The Higher Regional Court of Hamburg had to decide on 16.04.2020 on the question of the area exemption in the rescue service. According to the opinion of the Public Procurement Senate at the Hanseatic Higher Regional Court, this can be applied in Hamburg – but does not have to.

Hamburg Higher Regional Court, decision of 16.04.2020 – 1 Verg 2/20

In the case decided, the applicant – a non-profit limited liability company active in the rescue service – objected to the rejection of its application for review of the implementation of emergency rescue in the public rescue service. Hamburg had conducted an administrative selection procedure and announced the application procedure nationally. In doing so, the city had pointed out that it intended to award the contract to non-profit organisations. In addition, it would also be necessary to be involved in disaster control. The contract value was estimated at 100,000,000 euros. The applicant criticised the procedure on several points.

However, the Public Procurement Tribunal rejected the applicant’s request for review. Within the scope of the immediate appeal, the Hanseatic Higher Regional Court then also decided that there was no legal recourse to the procurement review bodies. The invitation to tender fell under the sectoral exception of § 107 Paragraph 1 No. 4 GWB, and was therefore not subject to the fourth part of the GWB, and thus not subject to the provisions of §§ 155 ff. GWB. At any rate, this is the legal situation under the Hamburg Rescue Services Act (HmbRDG) – in contrast to Bavaria or Lower Saxony, for example

For details, please refer to the decision. However, I would like to take this opportunity to present once again the basic features of the exemption for the rescue services.

Public procurement law in the rescue service

As a matter of principle, public procurement law provides for a competitive tendering procedure for the award of public contracts and concessions. Public contracting authorities must conduct a transparent procedure. They must observe the principles of economic efficiency and proportionality. This also applies – according to the European Court of Justice in its decision of 21.03.2019 – Case C-465/17 – to the rescue services.

Exception in the rescue service sector

The Act against Restraints of Competition (GWB) provides for exceptions to this rule, the controversial area exception. Section 107 GWB regulates cases in which public procurement law should not apply. According to § 107 Paragraph 1 No. 4 GWB these are

  • Civil protection services of civil defence and emergency response,
  • which are provided by non-profit organisations or associations, and
  • which fall under reference numbers specifically mentioned in the law,
  • except ambulances for the transport of patients

The law defines as non-profit organisations or associations in particular those relief organisations which are recognised as civil defence and disaster control organisations under federal or state law. At this point, the ECJ criticises the lack of a requirement of non-profit status under German law, which is, however, a prerequisite under European law (ECJ ibid., para. 53).

When does the area exception apply?

When the area exception applies is ultimately determined by the regulations in the respective national law.

Hamburg: Participation in rescue services

After. § 14 HmbRDG, the competent authority may entrust service providers with public rescue service tasks. This applies to both non-profit organisations and private individuals. However, the authority can restrict the circle of service providers – to

  • non-profit organisations within the meaning of Section 107 (1) No. 4 GWB and
  • whose participation in the civil protection of the Free and Hanseatic City of Hamburg the competent authority has approved.

In this respect, the OLG Hamburg is of the opinion that the competent authority must exercise its discretion in individual cases. This authority must decide whether an invitation to tender is restricted to non-profit organisations or whether a formal award procedure involving private bidders is to be carried out. Only in the case of a restriction is the award procedure excluded; otherwise the area exception would not apply.

One of the legal consequences of the area exception is the exclusion of legal recourse to the public procurement review bodies. This does not exclude legal protection against a decision.

Legal protection in the selection procedure

Although public procurement law under the ARC does not apply in this case, if it is restricted to non-profit organisations without any error of judgement, administrative law does. The decision on the restriction of the service providers eligible for selection as well as the selection of a competitor can therefore still be reviewed before the administrative courts.

If the procedure before the Public Procurement Tribunal is not admissible, the Public Procurement Tribunals can refer the matter to the specialised courts under public law pursuant to § 17a (2) sentence 1 GVG, according to the Higher Regional Court. In contrast, referral from the administrative courts to the public procurement tribunals is not possible.

Non-profit status in rescue services

Private entrepreneurs can – if they have not already done so – consider a change to a non-profit company. The advantages and disadvantages must be weighed up carefully.

Buy rescue service company

If you want to buy a company in the rescue service, pay attention to the state licenses. These may be linked to the person of the entrepreneur. It is therefore imperative that the permits are checked as part of a due diligence before a permit purchase.