C-176/98

* Original language: French. 1 — Council Directive 92/50/EEC of 18 June 1992 relating to the coordination of procedures for the award of public ' 1 . Proof of the service provider's financial service contracts (OJ 1992 L 209, p. 1). and economic standing may, as a general

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rule, be furnished by one or more of the the contracting authority considers appro- following references: priate.'

(a) appropriate statements from banks or evidence of relevant professional risk 5. Article 32 of the Directive provides: indemnity insurance;

(b) the presentation of the service provi- ' 1 . The ability of the service providers to der's balance sheets or extracts there- perform services may be evaluated in from, where publication of the balance particular with regard to their skills, effi- sheets is required under company law ciency, experience and reliability. in the country in which the service provider is established;

— where provided to contracting authorities, evidence is to be in the form of certificates issued or (f) a description of the service provider's countersigned by the competent measures for ensuring quality and his authority, study and research facilities;

— where provided to private pur- chasers, delivery is to be certified (g) where the services to be provided are by the purchaser or, failing this, complex, or, exceptionally, are required simply declared by the service for a specific purpose, a check carried provider to have been effected; out by the contracting authority or on its behalf by a competent official body, of the country within which the service provider is established, subject to that body's agreement, on the technical capacities of the service provider and, (c) an indication of the technicians or if necessary, on his study and research technical bodies involved, whether or facilities and quality control measures; not belonging directly to the service provider, especially those responsible for quality control;

(h) an indication of the proportion of the contract which the service provider (d) a statement of the service provider's may intend to sub-contract. average annual manpower and the number of managerial staff for the last three years;

3. The contracting authority shall specify, (e) a statement of the tool, plant or in the notice or in the invitation to tender, technical equipment available to the which references it wishes to receive.

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8. Ruhrwasser is a German limited liability company whose share capital is held by a consortium of six German companies, each I I— Facts and the main proceedings owning one sixth of the company shares. The object of Ruhrwasser is to enable the consortium to win contracts, particularly abroad, in the field of water supply and 6. For the purposes of the award of a three- waste water purification. One of the com- year contract for the management of the panies forming part of the consortium, waste water purification plant of 'Is Are- RWG Ruhr-Wasserwirtschafts-Gesellschaft nas' and the water collection stations mbh (RWG), has as its only shareholder situated at 'Is Arenas', 'San Bartolomeo' Ruhrverband, a public-law body responsi- and 'Borgo Sant'Elia', the Municipality of ble in Germany for public service tasks in Cagliari issued an invitation to tender. This the field of the management of waste water. was published in the Official journal of the It is established that this body has refer- European Communities on 3 January ences which would have been sufficient to 1997. In order to tender, interested under- qualify it for the call for tenders by the takings had to provide proof of an average Municipality of Cagliari. annual turnover of not less than ITL 5 000 million, in the field of management of water purification and sewage disposal plants, and also actual management of at least one domestic water purification plant for a period of two consecutive years during the previous three years. 9. It is also established, however, that Ruhrwasser did not directly possess the required qualifications to tender properly, being a newly constituted company which was entered on the register of companies 7. The companies Hoist Italia AG (Holst only on 9 July 1996. For this reason, Italia) and Ruhrwasser AG International Ruhrwasser relied on the technical and Water Management SpA (Ruhrwasser) financial qualifications of Ruhrverband were permitted to participate in the call which, through its subsidiary RWG, parti- for tenders. By a decision of the contract- cipated in the joint venture from the outset awarding committee of 13 June 1997, of the creation of Ruhrwasser. The con-

11. Considering that, in order to rule on this point it was necessary to determine whether Directive 92/50 permits a candi­ date participating in a tender procedure to 13. In order to answer the question refer­ rely on the technical and financial qualifi­ red, it is necessary to examine the rules and cations of another legal person to which it provisions of Community law, as they are is linked, the national court stayed pro­ contained in Directive 92/50 and as they

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have been supplemented by the case-law of that there is no discrimination between the Court. different service providers.' It is necessary to determine whether the non-admission of a tenderer on the ground that he does not personally fulfil the technical and financial capacity conditions set by the contracting authority constitutes such discrimination.

