Evropaiki Dynamiki v Commission of the European Communities [2008] EUECJ T-465/04 (10 September 2008)

BAILII is celebrating 24 years of free online access to the law! Would you consider making a contribution?
No donation is too small. If every visitor before 31 December gives just £1, it will have a significant impact on BAILII's ability to continue providing free access to the law.
Thank you very much for your support!

(Public service contracts - Community tendering procedure - Provision of computer and related services linked to the information systems of the Directorate-General for Fisheries - Rejection of a submitted tender - Obligation to state the reasons on which the decision is based)

Evropaïki Dinamiki - Proigmena Sistimata Tilepikinonion Pliroforikis kai Tilematikis AE, established in Athens (Greece), represented by N. Korogiannakis, lawyer,

Commission of the European Communities, represented initially by K. Banks, and subsequently by M. Wilderspin and E. Manhaeve, acting as Agents,

APPLICATION for annulment of the Commission’s decision of 15 September 2004 not to accept the tender submitted by the applicant in the tendering procedure relating to the provision of computer and related services linked to the information systems of the Directorate-General for Fisheries, and to award the contract to the successful tenderer,

having regard to the written procedure and further to the hearing on 16 May 2007,

1 The award of Commission service contracts is governed by the provisions of Title V of Part One of Council Regulation (EC, Euratom) No 1605/2002 of 25 June 2002 on the Financial Regulation applicable to the general budget of the European Communities (OJ 2002 L 248, p. 1, ‘the Financial Regulation’) and by the provisions of Commission Regulation (EC, Euratom) No 2342/2002 of 23 December 2002 laying down detailed rules for the implementation of the Financial Regulation (OJ 2002 L 357, p. 1, ‘the Implementing Rules’). Those provisions are based on the Community directives on the subject, in particular, in the case of service contracts, Council Directive 92/50/EEC of 18 June 1992 relating to the coordination of procedures for the award of public service contracts (OJ 1992 L 209, p. 1), as amended.

‘All public contracts financed in whole or in part by the budget shall comply with the principles of transparency, proportionality, equal treatment and non-discrimination.’

3 Article 97 of the Financial Regulation, in the version applicable at the material time, states:

‘1. The selection criteria for evaluating the capability of candidates or tenderers and the award criteria for evaluating the content of the tenders shall be defined in advance and set out in the call for tender.

2. Contracts may be awarded by the automatic award procedure or by the best-value-for-money procedure.’

‘The contracting authority shall notify all candidates or tenderers whose applications or tenders are rejected of the grounds on which the decision was taken, and all tenderers whose tenders are admissible and who make a request in writing of the characteristics and relative advantages of the successful tender and the name of the tenderer to whom the contract is awarded.

However, certain details need not be disclosed where disclosure would hinder application of the law, would be contrary to the public interest or would harm the legitimate business interests of public or private undertakings or could distort fair competition between those undertakings.’

5 Article 149 of the Implementing Rules, in the version applicable at the material time, provides:

‘1. The contracting authorities shall as soon as possible inform candidates and tenderers of decisions reached concerning the award of the contract, including the grounds for any decision not to award a contract for which there has been competitive tendering or to recommence the procedure.

2. The contracting authority shall, within not more than fifteen calendar days from the date on which a written request is received, communicate the information provided for in Article 100(2) of the Financial Regulation.’

6 The applicant, Evropaïki Dinamiki - Proigmena Sistimata Tilepikinonion Pliroforikis kai Tilematikis AE, is a company incorporated under Greek law, active in the area of information technology and communications.

7 By a contract notice of 14 April 2004 published in the Supplement to the Official Journal of the European Union (OJ 2004, S 73), the Commission issued a call for tenders bearing the reference ‘FISH/2004/02’ relating to a framework contract for the provision of computer and related services linked to the information systems of the Directorate-General for Fisheries (‘DG Fisheries’).

8 Section 2 of the tender specifications relating to the call for tenders at issue, headed ‘Evaluation of tenders and award of the contract’ provided:

The award procedure consists of three main phases. First, an examination of the conditions for the exclusion of tenders. Second, the selection of tenders which is subdivided into an examination of the professional, economic and financial and technical capacity of the contractor. Third, the evaluation of the tender from the technical and financial points of view.

The evaluation will proceed in stages, as described below. Only tenders meeting the requirements of each stage will pass on to the next stage of the evaluation. The final stage will involve the award of the contract to the tenderer whose offer provides the best value for money.

The selection criteria for this call for tenders are set out below and concern the economic and financial capacity and professional expertise and experience of tenderers (and their subcontractors). Tenderers must demonstrate that their capacities correspond, both in type and scale, to the subject matter of the contract to be awarded.

The aim is to demonstrate the contractor’s know-how, effectiveness, experience and reliability.

The Commission will award the contract after comparing the tenders in the light of the following technical and financial criteria (Article 36 of Council Directive 92/50/EEC).

For the technical evaluation phase, the committee will assess each criterion and award it a final score. The contract will be awarded to the tender offering the best value for money.

(a) Conformity of the tender in the light of the constraints set and the quality of drafting (20 points).

(b) Comprehension of the tasks and the relevance of the proposal to this call for tenders (70 points).

(c) Communication methods used to coordinate the work of the in-house and outside teams and the means employed to ensure communication between the project managers in-house, officials and users (50 points).

(d) Breakdown of the workload at the different phases of the development cycle (30 points).

(g) Knowledge of languages of the candidates proposed for the in-house team (50 points).

(j) Procedures and methods proposed for transferring knowledge on completion of the project (30 points).

