CASE-LAW

Scottish Court of Session confirms no lack of clarity or error in award criteria in procurement procedure

On 21 March 2013, the Scottish Court of Session confirmed a first instance ruling that dismissed an action by Healthcare at Home Limited (HAH). HAH sought to set aside a decision by the Common Services Agency (CSA) to award a framework agreement on the basis, in particular, that the award criteria lacked sufficient clarity. The Court examined the test and approach for examining whether the award criteria set out in the invitation to tender were compliant with the obligations of equal treatment and clarity. It concluded that the CSA's formulation of the criteria in the ITT allowed all reasonably well-informed and normally diligent tenderers to interpret the criteria in the same way and in the way that they were applied by the CSA. The Court also agreed with the judge at first instance that the CSA had not erred in its evaluation of the tenders and had provided sufficient reasons for its decision. (Healthcare At Home Ltd v The Common Services Agency [2013] ScotCS CSIH_22). Read more

English High Court ruling on disclosure in public procurement dispute

On 19 April 2013, the High Court handed down a ruling on an application by the claimant in a public procurement dispute for specific disclosure and pre-action disclosure. The High Court set out the principles that it considered are relevant to considering applications for early specific disclosure in procurement cases. It concluded that the claimant was entitled to various documents relating to the procurement evaluation process, including instructions to the evaluation team, contemporaneous records of the evaluation process and any independent audit of the evaluation. Such documents were necessary to allow the claimant to take a considered and informed view of the legality and fairness of the evaluation process. The High Court has also granted a request by the claimant for pre-action disclosure of certain documents in the context of potential proceedings to challenge the grant of an interim contract to the successful bidder in the main procurement exercise. Such disclosure would enable the real issues to be identified and, possibly, resolved. (Roche Diagnostics Ltd v The Mid Yorkshire Hospitals NHS Trust [2013] EWHC 933 (TCC).) Read more

Advocate General opinion on application of procurement rules to land development agreements

On 11 April 2013, Advocate General Melchior Wathelet handed down an opinion on an appeal from the European Commission regarding the application of EU procurement law to land development agreements. The Advocate General considered that the applicable directive in this case was Directive 93/37 (rather than Directive 2004/18) because the actionable event was the municipality of Eindhnoven's approval in 2002 of the preliminary plans for a community centre to be known as the Doornakkers Centre. At the same time, the municipality of Eindhoven decided that the EU procurement rules did not apply because it was considered a sale of land, exempt from the procurement rules. The Advocate General considered that the Commission's appeal should be dismissed because it was based on an alleged infringement of Directive 2004/18 rather than Directive 93/37 (the Commission considered that the actionable event was Eindhoven's approval of the developer's plan for the Doornakkers Centre in 2006, after Directive 2004/18 came into effect). Nevertheless, the Advocate General also considered the substance of the Commission's appeal. The Advocate General recommended that the ECJ dismiss the appeal as unfounded because the developer obtained its right of exploitation as a result of its purchase of the land and not as a result of the co-operation agreement with the municipality and therefore the EU procurement rules were not applicable because the co-operation agreement was not a public works concession within the meaning of Directive 2004/18. The Advocate General based his opinion on the ECJ's conclusions in the Helmut Müller case, where the ECJ found that in order for a contracting authority to be able to transfer to the other contracting party the right to exploit a work within the meaning of Directive 2004/18, that contracting authority must be in a position to exploit that work and this will normally not be the case where the only basis for the right of exploitation is the right of ownership of the economic operator concerned. Read more

Advocate General recommends setting aside of General Court judgment in case concerning circumstances in which private construction projects substantially subsidised by public funds should fall within EU public procurement rules

On 18 April 2013, Advocate General Juliane Kokott handed down her opinion in an appeal by France against a General Court ruling upholding a European Commission decision cancelling part of the contribution of the European Regional Development Fund (ERDF) for EU structural assistance in Martinique. The case concerns the circumstances in which private construction projects that are in a large part subsidised or financed by public funds, in this case the renovation and extension of a holiday village, should be subjected to a tender procedure under EU public procurement rules. The Advocate General considered that the General Court committed an error of law when it included simple tax credits within the scope of Article 2 of Directive 93/37 concerning the co-ordination of procedures for the award of public works contracts. The General Court also erred in its appreciation of the concept of facilities intended for sports, recreation and leisure within paragraph 2 of Article 2 of Directive 93/37. Advocate General Kokott recommended that the ECJ annul both the General Court's judgment and the Commission's decision. Read more

General Court dismisses procurement appeal against tender by EU fusion energy body

