RELIANCE OF ECONOMIC OPERATORS ON CAPACITIES OF OTHERS IN PUBLIC PROCUREMENT

PROCEDURES
Dariusz Piasta, Ph.D., is a civil servant, works in the Polish Public Procurement Office
ABSTRACT
The present paper presents legal provisions and practice related to the issue of reliance by bidders
on resources (capacities) of other companies in cases where bidders replying to the call for tenders
do not meet requirements set by the procuring entity, for example with regard to the required
equipment, staff, financial resources, know how. The author presents first the evolution of the
relevant European Union legislation on public procurement, the case law of the European Court of
Justice as well as the respective provisions of the Government Procurement Agreement of WTO. He
approaches then the respective rules and practices of the selected countries of the European Union,
presenting examples of national jurisprudence related to the issue of integration of external means
by economic operators. The paper is concluded with brief remarks wrapping up the most salient
features of presented systems.
INTRODUCTION
One of the most important aspects of public procurement rules is the assessment of economic
operators with regard to certain requirements or criteria established in advance by a contracting
authority. The purpose of this exercise is to assess whether a given economic operator, in case his
tender is the best one and he is entrusted with supply of products, performance of services or
execution of works is able to perform the contract properly, in accordance with all requirements of
the contracting authority. Rules related to this assessment are referred to as qualification (selection)
of economic operators and play important role in most international as well as national regulations
dealing with public procurement. It is also the case of the European Union directives on public
procurement as well as equivalent provisions of its Member States.
The issue which stirs up some controversies in practice is the reliance by an economic operator
requesting admittance to participation in a public procurement procedure (a candidate) or
submitting a tender (a tenderer) on capacities of other entities (companies). This possibility
becomes relevant in the case the candidate or tenderer does not meet (all) of the requirements
(criteria) set by the contracting authority. For instance, a candidate or a bidder who does not possess
the required equipment, staff, financial resources, know how or experience required and as such
does not meet the requirements, may, nonetheless, prove fulfilment of those requirements by
requesting that the contracting authority takes into account resources or capacities of another
company. In other words, the economic operator may prove that he is able to perform the contract in
question by relying on resources which are not his property but are accessible to him.
The entities to which the economic operator has recourse, in order to supplement missing resources
or capacities are, referred to as third parties. It is because the common element of all cases of this
reliance is that the company used for that purpose is not a party to a contract between the
contracting authority and the economic operator awarded the contract. This recourse may take a
form of, for instance, a subcontracting. In such a case the economic operator commits himself to

entrust another company with performance of a part of a contract in the event he is himself a winner
of a public procurement procedure (the potential subcontractor should be identified in advance).
Reliance on resources of another company (technical, financial and so on) is also possible without
involving of that company in actual performing of the contract. If the bidder relies on the equipment
belonging to another company (say, he rents it) it is not necessary that the other company performs
the part of the contract where the rented equipment is used. It is different, though, in case of
professional capacity which is expressed in terms of know how or experience.

1. PROVISIONS OF THE EUROPEAN UNION DIRECTIVES ON PUBLIC PROCUREMENT RELATED TO

RELIANCE ON CAPACITIES OF THIRD PARTIES

1.1.

Public Procurement Directive 2004/18/EU

In the European Union the award of contracts by public bodies or persons is regulated by directives
on public procurement (public procurement directives) which were adopted by the EU institutions
and require to be transposed to internal legal orders of EU countries (the Member States). The goal
of those rules is opening up public contracts to the widest possible competition and the
encouragement of the access to those contracts of small and medium sized undertakings.
The procurement directives concern only contracts of the estimated values equal to or bigger than
relevant financial thresholds1 while contracts of smaller values are subject only to the principles of
the Treaty on the functioning of the European Union2. Member States must regulate in accordance
with the procurement directives award of contracts covered by those directives. They may also
legislate on the issue of contracts not covered by those directives but they should at least ensure that
the award of those contracts comply with above mentioned principles should those contracts be a
subject to potential cross border interest3
EU procurement directives provide among others for rules on the assessment of qualifications of
economic operators competing for public contracts. In directive 2004/18/EC4 the assessment of
economic operators is referred as qualitative selection. Detailed provisions concerning qualitative
selection are provided for in Chapter VII of the directive. They define, first of all, general requirements
concerning verification of suppliers and choice of participants in public procurement procedures.
Then, Section 2 of that Chapter deals with such criteria for qualitative selection as the personal
situation of the candidate or tenderer (Article 45), the suitability to pursue professional activity
(Article 46), the economic and financial standing (Article 47), the technical and professional ability,
the quality assurance standards (Article 49) and the environmental management standards (Article
50). Finally, it contains provisions concerning possibility of supplementing or clarifying documents
submitted by suppliers with reference to their suitability. Article 52 deals with the official list of
approved economic operators and certification by bodies established under public or private law.
With regard to application of qualitative selection criteria the contracting authorities may require
candidates and tenderers to meet minimum capacity levels in accordance with Articles 47 (financial
and economic standing) and 48 (technical and professional ability). The extent of the information
required by the contracting authorities as well as the minimum levels of ability required for a specific
contract must be related and proportionate to the subject-matter of the contract. These minimum
levels should be indicated in the contract notice (call for tenders).
The right of participation in the EU procurement procedures is conferred not only on legal or natural
persons but also on groups of such persons (including consortia). Economic operators may wish to
apply together for a contract mainly in those cases where they are not able on their own to meet
requirements of the contracting authority concerning financial and economic standing or professional
2

or technical ability. Groups of bidders may be probably created also in those cases where their
members would be able to meet the requirements of the contracting authority alone, but nonetheless
they decide to form a group, for example, in order to ensure better performance of the contract.
Creation of a group in those circumstances may be, however, problematic from the perspective of
genuine competition, for example, in those cases where two companies which normally compete for
provision of services one against another decide incidentally to join their forces for the purpose of
participation in a specific procedure and submit a joint tender5.
If a group of bidders decides to submit a tender jointly the contracting authority may not request from
the members of this group to assume a specific legal form. If the tender is won by such a group, the
contracting authority may, however, request from it to assume such a form as a condition for signing
the contract provided, however, that it is necessary for the satisfactory performance of the contract.
The directive 2004/18 provides also for provisions concerning subcontracting i.e. situations where
parts (shares) of the contract are performed not by the contractor himself but by third parties
(subcontractors) chosen by the main contractor. According to Article 25 of the directive the
contracting authorities may ask or be required by Member States, in the contract documents, to ask
the bidder to indicate in his tender any share of the contract he may intend to subcontract to third
parties and names of any proposed subcontractors. This indication remains without prejudice to the
question of the principal economic operators liability. Subcontractors are not party to the contract
between the contracting authority and the bidder whose offer was chosen. Another provision related
to subcontracting is Article 48 of the directive concerning technical and/or professional ability which
lists evidence which can be used in order to prove to the contracting authority that the bidder or
candidate fulfils the requirement concerning his professional or technical ability. Among this evidence
the directive lists an indication of the proportion of the contract which the service provider intends
possibly to subcontract.
Finally, the directive allows economic operators to rely on capacities of other entities in order to
satisfy the requirements of the contracting authority. Thus, as regards the economic and financial
standing, Article 47 (2) states as follows: An economic operator may, where appropriate and for a
particular contract, rely on the capacities of other entities, regardless of the legal nature of the links
which it has with them. It must in that case prove to the contracting authority that it will have at its
disposal the resources necessary, for example, by producing an undertaking by those entities to that
effect. According to paragraph 3 of the same Article Under the same conditions, a group of
economic operators as referred to in Article 4 may rely on the capacities of participants in the group
or of other entities.
Similar provisions are found in Article 48 (3) and (4) Technical and/or professional ability. There is
no equivalent provision, though, in Article 46 of the directive (Suitability to pursue the professional
activity). The upshot is that the economic operator applying for a contract required to be enrolled on
professional or trade register or to possess a particular authorisation or be a member of a particular
organization may not rely on authorisation or membership of another entity if he does not fulfil the
required conditions.
1.2 Public Procurement Directive 2014/24/EU
The reform of the EU public procurement system which took place in 2014 adoption of three new
procurement directives - brought some changes with regard to issues covered by this paper. First, the
provisions 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 (referred to as the
new Public Sector Directive) have a bit different structure. The rules concerning reliance on the
capacities of other entities have been now gathered in one single Article 63 (titled, unsurprisingly,
Reliance on the capacities of other entities). The new directive maintained the functional approach
present in the previous directive and consolidated in one single Article 63 provisions on reliance on
the capacities of other entities which were scattered previously in four different provisions6. The
equivalent provision is found in Article 79 of Directive 2014/25/EU of the European Parliament and

