The facts
The European Food Safety Authority (EFSA) invites tenders for a contract for commuter transportation in Italy and Europe. The award criteria were price and technical quality, each accounting for 50 percent.
The unsuccessful bidder believes that the EFSA did not assess the technical quality of its offer well and criticizes the lack of transparency in the procedure, because the reasoning behind the decision to award the contract to the competitor cannot be understood without seeing the competitor's offer.
Decision
The court rejects these arguments.
1.
The Court emphasizes that the guarantees provided by EU law for administrative procedures also include the obligation of the competent body to "carefully and impartially examine all relevant aspects of the individual case" (para. 35). According to Article 296 TFEU and also Article 100(2) of the Financial Regulation, there is a duty to state reasons, according to which the considerations that led to the decision must be expressed clearly and unequivocally so that "can ascertain the reasons for the measure adopted and enable the courts to exercise their power of review" (paras. 42, 43). This does not generally justify inspecting a competitor's offer, since the legitimate business interests of competitors preclude the disclosure of competing offers (para. 100). This restriction also applies to the awarding of public contracts, which is based on undistorted competition; therefore, "public contracting authorities may not disclose information relating to contract award procedures the content of which might be used to distort competition in either an ongoing or a future procurement procedure" (para. 100). For this reason, Article 100(2), subparagraph 1 of the Financial Regulation stipulates that the unsuccessful tenderer "shall be informed only of the characteristics and the relative advantages of the tender selected and of the name of the contracting authority" (para. 49). In this case, the unsuccessful tenderer had received the report of the evaluation committee, which explained the reasons for the marks awarded to the tenderers concerned for each sub-criterion of the technical evaluation of the tenders; on this basis, the unsuccessful tenderer was able to put forward arguments relating, first, to the comparative advantages of the tenders in question and, second, to the tender submitted by the successful tenderer (paragraph 46).
2.
The contracting authority has a wide margin of discretion in assessing the elements to be taken into account for the purpose of deciding whether to award a contract for which there has been an invitation to tender; the review carried out by the Court of First Instance must be limited to examining whether the procedural requirements and the duty to state reasons have been complied with, the facts have been correctly established and there is no manifest error of assessment or misuse of powers (para. 54).
In this case, both bidders submitted offers that exceeded the requirements of the service catalog. "In these circumstances, the fact that the applicant may have had a larger fleet of vehicles than the successful tenderer has no bearing on the comparative assessment of the tenders in this regard" (para. 58). Therefore, the contracting authority's decision is covered by the discretion to which it is entitled.
Practical tip
The decision is so interesting from a procurement law perspective because, although the parties are not subject to the EU directives for the application of procurement law, the defendant, as an organ of the European Union, is directly bound by the principles of the EU Treaty. And these principles in turn influence the interpretation of the substantive European procurement law that gives them concrete form.
The court's comments on the contracting authority's discretionary powers are less exciting. These are in line with the case law of national courts, among others. The statement that the contracting authority may ignore differences in performance between the offers if both offers meet the requirements of the performance specifications is also understandable. This argument is reminiscent of the well-known prohibition of "more suitability", except that here this principle is probably extended from the level of bidder-related professional suitability to the level of bid-related evaluation of bids. However, this seems justifiable here if more performance does not bring the public client any advantage in the execution of the contract.
However, the fact that the court is focusing its decision on the scope of the obligation to state reasons when awarding the contract will have an impact on future award and review procedures. The fact remains that neither party will be allowed to see the offers of the other party; in view of the need for a genuine, secret competition, this decision is correct.
But in the future, every bidder will be able to demand a justification of the award decision that goes beyond what has been customary up to now, citing the principles of EU contract law (Art. 296 TFEU), which are merely substantiated by the special standards of procurement law.
For example, the duty to provide reasons in Section 101a (1) GWB is limited, among other things, to notifying the unsuccessful bidder "of the reasons for the intended non-consideration of its offer". Case law does not place excessive demands on this duty to state reasons and, for example, accepts a notification of the partial scores achieved for the individual evaluation criteria, combined with the statement that the bidder intended for the contract award received the maximum achievable score. Examination of the prospects of success of an appeal does not enable the unsuccessful tenderer to do so. As a rule, the procurement documentation does not help the unsuccessful tenderer in the review procedure either. This is because, in the context of access to the files, the unsuccessful bidder is normally only granted access to those parts of the documentation that they themselves have made the subject of the proceedings by their complaint. The procurement tribunal and senate also limit themselves to what the parties have submitted or what has otherwise become known to them (Section 110 (1) GWB). In practice, the combination of mere control of the exercise of discretion and limited reasoning has long since come close to denying effective legal protection.
If one follows the case law of the General Court, the "characteristics and advantages of the selected offer" must in future be communicated to the unsuccessful tenderer. Instead of a justification for the rejection of the unsuccessful offer, there must therefore be a justification for the preferential aspects of the selected offer. And this must be done in such a way that the reasons for the decision to award the contract can be inferred and the judge can carry out his supervisory function (marg. no. 43). This will lead to significantly increased demands on the public contracting authority. This is good for legal protection.
The statements represent initial information that was current for the law applicable in Germany at the time of initial publication. The legal situation may have changed since then. Furthermore, the information provided cannot replace individual advice on a specific matter. Please contact us for this purpose.