Distinguishing unwise decision-making from lacking capacity
Dec 12 2023
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On 14 July 2016 the Court of Justice handed down judgment in response to a request for a preliminary ruling from the Belgian Council of State on the thorny question of whether a contracting authority is obliged to make known in advance the method of evaluation used to assess tenderers' bids in a public procurement.
In its judgment in TNS Dimarso v Vlaams Gewest (Case C-6/15) the Court of Justice did not go as far as they were urged to by Advocate General Mengozzi in his Opinion, delivered on 10 March 2016, and the judgment lacks the clarity of that Opinion, and leaves some important and difficult questions unresolved.
The facts of the case
The procurement in question was for a services contract involving a large-scale survey of housing and housing consumers in Flanders. The procurement documents stated that tenders would be assessed 50/50 on quality and price but contained no information about the methodology that would be adopted in that assessment. In relation to quality, each bid was given a rating: high, satisfactory, or low. Then the price criterion was applied. On that basis, a final ranking was established. Four bids were submitted. Three, including Dimarso's, were rated "high" for quality. Of those three, Dimarso's was the most expensive. The contract was awarded to the bidder that submitted the lowest-priced of those high-rated bids.
Disclosure of evaluation methodology
Dimarso's argument was that the "high-satisfactory-low" method of quality evaluation was so vague that in reality it was the assessment of price alone that was decisive. Given that three of the four bids were rated "high" for quality, it is clear that the winner was selected from those three based on price alone. Dimarso also argued that the contracting authority should have disclosed to bidders the methodology that was to be applied to the assessment of quality and that, had it done so, bidders would have realised that price would be the decisive factor, and that would inevitably have had an effect on the preparation of tenders.
The Court's judgment
In this case the award criteria had been weighted equally, there was no indication in the procurement documents as to the weighting of sub-criteria, and the methodology for assessing quality was highly generic and did not allow for precise distinctions to be drawn between the quality of bids. Advocate General Mengozzi concluded that in such a case there is a significantly greater risk that the method of evaluation would have been capable of affecting the preparation of tenders had it been known to bidders in advance, and therefore should have been disclosed.
Noting the rules that apply to the disclosure of sub-criteria and their weightings, the Advocate General urged upon the Court the conclusion that:
A contracting authority is not obliged to disclose to bidders the evaluation method to be adopted provided that such a method:
This conclusion would have created some welcome consistency by bringing the rules on disclosure of evaluation methodologies into line with those developed by the Court in relation to sub-criteria and their weightings.
The Court found that the methodology adopted in this case was capable of affecting the award criteria and their weightings (by giving price decisive weight) but did not expressly consider whether disclosure could have affected the preparation of tenders. The Court's ruling on the question posed by the Belgian court was therefore more limited than that proposed by the Advocate General. The rule in relation to disclosure of evaluation methodologies is now:
A contracting authority is not obliged to disclose to bidders the evaluation method to be adopted. However, that method may not have the effect of altering the award criteria and their relative weighting.
The Court was keen to stress the "leeway" that a contracting authority should enjoy in carrying out its task of assessment. However, the Court adopted an approach that is more proscriptive ("your method must not have these effects") than the Advocate General's more permissive and transparent formulation ("your method can have these effects as long as you disclose it").
The judgment does not make life easier for contracting authorities struggling to work out whether a particular methodology is capable of affecting sub-criteria weightings (in which case it should be disclosed) or only capable of affecting the preparation of tenders (in which case it need not be). Pragmatism and transparency would usually favour disclosure, and in all cases the question should be given early and careful consideration.
Bevan Brittan's specialist procurement team has considerable experience of advising bidders and contracting authorities on all aspects of public procurement, including bringing and defending challenges under the Public Contracts Regulations, dealing with disclosure obligations, applications to lift the automatic suspension, the management of all stages of High Court litigation, and pursuing alternative dispute resolution.