Public procurement in France: overview

A Q&A guide to public procurement law in France.

The country-specific Q&A gives a high level overview of applicable legislation, recent trends, use of the four EU procurement procedures, review procedures, remedies, transparency, contracts outside the scope of the Consolidated Public Service Directive and proposals for reform.

To compare answers across multiple jurisdictions visit the Public Procurement Country Q&A tool and EU Public Procurement Country Q&A tool.

This Q&A is part of the multi-jurisdictional guide to public procurement. For a full list of jurisdictional Public Procurement Q&As visit www.practicallaw.com/publicprocurement-mjg.

Vincent Brenot, Willkie Farr & Gallagher LLP
Contents

Legal framework

1. What is the principal legislation that regulates public procurement?

EU procurement Directive 2004/17/EC co-ordinating the procurement procedures of entities operating in the water, energy, transport and postal services sectors (Utilities Directive) and Directive 2004/18/EC on the co-ordination of procedures for awarding public works, supply and service contracts (Consolidated Public Sector Directive) have been implemented in French law by the Code of Public Procurement (Code des Marches Publics) (CMP) of 1 August 2006 and, for the contracting authorities that are excluded from its scope, by Ordinance No. 2005-649 of 6 June 2005 (2005 Ordinance).

The scope of the CMP covers procurement contracts entered into by the French state, its administrative public bodies (établissements publics administratifs nationaux) (for example, Institut de France, Pôle Emploi or Météo France), local governments and local public bodies (établissements publics locaux).

Procurement contracts entered into by public bodies excluded from the scope of the CMP (which are considered as "bodies governed by public law" by the EU Directives) are subject to the 2005 Ordinance. This includes most of the state industrial and commercial public bodies (établissements publics industriels et commerciaux nationaux) (for example, the Agence Française de Développement, RATP or SNCF), bodies that are specifically designated (for example, Banque de France or Caisse des depots et consignations), and bodies that were established for the specific purpose of meeting general interest needs, other than industrial or commercial, and that fulfil one of the following requirements:

  • Their activity is financed, for the most part, by a contracting authority subject to the CMP or to the 2005 Ordinance.

  • They are subject to management supervision and control by one of those bodies.

  • Their board of directors is composed of more than half of the members which are appointed by bodies subject to the CMP or to the 2005 Ordinance.

At the time of writing, the new EU procurement Directives of 26 February 2014 (Directive 2014/24/EU on public procurement and repealing Directive 2004/18/EC text with EEA relevance, and Directive 2014/25/EU on public procurement by entities operating in the water, energy, transport and postal services sectors and repealing Directive 2004/17/EC text with EEA relevance) have not yet been implemented into French law.

 

Recent trends

2. What have been the recent trends in the public procurement sector?

The recent trends in the public procurement sector principally concern the new judicial policies. Although public contracts litigation only appear in approximately 4% of cases pending before French administrative courts, claims are still numerous and almost systematic for major infrastructure projects. In this regard, administrative case law has evolved to address these new constraints.

On the one hand, access to the court has been facilitated by the judicial policies (see Questions 7 to 10). Until a recent period, the standard procedure for third parties to challenge the tender procedure relating to a public procurement was rather complex and not very efficient, as it was focused on the recourse brought against a "separable administrative decision" (acte administratif detachable) with only potential indirect effects on the contract itself.

As a result, the procedure has been modernised and simplified. A decision of the French administrative Supreme Court (Conseil d’Etat) (CE) ruled that any unsuccessful bidder can directly challenge the validity of the awarded contract, or of some of its provisions, and claim compensation in the same claim or separately, where applicable (CE, 16 July 2007, Tropic Travaux Signalisation, No. 291545).

This procedure was later extended to any interested third party as well as members of the deliberative assembly of the contracting authority or the state representative in the department (Préfet) (CE, 4 April 2014, Département du Tarn-et-Garonne, No. 358994).

The CE has also created a claim called an "action for the recovery of contractual relations" (action en reprise des relations contractuelles) allowing a party to file a claim to both (CE, 21 March 2011, Commune de Béziers, No. 304806):

  • Cancel an unlawful decision to terminate a public procurement contract.

  • Resume the contractual relationship.

Previously, a party to a public contract could only make a claim for compensation in a case of unlawful termination.

On the other hand, recent trends have caused access to the courtroom of the CE to expand, and the CE has conferred a wide variety of powers to the administrative judge to limit the negative impact this may have. Courts must indeed assess the seriousness of the alleged infringement and find the most appropriate solution (regularisation, termination, and so on) ensuring that the cancellation of the contract intervenes only in the most severe cases. Therefore, the increase in persons likely to pursue an action in the courtroom of the CE comes in conjunction with an obligation for the judge to weigh the interests at stake in order to find a balance between a strict respect of legality and the stability of the contractual relationship.