(k) If awarded the contract, the contractor’s capacity to set up an office/offices in or around Brussels using its own resources or those of a partner or subcontractor. If the office set up in or around Brussels is not an agency of the tenderer’s company, the partner(s) must supply the following information:

The points obtained for each criterion will be added together and given a score of Q expressing the technical evaluation as a quantity.

The value of the tender will be calculated on the basis of the prices shown in the price schedule provided in the model reply to this call for tenders.

(b) the price for familiarisation with the ‘basic’ and additional applications.

CPS: the workload percentage allocated to a senior project manager (see table in model reply),

p = [((((e*CPS) + (f*CPJ) + (g*DS) + (h*DJ))*3080) + (((e*CPS) + (f*CPJ) + (i*DS) + (j*DJ))*616)) + a + b + c + d]: 3696.

Comment: The above formula is an estimate which does not necessarily reflect the real situation that will apply during the performance of the contract and is not binding on the DG [Fisheries].

The contract will be awarded to the tenderer offering the best (greatest) value for money (quality/price ratio) as follows:

9 On 15 April 2004 the applicant expressed its desire to participate in the call for tenders at issue.

10 On 17 April 2004 DG Fisheries sent the tender documents to the applicant, stating in the accompanying letter that an information meeting would be held for potential tenderers on 7 May 2004. The tender specifications stated in that regard that tenderers could submit written questions seeking explanations about the call for tenders up to five working days before that meeting, and that answers would be given at the meeting. A summary in English would be sent to all companies which had asked for the tender specifications.

11 On 30 April 2004 the applicant’s legal adviser, without explaining which company he was representing, sent a letter to DG Fisheries containing six questions, together with certain critical comments, relating to the call for tenders at issue. In a reply sent by e-mail on 3 May 2004 DG Fisheries referred to the terms of the tender specifications and stated that the legal adviser would receive the minutes of the information meeting. By fax on the same day the applicant’s legal adviser expressed his agreement with that approach.

12 In parallel with the exchange of correspondence with its legal adviser, on the same day the applicant itself sent by e-mail 36 questions to DG Fisheries. Those questions were sent again on 3 May 2004 by fax and by registered post. A further set of 14 questions was sent by the applicant by e-mail, fax and registered post on the day before the information meeting.

13 The information meeting, attended by, among others, the applicant, was held on 7 May 2004. At that meeting, DG Fisheries replied to the questions which had been received up to the day before the meeting.

14 On the same day an erratum document concerning the call for tenders at issue was sent by DG Fisheries to all the companies which had shown an interest in that call for tenders.

15 By e-mail of 12 May 2004 DG Fisheries sent to the applicant the minutes of the meeting, including a first set of answers to the questions raised. On 17 May 2004 a further set of answers to questions which had not been dealt with at the information meeting was sent by e-mail to the applicant.

16 On 19 May 2004, the last date for receipt of tenders, the applicant submitted a tender in response to the call for tenders at issue. The 10 tenders received by DG Fisheries were opened on 28 May 2004 in the presence of 5 of the tenderers, including the applicant

17 During the months of June and July 2004 the tenders were examined by the evaluation committee, which finally recommended acceptance of the tender from the company Intrasoft (‘the successful tenderer’), the incumbent contractor, on the view that its tender offered the best value for money.

18 The evaluation committee’s recommendation was then approved by DG Fisheries, which, by letter of 15 September 2004, informed the applicant of the decision to reject its tender, stating that the grounds for that rejection related to the composition and stability of the team, the procedures proposed for transferring knowledge on completion of the project, and the fact that its tender did not offer the best value for money. DG Fisheries also stated that the applicant could request in writing additional information on the grounds for the rejection of its bid.

19 On 16 September 2004, by letter and fax, the applicant asked DG Fisheries for the following information: the name of the successful tenderer; the scores awarded to its technical offer and to that of the successful tenderer on each evaluation criterion; a copy of the evaluation committee report; and how its financial offer compared with that of the successful tenderer. In addition, the applicant expressed its objections to the first and second grounds for the rejection of its bid, and put the following questions:

‘(a) ….to which specific questions of the questionnaire each of those points refer to as well as to which specific award criteria?

(b) …why our response to each of those points was considered of less quality that that of the successful tenderer?’.

20 On 11 and 19 October 2004 the applicant sent two reminder letters to DG Fisheries and complained in the latter of the unfair and unjustified delay in replying to its questions. The applicant pointed out that the delay could seriously compromise its legal rights.

21 By letter of 18 October 2004, sent by fax on 22 October 2004, DG Fisheries replied to those letters as follows:

According to the evaluation report your bid has been assessed in the following way: according to section 2.6.2 [of the tender specifications], the tender requirements are generally well understood. The breakdown of the workload over the development items is very close to the DG expectations. The tests, which are important for the DG, are well understood also.

However, the experience of the team in ColdFusion is a weakness. Furthermore the proposed team is made of 16 resources, that makes it oversized in relation to the DG requirements. The workload for transferring of knowledge on completion of the project and the guarantee for team stability are weaknesses in the bid.

The average mark for the technical evaluation, ranked 4th, with a significant difference with the top three offers, is compensated by low daily rates which rank the offer at the second position according to section 2.6.4 [of the tender specifications].

By comparison, the offer of [the successful tenderer] has been assessed as follows: “The bid is of good quality (3[rd]). There is no particular comment on the offer. The contractor capitalises on low daily rates that achieve the best value for money”.

You will find hereafter the table which compare[s] your bid to the selected bid as regards the technical award criteria.

You will find hereafter the table which compare[s] your bid, ranked 2nd, to the selected bid, according to the provisions in section 2.6.4 [of the tender specifications].

22 By fax of 26 October 2004, the applicant set out a number of complaints in relation to that letter, in particular as regards the marking on the technical evaluation of its tender; the applicant also criticised the call for tenders procedure as a whole and asked that a new procedure be initiated.

