REPORT ON THE FIRST WORKSHOP ON PUBLIC
HARMONISATION OF PUBLIC PROCUREMENT SYSTEM IN UKRAINE WITH EU STANDARDS www.eupublicprocurement.org.ua REPORT ON THE FIRST WORKSHOP ON PUBLIC PROCUREMENT CASE LAW Ms Anastasia Kalina April 2015 A Project funded by the European Union and implemented by a Consortium led by Crown Agents Ltd HARMONISATION OF PUBLIC PROCUREMENT SYSTEM IN UKRAINE WITH EU STANDARDS The contents of this Report are the sole responsibility of the Crown Agents and its Consortium partners and the opinions expressed in this Report are not to be understood as in any way reflecting an official opinion of EUROPEAID, the European Union or any of its constituent or connected organisations. 2 HARMONISATION OF PUBLIC PROCUREMENT SYSTEM IN UKRAINE WITH EU STANDARDS ABBREVIATIONS AMCU CJEU Anti-Monopoly Committee of Ukraine Court of Justice of the European Union EU European Union MEDT Ministry of Economic Development and Trade of Ukraine PP Public Procurement TFEU Treaty on the Functioning of the European Union 3 HARMONISATION OF PUBLIC PROCUREMENT SYSTEM IN UKRAINE WITH EU STANDARDS TABLE OF CONTENTS Page 1. Introduction 5 2. The Workshop 7 Annexes 11 Annex 1: Workshop Programme 12 Annex 2: Presentations of Mr Steen Bruun-Nielsen 13 Annex 3: Case Law Notes 23 Annex 4: List of participants 32 Annex 5: Questionnaire 33 4 HARMONISATION OF PUBLIC PROCUREMENT SYSTEM IN UKRAINE WITH EU STANDARDS 1. INTRODUCTION The EU funded Project “Harmonisation of Public Procurement System in Ukraine with EU Standards” commenced work in Kyiv on 11 November 2013. The general objective of the Project is “to contribute to the development of a solid and consistent public finance management through the establishment of a comprehensive and transparent regulatory framework for public procurement, an efficient public procurement institutional infrastructure, the accountability and integrity of public authorities in regard to public procurement and the development of the Ukrainian state aid system”. The Project is currently providing priority assistance in regard to the planning of public procurement reforms in parallel with specific assistance towards necessary changes in public procurement legislation in Ukraine. In addition, the Project is supporting the strengthening of the Ministry of Economic Development and Trade (MEDT) and the Anti-Monopoly Committee of Ukraine (AMCU) as the main institutions responsible in the public procurement system of Ukraine and improved coordination between these entities and other entities in charge of financial control of public procurement activities. The AMCU is one of the main stakeholders in the Ukrainian public procurement system in its capacity as the complaint review body and as the national regulator regarding fair competition. In accordance with the approved planning for the Project, the work of the Project is organised into 5 Components. Project Component 3: Public Procurement - Institutional Development and Training includes a specific Sub-Component 3.2 focused on: Strengthening the institutional capacity of the AMCU in the public procurement system. As part of its programme of institutional development and training support, the Project firstly organised a Workshop on EU case law relevant to public procurement complaints review processes and, in particular, the application of the EU Remedies Directives on public procurement, on 10 September 2014. The Workshop was presented by Senior Public Procurement Expert, Mr Peter Gjortler. As a result of discussion and on the basis of a follow-up request from the AMCU, the Project is now running a training series of 5 workshops until end 2015 focused on some 30 main EU cases on public procurement. Knowledge of the case law of the Court of Justice of the European Union (CJEU) and the ability to use the approach of the CJEU will become increasingly relevant as the EU alignment of Ukrainian legislation and practice continues. The purpose of each workshop is therefore (1) to familiarise participants with the approach of the CJEU in order to enable them to use this approach, and (2) to show how the CJEU case law has influenced and continues to influence the development of the EU public procurement directives. The workshops essentially have the following structure: Presentation of the facts of the cases and the questions submitted to the CJEU; Analysis of the manner in which the CJEU interprets and applies the EU directives and the other sources of law, including the Treaty on the Functioning of the European Union (TFEU) and EU principles of law. 5 HARMONISATION OF PUBLIC PROCUREMENT SYSTEM IN UKRAINE WITH EU STANDARDS The Workshop held on 22 April 2015 had a specific focus on five CJEU judgments considering the principles of equal treatment, transparency and non-discrimination. The Workshop Programme is attached to this Report as Annex 1. The case facts and judgments were summarised and presented as Case Law Notes (see Annex 3). The Workshop was attended by officials from the Anti-Monopoly Committee of Ukraine - in total 20 persons (the participation list is attached to this Report as Annex 4). 6 HARMONISATION OF PUBLIC PROCUREMENT SYSTEM IN UKRAINE WITH EU STANDARDS 2. THE WORKSHOP Mr Mykola Barash, Acting Head of the AMCU, opened the Workshop. He welcomed the Project experts, introduced the speakers and expressed a conviction of the further continual gainful cooperation with the Project. Also, Mr Barash highlighted the strong interest of the AMCU in a full appreciation of the relevant EU case law and its future importance for the work of the Complaints Board in the context of the EU-Ukraine Association Agreement. The Project Team Leader Dr Eugene Stuart introduced the Project and its objectives to the Workshop. He pointed out many requirements on approximation of the Ukrainian legislation to EU law according to the EU-Ukraine Association Agreement and, in this vein, importance of awareness of EU case law. Mr Steen Bruun-Nielsen made a two-part presentation to the workshop. He presented selected CJEU cases (see Annex 2) with a focus on the following 5 cases: Case 1. C-45/87 Commission of the European Communities v Ireland (‘Dundalk’): - Dundalk Urban District Council (the contracting authority) is a public body promoting a scheme for the augmentation of Dundalk's drinking water supply. Contract No 4 of that scheme is for the construction of a water-main to transport water from the River Fane source to a treatment plant at Cavan Hill and thence into the existing town supply system; - “There is no reason to consider that the exception in question (for utilities) no longer applies, and the reasons underlying it are no longer valid, where a Member State has a