Case C-15/04

Koppensteiner GmbH

v

Bundesimmobiliengesellschaft mbH

(Reference for a preliminary ruling from the Bundesvergabeamt)

(Public procurement – Directive 89/665/EEC – Review procedures concerning the award of public procurement contracts – Decision to withdraw an invitation to tender after the opening of tenders – Judicial review – Scope – Principle of effectiveness)

Opinion of Advocate General Stix-Hackl delivered on 16 December 2004 

Judgment of the Court (Second Chamber), 2 June 2005 

Summary of the Judgment

Approximation of laws – Review procedures relating to the award of public supply and public works contracts – Directive 89/665 – Withdrawal of an invitation to tender – Member States under an obligation to provide for review procedures — Absence of such a procedure in national law — Not permissible — Direct effect of Articles 1(1) and 2(1)(b) of the directive — Obligations of the national courts

(Council Directive 89/665, Arts 1(1) and 2(1)(b))

Articles 1(1) and 2(1)(b) of Directive 89/665 relating to the coordination of the laws, regulations and administrative provisions relating to the application of review procedures to the award of public supply and public works contracts require the decision of the contracting authority to withdraw the invitation to tender for a public procurement contract to be open to a review procedure, and to be capable of being set aside where appropriate on the ground that it has infringed Community law on public procurement or national rules implementing that law.

Consequently, where national law, even when it is interpreted in accordance with the requirements of Community law, does not make it possible for a tenderer to challenge a decision to withdraw an invitation to tender inasmuch as that decision infringes Community law and on that ground to apply for it to be set aside, that national law does not fulfil the requirements of Articles 1(1) and 2(1)(b) of Directive 89/665.

In those circumstances, the court or tribunal having jurisdiction is required to disapply national rules which prevent compliance with the obligation arising from those provisions.

Those provisions are unconditional and sufficiently clear to create rights for individuals on which they may rely, where necessary, against contracting authorities.

(see paras 30-31, 38-39, operative part)

JUDGMENT OF THE COURT (Second Chamber)

2 June 2005 (*)

(Public procurement – Directive 89/665/EEC – Review procedures concerning the award of public procurement contracts – Decision to withdraw an invitation to tender after the opening of tenders – Judicial review – Scope – Principle of effectiveness)

In Case C-15/04,

REFERENCE under Article 234 EC for a preliminary ruling from the Bundesvergabeamt (Austria), made by decision of 12 January 2004, received at the Court on 19 January 2004, in the proceedings

Koppensteiner GmbH

v

Bundesimmobiliengesellschaft mbH,

THE COURT (Second Chamber),

composed of C.W.A. Timmermans, President of the Chamber, R. Silva de Lapuerta, C. Gulmann (Rapporteur), P. Kūris and G. Arestis, Judges,

Advocate General: C. Stix-Hackl,

Registrar: R. Grass,

having regard to the written procedure,

after considering the observations submitted on behalf of:

–       Koppensteiner GmbH, by D. Benko and T. Anker, Rechtsanwälte,

–       Bundesimmobiliengesellschaft mbH, by O. Sturm, Rechtsanwalt,

–       the Austrian Government, by M. Fruhmann, acting as Agent,

–       the Commission of the European Communities, by K. Wiedner, acting as Agent,

after hearing the Opinion of the Advocate General at the sitting on 16 December 2004,

gives the following

Judgment

1       The reference for a preliminary ruling concerns the interpretation of Articles 1 and 2(1)(b) of Council Directive 89/665/EEC of 21 December 1989 on the coordination of the laws, regulations and administrative provisions relating to the application of review procedures to the award of public supply and public works contracts (OJ 1989 L 395, p. 33), as amended by 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) (‘Directive 89/665’).

2       That reference was made in proceedings between Koppensteiner GmbH (‘Koppensteiner’) and Bundesimmobiliengesellschaft mbH (‘BIG’) regarding the decision taken by the latter to withdraw an invitation to tender for a public service contract after the expiry of the time-limit for the submission of tenders.