23 On 5 November 2004, DG Fisheries replied to the various points raised by the applicant and stated that it would be signing the contract with the successful tenderer. In that letter, DG Fisheries stated inter alia, the following:

Concerning criteria p) in the technical selection, the appreciation of the technical team capacity in ColdFusion technology is based on the data which you have provided in section 1.5.3.x.3 of your offer. The total of “points” for the whole team in ColdFusion has been added up (145 points) and divided by 1 600 points (the maximum 100*16 CV). The result is equal to 9.06%. The average result of this criterion for all competitors is 14.49% with a maximum of 21.5% and a minimum of 6.8%. Based on this result, the team is ranked 6th position. According to this ranking, the committee has considered your company to comparatively have a certain weakness in this technology. Please note that this assessment is part of the selection phase of the tenderers and does not relate to your offer in the context of the awarding phase. This appreciation does not prejudice … the quality mark and … the final result.

The remark about the number of resources in the team, is based on a financial calculation. The cost of the team for the maximum contract period at the prices indicated in your bid is 5 192 000 euros. In section 1.1, the DG has provided an estimation of 4 000 000 euros for the complete contract period. The difference between the estimation and the forecast is 29.8%. This impact is the direct consequence of the daily rates provided in your bid. The observation that indicates “the team over sizes the expectation of the DG” was an information for the evaluation committee based on the financial impact.

Concerning criteria h), “Assurance of the stability of the team”, your offer is ranked in the 4th position. The selection committee has assessed this criterion as “satisfying” and you get a mark of 26.4 points out of 40. You mention in section 1.5.4 of your proposal two arguments: “years of experience and professional characters [the team]” and “personal motivation”. The committee has given a “satisfactory” mark because, although the committee could trust the company about the personal motivation, the data provided in section 1.5.3.x.3 (number of months of experience) for the proposed team have an average of 6.45 man/year whereas the average of all other competitors is 8.16 man/year. Furthermore, your proposal remains quite vague as to any concrete measure to be implemented to guarantee the stability of the team, as requested in the reply form.

Concerning criteria (j) “Procedures and methods proposed for transferring knowledge on completion of the project”. The call for tenders specified a maximum of 100 man/days for this activity. You specified in section 1.5.7 of your proposal “The maximum number of man/days required is 40.” According to the expertise of the committee in the applications described in section 7.2 [of the tender specifications], the handover activity for 40 man/days is slightly underestimated. For this reason the committee has decided to mark this criterion as “satisfactory plus” and gave 21 points out of 30.

Finally on criteria (h) and (j) the appreciation “is a weakness in the bid” doesn’t refer to these specific criteria in isolation, but it is an overall appreciation compared to other criteria (a), (b), (c), (d), (g), (i) and (k) which are rated better in your offer. Furthermore, even if your offer would have got the maximum for both criteria (h) and (j), the final mark (R) would be equal to 1.4675 and your bid would still be ranked in the second position.

24 By letter of 8 November 2004 the applicant repeated its criticisms and asked DG Fisheries not to sign the contract.

25 On 15 November 2004 DG Fisheries replied that its position remained the same as regards rejection of the applicant’s tender and that it did not intend to freeze the contract.

26 The applicant brought the present action by application lodged at the Registry of the Court on 25 November 2004.

27 The written procedure was completed by the lodging of the defence, since the applicant did not lodge at the Registry of the Court, in accordance with Article 43(6) of the Court’s Rules of Procedure, a copy of the original reply within the period of 10 days after it had been sent by fax.

28 Upon hearing the report of the Judge-Rapporteur, the Court (Third Chamber) decided to open the oral procedure and, and within the framework of measures of organisation of procedure provided for in Article 64 of the Rules of Procedure, asked the applicant to reply in writing to a set of questions and the Commission to produce certain documents, including, in particular, the evaluation report and the bid of the successful tenderer. The Commission partly acceded to this request, stating that it was not able to produce a non-confidential version of the bid of the successful tenderer within the period prescribed.

29 The oral arguments of the parties and their answers to the questions put by the Court were heard at the hearing on 16 May 2007. The Court asked the Commission to produce the non-confidential version of the bid of the successful tenderer and set a new time-limit of 28 May 2007.

30 By letter of 25 May 2007 the Commission requested an extension of that period. The Court acceded to that request and granted a further extension until 12 June 2007. A non-confidential version of the bid of the successful tenderer was placed with the case-file by the Commission on 8 June 2007. The applicant submitted its written observations on that document on 2 July 2007. After the Commission had in writing stated its views on the applicant’s observations, the oral procedure was closed on 19 July 2007.

- annul the Commission’s decision to reject its tender and to award the contract to the selected contractor (‘the contested decision’);

33 In its second head of claim, the applicant requests that the Court order the Commission to carry out a fresh evaluation of its tender.

34 The Commission contends that the Court has no jurisdiction to issue such a direction, since, if the contested decision is annulled, the Commission is required to take the measures necessary to comply with the judgment of the Court, in accordance with Article 233 EC.

35 It must be borne in mind that, in accordance with settled case-law, when exercising judicial review of legality under Article 230 EC, the Court is not entitled to issue directions to the institutions (Case C-5/93 P DSM v Commission [1999] ECR I-4695, paragraph 36; Joined Cases T-374/94, T-375/94, T-384/94 and T-388/94 European Night Services and Others v Commission [1998] ECR II-3141, paragraph 53; and Case T-145/98 ADT Projekt v Commission [2000] ECR II-387, paragraph 83). If the Court annuls the contested measure, it is then for the institution concerned to adopt, in accordance with Article 233 EC, the necessary measures to comply with the judgment annulling that measure (Case T-67/94 Ladbroke Racing v Commission [1998] ECR II-1, paragraph 200; ADT Projekt v Commission, paragraph 84; order in Case T-29/03 Comunidad Autónoma de Andalucía v Commission [2004] ECR II-2923, paragraph 26).

