French High Administrative Jurisdiction Clarifies Conditions for Concession Modifications Without New Award Procedure
Paris, December 3, 2024 – The French High Administrative Jurisdiction (Conseil d’État) has issued its “Lettre de la DAJ” (DAJ Letter) regarding the modification of concessions, clarifying the circumstances under which such modifications can be made without triggering a new concession award procedure.
Background
Under French public procurement law, concessions are long-term contracts that grant the holder exclusive rights to operate a public service or manage a public asset. Any modifications to the concession, such as changes to the scope of services or the financial balance, must be carefully assessed to determine if a new award procedure is required.
Key Clarifications
The DAJ Letter provides guidance on the following scenarios for concession modifications that do not necessitate a new award procedure:
- Minor Modifications: Changes that do not alter the overall nature or essential characteristics of the concession, such as minor adjustments to technical specifications or administrative provisions.
- Modifications in Accordance with Contract: Changes that are expressly provided for in the initial concession agreement, including those necessary to ensure its proper execution or adapt it to technical or economic conditions.
- Modifications Due to Unforeseen Circumstances: Changes necessitated by events that could not reasonably have been foreseen at the time of the initial award, such as significant changes in technology or regulatory requirements.
- Modifications to Facilitate Competition: Changes aimed at enhancing competition, such as introducing new competitors to the market or revising selection criteria to increase the number of qualified bidders.
- Modifications to Improve Performance: Changes that are designed to improve the quality, efficiency, or accessibility of the public service provided under the concession.
Conditions
The DAJ Letter emphasizes that the following conditions must be met for a concession modification to be considered acceptable without a new award procedure:
- No Alteration of Competition: The modification must not have the effect of altering the outcome of the initial competition or creating an unjustified advantage for the incumbent concession holder.
- Proportionality: The modification must be proportionate to the objective being pursued and not exceed what is necessary to achieve that objective.
- Transparency: The modification must be carried out in a transparent and non-discriminatory manner, ensuring equal access to all potential competitors.
Conclusion
The DAJ Letter provides valuable guidance to public authorities and concession holders alike on the circumstances under which concession modifications can be made without triggering a new award procedure. By clarifying these conditions, the French High Administrative Jurisdiction aims to promote a balanced approach that ensures the proper execution of concessions while fostering competition and protecting the interests of the public.
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