The European Court of Justice establishes a new criterion that limits administrative appeals against negotiated procedures without prior publication
Published on 27th Mar 2024
The General Court of the European Union, through its judgment dated February 21, 2024, has established a groundbreaking doctrine according to which the decision to use the negotiated procedure without prior publication of a tender notice is considered a preparatory act
The General Court of the European Union (GC) recently issued a ruling in case T-38/21, which is of significant importance for the realm of public procurement. This ruling introduces an innovative framework concerning negotiated procedures without prior publication. In the referenced case, Inivos Ltd and Inivos BV chose to file an appeal in response to the European Commission's decision to award a contract through a negotiated procedure without prior publication of a contract notice. This decision of the European Commission was motivated by a situation of urgent need arising from unforeseen events for the contracting authority. A specific number of economic operators were invited to participate in the procedure, among which the appealing companies were not included.
In this case, the two companies, one Dutch and the other one British, challenged the European Commission's decision to use a negotiated procedure without prior publication to purchase hospital disinfection robots for member states during the COVID-19 pandemic. The appealing companies also manufacture a specific type of these robots. Furthermore, the appellants sought the annulment of the award decision and the formalisation of two framework contracts, as well as compensation.
According to the award procedure, the European Commission launched the process with a preliminary market consultation which was not made public, but consisted of sending a survey to associations of hospital robot manufacturers that the Commission considered to be reliable. Following the market consultation, a list of suppliers was compiled and ultimately six suppliers were invited to participate in the negotiated procedure without prior publication, based on the urgency of the procedure. In the end, three companies submitted bids and framework contracts were awarded to two of them.
The relevance of the judgment under analysis lies in the considerations it makes regarding the negotiated procedure without prior publication of a tender notice and its challenges through administrative proceedings. The GC points out that the decision to use the negotiated procedure without prior publication of a tender notice does not constitute a decision affecting the appellants' interests, given that they were not excluded from the award procedure by such decision. It is the European Commission's award decision, by which the contract was finally awarded, which had the effect of definitively excluding the appellants from the award procedure in question.
Moreover, the Court highlights that the decision not to invite the applicants to tender, and not the award procedure followed, which causes damage to the applicants and thus, once provided that they have been aware of it, they can file an appeal against the last available act excluding them from the procedure. On the basis of the aforementioned argumentation, the General Court states that: "the decision to use the negotiated procedure without prior publication of a contract notice is preparatory in nature".
In conclusion it is determined that the decision to use the negotiated procedure without prior publication is not subject to appeal since it does not constitute a decision affecting the applicants' interests, given that they were not excluded from the award procedure by such decision, but by the award decision. Regardless, the award resolution of a negotiated procedure without prior publication is indeed an act subject to appeal, as it affects the legal status of the applicants in so far as it results in their definitive exclusion from the procedure.
Osborne Clarke comment
This ruling could represent a change at national level compared to the criterion previously adopted by the administrative courts for contract appeals, which had been accepting the filing of appeals against tender specifications in negotiated procedures without prior publication.
In this sense, the Administrative Court of Contractual Appeals of the Andalusian Regional Government in a case in which the tender specifications of a negotiated procedure without prior publication were challenged by an appellant who had not been able to access the tender. The court concluded that, in accordance with the current article 48 of the Public Sector Contracts Law, it must recognise the legitimacy to file an appeal against the specifications of a negotiated procedure without publication, given that "the reasons argued by the appellant demonstrate that the filed specifications prevent their chances to tender. It is therefore established their legitimacy to appeal is proven, despite not having participated in the tendering procedure, since it is precisely the basis of the tendering procedure which have caused the harm which they seeks to remedy by filling the appeal and by the issuing of a possible resolution upholding their claims'.
In the same sense, and particularly relevant, is the decision by the Administrative Body for Contractual Appeals of the Basque Country in the appeal EB 2019/42 in which it is stated that, in the case of a special appeal in matters of contracting filed against the specifications of a negotiated contract without prior publication, the appellant was deemed legitimate to file the appeal given that "the legitimacy to file the special appeal is characterised by the fact that its hypothetical approval would satisfy a tangible interest of the appellant, different from the mere compliance with the law in this case, the approval of the challenge would imply the cancellation of an award procedure in which it cannot submit a bid and, very likely, the processing of another procedure open to its participation. It is therefore considered that the requirement of active legitimacy for the filing of the appeals are met". According to the new criterion indicated by the European Court of Justice, it would no longer be possible to appeal against the publication of the specifications in a negotiated procedure without prior publication, since it would be considered a procedural act that could not be appealed, and therefore, as indicated, we are awaiting a possible change in the criterion followed until now by the administrative courts for contractual appeals.
Should you wish to know more about this new GC ruling and its possible implications, please do not hesitate to contact one of our experts listed below or your usual contact at Osborne Clarke.
