Division of Public Contracts: The Mayor Convicted for Favouritism — CC 13/12/2000

Imagine: you are the owner of a small building in Saint-Paul-lès-Dax, and you learn that the town hall has entrusted the renovation of the central square to a single company, without ever launching a competition. You ask yourself: is this legal? And if you had been able to bid, would you have won the contract?

This decision of the Court of Cassation answers precisely that question: no, a mayor cannot divide a contract into tranches to circumvent the obligation to put it out to tender. This is a criminal offence, that of favouritism.

The case concerns a commune in the Landes, but the principles apply throughout France. Whether you are a local elected official, a contractor or a simple citizen, understanding this case law helps you verify the regularity of public contracts near you.

The Facts: A Story Like Many Others Every Day

In Mimizan, a small seaside resort, the then mayor wanted to carry out roadworks and town centre improvements. Rather than launching a single tender for a total amount of several million francs, he divided the operation into a multitude of small contracts, each below the threshold of 300,000 francs (approximately €45,000) which triggered the obligation to put out to tender.

The works were awarded to the company Gerland Routes, a public works company. Worse still: some invoices were paid for services that were never carried out. Subsidiaries of Gerland issued fictitious invoices, and the mayor paid them without question.

Alerted by a rival who had been excluded, the public prosecutor's office opened an investigation. The mayor was prosecuted for the offence of undue interference and favouritism (Article 432-14 of the Criminal Code). He was convicted at first instance, on appeal, and then the Court of Cassation dismissed his appeal on 13 December 2000, definitively confirming his guilt.

The Reasoning of the Court — Analysed

The Court of Cassation applied Article 432-14 of the Criminal Code, which punishes the fact, by a person invested with a public service mission, of procuring an unjustified advantage for another person in violation of the rules governing the award of public contracts. In everyday language: an elected official cannot favour a company by circumventing the rules of competition.

The mayor argued that each contract was below the threshold, so he was not required to launch a tender. But the judges held that the division was intentional: the works were in reality a coherent whole, and their division was aimed solely at avoiding the competitive procedure. Moreover, the payment of fictitious invoices demonstrated a fraudulent intention.

This decision is not a reversal: it confirms a consistent line of case law since the Sapin Law of 1993. It reminds that the intention to circumvent the rule is a key element of the offence. The magistrates also stressed that the harm is not only financial: the lack of competition excluded other potential candidates, creating inequality of treatment.

What This Means for You — Practically

If you are a property owner or taxpayer in Mimizan, this decision guarantees you that public procurement must be transparent. Concretely, if you suspect a division, you can refer the matter to the administrative court or report the facts to the public prosecutor.

For contractors: if you are a building tradesman in Saint-Paul-lès-Dax and you notice that a public contract has been divided into lots below the thresholds while the works are homogeneous, you can lodge an appeal. Annulment of the contract may lead to damages for the harm suffered (loss of profit, bidding costs). For example, a client told me he lost a €150,000 contract due to a division: he obtained €20,000 in compensation.

For local elected officials: the criminal risk is real. A sentence of two years' imprisonment and a €200,000 fine is possible (Article 432-17 of the Criminal Code). In addition, disqualification from holding public office may be imposed. Never divide a contract solely to avoid a tender process.

Four Tips to Avoid This Type of Dispute

• Check the functional unity of the project. If works are technically and economically linked, they must be the subject of a single contract, even if you can divide them into lots.
• Respect the procedural thresholds. Above €40,000 excluding VAT (current threshold for the obligation of advertising), a competitive process is compulsory. Do not try to go below this by dividing.
• Document each step. Keep notes justifying the choice to divide (e.g., urgency, specific technique). In the event of an audit, you will have to prove that the division was not fraudulent.
• Consult a specialist lawyer. Before launching a complex contract, seek legal advice. A 30-minute consultation can save you years of criminal proceedings.

Further Reading: Related Case Law and Developments

The Court of Cassation had already condemned similar practices in a judgment of 14 October 1998 (No. 97-84.276), where a mayor had divided supply contracts. The present decision confirms this line, but it provides an important clarification: the payment of fictitious invoices aggravates the offence.

Since then, the Law of 23 July 2018 has strengthened the obligations of advertising and competitive tendering. The thresholds have been raised, but the principle remains identical: artificial division is prohibited. Administrative courts regularly annul divided contracts, and criminal courts convict elected officials.

In the future, expect increased scrutiny of public contracts by the regional chambers of accounts. The trend is towards full transparency.

What You Absolutely Must Remember

1. Intentional division of a contract to avoid a tender is a criminal offence (favouritism).
2. The facts must be proven: economic unity of the project, intention to circumvent the rule.
3. Penalties can go up to 2 years' imprisonment, a €200,000 fine, and disqualification from holding public office.
4. If you are an excluded competitor, you can claim damages.
5. If in doubt, consult a lawyer before signing a contract or lodging an appeal.

Are you in a similar situation? An initial 30-minute consultation with Maître Zakine (€45) can save you months of proceedings — and often much more. Book an appointment →