What level of transparency for award/call-off decisions within framework agreements?

During several recent conversations with participants at the Global Revolution conference, and particularly with my colleague Dr Marta Andrecka and some members of the European Institutions, I have been asked repeatedly about my views on the level of transparency that should apply to award/call-off decisions within framework agreements. 

There is no doubt that full transparency is mandated regarding the conclusion of the framework agreement itself and, subject to my general concerns about excessive transparency (here), I agree that this is the existing legal situation. However, there is significant uncertainty and an ongoing practical debate regarding the level of 'intra-framework' transparency that the EU rules require (as well as the applicability of rules on award criteria to those decisions, but that is a topic for another day).

There is no rule that expressly covers this issue from the perspective of the individual rights of information of contractors/tenderers either under Article 55 of Directive 2014/24 or reg.55 of the Public Contracts Regulations 2015 (PCR2015), which only make reference to transparency/debriefing obligations related to the conclusion (or not) of the framework agreement itself, but not the subsequent awards/call-offs within the framework. This creates uncertainty as to the applicability of these (or analogous) rights to be informed in relation to intra-framework awards/call-offs [for in-depth discussion, see S Arrowsmith, The Law of Public and Utilities Procurement. Regulation in the EU and UK, 3rd edn., vol. 1 (London, Sweet & Maxwell, 2014) 1153 and ff, esp 1156-57, and 1347].

More generally, when it comes to transparency of the awards/call-offs within framework agreements, the general transparency rules are clearly limited in Art 50 Dir 2014/24, according to which "[i]n the case of framework agreements... contracting authorities shall not be bound to send a notice of the results of the procurement procedure for each contract based on that agreement. Member States may provide that contracting authorities shall group notices of the results of the procurement procedure for contracts based on the framework agreement on a quarterly basis. In that case, contracting authorities shall send the grouped notices within 30 days of the end of each quarter." 

As I criticised in relation to reg.50 PCR2015 [see here], the drafting of this clause may make it susceptible of being interpreted as fully discretionary for Member States, which could opt  (like the UK) for not imposing any sort of transparency obligation (quarterly, or otherwise) connected to the results of the procurement procedure for contracts based on the framework agreement. I argued that such an approach could be an infringement of EU law and, more specifically, the requirements of the principle of transparency in Art 18(1) Dir 2014/24.

To my surprise (I should have known, though), the uncertainty seems to be much more limited when it comes to the draft new procurement rules for the European Institutions under the foreseen 2016 Financial Regulation (proposal available here), which Art 113 [equivalent to Art 55 Dir 2014/24] expressly excludes almost all 'intra-framework' transparency when it comes to award/call-off decisions. According to that provision,

2. The contracting authority shall notify all candidates or tenderers whose requests to participate or tenders are rejected of the grounds on which the decision was taken, as well as the duration of the standstill period referred to in Article 118(2). For the award of specific contracts under a framework contract with reopening of competition, the contracting authority shall inform the tenderers of the result of the evaluation.

3. The contracting authority shall inform each tenderer who is not in a situation of exclusion, whose tender is compliant with the procurement documents and who makes a request in writing of any of the following: (a) the characteristics and relative advantages of the successful tender and the name of the tenderer to whom the contract is awarded, except in the case of a specific contract under a framework contract with reopening of competition; (emphasis added).

This comes to determine that there is no transparency obligation whatsoever for award/call-off decisions that do not follow a 'mini-competition' and, in even in the case of such reopening of competition, the transparency obligation is limited to the evaluation (likely of their own tender), but does not seem to cover other aspects of the award/call-off decision. 

The European Court of Auditors criticised this situation in its January 2015 Opinion on the draft revised Financial Regulation (available here) in the following terms: "The proposed wording of Article 113(2)(2) and (3)(a) would not require the contracting authority, in the case of specific contracts awarded under a framework contract with reopening of competition, to notify the contractors whose tenders have been rejected of the reasons for their rejection, the relative advantages of the successful tender and the name of the tenderer to whom the contract is awarded. This exception to the rules governing transparency and the obligation to state reasons cannot be justified" (para 37, emphasis added).

In my view, this is an indication that my previous assessment regarding the lack of compatibility with EU law of the total lack of transparency of intra-framework awards is not shared by the European Commission (unless that Institution is looking to impose stricter standards to Member States' procurement than to its own and that of the rest of European Institutions). It could also be that DG BUDGET has a more process-oriented (buyer) approach to procurement regulation than DG GROWTH, which would explain the difference in willingness to (self)impose transparency obligations. However, be it as it may, I still think that this is not a desirable regulatory option and I would like to see the proposal for a new Financial Regulation amended on this point.

