Management through a mixed economy company

Management is carried out through the creation of a commercial company – anonymous or limited liability – in which the Administration participates, by itself or through a public entity, in conjunction with natural or legal persons, or in the participation of a commercial company already created. The mixed nature of the company results from the joint participation in the share capital and in the direction and management of the company in which the Administration must intervene.

Management through a mixed economy company is provided for in the LCSP as a contractual modality for the management of public services art. 253 –[2]‑ which would include even cases in which the participation of the Administration is a majority, since only those companies wholly owned by a Public Administration are excluded from its application.

Private or indirect management

In these cases we are faced with a contractual modality for the provision of public services, since said activity corresponds to a private person who agrees on its provision with the Public Administration that owns the service after the appropriate contractor selection process. Its legal regime is provided for in articles 154 to 170 of the LCAP.

With regard to the public services that may be the subject of the management contract - article 155 LCAP -, the Public Administration may resort to this means when they have an economic content that makes them susceptible to exploitation by private entrepreneurs and do not imply the exercise of the authority inherent to public powers.

There are various contracting modalities for the management of public services that obey different assumptions and characteristics:

Mixed economy company

In which the Administration participates, by itself or through a public entity, in conjunction with natural or legal persons. These are Commercial Companies that provide a SP, whose capital belongs partly to the titular Administration and partly to private individuals. It is the organizational technique (enlightened at the beginning of the 20th century), by which the Administration that owns the SP constitutes a company in whose capital it participates with a private company that, in addition to its capital contributions and technological means or know-how, is responsible for the management of the SP under the direct control of the Owner Administration (which is present in its corporate bodies and also participates in the benefits of the exploitation of the SP).

It consists of the leasing by the Administration of goods or facilities necessary for the provision of a public service that is managed by the private lessee thereof, paying a periodic fee to the leasing Administration. Thus, leasing follows the same scheme as the concession of public services, with the difference that here the goods and facilities are provided by the Administration, so the individual's investment is minimal. The maximum duration of the public services lease contract will be 10 years.

Currently, leasing is considered repealed as a way of managing public services, as it disappears from the drafting of the Public Administration Contracts Law and the Law regulating the Bases of Local Regime, as can be seen in report 24-05 of the Administrative Contracting Advisory Board of the Ministry of Economy and Finance.[1]​.

It is the contract entered into between the Administration and an individual through which the right to exercise, at their own risk and fortune, a public service activity reserved for the Administration under the supervision of the Administration that owns the activity is recognized.

The legal regime of the concession is mainly contained in the LCAP, although certain precepts of the Regulation of the Contract Law approved by Royal Decree 1098/2001, of October 12, are also applicable, without forgetting that Law 48/1998, of December 30, also establishes specific rules in contracting procedures in the sectors of water, energy, transport and, for what is now interesting, in telecommunications.

Although the exploitation of the public service is carried out at the risk and fortune of the concessionaire, compensation for unforeseeable risk and price revision is considered to be the guarantee of the concessionaire contractor.

Compensation for unforeseeable risk is applicable in those cases in which there is a breakdown in the economic balance of the contract due to unexpected and unforeseeable causes that are not attributable to the concessionaire or to the Administration.

The price review operates in those cases in which it is provided for in the contract.

It should be noted that the public service concession contemplates the possibility for the concessionaire to obtain, by delegation from the granting administration, police powers of the service regulated in art. 148 of Royal Decree 1098/2001.

This is a form of indirect management provided for in both state and local legislation that is especially appropriate for dealing with social or welfare services that involve the conclusion of a contract with public or private entities or individuals that are providing services analogous to those that constitute the public service in question.

Unlike leasing, in the case of a concert it is the Administration that takes advantage of the premises or facilities that the individual has for the provision of the activity, limiting itself only to granting them the legal status of manager of the corresponding public service.

Management through a mixed economy company

Management is carried out through the creation of a commercial company – anonymous or limited liability – in which the Administration participates, by itself or through a public entity, in conjunction with natural or legal persons, or in the participation of a commercial company already created. The mixed nature of the company results from the joint participation in the share capital and in the direction and management of the company in which the Administration must intervene.

Management through a mixed economy company is provided for in the LCSP as a contractual modality for the management of public services art. 253 –[2]‑ which would include even cases in which the participation of the Administration is a majority, since only those companies wholly owned by a Public Administration are excluded from its application.

Private or indirect management

In these cases we are faced with a contractual modality for the provision of public services, since said activity corresponds to a private person who agrees on its provision with the Public Administration that owns the service after the appropriate contractor selection process. Its legal regime is provided for in articles 154 to 170 of the LCAP.

With regard to the public services that may be the subject of the management contract - article 155 LCAP -, the Public Administration may resort to this means when they have an economic content that makes them susceptible to exploitation by private entrepreneurs and do not imply the exercise of the authority inherent to public powers.

There are various contracting modalities for the management of public services that obey different assumptions and characteristics:

Mixed economy company

In which the Administration participates, by itself or through a public entity, in conjunction with natural or legal persons. These are Commercial Companies that provide a SP, whose capital belongs partly to the titular Administration and partly to private individuals. It is the organizational technique (enlightened at the beginning of the 20th century), by which the Administration that owns the SP constitutes a company in whose capital it participates with a private company that, in addition to its capital contributions and technological means or know-how, is responsible for the management of the SP under the direct control of the Owner Administration (which is present in its corporate bodies and also participates in the benefits of the exploitation of the SP).

It consists of the leasing by the Administration of goods or facilities necessary for the provision of a public service that is managed by the private lessee thereof, paying a periodic fee to the leasing Administration. Thus, leasing follows the same scheme as the concession of public services, with the difference that here the goods and facilities are provided by the Administration, so the individual's investment is minimal. The maximum duration of the public services lease contract will be 10 years.

Currently, leasing is considered repealed as a way of managing public services, as it disappears from the drafting of the Public Administration Contracts Law and the Law regulating the Bases of Local Regime, as can be seen in report 24-05 of the Administrative Contracting Advisory Board of the Ministry of Economy and Finance.[1]​.

It is the contract entered into between the Administration and an individual through which the right to exercise, at their own risk and fortune, a public service activity reserved for the Administration under the supervision of the Administration that owns the activity is recognized.

The legal regime of the concession is mainly contained in the LCAP, although certain precepts of the Regulation of the Contract Law approved by Royal Decree 1098/2001, of October 12, are also applicable, without forgetting that Law 48/1998, of December 30, also establishes specific rules in contracting procedures in the sectors of water, energy, transport and, for what is now interesting, in telecommunications.

Although the exploitation of the public service is carried out at the risk and fortune of the concessionaire, compensation for unforeseeable risk and price revision is considered to be the guarantee of the concessionaire contractor.

Compensation for unforeseeable risk is applicable in those cases in which there is a breakdown in the economic balance of the contract due to unexpected and unforeseeable causes that are not attributable to the concessionaire or to the Administration.

The price review operates in those cases in which it is provided for in the contract.

It should be noted that the public service concession contemplates the possibility for the concessionaire to obtain, by delegation from the granting administration, police powers of the service regulated in art. 148 of Royal Decree 1098/2001.

This is a form of indirect management provided for in both state and local legislation that is especially appropriate for dealing with social or welfare services that involve the conclusion of a contract with public or private entities or individuals that are providing services analogous to those that constitute the public service in question.

Unlike leasing, in the case of a concert it is the Administration that takes advantage of the premises or facilities that the individual has for the provision of the activity, limiting itself only to granting them the legal status of manager of the corresponding public service.