In its Judgment of 8 February 2018 in Lloyd's of London, C-144/17, EU:C:2018:78, the Court of Justice of the European Union (CJEU) confirmed its increasingly pro-competitive and anti-formalistic approach to the exclusion of tenderers on grounds of prohibitions of multiple bidding. The Court provided this clarification along functional lines that may anticipate the direction of its Judgment in Specializuotas transportas (C-531/16, see discussion of the Opinion of AG Campos here).
In Lloyd's, the CJEU established that the 'principles of transparency, equal treatment and non-discrimination ... must be interpreted as meaning that they do not preclude legislation ... which does not allow two syndicates of Lloyd’s of London to be excluded from participation in the same procedure for the award of a public service contract for insurance merely because their respective tenders were each signed by the General Representative of Lloyd’s of London for that Member State, but instead allows their exclusion if it appears, on the basis of unambiguous evidence, that their tenders were not drawn up independently' (para 47).
Or, in other words, the CJEU declared the compatibility with EU primary (internal market) and secondary (procurement) law of domestic rules that do not impose the mandatory disqualification of bidders seemingly engaged in multiple bidding due to intra-group corporate links, but rather make any such exclusion decisions conditional upon an investigation of the extent to which they are representative of genuine competition for the contract. This is reflective of a functional approach to the treatment of multiple bidding situations that I think should be welcome [for in-depth discussion, see A Sanchez-Graells, Public procurement and the EU competition rules (2nd, Hart, 2015) 340-347].
As background for the analysis of the case, it is interesting to stress the existence of an Italian rule (Article 38(1)(m), quater of Legislative Decree No 163/2006) requiring the automatic exclusion of tenderers constituting a single decisional unit, whereby 'tenderers which "… are, in relation to another participant in the same tendering procedure, in a situation of control for the purposes of Article 2359 of the Codice civile (Civil Code), or in any relationship, including a de facto relationship, where the situation of control or relationship means that the tenders are attributable to a single decision-making centre" would be excluded from participation in a procedure for the award of concessions and of public works, supply and service contracts, and could not conclude contracts pertaining thereto or sub-contracts' (para 10).
However, the relevant administrative authorities (now ANAC), had established an interpretive practice dating back to 2008 whereby such automatic exclusion would not apply to intra-group competition where the signature of tenders by the same representative was a formality required by the domestic rules concerning the organisation of the tenderers, but did not evidence of intra-group collusion but rather reflected 'independence of syndicates and competition between them', which 'serve to ensure free competition and the equal treatment of candidates' (para 19). The case is coloured by the peculiarities of the Lloyd's market for insurance and reinsurance (on that, see para 27), but this seems reflective of a broader functional approach that mitigates the automaticity and strictness of the general rule in Article 38(1)(m), quater of Legislative Decree No 163/2006.
The question for preliminary interpretation of compatibility of this interpretation of Article 38(1)(m), quater of Legislative Decree No 163/2006 with EU law reached the CJEU because the referring court feared that 'the fact that the same person signs several tenders submitted by different tenderers may undermine the independence and confidentiality of those tenders and, as a result, infringe the principle of competition laid down, in particular, in Articles 101 and 102 TFEU' (para 20). In addressing this issue, there are a few passages of the Lloyd's Judgment that are worth noting:
... according to settled case-law of the Court, ... the automatic exclusion of candidates or tenderers that are in a relationship of control or of association with other competitors goes beyond that which is necessary to prevent collusive behaviour and, as a result, to ensure the application of the principle of equal treatment and compliance with the obligation of transparency ...
Such an automatic exclusion constitutes an irrebuttable presumption of mutual interference in the respective tenders, for the same contract, of undertakings linked by a relationship of control or of association. Accordingly, it precludes the possibility for those candidates or tenderers of showing that their tenders are independent and is therefore contrary to the EU interest in ensuring the widest possible participation by tenderers in a call for tenders ...
It should be pointed out in this regard that the Court has already held that groups of undertakings can have different forms and objectives, which do not necessarily preclude controlled undertakings from enjoying a certain autonomy in the conduct of their commercial policy and their economic activities, inter alia, in the area of their participation in the award of public contracts. Relationships between undertakings in the same group may in fact be governed by specific provisions such as to guarantee both independence and confidentiality in the drawing-up of tenders which may be submitted simultaneously by the undertakings in question in the same tendering procedure ...
Observance of the principle of proportionality therefore requires that the contracting authority be required to examine and assess the facts, in order to determine whether the relationship between two entities has actually influenced the respective content of the tenders submitted in the same tendering procedure, a finding of such influence, in any form, being sufficient for those undertakings to be excluded from the procedure (C-144/17, paras 35-38, references omitted).
This is a good way of synthesising the case law in this area and, as mentioned above, the only missing link concerns the extent to which a contracting authority has a positive duty to investigate potential intra-group collusion and seek exclusion--which is the other side of the coin to a LLoyds-type situation, where the contracting authority has an interest in excluding. This will soon (hopefully) be clarified by the CJEU in its awaited Judgment in Specializuotas transportas (C-531/16). Watch this space.