Procurement Update: The Sale Of Development Land By A Public Body Is Not Automatically Subject To EU Procurement Rules

A recent European ruling has further clarified when development agreements may be subject to an OJEU process. An earlier case (Roanne) said that development agreements with a total value over the EU tendering threshold should be tendered via OJEU where the contracting authority has significant control over the development. In Helmut Muller GmbH v Bundesanstalt fur Immobilienaufgaben ("Helmut Muller") the ECJ ruled that a land sale where there was no binding agreement to carry out works would not be a public works contract under the EU procurement rules. Bundesanstalt, a German federal agency, had announced that it intended to sell land in Wildeshausen, Germany. Helmut Muller (property developers) offered to buy the land, subject to the condition that urban planning permission was granted. Bundesanstalt rejected the offer and later requested offers for the land without urban planning permission. Helmut Muller made a fresh offer. After consulting with the Wildeshausen local authority, Bundesanshalt accepted a higher offer from another company, GSSI, declaring its preference for GSSI's proposals on urban development grounds. The agreement for sale contained no reference to the future use of the land.

Helmut Muller challenged the sale, arguing that it was a public works contract covered by the EU procurement rules, because of the intention to carry out works on the land. Helmut Muller appealed the initial ruling, claiming that GSSI was about to obtain a public works contract from the Wildeshausen local authority, possibly in the form of a works concession. The court referred a number of questions to the ECJ, and the ECJ made a number of rulings:

the ECJ distinguished between a pure land transaction which would not be subject to the EU procurement rules and purchasing land on which works are to be carried out (where, potentially, there will be a 'public works contract' subject to the rules); if works are...