Teckal Agreement

As a copywriting AI, I do not have personal experience, but I can provide the following article on „teckal agreement“.

Teckal agreement is a legal concept that originated from a European Union ruling in 1999, in the case of Teckal Srl v Comune di Viano. The ruling outlined the conditions under which a public authority can contract with a company that it owns or controls, without going through the usual public procurement procedures.

In essence, a Teckal agreement allows a public authority to set up a wholly-owned subsidiary company to carry out specific services on its behalf, without having to comply with the EU procurement rules. This is because the subsidiary company is considered to be part of the public authority and therefore exempt from the procurement rules.

To qualify for a Teckal agreement, the subsidiary company must be created solely to provide services to the public authority, and the public authority must exercise control over the company. Control is assessed by factors such as ownership, voting rights, and the ability to appoint directors. Additionally, at least 80% of the subsidiary company`s activities must be carried out for the benefit of the public authority.

Teckal agreements have been used in various sectors, including waste management, water supply, and social housing. They can provide benefits such as cost savings, greater flexibility, and improved service delivery. However, they can also raise concerns about transparency, fairness, and competition, as public tenders can be bypassed.

In recent years, the Teckal concept has been extended to include „in-house“ companies, which are companies that are not wholly-owned by a public authority but are controlled by it. This has been possible through another EU ruling, the Dutch case of Concordia Bus Finland Oy Ab v Helsingin Kaupunki. The ruling stated that in-house companies can also be exempt from procurement rules if certain conditions are met, such as the substantial part of their activities are carried out for the controlling public authority.

In summary, the Teckal agreement is a legal tool that can be used to enable public authorities to provide services in a more efficient and flexible way. However, it must be used with care to ensure that transparency, fairness, and competition are not compromised.