Tim (Public procurement of supplies, works or services - Judgment) [2020] EUECJ C-395/18 (30 January 2020)

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(Reference for a preliminary ruling — Public procurement of supplies, works or services — Directive 2014/24/EU — Article 18(2) — Article 57(4) — Optional grounds for exclusion — Ground for exclusion of a subcontractor mentioned in the economic operator’s tender — Subcontractor’s failure to comply with environmental, social and labour law obligations — National legislation providing for automatic exclusion of the economic operator for such a failure)

REQUEST for a preliminary ruling under Article 267 TFEU from the Tribunale amministrativo regionale per il Lazio (Regional Administrative Court, Lazio, Italy), made by decision of 21 February 2018, received at the Court on 14 June 2018, in the proceedings

composed of A. Arabadjiev, President of the Chamber, P.G. Xuereb, T. von Danwitz, C. Vajda (Rapporteur) and A. Kumin, Judges,

having regard to the written procedure and further to the hearing on 2 May 2019,

– Tim SpA — Direzione e coordinamento Vivendi SA, by F. Cardarelli, F. Lattanzi and F.S. Cantella, avvocati,

– the Austrian Government, by J. Schmoll, M. Fruhmann and G. Hesse, acting as Agents,

– the European Commission, by G. Gattinara, P. Ondrůšek and L. Haasbeek, acting as Agents,

after hearing the Opinion of the Advocate General at the sitting on 11 July 2019,

1 This request for a preliminary ruling concerns the interpretation of Article 57(4) and Article 71(6) of Directive 2014/24/EU of the European Parliament and of the Council of 26 February 2014 on public procurement and repealing Directive 2004/18/EC (OJ 2014 L 94, p. 65).

2 That request has been made in proceedings between Tim SpA — Direzione e coordinamento Vivendi SA (‘Tim’) and Consip SpA and the Ministero dell’Economia e delle Finanze (Ministry of the Economy and Finance, Italy) concerning the exclusion of Tim from an open tender procedure organised by Consip.

‘(40) Control of the observance of the environmental, social and labour law provisions should be performed at the relevant stages of the procurement procedure, when applying the general principles governing the choice of participants and the award of contracts, when applying the exclusion criteria and when applying the provisions concerning abnormally low tenders. …

(101) Contracting authorities should further be given the possibility to exclude economic operators which have proven unreliable, for instance because of violations of environmental or social obligations, including rules on accessibility for disabled persons or other forms of grave professional misconduct, such as violations of competition rules or of intellectual property rights. …

In applying facultative grounds for exclusion, contracting authorities should pay particular attention to the principle of proportionality. Minor irregularities should only in exceptional circumstances lead to the exclusion of an economic operator. However repeated cases of minor irregularities can give rise to doubts about the reliability of an economic operator which might justify its exclusion.

(102) Allowance should, however, be made for the possibility that economic operators can adopt compliance measures aimed at remedying the consequences of any criminal offences or misconduct and at effectively preventing further occurrences of the misbehaviour. Those measures might consist in particular of personnel and organisational measures such as the severance of all links with persons or organisations involved in the misbehaviour, appropriate staff reorganisation measures, the implementation of reporting and control systems, the creation of an internal audit structure to monitor compliance and the adoption of internal liability and compensation rules. Where such measures offer sufficient guarantees, the economic operator in question should no longer be excluded on those grounds alone. Economic operators should have the possibility to request that compliance measures taken with a view to possible admission to the procurement procedure be examined. However, it should be left to Member States to determine the exact procedural and substantive conditions applicable in such cases. They should, in particular, be free to decide whether to allow the individual contracting authorities to carry out the relevant assessments or to entrust other authorities on a central or decentralised level with that task.’

