Digital procurement, PPDS and multi-speed datafication -- some thoughts on the March 2023 PPDS Communication

The 2020 European strategy for data ear-marked public procurement as a high priority area for the development of common European data spaces for public administrations. The 2020 data strategy stressed that

Public procurement data are essential to improve transparency and accountability of public spending, fighting corruption and improving spending quality. Public procurement data is spread over several systems in the Member States, made available in different formats and is not easily possible to use for policy purposes in real-time. In many cases, the data quality needs to be improved.

To address those issues, the European Commission was planning to ‘Elaborate a data initiative for public procurement data covering both the EU dimension (EU datasets, such as TED) and the national ones’ by the end of 2020, which would be ‘complemented by a procurement data governance framework’ by mid 2021.

With a 2+ year delay, details for the creation of the public procurement data space (PPDS) were disclosed by the European Commission on 16 March 2023 in the PPDS Communication. The procurement data governance framework is now planned to be developed in the second half of 2023.

In this blog post, I offer some thoughts on the PPDS, its functional goals, likely effects, and the quickly closing window of opportunity for Member States to support its feasibility through an ambitious implementation of the new procurement eForms at domestic level (on which see earlier thoughts here).

1. The PPDS Communication and its goals

The PPDS Communication sets some lofty ambitions aligned with those of the closely-related process of procurement digitalisation, which the European Commission in its 2017 Making Procurement Work In and For Europe Communication already saw as not only an opportunity ‘to streamline and simplify the procurement process’, but also ‘to rethink fundamentally the way public procurement, and relevant parts of public administrations, are organised … [to seize] a unique chance to reshape the relevant systems and achieve a digital transformation’ (at 11-12).

Following the same rhetoric of transformation, the PPDS Communication now stresses that ‘Integrated data combined with the use of state-of the-art and emerging analytics technologies will not only transform public procurement, but also give new and valuable insights to public buyers, policy-makers, businesses and interested citizens alike‘ (at 2). It goes further to suggest that ‘given the high number of ecosystems concerned by public procurement and the amount of data to be analysed, the impact of AI in this field has a potential that we can only see a glimpse of so far‘ (at 2).

The PPDS Communication claims that this data space ‘will revolutionise the access to and use of public procurement data:

• It will create a platform at EU level to access for the first time public procurement data scattered so far at EU, national and regional level.

• It will considerably improve data quality, availability and completeness, through close cooperation between the Commission and Member States and the introduction of the new eForms, which will allow public buyers to provide information in a more structured way.

• This wealth of data will be combined with an analytics toolset including advanced technologies such as Artificial Intelligence (AI), for example in the form of Machine Learning (ML) and Natural Language Processing (NLP).’

A first comment or observation is that this rhetoric of transformation and revolution not only tends to create excessive expectations on what can realistically be delivered by the PPDS, but can also further fuel the ‘policy irresistibility’ of procurement digitalisation and thus eg generate excessive experimentation or investment into the deployment of digital technologies on the basis of such expectations around data access through PPDS (for discussion, see here). Policy-makers would do well to hold off on any investments and pilot projects seeking to exploit the data presumptively pooled in the PPDS until after its implementation. A closer look at the PPDS and the significant roadblocks towards its full implementation will shed further light on this issue.

2. What is the PPDS?

Put simply, the PPDS is a project to create a single data platform to bring into one place ‘all procurement data’ from across the EU—ie both data on above threshold contracts subjected to mandatory EU-wide publication through TED (via eForms from October 2023), and data on below threshold contracts, which publication may be required by the domestic laws of the Member States, or entirely voluntary for contracting authorities.

Given that above threshold procurement data is already (in the process of being) captured at EU level, the PPDS is very much about data on procurement not covered by the EU rules—which represents 80% of all public procurement contracts. As the PPDS Communication stresses

To unlock the full potential of public procurement, access to data and the ability to analyse it are essential. However, data from only 20% of all call for tenders as submitted by public buyers is available and searchable for analysis in one place [ie TED]. The remaining 80% are spread, in different formats, at national or regional level and difficult or impossible to re-use for policy, transparency and better spending purposes. In order (sic) words, public procurement is rich in data, but poor in making it work for taxpayers, policy makers and public buyers.

The PPDS thus intends to develop a ‘technical fix’ to gain a view on the below-threshold reality of procurement across the EU, by ‘pulling and pooling’ data from existing (and to be developed) domestic public contract registers and transparency portals. The PPDS is thus a mechanism for the aggregation of procurement data currently not available in (harmonised) machine-readable and structured formats (or at all).

As the PPDS Communication makes clear, it consists of four layers:
(1) A user interface layer (ie a website and/or app) underpinned by
(2) an analytics layer, which in turn is underpinned by (3) an integration layer that brings together and minimally quality-assures the (4) data layer sourced from TED, Member State public contract registers (including those at sub-national level), and data from other sources (eg data on beneficial ownership).

The two top layers condense all potential advantages of the PPDS, with the analytics layer seeking to develop a ‘toolset including emerging technologies (AI, ML and NLP)‘ to extract data insights for a multiplicity of purposes (see below 3), and the top user interface seeking to facilitate differential data access for different types of users and stakeholders (see below 4). The two bottom layers, and in particular the data layer, are the ones doing all the heavy lifting. Unavoidably, without data, the PPDS risks being little more than an empty shell. As always, ‘no data, no fun’ (see below 5).

Importantly, the top three layers are centralised and the European Commission has responsibility (and funding) for developing them, while the bottom data layer is decentralised, with each Member State retaining responsibility for digitalising its public procurement systems and connecting its data sources to the PPDS. Member States are also expected to bear their own costs, although there is EU funding available through different mechanisms. This allocation of responsibilities follows the limited competence of the EU in this area of inter-administrative cooperation, which unfortunately heightens the risks of the PPDS becoming little more than an empty shell, unless Member States really take the implementation of eForms and the collaborative approach to the construction of the PPDS seriously (see below 6).

The PPDS Communication foresees a progressive implementation of the PPDS, with the goal of having ‘the basic architecture and analytics toolkit in place and procurement data published at EU level available in the system by mid-2023. By the end of 2024, all participating national publication portals would be connected, historic data published at EU level integrated and the analytics toolkit expanded. As of 2025, the system could establish links with additional external data sources’ (at 2). It will most likely be delayed, but that is not very important in the long run—especially as the already accrued delays are the ones that pose a significant limitation on the adequate rollout of the PPDS (see below 6).

3. PPDS’ expected functionality

The PPDS Communication sets expectations around the functionality that could be extracted from the PPDS by different agents and stakeholders.

For public buyers, in addition to reducing the burden of complying with different types of (EU-mandated) reporting, the PPDS Communication expects that ‘insights gained from the PPDS will make it much easier for public buyers to

• team up and buy in bulk to obtain better prices and higher quality;

• generate more bids per call for tenders by making calls more attractive for bidders, especially for SMEs and start-ups;

• fight collusion and corruption, as well as other criminal acts, by detecting suspicious patterns;

• benchmark themselves more accurately against their peers and exchange knowledge, for instance with the aim of procuring more green, social and innovative products and services;

• through the further digitalisation and emerging technologies that it brings about, automate tasks, bringing about considerable operational savings’ (at 2).

This largely maps onto my analysis of likely applications of digital technologies for procurement management, assuming the data is there (see here).

The PPDS Communication also expects that policy-makers will ‘gain a wealth of insights that will enable them to predict future trends‘; that economic operators, and SMEs in particular, ‘will have an easy-to-use portal that gives them access to a much greater number of open call for tenders with better data quality‘, and that ‘Citizens, civil society, taxpayers and other interested stakeholders will have access to much more public procurement data than before, thereby improving transparency and accountability of public spending‘ (at 2).

Of all the expected benefits or functionalities, the most important ones are those attributed to public buyers and, in particular, the possibility of developing ‘category management’ insights (eg potential savings or benchmarking), systems of red flags in relation to corruption and collusion risks, and the automation of some tasks. However, unlocking most of these functionalities is not dependent on the PPDS, but rather on the existence of procurement data at the ‘right’ level.

For example, category management or benchmarking may be more relevant or adequate (as well as more feasible) at national than at supra-national level, and the development of systems of red flags can also take place at below-EU level, as can automation. Importantly, the development of such functionalities using pan-EU data, or data concerning more than one Member State, could bias the tools in a way that makes them less suited, or unsuitable, for deployment at national level (eg if the AI is trained on data concerning solely jurisdictions other than the one where it would be deployed).

In that regard, the expected functionalities arising from PPDS require some further thought and it can well be that, depending on implementation (in particular in relation to multi-speed datafication, as below 5), Member States are better off solely using domestic data than that coming from the PPDS. This is to say that PPDS is not a solid reality and that its enabling character will fluctuate with its implementation.

4. Differential procurement data access through PPDS

As mentioned above, the PPDS Communication stresses that ‘Citizens, civil society, taxpayers and other interested stakeholders will have access to much more public procurement data than before, thereby improving transparency and accountability of public spending’ (at 2). However, this does not mean that the PPDS will be (entirely) open data.

The Communication itself makes clear that ‘Different user categories (e.g. Member States, public buyers, businesses, citizens, NGOs, journalists and researchers) will have different access rights, distinguishing between public and non-public data and between participating Member States that share their data with the PPDS (PPDS members, …) and those that need more time to prepare’ (at 8). Relatedly, ‘PPDS members will have access to data which is available within the PPDS. However, even those Member States that are not yet ready to participate in the PPDS stand to benefit from implementing the principles below, due to their value for operational efficiency and preparing for a more evidence-based policy’ (at 9). This raises two issues.

First, and rightly, the Communication makes clear that the PPDS moves away from a model of ‘fully open’ or ‘open by default’ procurement data, and that access to the PPDS will require differential permissioning. This is the correct approach. Regardless of the future procurement data governance framework, it is clear that the emerging thicket of EU data governance rules ‘requires the careful management of a system of multi-tiered access to different types of information at different times, by different stakeholders and under different conditions’ (see here). This will however raise significant issues for the implementation of the PPDS, as it will generate some constraints or disincentives for an ambitions implementation of eForms at national level (see below 6).

