The European Union strengthens its control over public procurement rules

Following the Kolin ruling (C-652/22) of the Court of Justice of the European Union (hereinafter, CJEU) of 22 October 2024, which established that Member States cannot implement general measures that benefit economic operators from third countries that are not signatories to the Agreement on Government Procurement, the CJEU also ruled on 13 March 2025 in the Qingdao case (C-266/22), reaffirming this line of case law.

The Quingdao ruling

The Qingdao case began with the exclusion of a bid submitted by the Chinese company, CRRC Qingdao Sifang Co. Ltd from a Romanian public tender for the purchase of electric trains. This was due to the application of a national rule that restricts the participation of economic operators from third countries.

The CJEU, following the doctrine established in Kolin (C-652/22), has reaffirmed that the competence to regulate access by economic operators from third countries to public procurement lies exclusively with the European Union, in accordance with Directives 2014/24 and 2014/25. In the absence of an international agreement guaranteeing reciprocal access, Member States cannot unilaterally exclude such operators on the basis of their place of establishment alone. Furthermore, the CJEU establishes that exclusions based on national rules are subject to national law and do not constitute a breach of the principles of EU law.

Implications of Kolin and Quigdao rulings

Both rulings confirm that the responsibility for deciding on the admission and treatment of tenderers from third countries lies directly with the contracting entities or authorities. These entities or authorities must assess these issues on an individual and case-by-case basis. This interpretation reinforces the idea that each situation must be analysed in accordance with applicable legislation and the principles of equal treatment and legal certainty, as well as the case law established by the CJEU.

In light of the significant implications of the CJEU's judgments in the Kolin and Qingdao cases, on 15 May the European Commission published an explanatory document on the application of this new CJEU case law on public procurement.

Recommendation of the JCCPE

The State Public Procurement Advisory Board (JCCPE) has followed the Commission and recently published a non-binding report providing clarity and interpretative guidance on the application of Article 68 of Law 9/2017 of 8 November on Public Sector Contracts (LCSP). This article regulates the participation of non-EU companies in Spanish public procurement procedures.

The JCCPE emphasises that Member States' right to regulate public procurement in favour of economic operators from third countries that are not signatories to the Agreement on Government Procurement is limited. This is because it is the exclusive competence of the European Union to establish the regulatory framework in this area, as set out in Article 3 of the Treaty on the Functioning of the European Union (TFEU). Therefore, in the absence of an international agreement that guarantees reciprocity and mutual access, Member States cannot unilaterally adopt general measures to exclude or favour operators from third countries.

In general, Article 68 of the LCSP requires non-EU companies to prove reciprocity by providing a report from the Spanish Economic or Commercial Office in their country of origin. This report must confirm that the foreign state permits Spanish companies to participate in its public contracts under conditions that are substantially equivalent. This accreditation will not be necessary only in cases where there is a valid international agreement binding on Spain and guaranteeing reciprocal access, such as with signatory states to the World Trade Organisation Agreement on Government Procurement.

Interpretation of Article 68 LCSP by the JCCPE

In line with the principle of the primacy of European Union law and the case law of the CJEU, the Advisory Board establishes a practical interpretation of Article 68 of the LCSP.

This interpretation distinguishes between two fundamental cases:

• Companies from third countries that are party to an international agreement in force with the European Union. If the contract and the contracting authority are both covered by such an agreement, these companies are entitled to participate on equal terms and are not required to submit the reciprocity report referred to in Article 68.
• Other companies not covered by international agreements. A specific and differentiated procedure has been established for companies that are not covered by international agreements. In these cases, the contracting authority or entity has direct responsibility for admission to tender procedures. This means they can analyse admission on a case-by-case basis. Furthermore, once a company has been admitted, the contracting authority has the power to apply differentiated treatment, as endorsed by the CJEU (C-266/22, para. 63), which includes the possibility of adjusting that operator's tender score in comparison with others. All these particularities must be clearly reflected in the tender specifications. Finally, it is important to note that any appeal relating to these situations must be resolved in accordance with national law and not European Union law. This means that they cannot be based on alleged infringements of Community directives.

In conclusion, the Advisory Board emphasises that the CJEU's case law and the aforementioned European Commission report reinforce the need for a balanced approach based on clear criteria that guarantees uniform treatment in accordance with EU law for economic operators from third countries. Furthermore, the report recommends amending Article 68 to align its content with the CJEU's and Commission's established criteria, thereby providing greater legal certainty for contracting authorities and ensuring consistent application.

Should you wish to know more about public procurement, please do not hesitate to contact one of our experts listed below or your usual contact at Osborne Clarke.