Notice of intent

There is often pressure to rush to issue OJEU notices quickly, whether to meet political or timetable pressures. But a decision on 22 April 2010 from the European Court of Justice (ECJ) is a timely reminder of how important it is that a notice is carefully drafted and well considered so that it covers the full scope of the purchases to ensure the required transparency and equality of treatment of bidders, write Ruth Connorton and David Hansom

In Case C-423/07 - Commission v Kingdom of Spain, the ECJ held that Spain had breached the applicable Directive in its award of a concession contract for the construction of various motorway works because the award included additional works which were not envisaged in the OJEU notice or tender documents. The case related to the old Public Works Directive but the findings are equally applicable to the 2006 consolidated procurement directive.

Background

Spanish authorities published an OJEU notice using the works concession route for the construction, exploitation and maintenance of various motorways. One month after the notice was issued, the authorities issued a further OJEU notice which effectively replaced the original. The new notice changed the duration of the concession and the scope of the works to be delivered by the contractor.

The concession contract was awarded to the contractor who was the incumbent operator for part of the motorway network. It later came to light that the winning bid, and the contract, included a series of additional works which were not mentioned in the second OJEU notice or tender documents.

The European Commission’s view was that the award of the concession infringed Directive 93/37 as it included works that were not included in the original advertised OJEU notice or tender documents.

Judgment and comment

The ECJ’s clear view was that the additional works (which were in their own right over the financial threshold) were not set out in the description of the object of the concession in either of the second OJEU notice or the second tender document and that this was a breach of the relevant Directive.

The ECJ said it is essential in every case that the terms of the notice published in the OJEU are clearly formed and include all likely required works. This is to ensure transparency and equality of treatment in the procurement process to allow an objective opportunity for all potential tenderers to prepare their bids. The OJEU notice must allow potential tenderers to be able to form a concrete idea of the works to be carried out and of their location so that they can make their own decision about whether to bid.

Spain raised several arguments in its defence and which were all rejected by the ECJ. Spain claimed that it should have been understandable from the tender documents that the authority expected tenderers to submit proposals for additional works to resolve the problem of the density of traffic flow. The ECJ was clear that national legal requirements cannot allow the contracting authority to escape advertising obligations, and so OJEU notices or specifications cannot be subject to interpretation under national law. Spain also argued that the additional works could be awarded without a new advertisement on the basis that they were, at the time the contract was let, “genuinely unforeseen” additional works. The ECJ did not accept this, as the works were included in the first OJEU notice so could not be said to be genuinely unforeseen.

In its judgment, the ECJ said that if it were permissible to interpret an OJEU notice or tender documents in this way, then tenderers would have been able to put forward a tender for unlimited works in order to meet the needs of Spanish general transport policy, but not linked to any stated object of the contract. This is a clear reminder that every procurement must have a clear objective and cover a specific need.

There is some helpful guidance in the case that it is possible for a contracting authority to require tenderers to use innovation and their own initiative in compiling their tenders. Contracting authorities can provide further detail e.g as to specifications in the tender documentation because this naturally follows from the OJEU notice. Not all of the answers need to be given to the tenderers, but the scope of the contract must be clear.

Ruth Connorton is a partner and Head of Procurement at Eversheds

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David Hansom is an associate at Eversheds

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