Second, and less clearly, the PPDS Communication evidences that not all Member States will automatically have equal access to PPDS data. The design seems to be such that Member States that do not feed data into PPDS will not have access to it. While this could be conceived as an incentive for all Member States to join PPDS, this outcome is by no means guaranteed. As above (3), it is not clear that Member States will be better off—in terms of their ability to extract data insights or to deploy digital technologies—by having access to pan-EU data. The main benefit resulting from pan-EU data only accrues collectively and, primarily, by means of facilitating oversight and enforcement by the European Commission. From that perspective, the incentives for PPDS participation for any given Member State may be quite warped or internally contradictory.

Moreover, given that plugging into PPDS is not cost-free, a Member State that developed a data architecture not immediately compatible with PPDS may well wonder whether it made sense to shoulder the additional costs and risks. From that perspective, it can only be hoped that the existence of EU funding and technical support will be maximised by the European Commission to offload that burden from the (reluctant) Member States. However, even then, full PPDS participation by all Member States will still not dispel the risk of multi-speed datafication.

5. No data, no fun — and multi-speed datafication

Related to the risk that some EU Member States will become PPDS members and others not, there is a risk (or rather, a reality) that not all PPDS members will equally contribute data—thus creating multi-speed datafication, even within the Member States that opt in to the PPDS.

First, the PPDS Communication makes it clear that ‘Member States will remain in control over which data they wish to share with the PPDS (beyond the data that must be published on TED under the Public Procurement Directives)‘ (at 7), It further specifies that ‘With the eForms, it will be possible for the first time to provide data in notices that should not be published, or not immediately. This is important to give assurance to public buyers that certain data is not made publicly available or not before a certain point in time (e.g. prices)’ (at 7, fn 17).

This means that each Member State will only have to plug whichever data it captures and decides to share into PPDS. It seems plain to see that this will result in different approaches to data capture, multiple levels of granularity, and varying approaches to restricting access to the date in the different Member States, especially bearing in mind that ‘eForms are not an “off the shelf” product that can be implemented only by IT developers. Instead, before developers start working, procurement policy decision-makers have to make a wide range of policy decisions on how eForms should be implemented’ in the different Member States (see eForms Implementation Handbook, at 9).

Second, the PPDS Communication is clear (in a footnote) that ‘One of the conditions for a successful establishment of the PPDS is that Member States put in place automatic data capture mechanisms, in a first step transmitting data from their national portals and contract registers’ (at 4, fn 10). This implies that Member States may need to move away from manually inputted information and that those seeking to create new mechanisms for automatic procurement data capture can take an incremental approach, which is very much baked into the PPDS design. This relates, for example, to the distinction between pre- and post-award procurement data, with pre-award data subjected to higher demands under EU law. It also relates to above and below threshold data, as only above threshold data is subjected to mandatory eForms compliance.

In the end, the extent to which a (willing) Member State will contribute data to the PPDS depends on its decisions on eForms implementation, which should be well underway given the October 2023 deadline for mandatory use (for above threshold contracts). Crucially, Member States contributing more data may feel let down when no comparable data is contributed to PPDS by other Member States, which can well operate as a disincentive to contribute any further data, rather than as an incentive for the others to match up that data.

6. Ambitious eForms implementation as the PPDS’ Achilles heel

As the analysis above has shown, the viability of the PPDS and its fitness for purpose (especially for EU-level oversight and enforcement purposes) crucially depends on the Member States deciding to take an ambitious approach to the implementation of eForms, not solely by maximising their flexibility for voluntary uses (as discussed here) but, crucially, by extending their mandatory use (under national law) to all below threshold procurement. It is now also clear that there is a need for as much homogeneity as possible in the implementation of eForms in order to guarantee that the information plugged into PPDS is comparable—which is an aspect of data quality that the PPDS Communication does not seem to have at all considered).

It seems that, due to competing timings, this poses a bit of a problem for the rollout of the PPDS. While eForms need to be fully implemented domestically by October 2023, the PPDS Communication suggests that the connection of national portals will be a matter for 2024, as the first part of the project will concern the top two layers and data connection will follow (or, at best, be developed in parallel). Somehow, it feels like the PPDS is being built without a strong enough foundation. It would be a shame (to put it mildly) if Member States having completed a transition to eForms by October 2023 were dissuaded from a second transition into a more ambitious eForms implementation in 2024 for the purposes of the PPDS.

Given that the most likely approach to eForms implementation is rather minimalistic, it can well be that the PPDS results in not much more than an empty shell with fancy digital analytics limited to very superficial uses. In that regard, the two-year delay in progressing the PPDS has created a very narrow (and quickly dwindling) window of opportunity for Member States to engage with an ambitions process of eForms implementation

7. Final thoughts

It seems to me that limited and slow progress will be attained under the PPDS in coming years. Given the undoubted value of harnessing procurement data, I sense that Member States will progress domestically, but primarily in specific settings such as that of their central purchasing bodies (see here). However, whether they will be onboarded into PPDS as enthusiastic members seems less likely.

The scenario seems to resemble limited voluntary cooperation in other areas (eg interoperability; for discussion see here). It may well be that the logic of EU competence allocation required this tentative step as a first move towards a more robust and proactive approach by the Commission in a few years, on grounds that the goal of creating the European data space could not be achieved through this less interventionist approach.

However, given the speed at which digital transformation could take place (and is taking place in some parts of the EU), and the rhetoric of transformation and revolution that keeps being used in this policy area, I can’t but feel let down by the approach in the PPDS Communication, which started with the decision to build the eForms on the existing regulatory framework, rather than more boldly seeking a reform of the EU procurement rules to facilitate their digital fitness.

New CJEU case law against excessive disclosure: quid de open data? (C‑54/21, and joined C‑37/20 and C‑601/20)

In the last few days, the Court of Justice of the European Union (CJEU) has delivered two judgments imposing significant limitations on the systematic, unlimited disclosure of procurement information with commercial value, such as the identity of experts and subcontractors engaged by tenderers for public contracts; and beneficial ownership information. In imposing a nuanced approach to the disclosure of such information, the CJEU may have torpedoed ‘full transparency’ approaches to procurement and beneficial ownership open data.

Indeed, these are two classes of information at the core of current open data efforts, and they are relevant for (digital) procurement governance—in particular in relation to the prevention of corruption and collusion, which automated screening requires establishing relationships and assessing patterns of interaction reliant on such data [for discussion, see A Sanchez-Graells, ‘Procurement Corruption and Artificial Intelligence: Between the Potential of Enabling Data Architectures and the Constraints of Due Process Requirements’ in S Williams & J Tillipman (eds), Routledge Handbook of Public Procurement Corruption (forthcoming)]. The judgments can thus have important implications.

In Antea Polska, the CJEU held that EU procurement rules prevent national legislation mandating all information sent by the tenderers to the contracting authorities to be published in its entirety or communicated to the other tenderers, with the sole exception of trade secrets. The CJEU reiterated that the scope of non-disclosable information is much broader and requires a case-by-case analysis by the contracting authority, in particular with a view to avoiding the release of information that could be used to distort competition. Disclosure of information needs to strike an adequate balance between meeting good administration duties to enable the right to the effective review of procurement decisions, on the one hand, and the protection of information with commercial value or with potential competition implications, on the other.

In a related fashion, in Luxembourg Business Registers, the CJEU declared invalid the provision of the Anti-Money Laundering Directive whereby Member States had to ensure that the information on the beneficial ownership of corporate and other legal entities incorporated within their territory was accessible in all cases to any member of the general public—without the need to demonstrate having a legitimate interest in accessing it. The CJEU considered that the disclosure of the information to undefined members of the public created an excessive interference with the fundamental rights to respect for private life and to the protection of personal data.

In this blog post, I analyse these two cases and reflect on their implications for the management of (big) open data for procurement governance purposes, in particular from an anti-corruption perspective and in relation to the EU law data governance obligations incumbent on public buyers.

There is more than trade secrets to procurement confidentiality

In Antea Polska and Others (C-54/21, EU:C:2022:888), among other questions, the CJEU was asked whether Directive 2014/24/EU precludes national legislation on public procurement which required that, with the sole exception of trade secrets, information sent by the tenderers to the contracting authorities be published in its entirety or communicated to the other tenderers, and a practice on the part of contracting authorities whereby requests for confidential treatment in respect of trade secrets were accepted as a matter of course.

I will concentrate on the first part of the question on full transparency solely constrained by trade secrets—and leave the ‘countervailing’ practice aside for now (though it deserves some comment because it creates a requirement for the contracting authority to assess the commercial value of procurement information in the wider context of the activities of the participating economic operators, at paras 69-85). I will also not deal with the discrepancy between the concept of ‘trade secret’ under the Trade Secrets Directive and the concept of ‘confidential information’ in Directive 2014/24 (which the CJEU clarifies, again, at paras 51-55).

The issue of full transparency of procurement information subject only to trade secret protection raises an interesting question because it concerns the compatibility with EU law of a maximalistic approach to procurement transparency that is not peculiar to Poland (where the case originated) but shared by other Member States with a permissive tradition of access to public documents [for in-depth country-specific analyses and comparative considerations, see the contributions to K-M Halonen, R Caranta & A Sanchez-Graells, Transparency in EU Procurements. Disclosure Within Public Procurement and During Contract Execution (Edward Elgar 2019)].

The question concerns the interpretation of multiple provisions of Directive 2014/24/EU and, in particular, Art 21(1) on confidentiality and Arts 50(4) and 55(3) on the withholding of information [see my comments to Art 21 and 55 in R Caranta & A Sanchez-Graells, European Public Procurement. Commentary on Directive 2014/24/EU (Edward Elgar 2021)]. All of them are of course to be interpreted in line with the general principle of competition in Art 18(1) [see A Sanchez-Graells, Public Procurement and the EU Competition Rules (2nd edn, hart 2015) 444-445].

