Public and private candidacy: how to ensure a "fair" competition?
The Council of State recalls the conditions under which a local authority or a public cooperative institution may apply for the award of a public contract to meet the needs of another public person.
Teaching n ° 1: The admission in principle of the candidacy of the public persons for the obtaining of the public contracts
In its opinion dated November 8, 2000, Sté Jean-Louis-Bernard Consultants, the Council of State has already had the opportunity to recall that no text or principle prohibits, because of its nature, a public person, to apply for the award of a public contract.
Article L 1220-1 of the Code of Public Commitment henceforth devotes this solution since it indicates that an economic operator may be any natural or legal person, "public" or private, which offers on the market the execution of works or works, the supply of products or the provision of services.
A public person can henceforth compete with other public persons and / or private companies in order to obtain a public contract.
However, as Article L 3 of the same Code states, public procurement must respect the principles of freedom of access to public procurement, equal treatment of candidates and transparency of procedures. These principles were recognized by the Conseil d'Etat as general principles of law before the Constitutional Council established them as constitutional principles.
And it is precisely with regard to these principles that the participation of public persons in market procedures does not cease to raise a number of questions, particularly with regard to respect for the principle of equality. The equality of candidates concerns both access to the public order and its organization; it also has implications when awarding the contract. Thus, even though the principle of free competition has never meant absolute equality between the candidates, there is no reason for public candidates applying for a public contract to benefit from preferential treatment over their competitors. private.
The monitoring of the respect of the principle of equal treatment between public and private operators must therefore be made on a case by case basis, taking into account the particular constraints on each of them.
The latest decisions of case law show that the control of the administrative judge is more and more vigilant on the only point made so far by the Council of State concerning the conditions under which the offer of a public person can loyally compete with the one of a private person. The examination of the conditions of participation of public entities in competitive tendering procedures is more of an in concreto approach that can be described as compensatory compared to private operators.
In its judgment of 14 June 2019, the Council of State specifies the conditions under which a local authority or a public cooperative institution may apply for the award of a public contract to meet the needs of another public body. stating that such participation is possible only if it meets such a public interest, that is to say if it constitutes the extension of a public service mission of which the community or the public institution of cooperation in charge, for the purpose "in particular" to depreciate equipment, to enhance the means available to the service or ensure its financial equilibrium, and provided that it does not compromise the exercise of the mission.
The Conseil d'Etat adds, however, that this depreciation should not be understood in a precise accounting sense, but more broadly as reflecting the interest in increasing the rate of use of the equipment of the community, as long as they are not oversized in relation to their own needs.
In this case, the Vendée department had initiated an advertising and competition procedure with a view to ensuring dredging works. The department of Charente-Maritime has decided to apply for the procedure and has been awarded the contract.
The Council of State validates the application of the department of Charente-Maritime on the grounds that the dredge it has acquired has been designed to meet the needs and specificities of the ports of its territory but is used only a part of the year to meet these needs.
Therefore, the High Court considers that the use of this dredge out of the departmental territory can be regarded as part of the extension of the public service of creation, development and exploitation of the maritime fishing ports for which it is responsible, without compromising the exercise of this mission and that the provision of this dredge on behalf of another department can amortize the equipment and enhance it. Consequently, the plea that the application of the Department of Charente-Maritime did not respond to a local public interest must be rejected.
Teaching n ° 2: The thorny appreciation of fair competition between public and private operators in the context of the awarding of public contracts
Once admitted in principle, the Council of State reminds that this application must not distort the conditions of competition. In particular, the price offered by the local authority or the public establishment of cooperation must be determined taking into account all the direct and indirect costs involved in its formation, without the public authority benefiting, to determine it, from a benefit deriving from the resources or means allocated to it in respect of its public service tasks and provided that it can, if necessary, justify that by its accounting documents or any other appropriate means of information.
Thus, when the offer price of a local authority is significantly lower than the offers of other applicants, it is up to the contracting authority to ensure, by requesting the production of the necessary documents, that all direct and indirect costs has been taken into account to fix this price, so that the conditions of competition are not distorted. If the bid from the community is selected and if the price of the bid is contested in the context of a dispute, it is up to the administrative judge to verify that the contracting authority has not relied on a price that is clearly under- estimated in relation to all the costs incurred and in view of the documents communicated by the applicant community.
In this case, the department of Charente-Maritime made a lower offer compared to other companies, but also in view of the estimates of the contracting authority. The Vendée department asked for clarification and was able to verify that the lower price was justified because of a technical process integrated in the dredge "Fort Boyard" which allowed to greatly reduce operating costs. The Conseil d'Etat therefore considers due process.
