Public procurement is the acquisition of goods, services, and works by a public authority or body. Constituting one of the main expenditures of government, the importance of public procurement cannot be denied. Public procurement is at the heart of a solid economy. Needless to say, any improvements in the public procurement system can have a direct and beneficial effect on the overall economic situation of a country.

European procurement is founded on the need to remove barriers to intra-Union trade, on the fundamental freedom of provision of services and of the right to establishment enshrined in the founding treaty of the European Union. The regulatory framework in turn is based on four principles that act in tandem to make procurement fair and effective.

The first is equal treatment that ensures that all processes of commissioning and procurement are fair, without exclusions of potential bidders.

The second is transparency, ensuring that all potential bidders can easily see and understand the procurement process including the criteria on which bids and tenders are evaluated.

The third principle is that of proportionality and the fourth principle is that of non-discrimination between suppliers of member states.

The Court of Justice of the European Union (CJEU) was requested to give its interpretation on the application of these principles in the context of a public procurement process that took place in Denmark. This case involved a referral from the Danish Courts of a suit filed by Manova, an unsuccessful bidder in a tendering process, against the Danish Ministry for Science, Innovation and Higher Education, who claimed that the public procurement procedure adopted by the ministry was unlawful. In this tendering process, the two successful bidders had failed to include their published balance sheets with their original tender submissions and only did so after the contracting authority made a request for such missing information to be submitted following the tender deadline. They were subsequently awarded contracts.

The unsuccessful bidder contended that the contracting authority was not allowed to seek such information and ought to have ruled instead the two successful bidders as non-compliant.

The Danish Courts referred to the CJEU for a preliminary ruling on whether the principle of equal treatment precludes a contracting authority from asking a candidate, after the deadline for tender submissions elapsed, to provide financial statements required in terms of the qualitative selection criteria, but were not included with that candidate’s submission.

The ruling favours functionality over rigidity. It supports a pragmatic approach in a bid to avoid overly strict formal requirements getting in the way of good public procurement processes

In its recent judgment, the Court emphasised the principle of the equal treatment of tenderers and the corollary obligation of transparency. It concluded, however, that the principle of equal treatment does not preclude the contracting authority from making a request for a financial statement of a bidder, when such a document can be objectively shown to pre-date the deadline of the tender submissions. The European Court provided a form of test for the determination of whether a request for clarification from a bidder is legitimate: A request may not be made until after the contracting authority has looked at all the tenders and must be sent in an equivalent manner to all tenderers in the same situation, must relate to all sections of the tender which require clarification and must not lead to the submission of what would appear in reality to be a new tender.

In ruling in this manner, the Court created some room for the flexible interpretation of the rules on formal compliance of bids submitted in public procurement procedures. However, two important caveats were made: The request must not unduly favour or disadvantage the tenderer to which it is addressed and such a request can only be made where the provision of the information requested is not a pre-condition to compliance in the tender documents.

This ruling favours functionality over rigidity. It supports a pragmatic approach in a bid to avoid overly strict formal requirements getting in the way of good public procurement processes.

josette.grech@onvol.net

Josette Grech is an associate with Guido de Marco & Associates and heads its European Law division.

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