May’s case digest includes an ECJ judgment annulling a decision by the European Union Intellectual Property Office to reject a tender, which restates key principles relating to conflicts of interest and equal treatment, and a decision from the Court of Session refusing to bring to an end an automatic suspension.
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 annuls decision of European Union Intellectual Property Office to reject a tender and award a contract to three other tenderers (European Dynamics Luxembourg v European Union Intellectual Property Office)
The ECJ has handed down a judgment annulling the decisions of the European Union Intellectual Property Office (EUIPO) rejecting the tender of European Dynamics Luxembourg SA (EDL) and awarding the contract to three other tenderers in relation to a software development and maintenance contract because of an infringement of the principle of equal treatment between tenderers, manifest errors of assessment and several shortcomings in the statement of reasons.
The ECJ also ordered:
- EUIPO to compensate EDL for the damage incurred as a result of the loss of opportunity to be awarded the framework contract as, at the very least, the third contractor in the cascade procedure.
- The parties to inform the Court, within three months from the date of delivery of the judgment, of the amount, in figures, of compensation arrived at by agreement.
- That, in the absence of agreement, the parties must forward to the Court, within the same period, a statement of their views with supporting figures.
This case is of interest because it helpfully restates the key principles relating to dealing with conflicts of interest and how the requirements relating to equal treatment, assessment of tenders, the duty to give reasons and the drafting of pleadings are to be applied. It also sets out the basic principles applying to the award of compensation for loss of a contractual opportunity.
Court of Session refuses application to bring automatic suspension to an end (Scott & Co (Scotland) LLP v Aberdeenshire Council)
The Court of Session has refused an application by Aberdeenshire Council to bring the prohibition from concluding an agreement to an end. The prohibition was in place due to a claim that the Council breached the Public Contracts (Scotland) Regulations 2012 during a competition for the provision of sheriff officer services.
The Council had previously contracted with the pursuer for the provision of these services but the pursuer had been advised that its subsequent tender had been unsuccessful on account of a competitor having been given a higher score for quality. The pursuer sought an order setting aside the Council’s decision or, alternatively, damages on the grounds that the Council had breached regulations 30(3) and 4(3) where it had used undisclosed criteria and weightings in its evaluation of the tenders and that there was a lack of transparency, and there had been manifest errors in scoring the pursuer’s bid because the Council had ignored material information in its tender submission and at the site visit.
In refusing the Council’s application the court held that, while the first ground of challenge was unlikely to succeed, the pursuer did have an arguable case of breach of regulation 4(3) in respect of its “manifest error” ground of challenge and the balance of convenience favoured the prohibition remaining in force, particularly given the proximity of the date of the full hearing which facilitated the effective and rapid review of the award decision.
National law provisions requiring “good conduct guarantee” not allowed (AG Opinion) (SC Star Storage SA v Institutul Naţional de Cercetare-Dezvoltare în Informatică and SC Max Boegl România SRL SC Construcții Napoca SA v RA Aeroportul Oradea SC Porr Construct SRL Teerag-Asdag Aktiengesellschaft SC Col-Air Trading SRL AVZI SA Trameco SA Iamsat Muntenia SA (AG’s Opinion))
Advocate General Sharpston has delivered an Opinion recommending that the ECJ hold that EU law precludes national legislation, which requires an applicant to lodge a “good conduct guarantee” in order to obtain access to review of a contracting authority’s decisions relating to public procurement. The Advocate General stated that this should be the case whether or not:
- The contracting authority must retain that guarantee if the challenge is rejected or withdrawn, regardless of whether or not the challenge is frivolous.
- The applicant automatically gets back the guarantee at the end of the challenge, whatever its outcome.