JUDGMENT OF THE COURT (First Chamber)
7 September 2023 ( *1 )
(Failure of a Member State to fulfil obligations – Public contracts for services contracts – State printing office – Production of identity documents and other official documents as well as systems for managing such documents – National legislation providing for the award of contracts for such production to a public undertaking without first conducting a procurement procedure – Article 346(1)(a) TFEU – Directive 2014/24/EU – Article 1(1) and (3) – Article 15(2) and (3) – Special security measures – Protection of a Member State’s essential security interests)
In Case C‑601/21,
ACTION for failure to fulfil obligations under Article 258 TFEU, brought on 28 September 2021,
European Commission, represented initially by P. Ondrůšek, M. Siekierzyńska, A. Stobiecka-Kuik and G. Wils, and subsequently by G. Gattinara, P. Ondrůšek, A. Stobiecka-Kuik and G. Wils, acting as Agents,
applicant,
v
Republic of Poland, represented by B. Majczyna, E. Borawska-Kędzierska and M. Horoszko, acting as Agents,
defendant,
THE COURT (First Chamber),
composed of A. Arabadjiev, President of the Chamber, L. Bay Larsen (Rapporteur), Vice-President of the Court, P.G. Xuereb, T. von Danwitz and A. Kumin, Judges,
Advocate General: N. Emiliou,
Registrar: C. Di Bella, Administrator,
having regard to the written procedure and further to the hearing on 1 December 2022,
after hearing the Opinion of the Advocate General at the sitting on 2 March 2023,
gives the following
Judgment
1 |
By its application, the European Commission asks the Court to declare that, by adding to Polish legislation exemptions not provided for in Directive 2014/24/EU of the European Parliament and of the Council of 26 February 2014 on public procurement and repealing Directive 2004/18/EC (OJ 2014 L 94, p. 65), concerning contracts for the production of certain documents, printed matter and stamps and markings, the Republic of Poland has failed to fulfil its obligations under Article 1(1) and (3) and Article 15(2) and (3) of Directive 2014/24, read in conjunction with Article 346(1)(a) TFEU. |
Legal context
European Union law
2 |
Article 1 of Directive 2014/24 provides: ‘1. This Directive establishes rules on the procedures for procurement by contracting authorities with respect to public contracts as well as design contests, whose value is estimated to be not less than the thresholds laid down in Article 4. 2. Procurement within the meaning of this Directive is the acquisition by means of a public contract of works, supplies or services by one or more contracting authorities from economic operators chosen by those contracting authorities, whether or not the works, supplies or services are intended for a public purpose. 3. The application of this Directive is subject to Article 346 TFEU. …’ |
3 |
Under points 6 and 9 of Article 2(1) of that directive: ‘For the purposes of this Directive, the following definitions apply: … (6) “public works contracts” means public contracts having as their object one of the following:
… (9) “public service contracts” means public contracts having as their object the provision of services other than those referred to in point 6’. |
4 |
Article 4 of the directive determines the thresholds from which the directive applies. |
5 |
Article 12 of the directive, entitled ‘Public contracts between entities within the public sector’ provides in paragraph 1 thereof: ‘A public contract awarded by a contracting authority to a legal person governed by private or public law shall fall outside the scope of this Directive where all of the following conditions are fulfilled:
…’ |
6 |
Article 15 of Directive 2014/24, entitled ‘Defence and security’, provides, in paragraphs 2 and 3 thereof: ‘2. This Directive shall not apply to public contracts and design contests not otherwise exempted under paragraph 1, to the extent that the protection of the essential security interests of a Member State cannot be guaranteed by less intrusive measures, for instance by imposing requirements aimed at protecting the confidential nature of information which the contracting authority makes available in a contract award procedure as provided for in this Directive. Furthermore, and in conformity with point (a) of Article 346(1) TFEU, this Directive shall not apply to public contracts and design contests not otherwise exempted under paragraph 1 of this Article to the extent that the application of this Directive would oblige a Member State to supply information the disclosure of which it considers contrary to the essential interests of its security. 3. Where the procurement and performance of the public contract or design contest are declared to be secret or must be accompanied by special security measures in accordance with the laws, regulations or administrative provisions in force in a Member State, this Directive shall not apply provided that the Member State has determined that the essential interests concerned cannot be guaranteed by less intrusive measures, such as those referred to in the first subparagraph of paragraph 2.’ |
7 |
Article 28(1) and (2) of that directive, entitled ‘Restricted procedure’, is worded as follows: ‘1. In restricted procedures, any economic operator may submit a request to participate in response to a call for competition … … 2. Only those economic operators invited to do so by the contracting authority following its assessment of the information provided may submit a tender. Contracting authorities may limit the number of suitable candidates to be invited to participate in the procedure in accordance with Article 65. …’ |
8 |
Article 29 of the directive, entitled ‘Competitive procedure with negotiation’, provides, in paragraph 6 thereof: ‘Competitive procedures with negotiation may take place in successive stages in order to reduce the number of tenders to be negotiated by applying the award criteria specified in the contract notice, in the invitation to confirm interest or in another procurement document. …’ |
9 |
Article 30(4) of that directive provides: ‘Competitive dialogues may take place in successive stages in order to reduce the number of solutions to be discussed during the dialogue stage by applying the award criteria laid down in the contract notice or in the descriptive document. In the contract notice or the descriptive document, the contracting authority shall indicate whether it will use that option.’ |
10 |
Article 42 of Directive 2014/24 makes provision for contracting authorities to formulate technical specifications and take them into account in selecting tenders. Paragraph 1 of that article provides: ‘The technical specifications as defined in point 1 of Annex VII shall be set out in the procurement documents. The technical specifications shall lay down the characteristics required of a works, service or supply. Those characteristics may also refer to the specific process or method of production or provision of the requested works, supplies or services or to a specific process for another stage of its life cycle even where such factors do not form part of their material substance, provided that they are linked to the subject matter of the contract and proportionate to its value and its objectives. The technical specifications may also specify whether the transfer of intellectual property rights will be required. …’ |
11 |
Under Article 58 of that directive, entitled ‘Selection criteria’: ‘1. Selection criteria may relate to:
Contracting authorities may only impose criteria referred to in paragraphs 2, 3 and 4 on economic operators as requirements for participation. They shall limit any requirements to those that are appropriate to ensure that a candidate or tenderer has the legal and financial capacities and the technical and professional abilities to perform the contract to be awarded. All requirements shall be related and proportionate to the subject matter of the contract. 2. With regard to suitability to pursue the professional activity, contracting authorities may require economic operators to be enrolled in one of the professional or trade registers kept in their Member State of establishment, as described in Annex XI, or to comply with any other request set out in that Annex. … 3. With regard to economic and financial standing, contracting authorities may impose requirements ensuring that economic operators possess the necessary economic and financial capacity to perform the contract. For that purpose, contracting authorities may require, in particular, that economic operators have a certain minimum yearly turnover, including a certain minimum turnover in the area covered by the contract. In addition, contracting authorities may require that economic operators provide information on their annual accounts showing the ratios, for instance, between assets and liabilities. They may also require an appropriate level of professional risk indemnity insurance. … 4. With regard to technical and professional ability, contracting authorities may impose requirements ensuring that economic operators possess the necessary human and technical resources and experience to perform the contract to an appropriate quality standard. Contracting authorities may require, in particular, that economic operators have a sufficient level of experience demonstrated by suitable references from contracts performed in the past. A contracting authority may assume that an economic operator does not possess the required professional abilities where the contracting authority has established that the economic operator has conflicting interests which may negatively affect the performance of the contract. In procurement procedures for … services …, the professional ability of economic operators to provide the service … may be evaluated with regard to their skills, efficiency, experience and reliability. …’ |
12 |
Entitled ‘Reliance on the capacities of other entities’, Article 63 of that directive provides in paragraph 1 thereof: ‘With regard to criteria relating to economic and financial standing as set out pursuant to Article 58(3), and to criteria relating to technical and professional ability as set out pursuant to Article 58(4), an economic operator may, where appropriate and for a particular contract, rely on the capacities of other entities, regardless of the legal nature of the links which it has with them. … … Where 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. …’ |
13 |
Article 71 of that directive lays down detailed rules concerning subcontracting. |
Polish law
14 |
Article 4(5c) of the ustawa Prawo zamówień publicznych (Law on public procurement) of 29 January 2004 (Dz. U., No 19, item 177), as amended by the ustawa o dokumentach publicznych (Law on public documents) of 22 November 2018 (Dz. U. of 2019, item 53) (‘the Law on public procurement’), provides: ‘This Law shall not apply to: … (5c) contracts for the production of:
|
15 |
The public documents referred to in Article 5(2) of the Law on public documents are:
|
Pre-litigation procedure
16 |
By a letter of formal notice of 25 January 2019, the Commission expressed doubts to the Republic of Poland, inter alia, as to the compatibility with Directive 2014/24 of the Law on public procurement, transposing that directive into the Polish legal order. |
17 |
In particular, the Commission took the view that that Member State had failed to fulfil its obligations under that directive, since that law excluded from public procurement procedures the document production services, referred to in Article 4(5c) of that law, (‘the services at issue’), for excise stamps, legal markings, control stickers, ballot papers, holographic signs on certificates of voting rights and microprocessor systems with software for the management of public documents, computer systems and databases necessary for the use of public documents, containing an electronic chip, in accordance with their purpose, even though such an exclusion was not provided for in that directive. |
18 |
In its reply of 25 March 2019, the Republic of Poland disputed the Commission’s complaint. |
19 |
On 5 November 2019, that Member State informed the Commission of the adoption of a new law intended to replace the Law on public procurement from 1 January 2021. |
20 |
The Commission, taking the view that that new law still did not remedy the failure to fulfil obligations under Directive 2014/24, by letter of 28 November 2019, sent a reasoned opinion to the Republic of Poland and called on that Member State to take the necessary measures to comply with that opinion within a period of two months from receipt thereof. |
21 |
In its reply of 28 January 2020, the Republic of Poland challenged, in particular, the Commission’s complaint alleging the addition in the Polish legal order of exemptions not provided for in that directive in so far as concerns the services at issue. |
22 |
Since it was not satisfied with the responses provided by the Republic of Poland, the Commission decided, on 9 June 2021, to bring the present action before the Court. |
The action
Arguments of the parties
23 |
The Commission maintains that, when transposing Directive 2014/24 into the Polish legal order, the Republic of Poland infringed that directive by exempting the services at issue in the procurement procedure provided for by that directive. In that regard, that institution observes that such exemptions are neither provided for in Articles 7 to 12 of that directive, nor can be justified on the basis of Article 15 thereof. |
24 |
The Commission recalls that, in accordance with the case-law of the Court, it is the Member State which intends to rely on the derogations provided for in Article 15 which has the burden of proving that the exceptional circumstances justifying those derogations do actually exist. |
25 |
By referring to the judgment of 20 March 2018, Commission v Austria (State printing office) (C‑187/16, EU:C:2018:194), the Commission states that it is for the Member States to define their essential security interests and the security measures necessary for the protection of public security in the context of the printing of identity documents and other official documents, and that the measures adopted by the Member States in connection with the legitimate requirements of national interest are not excluded in their entirety from the application of EU law solely because they are taken, inter alia, in the interests of public security or national defence. In particular, it is for the Republic of Poland to establish that the need to protect the interests on which it relies could not be satisfied in the context of a call for tenders. Moreover, economic or industrial interests do not constitute, in principle, such essential security interests. |
26 |
In that regard, the Commission takes the view that the justifications put forward by the Republic of Poland concerning the services at issue, with a view to derogating from the application of the procurement procedures laid down by Directive 2014/24 are insufficient. |
27 |
That institution maintains that the fact that the State is the sole shareholder of the undertaking which has been entrusted with the supply of the services at issue cannot constitute a guarantee either against the possible bankruptcy of that undertaking or of the reliability of the implementation of the contracts at issue. In that regard, the Commission, first, doubts that any bankruptcy of Polska Wytwórnia Papierów Wartościowych S.A. (‘PWPW’) is impossible, having regard to applicable State aid rules and, second, raises the possibility for PWPW of having recourse to subcontracting. |
28 |