36 It follows that the second head of claim, the objective of which is that the Commission should be ordered to re-evaluate the applicant’s tender submitted in response to the call for tenders at issue, is not within the jurisdiction of the Court and must therefore be declared to be inadmissible.

37 In support of its action for annulment of the contested decision the applicant relies on five pleas in law. The first is based on the undermining of free competition and infringement of the principle of non-discrimination. The second plea is based on infringement of Article 97(1) of the Financial Regulation and of Article 17(1) of Directive 92/50. The third plea alleges that the Commission committed manifest errors of appreciation when evaluating the applicant’s tender. The fourth plea alleges failure to provide pertinent information and a statement of reasons. The fifth plea concerns infringement of the principles of good administration and of diligence.

38 In this case, the Court considers that it is appropriate to examine first the fourth plea in law.

The fourth plea in law: infringement of the obligation to state reasons and failure to provide pertinent information

39 The applicant claims that the contested decision is vitiated by a failure to provide an adequate statement of reasons. First, the applicant complains that the Commission denied it the possibility of assessing the legality of the Commission’s acts by not replying to its questions and not providing it with the clarification which it had repeatedly asked for in writing. Secondly, the applicant claims that the Commission failed to provide it with all the information requested on the reasons why its tender had been rejected. Thirdly, the applicant complains that the Commission did not send to it either the evaluation reports or the values of ‘quality’ and ‘price’ in relation to its tender and that of the successful tender.

40 The applicant states that, under Article 253 EC and Article 8 of Directive 92/50, the contracting authority is obliged to state reasons for its decision to reject the bid of a tenderer, when the latter so requests, within a period of 15 days.

41 In this case, DG Fisheries failed to explain clearly the reasons which led it to reject the applicant’s bid and did not elaborate on the characteristics and comparative advantages of the successful tender, thereby denying the applicant the possibility of commenting upon and countering the selection made and possibly seeking legal redress. Furthermore, DG Fisheries merely invoked commercial secrecy to justify its refusal to provide the evaluation report, which is normally delivered to all tenderers, as prescribed by Article 12(2) of Directive 92/50.

42 The Commission rejects the applicant’s complaint. It contends that its reasoning was explained in a succession of letters which it sent to the applicant on 15 September, 18 October, 5 and 15 November 2004. The Commission accepts that it did not comply with its obligation, based on Article 149 of the Implementing Rules, and not on Article 12 of Directive 92/50, to reply within 15 days following the applicant’s letter of 16 September 2004, but considers that that delay had no effect on the applicant’s ability to ‘assess the legality of its acts’. It is, the Commission argues, obvious that the applicant used the information contained in those letters in order to bring the present action.

43 As regards the claim that there was no disclosure of either the evaluation report or the values of ‘quality’ and ‘price’ in relation to the applicant’s tender and that of the successful tenderer, the Commission states that all relevant extracts of that report, including the comparative figures for quality and price of the applicant and of the successful tenderer, were included in its letter of 18 October 2004. Further explanations were given subsequently in its letter dated 5 November 2004. As for the fact that the Commission did not provide the applicant with the whole evaluation report, the Commission contends that, under Article 100(2) of the Financial Regulation, it has no obligation to do so.

44 In any event, the applicant’s claim, in so far as it relates to an administrative failure subsequent to the contested decision, cannot retrospectively invalidate that decision.

45 First, the Court has consistently held that the Commission enjoys a broad margin of assessment with regard to the factors to be taken into account for the purpose of deciding to award a contract following an invitation to tender. Review by the Community Courts is therefore limited to checking compliance with the applicable procedural rules and the duty to give reasons, the correctness of the facts found and that there is no manifest error of assessment or misuse of powers (Case T-211/02 Tideland Signal v Commission [2002] ECR II-3781, paragraph 33; Case T-148/04 TQ3 Travel Solutions Belgium v Commission [2005] ECR II-2627, paragraph 47; see also, to that effect, Case 56/77 Agence européenne d’intérims v Commission [1978] ECR 2215, paragraph 20).

46 As a preliminary point, contrary to what is claimed by the applicant, the provisions of Directive 92/50 - which, pursuant to Article 105 of the Financial Regulation, applies to public contracts awarded by the institutions of the Communities on their own account only in respect of matters relating to thresholds which determine the publication arrangements, the choice of procedures and the corresponding time-limits - are not those relevant to examination of whether the Commission has complied with its obligation to provide to the unsuccessful tenderer a statement of the reasons for rejection of its tender. As was stated in paragraph 1 above, the award of the contract at issue is, in fact, governed by the provisions of the Financial Regulation and of the Implementing Rules and, as regards the obligation to state reasons, specifically by Article 100(2) of the Financial Regulation and Article 149 of the Implementing Rules.

47 It is clear from those articles, and from the case-law of the Court, that the Commission fulfils its obligation to state reasons if it confines itself first to informing unsuccessful tenderers immediately of the reasons for the rejection of their respective tenders and then subsequently, if expressly requested to do so, provides to all tenderers who have made an admissible tender the characteristics and relative advantages of the tender selected as well as the name of the successful tenderer, within a period of 15 days from the date on which a written request is received (see, to that effect and by analogy, Case T-19/95 Adia Interim v Commission [1996] ECR II-321, paragraph 31; Case T-169/00 Esedra v Commission [2002] ECR II-609, paragraphs 188 and 189; and Case T-183/00 Strabag Benelux v Council [2003] ECR II-135, paragraph 54).

