This article is an excerpt from the 2021 edition of The Art of Tendering: A Global Due Diligence Guide, which is available for purchase.
In its December 2013 decision in European Dynamics Luxembourg SA v. European Commission, the European Court of Justice nullified a contract award after finding that the purchasing institution failed to provide an adequate debriefing to a losing bidder. The dispute dealt with a tendering process for an eighteen-month contract valued at EUR 2,400,000 for technology support services for developing IT infrastructure and eGovernment services in Albania. A losing bidder claimed that the purchasing institution failed to meet its debriefing duties since it refused to provide a detailed breakdown of each sub-criterion listed in the evaluation grid or provide the reasons for the scores given to the winning bidder and to its bid:
The applicants essentially claim that the Commission failed to disclose to them, first, the scores obtained by the technical bid of the successful tenderer under each sub-criterion listed in the evaluation grid (see paragraph 13 above) and the reasons for those scores, and, second, the reasons for the scores awarded to their own technical bid under the nine sub-criteria of the second evaluation criterion headed ‘key experts’. According to the applicants, the Commission therefore infringed its obligation to notify an unsuccessful tenderer, who so requests in writing, of the characteristics and advantages of the selected tender and, consequently, infringed its obligation to provide reasons for the contested decision.
In considering the claim, the Court summarized the governing principles that apply to debriefings under European law, which recognize that the purchasing institution is under a duty to provide reasons in support of its contract award decisions and must therefore provide sufficient information to losing bidders so that those bidders understand why they did not win the tendered contract:
For the award of public service contracts, the obligation to state reasons is given concrete expression in Article 100(2) of the Financial Regulation and Article 149 of the Implementing Regulation, from which it is apparent that a contracting authority meets its obligation to state reasons if it, first of all, merely informs the unsuccessful tenderers immediately of the rejection of their tender and, subsequently, notifies tenderers who expressly so request of the characteristics and relative advantages of the successful tender and of the name of the tenderer to whom the contract is awarded, within 15 days from receipt of a request in writing (judgment of 17 October 2012 in Case T-447/10 Evropaïki Dynamiki v Court of Justice [2012] ECR, paragraph 71).
This manner of proceeding satisfies the purpose of the obligation to state reasons laid down in Article 296 TFEU, whereby the reasoning followed by the authority which adopted the measure must be disclosed in a clear and unequivocal fashion so as, on the one hand, to enable the persons concerned to ascertain the reasons for the measure and thereby enable them to assert their rights and, on the other, to enable the Court to exercise its power of review (judgment of 14 July 1995 in Case T-166/94 Koyo Seiko v Council [1995] ECR II-2129, paragraph 103, and Evropaïki Dynamiki v Commission, paragraph 49 above, paragraph 134).
It should also be borne in mind that the requirements to be satisfied by the statement of reasons depend on the circumstances of each case, in particular the content of the measure, the nature of the reasons given and the interest which the addressees of the measure, or other parties to whom it is of direct and individual concern, may have in obtaining explanations (see judgment of 2 April 1998 in Case C-367/95 P Commission v Sytraval and Brink’s France [1998] ECR I-1719, paragraph 63 and the case law cited).
As the Court summarized, in response to the losing bidder’s debriefing request, the European Commission provided the bidder with two separate letters, the first of which summarized the losing bidder’s final scores by evaluation category and compared those final scores to the winning bidder’s final scores. The second letter provided a summary of the top scores and average scores by category. Neither scoring summary chart provided any reasons behind how the evaluators arrived at the scores. The supporting commentary that was provided was sparse and specific only to the losing bidder’s submission, and it lacked any comparative explanations as to why the winning bid was better in those areas. When the losing bidder subsequently asked for more details, including the evaluation summary report and information about the winning bid, the European Union stated confidentiality reasons as the basis for denying that request. The Court concluded that this failed to meet proper debriefing standards:
In that letter, the Commission drew the applicants’ attention to the fact that the service contracts were awarded within the framework of a closed procedure based on criteria drawn up in accordance with the principle of the most economically advantageous tender and that those criteria covered both the technical quality of the tender and its financial dimension. The Commission also pointed out that the overall score awarded to the applicants’ tender was very high, but it was not the most economically advantageous tender of those technically admissible. In addition, the Commission told the applicants that it was not in a position to provide them with the information they had requested in their letter of 10 February 2012 concerning the successful tender, as such information was confidential and for official use only.
The Commission also disclosed the comments corresponding to the evaluation committee’s assessment of the applicants’ technical bid.
As regards, first, the ‘organisation and methodology’ criterion, the Court finds that the Commission provided the assessment of the applicants’ tender for each sub-criterion. Thus, first of all, for the sub-criterion headed ‘reasoned analysis of the implementation of the contract’, the Commission stated that the assessment was ‘poor overall appraisal of key problems, risk analysis and mitigation not well
defined’. Next, the Commission stated that the assessment of the ‘strategy’ sub-criterion was ‘well detailed list of activities and very good list of support experts. Very competitive service level agreement’. Lastly, according to the Commission, the assessment for the ‘schedule of activities’ sub-criterion was simply ‘good overall schedule of activities’.