As regards the existence of a possible threat to the security of the Republic of Poland in the event that the successful tenderer is a private operator, on the ground that that operator may be acquired by new shareholders, the Commission submits that the contracting authority may put appropriate guarantees in place, including the termination of the public procurement contract in question. |
29 |
Furthermore, concerning the possibility of leaks of classified or sensitive information, it is argued that the Republic of Poland has failed to demonstrate the link between PWPW’s status as a public undertaking and the guarantees intended to avoid such a leak. A State shareholding of 100% in that company does not constitute a guarantee against such leaks, having regard to the possibility of having recourse to subcontractors. |
30 |
Although the Commission does not deny that the need to ensure the security of the information involved in the award of the contract for the services at issue is in the general interest, that interest nevertheless does not systematically correspond to an essential security interest of a Member State. |
31 |
That institution observes that the contracting authority may impose particularly exacting requirements concerning the suitability and reliability of tenderers and change the conditions governing calls for tenders and contracts for the provision of services. |
32 |
In particular, the contracting authority may set out technical specifications, such as those referred to in Article 42 of Directive 2014/24, and/or the setting of selection criteria, such as those referred to in Article 58 of that directive, thus ensuring that the successful tenderer is able to deliver a quality product, in compliance with the conditions and techniques imposed. |
33 |
As to the technical specifications referred to in Article 42 of Directive 2014/24, the contracting authority could, inter alia, impose requirements and specific procedures ensuring the safety of premises, transport and that relating to the handling of material and physical access to those premises, keeping proper records, the protection of personal data or the submission, by the economic operator selected, of ongoing reports. The contracting authority could, moreover, require that operator to permit it to carry out the checks that it considered necessary. |
34 |
According to the Commission, guarantees could be provided through contractual arrangements, such as a bank guarantee or a guarantee for the compensation of possible harm caused in the event of damage, with the assurance that any information leak would be regarded as serious professional misconduct. In addition, consideration could be given to imposing an obligation on the successful tenderer to draw up a detailed report in the event of irregularities, or to including provisions in the contract relating to the protection of intellectual property and the assumption of responsibility for the services at issue by another entity in the event that the successful tenderer is unable to fulfil its obligations. |
35 |
Furthermore, as regards the irreversibility of any harm resulting from the undermining of the essential interests of the Republic of Poland through the leaking of sensitive information, the Commission submits that such irreversibility does not preclude the contractual terms concerning damages having both a compensatory and a deterrent effect. |
36 |
In that connection, the Commission adds that such obligations and requirements may be imposed on the successful tenderer whether its headquarters are in the territory of the Republic of Poland or that of another Member State. |
37 |
When defining the selection criteria, referred to in Article 58 of Directive 2014/24, the Commission points out that a contracting authority may impose certain requirements intended to show relevant experience concerning the production of highly secure documents, the existence of the necessary infrastructure and equipment, the presence of suitably qualified and experienced staff, who also have a clean criminal record, a financial situation allowing the contract in question to be performed securely, or even professional indemnity insurance cover. |
38 |
Furthermore, the Commission submits that the confidentiality of information concerning the services at issue could be ensured by imposing a confidentiality requirement. In that regard, the contracting authority could impose a requirement of national security clearance in respect of access to classified information. Moreover, the contracting authority would still be in a position to amend or terminate the public procurement contract concerned when circumstances arose which the contracting authority could not have foreseen. |
39 |
The Republic of Poland, relying on the requirement of protection of its essential security interests, disputes the claim that it has failed to fulfil its obligations with regard to the services at issue. |
40 |
According to that Member State, it is not possible to make those services subject to the public procurement procedures laid down by Directive 2014/24 without undermining those interests. The exemptions that are the subject of the present action are measures proportionate, appropriate and necessary to achieving the objective of guaranteeing the protection of those interests at a level which the Republic of Poland considers to be appropriate. |
41 |
Concerning, in the first place, the exemption from public procurement procedures of the production of public documents referred to in Article 4(5c), from the Law on public procurement, first, the Republic of Poland, in the pre-litigation procedure, relied on the need to safeguard the security of those documents, which are regarded as essential to the security of that Member State, by preventing the falsification of such documents. However, only the printing of those documents by PWPW would allow that Member State to guard against such risks of falsification. |
42 |
The Republic of Poland emphasises that the security of those documents is closely linked to the fundamental interests of the State, namely both domestic interests including the security, health and freedom of citizens and respect for public order, and cross-border interests including the protection of the life, health and freedoms of citizens, and prevention of terrorism, human trafficking and organised crime. |
43 |
As regards, in particular, the documents referred to in paragraph 32 of Article 5(2) of the Law on public documents, namely, in particular, the service cards of police officers, border guards, State security agents, officers of the Internal Security Agency, officers of the Intelligence Agency, officers of the Military Counterintelligence Service and professional soldiers appointed to a post in that service, officers of the Military Intelligence Service and professional soldiers appointed to a post in that service, and members of the military police, that Member State maintains that the exclusion of those documents from the scope of the procurement procedures is justified by the protection of those fundamental interests. |
44 |
In that connection, the Republic of Poland takes the view that adequate protection of those documents, in particular against the risks of falsification or counterfeiting, is of particular importance for its internal security. In order to ensure the highest level of protection against those risks, the documents in question must be produced by an economic operator that is wholly controlled by that Member State, such as PWPW. |
45 |
Furthermore, as to identity cards and personal military documents, the Republic of Poland takes the view that the exclusion thereof from the scope of procurement procedures laid down by Directive 2014/24 is justified by the requirement, stemming from that Member State’s Constitution, of protection of national security of the State in the area of defence, which also guarantees the independence and integrity of its territory and ensures the security of its citizens. |
46 |
