Article(s) in Directive 2014/24/EU: Article 18(1) (general principles) and 42 
Topic: administrative discretion; tender requirements; technical specifications 
Member State: PT 
Court/rev. board: Supreme Administrative Court (SAC) 

1. IMPLEMENTATION / RELEVANT NATIONAL LEGISLATION

Articles 42, 49, 70(2) of the PPCC

2. FACTS

In an open procedure with notice published in the OJEU, related to a services contract for the “Provision of Distributed Data Network and Secondary Data Center” with a price limit above 7 million euros, one of the bidders claimed that one of the other offers should be excluded from the tender, since it did not offer evidence of complying with one of the tender requirements. The requirement in question was that the bidder should provide evidence – namely, photographic evidence – that the building where the datacenter was to be hosted had physical barriers that could be effective in protecting the building against a hypothetical terrorist attack performed using a vehicle. The contracting authority had considered that the barriers included in the contested offer were sufficient, but an aggrieved bidder challenged this in court. 

3. JUDGMENT

The courts deciding in first and second instance both considered that, in fact, the contracting authority had made a “manifest error in judgment” in qualifying as enough the physical barriers present, and therefore, considered that the offer should be excluded. However, the Supreme Administrative Court overturned these decisions, and considered that the instances had both invaded the margin of administrative discretion which the tender documents had left the contracting authority. The SAC pointed out that the tender documents chose not to require from the bidders any specific requirement that could, for example, be objectively certified by a third party, and, in the Court’s opinion, this meant that “the decision on the adequacy of the offers to the foreseen requirement is an administrative evaluation (discretionary) decision, and as such, subject to strict functional limitations regarding its control by a court”.

Commentary: This case offers yet another example of the relevance of background administrative law notions and concepts in influencing the way in which public procurement cases are solved. In this case, the Court resorted to the concept of administrative discretion, a margin of decision-making autonomy attributed to administrative authorities, which cannot be replaced by the opinion of courts, since courts can only rule on matters of legality, and not on matters of convenience or opportunity of administrative action [as Portuguese law explicitly foresees in article 3(1) of the Code of Procedure before Administrative Courts, approved by Law n.º 15/2002, of 22nd February]. 

According to the case-law of the European Court of Justice (clearly so since the ruling in case C-448/01, EVN and Wienstrom) demands that contracting authorities should always ask for enough information that allows them to actually assess if the qualities advertised by the bidders in their bids are true. This was not at stake here, since the contracting authority did ask for some kind of evidence in the offers. This case relates to the margin of appreciation that contracting authorities have in determining whether or not a tender requirement is complied with. In theory, the contracting authority could have required the bidders to present some kind of certification, by a third party, that the building had enough safety safeguards to stop a terrorist attack using a vehicle; EU and national law provide for the possibility to ask for labels or certifications (articles 43 and 44 of Directive 2014/24, transposed by article 49.º-A of the PCC), but this is only a possibility, not an obligation. In this case, the contracting authority asked for information, but wanted to assess the information directly, and concluded that the requirement was met. The first and second instances found that there had been a “manifest error of appreciation” by the contracting authority (which is one of the few ways to challenge a decision in which there is margin of discretion), but the SAC adopted a stronger “judicial deference” in favor of the contracting authority, and took the view that the assessment made was not clearly mistaken, and therefore upheld the contracting authority’s decision (while reversing the decision of the second instance court). 

What is interesting about the case is that, in the end, it seems that national legal traditions and elements of administrative culture and general administrative law are still very much relevant in public procurement procedures. In particular, the issue of discretion seems to justify the research that has been conducted recently on these matters [see, specifically on the topic, S. Bogojevic, X. Groussot & J. Hettne (eds.), Discretion in EU Public Procurement Law, Hart Publishing, 2019).

Link to the decision.