Discretion in EU Public Procurement Law

Sanja Bogojevic, Xavier Groussot, Jörgen Hettne, Sanja Bogojevic, Xavier Groussot, Jörgen Hettne

• Publisher: Hart Publishing
• Year: 2019
• Print ISBN: 9781509946136
• eBook ISBN: 9781509919499
• Edition: 1
• Topic: Law
• Subtopic: International Law
• Index: Law

The EU public procurement regime has recently undergone an overhaul and now allows Member States and their contracting authorities to pursue strategic goals via public procurement, including environmental and social objectives. The extent to which such interests may be accommodated in the procurement process is ultimately determined by the broader legal context in which the EU public procurement regime exists, which raises pressing questions regarding the scope and limits of Member States' discretion. This volume scrutinises these new legal acts – particularly Directive 2014/24/EU – focusing on discretion and engaging with questions central to the public procurement regime against the EU legal backdrop, including internal market law and environment law, as well as law beyond the EU.

PART I

Introduction

1

The ‘Age of Discretion’: Understanding the Scope and Limits of Discretion in EU Public Procurement Law

SANJA BOGOJEVIĆ, XAVIER GROUSSOT AND JÖRGEN HETTNE

I.Introduction

Discretion is, in the words of Dworkin, ‘the hole in a doughnut’,¹ or, as Delmas-Marty has expressed it somewhat more poetically, ‘le flou du droit’ (‘fuzzy law’).² Both expressions capture the commonly perceived tension between legal rules (‘certainty’) and discretion (‘uncertainty’),³ but neither provides clearly marked guidance on how to move away from such binary frames.⁴ This is problematic not only because it can easily polarise legal discussion, but also because it presents law as an irrelevant component in debates on discretion.⁵ This volume takes a rather uncommon approach by positioning discretion at centre-stage, and making it the starting-point for the various contributions on European Union (EU) public procurement law. This approach was chosen for two reasons.

First, understanding the scope and limits of EU public procurement law requires an understanding of the scope and limits of discretion in EU law. Such a requirement may seem overly demanding, especially in the EU context, where discretion operates at both the EU and the Member State levels, each within specific legal parameters.⁶ Indeed examining both is too ambitious for a single manuscript. This is why we have limited the present volume to the latter kind of discretion, and only as it relates to Directive 2014/24/EU (the Public Procurement Directive), the key legal act underpinning the EU public procurement regime.⁷ Within this framework, Member States may exercise discretion in two types of situations: when the state and its contracting authorities implement the Public Procurement Directive (legislative discretion); and when they rely on EU law, including the above-mentioned Public Procurement Directive, to pursue social or environmental interests, and thereby derogate from the economic freedoms protected by the Treaty (administrative discretion).⁸ Each of the two scenarios is examined in this book.

Second, the ways in which the Member States may exercise discretion are ultimately delineated by the EU courts’ adjudication on the topic. This jurisprudence, however, is significant not only in confirming the contours of what the Member States and their contracting authorities can and cannot do under the set legal regime. The case law is even more important for the way it exposes the legal reasoning behind each judgment. As this and the last chapter⁹ will show, assessments of proportionality play a central role. This suggests that discretion is less a matter of what a Member State may or may not do and more dependent on the legal tests the court develops and applies in relation to discretion. This shows the significance of law in debating discretion, and the need for mapping the many varieties of discretion in EU public procurement law.

Debates on discretion, even if limited to EU public procurement and Directive 2014/24/EU, are difficult to exhaust in a single volume. Nor has that been our aim. Rather, we hope to initiate a discussion on the EU public procurement regime beyond the narrow disciplinary scope of EU public procurement law alone. In this chapter we take the initial steps in this direction by sketching an analytical frame for conceptualising discretion in the broader EU law context (section II), focusing, more generally, on legal reasoning on discretion by the EU courts, which centres on assessments of proportionality (section III). The aim here is to set the scene for the remaining chapters, which discuss discretion in EU public procurement law in light of internal market laws (in Part I of this book), and in relation to the possibilities and restraints as found in general EU law in pursuing strategic goals under the EU public procurement law regime (in Part II). In the last part of this volume (Part III), we look beyond the EU and explore the role of discretion in public procurement regimes elsewhere for comparative benefits.