The Republic of Poland maintains, in that regard, that supervision over the production of those documents is part of the wider context of the security and credibility of that Member State concerning defence, having regard to the geopolitical situation of that State, its membership of the North Atlantic Treaty Organisation (NATO), but also the current international context. |
47 |
Moreover, concerning the microprocessor systems with software for the management of public documents, computer systems and databases necessary for the use of those public documents, containing an electronic chip, in accordance with their purpose, referred to in Article 4(5c)(f) of the Law on public procurement, the Republic of Poland submits that, since it is not possible to ensure the security of public documents without guaranteeing an adequate level of security of the electronic components of those documents and the systems and databases used for the purposes of the processing of those documents, similar protection measures must be applied to those components, systems and databases. |
48 |
As regards, in the second place, the excise stamps referred to in Article 4(5c)(b) of the Law on public procurement, the Republic of Poland maintains, in essence, that those stamps are of strategic importance for its national security. In that regard, the fundamental interests on which that Member State relies are the protection of the life and health of citizens, the security of financial transactions, effective prevention of organised and economic crime, financial security and the making available of an appropriate level of tax revenue. |
49 |
The fact of entrusting the production of those stamps to an economic operator such as PWPW, which has lengthy experience in the design, safe manufacture, storage and supply of such stamps on the territory of that Member State, is an essential measure in order to guarantee the safety of citizens in that area, since no other Polish undertaking is in a position to fulfil orders for excise stamps. |
50 |
The security of production of those stamps is intended to guarantee the monitoring of the collection of taxes and levies and the marketing and registration of means of transport. Entrusting the production of those stamps to an undertaking other than PWPW could have the consequence of reducing the level of security that the Republic of Poland wishes to maintain in that area. |
51 |
In so far as concerns, in the third place, legal markings and control stickers for vehicles, referred to in Article 4(5c)(c) of the Law on public procurement, that Member State notes the importance of documents concerning the entry into service of a vehicle for the security of a State. Inasmuch as the production of those documents requires access to secret information and involves the use of a central personalisation technology with the aid of an electronic system, it is necessary to ensure the protection of the classified information and personal data concerned, which is one of the essential elements of the security of the Republic of Poland. |
52 |
In particular, that Member State observes that the transport of dangerous goods, which might be used in order to commit terrorist attacks, inter alia, requires that the details of the driver and the control sticker of the vehicle concerned are only available to carefully selected entities, such as undertakings wholly owned by the State. |
53 |
As regards, in the fourth place, ballot papers and holographic signs on certificates of voting rights, referred to in Article 4(5c)(d) and (e) of the Law on public procurement, the Republic of Poland relies on public confidence in the proper conduct and security of elections and referendums in that Member State. In particular, the proper conduct of elections is of fundamental importance, both from the point of view of the confidence of citizens in the organs of the State and from that of national security, and requires that a sufficient number of ballot papers be printed in good time. |
54 |
The Republic of Poland maintains that the fact of entrusting the supply of services at issue to an entity such as PWPW over which it has complete control, guarantees its influence on the level of security of the public documents that it classifies as ‘sensitive’, by allowing continuous monitoring of that entity’s situation and a rapid response to any threats. |
55 |
That Member State underscores the fact that it is has complete control over PWPW and it manages both the functioning of the bodies of PWPW and the production process for public documents, which guarantees the protection of the fundamental interest of the security of that Member State. |
56 |
In particular, the State Treasury’s ownership of 100% of PWPW’s shares enables the Republic of Poland to prevent that company being taken over by an entity other than one controlled by the State Treasury. It thus guarantees continuity of production of public documents and avoids the risk of bankruptcy of the economic operator responsible for that production. |
57 |
The risk of bankruptcy of a company such as PWPW is purely theoretical and the Commission, furthermore, has not put forward reasons why, in the event that PWPW was in financial difficulty, it would not be possible to grant State aid to that company. |
58 |
As to the risk of insolvency of that operator, the solution proposed by the Commission does not allow a sudden deterioration in the financial situation of that company to be avoided, whereas, on the contrary, such a hypothesis is precluded in a system such as that put in place by the Republic of Poland. |
59 |
Furthermore, the consequences linked to the absence of essential documents for the functioning of the State, which would stem from a sudden interruption in their production by the chosen economic operator, would be irreparable. |
60 |
Moreover, according to the Republic of Poland, confining the production of those documents to an entity such as PWPW, without going through a procurement procedure provided for by Directive 2014/24, ensures the authenticity of those documents and, therefore, the security of that Member State, by limiting, furthermore, the group of entities that has access to classified information. |
61 |
As to the possibility for the contracting authority to have recourse to subcontractors, the Republic of Poland takes the view that a situation in which a contract is performed by an undertaking which is wholly owned by the State, even using subcontractors, is not comparable with a situation in which that contract itself is performed by an entity selected in accordance with the procurement procedures laid down by Directive 2014/24. Furthermore, if a subcontractor does not honour the contract, PWPW has the possibility of taking the place of that subcontractor in so far as concerns the entire chain of document production. |
62 |
The Republic of Poland submits that the Commission is wrong to base its argument on the judgment of 20 March 2018, Commission v Austria (State printing office) (C‑187/16, EU:C:2018:194), which is not relevant for the purposes of the examination of the present action for failure to fulfil obligations. In that connection, that Member State contends that the application of the directives on public procurement relied on in the case which gave rise to that judgment ensured a similar level of security to that which would have been attained without the use of the procurement procedures laid down by those directives. However, the same cannot be said for the present case. |
63 |
The Republic of Poland insists that it is not required to align the level of protection of its own essential security interests with the level of protection afforded by another Member State, in particular the Republic of Austria. In that connection, the Republic of Poland submits that, although the measures which, according to the Commission, may be taken so as to ensure the protection of its essential interests whilst submitting the services at issue to public procurement procedures provided for by Directive 2014/24 are sufficient for most contracts, those measures do not allow the level of protection of the essential security issues that it selected to be attained in respect of contracts concerning the services at issue. |