10. “economic operator” means any natural or legal person or public entity or group of such persons and/or entities, including any temporary association of undertakings, which offers the execution of works and/or a work, the supply of products or the provision of services on the market;

12. “candidate” means an economic operator that has sought an invitation or has been invited to take part in a restricted procedure, in a competitive procedure with negotiation, in a negotiated procedure without prior publication, in a competitive dialogue or in an innovation partnership;’

5 Article 18 of that directive, entitled ‘Principles of procurement’ and which constitute the first provision of Chapter II of that directive, entitled ‘General Rules’, provides:

‘1. Contracting authorities shall treat economic operators equally and without discrimination and shall act in a transparent and proportionate manner.

The design of the procurement shall not be made with the intention of excluding it from the scope of this Directive or of artificially narrowing competition. Competition shall be considered to be artificially narrowed where the design of the procurement is made with the intention of unduly favouring or disadvantaging certain economic operators.

2. Member States shall take appropriate measures to ensure that in the performance of public contracts economic operators comply with applicable obligations in the fields of environmental, social and labour law established by Union law, national law, collective agreements or by the international environmental, social and labour law provisions listed in Annex X.’

‘Contracts shall be awarded on the basis of criteria laid down in accordance with Articles 67 to 69, provided that the contracting authority has verified in accordance with Articles 59 to 61 that all of the following conditions are fulfilled:

(b) the tender comes from a tenderer that is not excluded in accordance with Article 57 …’

7 Article 57 of Directive 2014/24, entitled ‘Exclusion grounds’, provides in paragraphs 4 to 7 thereof:

‘4. Contracting authorities may exclude or may be required by Member States to exclude from participation in a procurement procedure any economic operator in any of the following situations:

(a) where the contracting authority can demonstrate by any appropriate means a violation of applicable obligations referred to in Article 18(2);

At any time during the procedure, contracting authorities may exclude or may be required by Member States to exclude an economic operator where it turns out that the economic operator is, in view of acts committed or omitted either before or during the procedure, in one of the situations referred to in paragraph 4.

6. Any economic operator that is in one of the situations referred to in paragraphs 1 and 4 may provide evidence to the effect that measures taken by the economic operator are sufficient to demonstrate its reliability despite the existence of a relevant ground for exclusion. If such evidence is considered as sufficient, the economic operator concerned shall not be excluded from the procurement procedure.

The measures taken by the economic operators shall be evaluated taking into account the gravity and particular circumstances of the criminal offence or misconduct. …

7. By law, regulation or administrative provision and having regard to Union law, Member States shall specify the implementing conditions for this Article. …’

‘With the aim of avoiding breaches of the obligations referred to in Article 18(2), appropriate measures may be taken, such as:

(b) Contracting authorities may, in accordance with Articles 59, 60 and 61, verify or may be required by Member States to verify whether there are grounds for exclusion of subcontractors pursuant to Article 57. In such cases, the contracting authority shall require that the economic operator replaces a subcontractor in respect of which the verification has shown that there are compulsory grounds for exclusion. The contracting authority may require or may be required by a Member State to require that the economic operator replaces a subcontractor in respect of which the verification has shown that there are non-compulsory grounds for exclusion.’

9 Article 17 of legge n. 68 — Norme per il diritto al lavoro dei disabili (Law No 68 concerning the rules on disabled persons’ right to work) of 12 March 1999 (ordinary supplement to GURI No 68, of 23 March 1999) provides:

‘Both public and private sector companies which take part in public procurement procedures, operate concessions or have agreements with government bodies must first provide the government body in question with a declaration by their legal representative stating that they comply with the rules on disabled persons’ right to work. If they fail to do so they face exclusion.’

10 Article 80(5)(i) of decreto legislativo n. 50 — Codice dei contratti pubblici (Legislative Decree No 50 establishing the public procurement code) of 18 April 2016 (ordinary supplement to GURI No 91 of 19 April 2016, ‘the Public Procurement Code’) provides:

‘The contracting authorities shall exclude an economic operator from participation in a tendering procedure in any of the following situations, and this shall also apply to a subcontractor of the economic operator in the cases referred to in Article 105(6), where:

(i) the economic operator fails to submit the certification referred to in Article 17 of Law No 68 … or to self-certify that the requirement in question has been satisfied; …’

‘6. The list of three subcontractors must be provided where the value of the works contracts, service contracts or supply contracts is equal to or greater than the thresholds laid down in Article 35 and no special qualifications are required in order to perform the contracts. In such cases this requirement must be specified in the call for tenders. The contracting authority may specify in the call for tenders other situations in which the list of three subcontractors must be provided even where the value of the contract is below the threshold laid down in Article 35.