contract notice published in the Official Journal of the European Communities, whether through an error or because it initially intended to seek a contribution from the Community towards the financing of the work ”; - CJEU, Point 22: “That technical argument cannot be accepted. The Commission’s complaint does not relate to compliance with technical requirements but to the refusal of the Irish authorities to verify whether those requirements are satisfied where the manufacturer of the materials has not been certified by the IIRS to IS 188. By incorporating in the notice in question the words "or equivalent", the Irish authorities could have verified compliance with the technical conditions without from the outset restricting the contract only to tenderers proposing to utilize Irish materials.” Case 2. C-243/89 Commission of the European Communities v Kingdom of Denmark (‘Great Belt Bridge’): - "Storebaelt" is a company wholly controlled by the Danish State. It is responsible for drawing up the project and, as the contracting authority, for the construction of a road and rail link across the Great Belt. Part of the project involves the construction of a bridge across the Western Channel of the Great Belt. The value of the contract for the construction of the Western Bridge is estimated at DKR 3 billion; - Main issues: Danish content clause and non-compliant tender not rejected; 7 HARMONISATION OF PUBLIC PROCUREMENT SYSTEM IN UKRAINE WITH EU STANDARDS - “On this issue, it need only be observed that, although the directive makes no express mention of the principle of equal treatment of tenderers, the duty to observe that principle lies at the very heart of the directive whose purpose is, according to the ninth recital in its preamble, to ensure in particular the development of effective competition in the field of public contracts and which, in Title IV, lays down criteria for selection and for award of the contracts, by means of which such competition is to be ensured” (para 33); - “… observance of the principle of equal treatment of tenderers requires that all the tenders comply with the tender conditions so as to ensure an objective comparison of the tenders submitted by the various tenderers” (para 37); - it follows from all the foregoing considerations that, by reason of the fact that Storebaelt invited tenders on the basis of a condition requiring the use to the greatest possible extent of Danish materials, consumer goods, labor and equipment and the fact that negotiations with the selected consortium took place on the basis of a tender which did not comply with the tender conditions, the Kingdom of Denmark failed to fulfil its obligations under Community law and in particular infringed Articles 30, 48 and 59 of the Treaty as well as Council Directive 71/305/EEC (para 45). Case 3. C-87/94 Commission of the European Communities v Kingdom of Belgium (‘Walloon Buses’): - The Société Régionale Wallonne du Transport (“SRWT”) based in Namur (Belgium) is a public undertaking operating a network providing a public bus service issued an invitation to tender for the award, under an open procedure, of a public contract for the supply of 307 standard vehicles. That contract, for an estimated sum of over BFR 2 000 000 000 (excluding VAT) and divided into eight lots, was to be performed over a period of three years; - Main issues: amendment of bid after bid submission and acceptance of non-compliant bid; - Admittedly the headings for the award criteria (…) could be interpreted (…) as having a wide scope (see, for example, the heading for the seven technical criteria, namely "the technical qualities of the material offered"), so that (..) all the characteristics relating to the technical qualities of the material offered would be relevant when comparing the tenders (para 86); - However, the SRWT itself defined all the technical criteria using a precise formula set out under each heading. Accordingly, the scope of the technical criteria, whatever the wording of the headings, was restricted by the formulas used by the SRWT to define them (para 87); Case 4. C-599/10 SAG ELV Slovensko and Others v Úrad pre verejné obstarávanie (‘ELV’): - Národná dial’ničná spoločnost’ a.s. (hereinafter “NDS”) is a national highway management company wholly owned by the Slovak State. In September 2007 NDS launched a tender process to award a contract for toll collection services on motorways and certain roads. The estimated value of the contract was in excess of EUR 600 million; - Main issues: right/obligation to seek clarification in connection with abnormally low bids and right/obligation to clarify imprecise bids or bids that do not fulfil technical specifications; - “By its very nature, the restricted public procurement procedure means that, once (..) the tenders have been submitted, in principle those tenders can no longer be amended either at the request of the contracting authority or at the request of the tenderers. The principle of equal treatment of tenderers and the obligation of transparency resulting therefrom preclude, in that procedure, any negotiation between the contracting authority and one or other of the tenderers” (para 36); 8 HARMONISATION OF PUBLIC PROCUREMENT SYSTEM IN UKRAINE WITH EU STANDARDS - “To enable the contracting authority to require a tenderer whose tender it regards as imprecise or as failing to meet the technical requirements of the tender specifications to provide clarification in that regard would be to run the risk of making the contracting authority appear to have negotiated with the tenderer on a confidential basis, in the event that that tenderer was finally successful, to the detriment of the other tenderers and in breach of the principle of equal treatment” (para 37); - “None the less, Article 2 of that directive does not preclude, in particular, the correction or amplification of details of a tender where appropriate, on an exceptional basis, particularly when it is clear that they require mere clarification, or to correct obvious material errors, provided that such amendment does not in reality lead to the submission of a new tender. Nor does that article preclude a provision of national legislation (..) according to which, in essence, the contracting authority may ask tenderers in writing to clarify their tender without, however, requesting or accepting any amendment to the tender” (para 40); - In the exercise of the discretion thus enjoyed by the contracting authority, that authority must treat the various tenderers equally and fairly, in such a way that a request for clarification does not appear unduly to have favoured or disadvantaged the tenderer or tenderers to which the request was addressed, once the procedure for selection of tenders has been completed and in the light of its outcome (para 41); - In order to provide a useful answer to the national court, it must be added that a request for clarification of a tender may be made only after the contracting authority has looked at all the tenders (….)