In our recent article, Equal Treatment and Fairness in Procurement, we reviewed two recent UK cases which consider the principle of the equal treatment of tenderers. In short, this principle requires that all tenders comply with the tender conditions so as to ensure an objective comparison of the tenders submitted by the various tenderers.

This concept recently came before the European Courts in the case of EMM G Lianakis AE and Others v Municipality of Alexandroupolis (Case C-532/06).

This was a case about Article 36(2) of Council Directive (EEC) 92/50 which provides that:

"Where the contract is to be awarded to the economically most advantageous tender, the contracting authority shall state in the contract documents or in the tender notice the award criteria which it intends to apply, where possible in descending order of importance".

Here, the Town Council had invited tenders for a town planning project. It had set out the award criteria in the contract notice and had listed these criteria in a specific order of priority. The list was (i) proven experience on projects carried out over the last three years (ii) manpower and equipment and finally (iii) the ability to complete the project by the anticipated deadline.

Thirteen consultancies responded. However, during the evaluation procedure, the committee in charge of the appointment set weightings of 60%, 20% and 20% for each of the three award criteria. It also set up certain sub-criteria, for example stipulating that experience should be evaluated by reference to the value of completed projects.

As the stipulation of the weighting factors and sub-criteria were only made at a date after the submission of the tenders, certain tenderers brought proceedings against the Town Council. The Greek Court referred the case to the European Court asking whether Article 36(2) precluded a contracting authority from acting in this way, i.e. stipulating at a later date the weighting factors and sub-criteria to be applied to the award criteria referred to in the contract documents or notice.

The European Court noted that the purpose of the legislation is to ensure that there is no discrimination between different service providers. Where a contract is to be awarded to the economically most advantageous tender, a contracting authority must state in the contract documents the award criteria which it intends to apply. Potential tenderers must be in a position to ascertain the existence and scope of the criteria elements when preparing their tenders. Therefore, a contracting authority cannot apply weighting rules or sub-criteria which it has not previously brought to the tenderers attention.

Tenderers must be placed on an equal-footing throughout the procedure which means that the criteria and conditions governing each contract must be adequately publicised by the contracting authorities. Here, the projects award committee referred only to the award criteria and it was only later after submission of the tenders that it introduced the stipulation of the weighting factors. Accordingly, this did not comply with the article requirements.

In other words, the European Court was making clear that compliance with the legislation requires the equal treatment of tenderers. The evaluation process must be transparent and objective. That had not happened here.

As to the consequences of any such beach? Well, where a public authority does not adhere to applicable public procurement law (colloquially the "OJEU Procedure") when tendering for work then it is susceptible to a claim by an aggrieved tenderer.  The whole thrust of the public procurement law is to ensure that those tendering are able to compete on an equal basis and that public contracts are awarded fairly.  It is perhaps less well known that in addition to the OJEU Procedure, there is common law authority to the effect that public authorities engaged in tendering processes may in fact create collateral contracts with the tendering parties. The nature of those contracts is likely to be that if the public authority in question has stated that it will evaluate tenders in accordance with a given procedure, then that public authority is obliged to the tendering parties to do just that.

This article is based on an extract from a forthcoming issue of the Fenwick Elliott Dispatch, a monthly newsletter which summarises recent key developments relating to contentious and non-contentious construction law issues. To see the current issue please visit www.fenwickelliott.co.uk.

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