GC supports exercise of discretion in the assessment of technical compliance in public procurement (T-30/12)

In its Judgment in IDT Biologika v Commission, T-30/12, EU:T:2015:159 (only available in DE and FR and involving public procurement by the EU Institutions), the General Court (GC) has decided on an issue involving the contracting authority's discretion to assess the sufficiency of technical reports and certificates submitted by the tenderer in order to proof conformity of its offer with requirements set out in the technical specifications. This is an important case because it supports the exercise of technical discretion in the assessment of compliance with specifications in public procurement processes and, in my view, consolidates a welcome anti-formalistic development of this area of EU public procurement law.

In the case at hand, there was a tender for the supply of anti-rabies vaccines to a region in Serbia. The technical specifications determined that the vaccines had to meet certain conditions, amongst which it was necessary to demonstrate that the vaccine had been registered by the European Medicines Agency or equivalent agency of an EU Member State, and that its use was also authorised by the Serbian medicines agency prior to its distribution.

Bioveta made an offer to supply anti-rabies vaccines based on a type of virus ("SAD-Bern MSV Bio 10") that differed from the one included in the registration and the authorisation documents it submitted as part of the technical documentation (referring to "SAD-Bern"), which had been obtained for commercialisation in both Serbia and the Czech Republic. 

In view of that discrepancy, the contracting authority required Bioveta to clarify and confirm that, despite the use of a different virus, the vaccine it offered did not require a new registration with a medicines agency, and that the commercialisation under a different name did not breach the initial authorisation to distribute the product in the Serbian market. 

In simple terms, Bioveta explained that the virus had been changed in 1992 and that the "SAD-Bern MSV Bio 10" was the virus used when the product had been authorised for distribution in Serbia. It also submitted a written explanation of the mere commercial orientation of the change of name (implemented to distinguish Bioveta's vaccines from those of competitors that also sold solutions based on the "SAD-Bern" virus), and submitted that it did not require new registration. It also furnished a report by the Czech medicines agency that confirmed that the products were equivalent and the name "SAD-Bern MSV Bio 10" had been used in all registrations and renewals that had taken place since 1992. 

The contracting authority considered that the clarification was sufficient and the contract was eventually awarded to Bioveta. The decision was subsequently challenged by the competing bidder IDT Biologika on several grounds (some of them very technical in veterinary terms). In my view, the interesting ground for challenge rests on the discretion of the contracting authority when it comes to the assessment of technical aspects of a tender for a contract to be awarded on the basis of the lowest price (or in post-2014 terms, to the most cost-effective offer).  

IDT Biologika fundamentally submitted that the explanations and certificates provided by Bioveta had been improperly assessed and taken into consideration by the contracting authority, and that the award decision was flawed due to the exercise of excessive discretion in accepting them--as, in IDT Biologika's view, the contracting authority should have taken a formalistic approach and rejected Bioveta's tender.

In order to resolve this issue, the GC builds on CMB and Christof v Commission, where it was established that "in the context of a public procurement procedure where ... the contract is awarded to the tenderer who has submitted the lowest priced administratively and technically compliant tender, the contracting authority limits its margin of discretion with regard to the award of the contract to the lowest priced tender among the compliant tenders. However, its margin of discretion must remain broad with regard to the evaluation of the conformity of the tenders presented, and in particular the documentation provided in that regard" (T-407/07, EU:T:2011:477, para 116, emphasis added). It then goes on to determine that, in view of the information supplied by Bioveta, it was not unreasonable or manifestly wrong for the contracting authority not to reject the tender.

In my view, this is a significant consolidation of the case law and, under the CMB and Christof v Commission and IDT Biologika v Commission line of case law, contracting authorities and their evaluation teams should be confident in sticking to a possibilistic approach towards the assessment of the tenders--so as to move past strict formalities and accept sufficient technical evidence as to ensure compliance with the technical specifications.

This is certainly the correct approach from the perspective of maximization of competition and the assessment of technical requirements from a functional perspective--and, consequently, the one that best fits the framework set by Art 44 of Directive 2014/24 on test reports, certification and other means of proof of conformity with requirements or criteria set out in the technical specifications, the award criteria or the contract performance conditions (in particular, art 44(2) dir 2014/24 on alternative means of proof).