In its January 2016 decision in Ostas celtnieks SIA v. Talsu novada pašvaldība, the European Court of Justice ruled that a Latvian municipality’s requirement that contractors enter into prescribed cooperation agreements with their subcontractors was unnecessarily restrictive and contrary to the European procurement directive. The case dealt with a road repair contract. The bidder successfully challenged the cooperation agreement requirement since the court found that under European law, “the tenderer is free to choose…the legal nature of the links it intends to establish with the other entities on whose capacities it relies in order to perform a particular contract.”