of the Council of 26 February 2014 on procurement by entities operating in the water, energy,
transport and postal services sectors and repealing directive 2004/17/EC .
The new provisions basically repeat the rules provided in 2004 directive, though, with certain
modifications and additions. They became also more elaborated and precise.
For one thing, the new directive makes it clear that provisions on reliance of third parties apply with
regard to economic and financial standing and technical and professional ability. Apparently, such a
possibility is not offered with regard to suitability to perform professional ability which is not
mentioned in this provision. This is, however, not a real novelty as compared with older rules. Second,
and this is much more relevant taking account of the practice of awarding contracts (see below
pending CJEU cases and fortunes and misfortunes of some national legislations), there is a limitation
concerning this reliance with regard to educational and professional qualifications as well as
relevant professional experience of economic operators. In those two cases, a bidder (a candidate)
may only rely on the capacities of other entities where the latter will perform the works or services
for which these capacities are required. It is very useful clarification, since, as we will see below,
there were doubts and controversies concerning, possibility of transferring experience or knowledge
from the companies not involved in the performance of contract to bidders (candidates) in need of
those attributes.
Third, the new directive explicitly allows the contracting authority to require that some parts of the
contract should be performed by the tenderer itself or, in the case that the tender is submitted by a
group of economic operators, by a member of that group (Article 63 (2)). There are some conditions
to be satisfied if this requirement is to apply:
-

the requirement is possible in the case of: a) works contracts b) service contracts and c)
sitting or installation operations in the context of a supply contracts; a contrario there is no
such possibility in the case of: supply contracts which do not involve sitting or installation
operations nor, within supply contracts, with regard to other tasks than sitting or installation,

the requirement concerning direct performance by the tenderer or a member of consortium

if the tender is submitted by a consortium concerns certain critical tasks which implies that
those tasks must be identified, in advance, by a contracting authority. It is because bidders
should be aware of all the criteria and conditions applied by the contracting authority in order
to verify that they meet them. The adjective which is used by the directive - critical seems to
mean that tasks which are to be performed by the bidder are crucial for the successful
performance of the whole contract (execution of works, provision of services).

What are the practical consequences of above mentioned provision?

First, when the contracting authority requires that certain (critical) tasks are to be performed by a
bidder (for the sake of brevity we will omit here the case of consortia) it implies that those tasks may
not be performed by anybody else than the bidder. Thus, subcontracting (i.e. letting out the part of
the contract by the winning bidder) seems to be excluded as it would mean performance of a part of
contract by a company (person) other than the bidder. Curiously enough, the requirement of direct
performance of the bidder is not located in the provision of the directive dealing explicitly with
subcontracting but (Article 71) but it in the Article 63 concerning reliance on other entities resources.
Since the latter deals with general principles of this reliance requirement concerning direct
performance introduces sort of exception to those general rules. One could infer from this provision
that in the case the contracting authority requires that the bidders perform directly specific task(s)
they may not rely on other parties capacities. If those third parties may not be involved in
performance of the contract in the first place their capacities cannot be used by bidders. Obviously,
this prohibition cannot concern resources such as technical equipment, tools, money etc. (i.e.
resources which are transferrable). It seems to be related rather to the provision dealing with the
requirement that the reliance on experience and knowledge is possible with actual involvement of the
person(s) on capacities of which bidder wants to rely in performance of the contract.
In upshot, the bidder who must directly perform certain tasks must fulfil himself all conditions
(criteria, requirements) imposed by the contracting authority purpose of which was to verify whether
the bidder is up to those tasks. If he is not able to prove to the satisfaction of the contracting

authority that he meets required criteria he may not be awarded that part of the contract, and since
we are talking about critical tasks within the contract, the whole contract.
Finally, the directive requires, that the contracting authority verifies whether:
1. the entities on whose capacity the economic operator intends to rely fulfil the relevant
selection criterion and
2. whether there are grounds for exclusion pursuant to Article 57 (related to the personal
situation of economic operators).
The first requirement means that the entity on which capacity the bidder relies does not need to fulfil
all the selection criteria applied in the procedure but only that criterion or criteria, where its capacity
is used. For instance, if the bidder relies on economic standing of that company because it does not
meet that requirement himself, the requirement should be satisfied by the company relied on. On the
other hand, it is not necessary that the company satisfies all other requirements in case of which its
resources are not called for. If it is the case that third party used by the economic operator does not
meet specific selection criteria the contracting authority should require that the economic operator
replaces such an entity. It is not clear from the wording of the directive whether the bidder has only
one chance to replace the company which does not satisfy the relevant selection criterion or it can
repeat this exercise until the moment the contracting authority is fully satisfied. It is probably left to
the decision of national legislators. For practical reasons (efficiency of the procurement procedure)
and the fact that burden of proving of reliability is on the bidder he probably should only have one
chance to propose another company.
As regards the other requirement mentioned above it should be noted that the contracting authority
should assess the company on resources of which the bidder relies against exclusion criteria (defined
in Article 57 of the new directive). Obviously, since those entities do not (directly) participate in the
procedure they are not excluded from it even if they are in any situation referred to in Article 57.
Expression whether there are grounds for exclusion should be understood as meaning that third
parties involved may not be in any of the situation which would result in their exclusion if they were
bidders or candidates themselves. It should be noted here that there are two types of exclusion
criteria in Article 57 compulsory and optional. Optional (all or some of them) may be also made
mandatory by EU country for its contracting authorities. If the company on resources of which the
bidder relies is in any of the situations referred to in the directive as compulsory ground for exclusion
the contracting authority should require the bidder to replace that company with another one which is
not caught by any of those cases of mandatory exclusion. When it comes to non compulsory
grounds for exclusion the contracting authority is not obliged to do so but may require or may be
required by the Member State to request that the economic operator substitutes an entity in respect
of which there are non-compulsory grounds for exclusion. The question concerning how many times it
may happen, raised above, is valid here too.
2. CASE LAW OF THE COURT OF JUSTICE OF THE EUROPEAN UNION
2.1 General principles
The issue of reliance by the economic operator on capacities of other entities was also a topic
present in the cases reviewed by the Court of Justice of the European Union (the Court or CJEU).
The CJEU is one of the institutions of the European Union role of which is the interpretation of
provisions of EU law (the acquis). The very first case related to that issue was Case C-389/92,
(Ballast Nedam Groep NV v The State - "Ballast Nedam")7. The Belgian authorities has decided that
Ballast Nedam was not qualified to undertake public works contracts in Belgium, since it was purely a
holding company with no resources to carry out works itself and refused to register the company on
the list of qualified economic operators. Ballast Nedam sought to annul this decision in the Belgian
courts, contending that under Directive 71/305 on public works8, the authorities were obliged to take

account of the resources of the subsidiaries which it controlled, and which would actually do the work
on the contracts.
The Court ruled that a holding company which does not itself carry out works but relies on
subsidiaries which are controlled by it may not for that reason by excluded from participating in public
works contracts. Further, the Court ruled that in assessing the economic and financial standing and
technical capacity of such a firm account must be taken of companies belonging to the same group,
where the firm in question "actually has available the resources of those companies for carrying out
the work". Whether the firm has shown that it does in fact have those resources available is a matter
for the national courts to assess. The ruling of the Court was not based on explicit wording of
provisions in Directive 71/305, but its conclusions were deduced from the general purpose of its
rules and incidental provisions of the directive, which envisaged that works may be subcontracted.
The interpretation provided in this judgment has been later confirmed in a second Ballast Nedam
case in 1997 (C-5/97, Ballast Nedam Groep NV v The State, Ballast Nedam II)9. This case
concerned a request for a preliminary ruling from the European Court of Justice, made again by a
Belgian court which sought clarification of a previous ruling by the Court of Justice in Case C-389/92.
It is happens from time to time that national courts are not sure what to make of ruling which was
adopted by the Court in response to the question concerning interpretation of the EU law. It was
exactly the case here. The Belgian court considered that there was an ambiguity in the wording of the
previous judgment of the Court of Justice. It believed that that judgment did not make it clear
whether contracting authorities are required to consider the resources of subsidiaries in the
circumstances set out above, or whether they are merely permitted to do so. The Court made it clear
in its ruling in the second case that contracting authorities are actually required to consider the
resources of subsidiaries in such circumstances.
In C-176/98 case (Holst Italia v Ruhrwasser AG International Water Management, Holst Italia)10 the
Court dealt with a procurement procedure conducted by an Italian public for the award of a contract
for the management of water purification and sewage disposal plants. The contracting authority set,
among others, two requirements:
-

that the bidder should meet a specified level of business turnover and

that the bidder should have had experience of at managing at least one purification plant
during the previous three years.

