THE BACKGROUND TO THE COMPLAINT

1. The complainant acted on behalf of an Italian company, SO.GI.N., which led a consortium comprised of (a) itself; (b) the Italian company CESI; (c) the French companies Sofregaz and Petrostrategie; (d) the Spanish company Mercados Energéticos; and (e) the British company Le Boeuf, Lamb, Greene & MacRae.

2. On 11 February 2005, SO.GI.N., acting on behalf of the consortium, submitted an offer in reply to the Commission's call for tender for the project entitled Harmonisation of Energy Policies of Russia and EU (EuropeAid/115584/C/SV/RU). The budget for the relevant project was EUR 4 000 000. The duration of the project was 21 months, renewable for a period of the same length.

3. By letter of 22 April 2005, the Head of Contract and Finance Section of the Delegation of the European Commission to Russia (the "Delegation") informed SO.GI.N. that its bid had been rejected. The letter stated that, after arithmetical corrections made by the Evaluation Committee, it emerged that SO.GI.N.'s bid exceeded the maximum budget available, that is, it exceeded the sum of EUR 4 000 000. Further, it informed SO.GI.N. of the overall score that it had obtained and of the score obtained by the winner of the tender, namely BCEOM French Engineering Consultants.

4. After an intensive exchange of correspondence between SO.GI.N., on the one hand, and the Delegation and the EuropeAid Co-operation office of the European Commission on the other, the complainant submitted the present complaint to the Ombudsman on 28 September 2005.

THE SUBJECT MATTER OF THE INQUIRY

5. The Ombudsman understood the complainant to allege that the Commission's decision not to select SO.GI.N., on the grounds that its bid exceeded the maximum budget allowed under the tender, was unfounded.

6. The complainant claimed that the Commission should reconsider SO.GI.N.'s proposal.

THE INQUIRY

7. After receiving the complaint on 6 October 2005, the Ombudsman opened an inquiry on 23 January 2006. The Commission sent the Italian translation of its opinion on 30 June 2006, which was forwarded to the complainant, who then sent his observations. After analysing the Commission's opinion and the complainant's observations, the Ombudsman was not satisfied that the Commission had responded adequately to the complainant's allegation and claim. Therefore, on 17 December 2007, the Ombudsman made a proposal for a friendly solution to the Commission.

8. On 20 May 2008, the Commission sent its reply to the Ombudsman stating that it could not accept the friendly solution proposal. The Commission's reply was forwarded to the complainant, who then sent his observations in relation thereto.

THE OMBUDSMAN'S ANALYSIS AND CONCLUSIONS

A. The complainant's allegation that the Commission's decision not to select SO.GI.N., on the grounds that its bid exceeded the maximum budget allowed under the tender, was unfounded

Arguments presented to the Ombudsman

9. In his complaint, the complainant alleged that the Commission's decision not to accept the bid of SO.GI.N., on the grounds that it exceeded the budget allowed by the tender, was unfounded. The complainant argued that there were no arithmetical errors to be corrected in the SO.GI.N bid. The relevant decision was thus vitiated by abuse of power and was in breach of Chapter 12.2 of the Instructions to tenderers.

The Commission's opinion

10. In its opinion on the complaint, the Commission stated that SO.GI.N. participated in a restricted tender procedure following the call for tender launched by the Commission for the project entitled Harmonisation of Energy Policies of Russia and EU (EuropeAid/115584/C/SV/RU) and financed under the Tacis Action Programme 2002. The maximum budget allocated to this service contract was EUR 4 000 000. The initial duration of the contract was 21 months. Subject to the availability of funding, it could be extended up to a maximum not exceeding its original length and value.

11. The Commission received twenty-one offers within the deadline of 24 November 2004. After a first selection, eight candidates were short-listed.

12. Chapter 4 of the Instructions to tenderers ("the Instructions") foresees that each tender should consist of a technical offer and a financial offer. Regarding the presentation of the financial offer, tenderers were instructed to use the specific electronic spreadsheet templates available on the Commission's website. The spreadsheet was formatted to round up the numbers entered as working days. The Commission stated that, in accordance with Article 28 (6) of the General Conditions for Service Contracts for the European Communities External Actions ("General Conditions"), no decimal numbers would be accepted for the purposes of invoicing. Tenderers were asked to submit both a printed original version and an electronic version of their offer. In case of discrepancies between the two versions, the printed version would prevail.

