Tender evaluation & risk of illegally introducing new award criteria via comments (C-677/15 P & T-477/15)


Thanks to the never-ending litigation efforts of European Dynamics, the EU Courts have recently added two decisions to the growing acquis on the duty to state reasons in the context of public procurement. Although the legal analysis in most of these cases tends to reiterate well-established principles of EU law; the ever more intricate arguments made by European Dynamics can sometimes make for interesting reading.

Two recent cases concern the risks that contracting authorities incur when stating the reasons for their evaluations if, as a result of the debriefing, disappointed tenderers can make an argument that the evaluation rested on award criteria not previously included in the tender documentation. In these two recent cases, the General Court (GC) has offered some insight on the treatment of examples as proxies for the evaluation of service quality (T-477/15), while the Court of Justice (ECJ) has shed some light on the situations in which specific comments on concrete aspects of a tender can be construed as illegally introducing new weighting factors for award sub-criteria (C-677/15 P). This post discusses those specific aspects of these two recent cases.

zum Beispiel

In its Judgment of 1 February 2018 in European Dynamics Luxembourg and Others v ECHA, T-477/15, EU:T:2018:52, the GC had to assess a complaint raised by European Dynamics (ED) that the evaluation committee would illegally have used award criteria not specified in the tender documentation by criticising its tender due to a lack of examples. The contract was for the provision of IT services and, in simplified terms, the tender documentation required the tenderers to submit offers based on a specific hypothetical scenario of service provision. It turned out that the winning bidder included numerous examples of the ways in which it would address service needs. Comparatively, the evaluation committee found ED's tender lacking in detail and, as justification for awarding ED a lower mark under the relevant award sub-criteria, the committee provided negative comments linked to the absence of examples to illustrate the tender submitted by ED.

ED challenged this approach by stating that "by penalising the tender ... on the ground that it did not contain a sufficient number of examples, although it [was] in line with the tender specifications, the [contracting authority] introduced a new criterion that was not included in the tender specifications ... [and] also criticis[ing] the [contracting authority] for having evaluated the tenders against an unpublished criterion, namely the tenderer’s choice as to what information to include in the tender. [ED] also refer[red] to the possibility that the [contracting authority] had based its evaluation on a horizontal criterion of the tenderer’s general understanding of the tender specifications" (para 121).

The GC placed this complaint within the strictures of the principles of equal treatment and transparency (para 123), and reiterated the general case law concerning the exercise of discretion in the choice of award criteria and evaluation rules, subject to those general principles (paras 124-126). It then established that

In the first place, it must be recalled that the fact that the content of the tender submitted by the European Dynamics consortium complied with the tender specifications does not mean that the negative assessments made by the evaluation committee on that tender resulted from the introduction of new award criteria, which were not mentioned in the documents relating to the call for tenders.

The same is true of the fact that all the negative comments did not necessarily correspond literally to one explicit requirement of the technical specifications ... In that regard, it must be recalled that an evaluation committee must be able to have some leeway in carrying out its task. Accordingly, it may, without amending the contract award criteria set out in the tender specifications or the contract notice, structure its own work of examining and analysing the submitted tenders ...

In the second place, ... the comments by the evaluation committee regarding insufficient examples illustrating more concretely the proposal for service delivery for the scenario contained in the tender submitted by the European Dynamics consortium does not mean that that committee took into account an award criterion that was not set out in the tender specifications. On the contrary, as the [contracting authority] submits, the presence of examples may be capable of reflecting the tenderer’s proper understanding of the services sought. Similarly, the selection, by the tenderers, of the information and detail included in the tender shows the understanding by the latter of the services sought. Hence, the comments relating to insufficient examples or details in the tender submitted by the European Dynamics consortium are indissociably linked to the assessment of the award criteria .... They do not therefore reveal the existence of additional award criteria.

In the third place, it is clear from the evaluation committee’s report that the value of the tenders was indeed evaluated with regard to the technical criteria referred to in the tender specifications. The fact that, as the [contracting authority] states in its defence, the points relating to each of the criteria and sub-criteria defined in the tender specifications were awarded after completion of an evaluation of the whole of the technical offer submitted by each tenderer cannot call that finding into question. Therefore, even if the objection were validly made, the argument that the [contracting authority] considered that the general understanding of the tender specification was a more important criteria than the criteria made public must be rejected (paras 129-132, references omitted and emphases added).

In my view, the GC's Judgment should be welcome. Mainly for two reasons. First, it avoids the dangerously prescriptive approach that would have underpinned a consideration that each example (or the number of examples) needs to be linked to a specific award criterion--which would have made the design of award criteria and tender formats impossibly complex and constraining. Second, because it recognises that, regardless of the break-up of criteria into sub-criteria, evaluation committees can (and I would say should) carry out the evaluation on the basis of their overall or holistic assessment of the tenders. Again, the opposite approach would be excessively constraining, and would result in an artificial split of the tenders into different sub-dimensions in a manner that could rend the evaluation process moot or exceedingly complicated. So, on the whole, this is a good example of pragmatic approach by the GC.

