Following its incipient line of public procurement case law that sets the burden of proof of conflicts of interest too high (see here), the General Court (GC) of the Court of Justice of the European Union has once more taken a very formalistic approach to the assessment of situations were certain bidders should be presumed to hold an unfair competitive advantage. In its Judgment of 13 October 2015 in Intrasoft International v Commission, T-403/12, EU:T:2015:774, the GC has adopted a very formalistic approach to the 'objective' assessment of an unfair competitive advantage derived from prior involvement of a tenderer in the preparation of documentation used in a specific tender. Once more, the case involves procurement by the EU Institutions, but the legal arguments and the reasoning of the GC is relevant for procurement under the general EU rules.
In Intrasoft International v Commission, the excluded tenderer had been involved in the preparation of tender documents in an indirect way or as a result of relative happenstance. Indeed, the tenderer had not drafted documents specifically for the tender at hand, but it had been involved in the drafting of tender documentation for a previous project that ended up being 'reused' by the contracting authority. This situation was assessed in conflicting ways between the contracting authority (the European Commission) and the excluded tenderer.
According to the Commission, the (indirect) previous involvement sufficed to provide the tenderer with an undue competitive advantage that required its exclusion from the tender process as the only remedy to that conflict of interest. As summarised by the GC
the Commission argues that ... a certain number of documents drafted by the applicant under the previous contract were joined to the terms of reference for the new tendering procedure. These documents ‘constitute[d] the basis for an important portion of the activities due under the ongoing tender’. The Commission does not dispute, as the applicant observes, that the documents were made available to all potential candidates. However, it contends that the applicant had access to them before the other tenderers and thus enjoyed a competitive advantage, in particular, in searching for qualified experts. Furthermore, while not claiming that this was actually the situation in the present case, the Commission suggests that, having participated in their drafting, the applicant would have been in a position to draft the documents in a way that gave it a competitive advantage for the procurement contract at issue (T-403/12, para 65).
Not surprisingly, the excluded tenderer disagrees and has an opposite assessment of the advantage derived from the previous (indirect) involvement in the drafting of the tender documentation
the applicant states that it was not involved in drafting the terms of reference or the project-related requirements for [the specific tender]. The applicant states, in addition, that it did not have in its possession any more information than that available to all the tenderers. Consequently, according to the applicant, the fact that it had taken part in drawing up a number of technical documents in connection with another tendering procedure could not, in itself, constitute a sufficient reason to draw the unfavourable inference that the applicant was subject to a conflict of interest. Further, it considers that it is apparent from the Court’s case-law (judgment of 3 March 2005 in Fabricom, C-21/03 and C-34/03, ECR, EU:C:2005:127) that the experience acquired under a previous contract is not capable of distorting competition, because if that were the case most tenderers would have to be excluded from new tendering procedures on that ground (T-403/12, para 63).
In addressing these diverging assessments of the situation of conflict of interest potentially affecting the excluded tenderer, the GC adopts a very formalistic approach, which builds up as follows:
76 The awarding authorities are under no absolute obligation to exclude systematically tenderers in a situation of a conflict of interests, such exclusion not being justified in cases in which it is possible to show that that situation had no impact on their conduct in the context of the tender procedure and that it entails no actual risk of practices liable to distort competition between tenderers. On the other hand, the exclusion of a tenderer where there is a conflict of interests is essential where there is no more appropriate remedy to avoid any breach of the principles of equal treatment of tenderers and transparency (judgment in Nexans France v Entreprise commune Fusion for Energy, [T-415/10], EU:T:2013:141, paragraphs 116 and 117).
79 It is apparent from the case-law ... that the reasoning in terms of risk of conflict of interests requires a concrete assessment, first, of the tender and, second, of the situation of the tenderer concerned, and that the exclusion of that tenderer is a remedy designed to ensure respect for the principles of transparency and equality of opportunity for tenderers.
80 In order to determine whether, in the present case, there has been an infringement ... it is, therefore, necessary to examine, in the context of an objective analysis without taking into account the applicant’s intentions, whether the risk of a conflict of interests stems from the applicant’s situation and from a concrete assessment of its tender.
81 In the first place, it should be noted that, according to the Commission, the exclusion of the applicant because of a conflict of interests has the purpose of ensuring observance of the principle of equal treatment of tenderers. It argues that the applicant had access, before the others, to certain documents used as the basis for some of the activities connected with the call for tenders at issue, on the ground that the applicant was part of the consortium which drafted the documents in question for another call for tenders. It is apparent from the letter of 10 August 2012 that that access would have made available to the applicant ‘privileged information’ ... The Commission therefore takes the view, in accordance with what appears in the letter in question, that that access, before the other tenderers, would have given the applicant a competitive advantage in relation to those tenderers.
