Procurement Pulse

An interesting selection of case law this month, two of which look at the extent to which a contracting authority can control aspects of its procurement procedure. The Meca case held that a contracting authority should not have to await the outcome of court proceedings before it could exclude a contractor which it already knew had been guilty of poor past performance on a previous similar contract. In the Amey case, the court confirmed that a procedure can be abandoned in its entirety if an authority has objective grounds for doing so, but that will not necessarily extinguish challenges from economic operators on grounds which existed prior to the date of abandonment. In practice, the decision to abandon if often made on the basis that it is cheaper to run a new procurement, rather than take on the costs of entering into a contract, and of a damages claim relating to the abandoned procurement. This was the scenario in the Circle case, where the court confirmed that such duplication of costs (even where expenditure is of tax payers' money) may in certain scenarios be in the public interest to ensure proper compliance with procurement obligations.

Triggering reliance on poor past performance: Regulation 57(8)(g) of the Public Contracts Regulations 2015 (PCR'15) acknowledges "significant or persistent" poor past performance as a discretionary ground on which to exclude a bidder from a procurement process. Its effect is limited by the requirement that poor performance must have lead to "early termination of the prior contract, damages or other comparable sanctions". What do those words mean? In this case a contracting authority terminated a catering contract because of incidents of food poisoning. The service provider (Serio) contested the termination through the Italian courts. Italian law did not allow discretionary exclusion if (regardless of the fact that conduct had been sufficiently deficient to justify termination of a contract) the termination had been referred to the courts. Consequently the contracting authority allowed Serio to take part in the procurement process to appoint a replacement provider. The ECJ considered that such a national provision "paralysed" the discretion to exclude, granted to a contracting authority pursuant to article 57 of Directive 2014/24, and that it did not encourage bidders to take corrective action / self-clean. It also undermined a contracting authority's right to exclude ""at any time during the...