II.Conceptualising Discretion in EU Law

It has long been argued that we live in the ‘age of rights’¹⁰ and the ‘age of subsidiarity’.¹¹ We anchor these two claims in the idea that we live in the ‘age of discretion’.¹² More precisely, our view is that discretion in EU law relates to the regulatory power allocation between the EU and its Member States, which, when reviewed judicially, rests heavily upon assessments of proportionality. What is more, discretion, as one of the most significant dynamics of administrative law,¹³ interacts with several key concepts of law, including the rule of law, separation of powers and methods of judicial interpretation. These links are unpacked in turn – albeit in brief – in the following sections.

A.Discretion and the Rule of Law in EU Law

The rule of law allows for a variety of definitions,¹⁴ but one basic view is that it seeks to limit arbitrariness through the mechanism of checks and balances.¹⁵ In the EU, the expansion of the rule of law, in the late 1980s and early 1990s, corresponds to an expansion of rights recognised by the Court of Justice of the European Union (CJEU) in litigation relating to the economic freedoms and general principles, which are in fact often thought of as the ‘rule of law principles’.¹⁶ This case law maps the scope of discretion through the application of a proportionality test. In a similar vein, the development of EU administrative law, and its authority, has been fostered by the application of procedural rights enshrined in two legal principles: effectiveness and equivalence.¹⁷ Indeed, the strong bond between discretion and proportionality in the adjudication of substantive and procedural rights is underlined in the scholarship.¹⁸ Kelemen, for instance, argues that

the ECJ [European Court of Justice] has also encouraged the spread across Europe of a proportionality test for discretionary administrative decisions – demanding that national courts assess whether an administrative measure imposed a burden on the individual suitable, necessary, and proportional to the objective sought … By spreading the principle of proportionality across the EU, the ECJ has invited courts to engage in stricter judicial scrutiny of discretionary administrative decisions.¹⁹

Thus the strong connection between proportionality and discretion seems to hold also in practice. One may even contend that ‘the theory of discretion must be co-extensive with the doctrine of proportionality if the separation of powers is not to collapse’.²⁰ The questions that then emerge are what the role of each branch of government is, and how much discretion each branch may enjoy without compromising the separation of powers.

B.Discretion and the Separation of Powers

In light of the doctrine of separation of powers, discretion can be defined as a space in the creation (‘legislative discretion’), application (‘executive discretion’) and adjudication (‘judicial discretion’) of legal norms.²¹ One of Barak’s fascinating conclusions following his scrutiny of each is that they are all ultimately designed to ensure individual liberty.²² Applying this thinking to the EU legal order is tricky, in part because the separation of powers in the EU institutional system is somewhat blurred, and in part due to the EU’s federalist nature, where the idea of separation of powers operates at both national and regional levels.²³ Yet the doctrine of (federal) separation of powers in EU law has a decided impact on how the concept of discretion is understood in the EU legal order. In such an intricate legal system, dare we speak of federal discretion?

One concern, in this regard, is what discretion national legislatures may enjoy in adopting laws that derogate from EU law (ie ‘legislative/federal’). Another question relates to the discretion of an administrative or contracting authority in a Member State, when implementing EU secondary law (‘executive/federal’). A further inquiry concerns the discretion of a national court in interpreting national law in light of EU law (‘judicial/federal’).

The answer to these questions may lie in the principle of ‘constitutional tolerance’, which Weiler sees as the normative hallmark of federalism.²⁴ In fact, since the origins of the European Economic Community, this principle has been enshrined in the clause about an ‘ever closer union of peoples’, reflecting both the unity (‘closer union’) and diversity (‘the peoples’) of the ongoing European project.²⁵ The Treaty of Lisbon reinforced its importance by including the so-called ‘national identity clause’ in Article 4(2) of the Treaty on European Union (TEU).²⁶ Under this provision, Member States may benefit from a certain margin of discretion when relying on their national constitutional identity. Against this background, federal discretion is indeed intimately connected with constitutional tolerance.