 Relevant provisions

 Community legislation

3       Article 1(1) of Directive 89/665 provides:

‘The Member States shall take the measures necessary to ensure that, as regards contract award procedures falling within the scope of Directives 71/305/EEC, 77/62/EEC and 92/50/EEC, decisions taken by the contracting authorities may be reviewed effectively and, in particular, as rapidly as possible in accordance with the conditions set out in the following articles, and, in particular, Article 2(7) on the grounds that such decisions have infringed Community law in the field of public procurement or national rules implementing that law.’

4       Under Article 2(1) and (6) of Directive 89/665:

‘1.      The Member States shall ensure that the measures taken concerning the review procedures specified in Article 1 include provision for the powers to:

(a)       take, at the earliest opportunity and by way of interlocutory procedures, interim measures with the aim of correcting the alleged infringement or preventing further damage to the interests concerned …;

(b)      either set aside or ensure the setting aside of decisions taken unlawfully, including the removal of discriminatory technical, economic or financial specifications in the invitation to tender, the contract documents or in any other document relating to the contract award procedure;

(c)      award damages to persons harmed by an infringement.

…

6.      The effects of the exercise of the powers referred to in paragraph 1 on a contract concluded subsequent to its award shall be determined by national law.

Furthermore, except where a decision must be set aside prior to the award of damages, a Member State may provide that, after the conclusion of a contract following its award, the powers of the body responsible for the review procedures shall be limited to awarding damages to any person harmed by an infringement.’

 National legislation

5       The Federal Law of 2002 concerning the award of public procurement contracts (Bundesvergabegesetz 2002, BGBl. I, 99/2002) (‘the BVergG’) provides inter alia for a distinction between decisions which may be challenged separately and those which may not.

6       Under Paragraph 20(13)(a)(aa) of the BVergG, the decisions which may be challenged separately in an open contract award procedure are the invitation to tender, various determinations made during the period for the submission of tenders and the award decision.

7       Paragraph 20(13)(b) of the BVergG provides:

‘The decisions which may not be challenged separately are all the other decisions which precede the decisions which may be challenged separately. The decisions which may not be challenged separately may be challenged only in conjunction with later decisions which may be challenged separately.’

8       Under Paragraph 166(2)(1) of the BVergG, an application for review is inadmissible where it is not directed against a decision which may be challenged separately.

9       According to Paragraph 162(5) of the BVergG, after the withdrawal of an invitation to tender the Bundesvergabeamt has jurisdiction solely to determine whether that withdrawal was lawful.

 The dispute in the main proceedings and the questions referred for a preliminary ruling

10     BIG, a company responsible for the management of the buildings and property of the Austrian Federal Government, which owns 100% of its shares, is the contracting authority in the case in the main proceedings. On 26 September 2003 it initiated an open contract award procedure for the ‘demolition work’ lot in connection with the construction of a primary school and three sports halls. The value of the entire project was estimated at EUR 8 600 000. The demolition work at issue in the main proceedings was estimated at EUR 95 000.

11     Koppensteiner tendered for that lot in that contract award procedure.

12     By letter of 29 October 2003, BIG informed Koppensteiner that pursuant to Paragraph 105 of the BVergG the invitation to tender had been withdrawn on serious grounds after the expiry of the time-limit for the submission of tenders.

13     On 6 November 2003 BIG invited Koppensteiner to participate in a negotiated procedure, without prior publication of a contract notice, for the demolition work which essentially covered the same services as under the first procedure. In the second procedure, the estimated contract value of that lot was now EUR 90 000.

14     Koppensteiner also tendered in that second procedure.

15     On 13 November 2003 Koppensteiner applied to the Bundesvergabeamt for the withdrawal of the invitation to tender in respect of the first contract award procedure to be set aside and for the issue of an invitation to tender in another contract award procedure to be prohibited and, in the alternative, for a declaration that the withdrawal was unlawful. At the same time it applied for the second contract award procedure to be terminated.

16     By decision of the Bundesvergabeamt of 20 November 2003, BIG was ordered to refrain from calling for tenders in the second contract award procedure for the duration of the review procedure or until 13 January 2004 at the latest.

17     On 28 January 2004 BIG awarded the contract in the second contract award procedure to another undertaking, and the demolition works have since been carried out by that undertaking.

