Judgment of the Supreme Court, October 16, 2025, (ROJ: STS 4471/2025 – ECLI:ES:TS:2025:4471), Spain
Article(s) in Directive 2014/24/EU: Art. 20 (Reserved contracts); Art. 18 (Principles of procurement: equal treatment)
Topic: Special Employment Centres; to participate in public procurement procedures for ‘reserved contracts’; not-for-profit or entrepreneurial in nature. Equal treatment
Member State: ES
Court/rev. board: Supreme Court
1. IMPLEMENTATION / RELEVANT NATIONAL LEGISLATION
The transposition of the rules regarding reserved contracts set forth in Article 20 of Directive 2014/24/EU is implemented through Article 43 of the Spanish General Law on the Rights of Persons with Disabilities and their Social Inclusion and through Additional Provision 4 of Law 9/2017, of 8 November, on Public Sector Contracts (LCSP).
A technical clarification is warranted: the European Directive 2014/24 employs more generic terminology than the Spanish legislation, the latter being more restrictive in its application of such reservations. While the Directive refers broadly to “sheltered workshops” and “economic operators”, the Spanish Public Sector Contracts Law specifically restricts the possibility of reservation to Special Employment Centres (CEEs) of social initiative.
Indeed, Article 20.1 of Directive 2014/24 stipulates that Member States may:
- Reserve the right to participate in public procurement procedures to sheltered workshops and economic operators whose main objective is the social and professional integration of persons with disabilities or disadvantaged persons.
- Impose a minimum threshold: At least 30% of the employees of these workshops or operators must be workers with disabilities or disadvantaged workers.
The transposition of this provision in Spain via the aforementioned Additional Provision 4 of the LCSP established that, although the Directive permits reservations for any integration operator, the national legislator restricted this reservation exclusively to:
- Special Employment Centres (CEEs) of social initiative (those that reinvest their profits and are predominantly owned by non-profit entities).
- Insertion Enterprises (Empresas de Inserción).
This Spanish distinction—which excludes “business-led” or for-profit CEEs from the scope of reserved contracts—was upheld by the Court of Justice of the European Union (CJEU) in its judgment of 6 October 2021 (Case C-598/19, Conacee). The Court ruled that Member States enjoy the discretion to impose additional requirements that are more stringent than those provided in the Directive, provided they comply with the principles of equal treatment and proportionality.
2. FACTS
The appeal on points of law (recurso de casación) was filed by the National Confederation of Special Employment Centres (CONACEE) with the aim of annulling the judgment delivered by the Administrative Litigation Chamber of the High Court of Justice of the Region of Murcia.
This judgment had dismissed the appeal brought against a resolution of the Central Administrative Tribunal for Contractual Appeals (Tribunal Administrativo Central de Recursos Contractuales – TACRC). In the context of an administrative appeal, the TACRC had confirmed the lawfulness of the tender specifications (pliegos) for the procurement procedure regarding the ‘Conservation and Maintenance Service for various parks and gardens in San Javier,’ issued by the San Javier City Council. Specifically, it affirmed the legality of reserving Lot No. 1 in favor of non-profit Special Employment Centres; this Lot concerned the ‘grass and tree planting service.’
Dissatisfied with this ruling, CONACEE lodged an appeal before the Supreme Court.
3. JUDGMENT
The Supreme Court (Tribunal Supremo) rules that there are no grounds for the appeal on points of law (no ha lugar al recurso de casación) and finds the tender specifications to be in conformity with the law regarding the reservation of Lot 1 in favor of social initiative special employment centres.
In addressing the question of objective appeal interest (interés casacional objetivo) for the establishment of legal doctrine, the Court declares:
“The regulation of public contract reservations—or specific lots thereof—in favor of social initiative Special Employment Centres, as provided for in Law 9/2017 on Public Sector Contracts, does not infringe upon the principle of equal treatment or the principle of proportionality set out in Article 18(1) of Directive 2014/24/EU as general principles of public procurement.”
The Court considers that the choice made by the Spanish legislator, as reflected in Additional Provision 4 and Final Provision 14 of Law 9/2017, to exclude business-led (for-profit) special employment centres from public contract reservations is neither arbitrary nor lacking in justification.
This is because the reservation in favor of social initiative centres was established to achieve a legitimate aim consistent with the principles enshrined in both Article 49 of the Spanish Constitution and Directive 2014/24/EU: the social and labor integration of persons with disabilities. The Court asserts that this integration can be attained more efficiently and beneficially for this group by relying on strictly objective criteria, namely the specific characteristics of social initiative centres. These entities commit to reinvesting all profits derived from their economic activity back into the centres to ensure the continuous improvement of their competitiveness and their social economy activities.
In its legal reasoning, the Supreme Court relies on the judgment of the CJEU of 6 October 2021, Case C-598/19 (EU:C:2021:810), which resolved a request for a preliminary ruling submitted by the High Court of Justice of the Basque Country. That litigation involved CONACEE and the Provincial Council of Gipuzkoa regarding instructions for reserved contracts. The CJEU held in its ruling that:
“Article 20(1) of Directive 2014/24/EU […] must be interpreted as not precluding a Member State from imposing additional requirements to those set out in that provision, thereby excluding from reserved public procurement procedures certain economic operators that meet the requirements of that provision, provided that the Member State respects the principles of equal treatment and proportionality.”
Ultimately, the Spanish Supreme Court understands that the reservation of public contracts for social initiative CEEs is established by a statutory provision (norma con rango de ley)—Additional Provision 4 of the LCSP 2017—which is neither arbitrary nor devoid of objective justification. It “does not infringe upon the principle of equal treatment among bidders nor the principle of proportionality, nor does it artificially restrict competition” in a manner that would justify the non-application of the national regulation in favor of the direct application of Article 20(1) of Directive 2014/24/EU.
Furthermore, the Court explains that it does not perceive an identity of situations between business-led CEEs and social initiative CEEs. This distinction justifies a different legal treatment for each type of centre regarding public contract reservations without constituting discriminatory treatment between bidders.
Regarding the proportionality test, the Court notes that non-profit entities possess a greater “social dimension” than for-profit entities, “making them more suitable and appropriate for achieving social and labor policy objectives for persons with disabilities.” Since these entities lack a profit motive, they commit to reinvesting the entirety of their earnings into creating employment opportunities and enhancing the social economy, which is the “ultimate objective pursued by the reservation of a lot or a public contract.”
The legislative choice adopted in the LCSP is deemed “not arbitrary or lacking in justification because it does not violate the principle of proportionality, insofar as the reservation is based on guaranteeing the social profile of the entities.” This ensures a greater dedication and efficacy in achieving the underlying purpose: “the labor and social integration of persons with disabilities so that they may have the economic means to lead an independent life.”
This line of reasoning by the Supreme Court aligns with several prior judgments issued by various Regional High Courts.
