Location requirement for hospitals is a violation of EU public procurement law

The European Member States have the discretion to decide on the degree of protection which they wish to afford to public health and on the way in which that degree of protection is to be achieved. It follows from both Article 168(7) Treaty on the Functioning of the European Union (TFEU) and the case-law of the Court of Justice of the European Union that EU law does not detract from the power of the Member States to organise their public health-care systems. Union action respects the responsibilities of the Member States for the definition of their health policy and for the organisation and delivery of health services and medical care. In the exercise of that power, the Member States may not, however, introduce or maintain unjustified restrictions on the exercise of fundamental internal market freedoms.

In a preliminary ruling of 22 October 2015 the Court of Justice has clarified the extent to which a location requirement in a call for tenders for public health services can create a unjustified obstacle to the opening up of public procurement to competition. Specifically, the referring court submitted the question whether technical requirements, included in public contracts for the management of public health-care services, that stipulate the provision of health services which is the subject-matter of such contracts be carried out only in a determined municipality, which is not necessarily the municipality in which the patients reside, are compatible with European Union law.

Taking into account the considerable room for manœuvre of Member States with regard to public health, the Court balances the principle of equal treatment of tenderers against the need to ensure the proximity and accessibility of the private support hospital establishment that is to be chosen, in the interests of patients, their families and the medical personnel. The Court concludes that the automatic exclusion of tenderers, who cannot provide those services in such an establishment situated within that municipality but who satisfy all the other conditions of those calls for tenders, does not comply with EU law.