64 |
As regards the protection of the security of information concerning the public documents in question, the opening up of the production services for those documents to competition increases the number of entities which may have access to information concerning the security of the Republic of Poland, which would increase the risk of that sensitive information being leaked. Such an attack to the essential security interests of that Member State would be, in the same way as a disruption of the supply of those documents, irreversible and a threat to the continuity of functioning of that Member State, since the information thus disclosed may be used by third States, organised crime groups or terrorist organisations. |
65 |
As to the measure envisaged by the Commission, consisting of imposing a duty of secrecy by requiring national security clearance in order to access classified information, the Republic of Poland submits that such an obligation only guarantees the security of that sensitive information to a certain extent. The same applies to measures concerning the definition of technical specifications imposing requirements and specific procedures guaranteeing security. |
66 |
Although the Commission argues that threats to the security of the Member State concerned could exist even when the services at issue were entrusted to a public undertaking such as PWPW, it has nevertheless failed to prove that the level of those threats would be as high as where the performance of the contract concerned was entrusted to an entity selected pursuant to that directive. |
67 |
Even if the measures referred to in paragraph 65 of the present judgment allow only a limited number of candidates which have, moreover, demonstrated that they meet high standards concerning the reliability of information protection procedures to have access to that information, the system chosen by the Republic of Poland allows reduction in the number of entities having access to such information. |
Findings of the Court
68 |
The present action concerns whether the Polish legislation providing for a direct award of the contracts relating to the services at issue to PWPW is in conformity with Directive 2014/24. |
69 |
It should be noted at the outset that, as is apparent from the file submitted to the Court, first, the public contracts covered by that legislation are public service contracts, within the meaning of Article 2(1)(9) of that directive and, second, it is not disputed that the estimated value of those contracts exceeds the application thresholds for that directive. Accordingly, in accordance with Article 1(1) of that directive, that legislation must, in principle, provide that the award of those contracts is to be carried out in compliance with the rules laid down by that directive. |
70 |
The only permitted exemptions to the application of Directive 2014/24 are those which are exhaustively and expressly mentioned therein (see, by analogy, judgment of 18 November 1999, Teckal, C‑107/98, EU:C:1999:562, paragraph 43 and the case-law cited). |
71 |
According to settled case-law relating to the burden of proof in proceedings for failure to fulfil an obligation under Article 258 TFEU, it is for the Commission to determine whether the obligation has not been fulfilled. It is the Commission that must provide the Court with the information necessary for it to determine whether the infringement is made out, and the Commission may not rely on any presumption for that purpose (judgment of 2 September 2021, Commission v Sweden (Waste water treatment plants), C‑22/20, EU:C:2021:669, paragraph 143 and the case-law cited). |
72 |
In the present proceedings, the Republic of Poland relies on Article 15(2) and (3) of Directive 2014/24, read in conjunction with Article 346(1)(a) TFEU, with a view to justifying the compatibility with EU law of the Polish legislation providing for a direct award of the service contracts in question to PWPW. |
73 |
In that connection, it should be noted that it is apparent from Article 15(2) of Directive 2014/24 that that directive does not apply to public contracts to the extent that the protection of the essential security interests of a Member State cannot be guaranteed by less intrusive measures, for instance by imposing requirements aimed at protecting the confidential nature of information which the contracting authority makes available in a contract award procedure as provided for by that directive. |
74 |
Furthermore, that provision states that, in accordance with Article 346(1)(a) TFEU, Directive 2014/24 does not apply to public contracts to the extent that the application of that directive would oblige a Member State to supply information the disclosure of which it considers contrary to the essential interests of its security. |
75 |
Under Article 15(3) of that directive, where the procurement and performance of the public contract are declared to be secret or must be accompanied by special security measures in accordance with the laws, regulations or administrative provisions in force in a Member State, that directive is not to apply provided that the Member State has determined that the essential interests concerned cannot be guaranteed by less intrusive measures. |
76 |
As regards the derogation contained in Article 15 of Directive 2014/24, it is for the Member States to define their essential security interests and, in the present case, for the Polish authorities to define the security measures necessary for the protection of the national security of the Republic of Poland in the context of the printing of documents such as those at issue in the present case (see, by analogy, judgment of 20 March 2018, Commission v Austria (State printing office), C‑187/16, EU:C:2018:194, paragraph 75 and the case-law cited). |
77 |
The wording of Article 15(2) and (3) of Directive 2014/24, read in the light of Article 346 TFEU, does not impose an obligation on the Member States as to the level of protection sought for their essential security interests. |
78 |
As the Advocate General notes, in essence, in paragraph 48 of his Opinion, the term ‘security’, referred to in those provisions, includes, inter alia, the safeguarding of national security. |
79 |
It should be recalled that, according to settled case-law, the objective of protecting national security corresponds to the primary interest in protecting the essential functions of the State and the fundamental interests of society through the prevention and punishment of activities capable of seriously destabilising the fundamental constitutional, political, economic or social structures of a country and, in particular, of directly threatening society, the population or the State itself, such as terrorist activities (judgment of 5 April 2022, Commissioner of An Garda Síochána and Others, C‑140/20, EU:C:2022:258, paragraph 61 and the case-law cited). |
80 |
However, measures adopted by the Member States in connection with the legitimate requirements of national interest are not excluded in their entirety from the application of EU law solely because they are taken in the interests of national security (see, by analogy, judgment of 20 March 2018, Commission v Austria (State printing office), C 187/16, EU:C:2018:194, paragraph 76 and the case-law cited). |
81 |
Moreover, it should also be recalled that derogations such as those relied on in the present action must be strictly interpreted (see, by analogy, judgment of 20 March 2018, Commission v Austria (State printing office), C‑187/16, EU:C:2018:194, paragraph 77 and the case-law cited). |
82 |
