Contrat de mobilier urbain : marché public ou concession de service ?

CE May 25, 2018, Sté Philippe Védiaud Advertising, req.n°416825

Order No. 2015-65 of January 29, 2016 now allows certain street furniture contracts to be attached to the category of service concessions and to abandon the systematic classification of public procurement which essentially stemmed from a desire to subject to the rules of advertising and competition these contracts which could not, since they did not relate to a public service, be subject to the rules applicable to public service delegations.

In its decision of 25 May 2018, Sté Philippe Védiaud Publicité, req.n°416825, the Council of State provides useful clarifications on the criterion of the real risk of exploitation which makes it possible, under the new regulations, to determine whether a street furniture contract should be qualified as a public contract or a service concession. The economic balance of the contract thus determines the qualification of the street furniture contract.

To qualify as a concession, the right to operate granted by the street furniture contract must involve an economic exploitation risk.

The main characteristic of a service concession which consists of the right of exploitation implies the transfer to the concessionaire of an exploitation risk of an economic nature. This operating risk only exists if the economic operator may find it impossible to amortize the investments made and the costs incurred under the operating conditions of the contract.

Recitals no. 18 and no. 19 of Directive 2014/23/EU of February 26, 2014 on the award of concession contracts in fact recall that the risk can sometimes be limited but that it must remain real and specify that the application of specific rules governing the award of concessions would not be justified if the public purchaser avoided the economic operator any risk of loss, by guaranteeing him a minimum income greater than or equal to the investments made and the costs he must bear in the context of the execution of the contract. In a judgment of March 10, 2011, the Court of Justice of the European Union had already indicated this by considering that “  the risk of economic exposure of the service must be understood as the risk of exposure to market vagaries ” (CJEU 10 March 2011, Aff. C-274-09)

Article 5 of Ordinance No. 2016-65 of 29 January 2016 transposing Directive 2014/23/EU emphasizes this notion of operating risk since it makes it a determining element for the qualification of a service concession: ”  Concession contracts are contracts concluded in writing, by which one or more granting authorities subject to this Ordinance entrust the execution of works or the management of a service to one or more economic operators, to whom a risk related to the operation of the work or service is transferred, in return either for the right to operate the work or service which is the subject of the contract, or for this right accompanied by a price”. The transfer of risk becomes a characteristic element of the concession contract.

The qualification of concession therefore implies the existence of a real risk linked to the operation of the service and that this risk is indeed transferred to the economic operator and not borne by the public buyer. On the other hand, it does not include any details relating to the importance of this risk.

Determining the operating risk allowing a street furniture contract to be classified as a public market or service concession.

Article 5 of Ordinance No. 2016-65 of January 29, 2016 simply states that the share of risk transferred to the dealer implies “  real exposure to market risks  ,” so that any potential loss borne by the dealer must not be purely nominal or negligible.

The concessionaire assumes the operating risk when, under normal operating conditions, it is not assured of amortizing the investments or costs it has incurred, linked to the operation of the work or service.

Under the old regulations, administrative jurisprudence has already had the opportunity to specify that the risk can be considered ”  real” if the remuneration is substantially linked to the results of the operation (CE November 7, 2008, Department de la Vendée, req.n°291794) and to consider conversely that in the absence of “real” operating risk, in other words in the absence of remuneration substantially assured by the operating results, the contract must be considered as a public contract (CE June 5, 2009, Avenance Enseignement et Santé, req.n°298641).

As the Public Rapporteur Bertrand DACOSTA points out in this case, ”  When an operating deficit may arise, but can only take on very modest proportions in the worst case scenario, given the revision mechanism devised by the parties, the remuneration must not be regarded as substantially assured by the operating results (or as substantially linked to these results, since the intervention of the law of 11 December 2001). The link between the operating results and the remuneration cannot be regarded as substantial if it only applies below a ceiling that is quickly reached. When the company runs the risk of bearing 30% of an uncapped deficit, the link is substantial; it is not in the present case, where the deficit is the responsibility of the operator only within narrow limits. There can be no question, by praetorian means, of setting a threshold, especially since many mechanisms can be used to neutralise or mitigate a risk. But we believe that an indication must be clearly given to local authorities and their partners: contractual arrangements in which, beyond the displayed link between remuneration and operating results, the operator assumes a real risk of a very limited scale cannot escape the classification of public contracts  .

A concession is now a contract in which the holder takes a real financial risk. Concretely, the public buyer must not exclude any risk of loss for the concessionaire through guarantee mechanisms, under penalty of reclassification of the contract. The risk must remain real, which implies that the concessionaire must assume a significant part of it even if partial compensation mechanisms may possibly be provided for in the contract.

The qualification of service concession implies a requirement of “reality of risk”.

A street furniture contract which does not include any operating risk compensation mechanism is a service concession

A contract whose purpose is the installation, operation, maintenance and upkeep of street furniture which provides that the contract holder provides these services free of charge in return for the collection of advertising revenues from the sale of spaces to advertising advertisers is a service concession as long as it does not include any stipulation providing for the payment of a price to its holder covering investments or eliminating any real risk of exploitation.

For the Council of State, the remuneration of the contract solely through advertising revenues derived from the exploitation of street furniture allows us to consider that the economic operator bears a significant risk since it is exposed to hazards of all kinds which may affect the volume and value of demand for street furniture spaces by advertisers in the territory of the municipality, without any stipulation in the contract providing for total or partial coverage by the municipality of losses which could result.

It follows that this contract, to which the successful bidder is transferred an operating risk linked to the operation of the furniture to be installed, constitutes a concession contract and not a public contract….

