Contributed By Willkie Farr & Gallagher LLP
In order to simplify and unify the legislation on procurement of government contracts, France has enacted the Public Procurement Code ('Code de la commande publique') which entered into force on 1 April 2019.
The Public Procurement Code assembles all the laws, ordinances and decrees related to public procurement contracts and concession contracts which are mentioned below.
In the meantime, the rules governing government contracts come from a variety of sources and depend to a large extent on the nature of the contracts.
Rules governing public procurement contracts (marchés publics)
A marché public is a contract for pecuniary interest concluded between one or more economic operators and one or more contracting authorities. Its objective is the execution of works, the supply of products or the provision of services. Public procurement contracts are regulated by:
Rules governing concession contracts (contrats de concession)
A contrat de concession is a contract, for pecuniary interest, by means of which one or more contracting authorities entrust the execution of works (or the provision and the management of services) to one or more economic operators, the remuneration for which consists solely in the right to exploit the works that are the subject of the contract or in that right together with payment. The award of a works or services concession shall involve the transfer to the concessionaire of an operating risk in exploiting those works or services. Concession contracts are regulated by:
The entities subject to procurement regulation are:
Public procurement contracts and concession contracts are subject to procurement regulation.
As far as public procurement contracts are concerned, there are no mandatory rules if the value of the contract is under EUR25,000 but minimal publicity measures are recommended. Above EUR25,000, the requirements depend on
The main thresholds are as follows:
As far as concession contracts are concerned, there is just one threshold of EUR5,548,000. Below this threshold, the contracting authority may award the contract further to a simplified procedure; above this threshold, the contracting authority must implement a formalised procedure.
French regulation may implement restrictions related to the nationality of candidates.
However, the contracting authorities must guarantee that members of the Agreement on Government Procurement executed under the authority of the World Trade Organisation, and members of any other equivalent international agreement to which the EU is a party, will be treated in a manner equivalent to that which would be applicable to candidates from member states of the EU.
Lastly, in principle, contracts related to defence and security matters are closed to non-European entities.
The key obligations for contracting authorities are to ensure free access to the tender procedures, to implement transparent procedures and to guarantee equal treatment of candidates.
There is an obligation to implement publicity measures when the value of the contract exceeds specific thresholds (see 1.3 Type of Contracts Subject to Procurement Regulation, above).
As far as public procurement contracts are concerned, publication must be undertaken:
As far as concession contracts are concerned, publication must be undertaken:
In the advertisement, the contracting authority must disclose its name and address, the object of the contract (works, services, supply, etc), the contemplated duration of the contract, the contemplated price of the contract, the legal qualification of the contract (public procurement contract or concession contract), the type of award procedure (open procedure, restricted procedure, negotiated procedure or competitive dialogue) and the deadline to submit a tender.
In principle, the contracting authority does not need to carry out preliminary market consultations before launching the contract award procedure. Indeed, the tender procedure is supposed to answer to the contracting authority’s needs and preliminary market consultations do not help contracting authorities to assess their needs. However, should any such preliminary market consultations take place, the contracting authority must ensure that these consultations will not affect the free access to public contracts and the genuine competition.
As far as public procurement contracts are concerned, there are four main formalised procedures:
As far as concession agreements are concerned, the contracting authority wishing to award a concession contract shall make its intention known by means of a concession notice.
In the concession notice, the contracting authority shall provide a description of the concession and conditions of participation. Either in the concession notice, in the invitation to submit a tender or in other concession documents, it shall also provide a description of the award criteria and, where applicable, the minimum requirements to be met.
Concession contracts shall be awarded on the basis of the award criteria set out by the contracting authority in the concession documents. The contracting authority shall communicate the description of the envisaged organisation of the procedure and an indicative completion deadline to all participants.
The contracting authority may hold negotiations with tenderers, having specified that the subject matter of the concession, the award criteria and the minimum requirements shall not be changed during the course of the negotiations.
During the negotiations, the contracting authority must ensure equal treatment of all tenderers and the transparency of the procedure. Consequently, all candidates must be provided with the same level of information and the negotiations cannot lead to a substantial change in the original terms of the contract.
The legislation only provides for more than one tender procedure in the case of public procurement contracts (for concession agreements, the formalised procedure is mandatory above EUR5,548,000; below this threshold, an 'adapted' procedure defined by the contracting authority is implemented).
As far as public procurements are concerned, if the price of the contract exceeds the threshold, the contracting authority is free to select one of the procedures it prefers (open procedure, restricted procedure, tender procedure with negotiation or competitive dialogue).
The legislation does not impose obligations as to the timing for the publication of the procurement documents; this kind of obligation is rather related to the timing for the receipt of expressions of interest or for the submission of offers (see 2.6 Time Limits for Receipt of Expressions of Interest or Submission of Tenders, below).
The time limits depend on the type of contract and the type of procedure.
As far as public procurement contracts are concerned:
As far as concessions contracts are concerned, the time limit is at least 30 days for the application to bid (25 days in the case of electronic submission) and at least 22 days for the submission of the offer (17 days in the case of electronic offers).
Apart from obvious mandatory criteria such as, for instance, the absence of sentence for infraction or the regular payment of taxes, the legislation does not mandate the criteria which interested parties must meet in order to be eligible for participation in a procurement process because these criteria are defined by the contracting authority.
However, those criteria must be related to the object of the contract and must be proportionate to the ability of the co-contracting party to perform the said contract. For instance, the professional and technical abilities of the candidates are assessed with experience similar to the subject matter of the contract to be awarded.