48 Such a manner of proceeding satisfies the purpose of the duty to state reasons enshrined in Article 253 EC, according to which the reasoning followed by the authority which adopted the measure in question must be disclosed in a clear and unequivocal fashion so as, on the one hand, to make the persons concerned aware of the reasons for the measure and thereby enable them to defend their rights; and, on the other, to enable the Court to exercise its supervisory jurisdiction (Adia Interim v Commission, cited in paragraph 47 above, paragraph 32; Esedra v Commission, paragraph 47 above, paragraph 190; and Strabag Benelux v Council, cited in paragraph 47 above, paragraph 55).

49 It is also important to bear in mind that the requirements to be satisfied by the statement of reasons depend on the circumstances of each case, in particular the content of the measure, the nature of the reasons given and the interest which the addressees of the measure, or other parties to whom the measure is of direct and individual concern, may have in obtaining explanations (Case C-367/95 P Commission v Sytraval and Brink’s France [1998] ECR I-1719, paragraph 63 and case-law cited).

50 Accordingly, in order to determine whether the requirement to state reasons laid down by the Financial Regulation and the Implementing Rules has been satisfied, the Court must examine not only the contested decision but also the letter of 18 October 2004, sent to the applicant in reply to its express request, which was made several times in its letters of 16 September, 11 and 19 October 2004, for additional information on the decision to award the contract at issue.

- The statement of reasons contained in the contested decision and in the letter of 18 October 2004

51 First of all, in the contested decision, in accordance with Article 100(2) of the Financial Regulation, DG Fisheries confined itself to stating the reasons for rejection of the applicant’s tender. Those reasons relate to the composition and stability of the applicant’s team, the procedures proposed for the transfer of knowledge on completion of the project, and correspond, respectively, to the technical award criteria set out in section 2.6.2, (f), (h) and (j), of the tender specifications (see paragraph 8 above), and to the fact that the applicant’s tender did not offer the best value for money (section 2.6.4 of the tender specifications; see paragraph 8 above).

52 As regards the letter of 18 October 2004, sent on 22 October 2004, it must be noted at the outset that that reply of DG Fisheries to the applicant was approximately three weeks late in relation to the maximum period, laid down in Article 149(2) of the Implementing Rules, of 15 calendar days from the date of receipt of the applicant’s written request, which was first sent by fax and by mail on 16 September 2004. Although it is to be deplored and in fact cannot be justified, that delay does not, however, appear to have restricted the applicant’s opportunity to assert its rights before the Court and cannot, by itself, lead to the annulment of the contested decision. It is clear from the documents before the Court that the applicant has used all the information contained in that letter in order to bring the present action.

53 Next, it must be noted that DG Fisheries provided in that letter further details of the reasons for rejection of the applicant’s tender. DG Fisheries notified the applicant of the procedure followed on evaluation of tenders, the name of the successful tenderer and the fact that the latter’s tender had been selected because it represented the best value for money, and then stated, inter alia, the following: ‘However, the experience of the team in ColdFusion is a weakness. Furthermore the proposed team is made of 16 resources, that makes it oversized in relation to the DG requirements. The workload for transferring knowledge on completion of the project and the guarantee for team stability are weaknesses in the bid.’ Lastly, DG Fisheries notified the applicant of the marks obtained by the applicant’s tender and that of the successful tenderer on each of the technical evaluation criteria, and the result of the financial evaluation, in the form of tables (see paragraph 21 above).

54 While the contracting authority may initially confine itself to notifying the unsuccessful tenderer of the reasons for the rejection of its tender and is only subsequently required, in the event that the tenderer so requests in writing, to notify it of the characteristics and relative advantages of the successful tender, it must none the less be pointed out that, where, as in this case, the Commission has a broad discretion, respect for the rights safeguarded by the Community legal order in administrative procedures is of even greater fundamental importance. Those safeguards include, in particular, the duty of the Commission to state sufficient reasons for its decisions. Only in this way can the Community Courts verify whether the factual and legal elements upon which the exercise of the power of appraisal depends were present (Case C-269/90 Technische Universität München [1991] ECR I-5469, paragraph 14, and Case T-241/00 Le Canne v Commission [2002] ECR II-1251, paragraphs 53 and 54).

55 In the present case, taking account of the broad discretion enjoyed by the Commission and the extent of its obligation to provide a statement of reasons to the unsuccessful tenderer, it appears that the information contained in the contested decision and in the letter of 18 October 2004 is not entirely satisfactory. First, the reasons for rejection of the applicant’s tender are not clearly disclosed and, second, the characteristics and relative advantages of the successful tender are not adequately explained.

56 In fact, leaving aside the tables which indicate, on the one hand, the marks obtained by the applicant and by the successful tenderer in relation to the technical award criteria and, on the other hand, the final result calculated using the formula in section 2.6.4 of the tender specifications to determine the best value for money, the letter of 18 October 2004 does no more than mention in general terms the weaknesses of the applicant’s tender together with vague and terse remarks on the bid of the successful tenderer. As regards the latter bid, the letter merely states the following:

‘By comparison, the offer of [the successful tenderer] has been assessed as follows: “The bid is of good quality (3[rd]). There is no particular comment on the offer. The contractor capitalises on low daily rates that achieve the best value for money.”.’