In addressing the question, the CJEU built on its recent judgment in Klaipėdos regiono atliekų tvarkymo centras (C‑927/19, EU:C:2021:700), and reiterated its general approach to the protection of confidential information in procurement procedures:

‘… the principal objective of the EU rules on public procurement is to ensure undistorted competition … to achieve that objective, it is important that the contracting authorities do not release information relating to public procurement procedures which could be used to distort competition, whether in an ongoing procurement procedure or in subsequent procedures. Since public procurement procedures are founded on a relationship of trust between the contracting authorities and participating economic operators, those operators must be able to communicate any relevant information to the contracting authorities in such a procedure, without fear that the authorities will communicate to third parties items of information whose disclosure could be damaging to those operators’ (C-54/21, para 49, reference omitted, emphasis added).

The CJEU linked this interpretation to the prohibition for contracting authorities to disclose information forwarded to it by economic operators which they have designated as confidential [Art 21(1) Dir 2014/24] and stressed that this had to be reconciled with the requirements of effective judicial protection and, in particular, the general principle of good administration, from which the obligation to state reasons stems because ‘in the absence of sufficient information enabling it to ascertain whether the decision of the contracting authority to award the contract is vitiated by errors or unlawfulness, an unsuccessful tenderer will not, in practice, be able to rely on its right .. to an effective review’ (C-54/21, para 50).

The Court also stressed that the Directive allows Member States to modulate the scope of the protection of confidential information in accordance with their national legislation, in particular legislation concerning access to information [Art 21(1) Dir 2014/24, C-54/21, para 56]. In that regard, however, the CJEU went on to stress that

‘… if the effectiveness of EU law is not to be undermined, the Member States, when exercising the discretion conferred on them by Article 21(1) of that directive, must refrain from introducing regimes … which undermine the balancing exercise [with the right to an effective review] or which alter the regime relating to the publicising of awarded contracts and the rules relating to information to candidates and tenderers set out in Article 50 and 55 of that directive … any regime relating to confidentiality must, as Article 21(1) of Directive 2014/24 expressly states, be without prejudice to the abovementioned regime and to those rules laid down in Articles 50 and 55 of that directive’ (C-54/21, para 58-59).

Focusing on Art 50(4) and Art 55(3) of Directive 2014/24/EU, the CJEU stressed that these provisions empower contracting authorities to withhold from general publication and from disclosure to other candidates and tenderers ‘certain information, where its release would impede law enforcement, would otherwise be contrary to the public interest or would prejudice the legitimate commercial interests of an economic operator or might prejudice fair competition’ (para 61 and, almost identically, para 60). This led the Court to the conclusion that

‘National legislation which requires publicising of any information which has been communicated to the contracting authority by all tenderers, including the successful tenderer, with the sole exception of information covered by the concept of trade secrets, is liable to prevent the contracting authority, contrary to what Articles 50(4) and 55(3) of Directive 2014/24 permit, from deciding not to disclose certain information pursuant to interests or objectives mentioned in those provisions, where that information does not fall within that concept of a trade secret.

Consequently, Article 21(1) of Directive 2014/24, read in conjunction with Articles 50 and 55 of that directive … precludes such a regime where it does not contain an adequate set of rules allowing contracting authorities, in circumstances where Articles 50 and 55 apply, exceptionally to refuse to disclose information which, while not covered by the concept of trade secrets, must remain inaccessible pursuant to an interest or objective referred to in Articles 50 and 55’ (paras 62-63).

In my view, this is the correct interpretation and an important application of the rules seeking to minimise the risk of distortions of competition due to excessive procurement transparency, on which I have been writing for a long time [see also K-M Halonen, ‘Disclosure rules in EU public procurement: balancing between competition and transparency’ (2016) 16(4) Journal of Public Procurement 528].

The Antea Polska judgment stresses the importance of developing a nuanced approach to the management, restricted disclosure and broader publication of information submitted to the contracting authority in a procurement procedure. Notably, this will create particular complications in the context of the design and rollout of procurement open data, especially in the context of the new eForms (see here, and below).

Transparency for what? Who really cares about beneficial ownership?

In Luxembourg Business Registers (joined cases C‑37/20 and C‑601/20, EU:C:2022:912, FR only—see EN press release on which I rely to avoid extensive own translations from French) the CJEU was asked to rule on the compatibility with the Charter of Fundamental Rights—and in particular Articles 7 (respect for private and family life) and 8 (protection of personal data)—of Article 30(5)(c) of the consolidated version of the Anti-Money Laundering Directive (AML Directive), which required Member States to ensure that information on the beneficial ownership of corporate and other legal entities incorporated within their territory is accessible in all cases to any member of the general public. In particular, members of the general public had to ‘be permitted to access at least the name, the month and year of birth and the country of residence and nationality of the beneficial owner as well as the nature and extent of the beneficial interest held.’

The CJEU has found that the general public’s access to information on beneficial ownership constitutes a serious interference with the fundamental rights to respect for private life and to the protection of personal data, which is exacerbated by the fact that, once those data have been made available to the general public, they can not only be freely consulted, but also retained and disseminated.

While the CJEU recognised that the AML Directive pursues an objective of general interest and that the general public’s access to information on beneficial ownership is appropriate for contributing to the attainment of that objective, the interference with individual fundamental rights is neither limited to what is strictly necessary nor proportionate to the objective pursued.

The Court paid special attention to the fact that the rules requiring unrestricted public access to the information result from a modification of the previous regime in the original AML Directive, which required, in addition to access by the competent authorities and certain entities, for access by any person or organisation capable of demonstrating a legitimate interest. The Court considered that the suppression of the requirement to demonstrate a legitimate interest in accessing the information did not generate sufficient benefits from the perspective of combating money laundering and terrorist financing to offset the significantly more serious interference with fundamental rights that open publication of the beneficial ownership data entails.

Here, the Court referred to its judgment in Vyriausioji tarnybinės etikos komisija (C‑184/20, EU:C:2022:601), where it carried out a functional comparison of the anti-corruption effects of a permissioned system of institutional access and control of relevant disclosures, versus public access to that information. The Court was clear that

‘… the publication online of the majority of the personal data contained in the declaration of private interests of any head of an establishment receiving public funds … does not meet the requirements of a proper balance. In comparison with an obligation to declare coupled with a check of the declaration’s content by the Chief Ethics Commission … such publication amounts to a considerably more serious interference with the fundamental rights guaranteed in Articles 7 and 8 of the Charter, without that increased interference being capable of being offset by any benefits which might result from publication of all those data for the purpose of preventing conflicts of interest and combating corruption’ (C-184/20, para 112).

In Luxembourg Business Registers, the CJEU also held that the optional provisions in Art 30 AML Directive that allowed Member States to make information on beneficial ownership available on condition of online registration and to provide, in exceptional circumstances, for an exemption from access to that information by the general public, were not, in themselves, capable of demonstrating either a proper balance between competing interests, or the existence of sufficient safeguards.

The implication of the Luxembourg Business Registers is that a different approach to facilitating access to beneficial ownership data is required, and that an element of case-by-case assessment (or at least of an assessment based on categories of organisations and individuals seeking access) will need to be brought back into the system. In other words, permissioned access to beneficial ownership data seems unavoidable.

Implications for open data and data governance

These recent CJEU judgments seem to me to clearly establish the general principle that unlimited transparency does not equate public interest, as there is also an interest in preserving the (relative) confidentiality of some information and data and an adequate, difficult balance needs to be struck. The interests in competition with transparency can be either individual (fundamental rights, or commercial value) or collective (avoidance of distortions of competition). Detailed and comprehensive assessment on a case-by-case basis is required.

As I advocated long ago, and recently reiterated in relation to the growing set of data governance obligations incumbent on public buyers, under EU law,

‘It is thus simply not possible to create a system that makes all procurement data open. Data governance requires the careful management of a system of multi-tiered access to different types of information at different times, by different stakeholders and under different conditions. While the need to balance procurement transparency and the protection of data subject to the rights of others and competition-sensitive data is not a new governance challenge, the digital management of this information creates heightened risks to the extent that the implementation of data management solutions is tendentially ‘open access’ (and could eg reverse presumptions of confidentiality), as well as in relation to system integrity risks (ie cybersecurity)’ (at 10, references omitted).

The CJEU judgments have (re)confirmed that unlimited ‘open access’ is not a viable strategy under EU law. It is perhaps clearer than ever that the capture, structuring, retention, and disclosure of governance-relevant procurement and related data (eg beneficial ownership) needs to be decoupled from its proactive publication. This requires a reconsideration of the open data model and, in particular, a careful assessment of the implementation of the new eForms that only just entered into force.

New lengthy reference by Lithuanian Supreme Court raises a range of difficult questions (C-927/19, Klaipėdos regiono atliekų tvarkymo centras) [guest post by Dr Deividas Soloveičik*]

This guest post by Dr Deividas Soloveičik provides interesting background and critical remarks on a recent Lithuanian reference to the Court of Justice for a preliminary ruling on issues concerning several aspects of the 2014 rules, in particular interesting boundary issues between qualitative selection and technical specifications, as well as exclusion of consortium partners. It will be interesting to keep an eye on the case, as it brings an opportunity for the CJEU to expand its case law.

Some difficult questions

The very end of the 2019 was highlighted by a new lengthy preliminary reference to the CJEU by the Supreme Court of Lithuania (the Supreme Court), in a case that raises a broad range of issues concerning economic and financial standing requirements, the boundary between qualitative selection and technical specification criteria, confidentiality of procurement documents in the context of ensuing litigation and the consequences of the provision of false information. This case and the initial findings of the Supreme Court will be  assessed in this “executive summary” of the references sent to the CJEU—which, at the time of writing (17 January 2020) are yet to be admitted (although the referral has been assigned case number C-927/19, Klaipėdos regiono atliekų tvarkymo centras).

