public works contract only if its object corresponds to the definition given in the preceding paragraph and that works that are ancillary rather than the object of the contract do not justify treating the contract as a public works contract.
47 It is, moreover, clear from the case-law of the Court that, where a contract contains both elements relating to a public works contract and elements relating to another type of contract, it is the main purpose of the contract that determines which Community directive on public procurement is to be applied in principle (see Case C-220/05 Auroux and Others [2007] ECR I-385, paragraph 37).
48 In particular, therefore, the scope of Directive 93/37 is linked to the main purpose of the contract, which must be determined in an objective examination of the entire transaction to which the contract relates.
49 The assessment must be made in the light of the essential obligations which predominate and which, as such, characterise the transaction, as opposed to those which are only ancillary or supplementary in nature and are required by the very purpose of the contract; the value of the various matters covered by the contract is, in that regard, just one criterion among others to be taken into account for the purposes of the assessment.
50 It may be inferred from the foregoing that, as the Advocate General has indicated in points 38 and 74 of his Opinion, the value of the works cannot, without infringing the requirements of Directive 93/37, constitute the sole criterion capable of resulting in the application of Law No 109/1994 to a mixed contract, where those works are only ancillary.
51 The rule laid down in Article 2(1) of Law No 109/1994 also fails to comply with the requirements in Directives 92/50 and 93/36, in so far as its application may result in certain mixed contracts falling outside the procedures provided for in those directives, namely those contracts where the works, although ancillary, represent more than 50% of the total value and the total value is below the threshold set by Directive 93/37 even though it reaches the thresholds adopted in Directives 92/50 and 93/36.
52 Therefore, it must be held that, by adopting Article 2(1) of Law No 109/1994, the Italian Republic has failed to fulfil its obligations under Directives 92/50, 93/36 and 93/37.
The second complaint
53 The second complaint relates to the direct award of works or a work to the holder of a building permit or an approved estate plan if their value is below the threshold for the application of Directive 93/37.
54 Under Article 2(5) of Law No 109/1994, works carried out directly by private persons which are set off against contributions payable in respect of building permits, works arising from the obligations set out in Article 28(5) of Law No 1150/1942 and works which are analogous to the two preceding categories are not covered by Law No 109/1994. Article 2(5) states, however, that if the value of the works, assessed individually, exceeds the thresholds laid down by the applicable Community rules, the contract must be awarded in accordance with the procedures prescribed by Directive 93/37.
55 It is also clear from Articles 1 and 31 of Law No 1150/1942 and Articles 3 and 11 of Law No 10/1977 that the holder of a permit may carry out infrastructure works himself and offset the whole or part of the cost against the charges due.
Arguments of the parties
56 The Commission claims, first, that the provisions of Law No 109/1994, read together with the relevant provisions of Law No 1150/1942 and Law No 10/1977, enable works or a work which constitute public works contracts within the meaning of Article 1(a) of Directive 93/37 to be awarded directly to the holder of a building permit or approved site plan without any guarantee, by way of express provisions, that the principles of transparency and equal treatment that are enshrined in the EC Treaty and must be observed even if the estimated value of the contract is below the threshold for application of the directive will be applied.
57 Second, the Commission submits that, in order to determine whether that threshold has been reached, the total value of the works and/or work covered by the agreement concluded between the private person and the authority must be calculated, as they must be regarded as separate lots in one single contract. The fact that, under national law, the tender procedures are applicable only if the agreement concerns works whose estimated value, taken individually, exceeds the threshold for the application of the relevant Community rules therefore amounts to a failure to comply with the requirements of Directive 93/37, through the exclusion from the scope of the national provisions transposing those requirements contracts the total value of which is higher than the threshold because the amounts corresponding to each of the matters involved in those contracts are insufficient.
58 According to the Italian Republic, as regards infrastructure works with a value less than the threshold for application of the Community rules and which are executed by the holder of a building permit or approved estate plan, it is unnecessary at the transposition stage to refer specifically to the rules of the Treaty on advertising and competition and the relevant case-law of the Court interpreting them.
59 Second, the Italian Republic draws attention to the specific features of the town planning sector in which estate owners take the place of local authorities and to the characteristics of the development agreements concluded between local authorities and estate owners.
