An abnormally low tender, a former official and a late document
The contracting authority of an EU agency runs an open procedure under Directive 2014/24/EU for a four-year facilities-management contract worth €2.4m. Four tenders are received. Tender C is priced at €1.35m, which is 38% below the €2.18m average of the other three; its price schedule shows labour costs 45% below the rate in the applicable collective agreement at the place of performance, and 60% of the work is to be subcontracted to a company established in another Member State. Tender A comes from a firm that recruited the agency's former head of procurement five months ago; while in post she had access to the draft specifications. Tender B omits its turnover figures and, after the chair of the evaluation committee asks all bidders for clarifications, supplies them two days after the deadline. Tender D is complete and compliant but is the second most expensive. The evaluation committee meets tomorrow and the head of unit wants to award to D 'to be safe'.
1. Can the authority reject tender C, and what procedure must it follow before any rejection?
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The 38% deviation is not by itself a ground for rejection. Under Article 69 of Directive 2014/24/EU the authority must, before rejecting a tender it considers abnormally low, request in writing the explanations it needs on the price and cost composition. The inquiry should cover the labour costs, since a rate 45% below the applicable collective agreement suggests non-compliance with the social and labour law obligations referred to in Article 18(2), the subcontracting arrangements under Article 63, and whether the posted workers will receive the applicable remuneration. Also check whether any State aid is involved.
Procedure matters as much as substance. Send a specific, itemised request; give a reasonable time to reply; examine the reply on its merits rather than comparing mechanically to the average; and, if the explanation does not account for the low level, adopt a reasoned decision rejecting the tender, notifying the bidder with the grounds. Rejecting on the basis of the average alone, or without hearing the bidder, would breach the adversarial principle and is a classic ground for annulment.
Awarding to D 'to be safe' is therefore wrong: the committee must first complete the Article 69 dialogue on C, since C may be the most economically advantageous tender, and must document each step in the evaluation report.
2. What is the effect of the former head of procurement's move to tenderer A, and how should the authority handle it?
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This is a potential conflict of interest and a potential distortion of competition, not a technicality. Under Article 24 of Directive 2014/24/EU, and the agency's own rules implementing Article 61 of the Financial Regulation, the authority must take appropriate measures to prevent, identify and remedy conflicts of interest. Article 57(4)(e) allows exclusion where a bidder has been involved in preparing the procurement in a way that distorts competition, or where it has obtained confidential information.
The analysis turns on facts to be established and recorded: what exactly did she see (draft specifications, technical parameters, evaluation weightings, other bids)? Did she work on the tender for A? Is there a documented confidentiality undertaking or a cooling-off period in her contract? Was any information shared with A?
The authority should not decide informally at the committee meeting. Open a written procedure: ask A for its position and for a declaration of confidentiality; consult the agency's ethics or legal service; if the distortion cannot be remedied, exclude A with reasons under Article 57, or, if the integrity of the whole procedure is compromised, cancel and relaunch. If the facts suggest intentional collusion or fraud, refer the matter to OLAF. The decision and its reasons must be in the evaluation file.
3. Should tender B's turnover figures be accepted, and does asking 'all bidders' for clarification cure the lateness?
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No. Article 56(3) of Directive 2014/24/EU permits the authority to request missing documents or clarification, provided the request does not result in undue discrimination. That is a narrow power to complete or clarify what is already in the file; it is not a means of curing a substantive gap after the deadline. Turnover is an economic and financial standing criterion, and evidence supplied after the deadline that enables a bidder to meet a criterion it did not previously satisfy gives it an advantage the other bidders did not have. The general request addressed to all bidders does not change the analysis: equal treatment is assessed by the effect, not the form of the request.
The committee should compare the tender file and the ESPD, determine whether B's self-declaration already contained the turnover figure or was silent, and decide accordingly. If the figure was present and only the supporting document was missing, acceptance may be defensible; if the figure was never stated, the tender must be rejected with a reasoned decision, the bidder informed, and the standstill period observed.
Throughout, the committee must record the reasoning for C, A and B in the evaluation report, because the risk on award is not that a decision is unpopular but that it is unexplained.