12. The successful tenderer shall provide for the replacement of subcontractors for whom it has been shown, following verification to that effect, that the grounds for exclusion under Article 80 were present.’

The dispute in the main proceedings, the questions referred and the procedure before the Court

12 By a call for tenders published on 3 August 2016 in the Official Journal of the European Union, Consip, the Italian central authority for public procurement, launched an open procedure for the award of a contract for the supply of an optical communication system, known as the ‘Wavelength Division Multiplexing (WDM) system’, for the interconnection of the data processing centre of several departments of the Ministry of Economy and Finance.

13 Tim submitted a tender mentioning three subcontractors whom it intended to use in the event of being awarded the contract at issue in the main proceedings, attaching for each of them the Single European Market Document (SEMD).

14 In the course of the procedure, the contracting authority found that one of the subcontractors mentioned by Tim in its tender did not comply with the standards relating to the right to work for people with disabilities. Consip therefore excluded Tim from the procedure pursuant to Article 80(5)(i) of the Public Procurement Code.

15 Tim brought an action before the national court, challenging the unfair and disproportionate nature of its exclusion. According to Tim, it is apparent from Directive 2014/24 that the finding of a ground for exclusion in respect of a subcontractor cannot result in the imposition of a penalty more severe than replacement of that subcontractor. Tim adds that it could, in any event, have had recourse, in order to perform the contract at issue in the main proceedings, to the two other subcontractors in respect of whom no grounds for exclusion were found, especially since recourse to subcontracting was not indispensable for the performance of that contract, since Tim fulfilled all the conditions necessary to perform the services concerned on its own.

16 The referring court observes that Tim’s exclusion is in accordance with Article 80(5)(i) of the Public Procurement Code, since the replacement of a subcontractor may be required, in accordance with Article 105(12) of that code, only if the ground for exclusion is established in respect of that subcontractor after the award of the contract.

17 The referring court asks, however, whether, by providing that the contracting authority is required, where there is a ground for exclusion found in respect of a subcontractor at the tender stage, to exclude from the procedure the tenderer who has indicated its intention to have recourse to that subcontractor, Article 80(5)(i) of the Public Procurement Code is compliant with Articles 57(4) and (5) and 71(6)(b) of Directive 2014/24.

18 In particular, the referring court asks whether the grounds for exclusion provided for in Article 57(4) and (5) of Directive 2014/24 can lead to the exclusion of the tenderer only if they relate to the tenderer or whether such exclusion is also possible where those grounds relate to a subcontractor designated by the tenderer. Furthermore, the referring court seeks to ascertain whether Article 71(6) of Directive 2014/24 precludes an automatic exclusion of the tenderer, such as that provided for in Article 80(5) of the Public Procurement Code, whereas that provision of the directive appears to provide only for the replacement of a subcontractor as the maximum penalty which may be imposed on the tenderer following the finding of a ground for exclusion in respect of a subcontractor.

19 In the alternative, the referring court asks whether, if the Court were to find that the provisions of Directive 2014/24 do not preclude national legislation such as Article 80(5) of the Public Procurement Code, such legislation complies with the principle of proportionality, where exclusion of the tenderer is automatic, without the possibility of exceptions, the contracting authority not having the option to require the tenderer to replace the subcontractor or to refrain from using that tenderer, even where recourse to subcontracting is not strictly necessary for the performance of the contract.

