The final case digest for 2013 sees confirmation that an ALMO qualifies for the Teckal exception alongside several reports from Europe on technical public procurement issues.
Please feel free to submit a comment below or contact us at: feedback@practicallaw.com if you have any views on the cases covered or think that we have missed a case that should be brought to the attention of public procurement practitioners.
Court confirms housing ALMO meets Teckal requierments (Tachie and others v Welwyn Hatfield Borough Council [2013] EWHC 3972 (QB))
The High Court has rejected a challenge to a decision by Welwyn Hatfield Borough Council to contract out its homelessness functions under Part VII of the Housing Act 1996 to an arms length management organisation (ALMO). The claimants had sought to challenge the decision on numerous grounds including that the decision failed to comply with the procurement regime. The court rejected this ground on the basis that the ALMO did meet the requirements of the exception to the procurement regime set out in Teckal SRL v Comune de Viano (Case C-107/98). The court also held that the Teckal exception could be implied into the council’s own procurement policy (in the same way it has been implied in to the European procurement regime to date).
No negotiating on mandatory requirements (Nordecon AS, Ramboll Eesti AS v Rahandusministeerium (Case C‑561/12))
The ECJ has given a preliminary ruling on a reference from an Estonian court on the question of whether it is possible for a contracting authority using the negotiated procedure to negotiate on tenders that do not comply with the mandatory requirements of the technical specifications of the contract.
The ECJ ruled that, under Article 30(2) of Directive 2004/18, a contracting authority is not permitted to negotiate with a bidder whose tender does not comply with specified mandatory requirements. To do so would result in a breach of the principles of transparency and the equal treatment of bidders.
The direct effect of the (very) old Utilities Contracts Directive (Sociedade de Produção e Distribuição de Gás SA v Ministério da Agricultura, do Mar, do Ambiente e do Ordenamento do Território (Case C-425/12))
In a judgment concerning the direct effect of Directive 93/38 (the old Utilities Contracts Directive) before its transposition into national law, the ECJ held that a private undertaking, which had been given responsibility, pursuant to a state measure, for providing, under the control of the state, a public-interest service and which had, for that purpose, special powers, was obliged to comply with the provisions of Directive 93/38. The authorities of a member state could therefore rely on those provisions against such an undertaking, even if the Directive had not been implemented.
Setting minimum fees to be charged by certifying organisations for access to public procurement opportunities can be lawful (Ministero dello Sviluppo Economico Autorità per la Vigilanza sui Contratti Pubblici di lavori, servizi e forniture contre Soa Nazionale Costruttori – Organismo di Attestazione Spa (Case C-327/12))
The ECJ held that the organisations responsible for providing certificates of technical and financial competence to companies wishing to participate in public procurement procedures are undertakings for the purposes of the EU competition rules. However, Articles 101, 102 and 106 of the TFEU do not prevent national rules that set the minimum fee levels. Although the setting of minimum tariffs constitutes a restriction of the freedom of establishment in Article 49 of the TFEU, it is a suitable measure for achieving the objective of protecting the recipients of the certification services. The ECJ concluded that it is for the national court to determine whether the national rules go beyond what is necessary to achieve that objective, with particular regard to the method of calculating the minimum tariffs.
Commission procurement decision annulled for lack of reasoning (European Dynamics Luxembourg SA and Evropaïki Dynamiki – Proigmena Systimata Tilepikoinonion Pliroforikis kai Tilematikis AE v Commission (Case T-165/12))
The General Court has upheld an appeal by European Dynamics in relation to a procurement process organised by the European Commission. In the General Court’s view, the refusal by the Commission to communicate the evaluation committee’s report during the pre-litigation procedure did not create unequal opportunities for European Dynamics and other bidders formulating their tenders. There was, therefore, no breach of the principle of transparency. However, the General Court found that the Commission had failed to fulfil its obligations to provide the unsuccessful tenderer with adequate reasons for its decision. Therefore, the General Court annulled the Commission’s decision not to award the contract to European Dynamics.
Ombudsman finds no maladminsitration even though regime not followed due to financial consequences (Decision of the European Ombudsman closing his inquiry into complaint 2347/2012/(ANA)PMC against the European Commission)
The European Ombudsman has published a decision on a complaint alleging that a request by the European Commission to extend the validity of tenders after the relevant deadline had expired was unlawful. The Ombudsman considered that the Commission’s request constituted an instance of maladministration and that the Commission should have cancelled the tender procedure and relaunched it.
However, the Ombudsman accepted the Commission’s argument that cancelling the tender would have been disproportionate as it would have meant forfeiting EUR5.5 million budgeted for 2012, there being insufficient time to relaunch the tender procedure in time for the award still to take place in 2012. The Ombudsman, therefore, found no maladministration on this point, and closed the inquiry with a critical remark to the effect that it is good administrative practice for an administration to comply with the rules governing a given tender procedure.