GC case law round up: Three relatively recent public procurement judgments (T-700/14; T-74/15; T-441/15)

After some months of having them sitting on my desk, and now that teaching obligations at the University of Bristol Law School subside a bit, it is about time to comment on three relatively recent Judgments of the General Court (GC) of the Court of Justice of the European Union (CJEU) in the area of public procurement. Of the three cases, two concern abnormally low tenders and the other  a tricky point about the scope of the CJEU's jurisdiction in the context of framework agreements--which creates some fuzziness in the delineation of private/public law dimensions of public procurement by the EU Institutions. Anecdotally, two of the cases involve European Dynamics, and two of them are available in French but not in English.

Abnormally low tenders (I): Substantive Aspects

Judgment of 26 January 2017, TV1 v Commission, T-700/14, not published, EU:T:2017:35. This tender concerned the provision of integrated audiovisual production, dissemination and archiving services for the European Commission in the context of the Europe by Satellite programme and was, thus, regulated by the Financial Regulation (version of 2012).

The procedure for the award of the contract foresaw three technical quality criteria in addition to the price criterion. It established that only offers that achieved a minimum score of 60% under each technical quality criterion and an overall score of at least 70% on their overall technical quality would be considered for award. It also determined that the overall score of a given tender would be calculated as follows: the ratio between the lowest priced offer and the price of a given offer would be multiplied by 40, and this would be added to the total (technical) quality score (over 100) multiplied by 60 (para 4, own translation from French). In other words, the award criteria relied on 60% of the points given to an absolute evaluation of technical quality and 40% of the points given to a relative evaluation of the prices offered by different tenderers. Given the relative assessment of the price component, this type of evaluation method is prone to challenges based on the treatment of seemingly abnormally low tenders.

Indeed, amongst other legal grounds, the award of the contract was challenged on this basis; the incumbent provider and disappointed tenderer, TV1, argued that the Commission had infringed Art 110(2) Financial Regulation, in conjunction with Art 151 of its Implementing Regulation and the general duty of good administration by not proceeding to a detailed assessment (and rejection) of the seemingly abnormally low offer submitted by the successful tenderer. The GC will eventually reject the complaint in its entirety. In my opinion, some parts of the reasoning of the GC deserve closer attention.

After reproducing consolidated case law on the interpretation of these provisions and the circumstances under which a contracting authority may (or should) have doubts about the viability of a seemingly abnormal tender (paras 32-42), as well as on the broad discretion enjoyed by the contracting authority and the limited review in which the court should engage (para 44), the GC proceeds to analyse the different arguments raised by TV1 against the Commission's decision. In particular, it is interesting to note that the GC dismisses arguments put forward by TV1 concerning the duty the Commission should have had to identify the winning offer as seemingly abnormally low on the basis of the fact that (i) it was 40% lower than the maximum annual budget allowed by the Commission in the tender documents and (ii) it was 11% lower than TV1's offer.

(i) Interestingly, the reasoning of the GC concerning the irrelevance of the fact that the winning tender was 40% below the maximum budget set by the Commission (and that the challengers' offer was itself 32% below maximum budget) rests on the inaccuracy of the budget set by the Commission. Apparently, when setting the maximum budget, the Commission had failed to take into account sharp reductions in the cost of providing the services now (re)tendered (para 49). Thus, the GC was satisfied that the discrepancy between maximum budget and actual offers was a result of the Commission's inaccurate budgeting rather that of abnormal low prices included in the offers. Logically, this makes sense and it could have well been the case. It does, however, raise important concerns about the accuracy and usefulness of budgeting for public contracts under the Financial Regulations--but that is probably a discussion to be had some other time.

(ii) The reasoning of the GC concerning the 11% discrepancy between the lowest (winning) tender and the next (challenger) tender is also interesting. As a matter of general consideration, the GC stresses that "[a]n offer may be cheaper than another without being abnormally low" (para 58) and that "[t]his also applies to a situation in which the tender price of the successful tenderer is lower than that of the tender of the incumbent provider. Otherwise, the incumbent provider could systematically question the reliability of the cheaper offers of the other tenderers, even if they are not abnormally low, but only economically more advantageous" (para 59, own translation from French). In that connection, it is important to stress that the GC sets aside as insufficient reasons to trigger an in-depth assessment of the challenger's offer as apparently abnormally low, the claims brought forward by TV1 that it had to make significant investments when it was first awarded the contract now (re)tendered, and that an expert should be appointed to check that the winning tenderer "should have incurred expenses comparable to those which the [incumbent] had had to bear several years previously in order to be able to supply the services covered by the earlier contract" (para 67, own translation from French). This is interesting because it avoids an analysis of sunk costs that could, otherwise, advantage the incumbent [for related analysis, see A Sanchez-Graells, Public Procurement and the EU Competition Rules, 2nd edn (Oxford, Hart, 2015) 412 ff].

Overall, then, the GC's assessment of the reasons adduced by TV1 to justify the existence of an obligation on the part of the Commission to engage in an in-depth investigation of the winning tender as apparently abnormally low is sound and should be welcome.

Abnormally low tenders (II): Procedural Aspects

Judgment of 2 February 2017,  European Dynamics Luxembourg and Evropaïki Dynamiki v Commission, T-74/15, not published, EU:T:2017:55. In this case, the tendered contract concerned the provision of IT services relating to off-site information systems development, studies and support. The tender was for the conclusion of a framework agreement which would operate on the basis of mini-competitions.

The challenge brought by European Dynamics concerned the rejection of two specific requests for quotations as a result of two such mini-competitions. One of the challenges concerned an allegation that the chosen quotation was abnormally low, and the legal basis on which it is founded concerns a failure to provide reasons for a dismissal of the claim that the winning quotation was not abnormally low (ie a breach of Arts 113(2) of the Financial Regulation and Art 161(2) of its Implementing Regulation, as cited above). Thus, in this case, the challenge is not based primarily on the dismissal of reasons adduced to create or justify an appearance of abnormality in a tender, but rather on the absence of motivation for that result.

The GC thus takes a very different approach in this case and, rather than concentrating on the elements under which the discretion of the contracting authority is assessed in relation to its determination of whether a tender is seemingly abnormally low or not (as above), on this occasion the GC concentrates on the duty to give reasons as the main check and balance of such discretion, as well as a necessary procedural step in order to preserve the procedural rights of tenderers for public contracts (paras 35-41). From this perspective, the GC stresses that

In the present case, it is apparent ... that the applicants expressly requested clarification from the Commission in order to demonstrate that the price offered by the successful tenderer was not abnormally low ... the Commission confirmed that its [debriefing] letter ... contained its reply in that regard. So far as concerns the nature of the tender selected [in the specific mini-competition] it is apparent from the last page of that letter that the Commission merely stated, in a single sentence, that ‘“the winning offer” of the IPT tender did not fall under the case of “abnormally low” offers.’ (para 45, emphasis added).

The legal issue in front of the GC was, consequently, whether such brief dismissal of the allegation brought forward by European Dynamics sufficed to meet the relevant threshold for the purposes of the duty to provide reasons. As could be expected, the GC does not offer a positive answer. It stresses that

... the single sentence in the letter ... stating that the tender was not abnormally low does not fulfil the duties assigned to the obligation to state reasons, that is, the reasons must be disclosed clearly and unequivocally so as, on the one hand, to make the persons concerned aware of the reasons for the measure and thereby enable them to defend their rights and, on the other, to enable the Court to exercise its power of review. It cannot be accepted that a contracting authority should explain the not abnormally low nature of a tender merely by stating that such was considered not to be the case (para 47, emphasis added).

