Case T‑402/06

Kingdom of Spain

v

European Commission

(Cohesion Fund — Regulation (EC) No 1164/94 — Environmental infrastructure projects implemented in Catalonia (Spain) — Partial cancellation of financial assistance — Public works and service contracts — Criteria for award of the contracts — Most economically advantageous tender — Equal treatment — Transparency — Abnormally low tender — Eligibility of expenditure — Determination of financial corrections — Article H(2) of Annex II to Regulation No 1164/94 — Proportionality)

Summary — Judgment of the General Court (First Chamber), 16 September 2013

1.      Approximation of laws — Public procurement procedures — Principle of equal treatment of tenderers — Transparency obligation — Scope

(Council Directives 92/50, Arts 3(2), 27(4), and 37, and 93/37, Arts 22(4), 30(4), fourth para., and 31(1))

2.      Approximation of laws — Public procurement procedures — Award of contracts —Most economically advantageous tender — Award criteria — Observance of the principle of equal treatment of tenderers and of the principle of transparency — Contracting authority subsequently specifying in more detail an award criterion for the contract previously brought to tenderers’ attention — Conditions — Application of the average price method — Not permissible

(Council Directives 92/50, Art. 36(2), and 93/37, Art. 30(2))

3.      Approximation of laws — Public procurement procedures — Award of contracts — Most economically advantageous tender — Concept

(Council Directives 92/50, Art. 36(1)(a), and 93/37, Art. 30(1)(b))

4.      Approximation of laws — Procedures for the award of public works contracts — Directive 93/37 — Award of contracts — Abnormally low tenders — Automatic disqualification — Not permissible — Duty to implement an inter partes procedure for examining tenders

(Council Directive 93/37, Art. 30(4))

5.      Approximation of laws — Public procurement procedures — Award of contracts — Criteria for qualitative selection of candidates taken into account as award criteria — Not permissible

(Council Directives 92/50, Arts 31, 32 and 36(1), and 93/37, Arts 26, 27 and 30(1))

6.      Court of Justice — Judgments — Interpretation of the rules of law — Application to legal relationships arising and established before delivery of the decision

7.      Economic, social and territorial cohesion — Structural assistance — EU financing — Reduction of financial assistance on account of irregularities — Compliance with principles of proportionality and conformity — Calculation of the amount of the reduction — Account taken of savings obtained in contravention of EU rules — Not permissible

(Art. 5 EC; Council Regulation No 1164/94, Art. 8(1), and Annex II, Art. H(2); Commission Regulation No 1386/2002, Art. 17(1) and (2))

8.      Acts of the institutions — Rules of administrative conduct of general scope — Measure designed to produce external effects — Institution adopting the measure imposing a limit on the exercise of its own discretion — Duty to comply with the principles of equal treatment, protection of legitimate expectations and legal certainty and with higher rules of EU law

9.      Approximation of laws — Procedures for the award of public service contracts — Directive 92/50 — Awarding authorities — Body governed by public law — Definition — Functional interpretation

(Council Directive 92/50, Art. 1(b))

1.      See the text of the decision.

(see paras 65-67)

2.      The contracting authorities are subject to an obligation of transparency which is essentially intended to preclude any risk of favouritism or arbitrariness on the part of the contracting authority. In particular, where the award of a contract depends on the determination of the most economically advantageous tender within the meaning of Article 30(2) of the Directive 93/37, concerning the coordination of procedures for the award of public works contracts, or Article 36(2) of the Directive 92/50, relating to the coordination of procedures for the award of public service contracts, the contracting authority must define and specify in the tender specifications the applicable award criteria. Those provisions thus seek to ensure compliance with the principles of equal treatment and transparency at the stage of evaluation of tenders with a view to award of the contract.

Furthermore, whilst case-law has not recognised a total or absolute ban on contracting authorities’ specifying in more detail, after expiry of the time-limit for submitting tenders, an award criterion for the contract previously brought to the tenderers’ attention, such a subsequent determination is nevertheless possible only if three cumulative conditions are strictly respected. First, that subsequent determination must not alter the criteria for the award of the contract set out in the contract documents or contract notice; second, it must not contain elements which, if they had been known at the time the tenders were prepared, could have affected that preparation; and, third, it must not be adopted on the basis of matters likely to give rise to discrimination against one of the tenderers.

The application of the average price method assumes the need for a subsequent determination of an essential, or even decisive, element for the decision on the award of the contracts, namely the average price against which all tenders are to be compared after they have been received by the contracting authority. Consequently, if they do not know that average price when submitting their tenders, tenderers are deprived of an element which, if they had known it previously, could have affected that preparation within the meaning of the second condition above.