18     BIG submitted before the Bundesvergabeamt that the reason for the withdrawal was the fact that all the tenders were much higher than the estimated contract value. Thus the estimated contract value of the ‘demolition work’ lot was EUR 95 000 in the first contract award procedure, but the lowest tender was EUR 304 150, which seemed much too high.

19     Koppensteiner argued inter alia that, in accordance with the judgment in Case C‑92/00 HI [2002] ECR I-5553, a decision of the contracting authority to withdraw an invitation to tender must also be open to a review procedure, and be capable of being set aside where appropriate on the ground that it has infringed Community law on public procurement.

20     In the decision making the reference, the Bundesvergabeamt notes that the system laid down by the BVergG does not permit the examination and, where appropriate, the setting aside in review proceedings of the withdrawal of an invitation to tender after the opening of tenders in an open contract award procedure. After the withdrawal of an invitation to tender, that body has jurisdiction solely to determine whether that withdrawal was unlawful on the grounds of infringement of the BVergG, the declaration of unlawfulness providing a means for the unsuccessful tenderers to bring an action for damages against the contracting authority.

21     However, in the view of the Bundesvergabeamt, Articles 1(1) and 2(1)(b) of Directive 89/665 require, in accordance with the Court’s interpretation in HI, cited above, that the domestic legal system provide for the possibility of setting aside a withdrawal occurring after the opening of tenders in a contract award procedure. The power of the review body to declare a withdrawal unlawful, with then the possibility of seeking damages, is therefore not sufficient.

22     In those circumstances, the Bundesvergabeamt decided to stay the proceedings and refer the following questions to the Court for a preliminary ruling:

‘(1)      Are the combined provisions of Article 1 and Article 2(1)(b) of Council Directive 89/665 … so unconditional and sufficiently precise that, in the event of withdrawal of the invitation to tender after the opening of tenders, an individual is entitled to rely on those provisions directly before the national courts and to seek a review of the withdrawal?

(2)      If Question 1 must be answered in the negative, is Article 1 in conjunction with Article 2(1)(b) of Council Directive 89/665 … to be interpreted as meaning that Member States are obliged to make a contracting authority’s decision, prior to withdrawal of the invitation to tender, that it will withdraw the invitation to tender (withdrawal decision analogous to the award decision) amenable to review in any case, whereby the applicant may have that decision set aside if the relevant conditions are met, notwithstanding the possibility, once withdrawal has taken place, of obtaining an award of damages?’

 The questions referred for a preliminary ruling

 Admissibility

23     The Austrian Government submits inter alia that as the contract in the case in the main proceedings was awarded, after the second contract award procedure, to an undertaking other than Koppensteiner and the demolition works have already been completed, the answer to the questions is no longer of any interest since Koppensteiner can now only obtain damages, which are in any event provided for by the BVergG. Moreover, the national court does not have jurisdiction to set aside the withdrawal decision and the answer to the questions will not assist it in resolving the dispute in the main proceedings.

24     BIG takes the view that the second question is merely hypothetical and therefore inadmissible. Given that the contract has been awarded, the question has no relevance to the outcome of the main case since it is impossible for the contracting authority to take a decision to withdraw that invitation to tender after the event.

25     The Court observes that it is solely for the national courts before which actions are brought, and which must bear the responsibility for the subsequent judicial decisions, to determine in the light of the special features of each case both the need for a preliminary ruling in order to enable them to deliver judgment and the relevance of the questions which they submit to the Court. Consequently, since the questions referred involve the interpretation of Community law, the Court is, in principle, obliged to give a ruling (see, inter alia, Case C-373/00 Adolf Truley [2003] ECR I-1931, paragraph 21).

26     Although the Austrian Government and BIG have rightly noted that the Court must decline to rule on a question referred for a preliminary ruling where it is quite obvious that the interpretation of Community law that is sought bears no relation to the actual facts of the main action or its purpose or where the problem is hypothetical (see, inter alia, Adolf Truley, cited above, paragraph 22), it is not obvious that the questions asked in this case have such characteristics.

27     In this case, the national court stated in its decision that the questions are asked in order to enable it to decide whether the application to have the withdrawal of the first invitation to tender set aside is inadmissible and if so on what grounds.

