I am looking for a legal expert in
in
CE, 3 Apr 2024, no. 472476, Sté Victor Hugo 21
As we know, the use of VEFA by public bodies is perfectly legal, provided that three conditions are met:
The entire construction operation is not carried out on its behalf;
It is not entirely intended to become its property;
It has not been designed for his own needs[1].
There is therefore no need to carry out an advertising or competitive tendering procedure, and the contract is governed by ordinary contract law.
This solution, initially adopted under the Public Procurement Code, was confirmed under the new provisions of the Public Order Code[2].
It was also ruled that the solution was identical for leases in the future state of completion[3]. The fact that the work is not intended to become his property is therefore irrelevant, provided that it was designed to meet his own needs[4]. Only the third criterion is relevant.
For the contract to be reclassified as a public procurement contract, it is sufficient for the purchaser to have exercised a ‘decisive influence’ on the design of the work.
The European Court of Justice has clarified this concept and considers that there is a ‘decisive influence’ if the purchaser influences the architectural structure of the building, whether in terms of its size or its external or load-bearing walls.
This may also be the case if the purchaser also has an influence on the interior fittings, provided however that the purchaser’s requests in this respect are distinguished ‘by their specific nature or scale’[5]. These are cases where the tenant’s demands exceed the usual requirements for this type of building.
It all depends on the case and the degree of specifications that the buyer imposes on the seller.
French courts have had few opportunities to rule on this issue. The case under review is therefore of particular interest.
In this case, a hospital had entered into a lease with a private developer for two existing buildings and a third to be built.
In a remarkable about-face, the hospital finally refused to take possession of the buildings and suspended the payment of rent, while at the same time bringing an action before the administrative court to challenge the validity of the contract, on the grounds that it was in fact a public works contract, and an irregular one at that.
When the matter was referred to it, the Conseil d’Etat began by making it abundantly clear that :
“The contract by which a contracting authority leases or acquires real estate which is to be the subject of works to be carried out at the expense of its co-contractor constitutes a works contract within the meaning of the aforementioned provisions of Articles 4 and 5 of the Order of 23 July 2015 when it is clear from the stipulations of the contract that it exercises a decisive influence over the design of the works.
This is the case when it is established that this influence is exerted on the architectural structure of the building, such as its size, exterior walls and load-bearing walls. The purchaser’s requests concerning the interior fittings can only be considered as demonstrating a decisive influence if they stand out because of their specificity or scale”.
This is no more and no less than the solution reached by the CJEU, notably in its judgment in Commission v Republic of Austria[6].
This is the first contribution of the ruling, which transposes European case law in this area in such clear terms for the first time.
Following in the footsteps of the Lyon CAA, it finds that the hospital had a decisive influence on the design of the works, which directly affected the layout of building A and the construction, location and layout of building C.
The contract was therefore a public works contract.
It was still necessary to determine whether its content was unlawful or whether it was vitiated by a particularly serious defect, since these are the conditions, interpreted very strictly by the Conseil d’Etat, for its annulment to be pronounced[7].
The Conseil d’Etat, still following the Court, therefore extended its reasoning and reclassified the rent and surcharge clauses as deferred payment clauses, which, as we know, are strictly prohibited by public procurement law[8].
It is this unlawfulness of the contract’s content and its indivisibility from the contract as a whole that, in his view, justifies the contract’s annulment.
And this is the second interest of the ruling, which for the first time makes the presence of a deferred payment clause indivisible from the rest of the contract an unlawfulness in the content of the contract, justifying the annulment of the contract.
The use of a deferred payment clause, insofar as it is indivisible from the rest of the contract, thus joins the very short list of illegalities in the content of the contract justifying its annulment, of which the Conseil d’Etat provides a definition that is, to say the least, restricted:
‘The content of a contract is unlawful only if the object of the contract itself, as formulated by the contracting public authority in order to launch the procedure for awarding the contract or as it results from the stipulations agreed between the parties which must be regarded as defining it, is in itself contrary to the law, so that by committing himself to such an object the co-contractor of the public authority necessarily disregards it’[9].
This article is the sole responsibility of its author.
[1] CE 25 February 1994, no. 144641, Avis CE 31 January 1995, no. 356960
[2] CAA Nancy, 3rd ch. 15 Apr 2021, no. 19NC02073
[3] CJEU 10 July 2014, no. C-213/13, Impresa Pizzarotti & C.SpA v. Comune di Bari et al.
[4] Ibid.
[5] Ibid. CJEU 22 April 2021, Case C-537/19 EU Comm v Republic of Austria
[6] CJEU 22 April 2021, Case C-537/19 Comm. EU v Republic of Austria
[7] CE 28 December 2009, no. 304802, Bézier 1
[8] Currently Article L.2191-5 of the French Public Procurement Code.
[9] CE 9 November 2018, Sté CERBA, 420654