This article is an excerpt from The Art of Tendering: A Global Due Diligence Guide, which is available for purchase.
In its May 2018 decision in European Union Intellectual Property Office v. European Dynamics Luxembourg SA, the European Court of Justice found that a losing bidder was provided an inadequate debriefing. The dispute dealt with a tendering process for software development and maintenance services. The unsuccessful bidder requested a debriefing and then challenged that process, alleging that the purchasing institution failed to provide sufficient information about the evaluation criteria and sub-criteria to properly explain why it lost the bidding process. As the Court summarized, while the duties owed to losing bidders during a debriefing do not require the disclosure of all evaluation information or an explanation of how all of the scores were arrived at, they do require the purchasing institution to describe the relative merits of the winning bidder against the unsuccessful bidder so that the losing bidder understands why it did not win the contract:
Findings of the Court
It should first of all be borne in mind that, under the first subparagraph of Article 100(2) of the Financial Regulation, the contracting authority is to notify all candidates or tenderers whose applications or tenders are rejected of the grounds on which the decision was taken, and all tenderers whose tenders are admissible and who make a request in writing of the characteristics and relative advantages of the successful tender and the name of the tenderer to whom the contract is awarded.
However, it is apparent from the case-law of the Court that the contracting authority cannot be required to communicate to an unsuccessful tenderer, first, in addition to the reasons for rejecting its tender, a detailed summary of how each detail of its tender was taken into account when the tender was evaluated and, second, in the context of notification of the characteristics and relative advantages of the successful tender, a detailed comparative analysis of the successful tender and of the unsuccessful tender (judgment of 4 October 2012, Evropaïki Dynamiki v Commission,C-629/11 P, not published, EU:C:2012:617, paragraph 21 and the case-law cited).
Similarly, the contracting authority is not obliged to provide an unsuccessful tenderer, upon written request from that tenderer, with a full copy of the evaluation report (judgment of 4 October 2012, Evropaïki Dynamiki v Commission,C-629/11 P, not published, EU:C:2012:617, paragraph 22 and the case-law cited).
In addition, it should be borne in mind that, according to the settled case-law of the Court, the statement of reasons required under the second paragraph of Article 296 TFEU must be assessed in the light of the circumstances of each case, in particular the content of the measure in question and the nature of the reasons given (judgment of 4 October 2012, Evropaïki Dynamiki v Commission, C-629/11 P, not published, EU:C:2012:617, paragraph 23 and the case-law cited).
While the complainant was provided an evaluation summary report setting out the relative scores of the different bidders in comparative tables, it challenged the level of disclosure provided as being inadequate for explaining the difference between its bid and the winning bid based on applicable case law standards:
In the present case, it is common ground that, in three letters dated 11 August, 26 August and 15 September 2011 respectively, EUIPO provided European Dynamics Luxembourg and Others with an extract from the evaluation report comprising the qualitative evaluation of their tender, the names of the three successful tenderers, and three tables setting out the scores which those three successful tenderers and European Dynamics Luxembourg and Others had obtained, more specifically, a comparative table of the technical tenders, a comparative table of the tenders from the perspective of their economically advantageous nature, and a comparative table concerning the financial criteria.
As was noted by the Advocate General in point 39 of his Opinion, those tables enabled European Dynamics Luxembourg and Others to have an overall view of the points awarded to their tender and to those of the successful tenderers in relation to both the qualitative criteria and the financial criteria, and of their effect on the final overall score.
Nevertheless, European Dynamics Luxembourg and Others maintain that being provided with those documents did not enable them to assess EUIPO’s evaluation of their tender with the degree of precision required by the case-law of the Court.
The Court agreed with the complainant. In referring to applicable disclosure standards as recognized in applicable case law, the Court found that the purchasing institution failed to provide sufficient information regarding the evaluation sub-criteria that evaluators relied on in their scoring to properly explain to the complainant why it scored lower than the winning bidder. The Court therefore concluded that the lower court was correct in finding that the debriefing process in question was therefore flawed:
In that regard, it should be noted that the case-law cited in paragraphs 57 to 59 above does not, in principle, require a specific weighting to be attached to every negative or positive comment in the evaluation. That being said, in a situation where the procurement documents contain specific quantified weightings attached to criteria or sub-criteria, the principle of transparency requires a quantified evaluation to be given in respect of those criteria or sub-criteria.
In this connection, it is apparent from the procurement documents in question that, in the present case, the tender specifications provided for a weighting by which 65 out of 100 points were allocated to qualitative criterion 1, of which 10 points were allocated to each of the sub-criteria 1.1 to 1.5 and 15 points were allocated to sub-criterion 1.6, 20 points were allocated to qualitative criterion 2, and 15 points were allocated to qualitative criterion 3.
It is also common ground that, first, the evaluation committee had applied a mathematical formula or had awarded fractions of points in respect of sub-criteria or sub-points and that the evaluation report contained specific negative assessments in that regard which had given rise to specific deductions of points, and, second, EUIPO did not disclose the number of points, together with a breakdown by sub-criteria, obtained by European Dynamics Luxembourg and by the successful tenderers.
In those circumstances, as was noted by the Advocate General in point 42 of his Opinion, it was impossible for European Dynamics Luxembourg and Others or the General Court either to understand the respective weightings of those sub-criteria in the evaluation, that is to say, in the determination of the total score, or to establish a correlation between the specific negative comments and the deductions of points which had had an impact on that total score.
Accordingly, the General Court was fully entitled to find, in paragraph 254 of the judgment under appeal, that EUIPO had not entirely met the requirements concerning the obligation to state the reasons for the outcome of the evaluation of the tender submitted by European Dynamics Luxembourg.
The Court therefore rejected the government institution’s appeal and upheld the lower court ruling that found that the debriefing process was flawed due to a lack of sufficient details provided to the losing bidder.
As case law standards continue to evolve and clarify the applicable debriefing disclosure duties, public institutions are subject to increasingly high levels of transparency in relation to the evaluation and award decisions.
