REUTERS | Dani Cardona

Public procurement case digest (May 2017)

May’s case digest includes a preliminary ruling of the ECJ on the principle of equality of treatment between tenderers, and an ECJ judgment considering the test for serious misrepresentation of tender information under Article 45(2)(g) of Directive 2004/18.

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 preliminary ruling on the principle of equality of treatment as between tenderers (Archus sp. z o.o. and Gama Jacek Lipik v Polskie Górnictwo Naftowe i Gazownictwo S.A.)

The European Court of Justice (ECJ) has handed down a judgment on a request for a preliminary ruling from a Polish court regarding the interpretation of the principle of equality of treatment as between tenderers under EU and Polish procurement legislation.

In 2015, Polskie Górnictwo Naftowe i Gazownictwo (PGNiG) (the Polish state-controlled oil and natural gas company) published a call for tenders in the Official Journal of the EU concerning digitalisation of its archives. Two bids were received. Archus and Gama (one of the bidders) submitted a further microfilm sample after the deadline had passed. PGNiG found that the new microfilm sample completed the documents required for the tender submission, but noted that there was some information missing as regards technical parameters. PGNiG invited Archus and Gama to submit the missing information. In the end, PGNiG awarded the tender to the other bidder (Digital-Center). Archus and Gama appealed and the Polish court referred questions to the ECJ.

The ECJ found that the principle of equal treatment of economic operators set out in Article 10 of Directive 2004/17 must be interpreted as precluding the contracting authority from inviting a tenderer to submit declarations or documents whose communication was required by the tender specification and which have not been submitted within the time limit given for the submission of tenders. However, Article 10 does not prevent a contracting authority from inviting a tenderer to clarify a tender or to correct an obvious clerical error on the condition that such an invitation is sent to all tenderers in the same situation, that all tenderers are treated equally and fairly and that that clarification or correction may not be equated with the submission of a new tender, which is for the referring court to determine.

The ECJ also found that Directive 92/13 should be interpreted as meaning that where two tenders have been submitted and the contracting authority has adopted two simultaneous decisions rejecting the offer of one tenderer and awarding the contract to the other, the unsuccessful tenderer who brings an action against those two decisions must be able to request the exclusion of the tender of the successful tenderer, so that the concept of a particular contract within the meaning of Article 1(3) of Directive 92/13 may, where appropriate, apply to the possible initiation of a new public procurement procedure.

ECJ ruling on interpretation of Directive 2004/18 and tenderers experience and the test for serious misrepresentation of tender information (Esaprojekt Sp. z o.o. v Województwo Łódzkie)

The ECJ has handed down its judgment in a reference from a Polish court for a preliminary ruling in a case concerning a challenge to the award of a public contract to supply hospital IT systems in Poland.

The ECJ ruled that an economic operator cannot submit to the contracting authority, in order to prove that it satisfies the conditions for participating in a public tender procedure, documents that were not included in its initial bid, such as a contract performed by another entity and the undertaking of the latter to place at the disposal of that operator the capacities and resources necessary for the performance of the contract concerned after the expiry of the time limit laid down for submitting tenders for a public contract.

It also considered an economic operator cannot rely on the capacities of another entity, within the meaning of Article 48(3), by combining the knowledge and experience of two entities which, individually, do not have the capacities required for the performance of a particular contract, where the contracting authority considers that the contract concerned cannot be divided, in that it must be performed by a single operator, and that such exclusion of the possibility to rely on the experience of several economic operators is related and proportionate to the subject matter of the contract which must be performed by a single operator.

Further, an economic operator, which has individually participated in an award procedure for a public contract, cannot rely on the experience of a group of undertakings of which it was a member, in connection with another public contract, if it has not actually and directly participated in the performance of the latter. However, it can rely on experience derived from two or more contracts treated as a single contract, unless the contracting authority has excluded such a possibility pursuant to requirements which are related and proportionate to the subject matter and purpose of the public contract concerned.

The ECJ also ruled that Article 45(2)(g) of Directive 2004/18, which allows the exclusion of an economic operator from participation in a public contract, in particular if it is guilty of ‘serious misrepresentation’ for making false declarations when submitting the information requested by the contracting authority, may be applied where the operator concerned is guilty of negligence of a nature that may have a decisive effect on decisions concerning exclusion, selection or award of a public contract, irrespective of whether there is a finding of wilful misconduct on the part of that operator.

