Quels droits pour le sous-traitant tenu au remboursement d’une avance du fait d’une faute du titulaire du marché ?

What rights for the subcontractor required to repay an advance due to the fault of the contractor?

by Sébastien Palmier on May 9, 2020 | Category: Public markets
Quels droits pour le sous-traitant tenu au remboursement d’une avance du fait d’une faute du titulaire du marché ? Quels droits pour le sous-traitant tenu au remboursement d’une avance du fait d’une faute du titulaire du marché ?

CE March 4, 2020, St Savima, n ° 423443

In this case, the Council of State recalls that when a public contract is terminated before the advance can be reimbursed by withholding tax on the services due, the public buyer can obtain the reimbursement of the advance paid to the contractor or its subcontractor subject to the expenses they have incurred and which correspond to services provided on the market and actually carried out. And when the subcontractor is obliged to reimburse the advance due to a fault on the part of the holder, he may incur his liability up to the costs incurred for the performance of the services envisaged.

 What you must remember :

Point n ° 1: The subcontractor of a public contract is entitled to the payment of an advance including when the holder renounces it

The advances granted and paid to the holder or the subcontractor on the basis of the provisions of article R. 2191-3 of the public procurement code are intended to provide pre-financing for the performance of market services. The advance is the payment of part of the amount of a contract to the holder before any start of performance of the services and constitutes as such a derogation from the rule of " service done ".

Article R. 2193-19 of the code of the public procurement code recalls that as soon as the holder fulfills the conditions to benefit from an advance then the approved subcontractor benefiting from direct payment is also entitled to benefit from it upon request upon notification of the public contract or the special act of subcontracting. It should be emphasized that the renunciation by the holder of the benefit of the advance does not prevent the subcontractor from obtaining payment.

The amounts which condition the payment of the advance referred to in article R. 2191-3 of the public procurement code which is assessed in relation to the overall amount of the public contract and not in relation to the amount of the services subcontracted. Thus the advance is of right if the total amount of the public contract, and not the only amount of the subcontracted services is more than 50,000 euros HT and if the execution time of the public contract is more than 2 months. The base of the advance paid to the subcontractor who benefits from direct payment corresponds to the amount of the services subcontracted as they appear in the public contract or in the special act of subcontracting

The advance paid is deducted from the sums due to the holder or the subcontractor, according to a rhythm and modalities fixed by the public market, by withholding tax on the sums due as installments, final partial settlement or balance . If the buyer has omitted to specify in the public contract the methods of reimbursement of the advance, the reimbursement, made by pre-payment on the sums due subsequently to the holder, begins when the amount of the services performed under the public contract reaches or exceeds 65% of the amount of the public contract. The full repayment of the advance must, in any event, be terminated when the amount of the services performed by the holder reaches 80% of the amount inclusive of tax of the services entrusted to it under the public contract.

In its judgment of March 4, 2020, Sté Savima, the Council of State recalls that the advance does not constitute a final payment by the public buyer so that the latter has the obligation to recover from his defaulting counterparty that he paid him as advances for services that were not performed. Thus, the Council of State lays down the rule according to which “ when the contract is terminated before the advance can be reimbursed by withholding tax on the services due, the contracting authority may obtain reimbursement of the advance paid to the contract holder or its subcontractor subject to the expenses that they have exhibited and which correspond to services provided on the market and actually performed ".

 

Point n ° 2: The subcontractor obliged to repay the advance due to the holder's fault may engage the latter's responsibility

In its judgment of March 4, 2020, Sté Savima, the Council of State also recalls that when the subcontractor is obliged to repay the advance due to a fault of the holder can engage the responsibility of the latter up to the expenses incurred for the performance of the services envisaged. The Council of State specifies that when, for example, a public contract is terminated due to a serious fault committed by the holder, then the subcontractor is entitled to seek responsibility for obtaining compensation for the damage that such termination may have caused him on account of the expenses incurred for the performance of services initially provided for in the market: " In the event of termination for fault of the contract, the reimbursement of the advance by the subcontractor does not prevent the latter from bringing an action against the contractor and asking him, if necessary, for compensation for the damage that this termination caused him on account of the expenses incurred with a view to the performance of services initially provided for on the market "


CE March 4, 2020, St Savima, n ° 423443

Considering the following:

  1. It appears from the documents in the file submitted to the trial judges that, within the framework of a design-construction contract between the hospital center of the municipality of Capesterre-Belle-Eau (Guadeloupe) and the company Alfa Bâtiment, acting in quality as a joint representative of a joint group of companies, for the construction of a new local hospital, the contracting authority, by a special act of December 16, 2008, accepted the Savima company as a subcontractor for the execution of part of lot 4-4 “Exterior carpentry sunbreaker” and approved its payment conditions for a maximum amount of € 2,056,253.86 excl. In accordance with its request, this company obtained a lump sum advance of 20 % for the amount of the subcontracted work, ie the sum of 446,207.09 euros including tax. Following the partial sale, for the benefit of the company Saint Landry, of the assets of the company Alfa Bâtiment relating to the site of the new hospital, brought into receivership, the hospital center noted the absence of resumption of the site. By a letter dated August 31, 2011, the director of the hospital center informed the company Savima of the termination of the contract at the wrongs of the company Saint Landry, which occurred on June 10, 2011. By a title of receipts issued and made enforceable on December 4, 2012 , the hospital center claimed from Savima the sum of 446,207.09 euros including tax, corresponding to the reimbursement of the lump sum advance on works which had been paid to it. By a judgment of June 21, 2018 against which the company Savima appeals in cassation, the administrative court of appeal of Bordeaux rejected the appeal that the company had filed against the judgment of the administrative court of Guadeloupe rejecting its request for the cancellation of this enforceable title.
  2. The advances granted and paid to the holder of a contract on the basis of the provisions of article 87 of the code of public contracts, applicable to the litigation, have for object to provide him with sufficient cash intended to ensure the prefinancing of the execution of the services entrusted to him. The principle and the terms of their reimbursement are provided for by the provisions of article 88 of this code, the substance of which was included in articles R. 2191-11 and R. 2191-12 of the public procurement code, which allow the contracting authority to charge the reimbursement of advances by withholding tax on the sums due to the contractor as down payments, final partial settlement or balance. Article 115 of the same code, the substance of which was included in articles R. 2193-17 et seq. Of the public procurement code, provides that these provisions apply to subcontractors benefiting from direct payment. It follows from the combination of these provisions that when the contract is terminated before the advance can be reimbursed by withholding tax on the services due, the contracting authority may obtain reimbursement of the advance paid to the contract holder or to his subcontractor subject to the expenses they have incurred and which correspond to services provided on the market and actually carried out. In the event of termination for fault of the contract, the reimbursement of the advance by the subcontractor does not prevent the latter from bringing an action against the contractor and asking him, if necessary, for compensation for the damage that this termination caused him on account of the expenses incurred with a view to the performance of services initially provided for on the market.

  3. It appears from the statements in the judgment under appeal that the court first of all considered that the contracting authority could not in this case obtain reimbursement of the advance he had paid to the subcontracting company by withholding tax on the sums due to the subcontractor, on the basis of the provisions of articles 88 and 115 of the public procurement code then applicable and of article 6.3 of the book of the specific administrative clauses, since this company had not executed, if only partially, the services entrusted to him. The Administrative Court of Appeal then found that, in the circumstances of the case, the conditions for the recovery of undue payments were not met but that the hospital center could, in order to issue the title of receipts in dispute, base on the theory of unjust enrichment. In doing so, the court erred in law since, as stated in point 2, the basis for the repayment of the advances by the subcontractor, on account of a total or partial absence of performance of its services are based on articles 88 and 115 of the public procurement code applicable to the dispute even though the terminated contract has not been performed.
  4. It follows from the foregoing that Savima is justified in requesting the annulment of the judgment under appeal.
  5. It is necessary, in the circumstances of the case, to charge the Capesterre-Belle-Eau hospital center with the sum of 3,000 euros under Article L. 761-1 of the Code of Administrative Justice. However, the same provisions prevent an amount from being charged to Savima.

 

DECIDE:

Article 1: The judgment of June 21, 2018 of the Administrative Court of Appeal of Bordeaux is set aside.
Article 2: The case is referred to the Administrative Court of Appeal of Bordeaux.
Article 3: The Capesterre-Belle-Eau hospital center will pay Savima the sum of 3,000 euros under article L. 761-1 of the Code of Administrative Justice.
Article 4: The conclusions presented by the Capesterre-Belle-Eau hospital under Article L. 761-1 of the Code of Administrative Justice are rejected.