Before proceeding to the analysis, it is worth recalling that, in relation specifically to the point on submission of false information and its impact on the potential exclusion of the tenderer concerned the Supreme Court was perfectly aware of the recent Judgments in Meca (C-41/18, EU:C:2019:507, not available in English) and Delta (C-267/18, EU:C:2019:826) case-law at the time of the reference to the CJEU. However, the Court extends its query and mainly is seeking to find out whether (i) the act of provision of false information by one of the consortium partners “infects” the rest of the team and (ii) what the role of the national court hearing this kind of legal case in the light of the above-mentioned Meca and Delta case-law is, when the CJEU previously specifically emphasized the importance of the discretion of the contracting authority while handling these kind of legal (procurement) situations.

Background

The Lithuanian contracting authority started an open tender for the services of municipal waste gathering and removal to landfill treatment facilities. The procurement procedure was regulated by national and Directive 2014/24/EU. The procurement documents inter alia included the following requirements:

• Technical specification: the service provider uses vehicles for waste management services that are in line with the requirements of EURO 5 standard; all vehicles must have installed constantly functioning GPS transmitters that would allow the contracting authority monitoring the exact location and movement route of the vehicle. The supplier must allow the contracting authority and the administration of the Neringa municipality to use its installed GPS as much as it is necessary to monitor the location and movement routes of the vehicles used in providing the services of waste management and transporting waste to landfill. If sub-suppliers are involved, this requirement is also applicable for their vehicles.

• Technical and professional capacity: the supplier must own or lease (or possess otherwise) the necessary quantity of vehicles needed to execute the public contract and these must comply with the requirements listed in the technical specifications. The requirements for qualification and technical specification were almost identical.

• Financial and economic capacity: tenderers’ average annual operating income from carrying out the activities related to the management of mixed municipal waste during the past 3 financial years (or the period since the supplier’s registration date if the supplier carried out the activities for a period less than 3 financial years) had to be not less than EUR 20,000 EUR excluding VAT.

There were three tenderers in a procedure: the plaintiff, another company and an awardee of the public contract, which was a consortium comprised by three individual companies. The plaintiff took second place. The plaintiff submitted the claim against the contracting authority claiming that the winner had not complied with the: (i) technical specifications – the vehicle indicated by the supplier is not for the mixed waste transportation and considering the years of manufacture – it does not comply with the requirements of the EURO 5 standard; (ii) financial and economic requirements - the average annual operating income of the supplier while carrying out the activities related to the management of mixed municipal waste during the past 3 financial years must be not less than EUR 20 000 EUR excluding VAT, but one of the joint venture partners of the supplier does not carry out waste management activities overall. The crux of the dispute was thus the following: one of the consortium partners made a statement that it had experience in management of mixed municipal waste. The claimant contended that this might not have been the truth because this partner of the consortium had never rendered any services of this type. So the claimant maintained that (a) this consortium partner did not have the needed qualification and (b) that this consortium partner made a false statement. This must have led, in the opinion of the claimant, to rejection of the consortium’s tender.

The court of first instance dismissed the claim but the appeal was successful, and the court obliged the contracting authority to re-execute the evaluation of the tenders. The Court of Appeals considered that the winner of the tender did not prove that it had the technical capacity, because the original tender did not include the information on the required vehicles, which were provided by the tenderer only after the submission of the bid to the contracting authority.

The initial awardee of the contract did not agree with the findings of the Court of Appeals and filed a cassation complaint which was accepted by the Supreme Court.

Regarding the financial and economic capacity as a qualification criterion

By raising the question on the scope of the qualification requirement to hold a relevant financial and economic capacity, the Supreme Court addressed the above-mentioned statements of the procurement documentation which required each tenderer to have an annual operating income from carrying out the activities related to the management of mixed municipal waste during the past 3 financial years or the period since the supplier’s registration date (if the supplier carried out the activities for a period less than 3 financial years) of not less than EUR 20,000 EUR excluding VAT. There were three legal aspects which triggered the Court’s doubts.

First, by reading Art. 58(3) of Directive 2014/24/EU the Supreme Court was prone to conclude that the latter limited the discretion of the contracting authority to require the suppliers to have a turnover from a very specific (niche) economic (business) activity as a sole and main financial criterion. The Court reasoned that the main goal of Art. 58(3) of the Directive was to help contracting authorities finding a financially trustworthy and economically stable contract partner. Therefore, the Court believed that, on the one hand, it allowed the contracting authorities to request from the tenderers having a general financial turnover (as specified in the procurement documentation) and, on the other hand, it left leeway to request the proof of the financial (monetary) capacity gained from a more specific business activity, because the wording of Art. 58(3) of the Directive 2014/24 contains a statement “... including a certain minimum turnover in the area covered by the contract”. However, the Court considered that any requirement for the suppliers’ qualification which is based on Art. 58(3) of Directive 2014/24 (and respectively the national procurement law) should (or even must) a priori address the general financial turnover and must not use a turnover from a niche commercial activity autonomously (i.e. as a sole requirement for financial and economic qualification). In the given case, it seems that the Supreme Court doubted if the contracting authority had a right to require an annual operating income to be received from carrying out the activities related to the management of mixed municipal waste as a single selection ground. The wording of the ruling suggests that the Supreme Court deemed that the contracting authority had a right to require a general turnover (e.g. 200,000 EUR annually) and an income from a specific activity (e.g. 20,000 EUR from management of mixed municipal waste), but not only the latter.

Second, by reading a text of the ruling it seems that the Supreme Court reasoned that if the interpretation of the Art. 58(3) of the Directive 2014/24 was otherwise, i.e. as allowing the contracting authority to require financial and economic standing on the basis of a narrow experience (like in a given case from management of mixed municipal waste), then, in the Supreme Courts’ view, there would be a blurred line between the qualification related to financial and economic standing and the one connected to technical and professional ability. There would hardly be a difference between Art. 58(3) and Art. 58(4) of Directive 2014/24. In other words, the Supreme Court considered that even if legally the requirement for qualification was named as a financial and economical one, it in fact would be the requirement for technical and professional ability when it required financial flows to be gained from a very specific practice. Therefore, it might be said that the Court’s question to the CJEU has an indirect perspective, namely the Court wants the CJEU to clarify the lines between Arts. 58(3) and 58(4) of the Directive 2014/24/EU.

Third, the Court went on to examine the CJEU case-law in Esaprojekt (C-387/14, EU:C:2017:338) and its possible application to the case at hand. It must be recalled that the awardee of the public contract was a consortium of three companies. One of these companies (say company A) constantly held that it had the required financial qualification, because it maintained that this requirement was not personal and could be relied upon as a capacity gained from the execution of a previous public contract which was executed by the consortium to which company A was a member. However, company A did not itself render the services related to the management of mixed waste and therefore it had not received any income from that.  Therefore, the claimant contended that the company A could not hold that it had received any income from the management of mixed municipal waste and, therefore, it did not have a required qualification. The Court recalled that in Esaprojekt the CJEU stated that an economic operator cannot refer to the qualification gained by the whole consortium and may only be deemed to be qualified to the extent it itself executed the relevant (part of) public contract. Therefore, the Supreme Court wonders if this ratio decidendi, delivered in Esaprojekt in respect of technical and professional ability as a qualification requirement, should be applied on the same grounds while dealing with financial and economic standing of the suppliers.

In the light of these considerations, the Court asked the CJEU to answer:

(i) if the requirement to prove the annual income of the relevant size, received from a specific commercial activity (the management of mixed municipal waste), should be subsumed under Art. 58(3) or Art. 58(4) of the Directive 2014/24;

(ii) if the answer to the previous question had any effect on the application of the rules, provided in Esaprojekt, namely, whether it is allowed under the EU public procurement law to disregard the financial and economical capacity, gained during the joint bidding and execution of the previous public contract, if this capacity in corpore is relied upon by a single member of consortium in a later procurement procedure. In other words, the Supreme Court seeks to find out if a consortium member (company A) in a present tender can rely on a qualification, gained by another consortium, to which this company A was also a member, although company A did not actually and directly execute the part of the contract to which it seeks to rely in the later (present) tender (in this case – the management of mixed waste).

Regarding the separation between professional and technical capacity and technical specifications

It is a consistent and already an old national case-law which makes a very clear and precise dividing line between the requirements of the suppliers’ qualification (selection criteria) and technical specification. The Supreme Court maintains a principle that this separation has a substantial practical implication because under the settled case-law of the Lithuanian courts each discrepancy of the tender that is related to qualification (missing document, insufficient provision of required information on qualification, etc.), may be easily rectified. This means that it is forbidden to reject the a tender without at least requesting for a decent explanation from the supplier. The Supreme Court holds that such approach is in line with the view of the CJEU, expressed in such cases as SAG ELV Slovensko (C-599/10, EU:C:2012:191) or Manova (C-336/12, EU:C:2013:647). Meanwhile, any part of the tender that is connected to the requirements of technical specification cannot be amended, rectified or explained by an economic operator at a later stage of procurement in such a way as to turn the non-compliant original tender into a compliant one.

It must be recalled that in this case the requirements for the technical and professional capacity (the supplier must own or lease (or possess otherwise) the necessary quantity of technical measures needed to execute the public contract) were copy-pasted to the technical specification. Therefore, the situation itself became confusing: if those conditions were deemed as criterion for qualification, then there must have been a possibility to provide the additional information upon the request of the contracting authority (what was one of the arguments by the respondent in a case). Meanwhile, in case of an opposite legal approach, i.e. that such requirements are a part of technical specification, any amendment to the original tender after the submission deadline would undergo a much stricter test.