The winning bidder, Ruhrwasser, did not meet these conditions by itself. However, a German public
body, Ruhrverband, which was the (100%) owner of one of six equal shareholders in Ruhrwasser, did
meet the conditions set out above. The contracting authority concluded that the relationships
between Ruhrwasser and Ruhrverband was such that Ruhrwasser was able to avail itself of the
facilities and organisation of Ruhrverband. Thus the contracting authority concluded that the
resources and experience of Ruhrverband should be taken into account in deciding if Ruhrwasser
complied with the conditions referred to above. However, another bidder, Holst Italia, disputed the
award before an Italian tribunal, claiming that the Ruhrwassers bid should not have been accepted
as the firm did not meet the relevant conditions. To help it resolve the dispute, the tribunal referred to
the European Court of Justice the question whether Directive 92/50 permits a bidder to prove its
qualifications by relying on the qualifications of another company that is wholly-owned subsidiary of
one of the bidders shareholders. In the previous cases of Ballast Nedam and Ballast Nedam II
the Court ruled that in assessing the economic and financial standing and technical capacity of a firm
in a group, account must be taken of companies belonging to the same group, where the firm in
question "actually has available the resources of those companies for carrying out the work". The
Court also ruled that whether the firm has shown that it does in fact have those resources available is
a matter for the national courts. Two older cases discussed above were different mostly because the
bidder that claimed that it was able to rely on the qualifications of others in the same group enjoyed a
dominant position in the group while in Holst Italia case the company relied on was effectively just
one of six shareholders in the bidding company. The Court ruled, nonetheless, that the basic principle
is that a firm can rely on the qualifications of other entities in any case in which it can show that "it
actually has the resources of those other entities at its disposal. The Court emphasised also that the

legal nature of the link between the bidder and the entities relied on is irrelevant. The Court also
reiterated that whether sufficient evidence has been provided of the availability of the relevant
resources is a matter for the national courts.
In the event a subsidiary company is unable to meet minimum requirements related to financial or
economic standing set by the contracting authority because relevant legal provisions require transfer
of profit to the parent company, the subsidiary may still rely on the availability of the parents
financial resources if the resources are available to it11. Case dukvzig and Hochtief
Construction12 concerned the requirement of a contracting authority that to establish the economic
and financial standing economic operators had to produce a uniform document, drawn in accordance
with accounting rules, and the profit/loss item in the balance sheet must not have been negative for
more than one of the last three complete financial years. Hochtief Construction, a Hungarian
subsidiary of a German group was not able to satisfy this requirement because it had a profit transfer
agreement with German parent company according to which its profit were to be transferred each
year. This way the profit recorded in its own balance sheet was always zero or negative. That would
not be possible under Hungarian law prohibiting such transfers of divided but was permitted under
the applicable German provisions which applied in that case since the corporate group was
incorporated in Germany.
Another case (C-94/12, Swm Costruzioni 2 SpA, Manocchi Luigino DI v Provincia di Fermo, Swm
Costruzioni13) concerned Italian procurement provisions according to which when economic
operators sought to rely on the resources of other entities to show their economic and financial
standing for a particular category of works contracts, they were permitted to rely on the resources of
one other entity only. The CJEU ruled that such a general provision, limiting the number of other
entities on which an economic operator may rely to demonstrate its financial and economic standing
is not compatible with the provisions of the Public Sector Directive that require economic operators to
be allowed to rely on the resources of others. In the Courts view EU rules do not envisage a general
limit on the number of entities that an economic operator may rely on. The Court did, however,
indicate that there may be specific cases where it is permitted to limit the number of entities whose
capacities may be relied on. In particular, there may be works with special requirements
necessitating a certain capacity which cannot be obtained by combining the capacities of more than
one operator, which, individually, would be inadequate. In such circumstances, the contracting
authority would be justified in requiring that the minimum capacity level concerned be achieved by a
single economic operator or, where appropriate, by relying on a limited number of economic
operators14. The Court emphasised that such a requirement must be, though related and
proportionate to the subject-matter of the contract at issue. It seems that such a limit will be allowed
only when applied on a case by case basis for specific contracts. The Court makes also explicit
reference to the policy of promoting access to public contracts for small and medium-sized
enterprises (SMEs): that interpretation also facilitates the involvement of small- and medium-sized
undertakings in the contracts procurement market, an aim also pursued by Directive 2004/18, as
stated in recital 32 thereof15. It can be noted that this recital refers only to promotion of SMEs as
being an objective of the specific provisions on sub-contracting in the directive, but apparently the
Court has elevated this to a broader objective to be used in interpreting other provisions.
2.2 Limitations concerning reliance on third parties resources
According to the case law of the Court economic operators may also rely, for the purpose of proving
their capabilities, on resources of their prospective subcontractors. Case C-314/01 Siemens16
concerned the award of a supply and services contract for a smart card based electronic data
processing system in Austria. A clause in the contract documents stipulated that a maximum of 30 %
of the contract could be subcontracted, and also that certain parts of the work could not be
subcontracted at all. The CJEU concluded that that the contracting authority may not exclude a
company solely because it proposes to rely on the resources of other to perform the contract
(paragraph 43 of the ruling). Since this reliance may also take a form of subcontracting the general
ban on subcontracting is not permitted under the EU law. The CJEU went further to state that the
procuring entity is allowed by the directive to prohibit the subcontracting during the performance of
7

the contract when the contracting entity had not been able to verify the capacity of the
subcontractors at the time the main contractor itself was selected (paragraph 46 of the ruling).
There is another related case in which the ruling has not been yet adopted by the CJE. Case C406/14 Wrocaw - Miasto na prawach powiatu, concerned the construction of a ring road in
Wroclaw (Poland). The procedure used was the restricted procedure which provides for two stages:
qualification of economic operators and submission of tenders by qualified and invited bidders. The
city of Wroclaw the contracting authority - stipulated in the tender specifications that the successful
tenderer was to perform at least 25 % of the works covered by the contract with its own resources.
It was not specified which works must be performed with the resources of the bidder and which could
be performed otherwise (unlike in Siemens case where the contracting authority stated clearly
which services may not be subcontracted). It is inferred that the contracting authority limited this way
recourse to subcontracting, though there is not direct reference to subcontracting in this clause. Even
if we assume that the clause referred to limits of subcontracting the relevant contract was more open
to possibilities of subcontracting than closed for this purpose. In fact, the contracting authority
allowed the bidders to use resources not belonging to them (subcontract) up to 75 % of the value of
the contract. What is more, the contracting authority was not bothered to specify which parts of the
contracts this limitation applied. What is interesting here is also the fact that apparently such a
requirement was accepted by construction companies (at least it was not objected) there were no
complaints, no company was excluded due to non-fulfilment of this requirement either. Tenders were
submitted in due course, though not all candidates invited to tender submitted their bids17. One may
ask what was the problem then? The contract was co financed with EU funds, national institutions
monitoring compliance with the law took the view that this requirement was not consistent with the
EU law, partly refused to finance the project. The contracting authority disagreed, took the issue to
the national court which in turn came to the conclusion that is necessary to ask the CJEU for the
opinion about the compliance of the said limitation with the EU procurement law. Interestingly, both
the national monitoring authority, the referring court and finally the Advocate General18 presenting
her opinion took the view that the case was about subcontracting, while it is not clear what was in
fact the meaning of words own resources. At the moment of writing the jury is still out. The answer
of the CJEU should be very useful as it should clarify remaining doubts concerning this type of
limitations. Undoubtedly, it should have also impact on the law and practice of a significant number
of EU countries where restrictions concerning the maximum value (expressed as percentage of the
value of concluded contract) are applied (Spain, Portugal, Italy).
In the relatively recent case C- 234/14 Ostas Celnieks19 the CJEU found to be inconsistent with the
EU rules the requirement, applied by the Latvian contracting authority, that an economic operator
who intends to rely on resources of other entities, concludes, before the contract is awarded, a
cooperation agreement with those entities or forms a partnership with them. According to the CJEU
the case law do not make it possible to exclude a priori certain types of proof that resources relied on
are in fact available. It follows from the above presented rulings that the bidder is free to choose, on
the one hand, the legal nature of the links it intends to establish with other entities on capacities it
relies in order to perform a contract, and on the other, the type of proof of the existence of those
links.