(para 42); - Furthermore, that request must be sent in an equivalent manner to all undertakings which are in the same situation (…)(para 43); - In addition, that request must relate to all sections of the tender which are imprecise or which do not meet the technical requirements of the tender specifications, without the contracting authority being entitled to reject a tender because of the lack of clarity of a part thereof which was not covered in that request (para 44). Case 5. C-336/12 Ministeriet for Forskning, Innovation og Videregående Uddannelser v Manova A/S (‘Manova’): - The Undervisningsministeriet (The Danish Ministry of Science, Innovation and Higher Education) (hereinafter “the Ministry”) launched a call for tenders in respect of services required for the operation of seven occupational guidance and advice centres (‘guidance centres’) starting from 1 August 2009. The value of the contract to be awarded was above the threshold which, under Article 7 of Directive 2004/18, triggers application of that directive; - Main issues: right/obligation to reject bids where requested information is missing; - “In SAG ELV Slovensko and Others, the Court laid down certain requirements to mark the bounds of the contracting authority’s right to make a written request to the tenderer or tenderers concerned for clarification of their bid” (para 33); - “That guidance in relation to tenders can also be applied to applications filed at the screening stage for candidates in a restricted procedure” (para 38); - Accordingly, a contracting authority may request the correction or amplification of details of such an application, on a limited and specific basis, so long as that request relates to particulars or information, such as a published balance sheet, which can be objectively shown to pre-date the deadline for applying to take part in the tendering procedure concerned (para 9 HARMONISATION OF PUBLIC PROCUREMENT SYSTEM IN UKRAINE WITH EU STANDARDS 39); - However, it should be explained that this would not be the case if the contract documents required provision of the missing particulars or information, on pain of exclusion (…) (para 40); In his closing remarks, Mr Steen Bruun-Nielsen summarised: (1) Bidders must receive the same amount of information as the basis for drawing up their bids (otherwise there will be a situation of undue advantage for some bidders), (2) Bids that do not correspond to the requirements of the tender dossier must be rejected as noncompliant (otherwise bids are not comparable) – C-254/89, Great Belt Bridge, C-87/96, Walloon Busses, C- 336/12, Manova, (3) A Procuring entity must apply the award criteria in an equal manner to all bids accepted as compliant - C-87/96, Walloon Busses, C-599/10, ELV. Workshop Evaluation The participants were invited to complete an evaluation of the event (see Questionnaire at Annex 5) in order to summarise their views and provide feedback. The assessment of responses from 13 participants revealed a high level of satisfaction with all aspects of the event. In particular, the event scored 4.92 (of a total of 5) in terms of overall participant satisfaction and there was strong positive feedback as to the novelty of the information provided. As a follow-up to a specific point raised in feedback from the AMCU, the case notes for the future workshops in this series will include a section on the positions of the parties in the case. Next Workshop in Series The next event is planned for 11 June 2015 and will be devoted to evaluation of procurement criteria according to principles of equal treatment. 10 HARMONISATION OF PUBLIC PROCUREMENT SYSTEM IN UKRAINE WITH EU STANDARDS ANNEXES Annex 1: Workshop Programme Annex 2: Presentations of Mr Steen Bruun-Nielsen Annex 3: Case Law Notes Annex 4: List of participants Annex 5: Questionnaire 11 HARMONISATION OF PUBLIC PROCUREMENT SYSTEM IN UKRAINE WITH EU STANDARDS ANNEX 1: Workshop Programme Date: 22 April 2015 (Wednesday), 14.00 - 17.00 Venue: Kyiv, AMCU, Uritskoho str. 45, conference room 14.00 – 14.15 Welcome and introduction to the workshop Mr Mykola Barash, Acting Head of the AMCU Dr Eugene Stuart, Team Leader, EU funded Project “Harmonisation of Public Procurement System in Ukraine to EU Standards” 14.15 – 15.15 Presentation and discussions of selected CJEU cases Mr Steen Bruun-Nielsen, Key Expert, EU funded Project “Harmonisation of Public Procurement System in Ukraine to EU Standards” 15.15 – 15.30 15.30 – 16.30 Coffee break Presentation and discussions of selected CJEU cases Mr Steen Bruun-Nielsen, Key Expert, EU funded Project “Harmonisation of Public Procurement System in Ukraine to EU Standards” 16.30 – 17.00 Round Up and Evaluation 12 HARMONISATION OF PUBLIC PROCUREMENT SYSTEM IN UKRAINE WITH EU STANDARDS ANNEX 2 PRESENTATION OF MR STEEN BRUUN-NIELSEN 13 HARMONISATION OF PUBLIC PROCUREMENT SYSTEM IN UKRAINE WITH EU STANDARDS 14 HARMONISATION OF PUBLIC PROCUREMENT SYSTEM IN UKRAINE WITH EU STANDARDS 15 HARMONISATION OF PUBLIC PROCUREMENT SYSTEM IN UKRAINE WITH EU STANDARDS 16 HARMONISATION OF PUBLIC PROCUREMENT SYSTEM IN UKRAINE WITH EU STANDARDS 17 HARMONISATION OF PUBLIC PROCUREMENT SYSTEM IN UKRAINE WITH EU STANDARDS 18 HARMONISATION OF PUBLIC PROCUREMENT SYSTEM IN UKRAINE WITH EU STANDARDS 19 HARMONISATION OF PUBLIC PROCUREMENT SYSTEM IN UKRAINE WITH EU STANDARDS 20 HARMONISATION OF PUBLIC PROCUREMENT SYSTEM IN UKRAINE WITH EU STANDARDS 21 HARMONISATION OF PUBLIC PROCUREMENT SYSTEM IN UKRAINE WITH EU STANDARDS 22 HARMONISATION OF PUBLIC PROCUREMENT SYSTEM IN UKRAINE WITH EU STANDARDS ANNEX 3: Case Law Notes Here we will consider the key decisions of the Court of Justice of the European Union (CJEU) presented on the first public procurement case law workshop for the AMCU staff. References to paragraphs below (in parentheses) are to paragraphs of the judgments analyzed. Case 1 C-45/87 Commission of the European Communities v Ireland (‘Dundalk’) Case 2 C-243/89 Commission of the European Communities v Kingdom of Denmark (‘Great Belt Bridge’) On the principles of equal treatment and non-discrimination On the principle of equal treatment Case 3 C-87/94 Commission of the European Communities v Kingdom of Belgium (‘Walloon Buses’) On the principle of transparency Case 4 C-599/10 SAG ELV Slovensko and Others v Úrad pre verejné obstarávanie (‘ELV’) Case 5 C-336/12 Ministeriet for Forskning, Innovation og Videregående