Aims and relevant provisions of Directive 92/50

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where several undertakings intend to to which contracting authorities are respond jointly to an invitation to tender. exposed. Under this provision, groups of service providers are expressly permitted to tender and the contracting authority may not require these groups 'to assume a specific legal form in order to submit the tender'. 22. A significant example of this type of requirement is provided by Article 26(3), which permits the contracting authority to require legal persons to '... indicate ... the names and the relevant professional quali- fications of the staff to be responsible for the performance of the service'. If it cannot be prohibited to award a contract to a legal 20. These various provisions make it clear person on the sole pretext of its legal form, that the Community legislature is less it is just as important not to deprive the concerned with the legal form which ser- contracting authority of information which vice providers assume than with their will enable it to evaluate the capability of a ability to carry out the tasks entrusted to service provider to carry out the contract them upon the award of public contracts, under the conditions laid down. or to gather together the resources for the performance of the contract regardless of their own organisation. The elimination of obstacles linked to the legal status of operators constitutes a means of increasing tenders, particularly those from undertak- ings from Member States of the Commu- 23. The Community legislature has there- nity other than the State in which the fore ensured that the full exercise of the contract awarding procedure takes place, freedom of movement does not compro- without compromising the substantive mise the proper performance of the ser- requirements for proper performance of vices, an element without which the Com- services. munity legislation loses all its meaning. Directive 92/50, like the interpretation to be applied to it, pivots between the two essential requirements of providing for a sufficient liberalisation of contract-award- ing procedures and of setting standards which assure contracting authorities that they receive quality services.

25. This is the objective of Articles 31 and 28. First, although an abundance of tenders 32 of Directive 92/50. The first article lists is in itself in the interests of the contracting the financial and economic proof which authority, this should not be achieved at the can be required from service providers, cost of mediocre services. Such a require- states how it can be provided and gives an ment legitimates those safeguards and jus- alternative solution in the event that a tifies that the interpretation given to the service provider is unable to produce the provisions establishing them should take requested references. The second article account of the risks of fraud liable to stifle lays down a number of criteria for deter- their protective effect. The consequences of mining the capability of service providers accepting that the legal conditions laid to supply the services requested, draws up a down by Directive 92/50 can be fulfilled list of the means of evidence of their by persons other than the tendering under- technical capacity and indicates how the taking should, therefore, be carefully contracting authority may request them. assessed.

29. Secondly, although the reference made by those two articles to the service provider could prompt an interpretation to the effect that the production of proof is limited to 26. It is not necessary to discuss the reasons the service provider himself, 7 other pas- for these provisions at any length, the sages militate in favour of a less strict object of these articles evidently being to reading. protect the interests of the contracting authority against applications from eco- nomic operators more concerned about securing lucrative contracts than about the main task, that is to say, performing them scrupulously.

authority considers appropriate', which, by The Ballast Nedam Groep cases giving the contracting authority a certain degree of discretion, allows it to accept proof produced by persons other than the service provider as long as they offer the same guarantees. Likewise, Article 32(2)(c) expressly refers to the case where the technicians or the technical bodies on which the service provider relies do not belong directly to the service provider. Still 32. The Court's judgments of 14 April other provisions go in this direction, such 1994 9 and 18 December 1997 1 0 in the as Article 32(2)(h), which accepts the pos­ Ballast Nedam Groep cases confirm this sibility of the service provider using a sub­ approach. contractor, or Article 32(2)(e), which pro­ vides for 'a statement of the tool, plant or technical equipment available to the service provider for carrying out the services',8 thus not limiting the statement to the undertaking's own equipment.

33. In Ballast Nedam Groep I, the question was whether a holding company could be excluded from participating in the proce­ dures for public works contracts because it did not carry out the work itself — in that case by the refusal to renew the approval which it had been awarded until then — and, if not, under which conditions it could prove the necessary standing for such participation. 11

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34. The Court held that the directives 37. First of all, in Ballast Nedam Groep I, applicable in this case 12 '... must be the Court ruled on the interpretation of the interpreted as meaning that they permit, Community legislation regulating public for the purposes of the assessment of the works contracts, whilst the present refer- criteria to be satisfied by a contractor when ence for a preliminary ruling concerns an application for registration by the Community law governing public service dominant legal person of a group is being contracts. It is therefore quite legitimate to examined, account to be taken of compa- examine whether that which applies to one nies belonging to that group, provided that sector is also applicable to the other. the legal person in question establishes that it actually has available the resources of those companies which are necessary for carrying out the works' and that '[it] is for the national court to assess whether such proof has been produced in the main proceedings'. 13 38. The differences between the two bodies of legislation result in more explicit refer- ences, in the area of public works con- tracts, 14 to the right for contractors to entrust performance of contracts to other operators. If they are added to the argu- 35. The Court therefore accepted that an ments in favour of this right in the works economic operator not in a position to sector, these differences do, in my view, carry out the contract himself because he detract from the factors advanced above 15 does not fulfil the qualitative selection supporting the possibility of tenderers in criteria required by the provisions may rely the area of services having the same right. on the resources of other companies, pro- vided that those resources are actually available to him for his use.

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contracts, provided that their selection is in view, of its legal organisation and on the made on the basis of proof of the compe- real importance of direct review by the tence actually available to the undertaking court of the effectiveness of that making and on the solidity of the guarantees which available of resources. they offer.

