REUTERS | Gary Hershorn

Public procurement case digest (April 2015)

April’s case digest includes a decision on specific disclosure and a refusal to lift the automatic suspension of a contract award, as well as a series of cases from Europe.

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.

Application for specific disclosure of other bidders’ documents granted (Geodesign Barriers Ltd v Environment Agency)

The High Court gave a ruling on applications, under CPR 31.12, by the claimant (an unsuccessful bidder) for early specific disclosure by the defendant contracting authority in a public procurement dispute. In this case, the defendant assured the court that there were no contemporaneous written tender evaluation documents to be disclosed. The High Court noted that this was highly unusual and raised questions about the transparency and clarity of the procurement exercise. It also warned of serious consequences if the defendant identified any such documents for disclosure in the future.

The High Court ordered specific disclosure, into a confidentiality ring, of the bid documents relating to four other unsuccessful bidders, which were ranked higher than the claimant. It held that these documents were directly relevant to the pleaded case as the defendant argues that the claimant would not have won the tender in any event. Therefore, the claimant (whose main plea relates only to the evaluation of the successful tenderer’s bid) should be able to assess as soon as possible whether the other bids were compliant. However, the High Court did not consider that it was necessary for the defendant to disclose the identity of these other tenderers.

Balance of convenience + non-profit making claimant = refusal to lift automatic suspension (Bristol Missing Link Ltd v Bristol City Council)

The High Court has refused an application by Bristol City Council to lift the suspension on its award of a contract pending resolution of a procurement dispute. The incumbent supplier is challenging a decision by the council to award a new contract for domestic violence and abuse support services to another company. The High Court made some observations about early disclosure in procurement disputes. It concluded that (particularly given the absence of sufficient disclosure by the council to clearly rebut the claimant’s arguments), this is a claim which is neither obviously weak nor obviously strong, but which plainly raises a serious issue to be tried.

The High Court also found that damages would not be an adequate remedy for the claimant, which is a non-profit making organisation and bid for the contract making no allowance for profit. Further, it was accepted that loss of contract would have a “catastrophic” effect on the claimant’s ability to provide other services. On the other hand, the disadvantages to the council of not lifting the suspension were either non-existent or negligible. The delay would not be significant and, most importantly, there was no evidence that such a delay would be damaging to users of the services provided under the contract.

ECJ ruling on changing technical specifications in tenders (SC Enterprise Focused Solutions SRL v Spitalul Județean de Urgență Alba Iulia)

The ECJ has handed down a preliminary ruling on a reference from a Romanian court on the use of references to branded products in the technical specifications of a tender. The contracting authority had rejected a tender on the basis that the product offered was not equivalent to the most recent version of the product produced by the manufacturer of the branded product referred to in the tender. This was despite the fact that the product offered was superior to the actual product referred to in the tender documents, which the contracting authority had subsequently found was no longer in production.

The value of the contract was below the thresholds for the application of Directive 2004/18. Therefore, the ECJ considered the application of the principles of non-discrimination and equal treatment, and the consequent obligation of non-discrimination. It held that these principles mean that a contracting authority cannot reject a tender that satisfies the requirements of the contract notice on grounds that are not set out in the tender documents. The contracting authority could not, therefore, amend the technical specification in respect of an element of the contract, regardless of whether or not the element referred to in the specification was still in production or available on the market.

ECJ dismisses European Dynamics appeal against EMA procurement procedure  (European Dynamics v European Medicines Agency)

The ECJ has dismissed an appeal by European Dynamics relating to a procurement process organised by the European Medicines Agency (EMA). The ECJ dismissed the appeal as partly unfounded and partly inadmissible, concluding that the General Court had made no error in finding that the EMA had correctly applied the criteria as set out in the contract specifications.

General Court judgment on appeal by European Dynamics against procurement decisions of EU body Frontex (European Dynamics v European Agency for the Management of Operational Cooperation at the External Borders (FRONTEX))

The General Court has considered an appeal by European Dynamics relating to two different procurement processes organised by the European Agency for the Management of Operational Co-operation at the External Borders of the Members States of the European Union (Frontex). The first procurement decision related to a tender for the supply of informatics services, hardware and software licences. The second procurement decision concerned a tender related to the Eurosur big pilot project.

As regards the procurement process relating to the supply of informatics services, the General Court concluded that Frontex’s statement of reasons was not adequate because it did not allow European Dynamics or the General Court to ascertain with sufficient certainty the evaluation criteria applied and the reasons why European Dynamics’ tender only obtained a certain number of points for the relevant lots. As this was an infringement of essential procedural requirements, the General Court concluded that the contested decision must be annulled.

As regards the procurement process relating to the Eurosur big pilot project, the General Court rejected the appeal in its entirety, finding that Frontex had not committed any manifest errors of assessment in the evaluation of European Dynamics’ tender and that the statement of reasons was adequate.

Advocate General opinion on application of procurement review procedures and on ability of court to make a reference for a preliminary ruling (Puligienica Facility Esco SpA (PFE) v Airgest Spa (AG’s opinion))

Advocate General Melchior Wathelet has handed down his opinion on a reference from the Sicilian Council of Administrative Justice regarding the application of Directive 89/665 (the Remedies Directive) and on the conformity of Italian legislation with Article 267 of the Treaty on the Functioning of the European Union (TFEU) regarding whether a court or tribunal is able to make a reference to the ECJ for a preliminary ruling.

In the main proceedings, the unsuccessful tenderer brought a claim against the award of the contract and the successful tenderer counterclaimed. Italian national legislation provides that where a counterclaim has been brought challenging the standing of a party on the grounds that that party had been unlawfully admitted to the award procedure, the counterclaim must be examined before the main action is considered. The Advocate General considered that, in line with previous a previous ECJ case (Fastweb SpA v Azienda Sanitaria Locale di Alessandria), Directive 89/665 must be interpreted as precluding an action for review from being declared inadmissible as a consequence of the examination of the preliminary plea. The Advocate General considered that the same principle applied in this case, even though there were more than two bidders, but none of the other bidders had appealed the decision. The crucial part was that both bidders in this case had a legitimate interest in the exclusion of the other.

As regards the power to make a reference for a preliminary ruling under Article 267 of the TFEU, the Advocate General considered that Article 99(3) of the Italian Code on Administrative Procedure does not conform to Article 267 of the TFEU, if it is interpreted as meaning that the Italian Council of State, being a national court against whose decisions no appeal lies, cannot independently refer a question to the ECJ for a preliminary ruling so as to obtain the correct interpretation of EU law.

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