The GC does not stop there and goes to the extra length of consolidating the substantive standard applicable to the reasons that should be given in order to discharge this duty vis-a-vis a claim concerning the abnormally low nature of a tender. The consolidation of the standard is rather formulaic and may be seen to follow too closely the specific aspects which the Financial Regulation sets out to be possible cause for the abnormality of low values in a tender (eg non-compliance with employment and social law), but it can be a generally useful benchmark in that it clarifies that

... requiring the contracting authority to present the grounds on the basis of which an offer was not considered to be abnormally low does not require it to disclose precise information on the technical and financial aspects of that tender, such as the prices offered or the resources that the successful bidder proposes to use in order to provide the services that it offers. In order to provide a sufficient statement of reasons for that aspect of the selected tender, the contracting authority must set out the reasoning on the basis of which, on the one hand, it concluded that, because of its principally financial characteristics, such an offer complied with the national legislation of the country in which the services were to be carried out in respect of the remuneration of staff, contribution to the social security scheme and compliance with occupational safety and health standards and, on the other, it determined that the proposed price included all the costs arising from the technical aspects of the selected tender ... Accordingly, the Commission’s argument that the tenders in the present case had not raised any doubts that they were not abnormally low and that there was therefore no other information which it could have provided to the applicants must be rejected. (para 49, references omitted and emphasis added).

This comes to clarify that, even if the contracting authority does not think that there is a need to engage in an in-depth assessment of the (winning) tender to determine if it is abnormally low, it must at all times be in a position to provide the reasons why it did not think that was the case. Overall, this seems adequate, although it continues a line of case law that tends to create a significant burden at debriefing stage and that can trigger significant concerns of excessive transparency of commercially-sensitive information between competitors, as the GC's relatively open-ended requirement in para 49 of the Judgment may be difficult to square with the contracting authority's obligation not to disclose information in a way that could alter competition [on that, generally, see 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). University of Leicester School of Law Research Paper No. 13-11]. 

A Tricky Jurisdictional Point

Judgment of 17 February 2017, European Dynamics Luxembourg and Others v EMA, T-441/15, not published, EU:T:2017:104. The tender in this case concerned the provision of IT services through a framework agreement that included a cascade mechanism for the allocation of call-off contracts within the framework (for a reference to previous litigation concerning this type of mechanism, see here). European Dynamics was awarded the second-tier framework agreement. At the relevant time, EMA asked European Dynamics for CVs of its candidates for the position of project manager for a given contract. EMA rejected all 5 candidates presented by European Dynamics, and this triggered the challenge.

From a jurisdictional perspective, the difficulty in this case was to determine whether EMA's rejection of the candidates put forward by European Dynamics was a decision of an EU Institution challengeable before the CJEU (GC) under its competence as per Art 263 TFEU. In that regard, the GC stressed that "[i]t must be borne in mind that, under Article 263 TFEU, the [Court] only reviews the legality of acts adopted by the institutions intended to produce legal effects vis-à-vis third parties, significantly by altering their legal position" (para 18, own translation from French). The key question was thus whether EMA's rejection of European Dynamic candidates fell within this jurisdictional framework. 

The GC distinguished this case from the previous analysis in Evropaïki Dynamiki v Commission (OLAF), T-498/11, EU:T:2014:831 (for discussion see here) on the basis that, "[t]he present case differs from [case T-498/11] in that [in the previous instance,] the specific contracts had not yet been awarded but had to be awarded on the basis of 'mini-competitions' between the selected 'framework contractors' ... [whereas] in the present case, as regards the implementation of a multiple framework contract with cascade allocation, the specific contract has already been allocated according to the position of the economic operators in the cascade, without the need for any further competition between those [economic operators]. Therefore, if the first economic operator is unable to provide the required service or not interested in doing so, the second best operator will be contacted. If the latter is unable to provide the required service or is not interested, then the third best operator will be contacted" (para 24, own translation from French).

Without any additional reasoning, the GC concludes that "the claim for annulment must be declared inadmissible in so far as it is based on Article 263 TFEU" (para 27), on the (implicit) basis that EMA's decision to reject European Dynamic's candidates falls strictly within a pre-established contractual relationship. In the specific case, the CJEU's jurisdiction is saved by the existence of a compromissory clause compatible with Art 272 TFEU in the framework agreement signed between EMA and European Dynamics (para 20), as well as due to the fact that EMA did not challenge the reclassification of the claim for annulment as a contractual claim (para 16). However, it is easy to see how the approach adopted by the GC could have left the claim in limbo -- and possibly time-barred ... -- had it not been by EMA's willingness to deal with the claim in a principled and open manner. Moreover, even if the GC's strictly literal interpretation was right (of which I am not convinced), there would be normative issues concerning the different treatment of functionally identical decisions depending on the type of framework agreement that European Institutions chose to conclude.

Overall, I would suggest that this case should work as a cautionary tale and that the scope of the jurisdiction of the CJEU (GC) to review acts of the European Institutions that, despite taking part within a contractual setting still carry (sufficient) connotations of the exercise of a public power (something the GC only lightly touched upon in this Judgment, at para [22]), requires some rethinking.

CJEU rules on Greek Support to The Agricultural Sector under the 2008 and 2009 State Aid Frameworks: A Blow to the Commission's Waiver of Discretion? (C-431/14 P)

In its Judgment of 8 March 2016 in Greece v Commission (ELGA), C-431/14 P, EU:C:2016:145, the Court of Justice of the European Union (CJEU) ruled on the compatibility of certain measures of financial support to the Greek agricultural sector in the aftermath of the 2008 financial crisis with the EU rules on State aid--ie mainly, Art 107 TFEU and the Temporary Community Framework for State aid measures adopted by the Commission in 2008 (the 2008 TCF), as amended in 2009 (the 2009 amended TCF).

The Judgment is interesting because it assesses the boundaries of the temporary discretionary measures adopted by the Commission in order to flexibilise the enforcement of EU rules in times of economic and financial distress, on the basis that they aim 'to remedy a serious disturbance in the economy of a Member State', ex Art 107(3)(b) TFEU. In particular, the ELGA Judgment assesses whether Member States can validly raise arguments based on Art 107(3)(b) TFEU directly, regardless of the Commission's delineation of its State aid policy based on that same legal basis. Or, in simple terms, whether a valid Art 107(3)(b) TFEU can exist outside of the (temporary) scope of the 2008 TCF and the 2009 amended TCF. The case may seem very specific because of its link to the economic crisis. However, the CJEU makes some broader points about the Commission's discretion that are worth taking into careful consideration.

This discussion is relevant from a legal perspective, due to the clarification of the so far unknown exemption of the State aid prohibition of Art 107(1) TFEU on the basis of Art 107(3)(b) TFEU regarding aid aimed to remedy a serious disturbance in the economy of a Member State' [see P Nicolaides & IE Rusu, 'The Financial Crisis and State Aid' (2010) 55(4) The Antitrust Bulletin 759-782]. It is also relevant for the policy implications of the CJEU's support for the Commission's intervention [for discussion of a general framework, see H Kassim & B Lyons, 'The New Political Economy of EU State Aid Policy' (2013) 13(1) Journal of Industry, Competition and Trade 1-21; and TJ Doleys, 'Managing the Dilemma of Discretion: The European Commission and the Development of EU State Aid Policy' (2013) 13(1) Journal of Industry, Competition and Trade 23-38].

