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Teckal exception
Practical Law UK Glossary 6-385-1382 (Approx. 3 pages)
Glossary
Teckal exception
The leading case on public to public contracts and their exemption from the procurement rules is Teckal Srl v Comune di Viano and Azienda Gas-Acqua Consorziale (AGAC) di Reggio Emilia (Case C-107/98) [1999] ECR I-8121 (Teckal). The Teckal principles have been codified in Article 12 of the Public Contracts Directive 2014 and regulation 12 of the Public Contracts Regulations 2015 (SI 2015/102) (PCR 2015).
Regulation 12(1) states that:
A public contract awarded by a contracting authority to a legal person governed by private or public law shall fall outside the scope of Part 2 of the PCR 2015 where all of the following conditions are fulfilled:
- The contracting authority exercises over the legal person concerned a control similar to that which it exercises over its own departments.
- More than 80% of the activities of the controlled legal person are carried out in the performance of tasks entrusted to it by the controlling contracting authority or by other legal persons controlled by that contracting authority.
- There is no direct private capital participation in the controlled legal person with the exception of non-controlling and non-blocking forms of private capital participation required by national legislative provisions, in conformity with the EU Treaties, which do not exert a decisive influence on the controlled legal person.
A contracting authority will exercise the required level of control where it exercises a decisive influence over both strategic objectives and significant decisions of the controlled legal person, or the control is exercised by another legal person, which is itself controlled in the same way by the contracting authority (Regulation 12(3)).
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