Procurement Update

Thursday 1st October 2009

Emm G Lianakis AE and Other v Dimos Alexandroupolis and Others Case C-532/06 (Lianakis) - Judgment relating to the use of selection and award criteria under the EC Treaty public procurement rules.

Facts

In 2004 the Municipal Council of Alexandroupolis issued a call for tenders for a number of town planning projects. The contract notice referred to a list of award criteria provided in order of priority but with no details of weightings. During the evaluation procedure the authority defined the weighting factors and sub-criteria in respect of the award criteria referred to in the contract notice. Additionally the authority set a methodology for awarding points for the assessment of the first criteria.

Two unsuccessful bidders challenged the award of the contract claiming the winning consortia had only been awarded the contract on the basis of the weighting factors and sub-criteria subsequently applied by the authority.

The question of whether a contracting authority can at a later date (during its evaluation) apply weightings to the award criteria was referred to the European Court of Justice ("ECJ").

Judgment

The ECJ ruled that a contracting authority is not able to stipulate weightings and/or sub-criteria of award criteria provided in a contract notice at a later date. The ECJ held that the principle of equal treatment involves an obligation of transparency, and as such potential tenderers should be told all the elements which will be taken into account by a contracting authority in identifying the economically most advantageous offer (and their relative importance) when they are preparing their bids.

Whilst not asked directly to rule on the point, the ECJ also felt compelled to clarify that a contracting authority cannot take into account the tenderers' experience, manpower and equipment, or their ability to perform the contract by the anticipated deadline as "award criteria". These factors should be taken into account only in relation to the suitability of tenderers to be selected to tender and not when determining the contract award.

Implications

Following the ECJ's ruling it is essential for contracting authorities to disclose the weightings of any sub-criteria in the contract notice or contract documents. The practice of notifying tenderers of the core criteria to be applied and then developing a more detailed evaluation methodology for internal use is not an option. The principle of transparency requires full disclosure at the contract notice stage of all the issues which will determine the evaluation of tenders.

Additionally this case has introduced a strict distinction between selection and award criteria. In light of this it is important that contracting authorities ensure they do not take account of matters such as the tenderer's experience, capacity and capability at the award stage in order to avoid potential risks of legal challenge.

Ashfords LLP is regulated by the Solicitors Regulation Authority. The information in this note is intended to be general information about English law only and not comprehensive. It is not to be relied on as legal advice nor as an alternative to taking professional advice relating to specific circumstances.