Public Procurement Law: Technical Contribution on Legal Protection in Continued Proceedings before the Federal Administrative Court (BVwG)

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The legal protection of contractors in award procedures under the Federal Public Procurement Act for Concessions (BVergGKonz 2018) is a recurring topic. Therefore, we have dedicated an article to this current and important topic in the December issue of the Journal for Public Procurement Law and Construction Contract Law (ZVB).

In the article, we summarize our experiences and critical reflections on legal protection under procurement law in fortgese declaratory proceedings before the Federal Administrative Court. It is based on a decision of the Administrative Court (VwGH) in a case conducted by us, which supports the legal position of our client in a procurement procedure concerning a service concession under the Tobacco Monopoly Act (TabMG).

The finding of the VwGH and the lack of legal protection in public procurement law

On a regular basis and for quite some time, we have been conducting proceedings before the highest courts of public law (Administrative Court, Constitutional Court) in a specific area. These proceedings concern the awarding of contracts for tobacconists or the conclusion of order contracts for tobacconists under the Federal Public Procurement Act for Concessions (BVergGKonz) and the Tobacco Monopoly Act (TabMG).

In the process, we have found that the legal protection regime under public procurement law contains numerous pitfalls: Even if we have obtained a ruling supporting our legal position for our clients at the Supreme Court, the proceedings before the Federal Administrative Court are continued on the basis of a motion for continuation. The Federal Administrative Court must make a new decision in which it takes into account the legal opinion of the Supreme Court. In practice, this sometimes happens inadequately.

In this article, we point out the existing deficits in legal protection and present possible solutions for the legislature and administrative practice. Furthermore, we provide considerations on the relevance for the following damages litigation.

Our concern: Your legal protection in public procurement law

Our many years of expertise in public procurement law have led us to dedicate a separate article to the topic of legal protection under the Federal Procurement Act and BVergKonz. We would be pleased to represent you in the field of public procurement law in the best possible and well-founded manner. Through our publication activities, for which we draw from our legal practice, we contribute to the development of the law. This is also to the benefit of our clients.

Please do not hesitate to contact us if you wish to examine the legality of a decision made by a public contracting authority (such as the Monopolverwaltung GmbH in the area of the tobacco monopoly, but also others) and contest it.

Source PDF of the article

Tobacco Monopoly: Federal Procurement Law Applicable!

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Our law firm has achieved another landmark victory for the rule of law: In its decision of 20 July 2021, Ra 2019/04/0231, the Administrative Court pronounced in a strengthened senate that the Federal Procurement Act for Concessions must be applied to the award of tobacconists or appointment of tobacconists within the framework of the tobacco monopoly.

In Austria, the award of tobacconists’ licenses was decided by the Monopolverwaltung GmbH (MVG GmbH). The difficult-to-comprehend and non-transparent awarding practice has recently also been questioned in media reports.
High-turnover tobacconists generate seven-figure revenues from the sale of tobacco products alone. In addition, the operation of a tobacconist’s shop enables lucrative sideline business such as the sale of lottery tickets etc. Currently, tobacconists are appointed practically for life.
Accordingly, traceability and transparency are important in the awarding of tobacconists’ contracts.

Tobacco monopoly: Court of Audit criticized awarding of tobacconists’ contracts

In the past, the Court of Audit has strongly criticized the awarding practice. Neither the legislature nor the administration has responded to this criticism. As in the past, the monopoly administration alone has been responsible for awarding contracts within the framework of the tobacco monopoly (based on the Tobacco Monopoly Act, or TabMG for short), which dates back to the post-war period. The special rights originally granted as a supply for war-disabled persons increasingly receded into the background in the allocation processes. The legislator did not react to the changed market conditions.

On the occasion of gross abuses in the award of some tobacconists’ contracts, our law firm initiated the first ever review proceedings under the BVergGKonz 2018 and demanded the application of the award regime for concessions based on Directive 2014/23/EU on the award of concessions or the Federal Act on the Award of Concessions (BVergGKonz 2018) adopted in implementation of this Directive.
The Federal Administrative Court rejected several of these requests for review on the grounds that the concessions were not service concessions, but a legal institution of a separate kind that does not impose any public interest obligations on tobacconists.

Administrative Court: BVergGKonz 2018 to be applied.

The Administrative Court has now corrected this ruling practice: In fact, numerous obligations in the public interest are imposed on tobacconists, in particular in the sense of supplying the population with tobacco products within the framework of the tobacco monopoly. For this reason, the monopoly administration GmbH must comply with the Federal Public Procurement Act for Concessions (BVergGKonz 2018). The legal protection instruments of the BVergGKonz 2018 also apply without restriction to the award of tobacco concessions.

We are pleased to have achieved this groundbreaking success in the field of public procurement law or public procurement law for concessions for our client.
Should you apply for a public concession, we will be happy to advise you and are also at your disposal in review proceedings!

Our success was reported by “Die Presse”, ORF, “Der Standard” and others.