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...

CJEU on renegotiation of mandatory technical conditions in negotiated procedures: A good case? (C-561/12)

In its Judgment of 5 December 2013 in case C-561/12 Nordecon and Ramboll Eesti, the CJEU has ruled on the interpretation of Article 30(2) of Directive 2004/18 as regards the negotiation of technical elements between a contracting authority and the tenderers participating in a negotiated procedure.
The case is complicated by the fact that a more general issue concerning the (potential) obligation to exclude technically non-compliant tenders in a negotiated procedure is entangled with the limits of the negotiation authorisation provided for in Article 30(2) Directive 2004/18. In my view, by not clearly distinguishing both issues, the CJEU may have provided unnecessarily limiting guidance on the proper interpretation of Article 30(2) Directive 2004/18.
In the case at hand, the contracting authority launched a negotiated procedure for the construction of a new road. The road had to have certain technical characteristics (including, amongst others, specific width in different parts of the road) and the technical specifications did not allow for the submission of variants, which (implicitly) means that  all technical requirements were mandatory (art 24 dir 2004/18) and, consequently, tenders that failed to meet the technical specifications (in full) should had to be rejected by the contracting authority.
However, the contracting authority engaged in negotiations with all tenderers, including one that had submitted a tender that did not meet the technical description of the road (it was narrower in some points). Even if, eventually, that tenderer was not awarded the contract, there were several challenges against the award decision and the case ended up before the CJEU on grounds of a potential infringement of Art 30(2) Directive 2004/18. The Court addressed it as follows:
33 [...] the referring court asks whether Article 30(2) of Directive 2004/18 allows the contracting authority to negotiate with tenderers tenders that do not comply with the mandatory requirements laid down in the technical specifications of the contract.

34 In that regard, it must be recalled that, in certain cases, Article 30(2) of Directive 2004/18 allows the negotiated procedure to be used in order to adapt the tenders submitted by the tenderers to the requirements set in the contract notice, the specifications and additional documents, if any, and to seek out the best tender.

35 According to Article 2 of Directive 2004/18, contracting authorities are to treat economic operators equally and in a non-discriminatory manner and are to act in a transparent way.

36 The Court has stated that the obligation of transparency is essentially intended to preclude any risk of favouritism or arbitrariness on the part of the contracting authority (Case C‑599/10 SAG ELV Slovensko and Others [2012] ECR I‑0000, paragraph 25).

37 Accordingly, even though the contracting authority has the power to negotiate in the context of a negotiated procedure, it is still bound to see to it that those requirements of the contract that it has made mandatory are complied with. Were that not the case, the principle that contracting authorities are to act transparently would be breached and the aim mentioned in paragraph 36 above could not be attained.

38 Moreover, allowing a tender that does not comply with the mandatory requirements to be admissible with a view to negotiations would entail the fixing of mandatory conditions in the call for tenders being deprived of useful effect and would not allow the contracting authority to negotiate with the tenderers on a basis, made up of those conditions, common to those tenderers and would not, therefore, allow it to treat them equally.

39 In the light of the foregoing considerations, the answer to the first question is that Article 30(2) of Directive 2004/18 does not allow the contracting authority to negotiate with tenderers tenders that do not comply with the mandatory requirements laid down in the technical specifications of the contract
(C-561/12 at paras 33-39, emphasis added).
In my view, this is a problematic interpretation, as Article 30(2) Directive 2004/18 covers a range of cases and, at least in some of them, the interpretation provided by the CJEU nullifies Art 30(1) Directive. To be more specific, under Art 30(1)(a) Directive 2004/18, contracting authorities are allowed to resort to negotiated procedures "in the event of irregular tenders or the submission of tenders which are unacceptable [...] in response to an open or restricted procedure or a competitive dialogue insofar as the original terms of the contract are not substantially altered".
The interpretation provided by the CJEU would imply that the lack of compliance or the reason that made the tenders unacceptable could not have been of a technical nature (or, at least, could not affect a mandatory technical specification) because, in that case, even if the procedure would be formally available under Art 30(1)(a), the contracting authority could not engage in any meaningful negotiation oriented towards adapting the tenders to the requirements set in the (technical)  specifications--which is precisely the purpose of Art 30(2) dir 2004/18, or one of them at least. Moreover, risks of excessive deviation from the original conditions are controllable by the last caveat in Art 30(1)(a), where it is expressly required that the original (technical?) terms of the contract are not substantially altered.
The interpretation provided by the CJEU could work when Article 30(2) is triggered by other grounds for resorting to the negotiated procedure under Art 30(1), but not for Art 30(1)(a). In my view, this derives from an excessive reliance on the principle of non-discrimination and a too rigid understanding of the need and purpose for a negotiated procedure triggered by a fundamental flaw of the initial competitive procedure (be it due to a fundamental technical flaw, excessive requirements, or any other reasons).
In my view, the CJEU could have found two alternative routes to sort out the case. Well, possibly three.
The first one, by accepting the criticisms raised as to the inadequacy of Art 30(2) Dir 2004/18 to solve this specific case--which should have led it to declare the question inadmissible and leave it at that.
The second one, to consider that the case was actually concerned with an illicit acceptance of technical variants and, consequently, a breach of Art 24 Directive 2004/18--hence sending out the clear message that, in negotiated procedures, contracting authorities still need to indicate that variants are acceptable if they want to engage in technical dialogue [except in the case of art 30(1)(a) where the tenders are inadmissible or unacceptable on technical grounds].
There would be a potential third option, ie to set out a differential interpretation of Art 30(2) depending on the ground in Art 30(1) which triggers the availability of the negotiated procedure--something that we can only do speculatively now by stressing the factual conditions that surrounded the cases [although it is not explained why the contracting authority resorted to a negotiated procedure and why it was acceptable under art 30(1) dir 2004/18, which seems duboius in the circumstances].
As a conclusion, I think that the Nordecon Judgment would actually create a very significant problem if technical negotiations were completely excluded in all cases and under all circumstances in negotiated procedures--and, particularly, where negotiations are triggered by the technical unsuitability of all the tenders received. However, this is something that may be avoided under the new Directives if an uncritical reading of Art 30(2) as interpreted in Nordecon is not carried forward to future Art 27 of the new Directive on the (rebranded) competitive procedure with negotiation.

