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4. Article 6 of Directive 92/50 provides that the directive 'shall not apply to public service contracts awarded to an entity II— Community legal context which is itself a contracting authority within the meaning of Article 1(b) on the basis of an exclusive right which it enjoys pursuant to a published law, regulation or 2. Article 1(a) of Directive 92/50 provides administrative provision which is compati- that, for the purposes of that directive, ble with the Treaty'. 'public service contracts' are 'contracts for pecuniary interest concluded in writing between a service provider and a contract- ing authority'. Article 1(b) provides that the term 'contracting authorities' means 'the State, regional or local authorities, bodies governed by public law, [and] asso- ciations formed by one or more of such authorities or bodies governed by public 5. Article 7 of Directive 92/50 provides law'. that the directive is to apply to public service contracts the estimated value of which, net of VAT, is not less than * Original language: Greek. ECU 200 000 and sets out the basis on 1 — OJ 1992 L 209, p. 1. which, in the case of contracts which do

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not specify a total price, the estimated below. The delivery of such products may contract value is to be estimated. 2 in addition include siting and installation operations'.

6. As indicated by its title, Council Direc- tive 93/36/EEC of 14 June 1993 concerns the coordination of procedures for the award of public supply contracts. 3This 8. Article 1(b) provides that 'contracting directive repealed the previously applicable authorities' are 'the State, regional or local Council Directive 77/62/EEC of 21 Decem- authorities, bodies governed by public law, ber 1976. 4However, Article 33 of Direc- [and] associations formed by one or several tive 93/36 states: 'Reference to the repealed of such authorities or bodies governed by [directive] shall be construed as reference to public law'. 5 this Directive and should be read in accor- dance with the correlation table set out in Annex VI'.

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estimated value net of VAT is not less than of local authorities, 8municipalities are to ECU 200 000'. provide for the management of public services involving the production of goods and the performance of activities designed to achieve social purposes and promote economic and civil development of local communities. In accordance with Arti- cle 22(3), municipalities may ensure the 10. Article 5(2), (3) and (5) specifies the provision of such local public services in method for calculating the estimated con- various ways: on a work-and-materials tract value. 7 basis, by way of concession to third parties, or using special undertakings, institutions or semi-public companies in which they hold shares.

III — National legal context

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the local administration is to provide the statutes ('the Statutes'), it has legal person- start-up capital, define objectives and pol- ality and operational autonomy. icy, approve the documents of constitution, exercise supervision, monitor management results and cover any social costs which may arise.

13. Article 25 of Law No 142/90 makes express provision for the joint management 15. Article 3(1) of the Statutes states that of one or more services through the crea- the object of AGAC is to assume direct tion of consortia, in accordance with the responsibility for, and manage, the public provisions on special undertakings laid services listed, which include the produc- down in Article 23. For that purpose, each tion and distribution of methane gas and municipal council must approve, by abso- heating for civil and industrial purposes. lute majority, a consortium agreement and Article 3(2) provides that AGAC may at the same time the statutes of the extend its activities to other related or consortium (consorzio). The general meet- ancillary services. Under Article 3(3) it may ing of the consortium is to be composed of create, or hold shares or have interests in, the representatives of its member entities public or private companies or public (the mayor, the council chairman or their bodies (enti) for the management of related deputies). The general meeting elects the or ancillary activities. Under Article 3(4) board of management and approves the the consortium may provide the above- documents of constitution prescribed by mentioned services to municipalities, pri- the statutes. vate persons or public bodies which do not belong to the consortium.

20. Pursuant to Article 28, any profits in a given financial year may be allocated to various purposes as decided by the general 23. AGAC's remuneration was fixed at ITL meeting: in particular, they may be distrib- 122 million for the period from 1 June uted between the member municipalities of 1997 to 31 May 1998. The value of the the consortium, retained by the consortium fuels to be supplied represented ITL 86 to establish or increase reserve funds or million while that of management and reinvested in other AGAC activities. maintenance of the installations repre- sented ITL 36 million.

