REUTERS | Tobias Schwarz

Public procurement case digest (April 2016)

April’s case digest includes ECJ rulings on relying on the capacity of other providers, lots and electronic auctions, and on actions for review of tender awards. Also included is a High Court judgment striking out a claim on the basis that the Public Contracts Regulations 2015 did not apply to the procurement exercise in question.

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 relying on the capacity of other providers, lots and electronic auctions (PARTNER Apelski Dariusz v Zarzad Oczyszczania Miasta)

The ECJ has handed down a preliminary ruling on a reference from a Polish court relating to the application of Articles 2, 44 and 48(3) of Directive 2004/18 and Directive 2014/24 relating to a tendering procedure divided into lots and to be concluded by an electronic auction.

The ECJ held that:

  • Directive 2004/18 recognises the right of economic operators to rely on the capacity of other entities, provided that the operator will have the necessary resources of those entities at its disposal including, where necessary, the direct participation of the entity. However, in specific circumstances, Directive 2004/18 also empowers a contracting authority to set out in the tender documents the rules under which the operator may rely on other entities.
  • After tenders have been opened, the principles of equal treatment and non-discrimination preclude a contracting authority agreeing with an operator which has bid for the whole contract, to consider its tender in relation to specific lots only. Those principles also require the annulment and repetition of an electronic auction from which an operator has been unlawfully excluded.
  • In the circumstances of the main proceedings, the relevant provisions of Directive 2004/18 cannot be interpreted in the light of those of Article 63(1) of Directive 2014/24.

While this case is of interest in terms of existing case law and the application of core principles (such as equal treatment and non-discrimination), it should be noted that article 63 of Directive 2014/24 introduces substantial amendments regarding the right of an economic operator to rely on the capacities of other entities.

ECJ preliminary ruling on application of Directive 89/665 and Article 267 TFEU to actions for review of tender awards (Puligienica Facility Esco SpA v Airgest SpA, (intervening parties: Gestione Servizi Ambientali Srl and Zenith Services Group Srl)

The ECJ has handed down a preliminary ruling on a reference from an Italian court relating to the interpretation of Articles 1(1) and 1(3) of Directive 89/665 (the Remedies Directive) and Article 267 of TFEU.

The ECJ held that:

  • A main action for review brought by a tenderer, with a view to excluding another tenderer, cannot be dismissed as inadmissible under national rules which provide that the counterclaim lodged by the other tenderer must be examined first.
  • A provision of national law could not prevent a chamber of a court of final instance from requesting a preliminary ruling from the ECJ concerning the interpretation or validity of EU law. The law in question required the chamber to refer it back to the plenary session of the court if it did not concur with a decision of the court in plenary session, rather than request a ruling from the ECJ.
  • After receiving the ECJ’s preliminary ruling, or where the ECJ case law already provides a clear answer to a question, a chamber of a court of final instance is required to do everything necessary to ensure that that interpretation of EU law is applied.

This case clarifies that where an unsuccessful tenderer challenges a contract award, a counterclaim by the successful tenderer challenging the admissibility of the unsuccessful bid will require a court to examine the merits of both bids simultaneously, without giving precedence to the counter-claim and that national laws cannot interfere with the right (or obligation, as the case may be) of a national court to seek a preliminary ruling from the ECJ on a point of EU law.

High Court strikes out claim on basis Public Contracts Regulations 2015 did not apply (Newlyn Plc v London Borough of Waltham Forest)

The High Court has struck out a claim brought by an aggrieved contractor, Newlyn PLC, following the company’s unsuccessful tender for the award of a contract tendered by the London Borough of Waltham Forest. It did so on the basis that the Public Contracts Regulations 2015 (PCR 2015) did not apply to the procurement exercise that the council had conducted, which finding was fatal to the contractor’s pleaded claim. The High Court also rejected the contractor’s argument that, instead of striking out the claim, the court should exercise its inherent power to allow a claim brought under CPR Part 7 to be amended and reformulated as a claim for judicial review. It did so on the basis that it was better for a claimant to start from the beginning with a proper judicial review claim form rather than turn a claim commenced as a Part 7 claim into a judicial review claim part way through the proceedings.

Although the contractor’s claim was unlikely to succeed, given that the PCR 2015 did not apply to the procurement exercise that was the subject of the challenge, the case is a useful reminder of the procedural and substantive authorities that mean a court is unlikely to permit a Part 7 claim to be amended to become a claim for judicial review.

General Court judgment on appeal by Österreichische Post regarding exemption of postal services from Utilities Directive (Österreichische Post AG v European Commission)

The General Court has handed down a judgment on an appeal by Österreichische Post AG against a decision of the European Commission of 2 April 2014 that held that Directive 2004/17 (the Utilities Directive) will continue to apply to a range of postal delivery services provided by Österreichische Post on the grounds that they are not directly exposed to competition.

Österreichische Post AG lodged an action with the General Court. The General Court partially upheld Österreichische Post’s appeal, finding that the Commission made manifest errors of assessment in concluding that postal services for addressed international (outbound) letters between business customers (B2B) and between business customers and private customers (B2C) (together B2X) at the international level were not directly exposed to competition and therefore should not be exempted from application of the Utilities Directive. The Commission’s contested decision was therefore annulled insofar as it provided that the Utilities Directive applied to this market.

However, the General Court rejected the rest of the appeal as unfounded, concluding that the Commission made no errors of assessment or failed to state reasons in finding that the other categories of postal services were not directly exposed to competition in Austria.

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