Uddannelser v Manova A/S (‘Manova’) On the principles of equal treatment and transparency On the principles of equal treatment and transparency Case 1. C-45/87 Commission of the European Communities v Ireland (‘Dundalk’) Judgment dated 22 September 1988 Summary of key facts Dundalk Urban District Council (the contracting authority) is a public body promoting a scheme for the augmentation of Dundalk's drinking water supply. Contract No 4 of that scheme is for the construction of a water-main to transport water from the River Fane source to a treatment plant at Cavan Hill and thence into the existing town supply system. The invitation to tender for that contract by open procedure was announced in March 1986 (paraphrased paragraphs 2 and 12). Clause 4.29 of the specification relating to Contract No 4, which formed part of the contract specification, included the following paragraph: “Asbestos cement pressure pipes shall be certified as complying with Irish Standard Specification 188:1975 in accordance with the Irish Standard Mark Licensing Scheme of the Institute for Industrial Research and Standards. All asbestos cement water mains are to have a bituminous coating internally and externally. Such coatings shall be applied at the factory by dipping.” The dispute stems from complaints made to the Commission by an Irish undertaking and a Spanish undertaking. In response to the invitation to tender for Contract No 4, the Irish undertaking had submitted three tenders, one of which provided for the use of pipes manufactured by the Spanish undertaking. In the Irish undertaking's view, that tender, which was the lowest of the three submitted by it, gave it the best chance of obtaining the contract. The consulting engineers to the project wrote a letter to the Irish undertaking concerning that contract stating that there would be no point in its coming to the pre-adjudication interview if proof could not be provided that the firm supplying the pipes was approved by the IIRS as a supplier of products complying with Irish Standard 188:1975 (“IS 188”). It is common ground that the Spanish undertaking in question had not been certified by the 23 HARMONISATION OF PUBLIC PROCUREMENT SYSTEM IN UKRAINE WITH EU STANDARDS IIRS but that its pipes complied with international standards, and in particular with ISO 160:1980 of the International Organization for Standardization (paragraphs 3-4). In the Commission's view, the inclusion in a contract specification of clauses like the disputed Clause 4.29 raises inter alia the question of the compatibility with Community law (in particular Article 30 of the EEC Treaty and Article 10 of Directive 71/305 concerning the co-ordination of procedures for the award of public works contracts) (paraphrased paragraph 6). According to Art. 10 of Directive 71/305 EU Member States are to prohibit the introduction into the contractual clauses relating to a given contract of technical specifications which mention products of a specific make or source or of a particular process and which therefore favour or eliminate certain undertakings. In particular, the indication of types or of a specific origin or production is to be prohibited. However, such indication is permissible if it is accompanied by the words 'or equivalent' where the authorities awarding contracts are unable to give a description of the subject of the contract using specifications which are sufficiently precise and intelligible to all parties concerned. The words 'or equivalent' do not appear in Clause 4.29 of the contract notice at issue in this case (paraphrased paragraph 7). The judgment in summary The CJEU agrees with the Irish Government that the Directive does not apply to water sector entities (the case was before the adoption of the Utilities Directive) and it then turned to the question as to whether the Treaty provision on free movement of goods (Art.30 at that time) could apply: It must be observed at the outset that the Commission maintains that Dundalk Urban District Council is a public body for whose acts the Irish Government is responsible. Moreover, before accepting a tender, Dundalk Council has to obtain the authorization of the Irish Department of the Environment. Those facts have not been challenged by the Irish Government (paragraph 12). After having concluded that Art.30 applies, it then had to be decided whether the requirement concerning specific Irish standards constituted a barrier to trade: Consequently, it must be considered whether the inclusion of Clause 4.29 in the invitation to tender and in the tender specifications was liable to impede imports of pipes into Ireland (paragraph 18). In that connection, it must first be pointed out that the inclusion of such a clause in an invitation to tender may cause economic operators who produce or utilize pipes equivalent to pipes certified as complying with Irish standards to refrain from tendering (paragraph 19). The Irish Government maintains that it is necessary to specify the standards to which materials must be manufactured, particularly in a case such as this where the pipes utilized must suit the existing network. Compliance with another standard, even an international standard such as ISO 160:1980, would not suffice to eliminate certain technical difficulties. That technical argument cannot be accepted. The Commission's complaint does not relate to compliance with technical requirements but to the refusal of the Irish authorities to verify whether those requirements are satisfied where the manufacturer of the materials has not been certified by the llRS to IS 188. By incorporating in the notice in question the words 'or equivalent' after the reference to the Irish standard, as provided for by Directive 71/305 where it is applicable, the Irish authorities could have verified compliance with the technical conditions without from the outset restricting the contract only to tenderers proposing to utilize Irish materials (paragraphs 21 and 22). Case 2. C-243/89 Commission of the European Communities v Kingdom of Denmark (‘Great Belt Bridge’) Judgment dated 22 June 1993 24 HARMONISATION OF PUBLIC PROCUREMENT SYSTEM IN UKRAINE WITH EU STANDARDS Summary of key facts Aktieselskabet Storebaeltsforbindelsen (hereinafter "Storebaelt") is a company wholly controlled by the Danish State. It is responsible for drawing up the project and, as the contracting authority, for the construction of a road and rail link across the Great Belt. Part of the project involves the construction of a bridge across the Western Channel of the Great Belt. The value of the contract for the construction of the Western Bridge is estimated at DKR 3 billion (paragraph 1). Storebaelt published a