20 In those circumstances, the Tribunale amministrativo regionale per il Lazio (Regional Administrative Court, Lazio, Italy) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:

‘1. Do Articles 57 and 71(6) of Directive [2014/24] preclude national legislation, such as Article 80(5) of [the Public Procurement Code], which requires the exclusion of a tendering economic operator where, during the tendering procedure, a ground is established for excluding a subcontractor forming part of the group of three subcontractors specified in the tender, rather than requiring the tenderer to replace the designated subcontractor?

2. In the alternative, if the [Court] considers that the option of excluding the tenderer is one of the options open to the Member State, does the principle of proportionality enshrined in Article 5 of the EU Treaty, referred to in recital 101 of Directive [2014/24] and established as a general principle of EU law by the [Court], preclude national legislation, such as Article 80(5) of [the Public Procurement Code], which provides that, where a ground for excluding a designated subcontractor is established during the tendering procedure, a tendering economic operator is to be excluded in all cases, including where there are other subcontractors that have not been excluded and satisfy the requirements for the provision of the services to be subcontracted, or where the tendering economic operator declares that it will not subcontract as it satisfies the requirements for the provision of the services on its own?’

21 On 27 February 2019, pursuant to Article 101 of its Rules of Procedure, the Court sent the referring court a request for clarification, seeking in particular to ascertain whether Tim was required to indicate three subcontractors in its tender and, if so, whether it was required to use those three subcontractors or at least one of them in the event that it was awarded the contract at issue in the main proceedings. The referring court was also asked to state whether, when drawing up its tender, Tim was required, under the Italian legislation, to verify that the subcontractors which it intended to designate in its tender were not affected by the ground for exclusion referred to in Article 57(4)(a) of Directive 2014/24, transposed into Italian law by Article 80(5)(i) of the Public Procurement Code, and whether it had the practical possibility of doing so.

22 In its reply, received at the Registry of the Court on 26 March 2019, the referring court stated, first of all, that Tim was obliged to indicate a fixed number of three subcontractors only in so far as it wished to reserve the option of subcontracting in the event of being awarded the contract at issue in the main proceedings. It went on to state that Tim was not obliged to use the three subcontractors mentioned in its tender or even one of them if it was awarded the contract. Finally, it stated that Tim was not required, under the Italian legislation, to verify that the subcontractors which it intended to designate in its tender were not affected by the ground for exclusion referred to in Article 57(4)(a) of Directive 2014/24 and that such verification required, in any event, the cooperation of the subcontractors concerned.

23 By letter of 15 July 2019 addressed to the Registry of the Court of Justice, the Austrian Government requested the reopening of the oral phase of the proceedings pursuant to Article 83 of the Rules of Procedure. In that regard, it argued that paragraph 52 of the Advocate General’s Opinion does not accurately reflect the reasoning underlying the argument it developed in its written observations.

24 Pursuant to Article 83 of the Rules of Procedure, the Court may at any time, after hearing the Advocate General, order the opening or reopening of the oral part of the procedure, in particular if it considers that it lacks sufficient information or where a party has, after the close of that part of the procedure, submitted a new fact which is of decisive significance for the decision of the Court, or where the case must be decided on the basis of an argument which has not been debated between the parties or the interested persons referred to in Article 23 of the Statute of the Court of Justice of the European Union.

25 In the present case, the Court, after hearing the Advocate General, considers that it has all the information necessary to answer the questions raised by the referring court and that the case does not have to be examined in the light of a new fact which is of decisive significance for its decision or of an argument which has not been debated before it.

26 In so far as the application for the reopening of the oral phase of the proceedings is to be understood as meaning that the Court lacks sufficient information on the Austrian Government’s argument on account of the considerations expressed by the Advocate General in point 52 of his Opinion, it should be borne in mind, first, that the Statute of the Court of Justice of the European Union and the Rules of Procedure of the Court make no provision for interested parties to submit observations in response to the Advocate General’s Opinion (judgment of 22 November 2018, MEO — Serviços de Comunicações e Multimédia, C‑295/17, EU:C:2018:942, paragraph 26 and the case-law cited).

