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 March 2015 decision in eVigilo Ltd v. Priešgaisrinės apsaugos ir gelbėjimo departamentas prie Vidaus reikalų ministerijos, the European Court of Justice determined that in order to challenge the validity of an evaluation process, bidders did not have to prove actual bias on the part of an evaluator but only had to provide objective evidence that called into question the impartiality of the evaluator in question. The dispute dealt with a tendering process conducted by the Lithuanian Department of Fire and Rescue for the provision of public mobile telephone connection services. One of the bidders raised concerns over a potential conflict of interest after discovering a significant prior relationship between a competing bidder and one of the government’s expert evaluators. The issue turned on whether the bidder had to prove actual bias in order to successfully challenge the process. The Court ruled that it was up to the purchasing institution to screen its evaluators for conflict of interest. Bidders were not required to prove actual bias on the part of those evaluators, but only needed to provide objective evidence that called into question the impartiality of an evaluator. This put the onus on the purchasing institution to assess the situation to determine whether it gave rise to a potential bias on the part of the evaluators:
Since that duty relates to the very essence of the public procurement directives (see judgment in Michaniki, C-213/07, EU:C:2008:731, paragraph 45), it follows that the contracting authority is, at all events, required to determine whether any conflicts of interests exist and to take appropriate measures in order to prevent and detect conflicts of interests and remedy them. It would be incompatible with that active role for the applicant to bear the burden of proving, in the context of the appeal proceedings, that the experts appointed by the contracting authority were in fact biased. Such an outcome would also be contrary to the principle of effectiveness and the requirement of an effective remedy laid down in the third subparagraph of Article 1(1) of Directive 89/665, in light, in particular, of the fact that a tenderer is not, in general, in a position to have access to information and evidence allowing him to prove such bias.
Thus, if the unsuccessful tenderer presents objective evidence calling into question the impartiality of one of the contracting authority’s experts, it is for that contracting authority to examine all the relevant circumstances having led to the adoption of the decision relating to the award of the contract in order to prevent and detect conflicts of interests and remedy them, including, where appropriate, requesting the parties to provide certain information and evidence.
The Court ruled that the fact that the government’s expert evaluator and an individual working for a competing bidder had previously worked together in the same university, belonged to the same research group at the university, and had a prior employer and employee relationship constituted sufficient objective evidence to call into question the impartiality of the evaluator. These facts justified further investigation by the purchasing authority or by the adjudicative bodies that regulate the government tendering process:
Evidence such as the claims in the main proceedings relating to the connections between the experts appointed by the contracting authority and the specialists of the undertakings awarded the contract, in particular, the fact that those persons work together in the same university, belong to the same research group or have relationships of employer and employee within that university, if proved to be true, constitutes such objective evidence as must lead to a thorough examination by the contracting authority or, as the case may be, by the administrative or judicial control authorities.
Subject to compliance with the obligations under EU law, and specifically with those referred to in paragraph 43 above, the concept of ‘bias’ and the criteria for it are to be defined by national law. The same applies to the rules relating to the legal effects of possible bias. Thus, it is for national law to determine whether, and if so to what extent, the competent administrative and judicial authorities must take into account the fact that possible bias on the part of the experts had no effect on the decision to award the contract.
As the Court concluded, the onus lies with the purchasing institution to take appropriate measures to detect and prevent conflicts and to take appropriate steps to remedy those conflicts when they are discovered. Furthermore, it is up to specific jurisdictions and their courts to determine the remedies that would apply when purchasing institutions fail to properly manage those conflicts:
In the light of the foregoing considerations, the answer to question 1(a) and (b) is that the third subparagraph of Article 1(1) of Directive 89/665 and Articles 2, 44(1) and 53(1)(a) of Directive 2004/18 must be interpreted as not precluding a finding that the evaluation of the tenders is unlawful on the sole ground that the tenderer has had significant connections with experts appointed by the contracting authority who evaluated the tenders. The contracting authority is, at all events, required to determine the existence of possible conflicts of interests and to take appropriate measures in order to prevent and detect conflicts of interests and remedy them. In the context of the examination of an action for annulment of an award decision on the ground that the experts were biased, the unsuccessful tenderer may not be required to provide tangible proof of the experts’ bias. It is, in principle, a matter of national law to determine whether, and if so to what extent, the competent administrative and judicial control authorities must take account of the fact that possible bias on the part of experts had an effect on the decision to award the contract.
As this case study illustrates, purchasing institutions are under a duty to avoid any conflicts that could undermine the impartiality of their evaluators and compromise the integrity of their contract award decisions.