13. After its technical evaluation, the Evaluation Committee considered that the offer submitted by SO.GI.N. was one of only two offers which complied with the technical requirements.

14. The Evaluation Committee noted that the total specified for each budget line in SO.GI.N.'s bid did not correspond to the number of working days multiplied by the respective fee rate shown in the offer. The Evaluation Committee therefore corrected the apparent arithmetical errors by multiplying the fee rate by the corresponding number of working days. After the corrections, it emerged that the bid of SO.GI.N. amounted to EUR 4 000 021. Since it exceeded the maximum budget available of EUR 4 000 000, the Evaluation Committee was obliged to reject the bid.

15. The Evaluation Committee suggested awarding the contract to the other consortium that submitted a technically compliant tender, that is, BCEOM French Engineering Consultants. The contract was signed by the Commission on 24 March 2005 and counter-signed by BCEOM French Engineering Consultants on 4 April 2005. On 22 April 2005, the Commission Delegation in Russia informed SO.GI.N. of the reasons for the exclusion of its offer. On 2 May 2005, SO.GI.N. contested the arithmetical correction made by the Evaluation Committee, arguing that its bid did not contain any error. It stated that the apparent discrepancy between the total shown in its offer and the calculations carried out by the Evaluation Committee resulted from the fact that the electronic spreadsheets used by the tenderers "rounded up" figures entered as working days to whole numbers when the electronic spreadsheets were printed out. However, the software programme still used numbers with decimal values for the calculation of the totals.

16. By letter of 11 May 2005, the Delegation informed SO.GI.N. that the members of the Evaluation Committee based their assessment only on the information contained in the original paper copy of each offer, which, in case of discrepancies, prevails over the electronic version. The arithmetical errors found in the original paper copy of the bid submitted by SO.GI.N made it necessary for the Evaluation Committee to correct the bid.

17. On 12 May 2005, SO.GI.N. wrote again to the Delegation to reiterate its argument. The Delegation sent a further reply on 29 July 2005. In this letter, the Commission stated that:

"the financial offer submitted by SO.GI.N. contained errors that were not sufficiently verified, as proved by the mistaken figures stated in the prevailing paper version. The arithmetical correction was therefore undertaken by the Evaluation Committee following the paper version in order to adjust the final calculation."

18. Concerning the complainant's allegations and claim that the Commission's decision was unfounded because there were no arithmetical errors to be corrected to the SO.GI.N.'s financial offer, the Commission stated the following.

19. The Commission did not share the complainant's view that the figures shown in the original paper version of the bid did not contain any arithmetical error. On the contrary, the total obtained from multiplying the fee rates by the corresponding number of working days gave totals which differed from the totals indicated by SO.GI.N. in its bid. The Evaluation Committee was therefore obliged to carry out arithmetical corrections. On the basis of those arithmetical corrections, it excluded SO.GI.N.'s bid. This was in accordance with the provisions laid down in Chapter 12.2 of the Instructions.

20. The Commission noted that, although SO.GI.N. had submitted a clarification request to the Commission before submitting its offer, none of the questions raised concerned the methodology of the electronic spreadsheet to be used for the budget breakdown. After providing the opportunity for clarifications regarding the tender dossier, the Contracting Authority assumed that the tender evaluation process was clear to all the parties. The Commission noted that tenderers had the responsibility of complying with the rules of the relevant procedure.

21. As regards whether the Commission's decision was vitiated by abuse of power, the Commission noted that, according to the complainant, the Evaluation Committee should have submitted a request for clarification to SO.GI.N, if it had "doubts" or if it identified "mere material mistakes" concerning its offer. The Commission considered, however, that, although sections 3.3.9.3 and 3.3.10.2 of the Practical Guide applicable to the tender in question foresaw that the Evaluation Committee might resort to clarification requests, these sections did not impose an obligation on the Evaluation Committee to do so. Furthermore, the same Practical Guide provided that "any such request for clarification must not seek the correction of formal errors or major restrictions affecting the performance of the contract or distorting competition". Had the Commission addressed SO.GI.N. with a request for clarification at the time of the tender evaluation, this would have effectively led to an alteration of the offer concerning the number of working days and/or the fee rate, and would therefore have lead to a breach of the principle of fair competition.