Yet discretion is not only related to divergence and decentralisation;²⁷ especially not in the EU context, where it is deeply engrained in the concept of unity. Ultimately, the acceptance or tolerance of diversity is a necessary condition for sustaining the narrative of unity in the EU legal order. All in all, this managed discretion conveys the ideas of ‘deference as respect’²⁸ and the cultivation of humility, both of which are in fact necessary for facilitating pluralism and the existence of a uniform EU legal order.²⁹ What this all means is that EU federal discretion is a complex notion that boasts both an external dimension (‘respect for the other’) and an internal dimension (‘the concept of unity’).³⁰ Striking a balance between the two is a task that inevitably involves judicial interpretation, as outlined next.

C.Discretion and Interpretation

Discretion is in many ways a natural part of law due to law’s inherent indeterminacy.³¹ Indeed, it is argued that there is ‘an intimate link’ between issues concerning interpretation and those of discretion.³² In Dworkin’s view, a distinction may be drawn between a stronger and a weaker form of discretion, depending on the level of control enjoyed, often by judges, in reviewing and applying law.³³

The EU legislature has traditionally been afforded wide discretion in adopting secondary legislation, to which the bourgeoning debate on subsidiarity and ‘competence creep’ attests.³⁴ When Member States, on the other hand, attempt to derogate from EU law, especially in internal market case law, this has generally been interpreted more strictly by the CJEU.³⁵ Indeed, the relevant jurisprudence tends to repeat one of the EU Court’s favourite mantras: that derogation by a Member State from one of the economic freedoms must be ‘strictly interpreted’.³⁶ Ultimately, CJEU interpretation of Treaty provisions links directly to the authority of EU law, especially as the Court is often seen justifying its judgments on the grounds of ensuring the effectiveness and uniformity of the EU legal order. Endorsing this view on behalf of the Member States would, however, imply that their own discretion is limited,³⁷ especially in finding justifications for a potential breach of EU law.

Yet discretion does not always restrain action but can also be used as an interpretative space. Thus, Member States may be afforded wide discretion in pursuing specific public policies. In significant cases, including Van Duyn,³⁸ Läärä³⁹ and Omega,⁴⁰ the CJEU asserts that the concept of public policy may vary from one country to another and from one period to another,⁴¹ meaning that it provides the possibility for Member States to rely on so-called ‘cultural discretion’.⁴² Furthermore, it may even be said that delegating to the national courts the task of the proportionality test under the preliminary reference procedure constitutes another example of discretion by the CJEU.⁴³ In Mickelsson & Roos and Sandström, for example, the CJEU confirmed that Article 267 of the Treaty on the Functioning of the European Union (TFEU) ‘is based on a clear separation of functions between the national courts and the Court of Justice’, and that ‘any assessment of the facts in the case is a matter for the national court’.⁴⁴ This can be viewed as ‘evidentiary discretion’, since the CJEU assumes that a national court is better positioned to perform the test of proportionality, thanks to its special access to the facts of the case.⁴⁵

In the end, the close connection between discretion and judicial interpretation reveals the virtue of discretion: its flexibility, which, however, is not isolated from law but dependent on legal reasoning for determining the appropriate standard of scrutiny.⁴⁶ In fact, a theory of discretion is co-extensive with the doctrine of proportionality. The doctr...

Table of contents

• Cover
• Title Page
• Preface
• Contents
• List of Contributors
• Table of Cases
• Table of Legislation
• PART I: INTRODUCTION
• PART II: DISCRETION IN EU INTERNAL MARKET LAWS
• PART III: DISCRETION IN PURSUING STRATEGIC GOALS UNDER THE EU PUBLIC PROCUREMENT REGIME
• PART IV: DISCRETION IN PUBLIC PROCUREMENT REGIMES BEYOND THE EU
• PART V: LOOKING AHEAD
• Index
• Copyright Page