Judgment on application of procurement rules to a works contract between contracting authorities

On 18 January 2007, the European Court of Justice (ECJ) handed down a judgment on a reference from a French court in relation to the application of the EC public procurement rules to contracts for the construction of a leisure centre, which were granted by a local council to another public body. The ECJ concluded that the Directive 93/37 (the Public Works Directive) applied where one contracting authority entrusts another contracting authority with executing works, regardless of whether or not the first contracting authority is or will become the owner of all or part of the works, and irrespective of the fact that sub-contracts will be tendered. The ECJ also found that it is the total value of the contract which is relevant, and not just the consideration paid by the contracting authority, when assessing the applicability of the Public Works Directive.