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by Maximilian Voll

Competition between tenderers is the salient principle of EU public procurement law. A competitive procedure for the award of public contracts requires each tenderer to act separately and to submit independent offers. For this purpose, a tenderer must not have knowledge about the content of any other offer by a competing tenderer in the same procurement procedure. Self-evidently, anticompetitive agreements between tenderers are prohibited. 

If two or more affiliated companies submit tenders in the same procurement procedure, it is questionable whether these tenderers act in compliance with the principle of competition or in a coordinated way. In this context, the Supreme Court of Lithuania referred a number of questions to the European Court of Justice (ECJ) for a preliminary ruling (case C-531/16) which can be summarized briefly as follows:

1. Is there a legal duty for related tenderers which submit separate tenders in a procedure for the award of public contracts to disclose that relationship to the contracting authority and, if so, what are the consequences of failure to do so?
2. What are the duties of the contracting authority in case affiliated companies submit separate tenders in a public procurement procedure?

Opinion of the Advocate General

On 11/22/2017 Advocate General Campos Sánchez-Bordona delivered his opinion. The Advocate General points out that neither the relevant European public procurement directive nor the applicable national law explicitly constitutes a duty for tenderers to disclose an affiliation if they participate in the same public procurement procedure (recital 45). Such duty to disclose does, furthermore, not follow from the fact that links between tenderers are generally liable to jeopardise the transparency of procurement procedures and distort competition, because, the procedural requirements for the award of a public contract are to be clearly defined in advance and made public (recital 46-52). Additionally, the prohibition to submit alternative or variant tenders stipulated by the tender specifications does neither constitute a duty to disclose the relationship between affiliated tenderers (recital 53-62).

Regarding the duties of the contracting authority, the Advocate General refers to the case-law of the ECJ and concludes that where the contracting authority is aware that related tenderers are participating in the procedure, it should normally make certain that the tenders submitted by those tenderers are separate (recital 66-77). The contracting authority will therefore be obliged to request the information from related tenderers it considers necessary if, in the light of the evidence available in the procedure, it harbours doubts concerning the risk that the simultaneous participation of those tenderers will undermine transparency and distort competition (recital 78-86).

Comment

The opinion delivered by Advocate General Campos Sánchez-Bordona deserves approval. Without an explicit legal obligation, related tenderers in a procedure for the award of public contracts cannot be required to disclose their relationship, if this is not expressly requested by the contracting authority on a case-by-case basis. The responsibility to safeguard competition within a public procurement procedure is with the contracting authority. However, the ECJ will have the final say in this matter.