21. Under Article 29, where a loss occurs the financial deficit may be corrected 24. Article 2 of the Decision provides that, on the expiry of the (one-year) period of management, AGAC undertakes to con- 9 — In accordance with Article 8, apart from the general tinue providing the service for a further meeting the other organs of the consortium are the board of management, the chairman of the board of management and the general manager. They are not answerable to the consortium's member municipalities for their managerial acts. The natural persons who constitute these organs do not 10 — Article 1 of the Decision, entitled 'Matters for manage- exercise any functions within the member municipalities. ment', enumerates the tasks entrusted to AGAC.

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period of three years, at the request of the action pending before it. It was of the municipality and following modification of opinion that the threshold of ECU 200 000 the conditions set out in the Decision. laid down in both directives was, in any Provision is also made for subsequent event, exceeded. extension. 11

26. Teckal brought proceedings against the Municipality of Viano and AGAC before the Tribunale Amministrativo Regionale per l'Emilia-Romagna, Sezione di Parma, seeking the annulment of the Decision of 29. The national court concluded that, in the Municipal Council of Viano. It con- order for the action pending before it to be tended that the municipality should have decided, it was necessary to interpret followed the procedures for the award of Article 6 of Directive 92/50 by way of a contracts required under Community legis- preliminary ruling and to settle in that way lation. the question whether, in directly placing the contract with AGAC, the municipality was released from the obligation to observe the award procedure laid down by the direc- tive, on the basis of the derogation con- tained in that article. 27. The national court first posed the question as to which of Directive 92/50 and Directive 93/36 was applicable in the

30. In addition, the national court raised 11 — This is possible subject to a request being communicated to the question of the compatibility with the AGAC at least three months before the expiry of the period concerned. provisions of the Treaty of the exclusive

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32. AGAC considers that an issue of admissibility arises because the question referred by the national court essentially concerns the interpretation of provisions of national law. 12 It further contends that

34. First of all, it must be borne in mind 12 — More specifically, AGAC considers that the national court that it is for the national court, which has a is asking the Court of Justice to decide whether the management of a municipality's heating installations can better and fuller knowledge of the facts of be classed as a public service of a local nature within the the case, to decide whether it is necessary to meaning of Article 22 of Law No 142/90, so as to enable it to determine whether or not Article 6 of Directive 92/50 is make a reference to the Court of Justice for applicable. According to AGAC, the national court is essentially asking whether or not provisions of national a preliminary ruling and to determine law (Articles 23 and 25 of Law No 142/90) involve the which provisions of Community legislation award of a public service contract to a body which is itself a contracting authority. need to be interpreted so as to enable it to

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minary ruling. AGAC contends that the value of the contract is below the threshold of ECU 200 000 laid down in the Commu- nity provisions and that the Community legislation on the matter therefore cannot 36. In my view, the basic problem posed by apply. 19 this case is the vagueness with which the national court's question is formulated. That vagueness does not, however, render the question inadmissible. The Court has held that, in the context of the procedure 39. The national court took the view that provided for in Article 177, where ques- the subject-matter of the dispute before it, tions are formulated imprecisely it may whether from the point of view of a extract from all the information provided by the national court and from the docu- 17 — See, for example, Case 70/77 Simmenthal v Amministra- ments concerning the main proceedings the zione delle Finanze dello Stato [1978] ECR 1453, para- provisions of Community law which graph 57, Case C-114/91 Claeys [1992] ECR I-6559, paragraphs 10 and 11, and Case C-280/91 Viessmann require interpretation, having regard to [1993] ECR I-971, paragraph 17. the subject-matter of those proceedings. 16 18 — See, for example, Case C-381/89 Sindesmos Melon tis Eleftheras Evangelikis Ekklisias and Others [1992] ECR I-2111, paragraph 19 et seq., and Case 38/77 Enka v Inspecteur der Invoerrechten en Accijnzen [1977] ECR

