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 2009 decision in Antwerpse Bouwwerken NV v. European Commission, the European Court of Justice upheld the decision to revoke a contract award after a re-evaluation process was triggered by a complaint filed during the statutory standstill period. The dispute dealt with a tender call for the construction of a reference material production hall for the European Commission’s Institute for Reference Materials and Measurements in Geel, Belgium. After the European Commission announced its contract award decision, it received a protest from a losing bidder and conducted a re-evaluation, which resulted in revoking the initial contract award and awarding the contract to the protesting bidder. The original awardee brought a legal challenge against the rescission of its contract award.
As the Court summarized, the re-evaluation was triggered by the discovery that the government evaluators had mistakenly concluded that certain price information was missing from some of the other bids when that information was actually contained within those bids. This re-evaluation resulted in the award to a lower bid that was originally mistakenly rejected:
During the standstill period provided for in Article 158a of the [Implementing] Regulation, the other tenderers pointed out that the missing prices were in fact to be found in their tenders. As a consequence, the standstill period was suspended so that an additional examination could be carried out. It emerged from that examination that the prices, initially missing, were in fact stated and that those undertakings had therefore submitted compliant tenders. Accordingly, it was necessary to re-examine all the tenders. Given that one of those undertakings had submitted the cheapest tender, it has been selected as the successful tenderer in this procurement procedure.’
The original awardee sought the annulment of the re-evaluation decision so that the original award decision could be restored. The European Commission argued that even if the new award was struck down, the complainant was not eligible for the award since under the re-evaluation the complainant was now ranked third and the award should go to the new second-best bid. The Court disagreed, ruling that if the re-evaluation process was found to be flawed then all the revised rankings were invalid, and the complainant could still be entitled to an award under the original evaluation.
However, turning to the merits of the re-evaluation decision, the Court determined that procurement rules not only recognized the right, but imposed a duty, to seek pricing clarifications for clerical errors or other matters that could be quickly clarified. However, the Court cautioned that clarification procedures did not give a purchasing authority an unfettered discretion to allow bidders to make material changes to their original bids:
That is the position, inter alia, where a tender has been drafted in ambiguous terms and the circumstances of the case, of which the Commission is aware, suggest that the ambiguity probably has a simple explanation and is capable of being easily resolved. In principle, it would be contrary to the requirements of sound administration for the Commission to reject the tender in such circumstances without exercising its power to seek clarification. It would be contrary to the principle of equal treatment to accept that, in such circumstances, the Commission enjoys an unfettered discretion (see, to that effect, Case T-211/02 Tideland Signal v Commission [2002] ECR II-3781).
In addition, the principle of proportionality requires that measures adopted by the institutions do not exceed the limits of what is appropriate and necessary in order to attain the objectives legitimately pursued, it being understood that, where there is a choice between several appropriate measures, recourse must be had to the least onerous and that the disadvantages caused must not be disproportionate to the aims pursued (Case C-157/96 National Farmers’ Union and Others [1998] ECR I-2211, paragraph 60). That principle requires that, when the contracting authority is faced with an ambiguous tender and a request for clarification of the terms of the tender would be capable of ensuring legal certainty in the same way as the immediate rejection of that tender, the contracting authority must seek clarification from the tenderer concerned rather than opt purely and simply to reject the tender (see, to that effect, Tideland Signal v Commission).
However, it is also essential, in the interests of legal certainty, that the Commission be able to ascertain precisely what a tender submitted in the course of a procurement procedure means and, in particular, to determine whether the tender complies with the conditions set out in the contract documents. Thus, where a tender is ambiguous and the Commission is not in a position to establish, quickly and efficiently, what it actually means, that institution has no choice but to reject the tender (Tideland Signal v Commission).
Lastly, it is ultimately for the Court to determine whether a tenderer’s replies to requests from the contracting authority for clarification can be regarded as explanations of the terms of the tender or whether those replies go beyond clarification and modify the substantive terms of the tender in relation to the conditions laid down in the contract documents (see to that effect, Esedra v Commission).
In the present case, it must first be determined whether, in a situation where a tenderer has omitted to quote, in the cost estimation summary accompanying its tender, the price for a particular item, the condition laid down in point 25 of the administrative annex to the contract documents must be interpreted as meaning that rejection of the tender is mandatory, as the applicant essentially submits, or whether, as the Commission submits, the tender cannot be rejected where there is a simple explanation for the clerical omission in question and the missing price can be deduced, easily and with certainty, from the price bid for another item in that summary.
The Court then determined that the clarification process was correctly used to seek a clarification on a clerical error and confirm that the intended pricing for the category that was left blank in the pricing form was the same pricing quoted for similar work in another category:
In the present case, the Commission acted consistently with the principle of equal treatment of tenderers, since it did not request clarification only from Company C; rather, it requested clarification from all those whose tenders contained, in particular, the same error as that submitted by Company C, that is to say, which omitted to quote prices for certain items in the cost estimation summary accompanying their tenders. The applicant was not asked to provide such clarification because it was unnecessary, since there was no price missing from the cost estimation summary accompanying its tender. Nevertheless, as is apparent from the evaluation report of 23 April 2008, the fact remains that the Evaluation Committee also made certain corrections to the applicant’s tender, which led to a slight reduction in the overall price bid.
The Court therefore upheld the decision to seek clarifications and re-evaluate the bids. It also upheld the resulting decision to rescind the original contract award and award the contract to a different bidder after the re-evaluation resulted in a change to the original rankings.
As this case illustrates, re-evaluation decisions, particularly those that result in a change to an original contract award decision, can be controversial and can result in legal challenges. Purchasing authorities must be careful to follow due process in such circumstances and tread a very fine line between permissible clarifications and improper post-bid resubmissions that materially change the original bids. In complex procurements, purchasing institutions would be well-served to allow for multi-staged submissions that permit the confidential submission of initial pricing and then allow for rectification stages where any initial pricing omissions can be cured in final pricing submissions. However, to ensure their defensibility, those procedures need to be transparently incorporated into the procedural rules of the specific tendering process.