57 In addition, as was stated in paragraph 52 above, the grounds for rejection of the tender which are set out in the contested decision, leaving aside that of the best value for money, related to the composition and stability of the team, and to the procedures proposed for the transfer knowledge on completion of the project, which correspond to the technical criteria defined in section 2.6.2, respectively (f), (h) and (j), of the tender specifications, and not to the technical criterion defined in section 2.6.2 (e), to which the letter of 18 October 2004 appears to refer when it mentions the weakness of the proposed team in ColdFusion technology. As regards the remark in the letter of 18 October 2004 on the size of the team, it is not clear whether that refers to the technical criterion defined in section 2.6.2 (f) of the tender specifications relating to composition of the team, alluded to in the contested decision. It follows that it is not possible to discern clearly the grounds for rejection of the tender by reading together the two letters of DG Fisheries which are supposed to satisfy the requirement that reasons be stated.

58 Moreover, the Commission itself has acknowledged, in its written pleadings and at the hearing, that the statement of reasons provided in those first two letters was not entirely satisfactory. The Commission, indeed, maintains that its reasoning was better explained in the following series of letters, which included those of 5 and 15 November 2004, (see, respectively, paragraphs 23 and 25 above), and that those should therefore also be taken into consideration to determine whether the Commission satisfied the requirement to state reasons, since the applicant used all the information in those letters in order to bring its action, although the Commission itself accepted, in paragraphs 20 and 23 of its defence, that the letter of 5 November 2004 might have caused confusion.

59 It must be borne in mind that, according to the case-law, when, as in this case, the institution concerned sends a letter, after a request from the applicant, before the bringing of an action but after the date laid down by Article 149(2) of the Implementing Rules, for additional explanations of a decision, that letter may also be taken into consideration when determining whether the statement of reasons concerned was adequate. The obligation to state reasons must be assessed in the light of the information available to the applicant at the time the application was brought, with the qualification, however, that the institution is not permitted to substitute an entirely new statement of reasons for the original statement of reasons (see, to that effect and by analogy, Case T-4/01 Renco v Council [2003] ECR II-171, paragraph 96, and Strabag Benelux v Council, cited in paragraph 48 above, paragraph 58).

- The statement of reasons contained in the letters of DG Fisheries dated 5 and 15 November 2004

60 It is appropriate therefore to examine whether, by means of the letter of 5 November 2004 - supposed, according to the Commission’s own submission, to complement the statement of reasons contained in the letter of 18 October 2004 - DG Fisheries provided more detailed explanations, corresponding to those given in the last-mentioned letter, of the grounds properly associated with rejection of the applicant’s tender, although it is patent that the letter of 5 November 2004 adds nothing with regard to the characteristics and relative advantages of the successful tender. As regards the letter of 15 November 2004, suffice it to point out that it provides no additional explanation on those two matters and that it is, consequently, of no relevance for the purposes of assessing the statement of reasons.

61 In relation to the letter of 5 November 2004, it is clear that, contrary to what is claimed by the Commission, the explanations of the grounds for rejection of the applicant’s tender stated there not only do not fully correspond with those provided in its earlier letters, but bring to light serious and manifest inconsistencies when compared with those earlier letters. It must also be noted that, at the hearing, the Commission itself acknowledged, in reply to a question from the Court, that the three letters sent to the applicant in order to provide a better explanation of the grounds for rejection of its tender, namely the contested decision and the letters of 18 October and 5 November 2004, taken together, appear to be rather inconsistent, not to say contradictory.

62 Firstly, DG Fisheries made its first reference to the weakness of the applicant’s team in ColdFusion technology in its letter of 18 October 2004 and then stated in its letter of 5 November 2004 that the team’s experience in that technology had been evaluated during the selection phase (see the criterion defined at section 2.5.3 (p) of the tender specifications, paragraph 8 above) and not the award phase. That claim was also repeated by the Commission in its defence and at the hearing.

63 It must be pointed out in this regard that DG Fisheries mentioned the question of the proposed team’s experience in reply to the applicant’s letter of 26 October 2004, in which the applicant stated the following:

‘Our team of experts covers in a very satisfactory manner all the thematic areas requested by DG Fisheries, including ColdFusion. Most of the proposed experts offer expertise in ColdFusion to various prestigious organisations, including the European Commission itself. We reject any reference to an alleged “weakness” in this or any other field of the requested expertise.’

64 It is therefore obvious that, contrary to the Commission’s apparent submission, when mentioning ColdFusion technology, the applicant was referring to the award criterion in section 2.6.2 (e) of the tender specifications (see paragraph 8 above), and not to the selection criterion in section 2.6.2 (p) of the tender specifications (concerning assessment of technical capacity in the selection phase, see paragraph 8 above), or, at the very least, that the applicant justifiably took the view that that award criterion was the one being referred to by DG Fisheries in its letter of 18 October 2004, when mention was made of the weakness of the applicant’s proposed team in relation to experience in ColdFusion technology. However, in its letter of 5 November 2004, DG Fisheries replied in the following terms:

‘Concerning criteria (p) in the technical selection, the appreciation of the technical team capacity in ColdFusion technology is based on the data you have provided in section 1.5.3.x.3 of your offer. The total of “points” for the whole team in ColdFusion has been added up (145 points) and divided by 1 600 points (the maximum 100*16 CV). The result is equal to 9.06%. The average result of this criterion for all competitors is 14.49% with a maximum of 21.5% and a minimum of 6.8%. Based on this result, the team is ranked 6th position. According to this ranking, the committee has considered your company to comparatively have a certain weakness in this technology. Please note that this assessment is part of the selection phase of the tenderers and does not relate to your offer in the context of the awarding phase. This appreciation does not prejudice … the quality mark and … the final result’.