3. PROVISIONS OF THE AGREEMENT ON THE GOVERNMENT PROCUREMENT OF WTO

The issue of reliance on resources of third parties is present not only in the EU directives but it is
dealt with other legal regimes on public procurement although they do not seem to dedicate that
much attention to this issue as EU directives. One of those instruments is the Agreement on the
Government Procurement (GPA) a plurilateral agreement within the framework of the WTO, composed
of 17 parties comprising 45 WTO members. The fundamental aim of the GPA is to mutually open
government procurement markets among its parties.

The issue of assessment of suppliers is dealt in Article VIII of GPA (1994 text). In accordance with the
principle of non - discrimination any conditions for participation in tendering procedures should be
published in adequate time to enable interested suppliers to initiate and, to the extent that it is
compatible with efficient operation of the procurement process, complete the qualification
procedures. The conditions for participation in tendering procedures must be limited to those which
are essential to ensure the firms capability to fulfil the contract in question. Any conditions for
participation required from suppliers, including financial guarantees, technical qualifications and
information necessary for establishing the financial, commercial and technical capacity of suppliers,
as well as the verification of qualifications, should be no less favourable to suppliers of other parties
to the GPA than to domestic suppliers and should not discriminate among suppliers of other Parties.
Finally, the financial, commercial and technical capacity of a supplier should be judged on the basis
both of that suppliers global business activity as well as of its activity in the territory of the procuring
entity, taking due account of the legal relationship between the supply organizations. This provision is
especially relevant for the topic of our study. It seems that in deciding whether a supplier has
capacity to perform the contract the procuring entity must take into account resources available to
the supplier from anywhere (global business activity). It may be the case of, for example, a
personnel working at the connected legal entities, such as companies belonging to the same group20.
It is, however, possible provided that the legal relation between the supplier and these entities
enables the supplier to actually have those resources available. It is inferred that the national law
which would provide for a provision depriving economic operators of a possibility of relying on
resources of other entities would run against GPAs provisions.
Interestingly, the provisions of the revised GPA (2012) repeat only obligation to evaluate the financial
capacity and the commercial and technical abilities of a supplier on the basis of that suppliers
business activities both inside and outside the territory of the country of the procuring entity. They do
not seem to provide for equivalent provision concerning obligation to take due account of the legal
relationship between the supply organizations.

4. LAW AND PRACTICE OF SELECTED COUNTRIES

4.1 General principles of reliance on resources of third parties
Qualification and selection of economic operators belongs to the most passionately debated public
procurement issues in Poland. In popular imagination abuse of the rules on reliance by bidders on
capacities of other entities lies at the hearth of the problems of public procurement such as low
quality of services and works, submission of abnormally low tenders, bankruptcy of companies
performing contracts, delays in performance of public services and other misfortunes. At the same
time, the provisions concerning the issues covered by this paper belong to the most often changed
provisions of the Polish Public Procurement Law (PPL)21.
The relevant provision of the PPL (Article 26 (2b)) has the following wording (adopted in August
2014):
The economic operator may rely on knowledge and experience, technical potential, personnel
capable of performing the contract, financial or economic abilities of other entities, regardless of the
legal nature of its relations with such entities. In such a case, the economic operator is required to
prove to the contracting authority that it will have at its disposal the resources necessary to perform
the contract, in particular by presenting for this purpose a written commitment of those entities to
place the necessary resources at the economic operators disposal for the purpose of contract
performance.
Thus reliance of the third party resources applies in Poland with regard to:
-

knowledge and experience,

9

technical potential,
personnel capable of performing the contract,
financial, and
economic abilities of other entities.

The only case where reliance on a third party is implicitly excluded is authorizations to perform a
specific activity. Those authorizations are issued with regard to specific entity (thus they cannot be
transferred without the transfer of the whole entity). Economic operator may be or not authorized to
perform specific activity but in the latter case he may not borrow authorization from a third party.
The reliance on third parties resources, although, generally available, is subject to some conditions.
The economic operator who wishes to rely on resources which do not belong to him is required to
prove to the contracting authority that it will have at its disposal the resources necessary to perform
the contract. The law does not elaborate on how to prove that those resources are available. It
provides, however, some hints. More specifically, it states that the economic operator should prove it
in particular by presenting for this purpose a written commitment of those entities to place the
necessary resources at the economic operators disposal for the purpose of contract performance.
By using the wording in particular the law implies that written commitment is just an example and
other methods of proving that such a reliance is real are also allowed. More often than not, proving of
this reliance takes form of production of a written undertaking by a third party. The PPL does not
specify either the content of this undertaking limiting itself to stating that it should be clear that
necessary resources are put at the disposal of the economic operator for the purpose of contract
performance.
Those provisions are supplemented by implementing rules (the regulation of the Prime Minister)
adopted on the basis of the PPL which specify types of documents which may be requested by the
contracting authorities from candidates or bidders. According to those rules the contracting authority
may assess whether the economic operator who wishes to rely on resources (capacities) of other
entities will in fact dispose the resources of other entities in a manner necessary for the proper
performance of contract and whether the relation between the economic operator and those entities
guarantee the real access to their resources. As it was already mentioned, according to the PPL,
based in this regard on the directives, the nature of legal links connecting the economic operator is
irrelevant. It means that the contracting authority may not insist in advance on a specific type of link,
leaving it to the discretion (or ingenuity) of the bidder. Those links may take a form of contractual
obligations (e.g. rent of equipment), putting at the disposal of the bidder some staff of a third party or
involving a third party as a subcontractor.
It is allowed, however, taking account of given circumstances, for the contracting authority to assess
whether the links of the bidder with another entity will allow the former to have real access to those
resources. It may happen, that, in specific case, contracting authority remains sceptical on whether
the information provided by the bidder concerning those links proves actual access to those
resources. It may be specifically the case of the requirement concerning knowledge and/or
experience where the contracting authority may take a dim view of the information provided by the
bidder concerning consultations and advice available to him. It is because the experience is
inextricably connected to the person (entity) which obtained it and cannot be the subject of
commercial transaction in the same way as, say, technical equipment.
In order to ascertain whether resources are really available to the bidder the contracting authority
may require the information (documents) concerning:
a) the scope of resources of another entity available to economic operator (i.e. whether it is the case
of financial resources, personnel, equipment or something else),
b) the manner of use by the economic operator of resources of another entity in the contract
performance,
c) the nature of relation between the economic operator and another entity (contract, cooperation
agreement),

