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Public procurement case digest (April 2013)


PLC Public Sector reports:

Our April 2013 case digest includes cases on the structure of evaluation processes, disclosure in procurement disputes and the application of the procurement regime to development agreements.

Please feel free to submit a comment below or contact us at: 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.

Two stage evaluation procedure approved (for utilities) (Irish Waste Services Ltd v Northern Ireland Water Ltd & Ors [2013] NIQB 41)

The High Court of Justice in Northern Ireland dismissed an appeal by Irish Waste Services Limited against a procurement procedure conducted by Northern Ireland Water Limited. The court concluded that the award criteria and their respective weightings were adequately set out in the tender documents. It also concluded that there was no blurring between the selection and award criteria, noting that the main EU case law on this issue was not applicable to the utilities procurement regime. Arguably of most interest, was the court’s finding that Northern Ireland Water had been entitled to conduct a two stage award evaluation procedure whereby bidders had to meet a minimum quality threshold before undergoing a price evaluation. It should not be forgotten that this a procurement covered by the utilities procurement regime. However, many contracting authorities set hurdles against certain criteria which must be met for a bid to be considered compliant. The process adopted by Northern Ireland Water is comparable, the difference being a formal two stage evaluation process so that if the hurdle was not met, no further evaluation was undertaken. The extent to which this approach can be carried over to a procurement regulated by the Public Contracts Regulations 2006 is an issue that will be of interest to many.

High Court orders evaluation documents to be disclosed (Roche Diagnostics Ltd v The Mid Yorkshire Hospitals NHS Trust [2013] EWHC 933 (TCC))

Cases shedding light on the mechanics of how a procurement dispute will play out in the courts are always of interest.  In this case, the High Court handed down a ruling on an application by the claimant for specific disclosure and pre-action disclosure. The court concluded that the claimant was entitled to various documents relating to the procurement evaluation process, including instructions to the evaluation team, contemporaneous records of the evaluation process and any independent audit of the evaluation. Such documents were necessary to allow the claimant to take a considered and informed view of the legality and fairness of the evaluation process.

The court also granted a request by the claimant for pre-action disclosure of certain documents in the context of potential proceedings to challenge the grant of an interim contract to the successful bidder in the main procurement exercise. Such disclosure would enable the real issues to be identified and, possibly, resolved. The claimant was not however entirely successful and the court refused to order the disclosure of certain documents including some relating to the Trust’s relationship with another supplier.

Contracting authorities need to be aware that if the worst does happen and a dispute does come to court, the details of their interaction with their evaluation team are likely to be open to disclosure. Therefore the processes put in place to manage an evaluation should be put together with this in mind.

Anyone considering going to a court in respect of a public procurement dispute will also be interested in the press reports that Leeds City Council has been awarded a £2 million interim costs order against Montpellier Estates following a high profile dispute about the construction of an arena.  It is claiming more than £4 million costs, but Montpellier has vowed to appeal the substantive decision to the Court of Appeal.

Müller haunts the Commission again (European Commission v Netherlands, (Case-576/10) (Advocate General’s opinion))

Advocate General Melchior Wathelet (AG) has handed down an opinion on an appeal from the European Commission regarding the application of EU procurement law to land development agreements. The AG stated that the Commission’s case should be rejected as it had based its case on Directive 2004/18 rather than its predecessor, Directive 93/37, which the AG considered was the applicable legislation.  Of greater concern to the Commission may be that the AG also considered the substance of the Commission’s appeal and recommended that, in the light of the ECJ’s conclusions in the Helmut Müller case, the ECJ should dismiss the appeal as unfounded because the developer obtained its right of exploitation as a result of its purchase of the land and not as a result of the co-operation agreement with the municipality. Therefore the EU procurement rules were not applicable because the co-operation agreement was not a public works concession within the meaning of Directive 2004/18. The high point of the procurement regime’s impact on development agreements, the ECJ decision in Roanne, feels like it was longer and longer ago.

Structural funds and the procurement regime (France v Commission (Case C-115/12 P) (Advocate General’s opinion))

In a case with a more tropical outlook than the average procurement dispute, Advocate General Juliane Kokott (AG) has handed down her opinion in an appeal by France against a General Court ruling upholding a European Commission decision cancelling part of the contribution of the European Regional Development Fund (ERDF) for EU structural assistance in Martinique.

The case concerns the circumstances in which private construction projects that are in a large part subsidised or financed by public funds, in this case the renovation and extension of a holiday village, should be subjected to a tender procedure under EU public procurement rules. The AG considered that the General Court committed an error of law when it included simple tax credits within the scope of Article 2 of Directive 93/37 concerning the co-ordination of procedures for the award of public works contracts. It had also erred in its appreciation of the concept of facilities intended for sports, recreation and leisure within paragraph 2 of Article 2 of Directive 93/37. The AG recommended that the ECJ annul both the General Court’s judgment and the Commission’s decision.

Another case where the reach of the procurement regime may not be as great as previously held.

General Court: website procurement did not confuse selection and award criteria (European Dynamics v European Commission (Case T-32/08))

On 24 April 2013, the General Court dismissed an appeal by the Greek company European Dynamics against a European Commission procurement process relating to the provision of services for a market study in view of developing a new approach for the “Environment for Young Europeans” website.

The General Court rejected the appeal in its entirety, finding that the Commission had not committed any manifest errors of assessment, nor had it mixed up the selection and award criteria in relation to its evaluation of the European Dynamic’s tender and that the statement of reasons was adequate.

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