Practical Law

November’s case digest includes a number of rejected appeals against European procurement decisions by the General Court, and an ECJ ruling regarding the exclusion of an economic operator from a procurement procedure due to inaccurate documentation.

Please feel free to submit a comment below or send us an Ask query 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.

ECJ ruling on right to exclude bid for failure to include statement relating to technical director (Cartiera dell’Adda SpA v CEM Ambiente SpA (Case C‑42/13))

The ECJ has handed down its ruling on a preliminary reference from an Italian court. The ECJ ruled that Article 45 of Directive 2004/18, read in conjunction with Article 2 of that Directive, and the principle of equal treatment and the obligation of transparency, must be interpreted as not precluding the exclusion of an economic operator from a procurement procedure on the ground that he has not complied with the requirement in the contract documentation to annex to its bid, on pain of exclusion, a statement to the effect that the person designated as the operator’s technical director has not been the subject of criminal proceedings or a conviction.

This applies even where, at a date after the deadline for submitting bids, such a statement has been provided to the contracting authority or it is shown that the person in question was identified as the technical director in error.

Ruling on strike out of amendment to particulars of claim in procurement action (NATS (Services) Ltd v Gatwick Airport Ltd [2014] EWHC 3728 (TCC))

The High Court has issued a ruling on an application by Gatwick Airport Limited to strike out parts of the amended particulars of claim of NATs (Services) Limited in an action alleging breach of the public procurement rules. The High Court held that amendments relating to the alleged abnormally low prices bid by the successful bidder should not be allowed as this claim had no realistic prospect of success. The claim depended on there being a duty on Gatwick Airport to have rejected the bid as being “abnormally low”. The High Court held that there was no such duty under the Utilities Contracts Regulations 2006 or EU law.

The High Court rejected another proposed amendment on the basis that it had been introduced too late. The substantive contents of the pleading could have been made earlier. There was no justification for the delay and there was a real risk that, in the short time left before trial, Gatwick Airport would not be able to respond adequately to the new allegations.

Application to lift suspension on award of framework agreement granted (Group M UK Ltd v Cabinet Office [2014] EWHC 3659 (TCC))

The High Court has granted an application by the Cabinet Office to lift the automatic suspension of its award of a single supplier framework agreement for media planning and buying services, following an appeal by an unsuccessful tenderer. The High Court confirmed that the American Cyanamid test was the appropriate test to use when considering, under Regulation 47H of the Public Contracts Regulations 2006, whether or not to lift the automatic suspension.

The High Court did not consider that the unsuccessful tenderer had raised a serious issue to be tried about the “unsustainability” of the prices bid by the winning tenderer. In particular, the tender documents did not indicate that the evaluation body should have conducted a different audit and verification process for the prices quoted. In any event, the High Court considered that damages would be an adequate remedy for the claimant and that the balance of convenience lay in favour of allowing the Cabinet Office to put the framework agreement in place.

Costs awarded to successful tenderer in relation to application to lift automatic suspension (Group M UK Ltd v Cabinet Office [2014] EWHC 3863 (TCC))

The High Court has ruled that a successful tenderer should, in principle, be awarded its costs of participating in a hearing in support of the contracting authority’s successful application for the automatic suspension of the award of the contract (in Regulation 47 of the Public Contracts Regulations 2006) to be lifted. The High Court considered that the successful tenderer had a very serious and fundamental interest in the outcome of the proceedings and that in this case it was important and useful for it to participate in the proceedings. In exercise of its discretion, the High Court concluded that this was a case in which it was appropriate for the costs of the interested party to be borne by the claimants.

The High Court also ruled that the fact that the successful tenderer had not submitted its statement of costs within the deadline set by a practice direction should not disqualify it from obtaining any costs. In all the circumstances of the case, the breach of the practice direction had been understandable and it would be unjust not to award any costs.

Appeal against European Council procurement procedure dismissed (Alfastar Benelux SA v European Commission (Case T‑394/12))

The General Court has dismissed an appeal by an unsuccessful tenderer in relation to a public procurement procedure for on-site IT support services conducted by the Council of the European Union. The General Court found that the Council had not committed manifest errors in its assessment of the tenders of either the unsuccessful tenderer or that of the successful tenderer. In particular, the General Court rejected arguments that the Council had confused the use of selection criteria and award criteria in its evaluation of the tenders. It also rejected arguments about alleged inconsistencies and inaccuracies in the tender documents.

Appeal against procurement decisions dismissed (Joined Cases European Dynamics Luxembourg and Evropaïki Dynamiki v Europol (T-40/12 and T-183/12))

The General Court has dismissed an appeal by European Dynamics Luxembourg SA and Evropaiki Dinamiki (together European Dynamics) against decisions of the European Police Office to exclude its bid in an open tender procedure and subsequently award the tender framework contract to another party. It also rejected European Dynamics’ claim for compensation for the loss of opportunity that the award to them of framework contract would have given.

Appeal against rejection of abnormally low tender dismissed (Computer Resources International (Luxembourg) SA v European Commission (Case T‑422/11))

The General Court has dismissed an appeal against a decision of the Publications Office of the European Union to reject tenders on the grounds that they were based on abnormally low pricing. The General Court found that the Publications Office had provided sufficient reasons for its decision and had followed the correct procedure. In addition, it had not erred in reaching the conclusion that the tenders were abnormally low. This decision was based on the correct legal grounds and there was no evidence of any misuse of powers by the Publications Office.

Ombudsman finds no maladministration in Court of Justice’s conduct of call for tender (Decision of the European Ombudsman closing the inquiries into complaints 826/2013/EIS and 878/2013/EIS against the Court of Justice of the European Union)

The European Ombudsman has published a decision finding that there was no maladministration by the Court of Justice of the European Union in its conduct of calls for tenders for the conclusion of framework contracts for the translation of legal texts from certain official languages of the EU into Italian. The calls for tenders required translators to hold a law degree. The Ombudsman rejected complaints that this requirement was discriminatory because the Court does not require a law degree in similar tender procedures for translators with English, Dutch, Danish or Swedish as a main language.

The Ombudsman accepted the Court’s explanation that a law degree is indispensable due to the nature of the tasks to be performed; in Italy, high-quality legal translation courses are offered at university level for non-lawyers; and that in tender procedures for translators with English, Dutch, Danish or Swedish as a main language, preference is given to candidates with a law degree and this is stated in the relevant contract notices, but as regards these languages, it would be impossible to find enough contractors who meet that requirement and there is a need to accept translators who do not hold a law degree. The Ombudsman found this explanation reasonable and closed the cases with a finding of no maladministration.