Consequently, even though Article 15(2) and (3) of Directive 2014/24 afford the Member States discretion in deciding the measures considered to be necessary for the protection of their essential security interests, those provisions cannot, however, be construed as conferring on Member States the power to derogate from the provisions of the FEU Treaty simply by invoking those interests. Accordingly, a Member State which wishes to avail itself of the derogations provided for in those provisions must establish that the protection of such interests could not have been attained within a competitive tendering procedure as provided for by that directive (see, by analogy, judgment of 20 March 2018, Commission v Austria (State printing office), C‑187/16, EU:C:2018:194, paragraphs 78 and 79 and the case-law cited). |
83 |
In the present case, although the Republic of Poland has admittedly identified the essential security interests which it considers must be protected and the guarantees inherent in the protection of those interests, it is however necessary to verify whether that Member State has shown that the objectives it pursues could not have been attained within a competitive tendering procedure as provided for by Directive 2014/24. |
84 |
In that regard, the Republic of Poland’s argument that the Commission cannot validly rely on the judgment of 20 March 2018, Commission v Austria (State printing office) (C‑187/16, EU:C:2018:194), inasmuch as, unlike the situation at issue in the present case, the national printing office in question in the case which gave rise to that judgment was an undertaking governed by private law, must be rejected from the outset. The legal status of the company responsible, at the national level, for printing official documents, does not relieve the Member State concerned, subject to the applicability of Article 12 of Directive 2014/24, from the obligation to demonstrate that its objectives could not have been attained within a competitive tendering procedure. The Republic of Poland has failed to demonstrate that the public contracts covered by the Polish legislation at issue were subject to an in-house award, falling within the specific cases for exemption from the public procurement rules, referred to in Article 12. |
85 |
As regards, in the first place, the Republic of Poland’s argument that the direct award to PWPW of the service contracts at issue meets the objective of ensuring continuity in the supply of official documents, by avoiding the risk of bankruptcy of that undertaking, it should be noted that, whilst most of those documents are closely linked to public order and the institutional operation of a Member State, which require that guaranteed provision be ensured, the Republic of Poland has, however, failed to show that that objective could not be ensured in the context of a call for tenders and that such guaranteed provision would be jeopardised if those services were entrusted to other undertakings, including, as the case may be, undertakings established in other Member States. |
86 |
In particular, that Member State has failed to show that the risk of disruption in the production of the public documents in question resulting from the potential bankruptcy of the economic operator responsible for that production was significantly greater where a public procurement procedure provided for by Directive 2014/24 was used. |
87 |
In order to mitigate such risks, the Polish legislation at issue could have provided for the imposition of other measures, such as, inter alia, an obligation, vis-à-vis the contracting authority, to conclude, where other considerations do not preclude this, contracts with several suppliers. |
88 |
Moreover, that contract could have provided for guarantee requirements as to financial stability of the candidates. Article 58(3) of Directive 2014/24 provides that contracting authorities may impose requirements ensuring that economic operators possess the necessary economic and financial capacity to perform the contract. That provision states that, for that purpose, contracting authorities may require, in particular, that economic operators have a certain minimum yearly turnover, including a certain minimum turnover in the area covered by the contract. In addition, contracting authorities may require that economic operators provide information on their annual accounts and have, where relevant, an appropriate level of professional risk indemnity insurance. |
89 |
The Republic of Poland has failed to demonstrate that the imposition of such requirements is incapable of mitigating the alleged risks regarding the supply of the documents concerned, due, inter alia, to a sudden deterioration in the financial situation of the undertaking responsible for their production. As the Commission observes, although there is a lesser risk that an undertaking such as PWPW be declared bankrupt, that risk cannot be completely ruled out. |
90 |
As regards the need for production in sufficient numbers and in good time of the ballot papers and holographic signs on certificates of voting rights, referred to in Article 4(5c)(d) and (e) of the Law on public procurement, so as to ensure the efficient conduct and security of elections, the Republic of Poland has failed to demonstrate that undertakings other than PWPW necessarily perform worse than that undertaking and that they cannot print those ballot papers and produce those signs in sufficient quantity and in good time. It follows that it has not been established that it is necessary to disapply the provisions on public procurement laid down by Directive 2014/24 in order to attain the objective put forward by that Member State. |
91 |
In so far as concerns, in the second place, the need to ensure, as regards the majority of the services at issue, the protection of the security of the documents concerned and, more specifically, the information that they contain, the Court has previously held that the requirement to impose an obligation of confidentiality does not in itself prevent the use of a competitive tendering procedure for the award of a contract (judgment of 20 March 2018, Commission v Austria (State printing office), C‑187/16, EU:C:2018:194, paragraph 89). |
92 |
Furthermore, the Court has also held that the confidential nature of data can be protected by a duty of secrecy, without it being necessary to contravene public procurement procedures. There is nothing to prevent the contracting authority from imposing particularly high requirements for the suitability and reliability of contractors, formulating tender specifications and service contracts accordingly and requiring the necessary proof from potential candidates (judgment of 20 March 2018, Commission v Austria (State printing office), C‑187/16, EU:C:2018:194, paragraphs 90 and 91). |
93 |
In order to ensure the security of the majority of the documents concerned, the contracting authority could, in the context of the procurement procedures laid down by Directive 2014/24, have set out, inter alia, technical specifications, as referred to in Article 42 of that directive, and/or set selection criteria, as referred to in Article 58 of the directive. |
94 |
More particularly, as regards those technical specifications, within the meaning of Article 42 of Directive 2014/24, it is apparent from paragraph 1 thereof that such specifications define the requisite characteristics of the services concerned, and that those characteristics may also refer to the specific process or method for supplying the services sought, provided that these are linked to the subject matter of the contract and proportionate to its value and its objectives. |
95 |