As regards, second, the ‘key expert’ criterion, the Commission stated that the assessment of the applicants’ tender was ‘the experience, education and linguistic skills of your team leader, of the expert in electronic documents and electronic record keeping and the portal expert were evaluated as follows: “good general profile”’.
Clearly, the statement of reasons contained in the letter of 21 February 2012 does not meet the requirements of Article 100(2) of the Financial Regulation.
While the Court acknowledged that a purchasing institution was not necessarily required to disclose its full evaluation report in a debriefing, the information disclosed must be sufficiently precise to enable the losing bidder to understand why the contracting authority rejected its offer and accepted that of the winning bidder. The Court determined that the summary scoring tables did not, in themselves, constitute an adequate statement of reasons since the losing bidder was unable to assess its scores against the winning bidder and those tables did not explain why the scores were given:
Admittedly, Article 100(2) of the Financial Regulation does not necessarily require the contracting authority to make the evaluation report available to the unsuccessful tenderer or to undertake a detailed comparative analysis of the successful tender and of the unsuccessful tender. Article 100(2) of the Financial Regulation does not preclude as a matter of principle a contracting authority from performing its obligation to state reasons by means of succinct comments on the successful and the rejected tender (Evropaïki Dynamiki v Court of Justice, paragraph 62 above, paragraph 95). That is why the applicants cannot complain that the Commission did not send them the entire evaluation report in reply to their request submitted under the Financial Regulation (see, as regards the assessment carried out under the first plea in law, paragraphs 39 to 52 above).
However, in order to meet the requirements of Article 100(2) of the Financial Regulation, the contracting authority’s comments must be sufficiently precise to enable the applicants to ascertain the matters of fact and law on the basis of which the contracting authority rejected their offer and accepted that of another tenderer (Evropaïki Dynamiki v Court of Justice, paragraph 62 above, paragraph 96).
In the present case, the Commission’s comments did not enable the applicants to ascertain those matters.
First, those comments only concerned the applicants’ tender and not the successful tender. Second, they were not even of such a kind as to enable the applicants to understand the scores awarded to their tender. Thus, as regards the ‘key experts’ criterion, the only comment provided by the Commission in the assessment of the applicants’ tender in relation to the three key experts — that is ‘good general profile’ — is vague and does not reflect the disparity in the scores awarded to each of the applicants’ experts. It should be observed that whilst the applicants’ tender obtained a score of 10.50 points out of a possible 14 for the ‘team leader’, it was awarded 7.58 points out of a possible 8 for the ‘expert in electronic documents and electronic record keeping’ and 6.92 points out of a possible 8 for the ‘portal expert’. Such a comment does not therefore enable the applicants to understand the scores awarded to their tender for the ‘key experts’ criterion.
Likewise, as regards the ‘organisation and methodology’ criterion, the comment ‘well detailed list of activities and very good list of support experts. Very competitive service level agreement’ in relation to the ‘strategy’ sub-criterion seems to be very positive. However, the comment ‘good overall schedule of activities’ in relation to the ‘schedule of activities’ sub-criterion merely indicates a vague positive assessment. Such comments do not enable the applicants to understand why their tender only obtained 32.33 points out of a possible 40 for the ‘strategy’ sub-criterion when it obtained 19.33 points out of a possible 20 for the ‘schedule of activities’ sub-criterion.
Furthermore, the comment ‘poor overall appraisal of key problems, risk analysis and mitigation not well defined’ in relation to the sub-criterion headed ‘reasoned analysis of the implementation of the contract’ is vague. In particular, it does not enable the applicants to understand why the Commission considered the description of the ‘key problems’ in their tender to be poor. Nor does it enable the applicants to understand in what respect the ‘risk analysis’ and ‘mitigation’ were not well defined in their tender.
Consequently, it must be concluded that the Commission’s comments did not constitute an adequate statement of reasons, even if read in conjunction with the scores set out in the table.
The letter of 21 February 2012 did not therefore include the information enabling it to constitute an adequate statement of reasons for the decision rejecting the applicants’ tender.
It follows from the foregoing that the Commission did not provide an adequate statement of reasons for the contested decision.
The Court therefore concluded that the European Commission infringed its obligation to state reasons in support of its contract award decision, as required by applicable procurement regulations. Based on this breach, the Court ruled that the contract award should be annulled. As this case illustrates, in many jurisdictions, the failure to provide adequate debriefings can result in a breach of the procurement rules and can give rise to significant legal consequences including the annulment of a contract award. Purchasing institutions should therefore ensure that their debriefing practices meet applicable transparency standards so that losing bidders understand the reasons why they did not win the contract award.