The case of the Greek support to the agricultural sector through ELGA

The specific case concerns a long-running action of the Greek State for the annulment of a 2011 Commission Decision concerning compensation payments made by the Greek Agricultural Insurance Organisation (ELGA) in 2008 and 2009, which the General Court (GC) upheld on appeal (T‑52/12, EU:T:2014:677). One of the difficulties with this case is the sequence of events. From the regulatory perspective, it is worth stressing that the 2008 TCF, which entered into force in 17 December 2008, did not cover aid to the agricultural sector. This was eventually made clear in the 2009 amended TCF, according to which

The possibility under [the TCF] to grant a compatible limited amount of aid does not apply to undertakings active in the primary production of agricultural products. Farmers, however, encounter increased difficulties to obtain credit as a consequence of the financial crisis ... it is appropriate to introduce a separate compatible limited amount of aid for undertakings active in the primary production of agricultural products.

Specifically, the 2009 amended TCF provided that

The Commission will consider such State aid compatible with the common market on the basis of Article [107(3)(b) TFEU], provided all the following conditions are met: ... (h) … Where the aid is granted to undertakings active in the primary production of agricultural products ..., the cash grant (or gross grant equivalent) does not exceed EUR 15,000 per undertaking ...

This took effect on 28 October 2009, which raises a practical temporary difficulty because, '[f]ollowing protests in January 2009 by a large number of Greek agricultural producers about the losses suffered by them in 2008 as a result of adverse weather conditions..., the Hellenic Republic provided that compensation aid of EUR 425 million would be paid to producers on an exceptional basis by ELGA' (C-431/14 P, para 11). Upon investigation, the Commission found that most of that aid was incompatible with the internal market and, in particular, that '[t]he compensation aid of EUR [387.4 million] granted to producers on dates before 28 October 2009 is incompatible with the internal market' (C-431/14 P, para 14, emphasis added).

The issue is that, in plain terms, the Commission rejected Greece's claims that the exemption foreseen in Art 107(3)(b) TFEU could be directly applied in the case because of the economic difficulties that Greece had been experiencing. The Commission rejected such claim on the basis that Art 107(3)(b) TFEU had to be applied within the boundaries of the policy documents developed to that effect, ie the 2008 TCF and the 2009 amended TCF, which could only apply for the future--that is, only from their respective dates of entry into force--which, as the agricultural sector is concerned, was that of the 2009 amended TCF: 28 October 2009. The GC upheld the Commission's approach in the following terms

185 ... it is clear that, contrary to what the Hellenic Republic claims, the Commission had to base its decision on the [TCF] and not directly apply Article 107(3)(b) TFEU in order to assess the compatibility of the payments made by ELGA in 2009 on account of the economic crisis experienced in Greece.
186 It is clear from the case-law that, in adopting rules of conduct and announcing by publishing them that they will henceforth apply to the cases to which they relate, the Commission imposes a limit on the exercise of its aforementioned discretion and cannot depart from those rules without being found, where appropriate, to be in breach of general principles of law, such as equal treatment or the protection of legitimate expectations (see judgment[s] in Germany and Others v Kronofrance, [C‑75/05 P and C‑80/05 P, EU:C:2008:482], paragraph 60 and the case-law cited, and … Holland Malt v Commission, C‑464/09 P, [EU:C:2010:733], paragraph 46).
187 ... in the specific area of State aid, the Commission is bound by the guidelines and notices that it issues, to the extent that they do not depart from the rules in the Treaty (see judgment in Holland Malt v Commission, [C‑464/09 P, EU:C:2010:733], paragraph 47 and the case-law cited).
188 Therefore, it is necessary to reject the arguments of the Hellenic Republic to the effect that, on account of the serious disturbance in the Greek economy due to the economic crisis experienced in Greece since the end of 2008 and in 2009, the Commission should have declared the payments made by ELGA in 2009 compatible directly on the basis of Article 107(3)(b) TFEU (T-52/12, paras 185-188, emphasis added).

The CJEU has now taken the same line of argument, but has introduced important nuances in determining that

69 ... as the General Court stated in paragraphs 186 and 187 of the judgment under appeal, the Court has also consistently held that, in adopting rules of conduct and announcing by publishing them that they will henceforth apply to the cases to which they relate, the Commission imposes a limit on the exercise of its aforementioned discretion and, in principle, cannot depart from those rules without being found, where appropriate, to be in breach of general principles of law, such as equal treatment or the protection of legitimate expectations (judgments in Holland Malt v Commission, C‑464/09 P, EU:C:2010:733, paragraph 46, and Banco Privado Português and Massa Insolvente do Banco Privado Português, C‑667/13, EU:C:2015:151, paragraph 69).
70 However, in the specific area of State aid, the Commission is bound by the guidelines that it issues, to the extent that they do not depart from the rules in the TFEU, including, in particular, Article 107(3)(b) TFEU (see, to that effect, judgment in Holland Malt v Commission, C‑464/09 P, EU:C:2010:733, paragraph 47), and to the extent that their application is not in breach of general principles of law, such as equal treatment, in particular where exceptional circumstances, different from those envisaged in those guidelines, distinguish a given sector of the economy of a Member State.
71      Consequently, first, the Commission may not fail to have regard to Article 107(3) TFEU by adopting guidelines vitiated by an error of law or a manifest error of assessment, nor may it waive, by the adoption of guidelines, the exercise of the discretion that that provision confers on it. Further, when, in the exercise of that discretion, it adopts guidelines of that nature, these must be kept under continuous review for the purposes of anticipating any major developments not covered by those measures.
72      Secondly, the adoption of such guidelines does not relieve the Commission of its obligation to examine the specific exceptional circumstances relied on by a Member State, in a particular case, for the purpose of requesting the direct application of Article 107(3)(b) TFEU, and to provide reasons for its refusal to grant such a request, should the case arise.
73      In the present case, it is not in dispute that, precisely because of the effect of the economic crisis experienced by the Member States, and in particular, the Hellenic Republic, on the primary agricultural sector of the European Union, the Commission exercised the discretion conferred on it by Article 107(3)(b) TFEU by adopting the TCF and then the amended TCF, since both the former and the latter expressly mention that sector.
74      However, the fact remains that although the Hellenic Republic claimed before the General Court that Article 107(3)(b) TFEU ought to be applied directly to the facts of the case, notwithstanding the existence of the rules of conduct set out in the TCF and the amended TCF, it did not argue, in support of that claim, that there were, in the present case, specific exceptional circumstances in the primary agricultural sector concerned ...
75      Indeed, it is apparent from the documents in the file that the material that the Hellenic Republic put before the General Court was intended to establish the existence of a very serious disturbance affecting the Greek economy from the end of 2008 and in 2009, but it was not such as to prove to the requisite legal standard that that economy was faced with specific exceptional circumstances that ought, in this case, to have led the Commission to assess the aid at issue directly in the light of Article 107(3)(b) TFEU (C-431/14 P, paras 69-75, emphasis added).

implications of the cjeu elga judgement

In my view, the implications of the case are two-fold, and they concern, first, the relationship between the Commission's disclosed State aid policy and the discretion that Art 107(3) TFEU gives it; and, second, the interpretation of Art 107(3)(b) TFEU in particular.

