This article is an excerpt from The Art of Tendering: A Global Due Diligence Guide, which is available for purchase.
In its October 2015 decision in Orizzonte Salute v. Città di Levico Terme, the European Court of Justice upheld a bid protest fee that was challenged in an Italian bid dispute. The case dealt with a bid protest over a tendering process for nursing services. The complainant was required to pay a EUR 2000 fee to bring the protest, which was higher than the standard fee of EUR 650 required in other legal proceedings in Italy. The complainant challenged the validity of the higher bid protest fees. The challenge was referred by the Italian national court to the European Court of Justice, where the issue was framed as follows:
Thus, according to the referring court, the national legislation at issue in the main proceedings limits the right to bring legal proceedings, restricts the effectiveness of judicial review, discriminates against operators with weak financial capacity as opposed to operators with significant financial capacity and treats them unfavourably by comparison with operators who, within the context of their activities, bring actions before the civil and commercial courts. The referring court takes the view that the cost borne by the State for the operation of administrative justice so far as concerns public procurement is not significantly different, separate or higher than the cost of proceedings linked to other types of disputes.
The European Court of Justice ruled that the bid protest filing fees were proportionate, since they were indexed to the value of the contract under challenge in the specific bid protest and therefore were unlikely to serve as a barrier to bringing bid protests:
As regards the principle of effectiveness, it should be recalled that the court fee regime at issue in the main proceedings includes three fixed amounts of standard fee amounting to EUR 2 000, EUR 4 000 and EUR 6 000 for the three categories of public contracts, namely those with a value equal to or less than EUR 200 000, those with a value between EUR 200 000 and EUR 1 000 000, and those with a value exceeding EUR 1 000 000.
It is apparent from the file placed before the Court that the system of fixed amounts of standard fee is proportional to the value of the public contracts falling within those three different categories and is, as a whole, degressive in nature.
In fact, the standard fee to be paid, expressed as a percentage of the ‘limit’ values of the three categories of public contracts, varies from 1.0% to 1.036% of the value of the contract if it is between EUR 193 000 and EUR 200 000, from 0.4% to 2.0% if that value is between EUR 200 000 and EUR 1 000 000, and corresponds to 0.6% of the value of the contract or less if that value exceeds EUR 1 000 000.
The court fees to be paid for bringing an action in administrative proceedings relating to public procurement, which do not exceed 2% of the value of the contract concerned, are not liable to render practically impossible or excessively difficult the exercise of rights conferred by EU public procurement law.
The European Court of Justice concluded that the Italian bid protest fee structure did not breach the European procurement rules because “such a system does not give rise to discrimination between operators practising in the same sector of activity”. The European Court of Justice also concluded that the court fees in question did not adversely impact the principles of equivalence and effectiveness under the European procurement Directive.
As this case illustrates, public institutions should carefully consider how they establish the costs associated with bringing bid protests since those costs can be legally disputed as creating unfair barriers to challenge.