60 Such agreements simply require the local authority concerned to issue building permits, the estate owner being responsible for undertaking the infrastructure works in the area concerned on the basis of proposals that the local authority reserves the right to approve.
61 The fact that the same estate owner has been entrusted with the execution of various works which by their very nature differ from each other does not mean that there is an obligation to aggregate the works for the purpose of applying Directive 93/37 simply because he is the owner of the land concerned. The Italian Republic submits, in that connection, that in Case C-399/98 Ordine degli Architetti and Others [2001] ECR I‑5409 the Court gave a ruling on a situation different from the one in the present case, in so far as it concerned the achievement of works which were clearly a single unit.
62 According to the Kingdom of the Netherlands, public contracts with a value below the threshold laid down by the relevant directives are not covered by the principle of transparency. It adds that the directives themselves expressly provide for a number of derogations, as the Community legislature chose in those situations to give priority to interests other than transparency.
63 The Republic of Finland submits that while contracts the value of which is lower than the thresholds set by those directives are thereby excluded from the scope of the directives, they are subject as a matter of law to the provisions of the Treaty relating to the free movement of goods and services and freedom of establishment.
64 Accordingly, national law should not impose specific requirements relating to advertising or inviting competing bids with respect to those contracts.
Findings of the Court
65 First of all, the Community legislature expressly made a policy choice to exclude contracts under a certain threshold from the advertising regime which it introduced and therefore did not impose any specific obligation with respect to them.
66 Furthermore, where it is established that such a contract is of certain cross-border interest, the award, in the absence of any transparency, of that contract to an undertaking located in the same Member State as the contracting authority amounts to a difference in treatment to the detriment of undertakings which might be interested in the contract but which are located in other Member States. Unless it is justified by objective circumstances, such a difference in treatment, which, by excluding all undertakings located in another Member State, operates mainly to the detriment of the latter undertakings, amounts to indirect discrimination on the basis of nationality, prohibited under Articles 43 EC and 49 EC (see, to that effect, as regards Directive 92/50, Case C‑507/03 Commission v Ireland [2007] ECR I‑0000, paragraphs 30 and 31 and the case-law cited).
67 Since, as the Advocate General has observed, in point 56 of his Opinion, under Article 249 EC directives are binding as to the result to be achieved upon each Member State to which they are addressed and since the Community legislature excluded certain contracts from the scope of Directive 93/37, in particular by laying down thresholds, the Member States are not required to adopt, in the legislation transposing that directive, provisions recalling the obligation to comply with Articles 43 EC and 49 EC, which is applicable only in the circumstances set out in paragraph 66 of this judgment.
68 The fact that the Italian legislature did not adopt such provisions with respect to public contracts for infrastructure works executed by the holder of a building permit or an approved estate plan the value of which is below the threshold for application of Directive 93/37, for cases where the existence of a certain cross-border interest is established, does not call into question the applicability of Articles 43 EC and 49 EC to those contracts.
69 Therefore, the second complaint, in so far as it is based on the infringement of fundamental rules of the Treaty, must be dismissed.
70 Second, as regards the scope of Article 2(5) of Law No 109/1994 in the light of the requirements of Directive 93/37, according to settled case‑law the fact that a provision of national law allowing direct execution by the holder of a building permit or an approved estate plan of infrastructure works which offset the whole or part of the contribution payable in respect of the permit forms part of a set of urban development regulations which are of a special nature and pursue a specific aim that is separate from Directive 93/37 is not sufficient to exclude the direct execution of works from the scope of the directive when the elements needed to bring it within the scope of the directive are present (see Ordine degli Architetti andOthers, paragraph 66).
71 Such execution must therefore be subject to the procedures provided for in Directive 93/37 where it satisfies the conditions contained therein for classification of a public works contract and, in particular, where the contractual element required in Article 1(a) thereof is present and the value of the work is equal to or higher than the threshold laid down in Article 6(1).