restricted invitation to tender for the construction of a bridge over the Western Channel and it invited five groups of companies to submit tenders. Condition 6, Clause 2, of the general conditions which form part of the contract documents (hereinafter "the general conditions") provides as follows: "The contractor is obliged to use to the greatest possible extent Danish materials, consumer goods, labour and equipment" (hereinafter "the Danish content clause"). Condition 3, Clause 3, of the general conditions sets out the conditions governing alternative tenders for alternative projects instead of the three different projects for the bridge which Storebaelt itself had designed and which serve as a basis for assessment of those tenders. Condition 3, Clause 3, provides that the tender price for an alternative project is to be based on the assumption that the contractor will undertake the detailed design of the project which it will submit to the contracting authority for approval and that it will assume full responsibility for the project and for its execution. That condition also specifies that the contractor is to accept the risk of variations in the quantities on which the alternative tender is based. Lastly, according to that condition, "if the contractor submits a tender for an alternative project for which he assumes responsibility, he must state a price allowing for a reduction in the event that the contracting authority decides to take over the detailed planning of the project". Five international consortia, comprising a total of 28 undertakings, were invited to submit tenders. One of those five consortia was the European Storebaelt Group (hereinafter "ESG"), whose members were Ballast Nedam from the Netherlands, Losinger Ltd from Switzerland, Taylor Woodrow Construction Ltd from the United Kingdom and three Danish contracting firms. ESG submitted an alternative tender to Storebaelt for the construction of a concrete bridge. Storebaelt then entered into discussions with the various tenderers in order to compare and assess their respective tenders and to quantify the cost of the numerous reservations which they contained. After cutting down the number of tenders, Storebaelt continued negotiations with ESG regarding its alternative tender. Those negotiations culminated in the signature of a contract between ESG and Storebaelt (paraphrased paragraphs 3-7). The Commission seeks a declaration from the Court on 2 grounds (1) that Denmark had failed to fulfil its obligations since Storebaelt had, on the basis of a tender which did not comply with the tender conditions, conducted with ESG negotiations resulting in a final contract which contained amendments to the conditions of tender favouring that tenderer alone and relating in particular to price-related factors, and (2) on the question of the legal rules allegedly infringed by the defendant, the Commission claims that the Kingdom of Denmark infringed Directive 71/305 [concerning the coordination of procedures for the award of public works contracts] "including the principle of equal treatment which underlies that directive" (paraphrased paragraphs 10-11). The judgment in summary In regards to the first ground of application concerning the Danish content clause: The Danish content clause, as set out in Condition 6, Clause 2, of the general conditions, is incompatible with Articles 30, 48 and 59 of the Treaty, a fact which is moreover undisputed by the Danish Government. However, the Danish Government contends, first, that it deleted the clause in 25 HARMONISATION OF PUBLIC PROCUREMENT SYSTEM IN UKRAINE WITH EU STANDARDS question before the signature of the contract with ESG on 26 June 1989 and that it thereby complied with the reasoned opinion even before it was notified on 14 July 1989. At the hearing, the Danish Government, relying on the judgment in Case C-362/90 Commission v Italy [1992] ECR I-2353 also argued that the Commission had failed to act in good time to prevent, by the procedures available to it, the infringement complained of from producing legal effects (paragraphs 23-24). CJEU did not accept that argument. In the first place, even though the clause in question was deleted shortly before signature of the contract with ESG and consequently before notification of the reasoned opinion, the fact remains that the tendering procedure was conducted on the basis of a clause which was not in conformity with Community law and which, by its nature, was likely to affect both the composition of the various consortia and the terms of the tenders submitted by the five preselected consortia. It follows that the mere deletion of that clause at the final stage of the procedure cannot be regarded as sufficient to make good the breach of obligations alleged by the Commission (paragraph 26). The second ground of application, concerning negotiations on the basis of a tender which did not comply with the tender conditions: The Court held, at paragraph 33, on this issue, it need only be observed that, although the directive makes no express mention of the principle of equal treatment of tenderers, the duty to observe that principle lies at the very heart of the directive whose purpose is, according to the ninth recital in its preamble, to ensure in particular the development of effective competition in the field of public contracts and which, in Title IV, lays down criteria for selection and for award of the contracts, by means of which such competition is to be ensured. In this regard, it must be stated first of all that observance of the principle of equal treatment of tenderers requires that all the tenders comply with the tender conditions so as to ensure an objective comparison of the tenders submitted by the various tenderers (paragraph 37). It follows from all the foregoing considerations that, by reason of the fact that Aktieselskabet Storebaeltsforbindelsen invited tenders on the basis of a condition requiring the use to the greatest possible extent of Danish materials, consumer goods, labour and equipment and the fact that negotiations with the selected consortium took place on the basis of a tender which did not comply with the tender conditions, the Kingdom of Denmark failed to fulfil its obligations under Community law and in particular infringed Articles 30, 48 and 59 of the Treaty as well as Council Directive 71/305/EEC (paragraph 45). Case 3. Case C-87/94 Commission of the European Communities v Kingdom of Belgium (‘Walloon Buses’) Judgment dated 25 April 1996 Summary of key facts The Société Régionale Wallonne du Transport (hereinafter “SRWT”) based in Namur (Belgium) is a public undertaking operating a network providing a public bus service issued an