Regarding the issue of the extent to which the Commission can deviate from adopted and publicised State aid policy, the CJEU has now made it clear that 'in adopting rules of conduct and announcing by publishing them that they will henceforth apply to the cases to which they relate, the Commission imposes a limit on the exercise of its aforementioned discretion and, in principle, cannot depart from those rules without being found, where appropriate, to be in breach of general principles of law, such as equal treatment or the protection of legitimate expectations' (para 69, emphasis added); and that 'the Commission is bound by the guidelines that it issues, to the extent that they do not depart from the rules in the TFEU ... and to the extent that their application is not in breach of general principles of law, such as equal treatment, in particular where exceptional circumstances, different from those envisaged in those guidelines, distinguish a given sector of the economy of a Member State' (para 70, emphasis added). It is thus plain that 'the Commission may not fail to have regard to Article 107(3) TFEU ... nor may it waive, by the adoption of guidelines, the exercise of the discretion that that provision confers on it' (para 71, emphasis added).

Somehow, the CJEU has made it clear that the Commission cannot hide behind its disclosed State aid policy if there are relevant circumstances that require a specific discretionary decision. This can be far reaching because the CJEU ELGA Judgment clearly opens the door to Member States' claims beyond the boundaries set by the Commission in its disclosed State aid policy, and may be the end of an era of increasing push for box-ticking exercises and for the Commission's reliance on its predetermined conditions for State aid exemption under block exemption regulations. This may well lead to an increase in litigation by Member States, which may be more willing to challenge the Commission's 'self-enforcement' approach in its recently adopted State aid 2.0 strategy [for discussion, see A Sanchez-Graells, “Digging itself out of the hole? A critical assessment of the Commission’s attempt to revitalise State aid enforcement after the crisis” (2016) Journal of Antitrust Enforcement, forthcoming].

The bit that puzzles me is that, in the specific circumstances of Art 107(3)(b) TFEU and its use in the aftermath of the economic and financial crisis, the Commission had not disclosed any policy documents prior to the 2008 TCF and the 2009 amended TCF. Thus, the issue whether the Commission could block any claims prior to the entry into force of those instruments could also have triggered an argument of retroactive application of beneficial discretionary measures, which I would have expected to read in a case like this. Somehow, the issue of the inter-temporal validity of policy and legal instruments in EU economic law continues to raise unresolved issues.

Regarding the specific interpretation of Art 107(3)(b) TFEU, the implications of the ELGA Judgment are mixed. On the one hand, it seems clear that the CJEU recognises that Member States can claim the existence of specific circumstances in its economy, and this would tail up with the drafting of Art 107(3)(b) TFEU, which indicates that the exemption is available for aid aimed to remedy a serious disturbance in the economy of a Member State. On the other hand, though, the CJEU seems to require Member States to demonstrate that those circumstances 'distinguish a given sector of the economy of a Member State' (para 70) and, in the specific case, 'specific exceptional circumstances in the primary agricultural sector concerned' (para 74). This seems problematic on two fronts.

First, it clearly goes beyond the wording of Art 107(3)(b) TFEU, which has no reference to specific sectors of the economy and seems to accept the possibility of exceptional rules aimed at a distressed economy as a whole. One is left with the doubt whether this requirement to have demonstrated specific exceptional circumstances in the agricultural sector derives from the CJEU's unwillingness to quash the Commission's decision--reading the case, it seems clear that the controversy about the existence of sufficient evidence in the file could have been a driver for this outcome--or, on the contrary, it is a purposeful interpretation of Art 107(3)(b) TFEU in a way that reduces its scope. If the latter is the real reason, then the CJEU could have been more explicit in determining the parameters of such narrow interpreation, not least because of the absence of a sufficient volume of case law that interprets this provision.

And, second, it seems to create a significant limitation in the Member States' design of their macroeconomic (emergency) policies in a way that some could argue falls foul of the principle of subsidiarity. In that regard, the CJEU could have been more explicit as to the reasons for the imposition of a requirement of economic intervention in the specific sectors affected by the serious economic disturbance--which, in my view, would be relatively easy to support on the basis of the general requirements of suitability and proportionality applicable to State measures that aim to benefit from exemptions of Treaty prohibitions under EU economic law, generally.

Contracting authorities should not be scared to exclude misbehaving tenderers, for the CJEU has their back (C-440/13)

In its Judgment in Croce Amica One Italia, C-440/13, EU:C:2014:2435, the Court of Justice of the EU (CJEU) has decided a complex situation concerning the exclusion of a tenderer based on an on-going criminal investigation derived from an allegation of fraud and misrepresentation in the submission of the documentation for that specific tender (ie an, 'intra-tender' ground for exclusion). The reasoning of the CJEU is complex because it conflates the application of exclusion grounds and the withdrawal of an invitation to tender under Directive 2004/18 and its interpreting case law--and, consequently, deserves some close consideration.

In the case at hand, the contracting authority announced an open procedure for certain specialist transportation services and received four offers. Three of the four offers where rejected on technical grounds. The contract was provisionally awarded to the fourth tenderer (Croce Amica One), but an investigation was initiated due to the evaluation scores being seemingly too high (ie carrying more than 80% of the maximum points in both the technical and the economic evaluation, which triggers specific scrutiny under the applicable Italian rules). As a result of the inquiry, the evaluation team determined that the tender was anomalous. Simultaneously, a preliminary criminal law investigation for fraud and intentional false statements was launched concerning, among others, the legal representative of Croce Amica One. It is not relevant for the assessment (as it comes ex post facto), but the investigation actually found that there had been fraud.

In view of all this, the contracting authority decided to cancel the tender. Its reasoning was as follows: given the circumstances described, apart from the anomalous nature of the tender, the [contracting authority] [could] not in any event, for evident reasons of expediency and reasons connected with the principle of sound administration, proceed to award the services contract to the tenderer Croce Amica One … nor, given the vital nature of the services in question, [could] it postpone the award of the contract pending the outcome of the criminal proceedings or even the conclusion of the investigations currently under way’ (para 17, emphasis added).

One of the difficulties in the case concerned the 'timing' of the application of the exclusion ground by the contracting authority. Implicitly, the allegation was that the contracting authority could only have applied the exclusion ground prior to deciding on the (provisional) award of the contract--following the logical sequence of exclusion, selection, award that Directive 2004/18 seemed to impose. By deviating from that apparently mandatory sequence or, in other words, by applying the exclusion ground at an inappropriate moment (ie too late in terms of the procurement procedure, and too early in terms of the parallel criminal investigation, which was on-going), the contracting authority would have breached the EU rules. Those rules would have been furthermore breached due to the unjustified cancellation of the tender--which, however, derives from the fact of excluding the only tenderer left and, consequently, it is hard to see why this second dimension would be (independently) relevant.

Unfortunately, and due to some procedural restrictions derived from the mechanics of the preliminary reference mechanism (para 28), the CJEU does not focus on the timing for the application of the exclusion ground (it simply mentions that the circumstances of the case are clearly covered under art 45(2) dir 2004/18, para 28) and, instead, looks at whether the cancellation of the tender (or the implicit withdrawal of the invitation to tender) is justified (paras 29-37). Hence, the reasoning of the CJEU in Croce Amica One does not seem very helpful in establishing whether, under the rules in dir 2004/18, exclusion grounds can be applied by contracting authorities after completing the initial selection screening , or whether they can base the exclusion on (suspected) breaches that occur during the tender procedure.

Thus, the Croce Amica One Judgment may at first sight seem to come too late or be of limited temporary relevance because this situation is now expressly regulated in art 57(5) of Directive 2014/24, which allows contracting authorities to apply the revised exclusion grounds 'at any time during the procedure' and 'in view of acts committed or omitted either before or during the procedure'. However, even if based on the (not necessarily) inter-linked point of the cancellation of the tender, the reasoning of the CJEU in Croce Amica One should remain valid after the entry into force of dir 2014/24 as a clear back-up to contracting authorities that decide to exercise their discretion and apply art 57(5) in view of exclusion grounds based on concurrent tendering (mis)behaviour. 