As to selection criteria, referred to in Article 58 of that directive, the Court has held that the contracting authority is afforded broad discretion by the EU legislature when determining selection criteria. Thus, in accordance with paragraph 1 of that article, it has some flexibility in setting those requirements for participation in a procurement procedure which it considers to be related and proportionate to the subject matter of the contract and appropriate to ensure that a candidate or tenderer has the legal and financial capacities and the technical and professional abilities required to perform that contract. More specifically, according to paragraph 4 of that article, the contracting authority is free to determine which requirements for participation it considers appropriate, from its point of view, to ensure inter alia the performance of that contract to a quality standard which it considers appropriate (see, to that effect, judgment of 26 January 2023, Construct, C‑403/21, EU:C:2023:47, paragraph 60 and the case-law cited). |
96 |
In particular, that paragraph 4 allows the contracting authority to impose conditions which guarantee that economic operators have the human and technical resources and the experience necessary to perform the contract concerned by ensuring an appropriate quality standard, which can be assessed in view of their know-how, efficiency, experience and reliability. Economic operators who are regarded as not having the requisite professional capacities may therefore be excluded, including in situations involving conflicts of interests which may have an adverse effect on the performance of that contract. |
97 |
Furthermore, as the Commission maintains, as regards the majority of the services at issue, the contracting authority could grant access to the confidential information concerned only to a limited number of candidates, by having recourse to the restricted procedure referred to in Article 28 of Directive 2014/24 or, where appropriate, to the procedures referred to in Articles 29 and 30 thereof. The contracting authority may, in fact, exercise the option of reducing the number of tenders to be negotiated as provided for in Article 29(6) or of solutions to be discussed as provided for in Article 30(4) of that directive. |
98 |
In those circumstances, first, in so far as concerns the argument put forward by the Republic of Poland that the production of legal markings and control stickers for vehicles, referred to in Article 4(5c)(c) of the Law on public procurement, together with the documents relating to the entry into service of a vehicle, requires access to secret or confidential information and involves the protection of classified information and personal data, it has been recalled, in paragraph 92 of the present judgment, that the confidentiality of data can, in principle, be ensured by means of a duty of secrecy, without it being necessary to contravene the public procurement procedures laid down by Directive 2014/24. |
99 |
In order to prevent leaks of sensitive information, it is permissible for the Polish authorities to insert into the conditions governing calls for tenders clauses obliging the successful tenderer to maintain general confidentiality, and to stipulate that a candidate undertaking which is not in a position to provide sufficient guarantees as regards compliance with that obligation will be excluded from the award procedure. It is also permissible for the Polish authorities to provide for the application of penalties against the successful tenderer, in particular contractual penalties, if there is a failure to comply with such an obligation during the performance of the contract in question (see, to that effect, judgment of 20 March 2018, Commission v Austria (State printing office), C‑187/16, EU:C:2018:194, paragraph 93). |
100 |
Moreover, while, admittedly, a Member State can take measures with a view to ensuring, in particular, that a driver’s data and the control sticker for a vehicle in the context of the transport of dangerous goods may be accessed only by strictly selected entities, the confidential nature of those data may also be guaranteed by an obligation of confidentiality incumbent on undertakings participating in an award procedure governed by Directive 2014/24. |
101 |
Accordingly, since the Republic of Poland has failed to put forward any elements capable of demonstrating that recourse to a public procurement procedure thus conceived would not make it possible to make access to secret data secure in a manner comparable to the direct award of the contracts concerned to PWPW, it is not established that protection of the security thereof precludes a competitive bidding process for awarding those contracts. |
102 |
As regard, second, excise stamps provided for in Article 4(5c)(b) of the Law on public procurement, although the Republic of Poland can take the measures necessary to ensure, in particular, the safety and security of its citizens, that Member State has, however, failed to demonstrate that only the award of the production of those stamps to an undertaking such as PWPW is such as to ensure the attainment of that objective and that it is appropriate to disapply the provisions on public procurement laid down by Directive 2014/24. |
103 |
It is in fact not clear that that objective could not be attained if such production were entrusted to economic operators other than PWPW, which have sufficient experience in the design, fully secure production, storage and supply of such stamps on the territory of that Member State. Furthermore, there is nothing to suggest that it would be impossible contractually to impose the necessary confidentiality and security measures on those operators. |
104 |
Third, when the Republic of Poland relies – with regard, in particular, to the production of the public documents referred to in Article 5(1) of the Law on public documents and microprocessor systems with software for the management of public documents, computer systems and databases necessary for the use of public documents, containing electronic chips, in accordance with their purpose, referred to in Article 4(5c)(f) of the Law on public procurement – on the imperative of preventing the falsification or forgery thereof, it should be observed that, as regards the majority of those documents and systems, the guarantees that the contracting authority may require appear to be sufficient to mitigate the risks relied on by that Member State in respect of its essential security interests. |
105 |
Strict compliance, by the economic operator selected, of the award criteria and the continuous monitoring thereof over the course of the performance of the contract awarded are, in principle, such as to prevent potential leaks and internal abuses, which could give rise to such falsification or forgery. |
106 |
It follows that the disapplication of the public procurement procedures laid down by Directive 2014/24 to the contracts relating to the production of the majority of the public documents referred to in Article 4(5c) of the Law on public procurement, but also to the contracts, also referred to in that provision, relating to the production of excise stamps, legal markings, control stickers, ballot papers, holographic signs on certificates of voting rights and microprocessor systems with software for the management of public documents, computer systems and databases necessary for the use of public documents, appears disproportionate in the light of the objectives on which the Republic of Poland relies. |
107 |
By contrast, as regards certain public documents, referred to in points 16 to 19 and 32 of Article 5(2) of the Law on public documents – namely the personal documents of members of the military and their identity cards, the service cards of police officers, border guards, State security agents, officers of the Internal Security Agency, officers of the Intelligence Agency, officers of the Military Counterintelligence Service and professional soldiers appointed to a post in that service, officers of the Military Intelligence Service and professional soldiers appointed to a post in that service, and members of the military police – it must be held that those documents present a direct and close link to the objective of protecting national security, with the result that these may justify additional confidentiality requirements. |
