The Economic Operator's Legal Position in the Interaction Between Procurement and State Aid Rules in Connection With Public Procurement Procedures in the EU

David Fajnzylber, Peter Cederfeld Falstaff & Peter Hilliger Petersen

Student thesis: Master thesis

Abstract

This thesis examines the legal position of the economic operator in the interplay between procurement and State aid rules in connection with public procurement procedures in the EU and how the legal basis may need to be adjusted based on the economic operator’s perspective.
First, the behaviour of economic operators and their pricing in markets with publicly competitive contracts are analysed. Next, it is examined how this behaviour in connection with the granting of State aid affects the economic operator's legal status in EU procurement. Finally, a legal policy analysis is conducted focusing on how the European Commission should understand the legal basis and whether the legal basis should be adjusted. In addition, considerations of efficiency are included aiming to ensure better economic conditions for the economic operator.
The thesis concludes that - regardless of the market structure, the nature of the procurement or the framework for the negotiating - the economic operator always shows a profit-maximizing behaviour. However, the abovementioned factors affect the pricing of an offer. Furthermore, it is concluded that a payment transaction in connection with the ‘open procedure’ according to art. 27 in the Procurement Directive 2014 should not be regarded as an economic advantage. However, the risk of an economic advantage in the other tendering procedures is gradually increasing. Thus, the economic operator risks having to reimburse an amount of State aid granted under the TFEU art. 107 (1). Finally, it is concluded that the European Commission should specify that payment transactions in connection with the tendering procedures under art. 27-32 in the Procurement Directive 2014 - with the exception of 'direct award' or receipt of one offer on the basis of a single applicant - cannot be considered as an economic advantage under TFEU art. 107 (1). If the offer is based on the procedure ‘direct award’ or an offer based on a single applicant the contracting authority should, like the provision for abnormally low tenders according to art. 69 (1) in the Procurement Directive 2014, be obliged to ask the economic operator to submit a statement that explains the price in the offer. In this context, the contracting authority should be obliged to comply with the ‘market economy operator test’ as developed by the European Court of Justice in order to ensure that the price of the contract is in line with the market price.

EducationsMSc in Commercial Law, (Graduate Programme) Final Thesis
LanguageDanish
Publication date2017
Number of pages182