CJEU flexibilises treatment of formally non-compliant bids in public procurement (C-336/12)

In its Judgment of 10 October 2013 in case C-336/12 Manova, the Court of Justice of the EU (CJEU) has  followed its own approach in Slovensko and created some room for the flexible interpretation of the rules on formal compliance of bids submitted in public procurement procedures.
In Manova, the contracting authority had requested some of the tenderers to provide financial statements that had not been included in their bids after the deadline for their submission had ellapsed. Given that this decision was challenged on the grounds of a potential breach of the principle of equal treatment, the referring court decided to request a preliminary ruling from the CJEU, which was asked "whether the principle of equal treatment is to be interpreted as precluding a contracting authority from asking a candidate, after the deadline for applying to take part in a tendering procedure, to provide documents describing that candidate’s situation – such as a copy of its published balance sheet – which were called for in the contract notice, but were not included with that candidate’s application".
In rather clear terms (although some caveats may have been dispensed with, in my opinion), the CJEU ruled that:
the principle of equal treatment must be interpreted as not precluding a contracting authority from asking a candidate, after the deadline for applying to take part in a tendering procedure, to provide documents describing that candidate’s situation – such as a copy of its published balance sheet – which can be objectively shown to pre-date that deadline, so long as it was not expressly laid down in the contract documents that, unless such documents were provided, the application would be rejected. That request must not unduly favour or disadvantage the candidate or candidates to which it is addressed (C-336/12 at para 42).
In my view, the Manova Judgment must be welcome, both for its functional approach and for its alignment with domestic practices in a significant number of EU Member States--as discussed in Sánchez Graells, A, "Rejection of Abnormally Low and Non-Compliant Tenders in EU Public Procurement: A Comparative View on Selected Jurisdictions", in S Treumer and M Comba (eds), Award of Public Contracts under EU Procurement Law, vol. 5 European Procurement Law Series, (Copenhagen, DJØF, 2013) 267-302. This seems a good step in the direction of avoiding that overly strict formal requirements get in the way of actual good public procurement practices.

Rejection of Abnormally Low and Non-Compliant Tenders in EU Public Procurement: A Comparative View on Selected Jurisdictions

In this new paper, I attempt a concise comparison of the rules applicable to the rejection of abnormally low and non-compliant tenders in a number of EU jurisdictions (namely, Denmark, France, Germany, Italy, Poland, Romania, Spain and the United Kingdom). 

In order to set the common ground for the analysis of such domestic rules, which are solely applicable to non-negotiated procedures, the paper first offers a description of the rules in the EU public procurement Directives and the case law of the European Courts (ie GC and CJEU), and then proceeds to compare them against this benchmark and amongst themselves. Where possible, the paper highlights innovative or different solutions, as well as potential deviations from EU law.

  • Sánchez Graells, Albert, Rejection of Abnormally Low and Non-Compliant Tenders in EU Public Procurement: A Comparative View on Selected Jurisdictions (April 11, 2013). European Procurement Law Series, Vol 6 (forth). http://ssrn.com/abstract=224859