Article 8 §2 of the Act of 17 June 2016 on public procurement allows a « group of economic operators » to participate in a procurement procedure. The Act also states that the contracting authority may not impose the legal form of the tenderer(s), except if this is necessary for the proper execution of the contract and only after the contract has been awarded to this consortium of economic operators (Article 8 §2, last paragraph of the Act). Each member of a consortium is jointly and severally liable for the execution of the contract (except if both an architect and a contractor are members of the consortium) (Article 44 §2 of the Royal Decree of 18 April 2017 on the award of public procurement in classic sectors). In addition, in public works contracts, the 10-year liability for the contractor and the architect also applies.
Imagine that we are a consulting firm and we participate in a procurement procedure together with a construction company as a « group of economic operators » for one public contract, which is awarded to us.
We can choose to set up a partnership for this joint venture and thus explicitly assume a corporate character. We then register with the Crossroads Bank for Enterprises (CBE) and keep accounts. We also file a UBO declaration. We can apply for a VAT status, employ staff, etc. In that case, there is no doubt: we are a full-function company, with all the obligations that entails. However, we remain fiscally transparent, unless we go so far as to set up a general partnership (VOF), a private limited company (BV), a limited partnership (CV) or a public limited company (NV).
What if we want to keep everything as simple as possible and keep our mutual involvement to a minimum?
What are our the accounting obligations? Do we register with the CBE and do we have to keep separate accounts for this assignment?
As so often, the answer is nuanced. There is a new interpretation of the term « enterprise » in the law and the case law has yet to settle. Not all practical questions have been clarified yet, but we can already give some guidelines.
The answer is no, if …
… the cooperation is clearly occasional and isolated. The « group of economic operators » has no existence outside of this one public contract. There is one contract (the occasional character) and only with regard to this one contract, the two parties manifest themselves jointly (the isolated character). The joint interaction with the market is limited to this one contract. There is no joint bank account, no co-owned goods, no joint communication to third parties. Once this contract is executed, the cooperation ceases to exist (the non-durable character).
Indeed, according to the Court of Cassation, « durability » is an essential characteristic of a company. In the absence of the durable character of the cooperation, there is no economic operator, composed of other economic operators.
The law itself treats the tenderers as multiple economic operators: it speaks of a « combination of economic operators » and thus assumes that this is not necessarily one single economic operator.
The answer is yes, if …
… the cooperation is of a more lasting nature.
This can be the case, for example, that the cooperation is entered into for an indefinite period of time.
Even if the contract is an occasional and isolated one, but substantial and/or concluded for a longer period (e.g. several years), it is not inconceivable that the cooperation could be of a lasting nature.
Even if two companies jointly tender for a framework agreement (of limited duration), this contributes to the durable nature.
If the companies themselves decide to give the cooperation more substance by maintaining reserves in the company, contracting with suppliers on its behalf, opening a joint bank account, etc., the cooperation loses its isolated and occasional character and becomes more sustainable.
When in doubt…
… it is best to opt for the safe course of action by registering with the CBE anyway and thus keep accounts and file a UBO declaration.
A good practice is …
To keep simple accounts in any case, even if it is not obligatory. After all, accounting is an important management tool. Also in the contractual context with the second company, financial settlement will be necessary.
Future case law will clarify what exactly constitutes a « durable character » in the context of public procurement.
Sarah Moens & Karel Vincent
Sarah Moens is a lawyer and expert in public procurement. She is a partner at Tender Law, a boutique law firm focusing on public procurement.
Karel Vincent is a lawyer and focuses on corporate and business law for SMEs. He is the founder of Onlaw.be.
article is purely indicative and should not be considered as an advice. It does not replace an assessment of your specific circumstances.