ECJ ruling on variation of contracts and whether this amounts to the award of a new contract under the public procurement rules

On 19 June 2008, the European Court of Justice (ECJ) handed down a ruling on a reference from an Austrian court on whether variation of an existing contract amounts to the award of a new contract under the old Public Services Contracts Directive (Directive 92/50). The ECJ has ruled that a new contract is not awarded for the purposes of the Directive where the services provided under a contract are transferred to a new company which is owned and controlled by the original service provider. In addition, the ECJ held that the adjustment of the initial contract to accommodate external circumstances (such as euro currency conversions) and, in the circumstances of this case, a supplemental agreement to renew a termination waiver provision and to adjust certain rebates, did not amount to the award of a new contract.