Public Procurement and State aid

Public procurement rules within the EU single market are included in a series of EU Directives, subsequently implemented by each EU Member State into its national legal order. The effect of this EU and national legislation is that contracts for works, supplies and services over a certain value provided by the public sector as well as utilities in water, telecoms, energy and transport offering a fundamental service to the public, must be advertised on an EU-wide basis. During the awarding procedure, public procurement law must be fully respected, in particular as far as discriminatory technical standards and objective and transparent criteria are concerned. The aim of public procurement legislation is to ensure that competition between bidders is fair and transparent and results in comparing tenders following identical terms. Thus, all potential bidders stand equal chances of success and public money is spent on a non-discriminatory fashion that could lead to serious market distortions and favouritism.

Sarantitis Law Firm has a specialist procurement department that has over the last years dealt with several multi-million Euro projects, including major public works of European dimension . We represent a diverse clientele including foreign and local companies participating in public bids related to both civil and military procurement.

Our services range from advising bidders at the stage of drafting their offers to challenging the outcome of tendering procedures. We have represented clients in many cases before the Greek Conseil d'Etat and the European Commission.

The firm has also been asked several times to act on behalf of the Greek Government and its various awarding authorities in assessing the compliance of tenders with Greek and EC public procurement law.

Involvement of State aid

Public procurement is often inter-related with State aid measures, which are prohibited under EU law. Some of our lawyers have advised several private parties and Governments on the application of State aid rules within the EU as well as on the compliance of subsidies with the WTO regime. Our advice ranges from identifying State aid measures incompatible with the EU common market, the application of the so-called "market economy investor principle" which could lift State aid concerns, assessing whether a measure or business project where the State is involved falls in the scope of State aid block exemption regulations or lawful regional development schemes, to assisting Governments and national authorities concerning their notification obligations to the European Commission.

Obviously, State aid may exist in all areas of business activity, whenever State resources are involved or passed-on to private parties. We, therefore, constantly keep an open eye for the existence of illegal State aid in all business sectors where our lawyers provide advice, such as in property, construction, regeneration and public procurement.

Not many businesses understand that in case they receive illegal State aid the EU Member State that provides it may be sanctioned by the European Commission (and the European Courts). This may result in the recovery of the aid illegally granted and the reversal of all economics related to a deal. This has often led recipients to financial distress. Especially in the field of private-public partnerships for major projects, the involvement of the State must be carefully scrutinised in order to avert the danger of illegal State aid.