Detailed comments v illegal sub-criteria & their weightings

In its Judgment of 20 December 2017 in EUIPO v European Dynamics Luxembourg and Others, C-677/15 P, EU:C:2017:998 (for discussion of the GC decision under appeal, see here), the ECJ assessed whether specific comments on particular aspects of a tender can constitute the illegal introduction of sub-criteria or their weighting. It is worth recalling that the case also concerned the provision of IT services, and that the evaluation of the quality of the tenders would partially rely on their project management strategy, which was to be assessed against a long list of non-prioritised elements (such as 'change management process', or having a 'lessons learnt programme').

At first instance, ED challenged the evaluation on the basis that the contracting authority's 'negative comment on the bid submitted by [ED] that the bids obtaining a higher score than it obtained under the first award criterion "identified change management and communication as the two most essential tasks for the success of the project’ showed that [the contracting authority] had applied a weighting to the various sub-criteria within the first award criterion"' (para 11). The GC sided with ED and found that 'since such weighting was not provided for by the tender specifications or communicated in advance to the tenderers, [the contracting authority] had breached, to the detriment of [ED], the principles of equal opportunity and transparency' (ibid).

On appeal, the ECJ has now found that "[i]t is clear that the judgment under appeal is vitiated by an error of law in that regard" (para 30). However, the ECJ has reached this position on purely procedural grounds, which leaves the question open as to whether the provision of negative comments indicating relative disadvantages in relation to some, but not all, the sub-criteria published in the tender document constitutes in itself an illegal case of introduction of illegal sub-weightings. The ECJ has indeed assumed that to be the case, and provided the following reasons for the annulment of the previous GC finding on procedural grounds:

... the principle that procurement procedures must ensure equal treatment and be transparent means that the adjudicating authority must interpret the award criteria in the same way throughout the entire procedure ... Accordingly, a contracting authority cannot apply weighting rules or sub-criteria in respect of the award criteria which it has not previously brought to the tenderers’ attention ...

Nevertheless, it is possible for a contracting authority to determine, after expiry of the time-limit for submitting tenders, weighting factors for sub-criteria which correspond in essence to the criteria previously brought to the tenderers’ attention. That subsequent determination must, however, satisfy three conditions, namely, it must not: (i) alter the criteria for the award of the contract set out in the contract documents or contract notice; (ii) contain elements which, if they had been known at the time the tenders were prepared, could have affected that preparation; and (iii) have been adopted on the basis of matters likely to give rise to discrimination against one of the tenderers ...

In the present case, the disputed findings concern the introduction of weighting given to sub-criteria within one of the award criteria, which was not provided for in the tendering specifications or disclosed in advance to the tenderers ... Thus, in the light of the foregoing, the General Court was not in a position to reach a valid finding that there had been a breach of the principles of equal opportunity and transparency without first examining whether it had been pleaded and established that those three conditions had not been met.

As the General Court failed to verify ... whether those three conditions ... were met in the present case, the first ground of appeal must be upheld, without there being any need to examine the merits of [the contracting authority's] argument that the General Court failed to have due regard for its duty to state reasons when it found that the introduction of factors for the assessment of the sub-criteria in question gave rise to a breach of the principles of equal opportunity and transparency (paras 31-35, references omitted and emphases added).

In my view, this is a lost opportunity for the ECJ to have clarified the extent to which a literal interpretation of the comments given by the contracting authority in debriefing documents can be subjected to the level of scrutiny that the GC had engaged in. It is also relatively difficult to put the two cases discussed in this post together. Strictly speaking, applying the logic that emerges from this second case to the first one, it would seem that ED may have been right in claiming that mentioning the existence of a larger number of examples as the reason for a lower technical mark could constitute a new sub-criterion (or a new sub-weighting if the provision of examples was indicated amongst the list of criteria to be taken into account). In that regard, the GC seems to have adopted a more lenient approach in the first case than the ECJ may be willing to recognise. Should the first case be appealed by ED (who knows?), this may be a tricky issue for the ECJ to iron out.

No comment unless in the presence of my lawyer?

On the whole, I think that these two cases show that, regardless of how flexible the courts are in the assessment of the comments given by the contracting authorities in the context of procurement debriefing, these are dangerous waters. Should this then lead to evaluation teams requiring a lawyer to sit in their meetings and make sure that nothing that is committed to paper (keyboard) can then be used to challenge the evaluation? 

No comment.