 

Use of procurement procedures

3. How are the four EU procurement procedures used by contracting authorities?

Both restricted and open procedures are the most used procedures regardless of the type of public procurement (works, services or goods). The restricted procedure is more frequently used in the case of complex contracts that require some technical expertise and for which meticulous selection of applications is necessary.

The negotiated procedure, although often used by contracting authorities falling under the scope of the Utilities Directive, remains rare.

As far as the competitive dialogue procedure is concerned, it has become the most commonly used procedure for all major contracts of public-private partnership (PPP) subject to the Ordinance No. 2004-559 of 17 June 2004 (2004 Ordinance) (which, technically, falls within the scope of Directive 2004/18/EC on the co-ordination of procedures for awarding public works, supply and service contracts (Consolidated Public Sector Directive)), works concessions and some complex public procurement under the CMP. However, both the abovementioned texts limit the use of the competitive dialogue procedure.

For example, Article 36 of the CMP restricts the use of the competitive dialogue procedure to public contracts considered to be complex (for example, when the contracting authority itself is not able to define the contract objectively, and in advance, in relation to the technical measures likely to meet its needs or the legal and/or the financial structure of the contract). The administrative judge controls whether the conditions of use of the competitive dialogue procedure are legal. In this context, the contracting authority must prove the complexity of the contract (CE, 11 March 2013, ACCI, No. 364551).

 

Review procedures

4. Which body is responsible for dealing with procurement law breaches?

The administrative jurisdictions are almost systematically competent for disputes related to public procurement contracts. They are composed of three levels of jurisdiction:

  • The administrative tribunals (Tribunal administrative).

  • The administrative courts of appeal (Cour administrative d'appel).

  • The CE.

The administrative tribunals are competent in the first instance and their decisions can be appealed before the administrative courts of appeal. The CE is competent to review the judgments of the administrative courts of appeal.

There are also specific emergency proceedings regarding public procurement which are summary judgments against tender procedures (référé précontractuel) or contracts (référé contractuel). These proceedings, as described in Questions 7 to 10, fall within the jurisdiction of a single judge called the "juge des référés" of the administrative tribunals of the place of performance of the contract. An appeal can then be lodged directly before the CE.

Civil jurisdictions are only competent to review the procurement contracts subject to private law executed by public contracting authorities.

 
5. Does the aggrieved party have to seek review first with the awarding body?

Generally, no review (recours administratif) must be made directly to the contracting authority.

However, the Administrative Justice Code (Code de Justice Administrative) (CJA) provides that if an aggrieved party lodges a claim for compensation before an administrative tribunal, it must make a prior claim for damages to the competent public body. This general rule applies when an unsuccessful bidder seeks compensation due to a breach of the advertising and competition rules.

 
6. Is there a requirement to notify the awarding body before starting court proceedings?

A claimant does not have to notify the contracting authority when an action is lodged before the administrative tribunal against a tender procedure or a contract. The judge, once seized, will notify the contracting authority.

However, there is an exception in the case of "référé précontractuel" since Article R.551-1 of the CJA provides that the notification of an action prevents the contracting authority from signing the contract (being noted that this specific procedure can only be ruled on by the court if the contract at stake has not been signed). If the omission to notify does not lead to the rejection of the claim (CE, 10 November 2010, Ministry of Defence, No. 341132), the unsuccessful bidder will not be able to plead the unlawfulness of the signature of the contract by the contracting authority since the latter was not aware of the claim.

 
7. Which parties have standing to launch proceedings for breach of procurement legislation?

Currently, there are four different types of remedy which are available to various persons against either tender procedures or public procurement contracts.

Pre-contractual action (Référé précontractuel)

The "référé précontractuel" is open to:

  • The representative of the state in the department (Préfet).

  • Unsuccessful bidders.

  • Persons who did not take part in the award procedure but that would have had an interest in being awarded the contract had the advertising and competitions rules been strictly complied with.

Contractual action (Référé contractuel)

The "référé contractuel" is open to the same claimants as for the "référé précontractuel".

Action challenging the validity of the contract (Recours en contestation de la validité du contrat)

Any unsuccessful bidder can challenge the validity of the awarded contract, or of some of its provisions, and claim compensation in the same claim or separately, where applicable (CE, 16 July 2007, Tropic Travaux Signalisation, No. 291545). This proceeding is called "challenging the validity of the contract" (recours en contestation de la validité du contrat).