invitation to tender for the award, under an open procedure, of a public contract for the supply of 307 standard vehicles. That contract, for an estimated sum of over BFR 2 000 000 000 (excluding VAT) and divided into eight lots, was to be performed over a period of three years (paraphrased paragraphs 1, 9 and 30). The contract documents consisted of the general conditions and the special conditions, which amended the general conditions in certain respects. Point 20.2 of the special conditions provided that the contract was to be awarded to the most economically advantageous tender. That tender would be selected on the basis of an evaluation of the tenders by reference to the award criteria under headings which are set out in point 59 of the Advocate General' s Opinion. An evaluation was 26 HARMONISATION OF PUBLIC PROCUREMENT SYSTEM IN UKRAINE WITH EU STANDARDS to be made, in particular, of the basic price of the bus, increased by the price of variants taken into account and then adjusted in accordance with the advantages and disadvantages resulting from the application of ten technical assessment criteria (hereinafter "the technical criteria"). The SRWT expressly requested potential tenderers to propose certain variants concerning the financial structure of the contract, such as staggered payment terms, lease or hire of the vehicles. As regards the technical criteria, the special conditions laid down, under each heading, a formula enabling the SRWT to allocate for certain features of the buses offered a notional bonus or penalty in "francs fictifs", the amount of which depended on the variables of the formula and was to be added to or deducted from the basic price (paraphrased paragraphs 10-13). After sending the contract documents to the interested parties, the SRWT issued three notices of amendment rectifying and clarifying the contract documents in certain respects. In the second notice the SRWT clarified certain aspects of the contract documents relating to the minimum number of seated places, the desired total number of places, the maximum height of the floor and the formula for calculating one of the notional penalties. Each notice stated that tenderers had to indicate clearly in their tenders that they had received the notices of amendment and that they had taken them into account (paraphrased paragraph 14). By the date fixed by the tender notice for both the receipt and the public opening of tenders, the following five companies had submitted tenders: EMI (Aubange), Van Hool (Koningshooikt), Mercedes-Belgium (Brussels), Berkhof (Roeselaere) and Jonckheere (Roeselaere) (paraphrased paragraph 15). The SRWT examined those tenders and issued a memorandum recommended the award of Lot No 1 to Jonckheere and Lots No 2 to 6 to Van Hool. In the meantime, EMI had sent to the contracting entity three "supplementary" notes commenting on certain points of its initial tenders, in particular fuel consumption, the frequency of engine and gearbox replacements, and certain aspects of the technical quality of the material offered (paraphrased paragraphs 16-17). The SRWT undertook a fresh comparison of the tenders, taking into account the content of the three supplementary notes. Then, those proposals were adopted thus awarded Lot No 1 to Jonckheere and Lots No 2 to 6 to EMI and, secondly, to postpone until 1996 an order for 30 vehicles (paraphrased paragraphs 22-23). The Commission brought an action under Article 169 of the EC Treaty for a declaration that, by taking into account, in the procedure for the award of a public contract by the SRWT, amendments made to one of the tenders after the opening of those tenders, by admitting to the procedure for the award of the contract a tenderer who did not meet the selection criteria laid down in the contract documents and by accepting a tender which did not meet the criteria for the award of the contract laid down in the contract documents, the Kingdom of Belgium has failed to fulfil its obligations under Council Directive 90/531/EEC of 17 September 1990 on the procurement procedures of entities operating in the water, energy, transport and telecommunications sectors (hereinafter "the Directive") and to comply with the principle of equal treatment, which underlies all the rules on procedures for the award of public contracts. The judgment in summary The procedure for comparing tenders therefore had to comply at every stage with both the principle of the equal treatment of tenderers and the principle of transparency so as to afford equality of opportunity to all tenderers when formulating their tenders. When, as in the present case, a contracting entity opts for an open procedure, such equality of opportunity is ensured by the requirement under Article 16(1)(a) of the Directive for the contracting entity to act in accordance with Annex XII A of the Directive. It must therefore both set a final date for receipt of tenders, so that all tenderers have the same period after publication of the tender notice within which to prepare their tenders, and set the date, hour and place of opening tenders, which also reinforces the transparency of the procedure, since the terms of all the tenders submitted are revealed at the same time. When a contracting entity takes into account an amendment to the initial tenders of only one 27 HARMONISATION OF PUBLIC PROCUREMENT SYSTEM IN UKRAINE WITH EU STANDARDS tenderer, it is clear that that tenderer enjoys an advantage over his competitors, which breaches the principle of the equal treatment of tenderers and impairs the transparency of the procedure (paragraphs 54-56). The Court mentioned the Storebaelt case, that when a contracting entity had laid down prescriptive requirements in the contract documents, observance of the principle of equal treatment of tenderers required that all the tenders must comply with them so as to ensure objective comparison of the tenders. Accordingly, the requirements of Annex 23 continued to be applicable to all the tenders and those tenders had to comply with them. It must therefore be held that EMI was not entitled to "amend" the terms of its initial tenders regarding those requirements and that the SRWT was not entitled to calculate EMI' s notional penalties by reference to its new figures, which did not correspond to the prescriptive requirements of the special conditions (paraphrased paragraphs 70-71). Admittedly the headings for the award criteria set out in point 20.2 of the special conditions could be interpreted … - as having a wide scope (see, for example, in point 20.2.2.4 of the special conditions, the heading for the seven technical criteria, namely "the technical qualities of the material offered"), so that, as