In a public procurement review procedure under the Act against Restraints of Competition (GWB), the Federal Court of Justice (BGH) declared the review application filed by a competitor of DB Regio NRW GmbH (DB Regio) to be well-founded.
In 2004, the Rhein-Ruhr Transport Association (VRR) and DB Regio concluded a transport contract. This contract obligated DB Regio to provide rail public transport services (SPNV) initially covering 44 million train kilometers. In the 2003/2004 timetable year, approximately 26 million train kilometers accounted for Regional-Express and Regionalbahn services, and approximately 18 million train kilometers for S-Bahn services. Unlike the S-Bahn services, the RE and RB services were to be partially phased out during the contract term and re-tendered competitively. Accordingly, by early 2009, approximately 7 million train kilometers had been separated from the contract. DB Regio had committed in the transport contract to renew its fleet, particularly to procure 84 new S-Bahn trains, the last of which were to be deployed by the end of 2010.
Under the transport contract, DB Regio receives the ticket revenues. Additionally, DB Regio receives a subsidy per train kilometer driven via the VRR. The VRR obtains the necessary funds from the State of North Rhine-Westphalia based on the North Rhine-Westphalian Public Transport Act (ÖPNVG NRW). In this context, the State of North Rhine-Westphalia primarily receives federal grants intended for financing public transport under the Regionalisation Act. In the event of a reduction in these funds, the transport contract includes a revision clause allowing the VRR to demand an adjustment of the SPNV offering in response to corresponding funding cuts.
After the funds for grants to the states had been cut based on the Regionalisation Act 2006, a dispute arose between the VRR and DB Regio regarding their mutual obligations, which led to the termination of the contract by the VRR, administrative court disputes, and also settlement negotiations between the contracting parties. On november 24, 2009, the VRR and DB Regio concluded an amendment agreement to the transport contract to settle their disputes. Among the provisions of this amendment agreement is that DB Regio will procure additional new S-Bahn vehicles and operate S-Bahn lines S 1 to S 11 beyond the end of the original transport contract until December 2023.
Abellio Rail NRW GmbH (Abellio), a subsidiary of the Dutch national railways interested in taking over the operation primarily of S-Bahn line 5 from December 2018, argues that the transfer of S-Bahn operations to DB Regio beyond December 2018 is invalid because the service contract should have been tendered. Therefore, it initiated a review procedure with the Public Procurement Chamber at the District Government of Münster. The Public Procurement Chamber Münster declared the amendment agreement invalid.
The Tenth Civil Senate (Procurement Senate) of the Federal Court of Justice confirmed the decision of the Public Procurement Chamber with its ruling announced today.
At the forefront of the dispute was the question of whether the invalidity of the amendment agreement could be reviewed in a public procurement review procedure under the Act against Restraints of Competition (GWB), or whether § 15 para. 2 of the General Railway Act (AEG), as a more specific law, precludes the initiation of such a review procedure in the present case.
The Federal Court of Justice ruled that § 15 para. 2 of the General Railway Act (AEG) does not take precedence over the public procurement provisions of the GWB under the principle of lex specialis, but rather is superseded by the GWB as the more recent law. In doing so, it followed its previous jurisprudence, according to which the scope of application of the public procurement provisions in the law is fundamentally defined comprehensively by contract types and subjects, and the catalogue of exceptions in § 100 para. 2 GWB – under which S-Bahn operations do not fall – is to be considered exhaustive. A legislative intent to nevertheless withdraw the awarding of such services from the scope of the GWB cannot be inferred from the legislative history of the statutory regulation.
The Federal Court of Justice further ruled that the amendment agreement does not concern a service concession, which would also be exempt from the public procurement review procedure, but rather a service contract. In doing so, it aligned with the jurisprudence of the Court of Justice of the European Union, according to which a characteristic of service concessions is that the concessionaire is exposed to market risks in exploiting the service transferred to them and assumes the operating risk entirely or at least to a significant extent. According to these criteria, a service concession is essentially not present because a profitable S-Bahn operation is largely secured by public subsidies, which, according to DB Regio's figures, cover approximately 64% of the total costs and thus significantly exceed ticket revenues.
The Federal Court of Justice thus found the admissible review application to be substantively justified because Abellio had timely challenged the conclusion of the contract before the Public Procurement Chamber, and the conditions of § 4 para. 3 no. 2 of the Public Procurement Ordinance (VgV) were not met. According to this provision, local public transport services may exceptionally be awarded without competitive tender if a significant part of the services ordered under the contract expires during the contract term and is subsequently tendered competitively. The contract term shall not exceed twelve years. However, since the possibilities of this provision had already been exhausted with the conclusion of the original transport contract between the VRR and DB Regio, they could generally not be utilized again. The Federal Court of Justice left open the extent to which the fact that the VRR and DB Regio intended to settle their disputes by way of compromise would nevertheless have allowed for a certain modification of the original contract duration in an amendment agreement. This would only have been permissible if, at the same time, future competition had also been promoted by expanding the transport services that would fall out of the contract during its term.
Decision of the Federal Court of Justice of February 8, 2011 – X ZB 4/10
Previous Instance:
Higher Regional Court Düsseldorf – Decision of July 21, 2010 – VII-Verg 19/10
Source: Press release of the Federal Court of Justice
Attorney Michael Ullrich, LL.M. (Information Law)
Specialist Lawyer for Information Technology Law (IT Law)
Email: info@goldberg.de