General Court Order rejects request for interim measures in Greek procurement case (Aristoteleio Panepistimio Thessalonikis v European Commission)

The General Court has published an order in an appeal by Greece against a European Commission decision of 2016 that rejected the University of Thessaloniki’s bid in a public procurement award procedure.

The General Court has now dismissed the University of Thessaloniki’s application for interim measures, noting that its arguments for urgency were based on it having received an exclusion warning from the Commission. However, the University of Thessaloniki had in fact received a verification warning from the Commission.

The consequences of exclusion warnings and verification warnings are different. Under exclusion warnings, bidders can be excluded from procurement procedures or payments suspended or contracts terminated for existing contracts whereas under verification warnings, additional supporting documents can be requested or evaluations related to pre-financing carried out. However, verification warnings are not grounds for urgency.

Advocate General proposes that tenderer can be excluded where member of its bidding consortium loses its accreditation (Casertana Costruzioni Srl v Ministero delle Infrastrutture e dei Trasporti — Provveditorato Interregionale per le opere pubbliche della Campania e del Molise Azienda Regionale Campana per la Difesa del Suolo — A.R.CA.DI.S and others (AG’s Opinion))

In a tendering procedure for the award of a contract for the design, planning and execution of works for sewage and purification infrastructures, tenderers were required to demonstrate their technical and professional ability by presenting a recognised certificate corresponding to the nature and value of the contract works.

One bidding consortium relied on the certificate of a third party. An issue arose as to whether that consortium ought to have been excluded from the tendering procedure because, in the course of that procedure, the third party it had relied on had ceased to be eligible for classification in relation to the relevant certificate.

The issue was referred to the ECJ and the Advocate General has proposed that the court rule that Articles 47 and 48 of Directive 2004/18/EC do not preclude a national rule which automatically excludes, from the tendering procedure, a tenderer that has relied on the capacities of another entity where that entity subsequently loses the required capacities.

This opinion is of interest because it examines the options available when a third party loses the required capacity after the expiry of the time limit for receipt of bids, but before the public authority has made the final award by reference to the relevant provisions in Directives 2004/18/EC and 2014/24/EU. In doing so, the AG compares and contrasts the relevant Articles in both Directives by reference to the key principles of equal treatment and transparency.

Advocate General invites ECJ to decide that a subsidiary of a contracting authority could itself indirectly be a contracting authority if it sells goods and services to its parent authority (LitSpecMet UAB v Vilniaus lokomotyvų remonto depas UAB and another (AG’s Opinion))

This case concerned a request for a preliminary ruling from the Regional Court, Vilnius, Lithuania to the ECJ. The questions submitted by the national court arose in the context of proceedings to challenge a tendering procedure commenced by a company which was wholly owned by the Lithuanian State railway company (whose status as a contracting authority was not disputed), to which the company supplied certain goods and services. The subsidiary claimed that, despite its links with the parent company, it was not a ‘public body’ within the meaning of the procurement directives since it was not established ‘for the … purpose of meeting needs in the general interest, not having an industrial or commercial character’.

The Advocate General proposed that the ECJ reply to the Regional Court as follows.
Article 2(1)(a) of Directive 2004/17/EC and the second subparagraph of Article 1(9) of Directive 2004/18/EC must be interpreted as meaning that:

  • A company that is connected to a contracting authority in terms of substance and function such that the in-house exemption is justified in respect of their mutual transactions, is subject to those directives when concluding works, supply and service contracts with third parties for the purpose of performing the task entrusted to it by that contracting authority.
  • In any event, that company should be considered a body governed by public law where it has legal personality, is controlled by a contracting authority and the essential part of its activity is to supply the contracting authority, free of any pressure from competitors and not in free market conditions, with railway equipment to enable the authority to provide its designated service of transporting passengers and freight.

This opinion is of interest because the Advocate General invited the ECJ to develop its case-law and to further clarify the concept of ‘contracting authority’ within the meaning of Directive 2004/17/EC and Directive 2004/18/EC. The Advocate General has invited the court to consider the issue of whether, by selling goods or services to a body which does meet needs in the general interest (which are neither commercial nor industrial), the subsidiary is also, in an indirect way, meeting those needs and might therefore be considered a contracting authority within the meaning of the directives in question.

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