In a significant ruling, the Supreme Court held that entities receiving public funds may participate in tendering processes for public contracts without necessarily compromising freedom of expression, as long as the funding status is properly accounted for. The adjudicating chamber noted that an exception arises when the organization in question is heavily subsidized by government aid or benefits from illegal subsidies that distort market conditions.
The Third Chamber emphasized that the public body must maintain clear accounting lines between its role as an economic actor in the private market and its other public activities. This separation is crucial to assess whether government aid creates distortions that undermine competition.
a public company
The question of interest in the appeal focused on whether participation or refusal to bid is appropriate for a bidder that relies on budget allocations constituting more than eighty percent of its resources. In such a scenario, the bidder could gain an advantage over private competitors, which would contravene the fundamental principle of fair competition in public procurement.
Accordingly, the court confirmed that the award in question went to the Catalan institution Cartographic and Geological Institute of Catalonia (ICGC). Founded in 2014, the ICGC had signed a contract for aerial imaging in twenty-eight Galician municipalities to support the municipal Basic Plan mapping effort. The ICGC submitted a proposal and secured multiple awards in the tender, a fact challenged by another participant who argued that the Catalan institute’s position granted it preferential treatment.
The Supreme Court observed that since its inception the ICGC, as an economic operator, has been empowered by its founding statutes to undertake activities, collaborate with other public entities, or perform tasks beyond the Generalitat’s jurisdiction, in exchange for appropriate consideration. This framework supports the view that the ICGC could participate in the Galician tender just as it had been permitted in the Balearic Islands, without exclusion on grounds of public involvement alone.
The Galicia Public Procurement Administrative Court had previously rejected the objection, reasoning that the organization qualifying as an economic operator due to substantial public participation could still engage in and win the tender. The case advanced to the Supreme Court of Justice of Galicia, which affirmed the administrative decision, a stance later upheld by the Supreme Court itself.