27 Second, under the second paragraph of Article 252 TFEU, it is the duty of the Advocate General, acting with complete impartiality and independence, to make, in open court, reasoned submissions on cases which, in accordance with the Statute of the Court of Justice of the European Union, require the Advocate General’s involvement. In that regard, the Court is not bound either by the Advocate General’s Opinion or by the reasoning on which it is based (judgment of 16 September 2015, Société des Produits Nestlé, C‑215/14, EU:C:2015:604, paragraph 32 and the case-law cited).

28 In those circumstances, since the Austrian government’s argument clearly emerges from its written observations and since the Advocate General’s Opinion is not binding on the Court as regards the exposition or interpretation of that argument, the Court must be held not to lack sufficient information within the meaning of Article 83 of the Rules of Procedure.

29 The application for the oral procedure to be reopened must therefore be dismissed.

30 By its questions, which must be examined together, the referring court asks, in essence, whether Directive 2014/24 and the principle of proportionality preclude national legislation under which the contracting authority is required automatically to exclude an economic operator from the contract award procedure where the ground for exclusion referred to in Article 57(4)(a) of that directive is found in respect of one of the subcontractors mentioned in that operator’s tender.

31 Under Article 57(4)(a) of Directive 2014/24, contracting authorities may exclude or be obliged by Member States to exclude any economic operator from participation in a contract award procedure where they can demonstrate, by any appropriate means, a failure to comply with the applicable obligations referred to in Article 18(2) of that directive.

32 It should be noted, first of all, that it follows from Article 2(1)(10) of Directive 2014/24 that ‘economic operator’ is defined as any natural or legal person or public entity or group of such persons and/or entities, including any temporary association of undertakings, which offers the execution of works and/or a work, the supply of products or the provision of services on the market.

33 As regards an optional ground for exclusion such as that provided for in Article 57(4)(a) of Directive 2014/24, it should be noted at the outset that, in accordance with Article 57(7) of that directive, it is for the Member States, in compliance with EU law, to lay down the ‘implementing conditions’.

34 It is apparent from the case-law of the Court of Justice that Article 57(7) of Directive 2014/24 does not provide for uniform application at Union level of the exclusion grounds it mentions, since the Member States may choose not to apply those grounds, or to incorporate them into national law with varying degrees of rigour according to legal, economic or social considerations prevailing at national level. Member States therefore enjoy some discretion in determining the implementing conditions of the optional grounds for exclusion laid down in Article 57(4) of Directive 2014/24 (see, by analogy, judgment of 20 December 2017, Impresa di Costruzioni Ing. E. Mantovani et Guerrato, C‑178/16, EU:C:2017:1000, paragraphs 31 and 32).

35 As regards the optional ground for exclusion provided for in Article 57(4)(a) of Directive 2014/24, it must be emphasised, as the Advocate General points out in point 32 of his Opinion, that that ground is drafted impersonally, without specifying who is responsible for the failure to fulfil the obligations referred to in Article 18(2) of that directive. Consequently, it must be held that the wording of Article 57(4)(a) of Directive 2014/24, even when read in the light of the first subparagraph of recital 101 of that directive, from which it is apparent that contracting authorities should be able to exclude unreliable economic operators for failure to comply with environmental or social obligations, does not prevent Member States from considering that the party responsible for the identified failure to fulfil obligations may also be the subcontractor and thus provide for the contracting authority to have the option, or even the obligation, to exclude, as a result, the economic operator who submitted the tender from participation in the contract award procedure.

36 It should be noted, however, that it is necessary, in interpreting a provision of EU law, to take into account not only the wording of the provision concerned, but also its context and the general scheme of the rules of which it forms part and the objectives pursued thereby (judgment of 5 July 2018, X, C‑213/17, EU:C:2018:538, paragraph 26).

37 As regards, in the first place, the context of Article 57(4)(a) of Directive 2014/24 and the general scheme of that directive, it must be noted that that provision expressly refers to a failure to fulfil the obligations referred to in Article 18(2) of that directive, namely the obligations applicable in the fields of environmental, social and labour law.

