In the Transforming Public Procurement Green Paper, the Government signalled its desire to increase its control over procurements by all contracting authorities.
In a previous ebriefing we profiled the case of Commission v Austria*, in which Wiener Wohnen (a contracting authority linked to the City of Vienna) contracted for a landowning developer to grant to them a 25-year lease of a new head office building they were constructing on that land.
The Advocate General had said that the arrangements were an unlawfully let public works contract because Wiener Wohnen had exercised a ‘decisive influence' over the design and construction of the building.
The European Court of Justice, who has the last word on this, came to the opposite conclusion. They said that the level of influence over the work did not amount to a decisive influence since it, “did not exceed the usual requirements of a tenant in relation to a building such as the complex concerned”.
The court said that a contracting authority will exercise a decisive influence over the design of a building if they “exercise that influence over the architectural structure of the building, such as its size, external walls and load-bearing walls".
However, they said that “stipulations concerning interior fittings may be regarded as demonstrating a decisive influence only if they are distinguished because of their specificity or scale”.
The choice of options offered by the developer was also insufficient to amount to a decisive influence.
This improves the prospects of a contracting authority being able to argue that, where properties are being constructed for them, the arrangements will not be a public works contract. This should now be arguable if the contracting authority has no more control over the design or construction of the development than would be usual for an 'off-plan' purchaser.
In many cases, a contracting authority will want greater control than this. For a limited number of cases, though, where the authority is paying a deposit and the balance on completion (rather than stage payments or payments against valuations under a JCT contract) and is content with the developer’s standard house types, it may be able to argue that the arrangements are a land transaction rather than a public works contract. This is a developing area of procurement law, though, and great care is needed over these kinds of arrangements.
For more information
For advice on whether a potential development structure is likely to be classified as a public works contract and how to deal with this, please contact Andrew Millross or your usual contact within our construction and procurement department.
*Commission v Republic of Austria, Case C-537/19
The monthly round-up from the Anthony Collins Solicitors charities team.
Legal updates as the UK enters into stage 4 of the roadmap and legal restrictions on face coverings and social distancing are lifted.
The first disability we are going to discuss is diabetes. We begin by discussing the different types of diabetes; their similarities and differences and how we live with the disability within our day.
Tim Coolican and Freya Cassia explore the legal and practical options available to providers if a disappointing result is received following an inspection.
Following the launch of the CQC’s new strategy for how it regulates health and social care, many providers will be keen to know more about how the changes might affect them in the future.
EPC’s are not required to be served with a Section 21 notice for assured shorthold tenancies if the tenancy predates October 2015.
A new era of paperless property deals is upon us following the Land Registry’s landmark decision in July 2020 to accept e-signed documents for registration.
Under NHSX, the Department of Health and Social Care, NHS England and NHS Improvement have published the Secretary of State's vision for how data will be used to improve health and care.
Ofsted recently published the findings from its rapid review of sexual abuse in schools and colleges. The review highlighted keys areas of concern and presents clear actions, which are discussed here.
To receive invitations to our events, as well as information and articles on legal issues and sector developments that are of interest to you, please sign up to Newsroom.