Therefore, the Supreme Court cast doubts on the legal possibility of the mentioned technical and professional qualification requirement. Although the Court referred to Commission v. Netherlands case (C-368/10, EU:C:2012:284) as the one allowing “relevant similar simultaneous requirements both as a condition of technical specification and criteria for entering into a public contract or its execution”, the Supreme Court was not sure if the qualification criterion can be so detailed and exhaustive as it was in the disputed procurement. The Court went on with its reasoning that the more detailed the requirement on qualification was, the more likely it was already a condition of the technical specification and not a selection criterion. In other words, it seems that the Supreme Court was prone to consider that the requirement on qualification cannot be so detailed as it should be in case of technical specification.

Thus, the Court asked the CJEU if the requirement of the procurement documentation that the economic operator used the vehicles needed for waste management services, that were in line with the requirements of EURO 5 standard; all vehicles must have had installed constantly functioning GPS transmitters, that would have allowed the contracting authority monitoring the exact location and movement route of the vehicle fell within the scope of regulation of Directive 2014/24 a) Art. 58(4), b) Art. 42 together with the Annex VII or c) Art. 70.

Regarding the scope of obligation of confidentiality in the light of effective remedies in public procurement

Although since Varec (C-450/06, EU:C:2008:91) there has not been a major development of the concept of confidentiality in public procurement law, on the contrary, in Lithuania it is one of the hottest legal topics during the recent five years. It has been circulated in all possible layers of the legal world, starting from the legislation and ending with the widely elaborated case-law [more on this might be read here: D Soloveičik, ‘Rethinking the confidentiality in public procurement: does public mean naked public?’ (2018) 1 UrT 11-26; for comparative perspectives, see the contributions to K-M Halonen, R Caranta & A Sanchez-Graells (eds), Transparency in EU Procurements. Disclosure Within Public Procurement and During Contract Execution (Elgar 2019)). In a nutshell the current national legal ecosystem in respect of confidentiality could be described as promoting extreme transparency in public procurement and thus limiting the disclosure of competitors’ information in very rare cases, mostly related to top commercial secrets of private parties. The Supreme Court considers that the mentioned “pro disclosure” case-lawis in line not only with the requirements of the principle of effectiveness of remedies in public procurement, but also with the regulation of Directive 2016/943/EU on the protection of trade secrets.

Despite the legal ecosystem, where the transparency should prosper, paradoxically the administrative practice during the procurement procedure is usually different. The contracting authorities, albeit being precisely aware of the mentioned juridical requirements to grant access to the relevant documentation, still are very disclosure averse. In a majority of procurement cases the contracting authorities deny the tenderers their right to gain the access to the competitors’ commercial proposal by arguing that this might lead to an illicit leak of a commercial secret. Moreover, while rejecting the claims of the tenderers, contracting authorities tend to give very abstract and uncomprehensive answers.

This leads to a situation where tenderers launch their legal challenges in from of the courts without having seeing the full picture of the procurement process and, therefore, being refused  an effective protection of their rights as required by the EU public procurement remedies directives. Usually in such cases the situation is rectified by the courts, which tend to disclose the information if it is not a commercial secret. As there is a two-layer procurement dispute system in Lithuania, where access to the court is guaranteed only after the prior submission of the claim to the contracting authority itself, the Supreme Court raised the issue of consistency and rationality of such practice when contracting authorities try to hide the information (usually the winners’) and then such information is only gained at the stage of litigation in court. This makes the procurement dispute at the stage of contracting authority useless. Therefore, the Court referred to Art. 1(1)(3) of Directive 89/665/EEC, Art. 21 of Directive 2014/24/EU and Directive 2016/943/EU and asked the CJEU if:

(i) if the contracting authority must deliver to the requesting tenderer the information comprising the competitors’ tender if such request is related to a legal challenge of such tender and is needed to verify its compliance with the requirements of the procurement documentation, subject to the fact that the claiming tenderer previously asked for this information. It is interesting to note that actually the main point of that question is whether the contracting authorities should be obliged to disclose the required information in order to avoid the mentioned practice that the information is locked during an early stage of the dispute, meanwhile it will still most likely be unlocked when it reaches the court. The hidden idea of the inquiry is that if it appears that the answer to the question is positive and the contracting authorities would be obliged to be almost fully open, then less disputes might reach the courts as the tenderers, after seeing the competitors’ tender, may find out that their claim would be unfounded.

(ii) In case the contracting authority rejects the suppliers’ claim, if its answer must be comprehensive, clear and informative, even though such an answer and its wording may disclose the confidential information. In other words, the Supreme Court wants to know to what extent the contracting authorities may be reserved while replying to the disclosure requests from tenderers, on the grounds that providing a detailed justification for the rejection could in itself constitute a breach of confidential treatment.

(iii) The mentioned provisions of the EU law must be understood as allowing the tenderer to separately challenge before the court the decision of the contracting authority each time it decides to reject the suppliers’ request for access to the competitors’ bid. It has to be mentioned that it is a long-standing national case-law which allows this kind of legal action in Lithuania. So, it seems that the Supreme Court knows the answer because it gave it to all the practitioners itself a long time ago. However, the inquiry sent to the Luxembourg is more an implicit request for verification if such case-law is in line with the EU legal regulation. An additional aspect to this inquiry is that the Supreme Court wanted to know if in the above-mentioned legal situations the tenderer may claim only the denial of the access to information, leaving the rest of possible legal claims, related to the competitors bid, aside. It seems that the Court is prone to think that if the answer to this question was positive, it would most likely mean that such tenderer would not lose its right to challenge these additional irregularities of the competitors’ tender after it receives the relevant information from the contracting authority, even if it is done with the assistance of the court. In other words, this part of the question is related to possible (non)application of limitation of actions.

(iv) Another two questions were related to a procedural law. The Court asked if the national court, hearing the public procurement dispute, in all cases must require the information on the challenged competitors’ tender from the contracting authority, despite its previous actions during the public procurement procedure. And a related question: if Art. 9(2)(3) of Directive 2016/943/EU must be understood as requiring the court, which declined the disclosure of the competitors’ tender to the claimant (but having this information in a file), to take this information into consideration while deciding on a merits of the case. In other words, the Supreme Court is asking whether the courts hearing the public procurement cases and having the information on one of the tenderers’ tender and which they decided to leave locked (meaning that the claimant would not see this data), are under an obligation to examine such information ex officio and take it into consideration while deciding the case. This means that in case of a positive answer to that question, the claimant might still have a chance to win the case, even without seeing the whole materials of a case-file, if there were actual irregularities of the competitors’ tender and the court spotted them.

Regarding the legal consequences of submitting false information and the courts’ discretion to decide upon this

Under the national provisions of the Law on Public Procurement, economic operators can be “blacklisted” if they provide false information to the contracting authority during the procurement procedure. In case of a joint bidding, all of the consortium members are included into this list.

In the case before the Court, one of the members of the consortium that was awarded the public contract was presenting to the contracting authority an inconsistent information regarding its previous financial income. The Supreme Court mentioned that according to the Esaprojekt ruling (above), there is no need to identify the intentional misbehavior of the tenderer in order to reject its bid. The Court reminded that purely negligent actions are sufficient to disqualify the tenderer if such actions could seriously mislead the contracting authority and negatively affect the result of the procurement. Therefore, taking into consideration the facts of a case, the Supreme Court stated that the actions of the mentioned consortium member, in Court’s view, might be considered as negligent.

After the Court came to such a conclusion, on the one hand it most likely must have decided that the tender of the consortium was invalid and that all the members were blacklisted. On the other hand, the Court was stopped from moving towards this legal direction because of two reasons. Firstly, the contracting authority was of the opposite opinion. It did not hold the tenderer negligent and neither it considered the consortiums’ given information as false. Therefore, the Court had a doubt if it can decide on its’ own initiative completely opposite to the direct will of the contracting authority. Secondly, these doubts were amplified by the recent findings of the CJEU in the above-mentioned Delta and Meca cases, where the Court of Luxembourg emphasized that it is a contracting authority, and only it, which is empowered to decide regarding the reliability of the economic operator. In the light of these conclusions, the Supreme Court decided to stay proceedings and request for explanation from the CJEU on the scope and limits of the discretion of national courts in such legal situations.

Besides, the Supreme Court raised a question on whether in case of submission of false information to the contracting authority the consequences of blacklisting must be applied to all members of the consortium. The Court noted that it is natural to expect the possibility of legal risks, related to the participation in a tender (e.g. the need to replace the partner due to its default, etc.). However, the Supreme Court considered that any such risk should be limited to the particular procurement and not be implemented in a way of a total ban on participation for a specified period of time and for all the consortium members. Although the Court did not use this wording, but it implied that this might be disproportionate.

Therefore, the Court asked the CJEU two following questions:

(i) If, in the light of the Art. 57(4)(h) of Directive 2014/24/EU and the Delta case, the national court is allowed, despite the will of the contracting authority, to ex officio decide that the economic operator intentionally or by negligence provided the contracting authority with false information and must have been excluded from the public tender.

(ii) If, in the light of the Art. 57(4)(h) of Directive 2014/24/EU and the principle of proportionality, the disqualification of a tenderer from a procurement procedure with the possible consequences of being “blacklisted” for the specified period of time is applicable against all the members of a joint bidding consortium or just against the economic operator responsible for such misbehavior.

Conclusion

There is no doubt that the Lithuanian Supreme Court triggered important issues related to public procurement practice. The answers from the CJEU are much awaited because procurement professionals face similar situations daily. Some of the areas, such as confidentiality, are extremely different across many EU jurisdictions, albeit all procurers operate under the same EU law on public procurement. Therefore, the interpretation suggested by the CJEU will be used to further unify practice across the internal market.

Dr. Deividas Soloveičik, LL.M

Dr Deividas Soloveičik is a Partner and Head of Public Procurement practice at COBALT Lithuania. He represents clients before national courts at all instances and arbitral institutions in civil and administrative cases, provides legal advice to Lithuanian and foreign private clients and contracting authorities, including the European Commission , on the legal aspects of public procurement and pre-commercial procurement.

