Who is subject to public procurement legislation?

Public procurement law governs the acquisition of various services (construction work, supplies and services) and subjects it to strict rules that must be adhered to. This logically raises the question of WHO is subject to this legislation or, in other words, which entities have the status of “contracting authority”.

While the subjection of certain entities to public procurement law may seem self-evident, other less obvious scenarios also exist. The purpose of this contribution is to present the different categories of entities subject to public procurement law.

All organisations that fall into these different categories are obliged to compete with several external service providers who must meet precise specifications. The final choice as well as the entire procedure must be made in compliance with the strict rules set by public procurement law.

This will apply, for example, to the purchase of vehicles or computer equipment, the acquisition of architectural or engineering services, the use of external service providers for the operation of a childcare centre or a school canteen.

Public authorities: Confederation, cantons and municipalities

This category is the easiest to understand and brings together all federal, cantonal and municipal public administrations, including their departments, offices and services. Associations of such entities are also considered contracting authorities. As a prime example, there are numerous municipal associations in the education sector or in that of water treatment.

“Sectoral” companies

These are public or private companies providing a public service and benefiting from exclusive or special rights in one of the following sectors: water supply, energy supply, transport (in particular railways) and telecommunications. Prime examples of this are the CFF, Services Industriels de Genève (SIG), Genève Aéroport , Transports publics genevois (TPG) or even La Poste in the areas where it enjoys a monopoly.

Public law bodies

This category covers a wide variety of entities to which public tasks have often been delegated. We also mention the terms of decentralised administration. This category is the one that is most open to interpretation. Three cumulative conditions characterise a public law body:

• • having been created to specifically satisfy needs of general interest of a nature other than commercial or industrial;
• • being endowed with legal personality, regardless of whether it is public or private law; and
• • being under the influence of public authorities (mainly-public financing, management subject to the control of public authorities, administration, management or supervisory body composed of members, more than half of whom are appointed by public authorities).

Concerning the first condition, the activity carried out must not be of an industrial or commercial nature. If this is the case, the organisation is then subject to competitive pressure and its decisions will therefore respond to economic logic. Submission to public procurement law is therefore unnecessary. This is the case for cantonal banks which also meet the last two conditions.

Many entities meet this definition. For example, we can cite the Geneva University Hospitals (HUG), the CHUV, and the cantonal insurance establishments.

Subsidised projects

Intercantonal law has extended the scope of public procurement law to “projects and services which are subsidised at more than 50 percent of the total cost by public funds”. Here, the origin of the financing is decisive and private entities, such as associations or foundations, can also find themselves subject to public procurement legislation through this means.

Your public procurement contacts

If you have any questions on the subject, do not hesitate to contact our public procurement specialists who wrote this article:

Jérôme Frachebourg
Lawyer & Public Procurement Specialist
jfrachebourg@loyco.ch

Christel Biderbost
Public Procurement Specialist
cbiderbost@loyco.ch

Grégoire Mottier
Head of Risk Management
gmottier@loyco.ch