Public Procurement

EU

General Court supports European Commission’s Use of the Negotiated Procedure without prior publication of a Contract Notice

The EU’s approach to protecting gas security of supply following the invasion of Ukraine included establishment of an EU Energy Platform to allow European companies to register their gas purchase needs, to be followed by joint purchasing of gas at EU level.

To have the service running in time for the filling season for gas storage facilities, the Commission estimated that the service contract would have to be signed by mid-January 2023. It decided to use the negotiated procedure without prior publication of a contract notice.

In Case T-1/23, a German software company challenged the decision of the Commission not to invite the company to participate in a call for tenders to provide the EU Energy Platform service.

The Court dismissed the challenge. The Commission was entitled to take the view that the energy crisis was an unforeseeable event. It drew up a schedule of time required to run the procurement based on objective factors. It was entitled to take the view that use of the open procedure could not ensure compliance with the schedule, given the potentially high number of participants in an open procedure and in the light of the technical award criteria, the technically complex nature of the contract in question, the technical requirements relating to each tenderer’s offer, the foreseeable duration of the evaluation process, and compliance with the standstill period. The Court also rejected arguments that the extreme urgency was attributable to the Commission and that use of the procedure was not such as to “address an immediate shortage of supply”.

Impact of Contract Review

Under Article 2(3) of the Remedies Directive, when a body of first instance, which is independent of the contracting authority, reviews a contract award decision Member States shall ensure that the contracting authority cannot conclude the contract before the review body has made a decision on the application either for interim measures or for review. The suspension shall end no earlier than the expiry of the standstill period.

In Case C-303/22, a Czech Court referred the question of whether it is permissible for Czech legislation to permit a contracting authority to conclude a public contract before an action is brought before a court competent to review the legality of a second-instance decision of the Office of the Protection of Competition to exclude a tenderer.

The Opinion of the Advocate General dealing with the question is that Article 2(3) and (9) and Article 2a(2) of the Remedies Directive must be interpreted as not precluding national legislation under which, once proceedings before an independent (non-judicial) review body have been exhausted, a contracting authority may conclude a public contract prior to an administrative action being brought before a judicial body having jurisdiction to review the legality of the decision to exclude a tenderer or to award that contract, provided that, in the context of that administrative action, the court which is to adjudicate on the case has the power to adopt interim measures consisting, where appropriate, in suspending the effects of the signed contract.

UK

Standing

Under the Remedies Directive, Member States must ensure that review procedures are available “at least to any person having or having had an interest in obtaining a particular contract and who has been or risks being harmed by an alleged infringement”.

In International Game Technology plc and other v the Gambling Commission [2023] EWHC 1961 (TCC), several entities challenged the award of a Fourth Licence to run the National Lottery. The court described these entities as “at best sub-contractors” to Camelot, the unsuccessful incumbent. They did not have standing to proceed with a procurement challenge. While Member States could go further than the Remedies Directive and offer standing to third parties or subcontractors, the Remedies Directive did not provide standing to a wider group than unsuccessful bidders.

The issue of standing arose in Ireland most recently in the Court of Appeal’s dismissal of Word Perfect’s appeal in [2022] IECA 131. In that case, in order to be an “eligible person” within the meaning of Regulation 4 of the Remedies Regulations in the sense of having an “interest in obtaining” the contract at issue in the public procurement tender procedure, the applicant must have participated in the particular tender procedure by submitting a tender. (The Court indicated that this is a general principle which is subject to exceptions, with a specific category of exception described at paragraph 178.)

Standard Contracts

The Government published Procurement Policy Note 08/23 on Using Standard Contracts. It looks at three templates:

- the Model Services Contract for complex services,

- the Mid-Tier Contract for goods and/or services procurements which are not particularly complex, and

- the Short Form Contract for low value goods and/or services.