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Public procurement case digest (December 2012)

PLC Public Sector reports:

Our December 2012 case digest includes an update on the latest cases on taking account of service user choice and the difference between selection and award criteria.

Please feel free to submit a comment below or contact us at: 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.

Service users can sit on evaluations panels (AJ and another v Calderdale Primary Care Trust [2012] EWHC 3552 (Admin))

The High Court has confirmed that the Public Contracts Regulations 2006 (PCR) do not prohibit service users or their carers forming part of an evaluation panel for a tender.

The Trust had written to service users informing them of its decision to change  its previous policy which allowed service users and their carers to sit on panels as this practice was in breach of regulation 4 of the PCR, which requires that tenderers are treated in an equal, non-discriminatory and transparent manner. The High Court concluded that this was incorrect and given the Trust had taken the decision on the basis of this error in law it must be quashed.

It is important to note that for a fully regulated procurement even if a service users are involved in evaluating tenders, the process will still need to comply with the applicable regulations regarding criteria etc. For more information on taking account of service user opinion in the public procurement process, see Ask the team: How can a contracting authority take account of service user choice in a procurement process?.

Polish law extending automatic exclusion beyond grave misconduct does not meet requirements of procurement regime (Case C-465/11 – Forposta SA and ABC Direct Contact sp. zoo v Poczta Polska SA)

Directive 2004/18 sets out a number of criteria that can lead to the automatic exclusion of an economic entity from a procurement process, including where an economic operator is guilty of “grave professional misconduct”. In this case, the ECJ considered a Polish procurement law which provides for the automatic exclusion of an economic entity where the contracting authority in question has, under certain conditions, annulled, terminated or renounced a public contract owing to circumstances for which the economic operator is responsible. The ECJ found the concept of “grave professional misconduct” could not be replaced by the concept of “circumstances for which the economic operator is responsible” in the Polish procurement law and therefore Directive 2004/18 must be interpreted as precluding any such national legislation.

Inter-authority contract cannot be automatically excluded (Case C-159/11 – Azienda Sanitaria Locale de Lecce v Ordine degli Ingegneri della Provincia di Lecce and others)

On 19 December 2012, the ECJ considered an Italian law which permits written agreements to be entered into between contracting authorities for the study of the seismic vulnerability of hospital buildings where:

  • The consideration does not exceed the costs incurred in the performance of the service.
  • The contracting authority responsible for performance is capable of acting in the capacity of an economic operator.

The ECJ held that the law did not exclude such contracts from the public procurement rules and they should have been followed in this case. It will now be up to the national court to determine if the purpose of the contract was to ensure co-operation between two public entities to carry out a public task (for more information, see Opinion, Brent v Risk Management Partners – could it have been different?).

Selection v Award (Case T-457/07 – Evropaïki Dynamiki Proigmena Systimata Tilepikoinonion Pliroforikis kai Tilematikis AE v European Food Safety Authority)

The General Court (GC) has taken a further look at the much discussed issue of whether experience can be taken account of in the procurement process at award stage.  It held that the EFSA had acted lawfully in taking account of certain CVs at both selection and award stage as the EFSA’s evaluation of the CVs at award stage concerned the quality of European Dynamics’ tender, not its capacity to perform the contract. However, the EFSA held that that the tender evaluation committee could not legitimately use details of prior performance as an award criterion. The GC agreed that European Dynamics’ score had been based on such work. As a result of this (and a further finding that the EFSA made a manifest error of assessment in relation to one of the technical award criteria) the GC annulled the EFSA’s award decision.

While the decision provides confirmation that experience can validly be taken into account at award stage, it also highlights the importance of a robust selection stage that takes issues such as prior performance fully into account.  For more information on evaluation, see our practice note.

Ombudsman update: conflicts of interest (Complaint 1005/2011/MMN against the European Commission)

On 9 December 2012, the European Ombudsman published a decision finding that the European Commission had committed maladministration in the conduct of a tender procedure. There had been an apparent conflict of interest because an individual, who had been involved in providing services previously, had been involved in the drafting of the terms of reference for the new tender. The company the individual was employed by then successfully tendered to deliver the services. However, the contract had already been awarded and the Ombudsman concluded that it was not realistic for the contract to be re-tendered. Therefore, the Ombudsman concluded that the Commission should make an adequate ex gratia payment to the complainant to compensate for the negative consequences it had suffered as a result of the maladministration.

December also saw the European Ombudsman close complaint number 2573/2007/VIK concluding that the Commission had accepted his draft recommendation and had taken satisfactory steps to implement it by explaining the evaluation committee’s approach to the complainant’s bid. Therefore, there was no maladministration by the Commission.


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