108 |
In that connection, it is clear that the documents set out in the preceding paragraph, in so far as they concern agents and officers whose duties appear to be directly and closely linked to tasks which contribute to safeguarding the national security of a Member State, can render indispensable a limitation on the disclosure of the characteristics of such documents and the information that they contain – including, in particular, the identity of those agents and officers – with the result that such documents must be regarded as having a particularly high level of sensitivity which requires greater protection against, inter alia, leaks and falsification. |
109 |
As the Republic of Poland essentially maintains, without being effectively contradicted by the Commission, any leak of such information could have irreparable consequences for the national security of a Member State, given that such information is liable to be used by third States or, in particular, by criminal gangs or terrorist organisations. |
110 |
Accordingly, although it could admittedly have been envisaged that provision be made for guarantees such as the application of penalties, including contractual penalties, to an economic operator entrusted with the task of producing the documents referred to in paragraph 107 of the present judgment, in the event of a leak of such sensitive information, such guarantees cannot be regarded as sufficiently effective as to ensure the security of that information. |
111 |
As the Advocate General observes in point 95 of his Opinion, the application of disciplinary penalties to the persons responsible for such an information leak or to those who allowed them to do so, or even the inclusion in those contracts of terms providing for financial compensation which would necessarily be paid after the harm has occurred, are not appropriate solutions with a view to safeguarding such information. |
112 |
As to the Commission’s argument that an undertaking such as PWPW may use subcontractors and that it would therefore not be justified to award the services at issue exclusively to that undertaking, it should be noted, first, that the Commission has failed to establish that Polish legislation explicitly authorises the subcontracting of the production of the documents referred to in paragraph 107 of the present judgment. |
113 |
Next, it is not disputed that such recourse to subcontracting would constitute, at most, an option open to PWPW and could therefore be envisaged only under the supervision of, and to the extent and under the conditions defined by, that undertaking. Furthermore, the Republic of Poland stated at the hearing, without being contradicted by the Commission, that PWPW relies on subcontractors only in respect of a limited number of services, of which the production of the documents set out in paragraph 107 of the present judgment does not form part. |
114 |
Lastly, in the situation where that production would be performed by an entity selected in accordance with the rules laid down by Directive 2014/24, it should be noted that that entity could itself resort to using subcontractors, as is apparent from Article 63(1) and Article 71 of that directive, without an entity selected by the Member State concerned being able to oversee the activities of those subcontractors or define the terms and conditions of their involvement. It follows that it cannot be considered that eventual recourse by PWPW to subcontracting would mean that the level of security required for that production would not be higher than that which would result from the application of the public procurement procedures laid down by that directive. |
115 |
In those circumstances, it must be held that the Republic of Poland can rely on Article 15(2) and (3) of Directive 2014/24 when it claims that the nature of the documents set out in paragraph 107 of the present judgment is incompatible with the obligation to follow those procedures. |
116 |
Since the Commission has failed to adduce evidence for its claims with regard to those documents, its action must consequently be dismissed in so far as it concerns provisions of Polish legislation providing for the direct award of contracts relating to the production of those documents to PWPW, without following the public procurement procedures laid down by Directive 2014/24. |
117 |
In the light of all of the foregoing considerations, it must be found that, by adding to Polish legislation exemptions not provided for in Directive 2014/24 in so far as concerns the contracts relating to the production, on the one hand, of the public documents referred to in Article 4(5c) of the Law on public procurement, with the exception of the personal documents of members of the military and their identity cards, the service cards of police officers, border guards, State security agents, officers of the Internal Security Agency, officers of the Intelligence Agency, officers of the Military Counterintelligence Service and professional soldiers appointed to a post in that service, officers of the Military Intelligence Service and professional soldiers appointed to a post in that service, and members of the military police and, on the other hand, of excise stamps, legal markings, control stickers, ballot papers, holographic signs on certificates of voting rights and microprocessor systems with software for the management of public documents, computer systems and databases necessary for the use of public documents, also referred to in Article 4(5c), the Republic of Poland has failed to fulfil its obligations under Article 1(1) and (3) and Article 15(2) and (3) of Directive 2014/24, read in conjunction with Article 346(1)(a) TFEU. |
118 |
The action must be dismissed as to the remainder. |
Costs
119 |
Under Article 138(1) of the Rules of Procedure of the Court of Justice, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. |
120 |
Under Article 138(3) of those rules, where each party succeeds on some and fails on other heads, the parties are to bear their own costs. However, if it appears justified in the circumstances of the case, the Court may order that one party, in addition to bearing its own costs, pay a proportion of the costs of the other party. |
121 |
In the present case, the Commission and the Republic of Poland applied, respectively, for the other party to be ordered to pay the costs. |
122 |
Since the Commission’s action has been upheld, except in so far as it concerned the exclusion of the public procurement procedures laid down by Directive 2014/24 in respect of the contracts relating to the production of certain public documents, referred to in point 32 of Article 5(2) of the Law on public documents, to which Article 4(5c) of the Law on public procurement refers, namely the personal documents of members of the military and their identity cards, the service cards of police officers, border guards, State security agents, officers of the Internal Security Agency, officers of the Intelligence Agency, officers of the Military Counterintelligence Service and professional soldiers appointed to a post in that service, officers of the Military Intelligence Service and professional soldiers appointed to a post in that service, and members of the military police, it is appropriate, pursuant to Article 138(3) of the Rules of Procedure, to decide that, in addition to bearing its own costs, the Republic of Poland shall pay two thirds of the costs incurred by the Commission. |
123 |
The Commission must bear one third of its own costs. |
On those grounds, the Court (First Chamber) hereby: |
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[Signatures] |
( *1 ) Language of the case: Polish.