On 15 May 2008, the European Court of Justice gave its Judgment in the SECAP Case C-147 & 148/06, on reference from an Italian court. The key issue in the case was the application of the rules involving the treatment of abnormally low tenders in contracts valued below the procurement directive thresholds. Under the EU Directive, contracting authorities are required to take into account explanations before excluding a low tender. However, under Italian law, contracting authorities are entitled to automatically exclude contracts that are abnormally low, provided that there are five or more valid offers. However, despite the national provision, the municipality of Turin decided not to automatically exclude offers below the thresholds and its decision was challenged before the national courts. The ECJ took the view that the Italian legislation was itself objective and non-discriminatory but that there was a risk that automatic exclusion could prevent contracting authorities from assessing the viability of low tenders and this might result in an infringement of the principles of free movement and non-discrimination. The ECJ concluded therefore that it was up to the relevant contracting authority to assess whether there is a cross-border interest and to decide whether to apply the evaluation rule. However, the ECJ did find that, even where there is cross-border interest, it might be acceptable to automatically exclude tenders for being abnormally low if there are an unusually large number of tenders and detailed examination would be a burden on the contracting authority.
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ECJ rules on abnormally low tenders
- Nabarro LLP
- Cyrus Mehta and Rachel Bickler
- European Union, Italy
- June 3 2008
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