10

d) the scope and duration of participation in the contract performance by another entity (in order to
check whether those resources are available as long as it necessary).
The burden of proving that the requirements imposed by the contracting authority are fulfilled by
means of reliance of third party(ies) capacities (abilities, resources) is on the bidder.
The basic legal act regulating the issue of awarding public contracts in France was for years the
Public Procurement Code (Code des marchs publics, CMP). Its last version was dated 2006 but it
consolidated in a single text also later changes. According to Article 45 I of CMP the contracting
authority could request from candidates22 only information and documents aiming at assessment of
their experience, technical, professional and financial capacities23. The list of the documents which
could be required from economic operators was established by means of the implementing act
issued on the basis of CMP24.
According to Article 45 III of the French CMP the candidate or a member of group of candidates for
public procurement may request that the contracting authority takes into account the technical,
professional and financial capacities of other economic operators regardless of the character of legal
links between the candidate and those economic operators. In such a case the candidates should
explain how the requirements concerning capacities are satisfied and prove that he will dispose
those capacities for the purpose of performance of the contract. According to the Guide on good
practice in public procurement25 taking account of capacities of third party simply means relying on
resources of other companies. Any company, be it medium or small sized, may claim it has access to
resources of the companies belonging to the same group or get access to those resources by
subcontracting a part of the contract to third party. Legal links of any nature should be taken account
of they can take a form of subcontracting, joint contracting (cotraitance) or creation of a
temporary association of economic operators (groupement momentan dentreprises). In any case,
the economic operator should explain in his offer or request for participation that he will effectively
dispose those resources he relies on. The proofs submitted should take a form of legally binding
commitment to ensure the contracting authority that resources and competences of the third party
will be available to the economic operator concerned. For example, if the company requests that
resources of its prospective subcontractors are taken into account it should provide in the offer
information about the prospective subcontractor(s) and a confirmation that they agree to execute a
part of the contract. The contracting authority should then verify whether the subcontractor
possesses required qualities are used to supplement the missing qualifications (resources) of the
candidate and whether he is not covered by any of the cases which should result in his exclusion
from the procurement procedure.
The EU public procurement directives adopted in 2014 were transposed in France by two legal acts
which replaced CMP: the regulation on public contracts (Ordonnance n 2015-899 du 23 juillet
2015 relative aux marchs publics) and the decree (Dcret relatif aux marchs publics). Rules
concerning reliance on capacities of other entities are provided in the latter. Basically, they reiterate
the general rule according, in principle, economic operators should be allowed to refer to resources of
other entities regardless of the nature of legal links connecting them. In such a case they should
provide information about capacities relied on together with appropriate proofs that those resources
will be available for the purpose of performing the contract in question. The provisions do not define
the form of proof.
The current basic legal act governing award of public contracts in Spain is Real Decreto Legislativo
3/2011, de 14 de noviembre, por el que se aprueba el texto refundido de la Ley de Contratos del
Sector Pblico (henceforth TRLSCP). TRLSCP consolidates in one single text all changes introduced
to the original law adopted in 2007. TRLSCP dedicates a few of its provisions to the issue of
qualification and selection of economic operators including the topic discussed in this study. More
particularly, Article 62 stipulates that in order to conclude contracts with public administrations
economic operators should demonstrate they satisfy the minimum conditions related to their
economic and financial standing as well as technical and professional capacity as specified by the
contracting authority. The obligation of proving fulfilment of minimum requirements may be replaced

11

by the proof that the economic operator is registered on the list of recognized companies if such
requirement stems from the law26.
The requirements concerning capacity of the bidders/candidates should be specified in the contract
notice or the tender dossier, related to the object of the contract and proportional. According to
Article 63 of the law the economic operator may demonstrate its reliability and resources by relying
on capacities and resources of third entities regardless of the legal nature of the links it has with
those companies provided it is able to prove the effective access to those capacities and resources.
The draft of the new law implementing in Spain the new directives provides for, unsurprisingly, a
provision (Article 75) which deals with the issue of proving the capacity of the economic operators by
means of reliance on external resources. Accordingly, the economic operator in order to fulfil the
requirements set with regard to specific public procurement procedure may rely on reliability
(solvencia) and resources (medios) of other entities, regardless of the legal nature of links with
those companies. The economic operator making recourse to those resources should demonstrate
that during the whole (period of) execution of the contract he will be able to effectively rely on those
resources. The company on which the economic operator wishes to rely on should not be in any
circumstances in which it would be excluded from the participation in the procurement procedure.
This Article obviously aims at implementation of above mentioned Article 63 of the new Public Sector
Directive. At the moment of writing the paper it is still the draft law so the final version of the law may
differ but one can note the draft does not seem to be fully compliant with the directive. It goes too far
in requiring that the resources of the third party should be available to the bidder until the contract is
fully performed. It does not seem correct, in the case where resources are needed in order to perform
only a part of the contract to require they are available until the end of performance of the service or
works in question.
With regard to criteria related to educational and professional background or the experience the
economic operators may rely on capacities of third parties only in those cases where the latter are to
perform works or services for which those capacities are required. Again, this provision is based on
Article 63 of the new Public Sector Directive.
The basic legal act governing award of public contracts in Portugal is at the moment of writing this
paper is adopted in 2008 the Public Contracts Code (port. Codigo dos Contratos Pblicos, CCP).
Relevant provisions concerning reliance on third parties resources are provided in its Article 168 (4),
179 (2) and 246 (7). Portuguese provisions directly offered possibility of relying on third parties
resources only with regard to technical capacity but not in the case of financial and economic
standing. The Portuguese authorities seemed to be aware of the fact that because of this limitation
EU provisions were not transposed correctly, at least with regard to reliance on financial (economic)
capacities. The Supreme Administrative Court (STA) came to the conclusion that above mentioned
EU rules, notwithstanding lack of their equivalents in the Portuguese CCP, are directly applicable in
Portugal. It is at least the case of Article 47 (2) first sentence of Directive 2004/18 according to
which economic operators may rely on economic and financial standing of other entities. In the
opinion of STA this provision is clear, precise, unconditional, sufficient, does not leave to a Member
State any room for interpretation, and in consequence it is directly applicable.
In Belgium, according to the Royal Decree implementing 2006 Public Procurement Law (PPL),
candidates and tenderers could rely, in the context of a specific public procurement procedure, on
capacities of other entities, regardless of the legal nature of the links with those entities (Article 74 of
the decree). In such a case a bidder or a candidate should prove to the contracting authority, by
submitting a commitment of the party lending to him necessary resources, that he will dispose of
necessary resources. The party on resources of which the economic operator intends to rely on may
not be in situation when it was convicted for any of the crimes which would result in its exclusion from
the participation in public procurement (compulsory grounds for exclusion). Under the same condition
a group of bidders or candidates may rely on capacities of other members of the group or other
entities. However, the contracting authority may restrict, in tender documents, the possibility of
relying on resources of third parties. It is possible in the case when entities which lend their resources
originate from countries for which the access to the public procurement market in Belgium is not

12

open (the current Belgian rules restrict the access to the public procurement on the basis of
reciprocity - Article 21 of the PPL)27.
Croatian public procurement rules concerning the issue of reliance on third parties resources are
based on the provisions of above discussed EU directive 2004/18 (Article 72 (6) of the Public
Procurement Law). It is worth of underlying that the case law (rulings of the procurement review body)
concerning reliance on technical and professional capacities of other entities evolved. The State
Commission for the Control of Public Procurement (the Commission, the Croatian public
procurement review body) was first of the opinion that a bidder could not rely, in order to prove his
technical capacity, on contracts performed by another company (even proposed as a subcontractor).
The Commission based its conclusions on the following premises - since certificates concerning
proper execution of a contract are issued only with regard to a company which performed the
contract they cannot be used by another entity so reliance on other parties capacities is not possible
in such a case28. Then, in September 201429 the Commission adopted diametrically different
decision admitting this time, and without restrictions, possibility of relying on capacities of other
entities in order to prove fulfilment of requirements concerning technical capacity, including reliance
on the list of services performed by somebody else. The change of view was explained simply by the
Commission by the fact the in the meantime Croatia became a Member State of the European Union
so it is bound by the case law of the CJEU.
4.2 Minimum own capacity
Are there any limitations concerning reliance on third party resources? Is it possible that a bidder
entirely relies on capacities of other companies with regard to financial and economic standing and
technical and professional capacity? Or quite the contrary, he should have some resources of his own
and reliance should be limited to complete them where it is needed because they are not sufficient to
fill those needs entirely? There is no direct answer to those questions in the EU directives. This topic
is discussed, though, in the Spanish procurement literature where it is referred as minimum own
capacity (solvencia minima propria). Some authors claim, on the basis of wording of the Spanish
public procurement law, that a bidder should have some minimum capacities to be able to apply for a
contract with public administration30. Such a view was expressed also by the procurement review
body (TACRECO)31. It seems that possibility of requirement of minimum capacity is supported by new
provisions of the EU directive which as it was mentioned above allow the contracting authority to
require direct performance by the tenderer of critical tasks (see Article 63 (2) of 2014/24/EU
directive.
4.3 Specific case of reliance on experience and knowledge of third parties
The Polish case law (rulings of the National Appeals Chamber NAC32) does not provide for uniform
opinion on the issue of whether reliance on experience and knowledge of a third party must take a
form of its involvement in the performance of the contract or its part. Prevailing view is that for this
reliance to be effective third party on experience of which the bidder would like to rely on must be
involved in actual performance of the procurement, at least of those of its parts for which this
experience (knowledge) is relevant. In some cases the NAC took, however, more liberal approach and
taking account of the specific circumstances, admitted that access to advice and consultations
provided by more experienced company should suffice.
As regards the French procurement legislation one can infer comparing paragraph 1 and 3 of Article
45 of CMP that reliance on capacities of third companies is not allowed with regard to experience. It
is because experience is mentioned in Article 45 (1) explicitly as separate category of professional
capacity while Article 45 (3) dealing specifically with the issue of reliance does not mention
experience as the capacity of other entities on which one could. It should be mentioned, however,