Indeed, it is worth stressing that the CJEU has clarified that:
EU law does not preclude Member States from providing in their legislation for the possibility of adopting a decision to withdraw an invitation to tender. The grounds for such a decision may thus be based on reasons which reflect, inter alia, the assessment as to whether it is expedient, from the point of view of the public interest, to carry an award procedure to its conclusion, having regard, among other things, to any change that may arise in the economic context or factual circumstances, or indeed the needs of the contracting authority concerned (C-440/13, para 35, emphasis added).
In my view, this reinforces the powers that art 57(5) dir 2014/24 gives to contracting authorities to 'self-protect' from entering into contracts with (potentially) unreliable suppliers. This will have to be coupled with certain procedural guarantees (as the CJEU stresses in paras 38-46), but the general principle is, in my view, that contracting authorities need to feel empowered to react to their informed and demonstrable suspicions by excluding tenderers affected by exclusion grounds.

However, there is also a final caveat in the Croce Amica One line of reasoning that looks very dangerous to me because of its potentially misleading content. Continuing with the exploration of the reasons that can justify the cancellation of a tender, the CJEU indicates that: The grounds for such a decision may also relate to there being an insufficient degree of competition, due to the fact that, at the conclusion of the award procedure in question, only one tenderer was qualified to perform the contract (C-440/13, para 35, emphasis added). 

I find this last bit of the reasoning potentially dangerous for two reasons. Firstly, because economics tells us that this is not a situation that per se can be interpreted as evidencing insufficient competition [see JM Keisler & WA Buehring, ‘How Many Vendors Does It Take To Screw Down A Price? A Primer on Competition’ (2005) 5 Journal of Public Procurement 291]. And, secondly, because it is prone to abuse in cases where the contracting authority is left with only one tenderer that it simply dislikes or does not want to engage with for reasons not covered by exclusion grounds or qualitative selection criteria. In such case, the random result that only one tenderer (of many participating) can actually perform the contract would be the (unexpected) perfect excuse to discriminate against it by cancelling the tender.

Hence, I would urge for a very restrictive interpretation of this last part of para 35 of the Croce Amica One Judgment, particularly in view of a proper interpretation of the principle of competition embedded in art 18(1) dir 2014/24--ie because the blank rejection of the only tender that meets all the requirements of the contracting authority would, if not otherwise justified, be an artificial restriction of the (outcome of) the competition actually materialised in the procedure.

CJEU confirms strict approach against acceptance of incomplete submissions in public procurement (C-42/13)

In its Judgment in Cartiera dell’Adda and Cartiera di Cologno, C-42/13, EU:C:2014:2345, the Court of Justice of the European Union (CJEU) has confirmed its strict approach against the acceptance of incomplete submissions in public procurement procedures, at least where the tender documentation imposes the (automatic, non-discretionary) rejection of non-compliant or non-fully compliant submissions. This Judgment is fully in line with its previous Judgment in Manova, C-336/12, EU:C:2013:647 and, consequently, Cartiera dell'Adda does not advance EU procurement law in a significant manner. However, given its brevity and the harshness of the solution adopted by the CJEU (at least if analysed in functional or practical terms), I think that the case deserves some further consideration.
 
In short, the CJEU has confirmed that the exclusion of a tenderer that omitted a declaration is acceptable under EU law, even if the declaration was not necessary or, in any case, the facts concerned by the declaration would not trigger exclusion. In an extreme reading, the case confirms the legality under EU procurement law of an absolute obligation to reject submissions that are 'merely' affected by strictly formal shortcomings [for discussion, see A Sanchez Graells, 'Rejection of Abnormally Low and Non-Compliant Tenders in EU Public Procurement: A Comparative View on Selected Jurisdictions', in M Comba & S Treumer (eds), Award of Contracts in EU Procurement, vol. 5 European Procurement Law Series (Copenhagen, DJØF, 2013) 289]. As mentioned, this is an area of very significant practical relevance and there is a need to properly understand the conditions under which such a stringent case law is being developed.
 
In that regard, it is important to highlight that, as the CJEU emphasises, the grounds for exclusion of tenderers expressly disclosed by the contracting authority in the tender documentation included situations where 
one of the documents and/or one of the sworn statements the purpose of which is to demonstrate that both the general and special requirements have been complied with is incomplete or irregular, except where any irregularity is of a purely formal nature and may be remedied but is not decisive for the assessment of the tender (C-42/13, para 10).
 
After juggling with the other (rather complicated) circumstances of the case, the CJEU clarifies the relevant legal dispute as a question of the
compatibility with European Union law of the fact that it is impossible for ... a tenderer, after submitting his bid, to remedy the fact that he failed to annex ... a statement to his bid [confirming that its technical director was not affected by mandatory exclusion grounds related to criinal records], whether by submitting such a statement to the contracting authority directly or by showing that the person concerned was identified as the technical director in error (C-42/13, para 40).
 
At this point, the CJEU reiterates its position in Manova, and stresses that "the contracting authority must comply strictly with the criteria which it has itself established, so that it is required to exclude from the contract an economic operator who has failed to provide a document or information which he was required to produce under the terms laid down in the contract documentation, on pain of exclusion" (para 42, emphasis added). The CJEU further reiterates that this strict requirement derives from the principles of equal treatment and transparency (paras 43-49).
 
It is also important to stress that the CJEU clearly indicates that "in so far as the contracting authority takes the view that that omission is not a purely formal irregularity, it cannot allow the tenderer subsequently to remedy the omission in any way after the expiry of the deadline for submitting bids" (para 45), which seems to create significant space for the flexibilisation of ommissions that can be remedied, particularly before the expiry of the deadline for submission of tenderers--but equally of omissions that can be reduced to purely formal irregularities.
 
More generally, in my view, the Manova - Cartiera dell'Adda line of case law offers some interesting opportunities for Member States and contracting authorities to avoid such impractical situations, provided they restrict themselves to the general rules under the new art 56(3)  of Directive 2014/24. This provision indeed stresses that
Where information or documentation to be submitted by economic operators is or appears to be incomplete or erroneous or where specific documents are missing, contracting authorities may, unless otherwise provided by the national law implementing this Directive [or excluded by themselves in the specific tender documents, as per Manova and Cartiera dell'Adda], request the economic operators concerned to submit, supplement, clarify or complete the relevant information or documentation within an appropriate time limit, provided that such requests are made in full compliance with the principles of equal treatment and transparency.
Consequently, any criticism against the Manova - Cartiera dell'Adda line of case law seems rather unjustified in view of the fact that the origin of any potential obligation to automatically and non-discretionally exclude non-compliant or incomplete submissions does not have an origin on the EU rules or their general principles (now in art 18(1) of dir 2014/24), but on excessively stringent domestic rules or, even worse, in the specific conditions imposed by the contracting authority in its own tender documentation. In the absence of those restrictions, EU law as interpreted in Manova - Cartiera dell'Adda does not constrain the proper exercise of administrative discretion in this area. Hence, contracting authorities (and Member States) will be clever not to put a noose around their own necks. In the end, the only thing the CJEU has done in Manova - Cartiera dell'Adda is to pull their legs...

Difficult balance between #transparency and #competition in #publicprocurement

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.

GC on non-disclosure of ECB documents: Carte blanche to public market manipulation? (T-590/10)

Today's Judgment of the General Court of the EU in case T-590/10 Gabi Thesing and Bloomberg Finance LP v ECB has provided clarification on the reasons that the ECB (and, by analogy, other EU Institutions) can provide to reject a request of access to its documents. The GC has backed the ECB in its non-disclosure decision on the basis of the protection of public interest and has adopted a broad view of such an exception. 