Dr Soloveičik is an Associate Professor and researcher in commercial law at Vilnius University and a contributor to legal publications. He also closely cooperates with globally recognized academic members of the legal profession. Since 2011, MCIArb. Dr Soloveičik is a member of the Chartered Institute of Arbitrators; since 2016, he is a member of the European Assistance for Innovation Procurement – EAFIP initiative promoted by the European Commission and a recommended arbitrator at Vilnius Court of Commercial Arbitration.

* Guest blogging at HTCAN: If you would like to contribute a blog post for How to Crack a Nut, please feel free to get in touch at a.sanchez-graells@bristol.ac.uk. Your proposals and contributions will be most warmly welcomed!

reasons for the deduction of points at tender evaluation must be fully disclosed to their last detail: AG MENGOZZI ON DUTY TO MOTIVATE PROCUREMENT DECISIONS (C-376/16 P)

Image: Sébastien Thibault.

AG Mengozzi has put pressure on the Court of Justice (ECJ) to continue pushing for excessive transparency in the context of procurement litigation. On this occasion, the AG has invited the ECJ to establish an extremely stringent requirement for the disclosure of detailed comparisons of the evaluation reports to the level of award sub-criteria, without assessing the extent to which the contracting authority can have legitimate reasons to withhold parts of the evaluation.

In my view, this approach would create significant imbalances between the duty to provide reasons to disappointed tenderers and the duty to preserve competition for public contracts and sufficient protection of business and commercial information, which is problematic [for discussion, see K-M Halonen, 'Disclosure Rules in EU Public Procurement: Balancing between Competition and Transparency’ (2016) 16(4) Journal of Public Procurement 528; A Sanchez-Graells, ‘The Difficult Balance between Transparency and Competition in Public Procurement: Some Recent Trends in the Case Law of the European Courts and a Look at the New Directives’ (2013) Univ. of Leicester School of Law Research Paper No. 13-11]. Therefore, I argue that the ECJ should deviate from the Opinion of AG Mengozzi in its final Judgment in this case.

It is worth noting that the case is subjected to a previous version of the procurement rules in the EU Financial Regulation, but the ECJ's Judgment will be more generally relevant, both in the context of the current Financial Regulation controlling EU Institutional procurement and, more generally, for procurement controlled by the rules in the 2014 EU Public Procurement Package.

The AG Opinion

In his Opinion of 28 September 2017 in case EUIPO v European Dynamics Luxembourg and Others, C-376/16 P, EU:C:2017:729, AG Mengozzi has once more attempted a delineation of the obligation to state reasons for a decision to reject a tender and, in particular, "with regard to the correlation between the specific negative assessments set out in the evaluation report and the deductions of net points made by the contracting authority" (para 19). Or, in other words, AG Mengozzi has indicated the way in which the case law of the Court of Justice (ECJ) on the duty to provide justifications in the context of procurement debriefing applies to the reasons for the deduction of points on the basis of negative judgements of the evaluation committee [for general discussion of this obligation, see A Sanchez-Graells, “Transparency in Procurement by the EU Institutions”, in K-M Halonen, R Caranta & A Sanchez-Graells (eds), Disclosure Rules within Public Procurement Procedures and During Contract Period, vol 9 EPL Series (Edward Elgar, forthc.)].

This point of law was raised by EUIPO against the previous finding of the General Court (GC) that, despite the fact that contracting authorities are not required to provide unsuccessful tenderers with a detailed summary of how each aspect of their tenders was taken into account for its evaluation, however,

when the contracting authority makes specific assessments as to the manner in which the tender in question fulfils or otherwise [award] criteria and sub-criteria, which are clearly relevant to the overall score of the tender, the duty to state reasons necessarily includes the need to explain how, in particular, negative assessments gave rise to the deduction of points (Judgment of 27 April 2016 in European Dynamics Luxembourg and Others v EUIPO, T-556/11, EU:T:2016:248, para 250).

In the specific case, the GC considered it particularly important because the evaluation method included relative measures, so that "any deduction of net points in respect of certain sub-criteria automatically resulted, under the formula applied by the contracting authority, in the increase in the number of gross points to be allocated to the successful tenderers’ tenders in respect of their technical quality" (AGO C-376/16 P, para 24 & T-556/11, para 251).

The circumstances of the case where such that EUIPO disclosed the overall score for each of the three technical or qualitative criteria used in tender evaluation, but not the detailed breakdown for each of the award sub-criteria taken into consideration by the evaluation committee. In those circumstances, the GC found that "it was impossible, both for [the disappointed tenderer] and for the Court, to understand the calculation or precise breakdown of the points deducted for each sub-criterion, or even for each of the sub-points, and that it was therefore also not possible to verify whether and to what extent those deductions actually corresponded to the negative assessments made in the evaluation report and, accordingly, whether they were justified or not, or, at the very least, sufficiently plausible" (AGO C-376/16 P, para 26 & T-556/11, para 252).

EUIPO opposed that finding, and the more general point of law made by the GC, on the basis that neither the applicable rules, nor the case law of the CJEU required the debriefing information provided to a disappointed tenderer to include a demonstration of "which negative comment led to which deduction of points for each specific sub-criterion or sub-point" (AGO C-376/16 P, para 28 - for details of the reasons, see paras 29-31).

Thus, the main point of contention concerns the limits of the duty to disclose details of the evaluation process and report. Or, as AG Mengozzi put it, the question is "in essence, whether the [GC] was right in holding that the decision to reject the tender did not satisfy the requirements to state reasons stemming from [the applicable rules], as interpreted by the case-law, or whether the [GC] applied an overly strict test compared with the aforementioned provisions and the relevant case-law of the [ECJ]" (AGO, C-376/16 P, para 32). 

After a short restatement of the ECJ case law on the limits of the obligation to provide reasons and disclose relevant parts of the evaluation report, and despite stressing that "the contracting authority [is not] under an obligation to provide an unsuccessful tenderer, upon written request from it, with a full copy of the evaluation report" (AGO, C-376/16 P, para 36), in short, AG Mengozzi has invited the ECJ to establish that the right disclosure standard is one where

(i) the extracts of the evaluation reports disclosed by the [contracting authority] [make] it possible to deduce the number of points obtained by the appellant in question in comparison with the successful tenderer, broken down each time for each sub-criterion, and the weight of each sub-criterion in the overall evaluation, and (ii), the comments of the evaluation committee which [are] disclosed [explain], for each award criterion, on the basis of which sub-criteria the [contracting authority] had found the tender of the successful tenderer or that of the appellant in question to be the best (AGO C-376/16 P, para 47, emphases in the original).

AG Mengozzi suggests that this would have already been implicitly established in the Judgment of 4 October 2012 in Evropaïki Dynamiki v Commission, C-629/11 P, EU:C:2012:617, para 11, where the circumstances of the case reflected this level of disclosure.

Criticism

In my view, this is not an adequate test.

First of all, I struggle to see where the boundary lies between having to disclose the evaluation report in full and having to provide an absolutely broken down comparative assessment of the evaluation of the disappointed tenderers' tender and that of the preferred tenderer. To be fair, the previous case law is riddled with such tensions and it is difficult to establish clear boundaries on the obligation to disclose information contained in the evaluation report. However, in my view, the step taken by AG Mengozzi (and previously by the GC) comes to nullify the general (minimum) safeguard that contracting authorities are not required to disclose the evaluation report in full.

Secondly, I am not sure that in the assessment of these issues enough consideration is given to the fact that the relevant rules allow contracting authorities not to disclose certain details where disclosure would hinder application of the law, would be contrary to the public interest or would harm the legitimate business interests of public or private undertakings or could distort fair competition between those undertakings. In my view, there is a clear case to be made for restricting the level of disclosure of the points given to competing tenderers to a level of generality (eg award criteria rather than sub-award criteria) that strikes a balance between allowing for the review of the procurement decision while preserving competing interests. If the case law of the ECJ develop in the direction suggested by AG Mengozzi, it will be almost impossible for contracting authorities to protect legitimate interests in the context of procurement, and this will have chilling effects on participation.

Third, such a test would potentially make sense in terms of disclosure between the contracting authority and the review body or court, but not in relation to the disappointed tenderer. It would make much more sense to allow for disclosure limited to the level of award criteria at debriefing stage and, only in case the disappointed tenderer is not satisfied and launches an administrative or judicial review, for that information to be released to the review body of court, with stringent rules on access to that confidential information (for example, along the lines of the guidelines recently adopted in England). In the absence of this differential access to sensitive information, the adoption of the test proposed by AG Mengozzi is excessive and creates structural risks for abuse and competitive distortions--which makes it an undesirable test.

On the whole, I think that this Opinion and the previous decision by the GC show that the logic and operation of the rules on disclosure of information in the context of procurement litigation require a careful reassessment. In a case such as this one, where the record shows that EUIPO made significant efforts to disclose information to the disappointed tenderer, while still (maybe implicitly) aiming to protect sensitive information, the imposition of higher levels of disclosure obligations seems to me excessive. Once more, this militates in favour of the regulation of specific procedural steps to assess issues of confidentiality and, in particular, the need to create some asymmetrically opaque review mechanisms that allow for proper scrutiny of procurement decisions in a way that does not jeopardise competition in the market or anyone's legitimate business and commercial interests.

Interesting guidance on confidentiality of commercial secrets in procurement litigation issued by the TCC

In July 2017, the Technology and Construction Court (a sub-division of the Queen's Bench Division, part of the High Court of Justice for England and Wales) adopted new guidance on procedures for public procurement litigation (see Appendix H to the Technology and Construction Court Guide; the TCC guidance).

The TCC guidance includes two interesting sets of recommendations. One concerns an invitation to exhaust the possibilities for alternative dispute resolution before proceeding to full-fledged litigation (see paras [4] to [8]). The other concerns the disclosure of confidential information between the parties of the dispute (see paras [27] to [48]).

The latter is an issue that raises difficult problems for the protection of business secrets, and I find the TCC guidance interesting in the balance it tries to achieve between ensuring that disappointed tenderers gain access to the information they need to support their claims, and the broader considerations surrounding the need to ensure adequate protection of business secrets in order not to deter participation in public tenders (which is a tricky issue facing all EU jurisdictions, including the rules applicable to procurement carried out by the EU Institutions, and on which we are concentrating in the on-going research of the EPLG).

