Procurement in a Nutshell – Court reiterates that MEAT tender is not necessarily the cheapest
22nd February, 2019
A recent judgment of the Court of Justice of the European Union (CJEU) has examined the principles governing the award of public contracts. In doing so, the CJEU focussed on the requirement that a contract is awarded to the Most Economically Advantageous Tender (the MEAT tender); as well as assessing whether this must be determined solely on the issue of price or whether additional factors can be taken into account.
Click here to view the judgment.
The dispute arose after the Claimant company, Proximus SA, challenged the decision of the Council of the European Union (the Council) to award the framework contract for the provision of cybersecurity to another tenderer, despite the successful organisation’s tender having a higher total price than the Claimant’s.
On this basis, the Claimant alleged that:
- The Council had failed to select the MEAT tender, thus breaching European legislation; and
- The Council had infringed the general principles of transparency, non-discrimination and equal treatment.
Had the Council failed to award the contract to the MEAT tender?
The Claimant criticised the mathematical formula used by the Council to provide bidders with an overall score which combined the technical and financial merits of bids. Furthermore, the Claimant also stated that the subsequent process of applying weightings to the scores was both artificial and arbitrary.
Was the use of the specific mathematical formula permitted?
In its assessment of this point, the CJEU noted that European law requires Contracting Authorities to base the award of contracts on the most economically advantageous offer, as determined according to either the lowest price, the lowest cost, or the lowest price-quality ratio.
When considering the facts of this case, the CJEU was of the opinion that the Council had decided to award the contract to the tenderer offering the best price-quality ratio and, consequently, could “take into account the price or cost and other quality criteria linked to the subject matter of the contract.”
In this regard, it was noted that a Contracting Authority has “a broad discretion as to the choice, content and implementation of the relevant award criteria linked to the contract in question, including those intended to identify the most economically advantageous tender”.
Additionally, “The criteria adopted by the Contracting Authority to identify the most economically advantageous tender need not necessarily be quantitative or related solely to prices. It is sufficient that such criteria can be applied objectively and uniformly in order to compare the tenders, and that they be clearly relevant for identifying the most economically advantageous tender.”
In this instance, the formula which was applied was held to have assessed the MEAT tender on the basis of the best price-quality ratio and, as such, the fact that the Claimant’s tender was cheaper was irrelevant.
Was the application of weightings legal?
Finding that the application of weightings to tenderers’ scores was permitted, the CJEU noted that it was common ground that the tender specifications clearly provided for such weightings, the weightings served a clear purpose and, consequently, such weightings should have been taken into account by candidates during the submission of tenders.
In line with this, it was noted that the fact that the application of those weightings had a negative impact on the Claimant’s financial score was linked to the content of the tender, and was not the result of the weightings. On this basis, this aspect of Claimant’s argument failed and the weightings were found to be legal and the contract was awarded to the MEAT tender.
Did the Council infringe the principles of transparency, non-discrimination and equal treatment?
In addition to the above, the Claimant also sought to argue that a tender evaluation process which does not provide the highest overall score to the tenderer offering the lowest price infringes the general principles of transparency, non-discrimination and equal treatment.
However, once again, this argument was dismissed by the CJEU on the basis that the precise award criteria, in addition to details as to how this would be applied, were set out clearly in the tender documents.
Commenting on the requirements generally, the CJEU stated that:
- All conditions and detailed rules of the award criteria must be drawn up in a clear, precise and unequivocal manner in the contract notice or tender specifications;
- All tenderers must be afforded the “equality of opportunity” when submitting their tenders – meaning that all tenders should be subject to the same conditions;
- The award criteria must be set out in the tender specifications or contract notice, in such a way as to allow reasonably well informed tenderers to interpret them in the same way; and
- The award criteria must be applied in a uniform manner.
In this instance, the CJEU found that each of the above requirements had been complied with and, as such, the tender process did not infringe the principles of transparency, non-discrimination and equal treatment.
Why is this important?
The case is a useful reminder that the MEAT tender is not necessarily synonymous with the cheapest tender and that, in certain situations, a Contracting Authority can award a contract to a tender which, despite being more expensive, offers a better overall quality. Additionally, the judgment emphasises that Contracting Authorities should remain vigilant in ensuring that the specific evaluation criteria are set out in a clear and unequivocal manner. Furthermore, such criteria should be applied uniformly to all tenders and detailed and comprehensive records should be kept of the justifications for all decisions made.
How can I find out more?
If you have any queries on the issues raised or on any aspect of procurement, please contact us via our procurement hotline on 0191 204 4464.
Please note that this briefing is designed to be informative, not advisory and represents our understanding of English law and practice as at the date indicated. We would always recommend that you should seek specific guidance on any particular legal issue.
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