CJEU judgment C-692/23 – public contracts awarded in-house
Public contracts awarded in-house have been a major part of public procurement for many years. This procedure can be followed to award contracts to companies affiliated to the contracting authority without adhering to the competitive tendering procedure. In 2024, the value of the contracts of this kind below EU thresholds amounted to approximately PLN 544 m, while the value of contracts of this kind equal to or exceeding EU thresholds amounted to PLN 17.1 bn.[1]
What is meant by public contracts awarded in-house
In-house contracts is the term commonly used for contracts awarded under the procedure provided for in art. 214 (1)(11) – (13) of the Public Procurement Act. Contracts of this kind restrict competition, and are thus strictly regulated. Situations in which a contracting authority can award an in-house contract are as follows:
- the contracting authority controls the contractor, or vice versa;
- [2] the tasks commissioned by the controlling entity constitute more than 90% of operations of the entity under control;
- There is no direct private capital holding in the entity under control.
The CJEU judgment
The CJEU laid down more specific rules for assessing the second of these requirements in a judgment of 15 January 2026, finding that when a contractor has a dominant position in a capital group, the assessment of the scale of its operations must incorporate turnover of the other firms in the group. This in turn means that it is not sufficient to look at the operations of the contractor alone without considering other group companies.
The implications for this industry
In practice, affiliates of contracting authorities have been transferring some of their operations to SPVs, so that under the capital structures created in this process, the contractor only performed the tasks commissioned by the contracting authority, and the other companies in the group performed the other operations. Contractors sought to use this mechanism to qualify for in-house contracts.
The CJEU judgment is intended to curb solutions of this kind. From now on, contracting authorities are required to include the operations of the other group companies when determining whether the dominant company is eligible to be awarded an in-house contract, and consequently transferring certain operations to SPVs will no longer alter the structure of the operations This amendment is intended to prevent distortion of competition and undue advantage being gained over private competitors.
The CJEU judgment lays down more stringent rules for awarding in-house public contracts, and this may cause them to become less common on the EU and Polish markets.
[1] According to a President of the Public Procurement Office report on the functioning of the public procurement system in 2024, https://www.gov.pl/web/uzp/sprawozdania-o-funkcjonowaniu-systemu-zamowien-publicznych (accessed: 5.03.2026).
[2] The CJEU reviewed the 80% EU threshold, increased to 90% under the Polish Public Procurement Act.