72 Furthermore, it is clear from Article 6(3) of Directive 93/37 that, where a work is subdivided into several lots, each one the subject of a contract, the value of each lot must be taken into account for the purpose of calculating the amount referred to in Article 6(1) which determine whether or not the directive is applicable to all the lots. In addition, under Article 6(4), no work or contract may be split up with the intention of avoiding the application of the directive.
73 Therefore, as the Advocate General has stated in point 88 of his Opinion, if the agreement concluded between a private person who is the owner of development land and the municipal authority satisfies the criteria for the definition of a ‘public works contract’ within the meaning of Article 1(a) of Directive 93/37, which are set out in paragraph 45 of this judgment, the estimated value which must in principle be taken into account in order to ascertain whether the threshold set by the directive is attained and whether, therefore, the award of the contract must comply with the rules on advertising laid down therein, may be calculated solely by reference to the total value of the various works, by adding together the value of the various lots.
74 By providing for an award procedure which complies with the requirements of Directive 93/37 only where the estimated value of each of those lots, taken individually, exceeds the threshold for application of the directive, Italian law infringes the directive.
75 It is clear from the foregoing that Article 2(5) of Law No 109/1994 fails to comply with the requirements of Directive 93/37 by improperly limiting use of the procedures established by the directive.
The third complaint
76 The third complaint concerns the award of the design, supervision and inspection of works in the context of public service contracts the value of which is below the threshold for the application of the relevant Community provisions.
77 According to Articles 17(12) and 30(6a) of Law No 109/1994, public service contracts for the design and supervision of works and inspection of the works, the estimated value of which is below the threshold for the application of Directive 92/50, may be awarded to persons trusted by the awarding entity.
Arguments of the parties
78 The Commission criticises those provisions, which allow the use of a method of awarding the public service contracts concerned that excludes any form of advertising, on the ground that, although those contracts do not fall within the scope of Directive 92/50, they remain subject to the rules of the Treaty on the freedom to provide services and freedom of establishment as well as to the principles of non-discrimination, equal treatment, proportionality and transparency.
79 The Italian Republic submits that any rule of secondary legislation must be interpreted on the basis of the general principles of the Treaty and that any interpretation which deviates from them would be unlawful. In any event, any unlawfulness can only arise from an incorrect application of the rule to a particular case. Therefore, when transposing Community law, there cannot be a requirement to refer specifically to the provisions of the Treaty.
80 It adds that a ministerial circular drew the attention of contracting authorities to the requirement to comply with the general principles of non-discrimination, equal treatment and transparency and that, in any event, direct award of the contracts concerned to trusted persons may take place only after their professional experience and professional capacity have been checked.
Findings of the Court
81 It is settled case‑law, as stated in paragraph 66 of this judgment, that public service contracts falling outside the scope of Directive 92/50 which have been shown to be of certain cross-border interest remain subject to the fundamental freedoms laid down by the Treaty in the circumstances specified in the case-law set out in that paragraph.
82 Since the obligations arising from primary law that relate to equal treatment and transparency are therefore automatically applicable to those contracts – which are nevertheless excluded from the scope of Directive 92/50 on account of their value – in so far as the conditions laid down by that case-law are satisfied, there is no requirement for the national legislation transposing the directive to recall them expressly.
83 Therefore, the third complaint must be dismissed.
The fourth and fifth complaints
84 The fourth complaint concerns the provisions of Article 27(2) of Law No 109/1994, according to which, if the contracting authorities are unable to carry out the supervision of works which is as a rule the responsibility of their technical departments, those activities are entrusted to the project designer within the meaning of Article 17(4) thereof.
85 The fifth complaint relates to the award of testing and of inspection tasks in respect of public works, as governed by Article 28(4) of Law No 109/1994 and Article 188 of DPR No 554/1999. It is clear from a combined reading of those provisions that although those tasks are, as a rule, the responsibility of the technical departments of the contracting authorities, where a lack of staff has been established and certified by the person responsible for the procedure the authority may award the tasks to third parties featured on lists drawn up for that purpose by the Ministry of Public Works, without using the procedures relating to the opening of contracts up to competition.
Arguments of the parties
86 In the Commission’s view, since Articles 27(2) and 28(4) of Law No 109/1994 allow the public service contracts concerned to be directly awarded without competition, they infringe, depending on the value of those contracts, either Directives 92/50 and 93/38 or Articles 43 EC and 49 EC.