1. The documents in the file submitted to the Court of First Instance indicate that the Vendée Department initiated, in 2006, a tendering procedure for the dredging of the Lay estuary, a period of one year with the possibility of renewal for three years. By a decision of 16 June 2006, the tender commission awarded this contract to the Charente-Maritime department. The company Armor SNC, whose offer was not retained, asked the Administrative Court of Nantes, on the one hand, to annul the decision of June 16, 2006, as well as that of the president of the general council of Vendée to sign this contract with the awarding department and, secondly, to order the president of the Vendée General Council to refer the matter to the competent judge in order to establish the nullity of the contract. By a judgment of 9 April 2010, the Nantes Administrative Court rejected his request. In a judgment of 4 November 2011, the Administrative Court of Appeal of Nantes rejected the appeal filed by the company Armor SNC against this judgment. By a decision of 30 December 2014, the Council of State, ruling in litigation, annulled the judgment of the court and returned the case. The company Vinci maritime and fluvial construction, coming to the rights of the company Companies Morillon Corvol Courbot, itself coming to the rights of the company Armor SNC, appeals in cassation against the judgment of April 12, 2017 by which the administrative court of Nantes appeal again dismissed the appeal against the judgment of 9 April 2010 of the Administrative Court of Nantes.
2. Except for those entrusted to them on behalf of the State, the competences available to the local authorities or their public institutions of cooperation shall be exercised with a view to satisfying a local public interest. If there is no principle or text that prevents these communities or their public cooperating institutions from applying for a public procurement contract to meet the needs of another public body, they may not legally such an application only if it meets such a public interest, that is to say, if it constitutes an extension of a public service mission for which the community or the public cooperation institution is responsible, for the purpose, in particular depreciate equipment, enhance the means available to the service or ensure its financial equilibrium, and provided that it does not compromise the exercise of the mission. Once accepted in principle, this application must not distort the conditions of competition. In particular, the price offered by the local authority or the public establishment of cooperation must be determined taking into account all the direct and indirect costs involved in its formation, without the public authority benefiting, to determine it, from a benefit deriving from the resources or means allocated to it in respect of its public service tasks and provided that it can, if necessary, justify that by its accounting documents or any other appropriate means of information. These rules finally apply without prejudice to the cooperation that public entities may organize between themselves, in the context of relations distinct from those of operators operating in a competitive market.
On the appeal:
3. As stated in point 2, the application of a local authority for the award of a public contract may be regarded as a local public interest when it is an extension of a public contract. public service for which the community is responsible, in particular because the award of the contract would allow the amortization of equipment at its disposal. This depreciation, however, should not be understood in a precise accounting sense, but more broadly as reflecting the interest that is attached to the increase in the rate of use of the equipment of the community, since these are not oversized in relation to its own needs. Consequently, by confining itself to taking into account the period of depreciation accounting of the dredge "Fort Boyard" to assess the local public interest of the candidacy of the department of Charente-Maritime, the administrative court of appeal of Nantes has erred in law.
4. It follows from the foregoing that, without it being necessary to examine the other grounds of its appeal, the company Vinci maritime and river construction is justified in seeking the annulment of the judgment it is attacking.
5. Under the second paragraph of Article L. 821-2 of the Code of Administrative Justice: "When the case is the subject of a second appeal on points of law, the Conseil d'Etat decides definitively on this case" . Since the Conseil d'Etat has before it a second appeal on points of law, it is incumbent upon it to settle the case on the merits.
On the appeal request:
6. In the first place, under Article 40 of the Public Procurement Code then in force: "(...) IV - For works contracts of between € 90,000 and € 5,270,000 In euros, the public entity is required to publish a public notice of competition either in the Official Bulletin of Public Procurement Announcements or in a newspaper authorized to receive legal announcements. Given the nature or the amount of the works in question, a publication in a specialized newspaper corresponding to the economic sector concerned is also useful to ensure publicity in accordance with the objectives mentioned in Article 1 of this Code. (...) VI The opinions mentioned in III, IV and V are established in accordance with the models set by order of the Minister of the Economy (...) ". The decree of January 30, 2004, then in force, by which the Minister in charge of the economy fixed the models of forms for the publication of these notices specifies in particular the obligatory mentions and those having a facultative character.
7. It follows from the above that, in view of the amount of the contract in question, the Vendée department was required to publish only one public notice of competition, which he made a publication of April 29, 2006 in the Official Bulletin announcements of public markets. The publication, moreover, of an opinion summarized in another newspaper does not affect the lawfulness of the contentious tender procedure. Therefore, the plea alleging the irregularity of the tendering procedure due to the absence in this second publication of some of the information required by the order of 30 January 2004 can only be rejected. .
