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 November 2014 decision in Cartiera dell’Adda SpA v. CEM Ambiente SpA, the European Court of Justice upheld the right to reject a non-compliant bid. The dispute dealt with an Italian tendering process for a municipal waste management contract. A losing bidder challenged the purchasing institution’s decision to reject its bid as non-compliant for failing to submit a timely declaration form confirming that its lead director was not engaged in criminal activity or subject to criminal prosecution.
As the Court noted, purchasing institutions are under a duty to ensure that their bid evaluation rules are clearly drafted to allow all bidders an equal opportunity to properly respond to bid submission requirements and enable the transparent assessment of those bids:
First, the principle of equal treatment requires tenderers to be afforded equality of opportunity when formulating their bids, which therefore implies that the bids of all tenderers must be subject to the same conditions. Second, the obligation of transparency is intended to preclude any risk of favouritism or arbitrariness on the part of the contracting authority. It implies that all the conditions and detailed rules of the award procedure must be drawn up in a clear, precise and unequivocal manner in the contract notice or specifications so that, first, all reasonably informed tenderers exercising ordinary care can understand their exact significance and interpret them in the same way and, second, the contracting authority is able to ascertain whether the bids submitted satisfy the criteria applying to the contract in question (see, to that effect, judgment in Commission v CAS Succhi di frutta, C-496/99 P, EU:C:2004:236, paragraphs 108 to 111).
While the rejected bidder maintained that it should have been able to rectify the non-compliance after the bid deadline, the Court determined that the process rules did not allow bidders to rectify non-compliance after the bid submission deadline where the rules of the specific tendering process required disqualification for such non-compliance. As this case illustrates, given the duty to reject non-compliant bids, purchasing institutions should be careful to avoid drafting strict tendering rules that require the disqualification of bids that contain easily correctible irregularities. Rather than tying compliance to the bid submission deadline in a manner that prohibits subsequent rectifications, protocols relating to the submission of forms should be drafted in a manner that permits the rectification of irregularities by tying the deadline for compliance to a later stage in the bidding process. This would allow the purchasing institution to review all required forms for compliance and allow all bidders a cure period to rectify submission irregularities before they become grounds for a non-compliance disqualification.
