Social Services of General Interest (SSGI)

Eilmansberger/Herzig
fulfilment of the first three Altmark criteria and excludes over-compensation unless the
amount exceeds what is necessary to cover the costs incurred, taking into account reasonable
profit for discharging those obligations. Benchmarking is not required.
In procedural terms the policy package makes distinctions. Under the exemption
decision any public service compensation which is below certain threshold levels and meets
the above criteria will not be subject to notification. This mainly applies to compensation of
less than EUR 30 million to undertakings with an annual turnover of less EUR 100 million, as
well as to compensation to hospitals and social housing undertakings irrespective of the
amounts involved. Any other compensation must be notified to the Commission but will be
approved if it meets the Community framework criteria. Finally this Altmark package
includes an amendment to the Transparency Directive which clarifies that companies
receiving compensation and operating on both public service and other markets must have
separate accounts for their different activities, so that the absence of over-compensation can
be checked. 146
4. Public procurement rules
Public procurement rules can be of relevance to the social sector in two respects. For
one thing, social entities may be considered public contracting bodies under certain
circumstances. Their procurement system would then be subject to Community rules
applicable to public procurement. For another thing, the social sector depends on public
contracts in many instances. This raises the question about the circumstances which require
such contracts to be subject to public procurement procedures and about any specificities to
be observed.
4.1. Social entities as public contracting bodies
Beyond the narrower group of territorial entities, the personal scope of Austria’s
Federal Procurement Act (BVergG 2006) also includes entities having a particularly close
relationship with the State. This is supposed to ensure that all public entities whose
procurement conduct could be guided by criteria other than economic criteria are subject to
public procurement rules.
§3(1)(2) BVergG 2006 is sedes materiae in this respect. Alongside the requirement of
partial legal capacity, this provision links the concept of public contracting body to two
cumulative requirements: The entity must have been established for the specific purpose of
performing tasks in the general interest of a non-industrial or non-commercial nature. Plus
there must be some form of government influence on the entity, either because the entity is
for the most part financed from the public purse or because its activity or that of its executive
bodies is subject to State supervision.
4.1.1. Needs in the general interest, not having an industrial or commercial character
The concept of needs in the general interest, not having an industrial or commercial
character, is, to some extent, related to the concept of undertaking and to the distinction
between economic and non-economic activity. Many of the criteria discussed above can be
quoted in this context. However, there is no complete overlap between the two concepts. If an
146 Commission Directive 2005/81/EC of 28 November 2005 amending Directive 80/723/EEC on the
transparency of financial relations between Member States and public undertakings as well as on financial
transparency within certain undertakings, OJ 2005 L 312/47.
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