On 21 December 2023, the Court of Justice delivered its judgment in case Infraestruturas de Portugal and Futrifer Indústrias Ferroviárias (C-66/22). The case originated in a request for a preliminary ruling from the Portuguese Supreme Administrative Court and concerns the interpretation of point (d) of the first subparagraph of Article 57(4) of Directive 2014/24/EU on public procurement and Article 80(1) of Directive 2014/25.

At issue in this case is the lawfulness of the decision to award a public contract to a tenderer who has been ordered by the national competition authority to pay a fine for violation of competition rules in the context of previous public procurement procedures. Under the Portuguese legislation transposing Directive 2014/24, the contracting authority is bound by the assessment carried out by the competition authority as to the reliability of the tenderer, irrespective of whether or not that assessment has led to an ancillary penalty of a temporary prohibition from participating in public procurement procedures (paragraph 36).

In its judgement, the Court of Justice analysed the question of whether Member States can limit the exclusion of competition law infringers from participation in public procurement procedures to cases in which the national competition authority has previously imposed such exclusion as an ancillary sanction and provided some important clarifications on the facultative grounds for exclusion (grounds that allow the authorities to exclude economic operators that have proven to be unreliable) and, consequently, on the scope of the discretion that the aforementioned Directive confers on the contracting authorities.

The exclusion of economic operators for anticompetitive behaviour

In line with its traditional approach, based on analysing the text, context and purpose of the rule in question, the Court of Justice started by clarifying that, contrary to what is apparent from previous judgments, Member States are obliged to transpose into their national law the first subparagraph of Article 57(4) of Directive 2014/24, which provides that contracting authorities may exclude or may be required by Member States to exclude an economic operator from participation in a public procurement procedure in certain situations (paragraphs 50 to 55 and 58).

The judgement (adopted by the Grand Chamber) therefore represents an explicit reversal of the previous case law according to which Member States could decide whether or not to transpose the facultative grounds for exclusion (paragraph 49).

In this context, the key points of the judgment can be found in paragraph 55, according to which “the EU legislature intended to confer on the contracting authority, and on it alone, the task of assessing whether a candidate or tenderer must be excluded from a procurement procedure during the stage of selecting the tenderers”, and in paragraph 57, which clarifies that “the EU legislature thus intended to ensure that contracting authorities have, in all Member States, the possibility of excluding economic operators who are regarded as unreliable by those authorities”.

According to the Court of Justice, in order to properly transpose the rule in question, Member States can choose one of the following options: either they impose on the contracting authorities the obligation to apply the facultative grounds for exclusion, or they allow them to decide whether or not to apply them (paragraph 58).

This safeguards the obligation for Member States to transpose the provisions of a directive in all cases, as stated in Article 288 of the Treaty on the Functioning of the European Union.

The referring court also asked the Court of Justice whether, in the light of point (d) of the first subparagraph of Article 57(4) of Directive 2014/24, Portuguese law could provide that the existence of significant evidence of anti-competitive behaviour likely to lead to the exclusion of the competitor must necessarily occur in the context of the ongoing tender procedure (paragraph 65).

In response, the Court of Justice held that the wording of Article 57(4) does not limit the application of this ground for exclusion to the award procedure in which the anti-competitive behaviour took place (paragraph 67). On the contrary, the integrity and reliability of each of the economic operators participating in a given public procurement procedure must be able to be questioned not only on grounds linked to their behaviour in the context of the pending procedure, but also on the basis of the operators' participation in previous procedures (paragraph 69).

The role of the contracting authority in taking decisions to exclude economic operators and the obligation to state reasons

Finally, the Court of Justice confirmed that it is exclusively the task of the contracting authority to assess whether an economic operator should be excluded from a public procurement procedure, by determining the integrity and reliability of each of the economic operators participating in that procedure (paragraph 75), even though that authority is obliged to observe the principle of proportionality, which requires it to make a specific and individual assessment of the conduct of the operators concerned (paragraph 77).

Finally, the Court of Justice addressed the obligation to state reasons for decisions adopted by the contracting authorities on the reliability of an economic operator, concluding that the authority must comply with the general principle of EU law relating to sound administration, which includes the duty to state reasons (paragraphs 87 and 88). This duty to state reasons exists even if the decision is not to exclude (for example, on the ground that exclusion would constitute a disproportionate measure), since such a decision not to exclude, where a facultative ground for exclusion appears to apply, affects the legal situation of all the other economic operators participating in the public procurement procedure in question (paragraph 90).

Conclusion

With this judgment, the Court of Justice has clarified the obligations of Member States with regard to the transposition of facultative grounds for exclusion, while also reinforcing the national authorities' broad and autonomous power of discretion to exclude operators who have engaged in anti-competitive behaviour in the past. The counterpoint to the contracting authorities' power is necessarily the duty to state reasons for their decisions.

For economic operators taking part in public procurement procedures, this judgment reinforces the need for scrupulous observance of competition rules in any context, under penalty of exclusion. A commitment to robust compliance programmes could help mitigate risks in this regard.