Procurement law and development agreements: case law update Cyrus Mehta, Partner Nabarro LLP

U0296.3/ Update OGC Procurement Policy Note (16 October 2009) – guidance on development agreements AG’s opinion in Helmut Müller (case C-451/08)

U0296.3/ OGC guidance Definition of “works contracts” Outline specifications Specifications relating to land use planning policies “Mixed” land/works contracts – e.g. covenants to refurbish Need for legally binding contract Building licences

U0296.3/ OGC guidance Problem areas: Section 106 Agreements Developer-led projects: –para 24 of Guidance –development agreements “to safeguard Council’s interests as freeholder” –Müller provides some support Regulation 14(1)(a)(iii) exemption – “For technical or artistic reasons, or for reasons connected with the protection of exclusive rights, a public contract may be awarded only to a particular economic operator”

U0296.3/ AG - Müller Limits to “functional” interpretation of procurement law in defining works contracts Need for a “direct link” between the public authority and the works: –acquisition of ownership/use –using public resources – e.g. cheap land –initiative taken by public authority New use of planning powers does not suffice Need for contractual obligations to develop

U0296.3/ AG Müller Works concessions –“ownership” test –limited duration –conflicts with City of York/Osbaldwick –implications for PFI/PPP contracts Separate but related “land” and “development” transactions must be aggregated

Procurement law and development agreements case law update Cyrus Mehta, Partner Nabarro LLP