38 In this respect, it should be noted that Article 18 of Directive 2014/24, entitled ‘Principles of procurement’, is the first article of Chapter II of that directive devoted to ‘general rules’ on public procurement procedures. Accordingly, by providing in paragraph 2 of that article that economic operators must comply, in the performance of the contract, with obligations relating to environmental, social and labour law, the Union legislature sought to establish that requirement as a principle, like the other principles referred to in paragraph 1 of that article, namely the principles of equal treatment, non-discrimination, transparency, proportionality and prohibiting the exclusion of a contract from the scope of Directive 2014/24 or artificially narrowing competition. It follows that such a requirement constitutes, in the general scheme of that directive, a cardinal value with which the Member States must ensure compliance pursuant to the wording of Article 18(2) of that directive.

39 In those circumstances, the need to ensure appropriate compliance with the obligations referred to in Article 18(2) of Directive 2014/24 must enable Member States, when determining the implementing conditions of the ground for exclusion referred to in Article 57(4)(a) of that directive, to consider that the party responsible for the failure to fulfil obligations may be not only the economic operator who submitted the tender, but also the subcontractors which the latter intends to use. The contracting authority may legitimately claim to award the contract only to economic operators who, at the stage of the contract award procedure, demonstrate their capacity to ensure in an appropriate manner, during the performance of the contract, that those obligations are fulfilled, where appropriate by having recourse to subcontractors who themselves comply with those obligations.

40 It follows that Member States may provide, for the purposes of applying Article 57(4)(a) of Directive 2014/24, that the contracting authority has the option, or even the obligation, to exclude the economic operator who submitted the tender from participating in the contract award procedure where a failure to fulfil the obligations referred to in Article 18(2) of that directive is established with regard to one of the subcontractors referred to in that operator’s tender.

41 That interpretation is supported, secondly, by the objective underlying Article 57(4) of Directive 2014/24. In that connection, it should be borne in mind that the option, or even the obligation, for the contracting authority to exclude an economic operator from participating in a contract award procedure is intended in particular to enable it to assess the integrity and reliability of each of the economic operators. In particular, the optional ground for exclusion mentioned in Article 57(4)(g) of Directive 2014/24, read in conjunction with recital 101 of that directive, is based on an essential element of the relationship between the successful tenderer and the contracting authority, namely the reliability of the successful tenderer, on which the contracting authority’s trust is founded (see, by analogy, judgment of 3 October 2019, Delta Antrepriză de Construcţii şi Montaj 93, C‑267/18, EU:C:2019:826, paragraph 26 and the case-law cited).

42 Combined with the specific objective of Article 57(4)(a) of Directive 2014/24, which is to ensure compliance with obligations under environmental, social and labour law, the objective relating to the reliability of the economic operator must enable the Member States to grant the contracting authority the option, or even the obligation, to regard as reliable only those economic operators who, when drawing up their tenders, have exercised the care and diligence required to ensure that, in the course of performance of the contract, the obligations concerned are complied with in all circumstances, whether by themselves or by the subcontractors to whom they intend to entrust part of that performance.

43 It follows from the foregoing considerations that Article 57(4)(a) of Directive 2014/24 does not preclude national legislation under which the contracting authority has the option, or even the obligation, to exclude the economic operator who submitted the tender from participation in the contract award procedure where the ground for exclusion referred to in that provision is found in respect of one of the subcontractors mentioned in that operator’s tender.

44 That being so, it should be recalled, as stated in paragraph 33 of the present judgment, that Member States, when adopting the implementing conditions of Article 57 of Directive 2014/24, must, under paragraph 7 of that article, comply with EU law.