As the TCC guidance puts it, indeed, "[c]onfidentiality is not a bar to disclosure. However, the need to protect confidential information needs to be balanced by the basic principle of open justice", at para [27]. The TCC guidance aims to achieve such balance through practical approaches and general criteria for the balancing of interests. The approaches adopted by the TCC have been praised for being less restrictive than some of the decisions previously adopted in the context of procurement litigation in England and Wales (Kotsonis & Williams). 

In my view, beyond the effects it can have in litigation in England and Wales, the TCC guidance can be useful as a benchmark for the treatment of confidential information in other jurisdictions -- provided that the practical solutions that derive from the peculiarities of the British legal culture are adapted to domestic idiosyncrasies.

In particular, there are three aspects that I would identify as best practice susceptible of replication or adaptation in other legal contexts:

1. Promotion of the use of redacted versions of documentation rather than absolute bans on the disclosure of materials, as the use of redacted documents enables documents to be more widely disclosable (see paras [32]-[33]), and thus avoids decisions on confidentiality being taken on an 'all-or-nothing' basis for each of the documents. The guidance also indicates the best way of preparing and submitting to the court redacted versions of documents containing confidential information in a manner that allows for scrutiny and a speedy narrowing down of any discrepancies between the parties on the need to redact any specific bits of information.

2. Creation of one- or two-tier confidentiality rings. TCC guidance defines confidentiality rings as comprising persons to whom documents containing confidential information may be disclosed on the basis of their undertakings to preserve confidentiality, at para [34]. Importantly, the guidance indicates both that the party's external legal advisors will need to be included in the confidentiality ring (para [37]) and that the inclusion of personnel of the parties, including their in-house lawyers, will need to be assessed on the basis of relevant factors likely to include "that party’s right to pursue its claim, the principle of open justice, the confidential nature of the document and the need to avoid distortions of competition and/or the creation of unfair advantages in the market (including any retender) as a result of disclosure" (para [39], emphasis added). In reaching a decision about a specific individual, account needs to be taken of "his/her role and responsibilities within the organisation; the extent of the risk that competition will be distorted as a result of disclosure to them; the extent to which that risk can be avoided or controlled by restrictions on the terms of disclosure; and the impact that any proposed restrictions would have on that individual (for example by prohibiting them from participating in a re-tender or future tenders for a period of time)" (para [40], emphasis added). Similar reasoning would apply to other specialist advisors (such as accountants or other experts) (see para [43]).

Interestingly, the TCC guidance clarifies that employee representatives may need to be "admitted to a confidentiality ring on different terms from external representative" (para [41]), this giving rise to two-tier confidentiality rings--which administration can take different forms: ie, either court administered, with the judicial body establishing the conditions of access by different categories of representatives of the parties, or by delegating the management of the access to the confidentiality ring to the external advisors of the parties, who would then act as gatekeepers of the confidential information (para [42]). This second possibility may be foreign to practice and legal culture in other jurisdictions, but the first (court-administered) possibility for a two-tier confidentiality ring seems quite promising to me.

3. Establishment of (enforceable) undertakings to prevent unauthorised uses of the information gained as part of a confidentiality ring. TCC guidance establishes that access to confidential information will only be allowed where the members of confidentiality rings provide undertakings that "will preclude the use of the relevant material other than for the purposes of the proceedings and prevent disclosure outside the ring" (para [44]). More importantly, the TCC guidance explicitly contemplates the possibility for additional undertakings to be necessary "where there are concerns that disclosure could have an impact on competition and/or any subsequent procurement", and that such additional measures can include: "(1) Preventing employee representatives from holding copies of documents at their place of work and requiring them to inspect the material at a defined location (such as the offices of their external lawyers) ; (2) Limiting the involvement of a recipient of a document in any re-procurement of the contract which is the subject of the litigation; (3) Limiting the role which a recipient can play in competitions for other similar contracts for a fixed period of time in a defined geographic area; and/or (4) Preventing the recipient from advising on or having any involvement in certain matters, again for a fixed period of time" (para [45], emphasis added).

Of course, the monitoring of such undertakings will be complex and there can be very difficult evidentiary issues linked to claims of undue subsequent use of confidential information gained in the context of previous procurement litigation. On that issue, the TCC guidance establishes a strict proportionality test, whereby "[w]hilst the Court will give weight to the need to protect competition in the market, the more onerous the proposed restriction is, the more clearly it will need to be justified" (para [46]). In my view, this will play both ways. On the one hand, high risks of competition distortions will be able to justify the imposition of heavy restrictions on future activity of the employee concerned. On the other, an in reverse reasoning, the Court will have to ensure that future restrictions are not disproportionate to the value of the information and the position of the employee within its organisation.

However, there is a third implication that may bear spelling out, which is that some risks of future distortions of competition will be so high, that no acceptable restrictive measure can be designed--in which case I would argue against the inclusion of the relevant person in the confidentiality ring (eg I would not grant the CFO of a company access to the detailed financial schedule of any of its competitors).

* * * * 

Overall, I think that the TCC guidance will be useful and it will be interesting to see to what extent the practical roll-out of these recommendations provide an even more detailed case study that can serve as benchmark in other jurisdictions seeking to regulate the disclosure of confidential information in the context of public procurement litigation.

The curious case of the open envelope inside the envelope - a propos GC's Gfi PSF v Commission Judgment (T-200/16)

The General Court of the Court of Justice of the European Union (GC) has issued Judgment in case Gfi PSF v Commission, T-200/16, EU:T:2017:294 (available in French only). This is a curious case about the physical formalities imposed in a procurement procedure carried out by the European Commission (Publications Office), which required a set of envelopes to be enclosed in multiple layers so as to avoid their tampering prior to the official opening of bids. It is also interesting because it raises some issues around the difficulties in the fact finding of processes dominated by formal documentary evidence.

I am also afraid that the factual circumstances of the case are probably rather common in practice (they remind me of the submission of a tender for a multi-million concession contract that had to be submitted in suitcases locked with padlocks in Mexico some 10 years ago), and I guess that the case also reflects some of the advantages that could be gained by a proper migration to e-procurement (or at least to electronic submission of tenders).

In the case at hand, tenderers had to prepare their tenders in two separate envelopes. An envelope (a) containing their technical offer and an envelope (b) containing their financial offer. Both envelopes then had to be enclosed in a third envelope (c) marked as "Tender - not to be opened by the internal mail service" and placed in a fourth envelop (d), which had to be sent by registered mail or courier service, or be submitted in the offices of the European Commission as indicated in the letter of invitation to tender.

Gfi PSF prepared its tender in accordance with these instructions and sent it to the European Commission via UPS. However, t is worth noting that, inside envelope (c), Gfi PSF did not only include envelopes (a) and (b), but also several binders including additional information. The tender was submitted in time and there is an electronic receipt issued by UPS with a signature from a Commission official. However, an acknowledgement of receipt was also prepared by the mail service of the European Commission indicating that the offer had been received, but not in good state, and also including the following:

two headings, relating respectively to the "first container" and the "second container". In the section on the first container, the pre-printed indications "open" and "damaged" have both been checked. In the section on the second container, the same information was also checked. This last heading also contains the words "did not include the words "Do not open by the mail office"" and "there were no double envelopes", which were not checked (T-200/16, para 7, own translation from French).

After proceeding to the formal opening of the tenders, Gfi PSF's was rejected on the basis that the tender was already open when the contracting authority received it, which is a cause for rejection under Art 111(4)(b) of the Financial Regulation. After Gfi PSF challenged this decision and asked for additional details, the European Commission wrote a letter indicating that

even if the electronic receipt [issued by UPS] did not contain any remarks as to the status of the consignment containing the applicant's tender, this was because of the technical constraints of the terminal used by the courier acting for UPS. The [Commission's] note of receipt acknowledging the damage of the consignment was signed jointly by the same courier and a representative of the [Commission]. Copies of this note and a photograph of the said item were annexed to the" Commission's letter (T-200/16, para 13, own translation from French).

After inspecting the envelopes still in the custody of the Commission, counsel for Gfi PSF challenged the time, the content, and the probationary value of this acknowledgement of receipt issued by the Commission. It also sought to prove that the document had been issued unilaterally by the Commission because it was not clear that UPS had signed the note (which is however later proven wrong by the GC, see paras 53-54), and submitted that in any case the state of the offer resulted from improper handling by the Commission's mail services, rather than as a result of defective compliance with the physical requirements for the submission of the offer by Gfi PSF at the time of its expedition.

The Commission opposed this interpretation of the documents (in particular the lack of signature by a UPS representative) and the physical evidence (ie damaged envelopes), and provided additional evidence downloaded from UPS' tracking webpage, where the following remarks appeared from entries logged in the weeks following the delivery of the package to the Commission:

"[t] he goods are lacking. UPS will notify the additional details to the consignor / goods entrusted to the consignee "; and ... " [t]he damage to the contents of the packages has been reported [;] We will notify the consignor / We are investigating the claim for damages" (T-200/16, para 18, own translation from French).

Overall, then, the dispute concerns the factual circumstances of the delivery, the documentation of its receipt, as well as the ensuing investigation of the Commission's claim that the package was delivered by UPS. It is hard to imagine the physical state of the envelopes (it would have helped to have the pictures attached to the GC's Judgment), but it is certainly plausible that the envelopes where stacked in such a way that opening envelop (d) also ripped envelop (c) (particularly if they were of similar sizes). Be it as it may, the reasoning of the GC is interesting beyond the specific issues leading to the discrepancy in the state of the offer at the time of submission and of the formal opening of the tenders, which exonerates the Commission from any responsibility.

