In its Judgment of 4 May 2017 in Esaprojekt, C-387/14, EU:C:2017:338, the European Court of Justice (ECJ) provided clarification on some practical issues concerning the application of qualitative selection criteria to tenderers for public contracts seeking to rely on the capacities of third parties. The case is interesting because it concerns a situation where reliance on third party capacities is only sought once the contracting authority has reached a decision that the tenderer does not meet the relevant qualitative selection criteria on its own (or in the consortium configuration used in the submission of the initial tender).
Thus, the case combines elements of clarification or supplementation of tender documentation with issues derived from the principles of non-discrimination, equal treatment and transparency. The Esaprojekt Judgment is based on the 2004 EU procurement rules (Dir 2004/18, Arts 2, 45, 48 and 51) but it is relevant for the interpretation of the 2014 rules as well (Dir 2014/24/EU, Arts 18, 19, 57 to 60, 63 and, specially, 56(3)).
In the case at hand, and in simple terms, the tenderer that submitted the preferred bid for the provision of IT services (Konsultant Komputer) had declared that it had the required previous experience through the execution of two contracts prior to the tender. However, on a challenge from a disappointed bidder (Esaprojekt), the contracting authority found that such previous experience was not acceptable because it did not concern contracts of the same type required in the tender documentation. At this stage, Konsultant Komputer sought to 'complement' the documentation evidencing its experience by providing the contracting authority with "a new list of supplies in which it relied on the experience of another entity, Medinet Systemy Informatyczne sp. z o.o. concerning two supplies ... It also sent an undertaking from Medinet Systemy Informatyczne to provide, as an advisor and consultant, the resources necessary for the performance of the contract ..." (C-387/14, para 27).
The contracting authority was satisfied with the submission of such 'complement' to the previous documentation, but (unsurprisingly), this was challenged by Esaprojekt on the basis that "Konsultant Komputer ... had submitted false information and had failed to prove that it had fulfilled the conditions for participation in the procedure" (para 29). The Polish court referring the case for preliminary ruling to the ECJ condensed the main legal issues as concerning whether the EU procurement rules (1) "preclude an economic operator, when it supplements documents at the request of the contracting authority, from relying on supplies of services other than those it included in its initial bid or from being able to rely, in that regard, on supplies of services made by another entity on whose resources it did not rely in its initial bid" (para 30); (2) whether, in the circumstances of the case, "the economic operator is able to ... rely on the capacities of other entities where it does not itself fulfil the minimum conditions required in order to take part in the tender procedure for a service contract" (para 31); and (3) the need to determine "in which circumstances an economic operator may be held liable for serious misconduct and, therefore, be excluded from taking part in a public contract" due to the supply of incorrect or misleading information concerning its previous experience (para 32). However, the questions referred to the ECJ do not map these three legal issues, but rather raise some other (more specific) issues.
It will not be surprising to find that the ECJ, in general, declared that proceeding as Konsultant Komputer and the contracting authority did was not allowed under the relevant provisions. On the main point concerning whether there was a breach of the requirements derived from the procurement rules and the general principles of procurement, after relying extensively on the principled framework consolidated in Partner Apelski Dariusz, the ECJ clarified that "Konsultant Komputer submitted documents to the contracting authority which were not included in its initial bid after the expiry of the time limit laid down for submitting applications for the public tender concerned. In particular ... it relied on a contract performed by another entity and the undertaking by the latter to place at the disposal of that operator the resources necessary for the performance of the contract ... Such further information, far from being merely a clarification made on a limited or specific basis or a correction of obvious material errors ... is in reality a substantive and significant amendment of the initial bid, which is more akin to the submission of a new tender" (paras 41-42). Thus, "by allowing the presentation by the economic operator concerned of the documents in question in order to supplement its original tender, the contracting authority unduly favour[ed] that operator as compared with other candidates and, thereby, breache[d] the principles of equal treatment and non-discrimination of economic operators and the obligation of transparency which derives from them" (para 44).
The ECJ later addressed more specific issues. The following is thus just a short excerpt of the relevant parts of the Esaprojekt Judgment in relation to each of the issues--while some more critical reflections are saved for the final part of this post.
First, the ECJ considered the possibility of combining the knowledge and experience of two entities to meet a selection criterion where those entities do not separately have the capacities required to perform a particular contract, and where the contracting authority considers that the contract concerned cannot be divided and must thus be performed by a single operator. On that point, after slightly reinterpreting the question, the ECJ established that the relevant rules do "not allow an economic operator to rely on the capacities of another entity ... by combining the knowledge and experience of two entities which, individually, do not have the capacities required for the performance of a particular contract, where the contracting authority considers that the contract concerned cannot be divided, in that it must be performed by a single operator, and that such exclusion of the possibility to rely on the experience of several economic operators is related and proportionate to the subject matter of the contract which must be therefore performed by a single operator" (para 54).