This remedy has been extended to any third party to an administrative contract likely to suffer damages in a manner sufficiently direct and certain due to its awarding conditions or to its provisions, including (CE, 4 April 2014, Département du Tarn-et-Garonne, No. 358994):

  • The members of the deliberative assembly of the local authority or group of authorities concerned.

  • The state representative in the department.

Contractual review when a claim is brought by the parties themselves

Parties to a public procurement contract can challenge the validity of the contract that binds them before the administrative judge.

 
8. What conditions must an applicant meet before a claim can be brought?

The conditions will vary depending on the kind of proceeding brought before the administrative tribunal.

Pre-contractual action (Référé précontractuel)

The unsuccessful bidders or the competitors who were prevented from bidding must show that they would have had an interest in signing the contract at stake and that they could suffer damages due to the breach of advertising and competition rules. The CE has ruled that the administrative judge must verify that the breach of these rules could directly aggrieve the claimant (CE, 3 October 2008, SMIRGEOMES, No. 305720).

Contractual action (Référé contractuel)

The same conditions as for the "référé précontractuel" apply to the "référé contractuel".

However, it must be noted that claimants cannot lodge a "référé contractual" when they have already successfully lodged a "référé précontractuel" and the contracting authority has complied with either:

  • The suspension of the tender procedure.

  • The court ruling following the "référé précontractuel".

Furthermore, the conditions of engagement are very restrictive and limited to the most serious breaches (see Question 10). At the time of writing, this legal remedy is rarely used by operators, which prefer the "recours en contestation de la validi du contrat".

Action challenging the validity of the contract (Recours en contestation de la validité du contrat)

Unlike the "référé précontractuel", claimants are not required to prove the breaches of the advertising rules and competition rules could have, or had, personally aggrieved them (CE, 11 April 2012, Société Gouelle, No. 355446). Simply, if any violation of the rules of advertising and competition can be invoked, the judge will temper the effects of nullity depending on the seriousness of the alleged breach.

Contractual review when a claim is brought by the parties themselves

Assuming the validity of the contract is challenged by the parties themselves, the judge will determine the validity of the claim taking into account the principle of loyalty of contractual relationships. Consequently, a party to a public contract will not be entitled to seek the cancellation of the contract if it is the alleged party in breach or is aware of the alleged breach (CE, 28 December 2009, Commune de Béziers, No. 304802).

 
9. What are the applicable statutes of limitation?

Pre-contractual action (Référé précontractuel)

The "référé précontractuel" must be lodged before the contract is signed.

Contractual action (Référé contractuel)

The "référé contractuel" is subject to a limitation period of one month from the notice or publication of the challenged contract. If no notice of award has been issued, the period is extended to six months.

Action challenging the validity of the contract (Recours en contestation de la validité du contrat)

The "recours en contestation de la validité du contrat" is subject to a limitation period of two months from the notice or publication of the challenged contract. If no notice of award or equivalent publication has been issued, the action can be brought without a time limitation.

Contractual review when a claim is brought by the parties themselves

The parties to a public procurement contract can challenge the validity of the contract that binds them before the administrative judge throughout the duration of the contract.

It must be noted that compensatory claims must be lodged within four years from the first day of the year following the occurrence of the damage. Otherwise, the debt of the public body will be prescribed.

 

Remedies

10. What remedies are available to an aggrieved contractor? Can a breach of procurement legislation by a regulated body lead to criminal liability?

Remedies

Référé précontractuel. The "référé précontractuel" is an effective remedy to sanction any breach of advertising and competition rules during the tender procedure.

It is a summary judgment held by a single judge. The judge can order the contracting authority to either:

  • Comply with its obligations.

  • Suspend or cancel the execution of any decision that relates to the award of the contract.

  • Remove clauses that are in the contract.

The judge also has powers of injunction and suspension. The judge can either:

  • Cancel the whole procedure.

  • Resume it at the stage just before the moment when the failure occurred.

  • Demand the reinstatement of an evicted candidate.

  • Require disclosure of the reasons for rejection.

These powers can be used by the judge, "unless the court finds, in consideration of all interests likely to be harmed including the public interest, that the negative consequences of these measures may outweigh their benefits" (Article L.551-7, CJA).

Référé contractuel. The single judge of the "référé contractuel" has significant powers. However, the exercise of these powers is strictly regulated (unlike the "recours en contestation de la validité du contrat").