22. As regards the complainant's argument that the Commission did not comply with Directive 17/2004 and Directive 18/2004 (which concern the procurement procedures of entities operating in the water, energy, transport and postal services sectors), the Commission noted that these Directives were addressed to the Member States and that the Commission was not bound by these Directives. The Commission noted that the Procurement rules binding upon it in the context of external relations were those laid down in the Financial Regulation. According to Article 167 of the Financial Regulation

"(...) The provisions of Article 56 and of Chapter 1 of Title V of part one relating to the general provisions on procurement shall be applicable to contracts covered by this Title subject to the special provisions relating to thresholds and arrangements for awarding external contracts laid down in the implementing rules. The contracting authorities for this purpose of this chapter shall be:

(a) the Commission on behalf of and for the account of one or more beneficiaries;

(b) the beneficiary or beneficiaries;

(c) a national or international public-sector body or natural or legal persons who have signed with the Commission a financing agreement or grant agreement for the implementation of external action."

23. The Commission noted that the rules applicable to procurements in the context of external relations foresee the principle of transparency and the need for ensuring the widest possible participation in competitive tendering. The Commission stated that it fully respected these principles.

24. The Commission further stressed that the electronic spreadsheets used by tenderers had been posted on the European Commission's website since 2003 and had not been modified since. Furthermore, this file had not been developed with the aim of calculating the suitability of bids, but was intended for tenderers so that they could avoid inconsistencies between figures introduced in three different annexes to the tender, namely, the budget breakdown, the cash flow forecast and the breakdown of working days by month. The Evaluation Committee, however, manually checked the bids received.

25. As regards the complainant's argument that the Commission did not comply with Chapter 12.2 of the Instructions to Tenderers, the Commission noted that the said Chapter reads as follows:

"(...)Any arithmetical errors are corrected without prejudice to the tender[er][1] such that, where there is a discrepancy between a fee rate and the total amount derived from the multiplication of the fee rate by the corresponding number of working days, the fee rate as quoted shall prevail, unless in the opinion of the Evaluation Committee there is an obvious error in the fee rate, in which event the total amount as quoted shall prevail and the fee rate shall be corrected."

26. The Commission noted that, in SO.GI.N.'s case, there were no obvious errors in the fee rate. The fee rate therefore prevailed over the total amount quoted. In accordance with the applicable rules, the Evaluation Committee thus corrected the errors in SO.GI.N.'s bid by multiplying the fee rate by the number of working days noted in the bid.

27. The Commission stated that, in order to avoid the possibility that future tenderers would make the same errors, the tender documents had been modified. In addition to the existing documents, the following note had been inserted: "Note that the input of experts must be given in full working days".

28. The Commission finally stressed that companies submitting an offer must take full responsibility for the content and presentation of their bids.

The complainant's observations

29. The complainant emphasised that the arithmetical corrections of the bid submitted by SO.GI.N. were made by the Evaluation Committee unilaterally and were based on the assumption that there had been an error in the bid submitted by SO.GI.N. However, no such error existed. The amount indicated in the original paper copy corresponded precisely to the one indicated on the electronic version of the offer. The calculation had been done by using the software programme referred to in the invitation letter for the tender. It was possible to introduce decimal numbers into that software programme, even though the decimals did not appear in the printed version, where the numbers were rounded up or down.

30. If the Evaluation Committee had identified arithmetical errors in the bid submitted by SO.GI.N., it should, the complainant argued, have considered it as merely a "material error" and the final total amount, as set out in the SO.GI.N. bid, should have prevailed. Furthermore, if, in the Evaluation Committee's view, a correction were necessary to correct the apparent discrepancy between the electronic and the paper copy, it could have replaced, in the paper copy of the bid, the whole number with the decimals (as introduced by the complainant in the electronic spreadsheet), without changing the total amount of the offer submitted by SO.GI.N.

