PUBLIC PROCUREMENT: MECHANISM FOR THE CONTROL OF UNUSUALLY LOW TENDERS

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PUBLIC PROCUREMENT: MECHANISM FOR THE CONTROL OF UNUSUALLY LOW TENDERS

By Giorgos Skampoulos LL.M, Associate

The mechanism for the control of unusually low tenders, as provided for in Articles 69 of Directive 2014/24/EU and Articles 88-89 of Law No. 4412/2016, is of fundamental importance for the protection of the public interest, as it assists the contracting authority in identifying bogus tenders submitted by economic operators who are unable, for whatever reason, to properly execute the contract and violate the principles of free competition.

It is accepted that the characterisation and control of a tender as abnormally low is in principle at the discretion of the contracting authority. The above check is carried out in two stages. First, the contracting authority assesses in general and abstract terms whether the proposed price provides evidence which, without detailed analysis, would give rise to a suspicion of being abnormally low. In the absence of such indications, the tender is normally evaluated. In a second stage, if there are indications, a thorough check is made that the tender, on the basis of its economic characteristics, complies with the legislation of the country where the services are to be performed and that all the costs arising from the technical aspects of the tender are included in the tender, in accordance with the average market prices.

The above-mentioned discretion of the contracting authority is curtailed when a participant in a public tender procedure contests a tender. In this case, the contracting authority is obliged to carry out the above-mentioned thorough analysis (second stage) and reply with clear and full reasons as to the admissibility or otherwise of the tender submitted, unless the challenge is manifestly unfounded or irrelevant.

The above assessments were fully confirmed by the recent judgment of the Court of Justice of the European Union in Case C-101/22, which dismissed the European Commission’s appeal. Regarding the background of the case, the European Commission launched a competitive tender procedure for the award of a framework agreement for the development and maintenance of an online platform. Tenders were submitted by Sopra Steria Benelux and Unisys Belgium (S2U companies) on the one hand, and by the ARHS-IBM consortium on the other. After the latter had been awarded the contract, the two others submitted a written challenge, claiming that its tender was incompatible with market conditions and could not be considered viable without the risk of ‘social dumping’ (use of unfair practices to obtain cheap labour). The Commission replied succinctly that the offer was in line with market conditions. Subsequently, the companies brought an action for annulment of the award decision before the General Court of European Union, which was upheld on the grounds that the Commission should have fully explained why the tender was not abnormally low, as stated above. The Court of Justice of the European Union upheld this decision.

In conclusion, this decision is of major importance for companies operating in the health and technology sector as there are many times when these companies face unfair competition issues due to the submission of abnormally low bids in public tenders, enabling them to challenge the reasoned response of the contracting authority to the relevant issues, thus protecting their interests.