Compulsory tender process for public sector property transactions - International Law Office

On March 25 2010 the European Court of Justice (ECJ) delivered an eagerly awaited decision on the obligation to carry out a tender process for public sector property transactions.(1) Initial reaction in Germany was enthusiastic, the suggestion being that local communities, project developers and investors could relax since the ECJ had ruled that municipal property transactions were fundamentally not subject to EU public procurement law. However, an examination of the finely differentiated grounds given for the ruling shows that such conclusions were too hasty and did no justice to the deliberations of the court.

Dusseldorf Higher Regional Court ruling

The background of the judgment was a request to the ECJ for a legal ruling from the Dusseldorf Higher Regional Court. The Federal Agency for Public Property had carried out a tender process for the development of the Wittekind barracks complex in Wildeshausen. After four candidates submitted proposals, the town decided to implement one of the proposals and the agency sold the land to that developer. The purchase contract included no obligation for the purchaser to realise the project, but the municipal authority indicated that it would be willing to issue a project-based development plan if appropriate. The defeated claimant – one of the other three candidates – appealed to the review bodies, alleging that the purchase was null and void because no proper contract award procedure had been carried out.