Justifications for apparently abnormally low tenders need to be in sync with original tender (T-422/11)

In its Judgment in Computer Resources International (Luxembourg) v Commission, T-422/11, EU:T:2014:927, the General Court (GC) has clarified (although limited if any doubt could be bharboured) that the reasons provided by tenderers to justify the viability of their apparently abnormally low tenders need to be compatible with the terms of their initial tender.

 

In the case at hand, the apparent abnormality of the offer derived from the low manpower costs offered in relation to the provision of IT services in Luxembourg. Upon request of the contracting authority, the participating consortium tried to justify the low cost included in the tender on the basis that the services would (actually) be provided as a mix of presential support in Luxembourg and remote support from Romania. The contracting authority rejected this explanation as inadmissible and rejected the offer for being abnormally low. The GC has confirmed this decision (paras 53-55 and 82 and ff).

 

Maybe more interestingly, the GC also rejected an argument based on a sort of estoppel, whereby the participating consortium challenged the abnormally low consideration of costs that had, however, been accepted by the same contracting authority in a different procurement exercise. As a general point, the GC determined that the contracting authority

correctly took the view that a comparison of the prices proposed in the applicant’s tenders with the prices proposed within the context of other tendering procedures was irrelevant. Contrary to the applicant’s claim that no precedent is irrelevant when it is in the ‘same market’, the content of a tender must be examined in the light of the call for tenders to which it responds (T-422/11, para 69, emphasis added).

In my view, this is the only criticisable point in the Judgment (and an unnecessary one, given the lack of support for the applicant's arguments) and should be limited to the obiter dictum character it has in the specific circumstances of the case. Indeed, looking at the prices the contracting authority has accepted in contemporaneous and comparable procurement exercises would be relevant to the assessment of abnormality--not so much in order to create a (constructive) estoppel, but as an economic benchmark.

Other than that, the Judgment of the GC in Computer Resources International is an interesting summary and case study of the specific obligations imposed on contracting authorities that suspect that an offer (or some of its components) is abnormally low. This should serve as guidance in the interpretation and enforcement of article 69 of Directive 2014/24.

CJEU on limitation period to claim damages due to tender rejection (C-469/11)

In its Judgment of 8 November 2012 in case C-469/11 Evropaiki Dynamiki v Commission, the CJEU has clearly settled the rules controlling limitation periods applicable to claims for damages resulting from the (illegal) rejection of tender offers. 

The Judgment of the CJEU is straightforward:

39 In the present case, the claim for compensation made by Evropaïki Dynamiki is based on the rejection of the tender which it submitted in a Commission tendering procedure.

40 In such a situation, as the General Court correctly ruled in the order under appeal, without Evropaïki Dynamiki having challenged that finding, the decision of the contracting authority to reject the tender submitted constitutes the loss-causing event capable of giving rise to non-contractual liability on the part of that authority. The adverse effects of such a decision affect the tenderer concerned once its tender has been rejected. Thus, knowledge of such a decision by the tenderer must, in principle, be regarded as constituting the starting point of the limitation period, not knowledge of the grounds therefor (C-469/11 at paras 39 and 40, emphasis added).

The decision reached by the CJEU seems sensible at face value. However, once the specific circumstances of the case are taken into consideration, the strict limitation imposed by the CJEU may seem disproportionate. In view of the CJEU:

42 [...] it is also not relevant that the [rejection] decision of 15 September 2004 was annulled on 10 September 2008 by the Judgment of the General Court in Case T‑465/04 Evropaïki Dynamiki v Commission on the ground of deficient reasoning. It is in fact immaterial, as regards the starting point of the period of limitation, whether the European Union’s unlawful conduct has been established by a judicial decision (Judgment in Case C‑282/05 P Holcim (Deutschland) v Commission, paragraph 31).

43 In any event, Evropaïki Dynamiki has not argued that it did not have a reasonable time in which to submit its application before the expiry of the limitation period by reason of the fact that the latter began to run from the time at which it became aware of the Commission’s decision rejecting its tender, or even because of the insufficient reasoning of that decision (C-469/11 at paras 42 and 43,emphasis added).

In my view, while the illegality of the rejection has not been declared, it is impractical to think that the aggrieved tenderer can sue for damages with any chance of succeeding before that key point of law is settled. Therefore, the decision of the CJEU seems rather harsh, since the actual possibility to claim for damages did not accrue until after the rejection decision had been declared illegal. Bearing that in mind, the reasoning that the would be claimant has not argued that it did not have a reasonable time in which to submit its application before the expiry of the limitation period does not hold water (precisely, the action against the dismissal of his claim due to the expiry of the limitation period seems to be based on nothing but that argument).

In my opinion, then, we would need to set a two-step limitation period for claims for damages due to the illegal rejection of tenders, which impose a maximum period of (say) 5 years always provided that the claimant has at least (say) 1 year to file a claim from the moment the rejection decision is declared illegal by a resolution having the force of res iudicata. Otherwise, many damages claims can be preempted exclusively as a result of lengthy appeals procedures, which does not seem desirable (nor fair).