Rejecting an abnormally low tender
A recent case in the General Court of the European Union highlights the importance of giving full reasons when a tender is rejected for being abnormally low, writes Edward Reynolds.
In Computer Resources International (Luxembourg) SA v European Commission [2014] EUECJ T-422/11, the Court found that the decision to reject a tender on this basis was justified and sufficient reasons were provided. The claim therefore failed.
The background
The Publications Office of the European Union (PO) published an Official Journal of the European Union (OJEU) contract notice in April 2011 for tenders to establish framework agreements for software development and maintenance services. These were divided into four lots and the two lots concerned related to (1) support and specialised administrative applications and (2) production and reception chains.
Computer Resources International (Luxembourg) SA and Intrasoft International SA (the Consortium) submitted tenders for two lots. The PO asked the Consortium to explain how it had reached its price per man-day, indicating that the tendered price could be considered abnormally low in accordance with Article 139 of Commission Regulation (EC, Euratom) No 2342/2002 (Article 139).
The PO subsequently rejected the Consortium's tenders for being abnormally low. The Consortium brought a claim for annulment of the decision.
The decision
1. Alleged infringement of an essential procedural requirement
The Consortium claimed that the PO had failed to provide any reasoning relating to the specific grounds it took into account when it concluded that the tenders were abnormally low. The Court rejected this argument and held that the PO had provided reasons "…to the requisite legal standard…" (paragraph 41).
2. Alleged infringement of applicable procedure
The Consortium claimed that the PO had failed to comply with the correct legal procedure for verifying that the tender was abnormally low, and also disputed the conclusion that they were abnormally low. The Court also rejected this argument.
3. Alleged misuse of power or incorrect legal basis
Finally, the Consortium claimed that the PO's decision was not based in Article 139, and was therefore founded on an incorrect legal basis. In addition, it alleged that the PO misused its power in assessing the tenders. The Court rejected both arguments, and held that the Consortium had provided no evidence to show either that the PO had misused Article 139, nor that its decision was founded on an incorrect legal basis.
The lessons
Decisions to reject tenders for being abnormally low are always likely to be controversial. However, there will be cases when an authority is genuinely concerned about accepting a bid that does not seem economically viable.
This case does therefore provide authorities with some comfort provided they set out as clearly as possible the underlying reasons, demonstrating why a tender is believed to be abnormally low. This in itself should dissuade bidders from challenging, but if not, then it will help defend a claim.
Edward Reynolds is an Associate at Veale Wasbrough Vizards. He can be contacted on 0117 314 5322 or This email address is being protected from spambots. You need JavaScript enabled to view it..
