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Connexxion Taxi Services case - The importance of complying with tender documentation

  • Ireland
  • General

10-05-2017

Contracting authorities should not underestimate the importance of the rules they set in their tender documents and should be wary of acting in contravention of those rules.

A recent judgment from the European Court of Justice underlines the significance of the rules devised and published by a contracting authority in its tender documentation. In the case of Connexxion Taxi Services BV v Staat der Nederlanden (C-171/15), the CJEU ruled that the terms of the tender document took precedence over an ‘explanatory memorandum’ to Dutch legislation which required contracting authorities to factor in an assessment of proportionality when exercising the power to exclude a bidder falling within a discretionary ground for exclusion.

Facts

The Dutch Ministry for Health launched a call for tenders for transport services for people with reduced mobility. The tender document stated that ‘a tender to which a ground for exclusion applies shall be set aside and shall not be eligible for further (substantive) assessment’. Tenderers were required to self-declare that no grounds for exclusion applied to them, including that they were not guilty of grave professional misconduct.

Following the outcome of the competition, the Dutch Competition Authority imposed penalties on two members of the winning consortium for breaches of competition law. The Ministry notified the second-ranked tenderer, Connexxion Taxi Services (Connexxion), that it stood by its decision to award the contract to the winning consortium: although members of the consortium were guilty of grave professional misconduct, to exclude the consortium on that basis would, in the Ministry’s view, be disproportionate. This position was driven in large part by the terms of an explanatory memorandum to Dutch legislation on the award of public contracts which stated that ‘the assessment of whether exclusion should actually take place and for how long […] should, having regard to the general principles of Directive 2004/18, always be proportionate and nondiscriminatory’. Connexxion challenged.

The Dutch Court took the view that the consortium should have been excluded: the Ministry, having established that consortium members were guilty of grave professional misconduct, had no latitude to carry out any assessment of proportionality. This decision was appealed and then further appealed to the Supreme Court which referred to the CJEU for a preliminary ruling on the significance of the inclusion in the tender documents of the statement that a tender to which a ground for exclusion applied must be set aside.

The CJEU’s decision

The Court took the view that the inclusion of the statement in question in the unambiguous terms in which it was formulated meant that a tenderer guilty of grave professional misconduct must be excluded: as the Manova case (C-336/12) made clear, an authority must comply strictly with the criteria it has itself laid down.

The statement enabled all reasonably well informed tenderers to be apprised of the requirements of the authority and the conditions of the contract. To depart from the terms of the tender document would be likely to place tenderers in an uncertain position, particularly those from other Member States who would be unlikely to be aware of the explanatory memorandum’s requirement for a consideration of proportionality, and adversely impact the principles of equal treatment and transparency.

Comment

The CJEU decision highlights the need for contracting authorities to exercise care when formulating tender conditions and to be cognisant of the consequences of those conditions. In spite of the requirements of the explanatory memorandum, there was, in the Court’s view, no room for manoeuvre on the part of the authority given the unambiguous nature of the statement in question: the authority was bound to act in accordance with the rules it had laid down in its tender documents.

In reaching its conclusion, the Court undertook an assessment of the importance of the principle of proportionality as against the principles of equal treatment and transparency and, in this instance, came down resolutely in favour of equal treatment and transparency.

For more information contact

Áine Smith
Consultant
+353 1 6441 474
ainesmith@eversheds-sutherland.ie

This information is for guidance purposes only and should not be regarded as a substitute for taking legal advice. Please refer to the full terms and conditions on our website.

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