REUTERS | Mick Tsikas

Public procurement case digest (August – September 2015)

August and September’s case digest includes a High Court decision granting an application by a council to lift an automatic suspension on its award of a contract and a General Court ruling rejecting claims that the European Court of Justice abused its power in eliminating a subcontractor from a bidding process.

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.

High Court lifts another automatic suspension (Openview Security Solutions Ltd v The London Borough of Merton Council)

The High Court has granted an application by the London Borough of Merton Council to lift the automatic suspension on its award of a contract (relating to traffic management systems) pending resolution of a procurement dispute. The High Court held that damages would be an adequate remedy for the claimant (the unsuccessful bidder). There were no other factors (in relation to consideration of the public interest and balance of convenience) that justified maintaining the suspension.

This judgment reviews the case law relating to the application of the American Cyanamid test in such applications. In particular, the judgment considers the relevance of public interest considerations, the significance of difficulties in assessing damages for loss of chance, and the circumstances in which the loss of reputation of the unsuccessful bidder should lead to a finding that damages are an inadequate remedy.

Northern Ireland High Court rules on application for early discovery in procurement dispute about alleged abnormally low bids (Fox Building & Engineering Ltd v The Department of Finance And Personnel)

The Northern Ireland High Court has given a ruling on an application for early discovery by the plaintiff in a procurement action. The plaintiff claimed that the defendant government department had accepted abnormally low tenders. The High Court considered that the claim raised issues relating to transparency and that early disclosure of certain information, which was uniquely within the province of the defendant, was necessary to establish whether there was a valid basis for the claim.

The High Court considered that the form of disclosure proposed (by way of a statement of the level of nominal bidding allowed) was an appropriate approach to securing disclosure of the required information while addressing the issue of the commercial sensitivities. It therefore granted the application.

General Court rules that ECJ was entitled to eliminate subcontractor from bid process (Alain Laurent Brouillard v Court of Justice of the European Union)

The General Court has dismissed an action by Alain Brouillard challenging a decision of the ECJ that effectively eliminated him from the list of approved subcontractors to be included in a bid by IDEST Communication SA (IDEST) for framework contracts for the translation of legal texts from certain official languages of the European Union into French. After examining IDEST’s request to participate in the tender, the ECJ invited it to participate in the negotiated tender procedure by submitting a bid in which it confirmed that Mr Brouillard would not be engaged as a subcontractor to provide legal translation services, as the Court did not consider that Mr Brouillard fulfilled the full legal education requirements set out in the contract notice.

The General Court rejected claims that the ECJ abused its power and erred in its assessment of Mr Brouillard’s academic and professional qualifications, considering that the Court was entitled to conclude that Mr Brouillard did not meet the minimum conditions of professional competence laid down in the contract notice. The General Court also dismissed claims that the ECJ infringed Directives 2000/78 and 2005/36 and the principles of proportionality and transparency.

General Court annuls Council decision to reject tender for lack of reasoning (Ricoh Belgium NV v Council of the European Union)

The General Court has annulled a decision of the Council of the European Union not to award a contract to Ricoh Belgium NV for the purchase or hire of black and white multifunction printers and associated maintenance services in the buildings occupied by the General Secretariat of the Council. The General Court found that the Council had not provided sufficient reasons for its decision. It had not explained how or why it had applied a coefficient of 1.2 to the minimum technical requirements announced in the tender specifications, meaning that Ricoh’s technical evaluation score was lower than was first announced. Therefore, Ricoh, as the unsuccessful tenderer, was not able to understand why the Council concluded that the successful tender was better.

Advocate General opinion on tenderer’s reliance on experience of third party and e-auctions (PARTNER Apelski Dariusz v Zarząd Oczyszczania Miasta (AG’s Opinion))

Advocate General Jääskinen has given his opinion on questions referred from a Polish court in relation to a procurement procedure in which the contracting authority excluded a tenderer who sought to rely on the technical capacity of a third party to demonstrate compliance with minimum technological specifications.

The Advocate General set out his view that there are no substantive limitations on the circumstances in which a tenderer may rely on the capacities of other entities to prove it has the necessary technological capabilities, although it must be able to prove that it in fact has at its disposal all the means to execute the terms of the contract. This is also subject to the limitations flowing from the nature and objective of the particular contract. He also concluded that a contracting authority must specify in the contract notice or tendering specifications any condition entailing the preclusion of recourse to third party capacities. It must not lay down any other express conditions or rules concerning if and how tenderers may rely on the capacities of other entities.

The Advocate General also expressed the view that an electronic auction must be annulled and repeated if a tenderer is found to have been unlawfully excluded from participation. He also stated that it is not permitted under Directive 2004/18 to allow an economic operator, after the submission of tenders, to state to which lot of a contract the resources specified by it for fulfilling the conditions for participation are to be attributed.

Advocate General opinion on whether tenderers can be required to provide declarations of minimum hourly wage (RegioPost GmbH & Co KG v Stadt Landau (AG’s Opinion))

Advocate General Mengozzi has given an opinion on a reference from a German court on whether, in the context of a public procurement procedure, contracting authorities can require bidders to submit declarations stating that they will comply with national legislation on employment conditions for their employees (and sub-contractors) in the performance of the public contract, including an hourly minimum wage requirement.

The Advocate General considered that Article 26 of Directive 2004/18 (which allows contracting authorities to lay down special conditions relating to the performance of a contract) does not preclude national legislation which requires contracting authorities to award contracts only to undertakings which undertake to comply with applicable national employment legislation, including the payment of a minimum hourly wage for public contracts. However, the Advocate General did not consider that the national legislation on minimum salary could be extended to private contracts.

The Advocate General also considered that Article 26 of Directive 2004/18 was compatible with national legislation which allowed contracting authorities to exclude bidders who refused to provide the declaration of compliance with the minimum hourly wage for workers who would perform the public contract in question.


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