The purpose of restricted procedures is precisely to restrict participation in the procurement process to only a small number of suppliers.
The shortlist is determined on the basis of the criteria set out by the contracting authority, criteria which must be objective, non-discriminating and related to the object of the contract to be awarded.
There is no minimum number of qualified suppliers except for some specific procedures. In restricted procedures, there must be at least five qualified bidders and in competitive dialogues and negotiated procedures, there must be at least three qualified bidders.
The offers are evaluated on the basis of criteria defined by the contracting authority and set out in the call for tender and in the tender documents. These criteria must be objective, impartial and in relation with the object of the contract. These criteria may be weighted by the contracting authority.
The offer chosen by the contracting authority must be the 'most economically advantageous offer', ie, the offer that meets the predefined criteria in the best way.
Pursuant to the obligation of transparency and equal treatment of the candidates, the contracting authority must disclose the criteria on the basis of which bidders are selected and their tenders are evaluated. These criteria are set out in the call for tenders and in the tender documents.
As contracting authorities must act in a transparent and impartial manner, they must notify the interested parties who have not been selected for participation in the contract award procedure of their rejection.
The mean of notification and its content depend of the type of award procedure implemented by the contracting authority. However, when a formalised procedure has been put into place, the contracting authority must indicate to the candidate the reasons for its elimination.
Whatever the type of procedure, the contracting authorities must inform the unsuccessful bidders of the rejection of their offer.
When a formalised procedure has been implemented, the contracting authority must give notice of the reasons for rejection. Moreover, as far a public procurement contracts are concerned, if this notification takes place after the award of the said contract, the contracting authority must also specify the name of the successful tenderer, the reasons for the choice of its tender and the contemplated date for the signature of the contract.
There is a standstill period for both public procurement contracts and concession contracts.
This period lasts between 11 days (if the notification of the contract award decision has been made electronically) and 16 days (if the notification of the contract award decision was not dematerialised).
The body responsible for the review of the awarding authority’s decisions is the administrative judge. Its decision may be appealed before the administrative court of appeal.
If the administrative judge considers that the contracting authority did not respect the procurement regulation, he or she will first of all try to regularise the situation (by means of amendment of the award procedure or amendment of the contract).
However, if the administrative judge is not able to regularise the breach (for instance because this breach is too serious), the judge can either stop the whole award procedure or cancel the awarded contract. As the cancellation of the contact is the ultimate sanction, its effects may be modulated in time by the judge (either retroactively or only for the future).
The administrative judge may also impose a fine when the cancellation of the contract is not an option.
Lastly, in the case of criminal violation (bribery or preferential treatment of one of the candidates, for instance), the criminal judge may pronounce criminal sanctions (such as fines or prison sentences).
Pre-contractual emergency procedures (actions lodged before the signature of the contract) exist in French law. In such a case (référé précontractuel), the administrative judge may suspend the contract award procedure and order to the contracting authority to comply with the procurement regulation.
The question of who has the standing to challenge the decision of the awarding authority depends on the stage of the award procedure.
If the contract has been awarded but not yet signed, the entities that may challenge the decision of the contracting authority are those who have an interest in signing the contract and may be prejudiced by the alleged breach in the tender regulation (for instance, unsuccessful candidates, unsuccessful tenderers or candidates that have been discouraged from bidding because of the alleged breach) (référé précontractuel).
If the contract has been signed before the expiry of the standstill period, the above-mentioned entities (unsuccessful candidates, unsuccessful tenderers or discouraged candidates) may challenge the contract in the context of a contractual emergency procedure (référé contractuel).
If the contract has been signed after the expiry of the standstill period, any third party may challenge directly the contract that may be harmed in its interests, in a sufficiently direct and certain manner, by the signature of the contract or by its clauses.
Lastly, the representative of the French state in the department (the préfet) may challenge any decision of the awarding authority.
As far as pre-contractual emergency procedures are concerned, claims against the awarding authority's decision must be introduced before the signing of the contract.
As far as contractual emergency procedures are concerned, the time limit is 31 days after the publication of the awarding notice in the Official Journal of the European Union or, if no publication has been made, six months after the signing of the contract.
As far as normal procedures against the contract are concerned, the time limit is two months after the decision to award the contract.
As far as pre-contractual emergency procedures are concerned, the administrative judge must take its decision within a 20-day period following the introduction of the claim.
As far as contractual emergency procedures are concerned, this time limit is one month after the introduction of the claim.
As far as normal litigation procedures are concerned, in general, the administrative tribunal takes about one year to judge a claim. However, please note that this length of proceedings is not specific to procurement claims (no individual figures are available).
To our knowledge, procurement claims in 2017 represented circa 3% of the claims introduced before the administrative judge.
The only costs involved in challenging an awarding authority's decision are the attorney fees, which may vary significantly from one lawyer to another.
Modification of contracts is possible following their award, but may not lead to a substantial change in the contractual clauses of the said contract. Should such a substantial change be contemplated, a new tender procedure would have to be implemented by the contracting authority.
Direct contract awards are possible in very limited and specific cases, the latter being strictly construed by the administrative judge.
It is not possible to list all the cases where such direct award is possible but, for instance, it is possible if:
As mentioned in 1.1 Legislation Regulating Procurement of Government Contracts, above, all the rules concerning public procurement contracts and concessions contracts will be unified into a single code: the Public Procurement Code. This code will enter into force on 1 April 2019.
Apart from this evolution, as the French legislation on public procurement contracts and concession contracts has been recently updated (between 2014 and 2016), no legislative amendments are currently being considered.
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