45 In that regard, it should be borne in mind, first, that the contracting authorities must, throughout the procedure, observe the principles of procurement set out in Article 18 of Directive 2014/24, which include, inter alia, the principles of equal treatment and proportionality (judgment of 26 September 2019, Vitali, C‑63/18, EU:C:2019:787, paragraph 39 and the case-law cited), and, second, that, in accordance with the principle of proportionality, which is a general principle of EU law, the rules laid down by the Member States or contracting authorities in implementing the provisions of that directive, such as the rules intended to lay down the implementing conditions of Article 57 of that directive, must not go beyond what is necessary to achieve the objectives of that directive (see, to that effect, judgments of 7 July 2016, Ambisig, C‑46/15, EU:C:2016:530, paragraph 40, and of 8 February 2018, Lloyd’s of London, C‑144/17, EU:C:2018:78, paragraph 32 and the case-law cited).

46 Accordingly, first, where the contracting authority undertakes to verify during the contract award procedure, as it is obliged to do under Article 56(1)(b) of Directive 2014/24, read in the light of recital 40 of that directive, whether there are exclusion grounds within the meaning of Article 57(4)(a) of that directive and the national rules provide that it has the option, or even the obligation, to exclude the economic operator on the grounds that a subcontractor has failed to comply with obligations relating to environmental, social and labour law, it is required, in order to comply with the principle of equal treatment, to verify whether there is any failure to comply with those obligations in respect not only of all the economic operators who have submitted a tender, but also in respect of all the subcontractors indicated by those operators in their respective tenders.

47 Since such a uniform verification takes place at the stage of the contract award procedure, it should be made clear that the principle of equal treatment does not preclude national legislation from providing that a finding of failure to fulfil obligations in respect of a subcontractor after the award of the contract does not entail the exclusion of the successful tenderer, but only the replacement of the subcontractor. Since all the economic operators and subcontractors indicated in those operators’ tenders were subject, in the course of the procurement procedure, to a verification process carried out under identical conditions by the contracting authority, those operators and subcontractors should be considered to have been treated on an equal footing in that regard during the procurement procedure, the principle of equal treatment not precluding the provision of a different rule where the failure to fulfil obligations could not be established until later, during the performance phase of the contract.

48 As regards, second, the principle of proportionality, it should be recalled, in addition to the case-law referred to in paragraph 45 of the present judgment, that it follows from the third paragraph of recital 101 of Directive 2014/24 that, when applying optional grounds for exclusion such as that set out in Article 57(4)(a) of that directive, contracting authorities must pay particular attention to the principle of proportionality, taking into account in particular the minor nature of the irregularities committed or the repetition of minor irregularities. That attention must be even greater where the exclusion provided for by national legislation is imposed on the economic operator who submitted the tender for a failure to fulfil obligations committed not directly by that operator but by a person outside his undertaking, in relation to the control of whom the operator may not have all the authority required or all the necessary means at his disposal.

49 The need to comply with the principle of proportionality is also reflected in the first subparagraph of Article 57(6) of Directive 2014/24, according to which any economic operator who, inter alia, is in the situation referred to in Article 57(4)(a) of that directive including, as is apparent from paragraph 43 of the present judgment, by the effect of a failure found in respect of a subcontractor indicated in the tender, may provide evidence to show that the measures it has taken are sufficient to demonstrate its reliability despite the existence of that ground for exclusion. The first subparagraph of Article 57(6) of Directive 2014/24 specifies that, if such evidence is considered sufficient, the economic operator concerned must not be excluded from the contract award procedure. That provision thus introduces a mechanism for corrective measures (self-cleaning) which underlines the importance attaching to the reliability of the economic operator (judgment of 19 June 2019, Meca, C‑41/18, EU:C:2019:507, paragraphs 40 and 41).

50 It follows that, where he runs the risk of being excluded from participation in the procurement procedure because of a failure to fulfil environmental, social and labour law obligations attributable to one of the subcontractors he is considering using, the economic operator who submitted the tender can demonstrate to the contracting authority that he remains reliable despite the existence of such a ground for exclusion, the contracting authority being required, in accordance with the third subparagraph of Article 57(6) of Directive 2014/24, to assess the evidence provided by that operator in the light of the seriousness of the situation and the particular circumstances of the case.