(see paras 71-73)

3.      Whilst Article 36(1)(a), of Directive 92/50, relating to the coordination of procedures for the award of public service contracts, and similarly Article 30(1)(b) of Directive 93/37, concerning the coordination of procedures for the award of public works contracts, leaves it to the contracting authority to choose the criteria on which it proposes to base the award of the contract, that choice may relate only to criteria aimed at identifying the economically most advantageous tender. The tender offering the best value for money can be defined as the one with the best price-quality ratio, taking into account criteria justified by the subject-matter of the contract. Accordingly, where the contracting authorities choose to award the contract to the most economically advantageous tender, they must assess the tenders in order to determine the one which offers the best value for money.

Thus, whilst the economically most advantageous tender is not always the one with the lowest price, the fact remains that, where all tenders are perfectly equal as regards all the other relevant criteria, including technical criteria, a less expensive tender must be regarded, from an economic point of view, as being more advantageous than a more expensive tender.

(see paras 76, 77)

4.      Article 30(4) of Directive 93/37, concerning the coordination of procedures for the award of public works contracts, necessarily presupposes the application of an inter partes procedure for examining tenders regarded by the contracting authority as abnormally low, placing the latter under an obligation, after it has inspected all the tenders and before awarding the contract, first to ask in writing for details of the elements in the tender suspected of anomaly which gave rise to doubts on its part in the particular case and then to assess that tender in the light of the explanations provided by the tenderer concerned in response to that request. It is essential that each tenderer suspected of submitting an abnormally low tender should have the opportunity effectively to state his point of view in that respect, giving him the opportunity to supply all explanations as to the various elements of his tender at a time — necessarily after the opening of all the envelopes — when he is aware not only of the anomaly threshold applicable to the contract in question and of the fact that his tender has appeared abnormally low, but also of the precise points which have raised questions on the part of the contracting authority.

The above interpretation is the only one which complies with both the wording and the purpose of Article 30(4) of that directive. It is apparent from the very wording of that provision, drafted in imperative terms, that the contracting authority is under a duty, first, to identify suspect tenders, secondly to allow the undertakings concerned to demonstrate their genuineness by asking them to provide the details which it considers appropriate, thirdly to assess the merits of the explanations provided by the persons concerned, and, fourthly, to take a decision as to whether to admit or reject those tenders. It is therefore not possible to regard the requirements inherent in the inter partes nature of the procedure for examining abnormally low tenders, within the meaning of Article 30(4) of Directive 93/37, as having been complied with unless all the steps thus described have been successively accomplished. Furthermore, the existence of a proper exchange of views, at an appropriate time in the procedure for examining tenders, between the contracting authority and the tenderer constitutes a fundamental requirement of the Directive, in order to prevent the contracting authority from acting in an arbitrary manner and to ensure healthy competition between undertakings.

(see paras 90, 91)

5.      See the text of the decision.

(see paras 100-103)

6.      The interpretation which the Court of Justice gives of a provision of EU law is limited to clarifying and defining the meaning and scope of that provision as it ought to have been understood and applied from the time of its entry into force. It follows that the provision as thus interpreted may, and must, be applied even to legal relationships which arose and were established before the judgment in question and it is only exceptionally that, in application of a general principle of legal certainty which is inherent in the Union legal order, the Court may decide to restrict the right to rely upon a provision, which it has interpreted, with a view to calling in question legal relationships established in good faith.

(see para. 104)

7.      In the light of the principle of proportionality, the infringement of obligations observance of which is of fundamental importance to the proper functioning of a Community system may be penalised by forfeiture of a right conferred by EU legislation, such as entitlement to financial assistance. It is not possible to take into consideration, in the calculation of financial corrections, such purported savings obtained in contravention of the relevant EU public procurement rules. A Member State whose authorities have set up an unlawful tendering system cannot rely on such an unlawful practice in support of its position.

In that regard, the purpose of financial corrections is to restore a situation where 100% of the expenditure declared for co-financing from the Fund is in line with the applicable national and Community rules and regulations. In accordance with the principle of conformity, as enshrined in Article 8(1) of Regulation No 1164/94, establishing a Cohesion Fund, only expenditure made in keeping with the relevant rules is to be borne by the Union’s budget. Consequently, once it discovers the existence of an infringement of Community provisions in payments effected by a Member State, the Commission is required to correct the accounts presented by that Member State.

(see paras 119, 124, 125)

8.      By adopting rules of administrative conduct designed to produce external effects, and announcing by publishing them that it will henceforth apply them to the cases to which they relate, the institution in question imposes a limit on the exercise of its own discretion and cannot depart from those rules, if it is not to be found, in some circumstances, to be in breach of general principles of law, such as the principles of equal treatment, legal certainty or the protection of legitimate expectations. It cannot therefore be precluded that, on certain conditions and depending on their content, such rules of conduct of general application may produce legal effects and that, in particular, the administration may not depart from them in an individual case without giving reasons that are compatible with the general principles of law such as equal treatment or the protection of legitimate expectations, provided that such an approach is not contrary to other superior rules of EU law.

(see para. 130)

9.      See the text of the decision.

(see para. 155)