The new decision of the Court of Justice of the EU is a victory for private hospitals in Bulgaria

1. The Court of Justice of the European Union (CJEU) confirms the current definition of "public law organization" in Bulgarian legislation.
2. As a result, European legislation does not require the inclusion of private healthcare facilities within the scope of the public procurement regime.
3. The reasoned ruling of the CJEU emphasizes the right of Bulgaria to adapt its legislation to its needs and local characteristics.
4. The Court of Justice of the European Union confirms the analysis of the ECT of August 2024.

At the end of 2024 , the Court of Justice of the European Union (CJEU) decided the case of whether the definition of "public law organization" in the Public Procurement Act also applies to public procurement below the value threshold defined in Directive 2014/24.

The case has an inextricable link with Bulgaria because it is a result of a preliminary ruling from the Sofia District Court (SRC), and the conclusions from the CJEU's analysis are also applicable to the status of private medical institutions in the context of the public procurement regime.

As the ECT wrote in its detailed analysis, the decision on the specific case, in which the state-owned company “Montazhi” EAD challenges a fine imposed on it by ADFI, was expected in early 2025 in view of the workload of the European judges. However, the CJEU considered that the case left no room for doubt and concluded it prematurely with a reasoned ruling before the Christmas holidays. The actions of the CJEU may surprise many with their rapid development and clarity, but instead of introducing new and complex rules, the CJEU confirms the current definition of a “public law organization” relying on the provisions of the Directive and the PPA.

The key conclusions from the CJEU definition:

• The court did not engage in further analysis of the definition, nor did it criticize how the Bulgarian legislator transposed it into the Public Procurement Act.
• In its ruling, the CJEU also confirms that Bulgaria has discretion in transposing the Directive into national law.
• When a “public body” awards a public contract, the rules of the Directive are always applicable, regardless of the value of the contract, in order to guarantee the principles enshrined in the Treaty on the Functioning of the EU, such as the free movement of goods, the freedom of establishment and the freedom to provide services.

What does this mean for private hospitals in Bulgaria?

• The definition of "public law organization" in the current PPL corresponds to the European directive - the CJEU did not provide additional clarifications to the European definition and did not critically examine its Bulgarian transposition, contrary to the claims of some political parties, analysts and the European Commission.
• Bulgaria has the right to adapt its legislation to its needs and local specificities - the clarification of private hospitals in the Public Procurement Act and their exclusion from the scope of the public procurement regime is an expression of the freedom of discretion that Bulgaria, as an EU member state, has in transposing the directive into its legal system.
• Market economy for private hospitals– a key feature of the private sector is that when economic actors are not public law organizations, as is the case with private hospitals, the principles of the market economy allow for greater freedom of negotiation. This enables private hospitals to enter into transactions on market terms, without being bound by the strict requirements that apply to public institutions.

The decision of the Court of Justice of the EU represents a significant step towards strengthening legal clarity and predictability for private hospitals in Bulgaria. The confirmation that the definition of “organization governed by public law” in the Public Procurement Act is in line with the European directive removes doubts and criticisms that existed in the public sphere.

This decision reinforces Bulgaria's right to adapt its legislation to local needs, while preserving its sovereignty within the framework of European legal norms.

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