In general terms, the position of the ECB and the GC seem appropriate to grant  sufficient administrative discretion to the EU Institutions in their assessment of the public interest at stake. However, the specifics of the GC Judgment are a bit troubling, if one takes the position of the GC to its logical extreme. In my view, the following bears emphasizing:
43 [...] the ECB must be recognised as enjoying a wide discretion for the purpose of determining whether the disclosure of documents relating to the fields covered by that exception could undermine the public interest. The European Union judicature’s review of the legality of such a decision must therefore be limited to verifying whether the procedural rules and the duty to state reasons have been complied with, whether the facts have been accurately stated, and whether there has been a manifest error of assessment or a misuse of powers (see, by analogy, Case C‑266/05 P Sison v Council [2007] ECR I‑1233, paragraph 34). [...]
45 [...] with respect to the applicants’ arguments that the ECB incorrectly failed to take account of the public interest considerations in favour of disclosure and that there is a compelling public interest for disclosure of the documents at issue which would in fact further the public interest, the Court notes that the exceptions to the right of access to documents provided for in Article 4(1)(a) of Decision 2004/258 are framed in mandatory terms. It follows that the ECB is obliged to refuse access to documents falling under any one of those exceptions once the relevant circumstances are shown to exist, and no weighing up of an ‘overriding public interest’ is provided for in that provision, in contrast with the exceptions referred to in Article 4(2) and (3) of that decision (see, by analogy, Joined Cases T‑3/00 and T‑337/04 Pitsiorlas v Council and ECB [2007] ECR II‑4779, paragraph 227 and the case-law cited). [...]
51 As regards the issue whether disclosure of the first document would specifically and effectively undermine the protected interest in question, it is common ground [...] that, at the time of the adoption of the contested decision, the European financial markets were in a very vulnerable environment. The stability of those markets was fragile, in particular, because of the economic and financial situation of the Hellenic Republic. It is also common ground that that situation and the related sales of Greek financial assets were causing strong depreciations in the value of those assets, which also triggered losses for Greek and other European holders. The applicants did not dispute that that development had the potential of leading to negative spillover effects on the solvency and funding conditions of other issuers and countries in the euro area. In such an environment, it is clear that market participants use the information disclosed by central banks and that their analyses and decisions are considered a particularly important and reliable source to assess current and prospective financial market developments. Moreover, the ECB was entitled to find that public confidence is an essential element affecting the proper functioning of the financial markets. The ECB was not indeed contradicted in this respect by the applicants. [...]
56 [...] the fact that, on 21 October 2010, the data contained in the first document were outdated and that they gave only a snapshot of the factual situation at the time that the document was drafted does not permit the conclusion that, in the event of disclosure of that document, financial market participants would also have regarded as outdated and therefore of no value ECB staff assumptions and views regarding the impact of off-market swaps on government deficit and on government debt which are contained in that document.
57 Although it is true that those participants are professionals who can be expected to use information taken from documents in the context of their work, the fact remains that they consider assumptions and views originating from the ECB to be particularly important and reliable for assessing the financial market. It cannot reasonably be precluded that, even if those assumptions and views were made on the basis of data available well before 21 October 2010, they would have been regarded as still valid on that date. Moreover, it can be assumed that, by relying on those assumptions and views that were based on a certain known factual situation, those professionals might have inferred, on the basis of additional data, assumptions and views allegedly held by the ECB regarding the government deficit and government debt at the time that the ECB definitively refused access to that document. In this respect, any clarification by the ECB on the disclosed version of that document, indicating that the information contained therein was no longer up to date, would not have been able to prevent disclosure of that document from misleading the public and financial market participants in particular on the situation regarding the government deficit and government debt as assessed by the ECB.
58 In the light of the very vulnerable environment in which the financial markets found themselves at the time of adoption of the contested decision, the assessment that such an error would undermine the economic policy of the Union and the Hellenic Republic cannot be rejected as manifestly incorrect. Indeed, such an error might have had negative consequences on access, in particular for that Member State, to the financial markets and might therefore have affected the effective conduct of economic policy in the Hellenic Republic and the Union. (T-590/10, paras 43 to 58, emphasis added).
In my view, to put it clearly, the reasoning of the GC diminishes the analytical capacity of the financial sector and disregards the ability of professional financial advisors and analysts to separate the chaff from the grain and boldly assumes that panic and shortsightedness would have dominated the analysis of the documents which disclosure was requested (a rather strong assumption, at any rate). Moreover, in its analysis of the cumulative impact that disclosure may have had, the GC basically opposes all basic tenets that financial markets can only work effectively on the basis of full disclosure of any potentially relevant information [an assumption that, on the other hand, is strongly defended under EU rules on market abuse]. 

All in all, in an (acknowledged) extreme reading of the GC's Thesing Judgment, the ECB (and other EU Institutions) may have been given carte blanche to manipulate financial markets (by withholding information) if they deem such manipulation in the public interest. That can surely not be acceptable under EU Law. Therefore, a correction of the Thesing broad reasoning seems desirable, in order to keep any degree of effectiveness in the provisions of article 15 TFEU -- and so that everything is not effectively lost in the field of EU governance.

Summum ius, summa iniuria? GC supports a very narrow approach to the dismissal of non-fully compliant tenders (T-216/09)

In it Judgment of 25 October 2012 in case T-216/09 Astrim SpA and Elyo Italia Srl v European Commission, the General Court has backed up the Commission in its decision to dismiss a tender offer where 0,33% of the itemised prices required by the tender documents were not provided by the tenderers. 

In the invitation to tender, the Commission had indeed expressly stressed "the importance of completing all sections of files", and specifically mentioned that" [t]he omission of one or more of [the itemised prices] may result in the exclusion of the bidder from the tender". On the basis of this clear warning, the GC finds no fault in the decision of the Commission to dismiss the tender submitted by the appellants--which, as mentioned, failed to indicate prices for 7 of the 2091 items included in the contractual object.