Second, it considered the possibility for an economic operator that participates individually in an award procedure for a public contract to rely on the experience of a group of undertakings, of which it was part in connection with another public contract, irrespective of the nature of its participation in the performance of the latter. The ECJ found that the EU rules allow "an economic operator, for a particular contract, to rely on the capacities of other entities, such as a group of undertakings of which it is a member, so long as it proves to the contracting authority that that operator will have at its disposal the resources necessary for the execution of the contract" (para 60). Further, it clarified that "where an economic operator relies on the experience of a group of undertakings in which it has participated, that experience must be assessed in relation to the effective participation of that operator and, therefore, to its actual contribution to the performance of an activity required of that group in the context of a specific public contract" because, from a practical perspective, "an economic operator acquires experience not by the mere fact of being a member of a group of undertakings without any regard for its contribution to that group, but only by directly participating in the performance of at least part of the contract, the whole of which is to be performed by that group" and, consequently, "an economic operator cannot rely on the supplies of services by other members of a group of undertakings in which it has not actually and directly participated as experience required by the contracting authority" (paras 62-64).
Third, the ECJ was asked whether the possibility to exclude economic operators that are guilty of serious misrepresentation when supplying information requested by the contracting authority may be applied where the information is of such a nature as to affect the outcome of the call for tenders, irrespective of whether the economic operator acted intentionally or not. On this point, the ECJ concluded that the discretionary exclusion "may be applied where the operator concerned is guilty of a certain degree of negligence, that is to say negligence of a nature which may have a decisive effect on decisions concerning exclusion, selection or award of a public contract, irrespective of whether there is a finding of wilful misconduct on the part of that operator" (para 78) and, more explicitly, that "in order to sanction an economic operator which has submitted false declarations by excluding its participation in a public contract, the contracting authority is not required ... to provide evidence of the existence of wilful misconduct on the part of that economic operator" (para 72).
Finally, the considered whether EU procurement law allows an economic operator to justify compliance with an experience-based selection criterion by relying simultaneously on two or more contracts as a single contract (or, in other words, by combining different partial elements of experience), despite the fact that the contracting authority has not expressly provided for such a possibility either in the contract notice or in the tender specifications. On this point, the ECJ found that "it is conceivable prima facie that the experience necessary for the performance of the contract concerned, acquired by the economic operator in the performance of not one, but two or more different contracts, may be regarded as sufficient by the contracting authority and thereby enables that operator to win the public contract concerned" (para 85) and, therefore, "in so far as the possibility to rely on experience acquired in relation to several contracts has not been excluded either in the contract notice or in the tender specifications, it is for the contracting authority, subject to review by the competent national courts, to check whether the experience gained from two or more contracts, having regard to the nature of the works concerned and the subject matter and purpose of the contract concerned, ensures the proper performance of that contract" (para 87).
Overall, the level of clarification provided by the ECJ in the Esaprojekt should be welcome, although it also raises the broader issue of the extent to which national courts should be willing to engage in principles-based reasoning without referring extremely detailed references for preliminary rulings. There is a clear trade-off to be achieved between ensuring homogeneous interpretation of the EU public procurement rules and (not) overburdening the ECJ. If every case where the general principles of public procurement (now in Art 18(1) Dir 2014/24/EU) are applicable is referred to the ECJ, the system will not be able to cope. In my view, none of the issues raised in this case were particularly complex or controversial, and could have been resolved by general reference to the principles of equal treatment and transparency, which makes me wonder if there may not be a need for a different approach to these issues.
For example, discussion between practitioners has raised the issue whether it would be acceptable for an undertaking in a situation similar to Konsultant Komputer's first submission to 'complement' the selection documentation by supplying a fresh list of new own references (or references to its own experience not submitted in the original documentation). I would submit that it is not allowed. In my view, it is clearly not allowed if the experience has been gained after the date for the submission of tenders, because that establishes the relevant cut off point for the assessment of qualitative suitability (or responsiveness). And, also clearly (although it may be more debatable), this would not be allowed if the experience was gained before that date but the economic operator failed to include the relevant references in the original documentation. I think that this is the case because such an omission of previous experience is not observable by the contracting authority in view of the submitted documentation alone (how could it second guess whether the economic operator provided a full, or even the best, set of references?)--which, in my opinion, excludes it from the scope of application of the rules controlling the request for clarifications under both the Manova case law and the specific provisions of Art 56(3) Dir 2014/24/EU, except if the entire document concerning experience was missing (which would make the defect visible to the contracting authority). Functionally, I would think that this contributes to the manageability of the selection process, while being entirely compliant with the principles of equal treatment and non-discrimination.
Anyway, the point I am trying to make is that, if issues at this level of detail need to be clarified by the ECJ in relation with each of the provisions of the procurement directives, the potential gains of having regulation partly based on general principles will be lost. Therefore, I wonder if it would be possible to reconsider the need for preliminary references where the application of general principles could do.