the Belgian Government submits, all the characteristics relating to the technical qualities of the material offered would be relevant when comparing the tenders. However, the SRWT itself defined all the technical criteria using a precise formula set out under each heading (see paragraph 13 of this judgment). Accordingly, the scope of the technical criteria, whatever the wording of the headings, was restricted by the formulas used by the SRWT to define them (paraphrased paragraphs 86-87). Case 4. C-599/10 SAG ELV Slovensko and Others v Úrad pre verejné obstarávanie (‘ELV’) Judgment dated 29 March 2012 Summary of facts Národná dial’ničná spoločnost’ a.s. (hereinafter “NDS”) is a national highway management company wholly owned by the Slovak State. In September 2007 NDS launched a tender process to award a contract for toll collection services on motorways and certain roads. The estimated value of the contract was in excess of EUR 600 million. The NDS advertised the contract and ran a restricted procedure. In the course of that procedure, the contracting authority sent requests for tender clarification to two groups of economic operators that had submitted tenders. The contracting authority asked each group to i) clarify the abnormally low tender prices that it had proposed, and ii) respond to questions related to technical issues, which were specific to each tender. Both groups were subsequently excluded from the tender process and they appealed against that decision. They appealed to the competent administrative body, the Úrad (Public Procurement Office). The Úrad held that two of the grounds used by the NDS to exclude the two groups of tenderers were justified. First, the two groups had failed to provide adequate responses to the request for clarification of the abnormally low prices proposed in their tenders. Second, those tenders failed to comply with certain conditions set out in the tender specifications. In one case, the failure related to the parameters for calculating tolls. In the other case, the failure related to the requirement for provision of a diesel-powered electricity generator. The two groups appealed against the decision of the Úrad, and the cases eventually reached the 28 HARMONISATION OF PUBLIC PROCUREMENT SYSTEM IN UKRAINE WITH EU STANDARDS Supreme Court of the Slovak Republic. The Supreme Court stayed the proceedings and referred a number of questions to the CJEU (paragraphs 7-13). The CJEU considered the following questions (paraphrased): Context: In a restricted public procurement procedure, a contracting authority receives a tender that it considers to be i) abnormally low, or ii) imprecise or failing to meet the technical specification requirements. In either of these circumstances, is a contracting authority permitted or obliged to seek clarification from a tenderer? Can a contracting authority claim that it is not obliged to request clarification from a tenderer about an abnormally low price? The judgment in summary Abnormally low tenders: The CJEU decided that a contracting authority was obliged to ask a tenderer to clarify an abnormally low tender price (paragraphs 32-34). This decision was made on the basis of the express provisions of article 55 of the Directive. The CJEU confirmed that the requirement to examine the details of an abnormally low tender and seek explanations from the tenderer was mandatory. Imprecise tenders or tenders that do not meet specification requirements: The CJEU noted that no express provisions in the Directive covered this situation (paragraph 35). The Court stated that the very nature of the restricted procedure meant that once tenders had been submitted, those tenders could no longer be amended. The principle of equal treatment and transparency mean that the contracting authority may not negotiate with tenderers. The Court concluded that a contracting authority was not obliged to seek clarification of a tender that it regarded as imprecise or as failing to meet technical specification requirements. It could reject a tender on that basis (paragraphs 38-39). Permitted clarification: The CJEU was of the view that the Directive did permit “the correction or amplification of details of a tender, where appropriate, on an exceptional basis” (paragraph 39). This permission is granted in particular when it is clear that the contracting authority requires “mere clarification” or the correction of “obvious material errors” (paragraph 40). This clarification is only permitted when: the amendment does not lead in reality to the submission of a new tender (paragraph 40); all tenderers are treated equally and fairly. A request for clarification must not appear to unduly favour the tenderer to whom the request was addressed (paragraph 41). The CJEU laid down additional conditions to be applied when a contracting authority sought clarification: The clarification of a tender may be made only after the contracting authority has examined all of the tenders (paragraph 42); The request must be sent to all undertakings that are in the same situation unless objectively verifiable grounds justify a different treatment of the tenderers (paragraph 43); The request must relate to all sections of the tender that are imprecise or that do not meet the technical requirements (paragraph 44); The contracting authority cannot reject a tender because of a lack of clarity in a part of the tender when that part was not covered in the contracting authority’s request (paragraph 44). Decision (paraphrased) 29 HARMONISATION OF PUBLIC PROCUREMENT SYSTEM IN UKRAINE WITH EU STANDARDS 1. Abnormally low tenders The Directive requires the inclusion in national legislation of provisions obliging a contracting authority to seek clarification of an abnormally low tender. It is for the national courts to determine whether the request for clarification enabled the tenderer to provide a sufficient explanation. The Directive precludes a contracting authority from taking the view that it is not required to ask a tenderer to clarify an abnormally low price. 