This is because paragraph 19. renewal of the contract upon expiry of the initial period is at the absolute discretion of the municipality, subject to an 15 — See, for example, Case C-17/92 Distribuidores Cinemato- obligation to specify the financial terms and conditions. gráficos v Spanish State [1993] ECR I-2239, paragraph 8, Lastly, an aggregate value was fixed for the period from and, less recently, Case 9/74 Casagrande v Landeshaupt- 1 June 1997 to 31 May 1998, and that, it contends, also stadt München [1974] ECR 773, paragraph 4. precludes classifying the contract as one of indefinite 16 —See, for example, Case C-168/95 Arcaro [1996] ECR duration. The latter conclusion is also confirmed by the I-4705, paragraph 20 and, in particular, paragraph 21, and fact that the contract at issue terminated definitively on Case 251/83 Haug-Adrion v Frankfurter Versicherungs- 31 May 1998, since the Municipality of Viano decided to AG [1984] ECR 4277, paragraph 9. provide for the operation of the service by other means.

contract for the provision of services (heat- 41. It follows from the above that the ing) or from that of a contract for the Court of Justice is not empowered to supply of goods (fuel), exceeded the thresh- substitute its own appraisal for that of the old of ECU 200 000 laid down in the national court as regards the question Community legislation in order for public whether the threshold fixed by the Com- service and public supply contracts to be munity legislature is actually exceeded, but caught by Directives 95/20 and 93/36 must restrict itself to the factual situation as respectively.

cooperation and dialogue with the national court. 40. In my opinion, the Court of Justice has jurisdiction to indicate to the national court the method to be used for calculating the value of the contract in accordance with Community legislation. That method is laid down in Article 7 of Directive 92/50 and B — Reformulation of the question refer- Article 5 of Directive 93/36. The applica- red for a preliminary ruling tion of those provisions to a specific case is a matter for the national court, 22 which is aware both of the content of the contrac- tual terms and of the conditions under 42. In order, therefore, to provide the which the contract may be extended national court with a useful answer, it is beyond expiry of the one-year period of in my view necessary to reformulate its management. question in the light of the subject-matter of the dispute and the information con- tained in the order for reference. 20 — The national court explains in the order for reference that, according to Article 2 of the Decision of the Municipal Council of Viano, upon expiry of its (one-year) manage- ment period AGAC undertook to continue to provide the service concerned for a period of three further years, if so requested by the authority, after updating of the conditions laid down in the Decision. The national court also pointed out that the same applied to subsequent periods, provided 43. One point needs to be established that any such request was notified to AGAC at least three months before the expiry of the relevant period. clearly at the outset.

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able. Thus, the award of a mixed contract the order for reference that, by a single falls within the scope of Directive 92/50 if measure, AGAC was entrusted both with the value of the services exceeds that of the the provision of certain services and with goods supplied. 24 If, on the other hand, the the supply of certain products. 26 It is also value of the goods exceeds that of the apparent that the value of the products to services involved, Directive 93/36 must be be supplied is manifestly greater than that applied to the award of the entire con- of the services. I am therefore of the view tract. 2 5 that the Community provisions whose interpretation would assist the national court are those of Directive 93/36, not Article 6 of Directive 92/50 as mentioned in the order for reference. Consequently, an answer to the question as drafted would not, in my opinion, be helpful in disposing

contract'. Lastly, in Gestión Hotelera Internacional the Court pointed out (paragraph 28 of its judgment): 'It is for 26 — This is clear from Article 1 of the Decision of the the national court to determine whether the works are Municipal Council of Viano, which the referring court incidental to the main object of the award'. quotes in full.