65 It is true that, at the hearing, the Commission submitted for the first time that the evaluation committee had, when assessing the experience of the applicant’s proposed team in ColdFusion technology, confused the selection criteria and the award criteria. However, it remains the case that, even if the evaluation committee confused those criteria, which, as it happens, finds no support in any document before the Court, that did not deter the Commission, which, as contracting authority, took the final decision on the award of the contract, from referring in its letter of 18 October 2004 to the weakness of the applicant’s team in that technology, and from doing so in a letter which the Commission sent to the applicant in reply to the latter’s express request for the details of the grounds for rejection of its tender and the characteristics and relative advantages of the successful tender. In any event, it is impossible to understand why, at that stage of the procedure, DG Fisheries should have referred to a criterion, such as that relating to the technical capacity of the team, which had already been checked in the selection phase of the competition and which, consequently, ought not to have been again taken into account in the award phase.

66 Accordingly, the Court cannot determine whether the experience of the applicant’s proposed team, in particular in ColdFusion technology, was evaluated on the technical selection criterion in section 2.5.3 (p) of the tender specifications, as claimed by the Commission in the letter of 5 November 2004 and also in its written pleadings and at the hearing, or rather on the technical award criterion in section 2.6.2 (e) of the tender specifications, which seems to be implied in the letter of 18 October 2004 where reference is made to the weakness of the applicant’s team in that technology, and, if that is the case, whether the number of years of experience was the only factor taken into consideration by DG Fisheries when assessing the ‘technical merits of the team made available’ by the applicant.

67 Secondly, in the letter of 18 October 2004 DG Fisheries states quite simply that the applicant’s proposed team was oversized in relation to its requirements, whereas, in the letter of 5 November 2004, again in reply to an argument put forward by the applicant in its letter of 26 October 2004, DG Fisheries claims that the remark on the number of the team’s resources was information for the evaluation committee based on the financial impact of the tender.

68 In the letter of 5 November 2004 DG Fisheries states, in particular, the following:

‘The remark about the number of resources in the team is based on a financial calculation. The cost of the team for the maximum contract period at the prices indicated in your bid is 5 192 000 euros. In section 1.1, the DG has provided an estimation of 4 000 000 euros for the complete contract period. The difference between the estimation and the forecast is 29.8%. This impact is the direct consequence of the daily rates provided in your bid. The observation that indicates “the team oversizes the expectation of the DG” was an information for the evaluation committee based on the financial impact.’

69 Moreover, at paragraph 23 of its defence, the Commission explained that that remark did not relate to any of the award criteria used by the evaluation committee, since the financial evaluation of all the tenders had been carried out on a basis of strict comparability, using the formula set out in paragraph 2.6.3 of the tender specifications. In relation to that formula, the Commission states: ‘the number of members proposed for a team is without relevance, since the same number of daily rates (corresponding to the various profiles required) is taken into account for each tenderer. In other words, there is an equalisation of the number of resources included in the calculation as regards each tenderer.’ That argument was also taken up by the Commission at the hearing. By contrast, in paragraph 17 of its defence, the Commission appears to adopt different reasoning when referring to the size of the team. The Commission asserts, firstly, that if the evaluation committee considered that the proposed team was oversized, that was not because the applicant submitted the maximum number of CVs, but because the applicant proposed that all 16 candidates should be members of its core team, and adds that, since the average size of teams proposed by other tenderers was 10.8 persons, the evaluation committee was entitled to judge that the applicant’s proposed team would be too large. At the hearing, notwithstanding repeated questions from the Court, the Commission was unable to offer a clear explanation of this point and finally admitted that such a comment should not have been made.

70 However, assuming it to be true that the remark concerning the overall cost of the applicant’s proposed team did not affect the financial evaluation of its tender, the fact still remains that DG Fisheries mentioned that factor in the letters sent to the applicant, when the question of the size of the team could come within the scope only of the award criterion in section 2.6.2 (f) of the tender specifications, a criterion on which the applicant’s tender had been ranked fourth, with a mark of 56 points out of 80. It is clear that that criterion was the one referred to by DG Fisheries in the contested decision, and in its letter of 18 October 2004, which complements the statement of reasons notified in the contested decision.

71 In the light of those considerations, the Court is unable to understand why DG Fisheries highlighted in its letter of 5 November 2004 the cost of the applicant’s proposed team, given that that letter was supposed to be a reply to the applicant’s letter of 26 October 2004, in which the applicant’s concern was the alleged error committed by the evaluation committee by judging that the team was oversized. In any event, having regard to all of the explanations given by the Commission, it is impossible to determine whether the assessment of the applicant’s proposed team as oversized was or was not one of the grounds which justified rejection of the applicant’s tender.

72 In addition, it must be observed that the Commission’s arguments are no more consistent in relation to the individual assessment of the applicant’s tender made by the evaluation committee. It is clear from point 2.4.4.1 of the evaluation report that the committee, after recognising that the tender requirements were generally well understood by the applicant, that the breakdown of the workload was close to the DG’s expectations and that the tests, which were important for the DG, were well understood also, stated the following:

‘However, the tender remains weak in terms of the team’s experience and presents a relative weakness in ColdFusion. Furthermore, the proposed team is composed of 16 persons, which, in relation to the DG’s requirements, is an oversized team. If the tenderer were selected, the deployment of that large team would cause funding problems. Lastly, the stability of the team and the means of transferring knowledge on completion of the project are comparatively weak points of the tender … Notwithstanding an average mark for the technical evaluation, ranked 4th, with a significant difference from the top three offers, which is compensated by low daily rates, the tender is in 2nd position, which in the opinion of the committee members does not reflect its overall value. Although this tenderer is not the successful candidate in the call for tenders, it is brought to the attention of the authorising officer that, taking account of the company’s liabilities, the committee does not recommend use of the services of this supplier.’

