State Aid and Public Procurement in the EU

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The field of public procurement (the public purchase of goods, works and services) is one of the most important sectors of the single market for several reasons:

First, it affects a substantial share of world trade, amounting to 1.3 trillion euros per year and representing almost one fifth of the Union’s GDP. This means that in the European Union public procurement procedures are extremely important for the development of the Union’s trade policy.

Secondly, public procurement is an area that involves both the public and the private sector which makes it relevant for all sectors of the economy. Indeed procurement procedures aim to open public markets and to increase competition between private parties.

Thirdly, while public procurement rules find that legal basis in the articles on free movement, they are highly linked to competition law as well. Public authorities may abuse their dominant position at the demand side of the market, economic operators may collude and granting a public contract to a certain economic operator may quality as State aid if certain conditions are fulfilled. For this reason, studying the link between these area of law is of high importance.

Fourthly, public procurement procedures are increasingly used by public authorities to reach goals that are not necessarily ‘economic’ in nature, such as green and social objectives. The influence of procurement on sustainability should not be underestimated.

During the course ‘State aid and Public Procurement in the European Union’ students will study the above mentioned aspects and will focus on the links between procurement and competition law, and more specifically State aid law. The course will first present the two fields separately from different angles and will then reflect on the important underlying relationship.

Hence, the Master Course on State Aid and Public Procurement offers EU and non-EU students a thorough understanding of EU public procurement law and State aid rules. The course is composed of three layers:

1. The course will situate State aid not only as part of EU competition law but will also deal with the economic rationale of State aid. Regional aid, the limits of State aid and procedural aspects of State aid will be discussed. Students will be provided with an understanding of EU legislation and case law on State aid and special attention will be provided to the balancing test.

2. Public procurement will be identified as an element of the construction of the internal market. The different steps and aspects of procurement procedures will be discussed in light of the 2014 legislative package. The notion of contracting authorities will be explained and emphasis will be put on the relationship of sustainability, innovation and public procurement. Enforcement issues will be covered as well.

3. Competition law, including State aid law, and public procurement law should be looked at as related fields of law. As public authorities generally pay money to economic operators that are selected by a procurement procedure, the risk exists that compensation paid will be qualified as State aid. While the EU legislative framework on public procurement aims to avoid distortions of competition, one should be wary that public procurement procedures are not used to circumvent State aid rules. The course hence focuses on the link between State aid law and public procurement. The course also zooms in on the link between public procurement and another branch of competition law, namely article 101 TFEU which forbids collusion by members of a cartel. It will be discussed whether transparency requirements in public procurement procedures may facilitate collusion and impair free competition.