In the GC's view

... the acknowledgement of receipt is of significant probative value, since its content is attested by the signatures, on the one hand, of a person subject to the contracting authority and, on the other hand, by a third party not directly involved in the procurement tender, but rather acting indirectly on behalf of the tenderer whose tender is considered irregular by the contracting authority. However, the acknowledgement of receipt contains indications that both the first and second containers were both open and damaged, and that the second container displayed the words "Not to be open by the mail office" and contained a double envelope (T-200/16, paras 57-58, own translation from French).

This would create a difficulty in establishing the moment in which envelop (c) had been opened despite including the prescribed label against it. However, given the very peculiar circumstances of the case, where envelop (c) contained not only envelops (a) and (b)--which may not have been compromised--but also the binders including additional information, the GC found a way out by adopting a functional approach to the rules in Art 111(4)(b) Financial Regulation from the perspective of the integrity of the process. In that regard, it stressed that the submission instructions and Art 111(4)(b) aimed to ensure the confidentiality of all tenders until they are simultaneously open. From that perspective, the factual circumstances of the case led to the assessment that

On the one hand, the applicant does not claim that the binders were themselves placed in a closed envelope, the binders being visible in the photograph to which it refers, annexed to the letter of [the Commission sent during the debriefing and complaints procedure]. Furthermore, the fact that the binders were placed by the applicant in an envelope on which it indicated that it had affixed the words 'invitation to tender - not to be opened by the courier' [ie envelop (c)], which is established by the acknowledgment of receipt, shows that in the applicants' own view, the binders contained documents constituting its tender. Consequently, and due to the fact that it must be held that the outer envelope and the intermediate envelope of the item containing the applicant's tender had been presented open on the premises of the [European Commission], it must be found that certain data forming part of the applicant's offer were directly accessible. Consequently, it appears that the applicant's tender was submitted in such a way that its confidentiality, as required by Article 111 (1) of the Financial Regulation, was not guaranteed, as it was "already open" within the meaning of paragraph 4 (b) of that Article. Consequently, this offer was regularly rejected (T-200/16, paras 65-66, own translation from French).

This is important because the GC has no interest in (and probably no possibility to) establishing the way in which envelope (c) came to be open despite it being labelled as not to be open by the mail service. This fits with the burden of proof derived from a claim for damages based on Art 340 TFEU, which was the relevant underlying legal basis for this case. However, this leaves important questions unanswered, such as what would have happened if the binders were sealed in envelops, so that the opening of envelope (c) would not have made any of the contents of the offer directly accessible. In that case, the rejection of the offer on the basis that it had already been opened would be very problematic and would probably have required further investigation of how this came to be.

On balance, it seems that the GC places the burden of ensuring that the offers remain confidential on the tenderers, at least implicitly, by supporting a broad approach to the rejection of offers which confidentiality may have been compromised. As a matter of general trend, this seems preferable to the opposite. However, this also shows the unavoidable limitations of paper-based procurement procedures. Had the Commission been running an e-procurement (or at least electronic submission) process, this situation could have been easily avoided. It seems that, once more, the adaptation of procurement (and administrative activity, more generally) to new technologies cannot come quickly enough.

Difficult balance between #transparency and #competition in #publicprocurement

I have just uploaded a new paper on SSRN on 'The Difficult Balance between Transparency and Competition in Public Procurement: Some Recent Trends in the Case Law of the European Courts and a Look at the New Directives'. The abstract is as follows:

This paper stresses the negative impact that the excessive levels of transparency imposed by public procurement rules can have on competition for public contracts and, more generally, on the likelihood of cartelisation of the markets where public procurement takes place. The paper critically assesses some recent Judgments of the Court of Justice of the European Union and the General Court from this perspective and shows how the top EU Courts are still oblivious to the fact that excessive transparency may diminish the effectiveness of procurement by reducing competition. It also indicates that the case law itself has unused balancing tools that may help reduce the negative impact of excessive transparency, particularly if coupled with a reduction of the financial incentives offered to litigants that have no other claim than a 'mere' lack of compliance with full transparency. The paper concludes that a reform in the enforcement and oversight mechanisms oriented towards the setting up of a semi-opaque review system would overcome some of the deficiencies identified in the current case law from a law and economics perspective.

Sánchez Graells, A 'The Difficult Balance between Transparency and Competition in Public Procurement: Some Recent Trends in the Case Law of the European Courts and a Look at the New Directives' (November 2013). University of Leicester School of Law Research Paper No. 13-11. Available at SSRN: http://ssrn.com/abstract=2353005.

Again on the protection of confidentiality in procurement evaluation: A step forward? (T-339/10 and T-532/10)

In its Judgment of 29 January 2013 in Joined Cases T‑339/10 and T‑532/10 Cosepuri Soc. Coop. pA v European Food Safety Authority (EFSA), the General Court has ruled again on the topical issue of the protection of confidentiality and business secrets in tender evaluation--and, in principle, has shown a more balanced approach than in previous Judgments concerned with transparency at debriefing stage. 

However, in my opinion, the case law in this area still falls short from guaranteeing a proper balance between transparency and protection of business secrets and continues to promote excessive disclosure.

In the case at hand, Cosepuri challenged the EFSA's evaluation procedure on the basis of the confidential treatment of financial assessment. The GC has taken no issue with the degree of confidentiality imposed by EFSA, but on a series of grounds that still seem (partially) inadequate:

32 First, the applicant calls into question the fact that Part II.8.2 of the tender specifications provided that the tender evaluation procedure was to be confidential. It should be noted in that regard that the applicant has the right to challenge, as an incidental plea, the lawfulness of the specifications in the present action (see, to that effect, Case T‑495/04 Belfass v Council [2008] ECR II‑781, paragraph 44). […]

33 Article 89(1) of the Financial Regulation provides that all public contracts financed in whole or in part by the budget are to comply, inter alia, with the principle of transparency. In the present case, it must be noted that Part II.8.2 of the specifications, which provides that the procedure for the evaluation of the tenders is to be conducted in secret, satisfies the requirement of preserving the confidentiality of the tenders and the need to avoid, in principle, contact between the contracting authority and the tenderers (see, on this point, Article 99 of the Financial Regulation and Article 148 of the Implementing Rules). The principle of transparency, referred to in Article 89(1) of the Financial Regulation, which is invoked by the applicant, must be reconciled with those requirements. Accordingly, there is no basis on which it can be concluded that Part II.8 of the specifications is vitiated by unlawfulness.

34 Second, the applicant challenges the fact that it was not able to ascertain the price proposed by the successful tenderer. In particular, the applicant states that EFSA ensured that it would not be possible for any subsequent verification to be carried out by redacting from the evaluation report the price offered by the successful tenderer. In that regard, without there being any need to rule in the present case on whether the price proposed by the successful tenderer formed part of the information which the contracting authority should have communicated to the unsuccessful tenderers (sic), it is clear from the evidence submitted that the applicant was in a position to ascertain the price in question. It is apparent from Section 2.4 of the evaluation committee report that the applicant and the successful tenderer offered the same price in respect of points 2 to 7 of the financial bid, both obtaining the maximum score of 15 points. The price offered by the successful tenderer in respect of points 2 to 7 of the financial bid is therefore abundantly clear from the evaluation committee report. Moreover, with regard to point 1 of the financial bid, the evaluation committee report indicated the price offered by the applicant and the mark obtained. Although it does not expressly refer to the price offered by the successful tenderer, that report specifies the mark obtained by it. Taking account of those factors, it was possible to calculate, without any difficulty, the price proposed by the successful tenderer in respect of point 1 of the financial bid, as submitted by EFSA in connection with the second plea. Furthermore, the Court has been able to verify, by way of the measure of inquiry adopted at the hearing (see paragraph 16 above), that the price mentioned by EFSA in its written pleadings was in fact the price proposed by the successful tenderer. In view of all the foregoing considerations, the Court considers that, even if EFSA had erred by failing to indicate expressly to the applicant the price proposed by the successful tenderer, such an error would have had no effect on the lawfulness of EFSA’s decision to reject the applicant’s tender and award the contract at issue to another tenderer whose bid was considered to be better, since the applicant was in a position to ascertain that price. The applicant’s arguments in that regard must therefore be rejected.

35 Third, with regard to the principle of sound administration relied on by the applicant, according to case‑law, guarantees afforded by the European Union legal order in administrative proceedings include, in particular, the principle of sound administration, which entails the duty on the part of the competent institution to examine carefully and impartially all the relevant aspects of the individual case (see the judgment of 15 September 2011 in Case T‑407/07 CMB and Christof v Commission, not published in the ECR, paragraph 182 and the case‑law cited). In the present case, the arguments put forward by the applicant in the first plea, which essentially consist in criticising the fact that it was not granted access to the financial bid of the successful tenderer, do not demonstrate that EFSA failed to examine carefully and impartially all the relevant aspects of the case. In the absence of more detailed evidence, the applicant’s arguments in that regard must be rejected. (T-339/10 and 532/10 at paras. 32 to 35, emphasis added).

In my view, paragraphs 33 and 35 of the Cosepuri Judgment must be welcome, as they set a more balanced framework for the assessment of the obligation to disclose confidential information and business secrets under the principles of transparency and good administration.

On the contrary, paragraph 34 deserves a clear rejection, given that the GC keeps a very formalistic approach to the protection of confidential information and takes no issue with the fact that such sensitive information as price can be disclosed indirectly, and considers that that does not infringe either the rights of the 'disclosed' undertaking to protection of its business secrets, nor the procedural rights of the disappointed bidder that is granted indirect access to that information.

I think that the GC should have taken a stronger position and clearly confirmed that both direct and indirect disclosure of price elements and financial evaluations can be restricted or excluded on grounds of protection of confidentiality. Otherwise, the incentives continue to push contracting authorities for an excessive degree of transparency in public procurement settings--which creates significant risks of collusion [Sánchez Graells, "Public Procurement and Competition: Some Challenges Arising from Recent Developments in EU Public Procurement Law" in Bovis (ed) Research Handbook on European Public Procurement  (forthcoming), http://ssrn.com/abstract=2206502].