73 It is accordingly obvious, notwithstanding what is claimed by the Commission, that the factors relating to the size and experience of the applicant’s proposed team in ColdFusion technology were taken into consideration by the evaluation committee in the award phase and not the selection phase, which explains why DG Fisheries initially referred to those factors among the grounds justifying rejection of the tender. In any event, if the Commission’s reasoning were to be followed, it would be clear that neither the weakness of the applicant’s tender as regards, in particular, experience in ColdFusion technology, nor the assessment of the proposed team as over-large would have justified rejection of the tender, which is manifestly contrary both to the statement of reasons provided by DG Fisheries in its first two letters and to the assessment of the evaluation committee, which was approved by DG Fisheries.

74 As regards the technical award criteria in section 2.6.2 (h) and (j) of the tender specifications relating, respectively, to the guarantees of stability of the team and to the procedures and methods for the transfer of knowledge on completion of the project, it is clear from the letter of 5 November 2004 that, while DG Fisheries on the one hand provided information which was more detailed as compared with that contained in the contested decision and in the letter of 18 October 2004, on the other hand it asserted that ‘the appreciation “is a weakness in the bid” doesn’t refer to these specific criteria in isolation, but is an overall appreciation compared to other criteria [(a), (b), (c), (d), (g), (i) and (k)] which are rated better in your offer.’ Not only had that explanation never been stated previously, but it is expressed so elliptically that it is no more helpful in enlightening the Court as to the full reasoning which led DG Fisheries to reject the applicant’s tender.

75 Lastly, the Court cannot accept the submission of the Commission at the hearing, to the effect that the letter of 5 November 2004 is that in which the grounds justifying rejection of the tender may best be found. It must be pointed out that the Commission must fulfil its obligation to state reasons solely within a first letter which sets out the grounds for rejection of the bid of the unsuccessful tenderer and within a second letter which should, in reply to an express request from that tenderer, provide information on the characteristics and relative advantages of the tender of the candidate to whom the contract is to be awarded. Accordingly, an adequate statement of reasons must be made, at the latest, when the second letter is sent, the purpose of that letter being to complement the initial statement of reasons as regards the factors which justified the decision to award the contract. The possible sending of a third letter, as has been explained in paragraph 60 above, can be taken into account only when such a letter confirms the initial statement of reasons and is restricted to providing more detail on the grounds justifying rejection of the bid of the unsuccessful tenderer and award of the contract to the successful tenderer, and not when, as in the present case, the Commission sets out other considerations which go so far as to undermine the statement of reasons provided in the first two letters. That is all the more valid when the intention of the third letter, sent in reply to the complaints of the unsuccessful tenderer, is merely to ‘correct errors’ contained in earlier letters, which, as admitted by the Commission at the hearing, was the position in this case.

76 In the light of the foregoing, the explanations contained in the letter of 5 November 2004 cannot be taken into consideration in determining whether DG Fisheries complied with its obligation to state reasons and the effect of those explanations, since they are inconsistent with the explanations provided earlier, is that the reasoning of DG Fisheries in relation to the grounds justifying rejection of the applicant’s tender becomes even more obscure and ambiguous.

77 The ambiguity of the statement of reasons for the contested decision, as emerges clearly when all of the letters sent by DG Fisheries are read together, has prevented both the applicant and the Court from establishing, with sufficient certainty, the reasons why the applicant’s tender was rejected.

78 Equally, because of the ambiguity caused by the contradictions in the various letters sent by DG Fisheries to the applicant and intended to explain the rejection of its tender, the Court is also unable to review the merits of the award of the contract in question to the successful tenderer. From the statement of reasons provided by the Commission it is impossible to identify, with sufficient certainty, the selected award criteria, in particular those relating to the size and experience of the proposed team, or to check how they have been applied, even in relation to the successful tenderer.

79 It follows from the foregoing that the decision to reject the applicant’s tender and to award the contract to the successful tenderer is vitiated by a failure to provide a statement of reasons.

80 The contested decision must therefore be annulled, since the Commission has failed to fulfil its obligation under Article 100 of the Financial Regulation and Article 149 of the Implementing Rules to state reasons, and it is unnecessary to rule on the other pleas in law relied on by the applicant.

81 Lastly, as regards the applicant’s request that the Commission be ordered to produce the documents sought in the application, it suffices to state that the Court, by way of measures of organisation of procedure, called on the Commission to produce the evaluation report and that the Commission complied with that request.

82 Under Article 87(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since the Commission has been unsuccessful and the applicant has applied for costs, the Commission must be ordered to bear its own costs and to pay the costs of the applicant.

1. The Commission’s decision to reject the tender submitted by Evropaïki Dinamiki - Proigmena Sistimata Tilepikinonion Pliroforikis kai Tilematikis AE and to award the contract to the successful tenderer in the tendering procedure ‘FISH/2004/02’ is annulled;

The fourth plea in law: infringement of the obligation to state reasons and failure to provide pertinent information

- The statement of reasons contained in the contested decision and in the letter of 18 October 2004

- The statement of reasons contained in the letters of DG Fisheries dated 5 and 15 November 2004


1,4973	[EUR] 347,23	519,89
1,4034	[EUR] 352,84	495,18

	[Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback]
	Court of Justice of the European Communities (including Court of First Instance Decisions)
You are here: BAILII >> Databases >> Court of Justice of the European Communities (including Court of First Instance Decisions) >> Evropaiki Dynamiki v Commission of the European Communities [2008] EUECJ T-465/04 (10 September 2008) URL: http://www.bailii.org/eu/cases/EUECJ/2008/T46504.html Cite as: [2008] EUECJ T-465/04, [2008] EUECJ T-465/4, EU:T:2008:324, ECLI:EU:T:2008:324

Court of Justice of the European Communities (including Court of First Instance Decisions)