The possibility for municipal subsidiaries to seek in-house public contracts and EU funding for local and regional development projects

Abstract

The aim of the article is to analyse the issues of establishing and functioning of municipal subsidiaries and the lawfulness of such companies applying for EU funding for local and regional development projects. In this article, the author attempts to answer the following questions: what limitations are there in the procedure for founding municipal subsidiaries?; can municipal subsidiaries seek public contracts within the framework of in-house procurement?; can municipal subsidiaries apply for EU funding? The study was conducted using the legal-dogmatic method and it was based on an analysis of legislation and selected decisions of the Court of Justice of the European Union and the Polish National Appeals Chamber relating to the awarding of in-house public contracts and the founding of municipal subsidiaries. Further analysed were the legal possibilities for such companies to be awarded in-house public contracts and to apply for EU funding to invest in their projects. The study allowed to answer the questions posed. The concept of new business entities, or municipal subsidiaries, being founded by local authorities or their municipal companies is not only permitted by law, subject to certain statutory restrictions, but it may also turn out to be advantageous when it comes to awarding public contracts on an in-house basis or seeking EU funding for local and regional development projects. The study allowed for the creation of legal grounds for the practical use by local government units of the concept of municipal subsidiaries, in particular in terms of in-house public contracts and applying for EU funding for local and regional development projects.