29 — This difference reflects a special feature of the field regulated by Directive 92/50, in the sense that due account has to be taken of the fact that services may be provided in the context of stable legal relations and ties between separate bodies (collectivités) in accordance with a system of cooperation where one body is subordinate to the other. C — Substance Furthermore, Council Directive 93/38/EEC of 14 June 1993 coordinating the procurement procedures of entities operating in the water, energy, transport and telecommu- nications sectors (OJ 1993 L 199, p. 84), in addition to containing a provision (Article 11) analogous to Article 6 of Directive 92/50, includes another similar provision on 48. Directive 93/36 is essentially intended this question which takes account of the particular case of to ensure development of effective compe- entities which are undertakings classed as contracting authorities only in connection with service contracts in tition in the field of public supply con- specific sectors. The provision in question is Article 13, tracts. 28 That is to say, in selecting the concerning service contracts awarded by a contracting authority to an 'affiliated undertaking', which is defined by person with which it is to conclude in reference to a relationship of control and to dominant influence between a contracting entity and the undertaking writing a contract for pecuniary interest or (in certain circumstances) between undertakings (Arti- cle 1(3)); in other words, this relates to legal entities which involving the supply, in whatever form, of a belong to the same economic unit (see also M. Mensi, op. certain product, a contracting authority is cit., paragraph 18, p. 81 et seq.). required to apply the procedure guarantee- 30 — It may be noted that the Court found that a Member State failed to fulfil its obligations under the directives coordi- ing effective/free competition which is nating procedures for the award of both public works contracts (Directive 71/305) and public supply contracts established by Directive 93/36. (Directive 77/62) when it excluded from the scope of national rules on public procurement transactions effected by the administrative authorities with private persons in cases where those directives did not authorise such exemption. See the judgment in Case C-71/92 Commission 27 — Teckal denies that these provisions can be interpreted to v Spain [1993] ECR I-5923, paragraphs 10, 11 and 22. In that effect and points out that, during the five years particular, the Court stated (paragraph 10) that 'the only preceding the grant of the contract to AGAC, it had itself permitted exceptions to the application of Directive 77/62 been a contractual partner of the Municipality of Viano. are those which are exhaustively and expressly mentioned 28 — See the 14th recital in the preamble to Directive 93/36. therein'.

54. It follows from the above that the directive does not apply where the con- tracting authority has recourse to its own 52. Second, a contract must be drawn up 31 resources for the supply of the products it and, in particular, must be concluded in wants. 34 Community law does not require writing. The contract is synallagmatic and for pecuniary interest. This means that the directive is applicable where, first, there is a 32 — This element of fixing the remuneration in abstract terms concordance of wills between two different in the case of the award of a public supply contract is highlighted in the judgment in Case C-272/91 Commission persons, the contracting authority and the v Italy [1994] ECR 1-1409, at paragraph 2 5 ; the case concerned the concession for the computerisation system supplier, and, second, the commercial rela- for the Italian lottery, that is to say the supply of an integrated computerisation system for the lottery which involved, in particular, the supply of certain goods to the State. The same element involving payment of a specified consideration to remunerate the service provider is also 31 — It is significant that the eighth recital in the preamble to highlighted in paragraph 25 of the judgment in BFI Directive 92/50 states that the 'provision of services is Holding, cited above. covered by this Directive only in so far as it is based on contracts; ... the provision of services on other bases, such 33 — On this important element of the concept of a contract, see as law or regulations, or employment contracts, is not A. de Laubadère, F. Moderne and P. Delvolvé, Traité des covered'. In other words, Directive 92/50 applies only if contrats administratifs, volume 1 (1983, 2nd ed., 808 pp.), the legal relationship between the contracting parties is a paragraph 14 et seq., p. 29 et seq. service contract for the purposes of Article 1(a) of the 34 — A form of supply referred to as 'in-house'. On this question directive and does not apply where the provision of in connection with Directive 92/50, see P. Flamme and M.- services is not based on à contract; see also point 26 of the A. Flamme, 'Les marchés publics de services et la Opinion of Advocate General La Pergola in Case C-360/96 coordination de leurs procédures de passation (Directive Arnhem and Reden v BFI Holding [1998] ECR I-6821 and 92/50/ECC du 18 juin 1992)', Revue du Marché commun point 49 of the Opinion of Advocate General Alber in et de l'Union européenne (1993) N o 365, pp. 150-170, Case C-108/98 R.I.SAN.'v Comune di Ischia and Others paragraphs 15 and 16. See also M . Mensi, op. cit., [1999] ECR I-5219. paragraph 5.