13

that lack of experience concerning performing of similar contracts to the one being the subject matter
of procurement, cannot be, according to the French case law and practice the only reason for
exclusion of economic operator. In other words, the contracting authority is obliged to verify the
professional and technical capacity of economic operators not only with regard to experience but also
on the basis of the information provided concerning its staff, resources, equipment available etc.
Such a solution is applied in order to avoid the situation when SMEs and starts up are denied the
chance to participate in the public procurement. It seems that experience is treated according to the
French law as something inextricably connected to the economic operator (he either has it or not but
cannot borrow it from others) and as such is not covered by the rules concerning reliance on the
capacities of other entities. On the other hand, as it was already mentioned, lack of experience may
not a priori disqualify a company from possibility of proving that it is perfectly capable of performing
the contract. Hence, the lack of the possibility of relying on the experience of other companies does
not seem to be such an impediment for economic operators. Even if they do not have sufficient
experience and cannot, as it seems to be the case, to rely on capacities of other economic operators,
they may prove their capacities by other means where this reliance is not excluded (staff, equipment,
resources etc.).
The issue of reliance on resources and capacities of third parties was also discussed in the case law
of the Spanish procurement review bodies, for example Tribunal Administrativo Central de Recursos
Contractuales (TACRECO)33. As regards reliance on resources of third parties TACREO excluded such
a possibility with regard to those capacities which were inextricably related to the company which
possess them (such as experience). TACRECO made it clear that such reliance is possible only with
regard to material and personal resources (see, for instance, rulings in cases 254/2011 and
117/2012). Other review bodies are more liberal for example procurement review body for Aragon
which in ruling adopted on February 25, 2015 admitted reliance on third parties capacities in all
aspects concerning reliability of economic operators. In above mentioned ruling Tribunal
Administrativo de Contratos Pblicos de Aragn concluded that reliance on capacities of third parties
referred to in TRLSCP covers both the financial and economic standing as well as professional and
technical capacity, including experience.

4.3 Third parties resources in short listing

Another related issue is reliance on third parties resources in those cases when the contracting
authority conducts so called short listing. In procedures such as the restricted procedure, the
competitive dialogue or the negotiated procedure with prior publication, the contracting authorities, in
addition to setting the minimum conditions which should be satisfied by all candidates seeking
admittance to the tendering stage (or negotiations) may decide, in advance, that only limited number
of economic operators will be invited (not fewer though than 5)34. In the event the number of
qualifying candidates is bigger the contracting authority does not invite all of the qualified candidates
but a limited number of so called short listed candidates. If short listing is to be applied it must be
determined in advance what criteria the contracting authority will use in order to select (to short list)
those who will be invited. And this is the moment when the issue of reliance on third parties
capacities is relevant again. There were cases in Poland where economic operators were
(successfully) relying on capacities of third companies (sometimes, on the resources of the same
companies as their competitors) in order to get better score with regard to technical and professional
ability or economic and financial standing and secure this way their place in the second stage of the
procedure.
The situation changed in 2013 when the amendment was adopted to the PPL according to which:
if the number of economic operators meeting the criteria for participation in the procedure exceeds
the number specified in the contract notice, the contracting authority shall invite economic operators
selected in an objective and non-discriminatory manner to submit their tenders.

14

This provision was then interpreted by the case law in the way that the contracting authority is
allowed to take into account, for the purpose of creating short lists only own resources of
candidates. In order to meet the minimum requirements specified by the contracting authority the
economic operators are allowed to rely on capacities of the third parties they cannot be deprived of
that right because it would go against the Polish and EU law. However, once the contracting
authority applies the short listing and invites to the second stage of the procedure only limited
number of candidates it may apply different criteria than those which are used as minimum
requirements. Those criteria are not specified in the law, are left to the discretion of contracting
authorities but they should be in any case transparent and non- discriminatory. According to the case
law a contracting authority is allowed to not take into account (for the purpose of short listing)
those capacities which were committed by third parties but only own resources of the candidates.
The reasoning applied here is the following: reliance on capacities of third parties should enable the
economic operator concerned to prove he is able to perform the contract. Once those minimum
requirements are fulfilled resources put at the disposal of the bidder/candidate by third parties are
not relevant and the contracting authorities are allowed not to assess capacities of third parties and
promote, for example, those companies who are more qualified on their own, and not thanks to
experience of third parties. Previous case law which specified the criteria and conditions which may
be applied for that purpose did not differentiate effects of reliance on resources of third parties. In
other words, the economic operators seeking invitation to tender in two stages procedure could
request that this reference to capacities of other companies is taken into account not only in order to
verify fulfilment of minimum requirements but also for the purposes of deciding will be short listed.
This understanding of rules on reliance on third parties in the context of short listing seems to be not
unlike as the requirement of the Spanish minimum own capacity referred to above.
4.4 Reliance on third parties resources and subcontracting
Direct involvement of the third party in the performance of the contract brings us to the issue of
subcontracting. According to the Polish law the rule is that subcontracting should be always allowed
and restrictions concerning it are exception to this rule.
According to Article 36a of the PPL the economic operator may entrust the execution of a part of a
contract to subcontractor. The contracting authority may require, however, direct execution by the
economic operator of:
1) essential (key) parts of a contract for works or services;
2) sitting and installation works under contract for supplies.
The reservation mentioned above is not effective though to the extent to which the economic
operator relies on resources of another entity.
Limitations concerning subcontracting concern two cases:
a) performance of essential (key) parts of the contract (in all types of contracts) and
b) sitting and installation works in the case of supply contracts.
This provision adopted in 2014 was an attempt to transpose discussed above Article 63 (2) of
directive 2014/24. On the other hand, this provision does not allow for limitation of subcontracting in
the case where the economic operators uses subcontractors precisely in order to prove that he is
able to perform the contract in question. In other words, if the contracting authority insists on
personal execution of the contract (because it may have valid reasons for that) the bidder is still
allowed to rely on subcontractors in those cases he is unable to perform the contract without support
of prospective subcontractors.
In Portugal there is also specific provision related to subcontracting Article 318 (5) of CCP which
allows contracting authorities to limit the value of potential subcontracting. More precisely, the
contracting authorities may establish, in tender documents, the limit (expressed in percentage share
of the value of contract) above which contractor would not be allowed to entrust services or works to
subcontractors. This limitation cannot, however, deprive economic operators of possibility to use
15