I would not favour full transparency of intra-framework award decisions. However, I accept that contractors included in a framework agreement (and third parties) should be given information regarding the evolution of the intra-framework, at least of a 'historical' and overall nature, so that they can have a rough idea of how the implementation of the contract is being carried out. 

Moreover, there is no clear reason why frameworks would require being less transparent than dynamic purchasing systems (which are, in the end, open frameworks), particularly because the contracting authority is in a good position to identify any instances of intra-framework collusion in which the contractors could engage on the basis of the periodical reports they may get. 

Consequently, I would favour the creation of a system of delayed and grouped (quarterly) reporting of the intra-framework award/call-off decisions, along the lines of what Art 50(3) Dir 2014/24 and reg.50(5) PCR2015 establish for dynamic purchasing systems.

GC uses principle of equality of treatment as "fix-for-all", despite flagrant procedural irregularities (T-48/12)

In its Judgment in Euroscript - Polska v Parliament, T-48/12, EU:T:2014:680, the General Court addressed an interesting point on the application of the principle of equal treatment when the public buyer decides to reassess the offers received and, as a consequence of the reassessment, adjudicates the contract to a tenderer other than the one initially granted the highest score.

In the case at hand, a contract for translation services into Polish had been tendered by several EU Institutions under the lead of the Parliament. The first evaluation of the offers produced a shortlist were Euroscript Polska was ranked first and Agencja MAart second.

The Parliament proposed to award the contract to Euroscript, subject to its furnishing of sufficient proof of not being affected by any applicable exclusion ground. The decision was communicated to all tenderers and a 14-day period for the request of further particulars on this decision, including their own evaluation reports and the relative advantages of the selected offer, started.

 

Almost a month after the expiry of the 14-day deadline, and without having requested the suspension of the procedure, MAart requested that the Parliament reassessed its offer. The Parliament did so and granted sufficient additional points to MAart as to make its offer top the shortlist. The Parliament communicated this reassessment to all tenderers, including Euroscript, and proceeded to sign the contract with MAart.Euroscript's challenge was based on two grounds, and the GC decides only on the basis of the general principles of transparency and equal treatment. There are two aspects of the Judgment that deserve comments.

Firstly, the GC is willing to assess the case on its grounds despite the obvious procedural fault derived from the Parliament having accepted MAart's request for a reassessment outside the applicable 14-day period. The GC reaches that position on the basis of Art 103 of the applicable Financial Regulation, which would have allowed the Parliament to suspend the contract if there was evidence that the award procedure had been vitiated by substantial errors or irregularities or by fraud (para 58).

 

In my view, there was no evidence of a substantial error in the initial assessment (the reassessment merely granted MAart 3.58/100 extra points, which does not seem substantial), and the generosity of the GC is troubling, given that it may result in a permanent reopening of the assessment phase of the tenders for contracts with the EU Institutions--which the GC expressly argues against in para 55, with reference to the CJEU Judgment in Strabag, C-314/09, EU:C:2010:567, para 37. Hence, a more detailed assessment of fumus boni iuris at this point would have been desirable and, arguably, should have killed the case.

 

Secondly, on top of finding an infringement of the principle of transparency derived from the lack of communication to tenderers that a second evaluation was being carried out (para 60), the GC considers that the principle of equal treatment was breached because the reassessment only covered MAart's offer, but not Euroscript's or any other tenderers' (para 61). Here, again, the GC seems to be too generous by hinting at the fact that a reassessment of all offers would have sufficed to uphold the principle of equal treatment.

 

In my view, if the reassessment was due to a sense that there may have been 'substantial errors or irregularities', a mere reevaluation would not have sufficed and the Parliament would have needed to carry out a more detailed investigation and to offer all tenderers (and particularly Euroscript) the possibility to present their views on MAart's allegations. Conversely, if the reassessment was merely due to the fact that MAart had complained (despite being time-barred), the fact that all offers would have been reevaluated should have made no difference whatsoever and the procedural irregularity should have tainted the whole of the second award.

 

Generally, I think that reliance on the principle of equal treatment is excessive and that its use as a panacea in procurement review creates significant shortcomings in the case law. Hence, where there are good technical reasons to quash an award, I would like to see the courts refraining from ellaboration on equality terms, so that such a 'tool' can be used where discrimination is at the core of improper procurement decisions. Otherwise, we will keep on cracking nuts with a sledgehammer, which may end up breaking it...