2. Clarification of imprecise tenders or tenders that do not meet technical requirements The Directive does not preclude a national law according to which a contracting authority may ask tenderers to clarify their tenders, without requesting or accepting any amendment to the tender. When clarifying tenders the contracting authority must treat tenderers equally and fairly. The request for clarification cannot appear to favour or disadvantage the tenderer with whom the clarification is sought. Case 5. C-336/12 Ministeriet for Forskning, Innovation og Videregående Uddannelser v Manova A/S (‘Manova’) Judgment dated 10 October 2013 Summary of facts The Undervisningsministeriet (The Danish Ministry of Science, Innovation and Higher Education) (hereinafter “the Ministry”) launched a call for tenders in respect of services required for the operation of seven occupational guidance and advice centres (‘guidance centres’) starting from 1 August 2009. The value of the contract to be awarded was above the threshold which, under Article 7 of Directive 2004/18, triggers application of that directive (paraphrased paragraphs 2 and 10). Since the Ministry took the view that the contract at issue related to complex services requiring negotiations, the procedure included a preliminary screening stage. The section of the contract notice entitled ‘Qualitative selection criteria’ laid down the following provision: “Tenderers wishing to be considered must, as a basis for the assessment of their economic and technical qualifications, provide the following information and satisfy the minimum requirements set out: … (2) Submit a copy of the most recent balance sheet in so far as the tenderer is obliged to draw up such a document. (3) Reference list … (4) Information on the tenderer’s educational and technical qualifications …” By the deadline for applications, 10 undertakings/institutions had lodged applications for screening, including the Syddansk Universitet (University of Southern Denmark) (‘the USD’), the Københavns Universitet (University of Copenhagen) (‘the UC’), and Manova. The applications from the USD and the UC did not include copies of their balance sheets; in that connection, the UC referred to its website. The Ministry sent an email to each of those universities asking it to forward a copy of its balance sheet, a request which the UC met that same day and the USD on the following day. Nine candidates – including Manova, the USD and the UC – were judged successful at the screening stage and invited to submit tenders, three candidates to tender for each guidance centre. For one of those centres, Manova found itself competing with the USD and for another, with the UC. Following the final assessment of the tenders for those two guidance centres, the Ministry found that the tenders 30 HARMONISATION OF PUBLIC PROCUREMENT SYSTEM IN UKRAINE WITH EU STANDARDS from the USD and the UC were economically more advantageous than the tenders submitted by Manova – which, ultimately, was the only other candidate to have submitted a competing tender for those centres – and concluded the contracts relating to those centres with those two universities (paraphrased paragraphs 12-18). The judgment in summary The Court referred to the case C-599/10 SAG ELV Slovensko and Others, where the Court laid down certain requirements to mark the bounds of the contracting authority’s right to make a written request to the tenderer or tenderers concerned for clarification of their bid. The Court underlined that this guidance in relation to tenders can also be applied to applications filed at the prequalification stage for candidates in a restricted procedure (paraphrased paragraphs 33-38). Accordingly, a contracting authority may request the correction or amplification of details of such an application, on a limited and specific basis, so long as that request relates to particulars or information, such as a published balance sheet, which can be objectively shown to pre-date the deadline for applying to take part in the tendering procedure concerned (paragraph 39). However, it should be explained that this would not be the case if the contract documents required provision of the missing particulars or information, on pain of exclusion. It falls to the contracting authority to comply strictly with the criteria which it has itself laid down (paragraph 40). 31 HARMONISATION OF PUBLIC PROCUREMENT SYSTEM IN UKRAINE WITH EU STANDARDS ANNEX 4: WORKSHOP PARTICIPANTS No 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. Name Mykola Barash Roman Koval Igor Kasyanenko Victoriya Chepurna Nataliya Bunchak Anna Gornostal Lyudmila Bozhko Vladislav Udovichenko Iryna Bogachevska Lesya Kudin Eugene Stuart Steen Bruun-Nielsen Anastasiia Repilytska Anna Mahnyk Anastasiia Bilevych Olga Kravchenko L. Mogyrsova Victoria Titenko Anastasia Kalina Anna Stuart Sergey Khrypkov Julia Troyan Olexandr Tkachenko Olexandr Yankovich Occupation Acting Head of AMCU Director of the Department for Complaints Review, AMCU Department for Complaints Review, AMCU Department for Complaints Review, AMCU Department for Complaints Review, AMCU Department for Complaints Review, AMCU Department for Complaints Review, AMCU Department for Complaints Review, AMCU Department for Complaints Review, AMCU Department for Complaints Review, AMCU Team leader, EU funded Project Senior expert, EU funded Project AMCU AMCU AMCU AMCU AMCU AMCU Expert , EU funded Project Administrator, EU funded Project Interpreter Interpreter Equipment specialist Equipment specialist 32 HARMONISATION OF PUBLIC PROCUREMENT SYSTEM IN UKRAINE WITH EU STANDARDS ANNEX 5: Public procurement Case Law Workshop QUESTIONNAIRE 22 April 2015 1. In general, did the Training course fulfil your expectations? 2. What was particularly good in the Training sessions? 3. What information was particularly new in Training sessions? 4. Were there aspects of the Training with which you were not satisfied (e.g. you knew about this already or things were inadequately explained?) 5. Was there something important missing, which was not covered and discussed? 6. Do you believe that the knowledge and information from the Training will assist (you or others) in further work? Definitely not 1 Unlikely 2 To some degree 3 A fair amount 4 Very much 5 7. Were you satisfied with the presentation abilities of the training lecturers and facilitators? If not, please identify specific difficulties? Very unsatisfied 1 No 2 To some degree 3 A fair amount 4 Very much 5 Specific comments if dissatisfied: 8. Were you satisfied with the distributed material? (Enough materials, the quality of materials…) Very unsatisfied 1 No 2 To some degree 3 Have you any specific comments on the materials: 9. Specific session scorecard 33 A fair amount 4 Very much 5 HARMONISATION OF PUBLIC PROCUREMENT SYSTEM IN UKRAINE WITH EU STANDARDS Please score the individual sessions on the scale 1-5 Training Session Presentation and discussions of selected CJEU cases Lecturer/facilitator Mr Steen Bruun-Nielsen score 10. Other remarks about the Training (e.g. organisation, interpretation etc.)…. 11. Overall rating of the Training on scale 1-5 Your score: Signature: ________________________________ 1 1 Signature of the evaluation form is helpful to the evaluation process but is not mandatory. 34
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