According to the GC (only French and Italian versions available):
97 L’article 148 du règlement n° 2342/2002 prévoit, quant à lui, que, « [a]près l’ouverture des offres, dans le cas où une offre donnerait lieu à des demandes d’éclaircissement ou s’il s’agit de corriger des erreurs matérielles manifestes dans la rédaction de l’offre, le pouvoir adjudicateur peut prendre l’initiative d’un contact avec le soumissionnaire, ce contact ne pouvant conduire à une modification des termes de l’offre ». 
98 Il y a donc lieu de considérer que, en l’espèce, le pouvoir adjudicateur, après avoir constaté l’omission affectant certaines rubriques et avoir vérifié qu’il ne s’agissait pas d’erreurs matérielles manifestes dans la rédaction de l’offre, n’était tenu ni d’apprécier la gravité de l’omission ni, par conséquent, de consacrer une motivation spécifique à l’importance des rubriques non complétées
99 Il s’ensuit que la Commission n’a pas enfreint le point 17 de la lettre d’invitation en décidant d’exclure les requérantes au motif que certaines rubriques des listes de prix n’avaient pas été complétées
100 Troisièmement, s’agissant de la prétendue violation de l’article 89 du règlement n° 1605/2002 en ce qui concerne le principe de proportionnalité, il suffit de rappeler que le point 17 de la lettre d’invitation souligne « l’importance de remplir toutes les rubriques des fichiers » et indique que « l’omission d’une ou de plusieurs d’entre elles pourrait avoir pour effet d’exclure le soumissionnaire de l’appel d’offres »
101 Le point 17 de la lettre d’invitation indique donc clairement que l’omission d’une seule rubrique peut entraîner l’exclusion d’un soumissionnaire de l’appel d’offres. À cet égard, il convient de relever que cette disposition de la lettre d’invitation vise à fournir au pouvoir adjudicateur, en l’occurrence à la Commission, une explication détaillée quant à la manière selon laquelle le prix global offert pour le marché public en cause par chaque candidat se décompose en des prix individuels pour les différents produits et services inclus dans ce marché public
102 En outre, l’obligation de chaque candidat de mentionner un prix pour toutes les rubriques de la liste des prix vise à permettre la vérification aisée, par la Commission, du caractère exact du prix global offert par chaque soumissionnaire ainsi que du caractère normal de ce prix, conformément à l’article 139, paragraphe 1, du règlement n° 2342/2002 (voir, en ce sens, arrêt Antwerpse Bouwwerken/Commission, précité, point 62). 
103 Enfin [...] il y a lieu de rappeler que, si l’un des prix composant une offre n’est pas indiqué et que cette absence d’indication n’est pas le fruit d’une erreur matérielle manifeste et mineure qui permette, même grâce à des précisions et des explications du soumissionnaire, de déduire le prix de l’offre de manière facile et certaine, le pouvoir adjudicateur ne peut qu’exclure ladite offre
104 Dans ces circonstances, contrairement à ce que soutiennent les requérantes, la Commission n’a pas violé le principe de proportionnalité en décidant d’exclure leur offre sans tenir compte de l’incidence des rubriques non complétées sur la valeur de cette même offre. (GC T-216/09 at paras 97 to 104, emphasis added).

Even if the legal reasoning followed by the GC is formally sound, in my opinion, it sets a negative precedent that potentially restricts the possibilities to take into account marginally-faulty tenders, particularly in its paragraphs 98 and 103, where the GC adopts an absolute approach to the duty to dismiss incomplete or faulty bids (ie non-fully compliant tenders), regardless of the material relevance of the defects--which the contracting authority would be under no obligation to assess. I think that an alternative approach would be preferable.

As indicated elsewhere [A. Sanchez Graells, Public Procurement and the EU Competition Rules (Oxford, Hart Publishing, 2011) pp. 318-323]:

During the tender evaluation process, and as a result of applying the evaluation rules […] contracting authorities can determine that a given tender is not fully compliant with the technical specifications or other requirements regulating the tender. This deviation from the tender requirements should be determined in accordance with the mandate to accept functional and performance equivalents and, consequently, cannot be justified on purely formal terms or by relation to a given standard—at least if alternative standards are available and if the tenderer has proven the equivalence of the proposed solution under the latter (art 23(4) and 23(5) dir 2004/18). In any case, deviations from the requirements set by the contracting authority in the tender documents can still take place under the test of functional or performance equivalence, and a determination that a bid is not fully compliant with the tender requirements can clearly take place under the regime regulating technical specifications. In that situation, however, there is room for significant variation as regards the degree of non-compliance of bids. At the one extreme, bids can be completely unsuitable for the purposes intended by the contracting authority and, at the other extreme, tenders can be merely non-compliant with marginal or secondary issues that would not significantly alter the ability of the tender to satisfy the contracting authorities’ needs. Any imaginable situation lying in the middle of these two extremes is possible and, consequently, a rigid rule applicable equally to all instances of formal non-compliance seems to offer relatively limited results. In this regard, contracting authorities might be willing to accept relatively minor deviations from the tender requirements provided that, overall, the tender is beneficial to their interests. Therefore, an automatic and non-waivable requirement to reject non fully compliant bids could limit unnecessarily the alternatives of the contracting authority.
[…] 
Non-Fully Compliant Tenders and Non-Fully Compliant Variants. Regardless of whether contracting authorities authorise or not the submission of variants, the issue of the treatment of non-fully compliant bids remains largely open. On the one hand, where no variants are authorised, bids can be non-fully compliant with the general requirements included in the tender documents. Similarly, where variants are accepted, both ‘standard’ and ‘variant’ tenders can be non-fully compliant with the ‘minimum’ requirements contained in the tender documents. In either case, contracting authorities could have an interest in accepting non-fully compliant bids that, however, are substantially suited to satisfying their needs, and prove to be superior to fully compliant bids in some relevant respects—ie, bids that would be considered the most economically advantageous under the relevant award criteria (even taking into consideration their partial or non-full compliance with one or several criteria) and which might not be admissible precisely (or only) because of such partial or non-full compliance. As suggested, these decisions on the treatment granted to non-fully compliant bids can alter the outcome of the tender and can have an impact on competition and, consequently, merit further scrutiny. 
Directive 2004/18 does not contain express rules determining whether contracting authorities are bound to reject non-fully compliant bids in all cases or, on the contrary, whether they can retain a certain degree of discretion to accept them. Nonetheless, this issue has been addressed by the case law of the EU judicature, which has determined that ‘the principle of equal treatment of tenderers requires that all the tenders comply with the tender conditions so as to ensure an objective comparison of the tenders submitted by the various tenderers’ and that ‘[t]hat requirement would not be satisfied if tenderers were allowed to depart from the basic terms of the tender conditions … except where those terms expressly allow them to do so’. In principle, it might seem that—unless contract documents expressly allow for specific departures from the basic requirements (ie, unless variations are authorised)—there is an absolute obligation to dismiss non-fully compliant bids as a requirement or corollary of the principle of equality of treatment. Therefore, it might seem that, other than according to the rules on variants, the acceptance or rejection of a non-fully compliant bid is not within the discretion of the contracting authority—which must automatically reject all non-fully compliant bids in order to guarantee equality of treatment. However, it is hereby submitted that such a reading of the interpreting case law is unnecessarily restrictive and might lead to excessive limitations of competition based solely on largely formalistic criteria that might also diminish the ability of contracting authorities to obtain value for money. Consequently, while complying with the requirements of the principle of equal treatment, an alternative reading might give leeway to more pro-competitive results. 
In this regard, it seems compatible with the abovementioned case law to allow contracting authorities to include in the tender documents a rule allowing for the acceptance of non-fully compliant bids—and, therefore, to make known to all potentially interested tenderers right from the beginning that such a possibility exists—where certain stringent conditions are met, so that i) the partial non-compliance does not materially affect the ability of the tender to satisfy the needs of the contracting authority and/or does not grant the tenderer a material advantage over other competing bidders (which, in the case of quantitative criteria could be limited by authorising a given percentage of deviation from the set requirements)—ie, where the tender is not unsuitable, but merely non-fully compliant; ii) the tender is superior to fully compliant bids in some relevant respects—ie, it is the most economically advantageous under the relevant award criteria— even taking into account the partial and non-material non-compliance with one or various requirements included in the tender documents; and iii) the rules do not confer on the contracting authority unrestricted freedom of choice amongst tenderers. Such rules could be supplemented by setting a penalisation system for non-fully compliant bids (either fixed, or varying with the number of criteria with which the tender is non-fully compliant), in order to ensure that their overall superiority compensates for and exceeds the potential deficiencies derived from partial non-compliance with one or several tender requirements. Also, contracting authorities could always establish that certain tender requirements are not subject to partial compliance (ie, awarding constraints). 
In our view, effective competition for the contract could be fostered by allowing tenderers that cannot fully comply with the specifications to submit tenders for the contract and, as long as the rules applicable to non-fully compliant tenders were clearly set in the tender documents ex ante, no breach of the principle of non-discrimination or the ensuing transparency obligation would arise. Therefore, it seems justified to require contracting authorities to adopt such an approach, whenever clear rules and criteria for the appraisal of non-fully compliant rules permit it. Once again, implementing this approach might raise the complexity and costs of the tender procedure and, consequently, should be subjected to a proportionality test.
Hence, I submit that a more flexible approach should have been adopted by the GC in T-216/09 or that, at least, future developments of EU public procurement law should not be restricted by the very tight corset created by the GC in paras 98 and 103 of the Astrim SpA and Elyo Italia v Commission Judgment. As the classics said, summum ius, summa iniuria...

