Renewal of ongoing procurement: what can be done with the already existing contractor and who benefits from this?
By a judgement of 28 June 2018, the General Court of the European Union sheds an important light on the conditions for determining if contracting authorities should proceed with neutralising the benefits of the existing contractor.
An appeal has been submitted to the Court by an excluded tenderer, an existing contractor, when the procurement process was completed. One of the matters referred to the Court was whether, by providing for a tiered pricing budget for rework tasks depending on whether the tenderer was already existing, the contracting authority had breached the principle of equal treatment of tenderers.
The Court rejects the argument of the excluded tenderer. After having recalled that the tenderer, also an existing contractor, profited from an “inherent de facto benefit”, the Court rules that the contracting authority should preserve, as much as possible, the principle of equal treatment of tenderers. Thus, it rules that the contracting authority should neutralise any possible benefits of the existing contractor only insofar as (cumulative conditions):
- This neutralisation is technically easy to carry out;
- It is economically acceptable; and
- It does not breach the rights of said contractor.
The scope of this ruling concerns all contracting authorities. In cases of new public procurement in which the existing contractor is likely to participate, contracting authorities would be well advised to formalise, in the specifications, a neutralisation of the benefits from which the existing contractor may profit, if the abovementioned triple condition is fulfilled. In any event, the review of said conditions should be conducted on a case-by-case basis.
Photo: Sonny Abesamis - CC by 2.0