57. Second, in order for it to be possible for the directive to apply there must be a written contract which lays down the rights 55. AGAC maintains that the Municipality and obligations of the parties and, more of Viano did not entrust the service of particularly, regulates the matter of remu- managing heating installations to a third neration. In other words, the national court party but merely decided to organise the must establish whether a contract was direct management of that service in a concluded, in writing, regulating the rela- different manner, by having recourse to the tionship between the contracting authority structure and staff of a special entity and the supplier and specifying the rights established for that purpose rather than and obligations of the parties, in addition its own structure and staff. to the decision of the Viano Municipal Council entrusting the task concerned to

It is case. What is involved here is a form of inter-departmental delegation that remains within the administrative ambit of likewise for the national court to establish the municipalities. In assigning the activities in question to ARA, the municipalities had absolutely no intention of whether the remuneration fixed for the privatising the functions they themselves had previously supply of goods and the provision of performed in this sector'. Furthermore, this issue of whether public services are provided by a part of the services to the municipality was determined public administration, in which case there is no public contract within the meaning of Directive 92/50, was also on the basis of prevailing commercial highlighted by Advocate General Alber in his Opinion in practice. 37 Whether or not there actually RI.SAN., cited in footnote 31 above; see point 49 of that Opinion.

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is a contract governed by Community belonging to the consortium and is subject legislation depends on the answers given to control by them. by the national court to the foregoing questions.

61. Under Article 10(3) of the Statutes, the Municipality of Viano's percentage partici- pation in the general meeting of AGAC and 59. In addition, as is made clear by the hence, in reality, both in the administration national court, the situation is one which and in the profits and losses of the con- involves two formally separate persons sortium, stands at 0.9%. In my view it is operating in the market. This element is therefore unlikely (and the same also important because a situation where a appears to be the case from the facts as municipality, in the interests of improved presented by the national court) that, in the internal organisation of its services, case of AGAC, a consortium set up by 45 entrusted supply to one of its units would municipalities in the province of Reggio constitute a form of internal delegation that Emilia and having separate legal personal- remained within its own administrative ity, it could be maintained that the Munici- ambit. 38 In those circumstances, the rela- pality of Viano exercises over that consor- tionship between the Municipality of Viano tium the kind of control which an entity and AGAC could not be regarded as a exercises over an internal body. public contract within the meaning of Directive 93/36.

66. Subject to the abovementioned reserva- 64. If, on the basis of the findings which it tions concerning the points to be clarified must make, the national court concludes by the national court, the procedure laid that the relationship between the munici- down in Directive 93/36 should, conse- pality and AGAC is the outcome of the quently, be observed. This means that in concordance of two autonomous wills selecting its contractual partner the muni- representing separate legal interests in a cipality should comply with the provisions manner consistent with the customary form aimed at safeguarding competition, with no of relationship that characterises the con- exception permitted even if it regards tractual relationship of two separate per- AGAC as a body governed by public law sons, 41 a conclusion which can also be within the meaning of Article 1(b) of inferred from a study of the contractual Directive 93/36, because, as I stated earlier conditions, 42 the entrusting of the supply in this Opinion, that directive makes no which constitutes the subject-matter of this provision, as regards the conclusion of case falls within the scope of Directive public supply contracts with other con- 93/36. tracting authorities, for a derogation com- parable to that contained in Article 6 of Directive 92/50.

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VI — Conclusion

68. In the light of the foregoing analysis, I propose that the Court should give the following answer to the question referred to it by the Tribunale Amministrativo Regionale per l'Emilia-Romagna, Sezione di Parma:

Council Directive 93/36/EEC of 14 June 1993 coordinating procedures for the award of public supply contracts requires the procedure which it lays down to be observed where a contract for pecuniary interest is concluded in writing for the supply of products, irrespective of whether the contract is concluded between entities which are contracting authorities.

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