45. It is in that sense that the principles 48. That finding and the factors explained contained in Ballast Nedam Groep I should above, which can be derived from the be read and applied to the present case. objectives pursued by Directive 92/50 and its tenor, suggest that the ruling in Ballast Nedam Groep I should be applied to the relationships between Ruhrwasser and Ruhrverband, although these connections 46. The Court stated that the performance of ownership are reversed in comparison of works by legal persons separate from the with that decided case and, instead of being holding company to which they are awar- 'dominant', the company in question is in a ded does not warrant the latter's exclusion subordinate position. from the procedures for participating in the award of public contracts. The Court added that the nature of the legal link between a company and its subsidiaries did not matter 16 and that it was for the national court to assess, in the light of the 49. Of course, it is not a question of factual and legal circumstances before it, drawing from such two different legal whether proof, by the company, of the situations the conclusion that the contract- actual availability of resources of its sub- ing authority will have, in both cases, the sidiaries had been adduced in the main same guarantee that resources external to proceedings. 17 the tenderer undertaking will actually be made available.

contracting authority has no certainty of nal resources which it claims to have, the being able to call on the skills needed for referring court is asked to carry out an the performance of the contract, it appears assessment of elements of fact and of law to me excessive to hold that, as a matter of which concern the content of the agree- principle, the fact that an undertaking, in ments possibly concluded between Ruhr- responding to an invitation to tender, relies wasser, RWG and Ruhrverband — or on the technical, financial and economic between the two companies concerned by resources of a company to which it belongs the contract in question — or the relations wholly or in part should prevent it from statutorily established between them, and tendering. The method used to ensure the also the binding nature of the legal link actual availability of the resources and binding these two companies together. guarantees required by the contracting authority does not matter, as long as that availability can be verified.

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benefit of minimal professional experience, will be involved in performance of the which, in order to be really useful, must be contract to a significant degree. directly employed in the performance of the contract. Therefore, it is essential to ascer- tain that the company whose experience is relied upon will be the one which, whilst not carrying out the entire range of activ- ities described by the contracting authority, 57. Secondly, in assessing whether the will at least provide the management, thus resources relied upon will actually be making its technical ability available. 18 available, it is appropriate to ascertain whether the legal instrument used for this purpose is not only in order but also ensures the intended effects by conferring a binding force on them. 19

58. It will be legitimate for the national court to investigate, for example, whether 56. This reasoning is capable of being an agreement has been concluded under applied to the second guarantee sought by which the parent company undertakes to the contracting authority, which concerns make available to its subsidiary a certain experience of actual management of a number of technical resources and financial domestic sewage treatment plant for two guarantees, whether this agreement is truly consecutive years during the previous three binding on the parent company and whe- years. Likewise, laying down such a criter- ther, in the case of non-performance, the ion does not make sense unless the tenderer parent company could be sued before the who wins the contract relying on the competent courts. experience of another company is in a position to prove that the latter company

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other, which is not without effect on the ing of the power to secure performance of guarantees and resources which will be the obligations in question through the available to the contracting authority. courts, it thus holds the power to undo its own commitments. The guarantees provi- ded to the contracting authority then risk being no more than a veil masking the tenderer's inability to fulfil the obligations 60. Indeed, if the parent company was of the contract. behind the decision to respond to the invitation to tender — although this deci- sion is formally attributed to the subsidi- ary — it is unlikely that it will refuse to make available the resources at its disposal. 64. The disadvantage for the contracting authority is, therefore, that the company which holds the power to decide to make available the resources and guarantees 61. However, it cannot be totally excluded necessary for the contract and the company that the subsidiary tenderer, being the only which assumes responsibility as co-contrac- party legally bound to the contracting tor are two separate legal persons. Nor authority, encounters a change of policy must it be overlooked that any proceedings by the decision-making parent company. brought against the subsidiary will not be without consequences for the parent com- pany.

62. It is to be feared that the contracting authority, which stands to suffer most from the unforeseen effects of a poorly per- formed or non-performed contract and faced with the impossibility of obtaining 65. In the present case, however, Ruhrwas- from its co-contractor prompt and satisfac- ser appears to have relative autonomy in tory performance of the contract or finan- relation to Ruhrverband since, as we have cial compensation for the latter's default, seen, its capital is divided in equal parts would have no right of action against the between six companies of which only one, parent company. RWG, is wholly owned by Ruhrverband.

Council Directive 92/50/EEC of 18 June 1992 relating to the coordination of procedures for the award of public service contracts is to be interpreted as not precluding a contracting authority from taking account, for the assessment of the selection criteria of the financial and technical standing which a company must satisfy upon examination of a bid made during a tendering procedure for the award of a public service contract, of the standing of another company which is the sole shareholder of one of the companies having a shareholding in the first- mentioned company, provided that the latter company proves that it actually has available the resources of the company on which it relies.

It is for the national court to assess whether the requisite proof in that regard has been adduced in the main proceedings.

For that purpose, the national court must, in particular, make sure that the company whose standing is taken into account is obliged to take an appropriate part in the performance of the contract, having regard to the purpose of the references relied upon.

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