August and September’s case digest, after a quiet period for the courts, includes an ECJ ruling holding that a tenderer can be excluded from a tendering procedure when a member of its bidding consortium loses its accreditation from a third party, and a High Court judgment lifting an automatic suspension.
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ECJ holds that tenderer can be excluded when member of its bidding consortium loses accreditation (Casertana Costruzioni Srl v Ministerio delle Infrastrutture e dei Trasporti, Provveditorato Interregionale per le opera pubbliche della Campania e del Molise, Agenzia Regionale Campana per la Difesa del Suolo)
In a tendering procedure for the award of a contract for the design, planning and execution of works for sewage and purification infrastructures, tenderers were required to demonstrate their technical and professional ability by presenting a recognised certificate corresponding to the nature and value of the contract works.
One bidding consortium relied on the certificate of a third party. An issue arose as to whether that consortium ought to have been excluded from the tendering procedure because, in the course of that procedure, the third party it had relied on had ceased to be eligible for classification in relation to the relevant certificate.
The issue was referred for a preliminary ruling to the European Court of Justice (ECJ) which held that Articles 47(2) and 48(3) of Directive 2004/18/EC must be interpreted as not precluding national legislation which excludes the possibility for an economic operator taking part in a tendering procedure to replace an auxiliary undertaking that has lost required qualifications after the submission of its tender and which results in the automatic exclusion of that operator.
Given the scope (in Article 63(1) of Directive 2014/24 and Regulation 63 of the Public Contracts Regulations 2015 (SI 2015/102) (PCR 2015)) for replacing entities that do not meet selection criteria, this decision may be of limited assistance to participants in procurements under the PCR 2015 and Directive 2014/24. However, the reasoning of the court, although applied to Directive 2004/18, did take into account established case law and the core EU general principles which will be relevant to procurements under the PCR 2015.
High Court lifts automatic suspension in procurement challenge (Sysmex (UK) Ltd v Imperial College Healthcare NHS Trust)
The claimant (Sysmex) sought to challenge the decision of the defendant (Trust) to award a managed services contract (MSC) in respect of pathology services to Abbott Laboratories Limited (Abbott). The commencement of the proceedings triggered an automatic suspension of the Trust’s ability to enter into the MSC with Abbott, pursuant to regulation 95 of the PCR 2015. The Trust applied under regulation 96(1)(a) PCR 2015 to lift that automatic suspension.
The court held that:
- It was accepted that there was a serious issue to be tried and it was not appropriate to reach any other conclusions about the alleged strengths or weaknesses of the parties’ respective cases.
- Damages were an adequate remedy for Sysmex but were not an adequate remedy for the Trust.
- The balance of convenience overwhelmingly favoured lifting the suspension in this case.
This case is of interest because the court addressed a number of important issues arising from such applications relating to the questions of whether there was a serious issue to be tried, the factors favouring the lifting of a suspension, if damages would be an adequate remedy and the assessment of potential reputational damage.