First, cancellation is the mandatory sanction if:

  • No procedure for advertising and competition has been implemented or no publication in the Official Journal of the European Union has been made.

  • Cumulatively, the contract was signed before the expiry of the standstill period, the breach of that obligation has deprived the applicant of the ability to lodge a "référé précontractuel" and, finally, that the breaches of advertising and competition have affected the claimant's chance to obtain the procurement contract (Article L.551-18, CJA).

If cancellation of the contract would raise a major concern that is of general interest, the judge can choose between alternative sanctions listed in Article L.551-19 of the CJA, which include cancellation of the contract, termination, reduction of duration or a financial penalty.

Second, in the case of a violation of the standstill period, the judge can choose between the same sanctions (Article L.551-20, CJA).

Likewise, apart from the cases where mandatory cancellation applies, the judge can adapt the sanctions according to the gravity of the breaches of the advertising and competition rules made and the context of the contract.

Recours en contestation de la validité du contrat. In the "recours en contestation de la validité", the judge takes into account the gravity of the breach and its consequences in order to determine the most adequate solution. After taking into consideration the nature of the illegality that may have been committed, the judge can either:

  • Order the termination of the contract or amend some of its clauses.

  • Order the continuation of its performance, in some cases, subject to the implementation of regularisation measures by the contracting authority.

  • Grant compensation in reparation for the violated rights.

  • After checking that the cancellation of the contract would not be a disproportionate interference with the general interest or the rights of parties, annul the contract (either totally or partially, and possibly with a delayed effect).

Unlike the "référé précontractuel" or "référé contractuel", the judge's decision is not enclosed within a particular timeframe as it is not a summary judgment but a normal proceeding. Therefore, claimants can lodge a suspension action (référé suspension) simultaneously seeking the suspension of the performance of the procurement contract.

The claimant can claim compensation in the same appeal or separately.

Criminal liability

The offence of favouritism, or granting an unjustified advantage, is contained in Article 432-14 of the French Criminal Code (FCC).

The offence of granting an unjustified advantage is punishable by two years of imprisonment and a fine of EUR30,000, and is committed by any person who obtains, or attempts to obtain for others, an unjustified advantage by committing an act breaching the statutory or regulatory provisions designed to ensure freedom of access and equality for candidates in respect of tenders for public service and public services concessions. The person committing the breaching act must either:

  • Hold public authority, or be discharging a public service mission, or hold a public electoral mandate.

  • Act as a representative, administrator or agent of the state, local governments, public companies, or mixed economy companies of national interest discharging a public service mission, or local mixed economy companies.

  • Be any person acting on behalf of any of the abovementioned bodies.

Furthermore, any person "who knowingly, by aiding and abetting, facilitates" the preparation or commission of an offence is considered an accomplice to that offence and is subject to the same punishment as the main perpetrator (Articles 121-6 and 121-7, FCC).

 
11. Does an ineffectiveness order have a prospective or retrospective effect?

A judgment relating to a public procurement contract can have a retroactive effect or prospective effect depending on the judge's decision, the latter taking into account the gravity of the breach. The recent trend in relevant case law is to pronounce the retroactive cancellation of a contract only as a last resort. Judges favour termination (possibly with delayed effect) to facilitate, on the one hand, the output of the contractual relationship and the financial settlement of the contract and, on the other hand, the launch of a new tender procedure.

 

Transparency

12. What systems are in place in relation to the publication of details/copies of completed tender and contract documentation, which include pricing and other potentially sensitive information?

Law No. 78-753 of 17 July 1978 on various measures to improve relations between the administration and the public (1978 Law) establishes the principle of freedom of access to administrative documents. If requested by a third party, the administration must disclose documents covered by this legislation, which include documents relating to public procurement.

The principle of access to administrative documents is under the supervision of the Commission on access to administrative documents (Commission d’accès aux documents administratifs) (CADA) and under the control of the administrative judge.

The 1978 Law and the jurisprudence of the CADA set out a number of exceptions to the general rule of freedom of access to documents relating to public procurement. Therefore, for example, no document can be disclosed before the contract has been signed. After it has been signed, nearly all the documents can be disclosed. However, the contracting authority can, in order to respect commercial and industrial secrecy, the competition rules, public order or national security, conceal a number of matters.

In addition, under Article 80 of the CMP, contracting authorities must notify the unsuccessful bidders of:

  • The outcome of their bid.

  • The reasons that led to that decision.

  • The name of the successful bidder.

The same obligation applies to public-private partnership agreements (PPP) under Article 9 of the 2004 Ordinance.

