Overview

In 2007, the European Court of Justice (ECJ) handed down its landmark judgment in Auroux which confirmed that the EU procurement rules apply to land development schemes. This has been followed by a further ruling on 25 March 2010 in the Müller case, which clarifies the circumstances in which public authorities may be entering into public works contracts within the meaning of the EU procurement directives. The Court has confirmed in particular that the exercise of planning powers does not in itself give rise to a works contract which must be put out to competitive tender.

A German public body, the Bundesanstalt, disposed of a large site previously used for military barracks to a property development company, GSSI. The local authority – the town council of Wildeshausen – examined GSSI’s development proposals under its urban planning powers and consented to the sale. The parties drew up a building plan for the area, but GSSI was not subject to any contractual obligations to carry out the development. The central issue before the Court was whether the arrangements amounted to a public works contract which should have been put out to tender under the EU procurement rules.

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