Courts give guidance on the scope of the procurement exclusion applicable to “in-house” arrangements

It is a well-established principle of EU procurement law that the open advertising and tendering rules for public contracts do not apply where a public body obtains services from “in-house” sources. This is the so-called Teckal principle. Two recent decisions, one made by the Court of Appeal in England and another made by the European Court of Justice, clarify how the Teckal principle operates, and remove any doubt as to whether the exemption applies to procurements in the UK.

What are the cases?

The cases are:

*Brent London Borough Council v Risk Management Partners Limited and London Authorities Mutual Limited and Harrow London Borough Council [2009] EWCA Civ 490 (“Brent v RMP”), a decision made by the English Court of Appeal in respect of a claim brought by an insurance provider against a local authority, which abandoned a procurement process after having decided to satisfy its insurance requirements through a mutual insurance company that it had established together with a number of other local authorities.

*Case C-480/06 Commission v Federal Republic of Germany (“Commission v Germany”), a decision made by the European Court of Justice (“ECJ”) in respect of a claim brought by the European Commission that Germany had breached the public procurement rules by allowing a group of local authorities to enter into an arrangement for waste disposal directly with another local authority without undergoing a tender process.

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