[PUBLIC LAW] The end of framework agreements without maximum

[PUBLIC LAW] The end of framework agreements without maximum
22/09/2021 , 07h30

Decree n° 2021-1111 of August 23rd, 2021, amending the provisions of the French Code of Public Procurement (« Code de la Commande publique ») relating to framework agreements and public defence or security contracts, puts an end to the possibilityof concluding framework agreements without a maximum (Article R. 2162-4 of the Code of Public Procurement).

This decree merely draws the consequences of the judgment of the European Justice Court (CJEU) of June 17th, 2021 (CJEU, June17th, 2021, Simonsen & Weel, case C-23/20).

A wake-up call from the CJEU at the end of 2018

The fact remains that this development was inevitable, the ground having been prepared by a first ruling of the CJEU of December 19th, 2018, Autorita della Concorrenza e del Mercato (Case C-216/17): the EU judges had then required purchasers to announce from the outset the overall volume of services to which their framework agreements relate, even those concludedwithout a maximum.

This judgment thus confirmed that the absence of a maximum does not exonerate purchasers from precisely defining theirneeds, in particular from a quantitative perspective (as required by Article L. 2111-1 of the Code of Public Procurement).

We already questioned, in the light of this first CJEU ruling, the compatibility with EU law of Article R. 2162-4 of the French Public Procurement Code, which still authorised the conclusion of framework agreements without a maximum and thus validated the practice of “quantities communicated by way of indication only and without contractual value” (a French practice encountered in particular in the context of groupings of orders or central buying offices).

A solution which still remains incomplete

However, this solution was not entirely satisfactory, in particular in terms of the rules for the execution of frameworkagreements.

Indeed, it could be argued that in the absence of a contractual maximum, the estimated quantities of a framework agreement concluded without a maximum could be exceeded without limit.

However, this reading seemed difficult to reconcile with the requirement set out in Article R. 2162-1 of the Code of Public Procurement, according to which “purchasers may not use framework agreements in an abusive manner or for the purpose of preventing, restricting or distorting competition”, and with the quantitative limits set out in Articles R. 2194-1 and following of the Code of Public Procurement governing amendments during performance.

The CJEU ruling of June 17th, 2021 and Decree of August 23rd, 2021

Doubts were therefore dispelled by the CJEU in its judgment of June 17th, 2021, closely followed by Decree No. 2021-1111 of August 23rd, 2021.

This decree amends Article R. 2162-4 of the Code of Public Procurement, to remove any possibility of concluding a frameworkagreement without a maximum (it is then only possible to conclude a framework agreement “only with a maximum” or “with a minimum and with a maximum”, expressed in value or quantity).

The question of the entry into force of the new rule

This new prohibition will only formally apply to framework agreements for which a consultation is launched as from January 1st, 2022.

Nevertheless, purchasers are strongly advised to refrain from entering into any framework agreement without a maximum, which would be contrary to EU law.  Recent case law starts to agree with such policy (e.g. TA Bordeaux, August 23rd, 2021, COVED, n°2103959 and TA Lille, August 27th, 2021, Centaure Avocats n°2106335).

This maximum is contractually binding

It should be noted that while some authors have concluded from the CJEU decision that this mandatory maximum could only beindicative, we do not share this position. Under the terms of Article R. 2162-4, the framework agreement must be “concluded” with a maximum, which implies that it necessarily has a contractual value.