Veale Wasbrough Vizards

UK 200 2014 position: 93

Teckal companies pursuing ‘private’ interests, even those that are charitable, could fall outside of the exemption

The recent advocate-general (AG) opinion in Centro Hospitalar de Setúbal and SUCH v Eurest Portugal — Sociedade Europeia de Restaurantes Lda (Case C-574/12) provides further guidance on how not-for-profit organisations are treated under the Teckal exemption in public procurement.

As readers will be aware, the Teckal exemption allows contracting authorities to directly award a contract to a separate company without a procurement in certain circumstances. There are two main characteristics that must be satisfied by an organisation for the Teckal exemption to apply: (1) control — the contracting authority exercises a level of control over that organisation, which is similar to its control over its internal departments; and (2) function — that organisation is devoted principally to that contracting authority in the carrying out of its activities.

The AG focused on the control test in this recent case, which concerned a contract directly awarded to SUCH for the provision of hospital catering services…

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