51 However, the national legislation at issue in the main proceedings provides in a general and abstract manner for the automatic exclusion of the economic operator where a failure to fulfil obligations under environmental, social and labour law is established in relation to one of the subcontractors indicated in that operator’s tender, irrespective of the circumstances which led to that failure, and thus establishes an irrebuttable presumption that the economic operator must be excluded for any failure attributable to one of its subcontractors, without leaving the contracting authority the option of assessing, on a case-by-case basis, the particular circumstances of the case or the economic operator being able to demonstrate its reliability despite the finding of that failure.

52 In particular, such legislation does not allow the contracting authority to take account, for the purposes of assessing the situation, of a series of relevant factors such as the means which the economic operator submitting the tender had at its disposal to verify whether there was a failure on the part of the subcontractors or any indication in its tender that it is able to perform the contract without necessarily having recourse to the subcontractor in question.

53 In those circumstances, national legislation providing for such automatic exclusion of the economic operator who submitted the tender infringes the principle of proportionality by requiring the contracting authorities to proceed automatically to that exclusion on the ground of the failure of a subcontractor and thus exceeding the discretion enjoyed by the Member States pursuant to Article 57(7) of Directive 2014/24, in specifying the implementing conditions for the ground for exclusion set out in Article 57(4)(a) of that directive in compliance with EU law. Such a regulation also deprives the economic operator of the possibility of demonstrating, in accordance with Article 57(6) of Directive 2014/24, its reliability despite the existence of a failure to fulfil obligations on the part of one of its subcontractors (see, by analogy, judgments of 19 May 2009, Assitur, C‑538/07, EU:C:2009:317, paragraph 30; of 13 December 2012, Forposta and ABC Direct Contact, C‑465/11, EU:C:2012:801, paragraphs 34 and 35; and of 26 September 2019, Vitali, C‑63/18, EU:C:2019:787, paragraphs 40 and 41).

54 Consequently, an automatic exclusion of the economic operator who submitted the tender, provided for by the national legislation, in so far as it deprives, first, that operator of the possibility of providing detailed information about the situation and, secondly, the contracting authority of any discretion in that regard, cannot be regarded as being compatible with Article 57(4) and (6) of Directive 2014/24 and the principle of proportionality (see, by analogy, judgment of 26 September 2019, Vitali, C‑63/18, EU:C:2019:787, paragraphs 42 and 43).

55 In the light of the foregoing considerations, the answer to the questions referred must be that Article 57(4)(a) of Directive 2014/24 does not preclude national legislation under which the contracting authority has the option, or even the obligation, to exclude the economic operator who submitted the tender from participation in the contract award procedure where the ground for exclusion referred to in that provision is established in respect of one of the subcontractors mentioned in that operator’s tender. However, that provision, read in conjunction with Article 57(6) of that directive, and the principle of proportionality preclude national legislation providing for the automatic nature of such exclusion.

56 Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.

Article 57(4)(a) of Directive 2014/24/EU of the European Parliament and of the Council of 26 February 2014 on public procurement and repealing Directive 2004/18/EC does not preclude national legislation under which the contracting authority has the option, or even the obligation, to exclude the economic operator who submitted the tender from participation in the contract award procedure where the ground for exclusion referred to in that provision is established in respect of one of the subcontractors mentioned in that operator’s tender. However, that provision, read in conjunction with Article 57(6) of that directive, and the principle of proportionality preclude national legislation providing for the automatic nature of such an exclusion.

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	Court of Justice of the European Communities (including Court of First Instance Decisions)
You are here: BAILII >> Databases >> Court of Justice of the European Communities (including Court of First Instance Decisions) >> Tim (Public procurement of supplies, works or services - Judgment) [2020] EUECJ C-395/18 (30 January 2020) URL: http://www.bailii.org/eu/cases/EUECJ/2020/C39518.html Cite as: [2020] EUECJ C-395/18, ECLI:EU:C:2020:58, EU:C:2020:58

Court of Justice of the European Communities (including Court of First Instance Decisions)