resources of subcontractors in order to fulfil the requirements of the contracting authority. It seems
that this provision has the same practical impact as the Polish provisions discussed above according
to which bidders can always rely on capacities of potential subcontractors in order to prove they are
capable of performing the contract in question.
In Spain too, current provisions on procurement provide for limitation concerning the maximum value
(share of the contract) of services or works which may be subcontracted by the economic operator. If
the contracting authority does not stipulate on this issue otherwise the default limit is 60 % of the
total value of the contract in question. In any case the subcontracting of the whole contract seems to
be excluded as it would be tantamount, in practical terms, to the (illegal) cession of the whole
contract. The contract would be performed by the company different that the one which was chosen
in the procurement procedure35 which in turn would mean substantial modification of the contract.
The issue of subcontracting in public procurement is distinguished in the Spanish literature from the
reliance on resources of third parties. Subcontracting is defined as situation where a company
performing the contract (the contractor) entrusts other entities with performance of some services or
works which are necessary in the order to perform the (main) contract36. The subordinate nature of
services performed under the subcontract is reflected in the sub- prefix. As such subcontracting may
only happen after the contract to which it relates has been awarded37. On the other hand, reliance on
resources of third parties takes place at the qualification (selection) stage of procurement procedure
before the best tender is chosen. It is at this stage that bidders try to prove their qualifications by
complementing lacking (missing) resources of their own by referring to other entities. As it was
mentioned above this reliance may include recourse to prospective sub-contractors i.e. companies
which would perform a share of the contract once and if it is awarded to the company intending to
subcontract a part or parts of the contract. While this reliance takes place before the award of the
contract the subcontracting logically takes place only after conclusion of the main contract. This
distinction enables to combine limitations concerning subcontracting with a priori unlimited
possibilities of applying reliance on third parties. While the party to the contract may not during the
execution of contract let out services or works which would value more than 60 % of the value of the
contract this limitation does not seem to apply at the qualification stage when the bidder who does
not possess required qualities supports his application with resources of his prospective
subcontractors. The difference lies in the fact that in order to prove fulfilment of requirements of the
contracting authorities the bidders has to indicate concrete companies which would be involved in
the performance of the contract. Only this way it would be possible for the contracting authority to
verify whether those conditions are fulfilled the bidder supported by prospective subcontractors
have enough resources. Both Spain and Portugal may have to revise their policy on limitations
concerning value of subcontracting if the CJEU finds such limitations not consistent with the acquis
(pending C-406/14 case). It is worth underlying, though, that such limitations seem to be widespread
practice in various public procurement regimes outside of the European Union38.
4.5 Relevance of experience obtained within a group of suppliers
Another related issue is the reliance on the experience obtained by an economic operator who
performs a contract as a part of a group of undertakings (consortium). More precisely, how to treat
experience claimed by a bidder who performed certain services or works jointly with other companies
and then applies for another contract, this time alone or together with other companies, but different
from those he cooperated on previous occasions. In various cases the Polish NAC ruled that a
member of consortium may use (all) documents (certificates, references) issued by the contracting
authority and confirming the contract in which it was involved has been correctly performed. Thus a
company may use without any limitations all references it obtained thanks to performing those works
(services), regardless of what was its real contribution towards the successful performance of the
contract, even it applies for a new contract alone, Such a conclusion was reached by NAC on the
following premises - the law allows for creation of groups of bidders, precisely in order to enable
members of those groups to combine their capacities in order to prove there are able to perform the
contract in question. If so, it would go against those rules and make creation of consortia utterly
pointless if the contracting authority would not allow the member of the consortium to claim the
16

experience obtained by the whole consortium as its own. Another argument used by NAC is the joint
and several liability of the group for the successful performance of the contract (all and each of them
are responsible towards the contracting authority for a proper performance). Provisions on groups of
economic operators work, according to NAC this way that if the group as a whole meets specific
condition this condition is met by each and every member of that group. Finally, such a conclusion is
supported by the principle of the equal treatment of economic operators. Apparently, in the opinion of
NAC members of consortium would be treated worse than economic operators applying alone for
contract because the former could not fully rely on the experience obtained as members of the group.
In the opinion of the author of this paper the view presented above is logically flawed39. Let us take
the following case. Say, company A, which performed contract for works with companies B, C
and D applies for another contract, this time alone. Company A claims that it performed the
contract and relies on this contract in order to prove its capacity. Following the logic presented above
the company may get experience even it did not perform, according to the agreement dividing the
work within group, any activity at all, but provided merely funds or equipment. It may also happen
that all companies who made a consortium on previous occasion participate again in a new
procurement procedure but this time all of them compete one against another for the same contract
and each and every of them relies on the same contract from the past. So, four different companies
which in the past were not able to perform the contract alone and needed to combine their resources
are now perfectly able to commit themselves to perform a new contract regardless of their real
experience. Assessment of qualifications becomes in such a case mere formalism. It is not to say,
that experience obtained by a group is irrelevant, quite the contrary. It is relevant, any time a member
of that group relies on the specific experience related to his activities within the group (if the work
was clearly enough divided) or the group composed by the same members applies for a new contract.
In the latter case, it can clearly rely on the experience from the past as the relevant contract was
performed by the same entities. Taking even more absurd example on board say, an expert
elaborated, as a member of the team of expert a few entries in the encyclopaedia. Would it be fair if
she claims to be the author of the whole encyclopaedia? The argument concerning equal treatment
referred to by NAC seems to work the other way round. Precisely, this principle requires that similar
situations are treated alike and cases which are not similar are treated differently (unless of course
there are good reasons for the lack of differentiation). It would amount to unequal treatment if the
contracting authority treats the same way a bidder who performed a contract alone and a member of
the group of economic operators who claims as his own the experience of that group. However, the
jury is still out on the issue on how far this reliance may go.
In Spain the review body - TACRECO did not accept an appeal submitted by a group of bidders which
complained that the contracting authority did not take into account combined turnover of all
companies composing the consortium. The contracting authority claimed that neither of the members
of the consortium satisfied the requirement concerning the minimum annual turnover of 350,000
euros and rejected the offer submitted by the consortium. TACRECO referred to discussed above
ruling of the CJEU in C- 94/12. More in particular, TACRECO quoted para 35 of the ruling:
It is true that there may be works with special requirements necessitating a certain capacity which
cannot be obtained by combining the capacities of more than one operator, which, individually,
would be inadequate. In such circumstances, the contracting authority would be justified in requiring
that the minimum capacity level concerned be achieved by a single economic operator or, where
appropriate, by relying on a limited number of economic operators, in accordance with the second
subparagraph of Article 44(2) of Directive 2004/18, as long as that requirement is related and
proportionate to the subject-matter of the contract at issue.
It should be noted, though, that it is not only that no member of the consortium satisfied alone the
requirement set by the contracting authority. Apparently, even accumulated turnover of all members
of the consortium did not reach the level set by the contracting authority.

17

Interesting solution concerning relevance of experience obtained by performing a contract within a

group is present in the Public Procurement Law of Costa Rica40. In case of contracts of significant
values or contracts where previous experience is relevant the contracting authority should specify in
the procurement documents rules according to which it will evaluate the experience obtained within a
group of companies. It is done specifically in order to avoid the situation where negligible
participation of the bidder in the performance of the previous contract by the group he was a member
would allow him to claim the experience obtained by the whole group. In any case the public
purchaser may set a level of minimum participation that would allow the member of the group to rely
on performing of the contract on its own. Moreover, the same provisions allow contracting authorities
to set the conditions which should be met by any member of the group as well as allow, in case of
other conditions, that capacities of all member of a group are summed up.
In the case of Brazil, on the other hand, the capacities of companies making the consortium may be
combined but in such a case they should be for a consortium at least 30 % higher than the minimum
requirements for individual undertakings41. This requirement applies though only in the case of
financial and economic standing. It does not apply in the event the group is entirely composed of
small and medium enterprises.
CONCLUSIONS
The European Union legislation on public procurement, developed by the case law of the CJEU,
requires that, in general, economic operators should be allowed to rely on resources or capacities of
other entities (third parties). Reliance on third parties capacities concerns economic and financial
standing and professional and technical ability but it is not allowed in the case of suitability to
perform professional activity (registration in commercial registers, obtaining authorizations, licences
etc.). In the case of educational and professional qualifications and relevant professional experience,
the reliance is conditional. It requires involving entities on capacities of which the economic operator
relies. In other words, those relied on should perform the works or services for which their capacities
are needed.
The economic operator who relies on capacities of other entities should prove, to the satisfaction of
the contracting authority, that he actually has those resources at his disposal. The burden of proof
that those external resources are available, to the extent they are necessary for the performance of
the contract or its parts, lies on the economic operator who wants to rely on those resources. The
contracting authority may require that certain specific (critical) tasks are performed directly by the
bidder (excluding this way possibility of recourse to subcontracting and/or reliance on capacities of
third parties). This concerns, however, under the EU law only works, services and certain supply
contracts. Entities supporting the bidder (candidate) in meeting the relevant criteria are subject to
verification of their personal situation (provisions on exclusion) and the qualification or selection
criteria.
The possibility of reliance of third parties resources seems to be contemplated in other than EU
public procurement systems (such as GPA) but this topic does not seem to get that much attention as
in the case of EU procurement directives.
Public procurement provisions of EU countries are based on EU minimum requirements set by 2004
directives and in those countries which have already transposed 2014 directives also on more
precise and detailed rules set by 2014 directives. As the law and practice of EU countries show
reliance on resources of other entities is possible with regard to economic and financial standing as
well as technical and professional ability, including knowledge and experience but is not allowed in
the case of suitability to pursue professional activities (including authorizations). There are certain
reservations in the national case law concerning reliance of experience and knowledge. Those two
qualities are considered to be inextricably linked to the economic operators. Hence in practice
reliance usually requires actual involvement of the party the bidder/candidate relies on. In other
words, the party relied on with regard to knowledge and experience should perform services or works
for which knowledge and/or experience is required,

