Blog | Special sectors require a specific approach (issue 4)

Edition 4: special sector company or not? The new 'collective heat act' as an example

There is currently a lot happening in the realm of special sector companies (SSCs). A concrete example of this is the government's work on a successor to the Heat Act: the 'Collective Heat Act'. A significant consequence of this law, which is expected to come into effect in 2026, is that municipalities will have more control over the construction of district heating networks and the supply of heat. This will impact companies involved in heat provision.

In my first blog, I explained what makes a company a special sector company.

This is, in fact, a misleading question, as it cannot be generally stated whether a company qualifies as a special sector company. This depends on the fact that Part 3 of the Public Procurement Act 2012 (Aw) only applies if the company is engaged in a so-called relevant activity.

A company is an SSC if it meets the definition of that term in Article 1.1 of the Public Procurement Act 2012 (Aw) and is engaged in a ‘relevant activity.’

A company meets the definition of an SSC in Article 1.1 of the Public Procurement Act if it qualifies as:

• A ‘contracting authority’,
• A ‘public enterprise,’ or
• When a so-called ‘special or exclusive right’ has been granted to the company by a contracting authority.

Legal debate: what falls within the 'relevant activity'?

Whether and when there are sufficient purchases related to the relevant activity often leads to interesting (legal) discussions. The question is how broadly or narrowly one should interpret matters such as the necessary security services for an SSC or other related topics, and whether procurement of those services should also be considered part of the relevant activities of the SSC.

The strict interpretation argues that, given the limited scope of the special sector directive compared to the general directive, the sector directive must be interpreted restrictively. Thus, the sector directive – and consequently Part 3 of the Public Procurement Act (Aw) – does not apply to contracts intended for activities other than the sector activities.

The importance of proper qualification in advance

In short, the strict view holds that only direct purchases for special sector contracts must be tendered according to Part 3 of the Public Procurement Act (Aw). Indirect purchases should then be made in accordance with Part 2 of the Aw for contracting authorities or, in the case of a company that is not also a contracting authority, can be procured without applying the Aw. After all, these activities are not directly related to the activities mentioned in Part 3 of the Aw.

The broader view asserts that related purchases should also be tendered according to Part 3 of the Aw. It is difficult to imagine that the relevant activities of Part 3 of the Aw could be properly carried out without these purchases.

The application of specific exceptions in Part 3 of the Aw (Articles 3.23 et seq.) also presents challenges and opportunities for heat companies and other businesses in the special sectors. This could provide material for discussion or a blog at another time.

A proper assessment in advance of the applicable regime for the specific procurement [3] can therefore be highly beneficial:

• When Part 3 of the Aw applies to a contracting authority, less stringent rules apply than under Part 2 of the Aw (Part 3 takes precedence over Part 2, as stated in Article 2.12(2) of the Aw); and
• When Part 3 of the Aw does not apply, this could mean that the Aw as a whole does not apply to non-contracting authorities.

Blog series on special sector companies

Pieter Smid is one of the attorneys at Brackmann specializing in procurement law. He has specific expertise regarding Part 3 of the Public Procurement Act, the section for special sector companies. Pieter highlights various topics in a series of blogs on this theme.