82 However, it cannot be accepted that the risk of a conflict of interests can be based on the mere fact that the applicant had access, before the other tenderers, to the documents specific to another call for tenders because it belonged to the consortium which prepared those documents which, subsequently, were retained to be used as a reference for the activities associated with the call for tenders at issue in the present case (T-403/12, paras 76 and 79-82, emphasis added).
This first part of the argument seems to follow the general Fabricom approach against instances of automatic exclusion of tenderers previously involved in the design of tender procedures. However, the specific application of this approach to the circumstances of the case becomes very quickly very formal and restrictive by putting what I see as excessive reliance on the fact that the tender documents 'originally belonged' to a different procedure or, in other words, were not exclusive for the tender procedure at hand. That part of the GC's argument goes as follows:
84 Within the meaning of the case-law ... the risk of a conflict of interests exists for the person responsible for the preparatory work for a public contract who participates in that same contract. In this respect it should be noted that, when the Court of Justice used the expression ‘preparatory work’ at paragraph 29 of the judgment in Fabricom, cited in paragraph 63 above (EU:C:2005:127), it was referring to work carried out in the context of one and the same call for tenders.
85 Therefore, the Commission was not entitled to treat the preparation of documents drafted in the course of another call for tenders in the same way as preparatory works under the tendering procedure at issue, within the meaning of the case-law mentioned at paragraph 63 above, unless to show objectively and specifically, first, that those documents had been prepared in the light of the tendering procedure at issue and, secondly, that they had given the applicant a real advantage. If this is not demonstrated, the documents prepared in the course of another tendering procedure, and chosen subsequently by the contracting authority as a reference for part of the activities in a different tendering procedure, are not considered ‘preparatory works’ within the meaning of the case-law previously cited ...
86 In the present case it must be stated that the applicant’s exclusion from the award of the contract was based on the mere fact that it was part of a consortium which drafted the documents under a previous tendering procedure, whereas it has not been argued that the other tenderers did not have access to those same documents in sufficient time. Furthermore, the preparation of those documents did not involve the applicant’s participation in the preparation of the tendering specifications in the call for tenders at issue. Therefore, it has not been established that the applicant was in possession of more information than the other tenderers, which would have amounted to a breach of the principles of equal treatment and of transparency.
87 It follows that the documents at issue do not constitute ‘privileged information’ ... The exclusion of the applicant, contrary to what is claimed by the Commission, is not therefore covered ... and is thus not justified by an infringement of the principles of equal treatment and transparency.
88 Moreover, to classify the documents prepared in the context of another tendering procedure as ‘preparatory work’, on the basis that they have been retained by the contracting authority as a reference for the activities connected to a subsequent tendering procedure, would lead, as the applicant rightly maintains, to it being automatically considered that the experience acquired through participation in an earlier call for tenders is liable to distort competition (T-403/12, paras 84-88, emphasis added).
The specific decision in the case at hand resulted in an annulment of the exclusion decision, but primarily on the basis of lack of evidence of the actual advantage enjoyed by the tenderer previously (indirectly) involved in the preparation of tender documentation.
Beyond the specific case, the formal approach taken by the GC can create difficulties in actually excluding tenderers with a previous indirect involvement in the preparation of documents used in a specific tender process, particularly because the test created in para 85 of Intrasoft International v Commission comes to set a very high burden of proof that will be hard to discharge: the contracting authority cannot 'treat the preparation of documents drafted in the course of another call for tenders in the same way as preparatory works under the tendering procedure at issue, unless to show objectively and specifically, first, that those documents had been prepared in the light of the tendering procedure at issue and, secondly, that they had given the applicant a real advantage'. Such element of 'linkage' to the specific tender will definitely be very problematic. In my opinion, it can also infringe the general requirement that the assessment of conflicts of interest be totally objective, as stressed by the GC itself in this same case:
The concept of a conflict of interests is objective in nature and, in order to establish it, it is appropriate to disregard the intentions of those concerned, in particular whether they acted in good faith (see judgment of 20 March 2013 in Nexans France v Entreprise commune Fusion for Energy, T-415/10, ECR, EU:T:2013:141, paragraph 115 and the case-law cited) (T-403/12, para 75, emphasis added).
If the expression 'prepared in the light of the tendering procedure at issue' is constructed to require (positive, recorded) knowledge by the tenderer preparing the documentation that it would be used in more than one tender procedure, then the GC may have just created a requirement of probatio diabolica where it is hard to see how that could be proved in cases where the 'reuse' of the documentation is decided subsequently to the involvement of the tenderer or, more importantly, where it is decided from the beginning but that decision is informal or never recorded (and regardless of it actually being disclosed to the tenderer participating in its preparation).
Once more, thus, the development of the case law on conflicts of interest in public procurement under a strict and formalistic approach seems to leave a number of questions open. It will be interesting to see how the Court of Justice itself addresses them if they ever reach its docket.