8. Secondly, under the first paragraph of Article L. 1412-1 of the General Code of Local Authorities: "Local authorities, (...) for the direct exploitation of a public industrial and commercial service within their jurisdiction, constitute a board subject to the provisions of Chapter 1 of Title II of Book II of Part Two (...) ". According to Article L. 2221-1 of the same Code: "The communes and the unions of communes may directly exploit services of public interest of an industrial or commercial character (...)". Under the terms of Article L. 2221-4 of the same code, made applicable to the departments by the aforementioned provisions of Article L. 1412-1 of the same code: "The régies mentioned in Articles L. 2221-1 and L. 2221-2 are endowed with: / 1 ° either legal personality and financial autonomy, if the municipal council or the union committee has so decided, / 2 ° either of the sole financial autonomy ". According to Article L. 2221-14 of the same Code: "Regies with sole financial autonomy are created, and their administrative and financial organization determined, by deliberation of the municipal council.They are administered, under the authority of the mayor and the municipal council, by an exploitation council and a director appointed under the same conditions on the proposal of the mayor ". It follows from these provisions that if local and regional authorities must, in order to operate a public industrial and commercial service, create a body with financial autonomy, they are not required to confer legal personality on them. As a result, the department of Vendée was legally able to retain the offer of a departmental board whose accounts are traced in the department's subsidiary budget.
9. Thirdly, it follows from paragraph 2 that local and regional authorities may apply for a public contract where the activity is in the public interest. It appears from the documents in the file that the dredge "Fort Boyard", acquired in May 2002 by the Charente-Maritime department, was sized to meet the needs and specificities of the ports of this department but is used only part of the year to meet those needs. Therefore, its use outside the departmental territory can be regarded as an extension of the public service of creation, development and exploitation of the maritime fishing ports whose department is in charge in application of the provisions of the Article L. 601-1 of the Code des ports maritimes, without compromising the exercise of this mission, such use of the dredge "Fort Boyard" to depreciate equipment and enhance the means available, in this context, the public dredging service of Charente-Maritime. Consequently, the plea that the application of the Department of Charente-Maritime did not respond to a local public interest must be rejected.
10. Fourthly, where the offer price of a local authority is significantly lower than the bid price of the other candidates, it is up to the contracting authority to ensure, by requesting the production of the necessary documents, that the all direct and indirect costs have been taken into account in setting the price, so that the conditions of competition are not distorted. If the bid from the community is selected and if the price of the bid is contested in the context of an appeal filed by a third party, it is for the administrative court to verify that the contracting authority has not relied on Retain the offer of the community, at a price that is clearly underestimated in terms of all the costs incurred and in view of the documents submitted by the applicant community.
11. It appears from the documents in the file that the tendering commission of the Vendée department, after having found that the offer of the Charente-Maritime department was inferior both to its own estimate and to the prices offered by the the two bidding companies, obtained from the candidate department the production of a sub-detail of the prices, showing that the difference in price was explained by the use of a suction hydraulic dredge equipped with a bucket to store the cuttings and clap them at sea, whose yields are much higher than the use of pontoons that require the use of barges to transport the cuttings. The contracting authority was able, without manifest underestimation, to consider, in view of this price sub-detail established on the basis of the cost accounting of the service, that all the costs, including the depreciation costs of the dredge "Fort Boyard", had been taken into account for the determination of the price. In this respect, the applicant company can not usefully argue in the present dispute that the dredging service should have been subject to corporation tax.
12. It follows from all the foregoing that the company Vinci maritime and river construction is unfounded to maintain that it is wrong that, by the judgment under appeal, the Administrative Court of Nantes rejected his request.
The findings relating to litigation costs:
13. It is appropriate, in the circumstances of this case, to charge the company Vinci maritime and river construction the sum of 3 000 euros to be paid, on the one hand, to the department of Vendée and, d on the other hand, in the department of Charente-Maritime, under Article L. 761-1 of the Code of Administrative Justice. The same provisions prevent an amount from being placed in the hands of the two departments which are not, in the present case, the losing parties.
Article 1: The judgment of 12 April 2017 of the Administrative Court of Appeal of Nantes is canceled.
Article 2: The application submitted by the company Armor SNC, whose rights came from the company Vinci maritime and river construction, before the administrative court of appeal of Nantes is rejected.
Article 3: The company Vinci maritime and fluvial construction will pay a sum of 3,000 euros to the department of Charente-Maritime and a sum of 3,000 euros to the department of Vendée under Article L. 761-1 code of administrative justice. The conclusions submitted by the same company are rejected.
Article 4: This decision will be notified to the company Vinci maritime and fluvial construction and the departments of Vendée and Charente-Maritime.