Procurement in a nutshell – Court of Justice rules on tenderers’ experience
14th June, 2017
The Court of Justice of the European Union (CJEU) has delivered a judgment in the case of Esaprojekt sp. z o.o. v Województwo Łódzkie (Case C‑387/14).
In a previous update we outlined the opinion of Advocate General Bobek in this case.
This post provides an overview of the Court’s decision, which offers useful guidance to contracting authorities (CAs) on the approach which can be taken to tenderers’ experience both when creating a procurement specification and when seeking to clarify documents provided by a tenderer.
The facts of the case
The facts of the case (which can be read in full in the previous update) can be summarised briefly:
- following the award of a public contract to an entity, a procurement challenge was raised by a rival bidder;
- the CA sought clarification from the successful bidder regarding the tender information which it had produced;
- the clarification process revealed that the winning entity had relied on:
- experience gained from two separate contracts as a single contract; and
- experience involving the capacity of other entities;
- following provision of further information from the entity, the CA accepted the modified tender to allow the contract award.
The decision of the CJEU
In its judgement the Court addressed the following substantive matters:
Following the deadline for application to a tender procedure, is a CA entitled to ask a candidate to provide documents, which can be shown objectively to predate the deadline?
As a general rule, a tender cannot be amended after it has been submitted. Where a CA regards a tender as imprecise or failing to meet the technical requirements of the tender specifications, it cannot seek clarification.
Moreover, a CA reserves the right to expressly state in tender documents that unless certain information is provided, the application will be rejected.
However, the Court explained that a CA can seek clarification or amplification of the details of a tender, on a limited and specific basis such as where it is clear that they require mere clarification or to correct obvious material errors.
When clarifying or supplementing tender documents, can a bidder refer to the performance of contracts other than those which it originally referred to in its response?
The Court was of the view that rather than clarification on a limited and specific basis or correction of obvious material errors, such further information is in reality a substantive and significant amendment of the initial bid. Therefore, being more akin to the submission of a new tender, this is not permissible.
When clarifying or supplementing tender documents, can a bidder refer to contracts performed by another entity on whose capacity it relies, if they were not originally referred to in its response?
As with the above matter, the Court recognised that this would represent more than a mere clarification or correction of obvious error.
The Court agreed with the reasoning of the Advocate General that: “…such a communication directly affects the essential elements of the award procedure, namely the very identity of the economic operator which may be awarded the public contract concerned, and the verification of the capacities of that operator and, therefore, its ability to perform the contract concerned.”
In its tender documents, can a bidder rely on the resources of another entity by combining the knowledge and experience of itself and that of other entity, where, individually, they would not have the knowledge and experience required by the CA?
The Court acknowledged the right of every bidder to rely upon the capacity of other entities provided it can show that it will have the resources available for the purposes.
However, CAs can limit this right in certain circumstances, for example, where works with special requirements necessitate a capacity which cannot be obtained by combining capacities.
The justification for the limitation to a single economic operator must be related and proportionate to the subject matter of the contract in question.
In its tender documents, can a bidder rely on two or more contracts simultaneously as a single contract where the CA has not expressly provided for such a possibility in the contract notice or tender specifications?
In the Court’s view, the law enables a bidder to rely on experience derived from two or more contracts treated as a single contract. As above, however, the CA can limit this ability and indeed may exclude such a possibility.
The justification for any such limitation or exclusion must be related and proportionate to the subject matter of the contract in question.
In its tender documents, can a bidder rely on the experience of a group of undertakings, of which it was a part in connection with a public contract, regardless of the nature of its participation in the performance of the contract?
In these circumstances the experience of the economic operator must be viewed in relation to the effective participation of that operator and therefore to its actual contribution to the performance.
Why is this important?
The questions answered by the Court provide guidance which CAs should keep in mind when creating tender documents.
For example, CAs would be wise to consider, in advance, the extent to which it is appropriate in the context of a particular public contract for a bidder to rely on the experience of other entities or the experience of two or more contracts as a single contract. CAs will then be able to tailor the procurement documents accordingly.
A CA must be clear and precise in the creation of its selection criteria in order to ensure it can select a bidder which has the correct capacity to perform the contract.
The identification of satisfactory contracting partners is fundamental to ensuring that the tender process best meets the needs of the CA concerned and delivers value for money.
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.
This page may contain links that direct you to third party websites. We have no control over and are not responsible for the content, use by you or availability of those third party websites, for any products or services you buy through those sites or for the treatment of any personal information you provide to the third party.