Func­tion­al con­sid­er­a­tion of con­struc­tion ser­vices: Dif­fer­en­ti­a­tion from the over­all con­tract

On Jan­u­ary 26, 2024, the West­phalia Cham­ber of Pub­lic Pro­cure­ment (VK West­falen) ruled in its deci­sion (Ref.: VK 1–40/23) that the addi­tion of con­tract val­ues for con­struc­tion ser­vices requires that these are to be viewed as a sin­gle struc­ture from a func­tion­al per­spec­tive.

Our video dis­cussing the judg­ment:

Facts: Res­cue sta­tions and the thresh­old issue

The defen­dant, an inde­pen­dent munic­i­pal author­i­ty, drew up a res­cue ser­vice require­ments plan in 2019 in order to opti­mize the pro­vi­sion of res­cue ser­vices. Among oth­er things, this plan pro­vid­ed for the con­struc­tion and com­mis­sion­ing of new res­cue sta­tions. Three of these sta­tions (10, 11 and 12) were includ­ed in the pro­cure­ment focus.

One res­cue sta­tion (no. 12) was put out to ten­der indi­vid­u­al­ly at nation­al lev­el, as the esti­mat­ed con­tract val­ue was EUR 2.2 mil­lion. As this val­ue was below the EU thresh­old of over 5 mil­lion euros for con­struc­tion ser­vices, the con­tract­ing author­i­ty refrained from an EU-wide ten­der.

One bid­der, whose offer only came in sec­ond place, object­ed to the ten­der as inad­mis­si­ble. His argu­ment was that the new build­ings for res­cue sta­tions 10, 11 and 12 had to be con­sid­ered as a sin­gle con­tract and their con­tract val­ues added togeth­er. If these had been added togeth­er, the EU thresh­old would have been exceed­ed, which would have made a Europe-wide ten­der­ing pro­ce­dure nec­es­sary. If the thresh­old had been exceed­ed, the bid­der would have been enti­tled to take legal action before the Pub­lic Pro­cure­ment Cham­ber.

Key point of the deci­sion: Func­tion­al coher­ence

The VK West­falen reject­ed the appli­ca­tion for review as inad­mis­si­ble, as the rel­e­vant thresh­old for the cham­ber’s juris­dic­tion was not reached.

The Cham­ber clar­i­fied when con­struc­tion ser­vices are part of an over­all con­tract:

• A sin­gle build­ing: Con­struc­tion ser­vices are part of a sin­gle con­tract if they are to be regard­ed as a sin­gle build­ing from a func­tion­al point of view.
• Inter­nal coher­ence: This is the case if the dif­fer­ent lots of the build­ing ful­fill the same eco­nom­ic and tech­ni­cal func­tion, i.e. if they are inter­nal­ly coher­ent.
• Delim­i­ta­tion: The Cham­ber does not fol­low the bid­der’s argu­men­ta­tion, as the indi­vid­ual res­cue sta­tions are able to func­tion inde­pen­dent­ly of each oth­er.
  • No loss of func­tion: The func­tion of a res­cue sta­tion is not lost because anoth­er, spa­tial­ly dis­tant sta­tion is not built.
  • Inde­pen­dent use: Each res­cue sta­tion can also func­tion on its own, with­out the oth­er sta­tions.
  • Too far-reach­ing argu­men­ta­tion: A mere orga­ni­za­tion­al link, for exam­ple because all guards serve the same pur­pose (res­cue ser­vices), would lead to a bound­less expan­sion of the def­i­n­i­tion of the man­date (e.g. to all schools or hos­pi­tals in a munic­i­pal­i­ty) and should there­fore be reject­ed.

The VK West­falen ruled that the new con­struc­tion of res­cue sta­tion 12 is not part of an over­all con­tract. Although the sta­tions are orga­ni­za­tion­al­ly linked and serve the same pur­pose, the nec­es­sary func­tion­al con­nec­tion is miss­ing.

Tips for pub­lic clients: The right con­tract val­ue esti­mate

The deci­sion under­lines the neces­si­ty of a care­ful and legal­ly com­pli­ant con­tract val­ue esti­mate as a fun­da­men­tal basis for every pro­cure­ment pro­ce­dure.

• Dif­fer­en­ti­at­ed con­sid­er­a­tion of con­struc­tion projects: Always check the func­tion­al and tech­ni­cal inde­pen­dence of sev­er­al sim­i­lar con­struc­tion projects. A joint strate­gic plan (such as the res­cue ser­vice require­ment plan) or a joint source of fund­ing alone is not suf­fi­cient to form an over­all con­tract val­ue. The deci­sive fac­tor is whether one part of the ser­vice can­not ful­fill a mean­ing­ful func­tion with­out the oth­er.
• Doc­u­men­ta­tion of the demar­ca­tion: Doc­u­ment trans­par­ent­ly why you assume sep­a­rate orders for spa­tial­ly sep­a­rate and inde­pen­dent­ly usable build­ings (even if they are sim­i­lar and serve the same over­ar­ch­ing pur­pose). Use the cri­te­ria of inter­nal coher­ence as well as eco­nom­ic and tech­ni­cal func­tion.
• Stan­dard­ized plan­ning vs. over­all con­tract: If the con­struc­tion work is sim­i­lar to sev­er­al objects, it is often mere­ly a case of stan­dard­ized plan­ning and not auto­mat­i­cal­ly an over­all con­tract in the sense of pub­lic pro­cure­ment law.

Tips for bid­ders and fund­ing recip­i­ents: legal pro­tec­tion and com­plaints

• Check­ing the thresh­old val­ue cal­cu­la­tion: In the case of a nation­al invi­ta­tion to ten­der for appar­ent­ly divid­ed ser­vices, check whether the thresh­old val­ues could be cir­cum­vent­ed. A vio­la­tion of the addi­tion rule of Sec­tion 3 (7) VgV requires that the lots are func­tion­al­ly relat­ed as a sin­gle con­struc­tion.
• Dif­fer­en­ti­a­tion from the “uni­form build­ing”: A com­plaint is only suc­cess­ful if you can prove that the indi­vid­ual orders do not func­tion inde­pen­dent­ly of each oth­er and could not ful­fill any mean­ing­ful func­tion with­out the oth­ers. In this case, the Cham­ber made it clear that a mere orga­ni­za­tion­al link (such as the com­mon objec­tive in the res­cue ser­vice) is not suf­fi­cient for the assump­tion of a uni­form struc­ture.