18

Reliance is subject to certain conditions submission of undertaking by the third party is needed that
the resources will be actually available. It does not suffice that the economic operator produces
general statement of a third party that the latter will place the necessary resources at the economic
operators disposal for the purpose of contract performance it should be explained how those
resources will be available, how long and in which form.
Burden of proof that reliance is real and resources are actually available is on the economic operator
using this solution. Effectiveness of the reliance is assessed on case by case basis. Involvement of
the third party does not have to take a form of subcontracting, taking account of the concrete
circumstances, other forms are also possible. Possibility of reliance may be subject to limitations in
the case of short listing where companies using own resources (having experience of their own) are
promoted. Minimum own capacity of bidders which could be supplemented with resources of third
parties may be also required, though it is not clear whether such a solution limiting this reliance is
consistent with the acquis. The party relied on with regard to knowledge and experience should
perform services or works for which knowledge and/or experience is required. Further advice on the
issue of limitations of this reliance, in particular in the context of groups of economic operators and
sub-contracting is forthcoming (pending case law of the CJEU).
REFERENCES
Albarran E. M. (2013) La subcontratacin y la contratacin pblica: algunas consideraciones sobre
la evolucin normative reciente y su context, Anuario Aragons del Gobierno Local, p. 465 -491.
Arrowsmith, S. (2003) Government Procurement in WTO, Kluwer Law International.
Arrowsmith, S. (2015) Law of Public and Utilities Procurement Volume 1, Sweet & Maxwell.
Fernandes D. M. (2013) O aproveitamento da capacidade financeira de terceiros para efeitos de
participao num concuros, Revista de Contratos Pblicos N. 7, p. 83-110.
Gonzalez J.C (2012) La integracin de la solvencia con medios externos en los contraltos del sector
pblico 28 Cuadernos de Derecho Local, p. 97-106.
Graells A. S. (2015) Public Procurement and the EU Competition Rules, Second Edition, Oxford:
Hart Publishing
Guide de bonnes pratiques en matire de marchs publics, (2014), [On line], available at
www.economie.gouv.fr/files/files/directions_services/daj/marches_publics/conseil_acheteurs/guide
s/guide-bonnes-pratiques-mp.pdf. [Retrieved February 24, 2016]

As of January 1, 2016 the thresholds of application of the directive are: 5,225,00 euros for public
works contracts, 139,000 euros for supplies and services if the procuring entity is the central
government entity or 209,000 euros for other procuring entities.
2
In particular, the free movement of goods, freedom of establishment and the freedom to provide
services, as well as the principles deriving therefrom, such as equal treatment, non discrimination,
mutual recognition, proportionality and transparency.
1

In particular, the free movement of goods, freedom of establishment and the freedom to provide
services, as well as the principles deriving therefrom, such as equal treatment, non discrimination,
mutual recognition, proportionality and transparency.

19

Meaning contracts of such values that suppliers from countries other than the country of the
procuring entity could be interested in competing for those contracts.
3

Directive 2004/18/EC of the European Parliament and of the Council of 31 March 2004 on the
coordination of procedures for the award of public works contracts, public supply contracts and
public service contracts.
5 The Authority for Protection of Competition of Montenegro came to the conclusion that submission
of a joint tender by two insurance companies was infringement of competition (and procurement)
rules see the annual report of activities of the Authority for 2014 (Izvetaj o radu za 2014 godinu)
available at www.azzk.me [Retrieved February 22, 2016]. Similarly, the Portuguese Authority for the
Protection of Competition suggests that submission of a joint tender in the event there is no need to
do so (because bidders separately meet all the conditions required) may indicate existence of
collusion (bid rigging) of economic operators (Guia de boas practicas no combate ao concluio na
contratao pblica), [On line]. Available at www.concorrencia.pt, [Retrieved March 14, 2016].
6 Graells A. S. (2015) Public Procurement and the EU Competition Rules, Second Edition, Oxford:
Hart Publishing, p. 315.
4

Judgment of 14 April 1994.

One of the first directives on public procurement of the then European Economic Community.

Judgment of 18 December 1997.

10

Judgment of 2 December 1999; [1999] ECR I-8607.

Arrowsmith, S. (2015) Law of Public and Utilities Procurement Volume 1, Sweet & Maxwell, p.
1198.
11

12

Judgment of 18 October 2012 in case C 218/11.

13

European Court of Justice, judgment of 10 October 2013.

14

Paragraph 35 of the judgment.

15

Paragraph 34 of the judgment.

16

Judgement of 18 March 2004.

See the opinion of Advocate General Sharpston delivered on 17 November 2015, available at
www.curia.eu.
17

Advocate General Sharpston suggests that 25 % limitation might potentially discouraged some
suppliers from bidding as in the second stage of the procedure only three out of five invited bidders
submitted their tenders.
18

19

Judgment of 14 January 2016, paragraph 27-28 and 34.

20

Arrowsmith, S. (2003) Government Procurement in WTO, Kluwer Law International, p. 226.

21

The Public Procurement Law of 29 January 2004 with later changes.

The CMP uses the word a candidate instead of a bidder but it obviously refers to any
entity/person interested in obtaining public procurement contract.
22

The contracting authority is obliged to assess the capacity of the economic operator always with
regard to three elements: professional, technical and financial capacity CE, 26 mars 2008,
Communaut urbaine de Lyon N 303779.
23

Arrt du 28 aot 2006 fixant la liste des renseignements et des documents pouvant tre
demands aux candidats aux marchs passs par les pouvoirs adjudicateurs, NOR:
ECOM0620008A.
24

Guide de bonnes pratiques en matire de marchs publics, (2014).[On line]. Available at

www.economie.gouv.fr/files/files/directions_services/daj/marches_publics/conseil_acheteurs/guide
s/guide-bonnes-pratiques-mp.pdf. [Retrieved February 24, 2016]
25

20

Indeed, the Spanish procurement law requires that companies applying for contracts for works or
services of significant values should have checked their reliability by relevant istitution and registered
on the list of qualified economic operators.
26

Access to public procurement contracts is open for companies from the European Union, countries
being parties to the Government Procurement Agreement and other international treaties concerning
opening of public procurement market.
27

28

Ruling no. 354-01/13-08.

29

Ruling no. 354-01/14-07.

Gonzalez J.C (2012) La integracin de la solvencia con medios externos en los contratos del
sector pblico, 28 Cuadernos de Derecho Local p. 100.
30

Resolucin del Tribunal Administrativo Central de recursos contractuales, n117 /2012,

23.05.2012.
32 The procurement review body reviewing appeals of economic operators against decisions of
contracting authorities.
31

Procurement review system in Spain is decentralized there are review offices at the State level
(TACRECO) as well as the level of autonomous regions such as Comunidad de Madrid, Pais Vasco,
Andalucia, Castilla y Leon, Aragon etc.
33

It should be at least three candidates invited in the competitive dialogue and the negotiated
procedure.
34

Albarran E. M. (2013) La subcontratacin y la contratacin pblica: algunas consideraciones

sobre la evolucin normative reciente y su context, Anuario Aragons del Gobierno Local,p. 483.
35

Oxford English Dictionary defines subcontractor as a business or person that carries out work for
a company as part of a larger project.
36

37

Albarran E. M. (2013) La subcontratacin.,p. 482.

In Albania, Montenegro and Serbia the maximum share of the contract which can be subcontracted
is 30 %; the same limit applies in Ecuador; in Honduras it is 40 % while in Paraguay 60 %.
38

It is probably the case of fallacy of division the flaw in logic when one reasons that what works
for a whole entity must also apply for any of its parts (see S. Pape Being right: why most people talk
bollocks most of the time and how to avoid being one of them, Kindle Edition 2016).
39

Reglamento a la Ley de Contratacin Administrativa Decreto N 33411-H, 27 September 2006,

Articles 72-73.
41 Lei ns. 8.666 de 21 juhno de 1993, Article 33.III.
40

21