87 The Italian Republic replies that it took formal notice of the criticisms made by the Commission and, as a result, it has amended its legislation by adopting Community Law 2004.
Findings of the Court
88 It must be noted as a preliminary point that, in accordance with the case-law set out in paragraph 42 of this judgment, only the national legislation in force on 15 December 2003 may be taken into account in assessing the complaints made by the Commission.
89 It must be observed, in the first place, that the only permitted exceptions to the application of Directives 92/50 and 93/38 are those which are exhaustively and expressly mentioned therein (see, by way of analogy, Case C-107/98 Teckal [1999] I‑8121, paragraph 43, and Case C-340/04 Carbotermo and Consorzio Alisei [2006] ECR I-4137, paragraph 45).
90 As the Advocate General has noted, in point 101 of his Opinion, supervision and the inspection of works are included in Category No 12 of both Annex I A to Directive 92/50 and Annex XVI A to Directive 93/38.
91 It is clear, first, from Article 8 of Directive 92/50 that contracts which have as their object services listed in Annex I A are to be awarded in particular in accordance with the provisions of Title III of that directive which concerns the choice of award procedures and, second, from Article 15 of Directive 93/38 that supply and works contracts and contracts which have as their object services listed in Annex XVI A are to be awarded in accordance with, inter alia, the provisions of Title IV of Directive 93/38, relating to award procedures.
92 Therefore, in so far as contracts for the supervision of works must be awarded in accordance with the rules laid down by Directives 92/50 and 93/38, the direct award to the project designer, as resulting from Article 27(2) of Law No 109/1994, infringes those directives as regards contracts which, having regard to their value, fall within the scope of the directives.
93 Likewise, in so far as contracts for inspection works must be awarded in accordance with the rules laid down by Directives 92/50 and 93/38, the award to third parties in the circumstances set out in Article 28(4) of Law No 109/1994 and Article 188 of DPR No 554/1999 infringes those directives as far as concerns the contracts included in their scope.
94 In the second place, in the case of contracts in respect of which the value of the services concerned is below the threshold for application of Directives 92/50 and 93/38, as stated in paragraphs 68 and 82 of this judgment the absence from the applicable national provisions of any express reference to the application of the obligations arising from the Treaty does not mean that there is no need to comply with the principle of equal treatment and the obligation of transparency when awarding those contracts in so far as the conditions laid down by the case-law recalled in paragraph 66 of this judgment are satisfied.
95 Therefore, the fourth and fifth pleas must be dismissed in so far as they refer to the infringement of Articles 43 EC and 49 EC but are well founded as to the remainder.
The sixth complaint
96 The sixth complaint concerns Articles 37a to 37c of Law No 109/1994, pursuant to which the authorities may allow the execution by third parties of public works which can be exploited commercially, in accordance with a specific award procedure. During the first stage, third parties are invited to submit, as promoters, proposals for the award of concessions, in respect of which the costs are assumed wholly or in part by the promoters. Once the proposals submitted have been evaluated, those considered to be in the public interest are selected in a second stage, in the course of which, with respect to each proposal selected, a restricted tender procedure is opened with a view to selecting two further offers.
97 A negotiated procedure is then opened by the contracting authority with the promoter and the other third parties who have submitted the two best offers in the tender procedure, the promoter having the opportunity to adapt his proposal to the offer considered most suitable by the contracting authority.
Arguments of the parties
98 The Commission submits that those rules are liable to constitute an infringement of the principle of equal treatment.
99 It takes the view that the rules for opening the concession up to competition favour the promoter as compared with all the other potential tenderers for two reasons.
100 First, the promoter is automatically invited to take part in the negotiated procedure for the award of the concession, irrespective of any comparison between his proposal and the offers submitted by the participants in the previous tendering procedure.
101 Second, the promoter has the opportunity to amend his proposal during the negotiated procedure in order to adapt it to the tender considered by the contracting authority to be the most suitable. In reality, that advantage amounts to the recognition of a right of priority for the promoter in the award of the concession.