On 20 March 2013, the General Court dismissed an appeal by Nexans France against a procurement process tendered by the European Joint Undertaking for ITER and the Development of Fusion Energy for the supply of electrical equipment. The General Court rejected the appeal in its entirety, finding that the European Joint Undertaking for ITER and the Development of Fusion Energy had not infringed the principles of legal certainty, transparency and equal treatment of tenderers, because the tender documents clearly set out that tenderers had to accept all the stipulations and conditions set out in the contract and attached annexes and that failure to do so gave the contracting authority the right to reject a bid without evaluation. The General Court also found that the tender documents had not been designed to favour the successful tenderer as they were designed to specifications set out by the international ITER project. (Case T-415/10: Nexans France v European Joint Undertaking for ITER and Development of Fusion Energy) Read more (not available in English)

General Court dismisses appeal against Commission tender relating to "Environment for Young Europeans" website

On 24 April 2013, the General Court dismissed an appeal by the Greek company Evropaiki Dinamiki (European Dynamics) against a European Commission procurement process relating to the provision of services for a market study in view of developing a new approach for the "Environment for Young Europeans" website. The General Court rejected the appeal in its entirety, finding that the Commission had not committed any manifest errors of assessment, nor had it mixed up the selection and award criteria as regards its evaluation of the European Dynamic's tender and that the statement of reasons was adequate. Read more

INFRINGEMENTS CASE-LAW

Commission requests Portugal to apply EU rules

The European Commission has requested that Portugal fully implement the Directive on procurement of arms, munitions and war material (and related works and services) for defence purposes, as well as the procurement of sensitive supplies, works and services for security purposes. The Defence Procurement Directive (Directive 2009/81/EC) had to be implemented in all EU Member States by 20 August 2011. However Portugal has only put part of the required provisions in place. The Commission's request takes the form of a reasoned opinion under EU infringement procedures. If no measures are notified to put an end to the violation of EU law within two months, the Commission may decide to refer Portugal to the EU Court of Justice. Read more

OTHER DEVELOPMENTS

HMRC publishes response to consultation on promoting tax compliance through procurement policy

On 20 March 2013, HM Revenue & Customs (HMRC) published a summary of the responses to the consultation on using the public procurement process to deter tax avoidance and evasion. This sets out the government's policy decisions following the consultation. The government has decided that the policy of requiring suppliers to certify compliance with tax obligations will apply from 1 April 2013. However, in light of comments received, the government has made a number of changes to the policy. In particular, it has concluded that the "look back" period for non-compliance will be six years (not 10 as proposed) and that bidders will only be required to certify occasions of non-tax compliance occurring on or after 1 April 2013, relating to tax returns filed on or after 1 October 2012. In addition, the government has revised the definition of "occasions of non-compliance" and also clarified who will be required to make the certification (the economic operator who will fulfil the contract). The government has also concluded that the policy will only apply to contracts with a value of over £5 million (rather than all contracts to which the public procurement rules apply). The government will review the new policy within a year. Read more

Cabinet Office announces questions to be included in procurement documentation to implement policy of promoting tax compliance

The Cabinet Office has published a Procurement Policy Note that sets out the questions that all central government departments should, from 1 April 2013, include in their procurement document at selection stage (Pre Qualification Questionnaires or the Invitation to Tender in open procedures) to implement the new policy of using procurement to promote tax compliance. The new policy applies to all suppliers (economic operators) bidding for central government contracts with a value of £5 million or more and subject to the EU public procurement rules. Read more

Single Supplier Registration platform to be developed for suppliers to compete for public sector contracts

On 15 March 2013, the government announced that the Government Procurement Service (GPS) has awarded a new contract to NQC Limited to develop a Single Supplier Registration platform, for suppliers to use to compete for public sector contracts. Currently, suppliers to the public sector have to register on several systems to be able to view, access and tender for business opportunities. The new platform is intended to be centralised, secure and more efficient to use, encouraging suppliers, particularly small to medium enterprises (SMEs), to bid for public sector opportunities. The new registration platform will be available for the health sector from April 2013. It will then be extended across other sectors. Read more

National Procurement Service for Wales established

On 12 March 2012, the Welsh Government announced that it had established the National Procurement Service for Wales. The aim is to generate savings of £25 million each year. The new procurement service will:  

  • Be used to establish and run contracts for common and repetitive public sector spending in Wales (for example, on stationery, office furniture and IT hardware).
  • Develop local supply chains, to help Welsh businesses benefit from public sector spending.
  • Be hosted within the Welsh Government.

Read more

Commission publishes case-book of e-procurement good practices

On 9 April 2013, the European Commission announced that it has published a case-book of best implementation practices in e-procurement. The Golden Book covers 24 best practices and is aimed at promoting convergence towards and take-up of such good practices by member states and public authorities investing in e-procurement infrastructure. Read more