GC backs broad Commission discretion not to pursue antitrust cases in absence of "Community interest"

In its Judgment of 13 September 2012 in case T‑119/09 Protégé International Ltd v European Commission and Pernod Ricard SA, the General Court has backed the Commission's decision not to pursue a complaint filed by Protégé International Ltd regarding a potential abuse of a dominant position by Pernod Ricard SA in the whisky market, in view of the absence of a sufficient "Community interest" [Decision C (2009) 505 (Case COMP/39414 - International Protégé / Pernod Ricard)].

The GC basically restates the prexisting case law of the CJEU on the Commission's discretion to pursue or drop cases in view of their "Community interest" and extends it to the post-Regulation 1/2003 enforcement scenario (as expressly mentioned in Recital 18 of that Regulation). Most importantly, the GC expressly shows certain judicial deference towards the Commission's assessment of the existence (or lack of) "Community interest", which review will be limited to check that the Commission's assessment guaranteees that the facts have been accurately stated and that there has been no manifest error or appraisal or misuse of power (on such "marginal review", see the key contribution by M Jaeger, "Standard of review in Competition Cases Involving Complex Economic Assessments: Towards the Margnialisation of the Marginal Review?" (2011) J of Eur Comp Law & Practice 2(4):295-314].

In more detail, in its Judgment (only available in French), the GC stressed that:

32 Il ressort d’une jurisprudence constante que l’article 7, paragraphe 2, du règlement n° 1/2003 ne confère pas à l’auteur d’une demande présentée en vertu dudit article le droit d’exiger de la Commission une décision définitive quant à l’existence ou non de l’infraction alléguée (voir, en ce sens, arrêts de la Cour du 18 octobre 1979, GEMA/Commission, 125/78, Rec. p. 3173, points 17 et 18, et du 4 mars 1999, Ufex e.a./Commission, C‑119/97 P, Rec. p. I‑1341, point 87 ; arrêt du Tribunal du 18 septembre 1992, Automec/Commission, T‑24/90, Rec. p. II‑2223, point 75).
33 En effet, la Commission, investie par l’article 85, paragraphe 1, CE, de la mission de veiller à l’application des principes fixés par les articles 81 CE et 82 CE, est appelée à définir et à mettre en œuvre l’orientation de la politique communautaire de la concurrence. Afin de s’acquitter efficacement de cette tâche, elle est en droit d’accorder des degrés de priorité différents aux plaintes dont elle est saisie et dispose à cet effet d’un pouvoir discrétionnaire (arrêt Ufex e.a./Commission, précité, point 88, et arrêt de la Cour du 17 mai 2001, IECC/Commission, C‑449/98 P, Rec. p. I‑3875, point 36).
34 La Commission est notamment en droit de se référer à l’intérêt communautaire pour déterminer le degré de priorité à accorder aux différentes plaintes dont elle est saisie (arrêt Automec/Commission, précité, point 85, et arrêt du Tribunal du 13 décembre 1999, Européenne automobile/Commission, T‑9/96 et T‑211/96, Rec. p. II‑3639, point 28). La possibilité pour la Commission de rejeter une plainte pour défaut d’intérêt communautaire est par ailleurs explicitement reconnue au considérant 18 du règlement n° 1/2003 (voir, en ce sens, arrêt du Tribunal du 16 janvier 2008, Scippacercola et Terezakis/Commission, T‑306/05, non publié au Recueil, point 93).
35 Le pouvoir discrétionnaire dont dispose la Commission à cet égard n’est cependant pas sans limites (arrêts Ufex e.a./Commission, précité, point 89, et Européenne automobile/Commission, précité, point 29).
36 En effet, d’une part, la Commission est tenue d’examiner attentivement l’ensemble des éléments de fait et de droit qui sont portés à sa connaissance par les plaignants (arrêts de la Cour du 11 octobre 1983, Schmidt/Commission, 210/81, Rec. p. 3045, point 19 ; du 28 mars 1985, CICCE/Commission, 298/83, Rec. p. 1105, point 18 ; du 17 novembre 1987, British American Tobacco et Reynolds Industries/Commission, 142/84 et 156/84, Rec. p. 4487, point 20).
37 D’autre part, la Commission est astreinte à une obligation de motivation lorsqu’elle refuse de poursuivre l’examen d’une plainte. La motivation devant être suffisamment précise et détaillée pour mettre le Tribunal en mesure d’exercer un contrôle effectif sur l’exercice par la Commission de son pouvoir discrétionnaire de définir des priorités, cette institution est tenue d’exposer les éléments de fait dont dépend la justification de la décision et les considérations juridiques qui l’ont amenée à prendre celle-ci (arrêts Ufex e.a./Commission, précité, points 90 et 91 ; Automec/Commission, précité, point 85, et Européenne automobile/Commission, précité, point 29).
38 De même, il importe de relever que le contrôle juridictionnel des décisions de rejet de plaintes ne doit pas conduire le Tribunal à substituer son appréciation de l’intérêt communautaire à celle de la Commission, mais vise à vérifier que la décision litigieuse ne repose pas sur des faits matériellement inexacts et qu’elle n’est entachée d’aucune erreur de droit ni d’aucune erreur manifeste d’appréciation ou de détournement de pouvoir (arrêt Automec/Commission, précité, point 80 ; arrêt du Tribunal du 18 septembre 1996, Asia Motor France e.a./Commission, T‑387/94, Rec. p. II‑961, point 46, et Européenne automobile/Commission, précité, point 29).
39 Par ailleurs, aux fins de l’appréciation de l’intérêt communautaire, il appartient à la Commission de mettre en balance l’importance de l’infraction prétendue pour le fonctionnement du marché commun, la probabilité de pouvoir établir son existence et l’étendue des mesures d’investigation nécessaires, en vue de remplir, dans les meilleures conditions, sa mission de surveillance du respect des articles 81 CE et 82 CE (voir, en ce sens, arrêt Automec/Commission, précité, point 86, et arrêt du Tribunal du 24 janvier 1995, Tremblay e.a./Commission, T‑5/93, Rec. p. II‑185, point 62).
40 En tout cas, l’évaluation de l’intérêt communautaire présenté par une plainte étant fonction des circonstances de chaque espèce, il ne convient ni de limiter le nombre de critères d’appréciation auxquels la Commission peut se référer ni de lui imposer le recours exclusif à certains critères (voir arrêt IECC/Commission, précité, point 46).
41 Enfin, la Commission n’est pas tenue de prendre position sur tous les arguments que les intéressés ont soumis à l’appui de leur plainte. Il suffit qu’elle expose les faits et les considérations juridiques revêtant une importance essentielle dans l’économie de la décision (voir, en ce sens, arrêt AEPI/Commission, précité, point 61, et la jurisprudence citée). (GC T-119/09,, at paras. 32-41, emphasis added).
In my view, this endorsement by the GC comes to strengthen the Commission's control over its own docket and case load, while still guaranteeing effective judicial review for aggrieved parties (ie complainants) in a sufficient degree.