This article was published on the Achatpublic.com website on May 31, 2018: find all the latest news on public procurement at: https://www.achatpublic.com/

Board of state

No. 416825

Reading for Friday May 25, 2018

FRENCH REPUBLIC

IN THE NAME OF THE FRENCH PEOPLE

1. Considering that it appears from the documents in the files submitted to the judge of the pre-contractual summary of the administrative court of Melun that the commune of Saint-Thibault-des-Vignes launched a procedure for the award of a street furniture contract, at the end of which the contract was awarded to the company Philippe Védiaud Publicité; that following the rejection of its offer, the company Girod Médias submitted a request to the pre-contractual summary judge for the cancellation of this procedure; that, by an order of December 11, 2017, against which the company Philippe Védiaud Publicité and the municipality of Saint-Thibault-des-Vignes appealed to the Court of Cassation, the summary judge canceled the procedure; that it is appropriate to join the two appeals to rule by a single decision;
2. Whereas under the terms of Article 5 of the Ordinance of 29 January 2016 relating to concession contracts: “Concession contracts are contracts concluded in writing, by which one or more granting authorities subject to this Ordinance entrust the execution of works or the management of a service to one or more economic operators, to whom a risk related to the operation of the work or service is transferred, in return either for the right to operate the work or service which is the subject of the contract, or for this right accompanied by a price. / The share of risk transferred to the concessionaire implies real exposure to the vagaries of the market, so that any potential loss borne by the concessionaire must not be purely nominal or negligible. The concessionaire assumes the operating risk when, under normal operating conditions, it is not assured of amortizing the investments or costs it has borne, related to the operation of the work or service”;
3. Whereas the pre-contractual interim relief judge of the Melun administrative court noted, on the one hand, that the disputed contract was for the installation, operation, maintenance and servicing of street furniture intended in particular for municipal information, and on the other hand, that the contract holder was to provide these services free of charge and was remunerated by the revenue from the sale of space to advertisers; that, in order to rule that this contract was a public contract and not a service concession, he merely noted that it exclusively entrusted the operation of the furniture for advertising purposes to its successful bidder, in order to deduce that no risk was transferred to the latter; that by ruling in this way, without determining whether the company awarded the contract assumed a real operating risk, he committed an error of law; that, therefore, and without there being any need to examine the other grounds of its appeal, the municipality of Saint-Thibault-des-Vignes is justified in requesting the annulment of the contested order; that there is consequently no longer any need to rule on the appeal of the company Philippe Védiaud Publicité;
4. Considering that, in the circumstances of the present case, it is necessary, in application of article L. 821-2 of the code of administrative justice, to settle the case under the summary procedure initiated by the Girod company Media;

5. Considering that it follows from the investigation that the disputed contract, the object and economic balance of which were recalled in point 3 above, does not include any stipulation providing for the payment of a price to its holder; that it is exposed to hazards of all kinds which may affect the volume and value of the demand for street furniture spaces by advertisers in the territory of the municipality, without any stipulation in the contract providing for the taking covered, totally or partially, by the municipality for any losses that could result; it follows that this contract, of which the beneficiary is transferred a risk linked to the operation of the works to be installed, constitutes a concession contract and not a public contract;

6. Considering that it follows from what has just been said that the means drawn from the fact that the commune of Saint-Thibault-des-Vignes would have failed in its obligations of advertising and competitive bidding by disregarding the provisions of II of the Article 99 and II of Article 62 of the decree of March 25, 2016 relating to public procurement, cannot be usefully raised by the company Girod Médias;
7. Considering, moreover, that the arguments based on the failure to comply with the provisions of the General Code of Local Authorities relating to the award of public service delegations can only be dismissed, since the contract in question does not entrust its successful bidder with the management of any public service;
8. Considering, finally, that the argument based on the fact that the disputed contract, the duration of which is ten years, would have been concluded in disregard of the provisions of article 6 of the decree of February 1, 2016 relating to concession contracts, is not not accompanied by details making it possible to assess the impact that such a duration was, where applicable, likely to have on the possibility, for the company Girod Médias, of usefully presenting its offer;
9. Whereas it follows from the above that Girod Médias is not entitled to request the annulment of the procedure for awarding the disputed contract; that its conclusions presented under Article L. 761-1 of the Code of Administrative Justice, both before the interim relief judge of the Melun Administrative Court and before the Council of State, can therefore only be dismissed; that it is appropriate, on the other hand, in the circumstances of the case, to order Girod Médias to pay, under the same provisions, the sum of EUR 4,500 to the municipality of Saint-Thibault-des-Vignes, for the entire procedure; that there is also no reason, in the circumstances of the case, to order Girod Médias to pay the sum requested by Philippe Védiaud Publicité under Article L. 761-1 of the Code of Administrative Justice;

DECIDES:
Article 1: The order of 11 December 2017 of the interim relief judge of the Melun administrative court is annulled.
Article 2: The application submitted by Girod Médias to the interim relief judge of the Melun administrative court and its submissions submitted to the Council of State under Article L. 761-1 of the Code of Administrative Justice are dismissed.
Article 3: Girod Médias will pay the municipality of Saint-Thibault-des-Vignes the sum of 4,500 euros under Article L. 761-1 of the Code of Administrative Justice.
Article 4: There is no need to rule on the appeal of Philippe Védiaud Publicité.
Article 5: The submissions submitted by Philippe Védiaud Publicité under Article L. 761-1 of the Code of Administrative Justice are dismissed.
Article 6: This decision will be notified to the company Girod Médias, to the municipality of Saint-Thibault-des-Vignes and to the company Philippe Védiaud Publicité.