28     It follows that the reference for a preliminary ruling is admissible.

 Substance

29     Before examining the questions, which should be dealt with together, the Court refers to the judgment in HI, cited above, in which it stated that:

–       the decision to withdraw an invitation to tender for a public procurement contract is one of those decisions in relation to which Member States are required under Directive 89/665 to establish review procedures for annulment, for the purposes of ensuring compliance with the rules of Community law on public procurement contracts and national rules implementing that law (paragraph 54);

–       the full attainment of the objective pursued by Directive 89/665 would be compromised if it were lawful for contracting authorities to withdraw an invitation to tender for a public service contract without being subject to the judicial review procedures designed to ensure that the directives laying down substantive rules concerning public procurement and the principles underlying those directives are genuinely complied with (paragraph 53).

30     Accordingly, in the same judgment the Court ruled that Articles 1(1) and 2(1)(b) of Directive 89/665 require the decision of the contracting authority to withdraw the invitation to tender for a public procurement contract to be open to a review procedure, and to be capable of being set aside where appropriate on the ground that it has infringed Community law on public procurement or national rules implementing that law.

31     It follows that, where national law, even when it is interpreted in accordance with the requirements of Community law, does not make it possible for a tenderer to challenge a decision to withdraw an invitation to tender inasmuch as that decision infringes Community law and on that ground to apply for it to be set aside, that national law does not fulfil the requirements of Articles 1(1) and 2(1)(b) of Directive 89/665.

32     A national court before which a tenderer applies for a decision to withdraw an invitation to tender to be set aside inasmuch as that decision infringes Community law, and which cannot rule on the application under national law, is therefore faced with the question whether, and if so, under what circumstances, it is required under Community law to declare that such an application for annulment is admissible.

33     The Member States’ obligation under a directive to achieve the result prescribed by the directive and their duty under Article 10 EC to take all appropriate measures, whether general or particular, to ensure fulfilment of that obligation is binding on all the authorities of Member States, including, for matters within their jurisdiction, the courts (see, inter alia, Case C-258/97 HI [1999] ECR I-1405, paragraph 25).

34     Although it is for the legal order of each Member State to designate the review bodies in relation to the award of public procurement contracts competent to decide disputes which affect rights of individuals derived from Community law (see, inter alia, Case C-76/97 Tögel [1998] ECR I-5357, paragraph 28, and Case C-81/98 Alcatel Austria and Others [1999] ECR I-7671, paragraph 49), such a question of jurisdiction does not arise in the case in the main proceedings.

35     In this case it is not disputed that under the applicable national law the Bundesvergabeamt has jurisdiction to hear applications for review relating to ‘decisions’ within the meaning of Article 1(1) of Directive 89/665 taken by contracting authorities in procedures for the award of public service contracts.

36     In addition, the national court stated (see paragraph 20 of this judgment) that the applicable national legislation precludes the examination and, where appropriate, the setting aside in review proceedings before the Bundesvergabeamt of decisions which withdraw an invitation to tender after the opening of tenders in an open contract award procedure.

37     As stated in paragraph 30 of this judgment, the Court has already held that precluding that possibility is contrary to Articles 1(1) and 2(1)(b) of Directive 89/665.

38     Those provisions of Directive 89/665 are unconditional and sufficiently clear to create rights for individuals on which they may rely, where necessary, against contracting authorities such as BIG.

39     In those circumstances, the court or tribunal having jurisdiction is required to disapply national rules which prevent compliance with the obligation arising from Articles 1(1) and 2(1)(b) of Directive 89/665.

 Costs

40     Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.

On those grounds, the Court (Second Chamber) hereby rules:

The court or tribunal having jurisdiction is required to disapply national rules which prevent compliance with the obligation arising from Articles 1(1) and 2(1)(b) of Council Directive 89/665/EEC of 21 December 1989 on the coordination of the laws, regulations and administrative provisions relating to the application of review procedures to the award of public supply and public works contracts, as amended by Council Directive 92/50/EEC of 18 June 1992 relating to the coordination of procedures for the award of public service contracts.

[Signatures]

---

* Language of the case: German.