102 The Italian Republic states that Community Law 2004, mentioned in paragraph 40 of this judgment, took account of the Commission’s objections.
Findings of the Court
103 It is clear from Article 38(1)(c) of the Rules of Procedure of the Court of Justice and from the case-law relating to that provision, that an application must state the subject-matter of the proceedings and a summary of the pleas in law on which the application is based, and that that statement must be sufficiently clear and precise to enable the defendant to prepare his defence and the Court to rule on the application. It is therefore necessary for the essential points of law and of fact on which a case is based to be indicated coherently and intelligibly in the application itself and for the heads of claim to be set out unambiguously so that the Court does not rule ultra petita or indeed fail to rule on an objection (Case C-195/04 Commission v Finland [2007] ECR I‑3351, paragraph 22).
104 In this case, the Commission's application does not satisfy those requirements so far as the present complaint is concerned.
105 By its application, the Commission seeks a declaration that the Italian Republic has failed to fulfil obligations under Directives 92/50, 93/36, 93/37 and 93/38 and Articles 43 EC and 49 EC. In the sixth complaint, it fails to state precisely which of those directives and/or provisions of the Treaty the Italian Republic is supposed to have infringed by allegedly infringing the principle of equal treatment.
106 Moreover, as far as concerns Articles 43 EC and 49 EC, those articles do not lay down a general obligation of equal treatment but contain, as is clear from the case-law cited in paragraph 66 of this judgment, a prohibition on discrimination on the basis of nationality. The Commission does not give any particulars regarding the existence of such discrimination in this complaint.
107 Therefore, the sixth complaint must be declared inadmissible.
108 Having regard to all the foregoing considerations, it must be held that, by adopting:
– Article 2(1) of Law No 109/1994, the Italian Republic has failed to fulfil its obligations under Directives 92/50, 93/36 and 93/37;
– Article 2(5) of Law No 109/1994, the Italian Republic has failed to fulfil its obligations under Directive 93/37; and
– Articles 27(2) and 28(4) of Law No 109/1994, the Italian Republic has failed to fulfil its obligations under Directives 92/50 and 93/38.
Costs
109 Under Article 69(3) of the Rules of Procedure, the Court may order that the costs be shared or decide that each party is to bear its own costs where each party succeeds on some and fails on other heads. Since the Commission has been partly unsuccessful with respect to the second, fourth and fifth complaints, unsuccessful with respect to the third complaint and the sixth complaint has been declared inadmissible, and the Italian Republic has been unsuccessful on the first complaint and partly unsuccessful with respect to the second, fourth and fifth complaints, each party is to bear its own costs.
110 Under Article 69(4) of the Rules of Procedure, the Member States which have intervened in the proceedings are to bear their own costs.
On those grounds, the Court (Second Chamber) hereby:
1. Declares that, by adopting:
– Article 2(1) of Law No 109 of 11 February 1994 – Framework Law on public works (legge quadro in materia di lavori pubblici), as amended by Law No 166 of 1 August 2002, the Italian Republic has failed to fulfil its obligations under Council Directive 92/50/EEC of 18 June 1992 relating to the coordination of procedures for the award of public service contracts, Council Directive 93/36/EEC of 14 June 1993 coordinating procedures for the award of public supply contracts, and Council Directive 93/37/EEC of 14 June 1993 concerning the coordination of procedures for the award of public works contracts as amended by European Parliament and Council Directive 97/52/EC of 13 October 1997;
– Article 2(5) of Law No 109/1994 as amended, the Italian Republic has failed to fulfil its obligations under Directive 93/37 as amended; and
– Articles 27(2) and 28(4) of Law No 109/1994 as amended, the Italian Republic has failed to fulfil its obligations under Directive 92/50 and Council Directive 93/38/EEC of 14 June 1993 coordinating the procurement procedures of entities operating in the water, energy, transport and telecommunications sectors;
2. Dismisses the action as to the remainder;
3. Orders the Commission of the European Communities and the Italian Republic to bear their own costs;
4. Orders the French Republic, the Kingdom of the Netherlands and the Republic of Finland to bear their own costs.
[Signatures]
* Language of the case: Italian.
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