 

Contracts outside the scope of the Consolidated Public Sector Directive

13. Is the award of contracts which are fully or partly outside the scope of the Consolidated Public Sector Directive regulated under national legislation?

Contracts that are outside the scope of the Consolidated Public Sector Directive are subject to various provisions of national law.

First, contracts falling under the Utilities Directive are regulated by the CMP or the 2005 Ordinance, depending on the legal nature of the contracting entity (see Question 1).

Second, public service concessions are subject to Law No. 93-122 of 29 January 1993 (commonly called "Sapin Law"). It provides for a set of rules for the award of public service concessions less formal than those set by the CMP for public procurement contracts. Due to the highly personal (intuitu personae) nature of these contracts, the applicable rules are more flexible. For example, it is possible to negotiate the offers with the bidders provided equal treatment between them is respected.

Finally, works concessions are subject to Ordinance No. 2009-864 of 15 July 2009, which provides a set of rules which are broadly similar to those applicable to public service concessions.

However, contracts relating to the sole occupation of the public domain are not subject to any tender procedure (CE, 3 June 2010, Ville de Paris, No. 329756).

 
14. What remedies are available in relation to the award of contracts which are fully or partly outside the scope of the Consolidated Public Sector Directive?

The remedies listed in Questions 7 and 10 are the same for contracts that are outside the scope the Consolidated Public Sector Directive.

 

Implementation of EU reforms

15. What decisions have been taken to date with regard to the transposition of the revised public procurement directives where there is flexibility for the member state as to how the directives are implemented?

In a speech delivered on 12 March 2014, the current French Minister of Economy and Finance, Pierre Moscovici, announced that the implementation of the legislative part of the new European Directives will be initiated by the end of 2014. The implementation will be through an authorisation to proceed by ordinance with regard to the procurement Directives and by Bill with regard to the concessions Directive.

Several simplifications of public procurement rules will be implemented promptly by a decree whose project has been put up for public consultation. These include the implementation of the "Innovation Partnership" and also the simplification of candidature files and the reduction of the financial capabilities that are required from candidates.

The transposition of these Directives may also be an opportunity to rationalise the legal background of public procurement in France, by reducing the number of categories of existing contracts and consolidating all the relevant texts into a new Code.

* The author would like to thank Michael Perche, who kindly assisted with the writing of this chapter.

 

Online resources

Legifrance

W www.legifrance.gouv.fr

Description. Légifrance is the official website of the French Government for the publication of legislation, regulations, jurisprudence and legal information. Some translations into English of the major Codes or legislation are provided.

French Administrative Supreme Court (Conseil d'Etat) (CE)

W www.conseil-etat.fr

Description. Official website of the CE, the highest administrative court. Case law of the administrative courts of appeal and the CE are provided. All texts are in French.

Legal Affairs Department of the French Ministry of Economy (Direction des Affaires Juridiques) (DAJ)

W www.economie.gouv.fr/daj

Description. Official website of the Legal Affairs Department of the French Ministry of Economy. It provides texts, case law and official legal doctrine. All texts are in French.



Contributor profile

Vincent Brenot, Partner (Public Law and Environment)

Willkie Farr & Gallagher LLP

T + 33 1 53 43 45 54
F + 33 1 40 06 96 06
E vbrenot@willkie.com
W www.willkie.com

Professional qualifications

  • University of Paris II Master in Public Law, 1998.
  • University of Paris I DESS in Public Law Litigation, 1999.
  • Attorney at Law admitted to the Paris Bar.

Areas of practice. Public and administrative law; environment.

Non- professional qualifications. Lauréat du Concours Général en droit public (1995)

Recent transactions. Mr Brenot has more than 15 years' experience in assisting French and international operators in contentious and non-contentious administrative law matters including public procurements, concession agreements and public-private partnerships. He also provides advice on project and asset financings involving the public sector.

Mr Brenot also regularly assists French and international clients on various environmental matters, including litigation, due diligences, negotiations of environmental representations, warranties and indemnities in the context of M&A, and environmental aspects of real estate transactions.

Languages. French, English, Spanish

Professional associations/memberships. Mr Brenot is a member of the Société Française pour le Droit de l'Environnement (French Environmental Law Society).

Publications. Mr Brenot regularly publishes articles on his fields of practice in legal and business journals. Recent articles include:

  • Green bonds : l'essor de la finance écologique, Option Droit & Affaires (2014) .
  • Regard optimiste sur l'évolution récente du droit des installations classées, Jurisclasseur (2013) .
  • L'exécution des marchés publics de communication, Contrats Publics (2013) .

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