REUTERS | Dani Cardona

Public procurement case digest (June 2017)

June’s case digest includes an ECJ ruling that a procurement of medicinal products in Slovenia was unlawful, despite being in accordance with national law, and two General Court decisions dismissing applications for interim measures in procurement disputes.

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 rules that Slovenian procurement of medicinal products is unlawful (Medisanus d.o.o. v Splosna Bolnisnica Murska Sobota)

The ECJ has ruled that a clause in a tender specification for a public contract, that was in accordance with the law of the contracting authority’s member state, breached the requirements of Articles 2, 23(2) and 23(8) of Directive 2004/18/EC and Article 34 TFEU read in conjunction with Article 36 TFEU.

The request for a preliminary ruling arose from proceedings between Medisanus d.o.o., a prospective bidder for a public contract tendered by Splosna Bolnisnica Murska Sobota, a hospital, for the supply of medicinal products. The disputed tender clause required the medicinal products to be manufactured on the basis of Slovenian blood plasma. This was in accordance with national law, which only permitted imports of plasma from other member states if the plasma collected in the national territory was insufficient to cover the needs of the national population.

The ECJ ruled that:

  • Such a restriction stemming from the national legislation was not an appropriate means of achieving the public health objectives invoked, and could not be regarded as a justified interference.
  • Articles 2, 23(2) and 23(8) of Directive 2004/18, and Article 34 TFEU read in conjunction with Article 36 TFEU, must be interpreted as precluding a clause in the tender specifications for a public contract which required medicinal products derived from plasma to be obtained only from plasma collected by the member state (in accordance with the contracting authority’s national law).

The court ruling reaffirms the obligations on contracting authorities to treat tenderers equally and without discrimination, and that equal access for bidders and the opening up of public procurement to competition are fundamental principles from which any derogation will be strictly construed.

Hearing of application for specific disclosure should come before procurement dispute hearing to decide lifting of suspension of contract completion (High Court) (Alstom Transport UK Ltd v London Underground Ltd and another)

By proceedings commenced on 11 May 2017, the claimant, Alstom Transport UK Limited, (Alstom) sought to challenge the outcome of a tender process in which the defendants, London Underground Limited, (LUL) announced an intention to award to Bombardier a contract for the supply of a new traction system for its Central Line fleet. The challenge was made under the Utilities Contracts Regulations 2006 (SI 2006/6) (UCR 2006).

The commencement of the proceedings operated automatically to suspend LUL’s ability to enter into the proposed contract. LUL applied to the court to lift that suspension and Alstom made an application for specific disclosure of a large number of documents and sought a date for that application to be heard in advance of the suspension hearing.
The court held that, in order to do justice to the application to lift the suspension, it would set a timetable which allowed for the hearing of the application for specific disclosure first.

This was not only in accordance with the relevant authorities but it was the best way to ensure that the decision on the important application to lift the suspension was reached on as full a basis as possible. Further, the delay thereby caused would not cause LUL any prejudice and was proportionate and reasonable in all the circumstances.

This case is of interest because of the detailed consideration of the relevant authorities and because, as the court pointed out, “the proper interplay between these two kinds of application regularly recurs in public procurement work”.

General Court dismisses application for interim measures to suspend award of contract by EIB (R –Post Telecom SA v European Investment Bank)

The General Court has dismissed an application by an unsuccessful tenderer for interim measures in an action to challenge a procurement decision by the European Investment Bank (EIB). The applicant sought to prevent the EIB from entering into a contract with the successful tenderer. However, the General Court held that Post Telecom had not provided any evidence to demonstrate the seriousness of the harm that it would suffer. It had not, therefore, demonstrated the urgency of the interim relief requested.

General Court rejects application for interim measures to suspend performance of contract with successful tenderer (Enrico Colombo SpA and Corinti Giacomo v European Commission and Carmet Sas di Fietta Graziella & C)

The General Court has dismissed an application for interim measures in an action to challenge a procurement decision by the European Commission. The applicants asked the General Court to suspend the performance of a contract that has already been awarded to the successful tenderer. The General Court rejected this application, finding that the applicants had failed to establish that the interim relief was justified due to the urgency of avoiding serious and irreparable harm to their interests.

The General Court ruled that the applicants had sufficient information in their possession to enable them to bring an action for annulment and to apply for interim measures prior to the expiry of the standstill period between the award and conclusion of the contract. However, the application for interim measures was not made until ten weeks after the end of the standstill period and eight weeks after the conclusion of the contract. Further, the applicants had not demonstrated that (due to the availability of possible financial compensation) any damage suffered would be serious and irreparable.

Advocate General opinion on reference from Italian Council of State regarding exclusion from procurement procedure because of a criminal conviction (Impresa di Construzioni INg. E. Mantovani et Guerrato S.p.A. v Municipality of Bolzano (AG’s Opinion))

Advocate General Campos Sánchez-Bordona has handed down an opinion on a request for a preliminary ruling from the Italian Council of State on whether it is permissible to exclude a bidder from a procurement procedure because one of its previous administrators had been sentenced to a criminal conviction (after the bid had been submitted).

The municipality of Bolzano made a call for tenders relating to the construction of a prison. Mantovani submitted a bid, including declarations stating that M.B. (Mantovani’s former council administration president and also legal representative) ceased to exercise his functions on 6 March 2013, and that to Mantovani’s knowledge, M.B. had never been convicted of a criminal charge as per Article 38(1)(c) of Italian decree 163/2006. However, it transpired that M.B. had been charged and sent to prison. The municipality rejected Mantovani’s bid on the ground that it had not provided, in a timely manner, sufficient information as regards the charges against M.B, and Mantovani appealed the case.

The Advocate General suggested that the European Court of Justice (ECJ) respond to the questions referred by finding that Article 45(2)(c) and (g) and Article 45(3) of Directive 2004/18 do not oppose national legislation that allows a contracting authority to take into consideration a criminal conviction of an administrator who previously worked for a bidder (in the year prior to the call for tenders). This is the case even where the conviction is not yet definitive at the time the bid was made. Further, the contracting authority is permitted to exclude the bidder from the procurement procedure if it has not disassociated itself completely from the relevant person affected by the criminal conviction.

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