31. In any case, SO.GI.N. could not be considered to be responsible for such a discrepancy.

32. The fact that, according to the Commission, the tender documents available on the Commission's website had now been modified and, in particular, the fact that a note stating that "the input of experts must be given in full working days" was added, showed that, at the time when SO.GI.N. submitted its offer, the use of decimal numbers was allowed. Furthermore, in view of the fact that, after the intervention of the Evaluation Committee, the budget was exceeded by only EUR 21, corresponding to the 0.0005% of the amount allowed, it would have been good practice to ask SO.GI.N. for clarification.

33. When, in its opinion, the Commission referred to point 12.2 of the Instructions to Tenderers and stated that "[a]ny arithmetical errors are corrected without prejudice to the tender" it wrongly referred to the original text which reads: "[A]ny arithmetical errors are corrected without prejudice to the tenderer". By introducing the relevant changes which led to the exclusion of the offer submitted by SO.GI.N., the Evaluation Committee acted contrary to the provision referred to above because the correction introduced caused prejudice to the tenderer, namely, caused its exclusion from the tender procedure.

The Ombudsman's preliminary assessment leading to a friendly solution proposal

34. The Ombudsman noted that Article 28 of the General Conditions concerns payments and interest on late payment. Article 28 (6) of the General Conditions states that "[f]or all experts, their time input must be rounded to the nearest whole number of days worked for the purposes of invoicing." This wording implies that the rounding off of time input to the nearest whole number is an exception which applies "for the purposes of invoicing". The wording of Article 28 of the General Conditions does not imply that the rounding off to the nearest whole number is obligatory for any other purpose, such as for the purposes of submitting a bid. Indeed, it can be inferred from Article 28 (6) of the General Conditions that time input is normally recorded in accounts using decimals numbers. If this were not the case, there would be no need to include in the General Conditions a specific provision as regards the rounding off of such decimals numbers for the purposes of invoicing.

35. The Ombudsman did not find any general prohibition on the use of decimal numbers as regards the annotation of days worked. Indeed, in contrast, Article 21 and Article 24(2) of the General Conditions explicitly make reference to the number of hours worked.

36. The Ombudsman also noted the fact that the Commission had modified the Instructions and now requires that time worked by experts must, in a bid, be given in full working days. The Ombudsman considered that this modification to the Instructions was an additional indication that, prior to its adoption, it was not obligatory for time worked by experts to be given in full working days, when submitting a bid.

37. As regards the manner in which SO.GI.N.'s bid was presented, the Ombudsman noted that, in accordance with Chapter 4 of the Instructions, tenderers were instructed to use the specific electronic spreadsheet templates available on the Commission's website. SO.GI.N. used the electronic spreadsheet template, in accordance with the Instructions. The electronic spreadsheet templates allowed tenderers to input decimal numbers. The electronic spreadsheet templates, which SO.GI.N. was not permitted to modify when making its bid, automatically rounded off these decimal numbers to whole numbers for the purposes of presentation. However, despite this presentational feature imposed by the Commission, the data, in decimal numbers, remained in the electronic spreadsheet which was submitted to the Commission by SO.GI.N.

38. While the Commission emphasised, in its opinion, that companies submitting an offer must take full responsibility for the content and presentation of bids, the Ombudsman did not consider that any such obligation can extend to making changes to how information is presented, when doing so would have required the companies concerned to ignore an explicit instruction from the Commission.

39. The Ombudsman also noted that it had not been contested that the electronic spreadsheet was submitted by SO.GI.N. to the Evaluation Committee at the same time as SO.GI.N. submitted the paper version of its bid.

40. The Ombudsman noted that the Commission took the view that the Evaluation Committee had no obligation to ask tenderers to clarify their offers. Furthermore, the Practical Guide provided that "any such request for clarification must not seek the correction of formal errors or major restrictions affecting the performance of the contract or distorting competition". Thus, according to the Commission, if the Evaluation Committee had addressed a request for clarification to SO.GI.N. during the evaluation of the tenders, this would have effectively led to an alteration of the offer concerning the number of working days and/or the fee rate, and therefore would have led to a breach of the principle of fair competition.

41. The Ombudsman agreed that it is important, in order to ensure (a) respect for principles of fair competition, and (b) the proper functioning of a tender process, that tenderers cannot be allowed to "alter" bids once the relevant deadline has passed. However, the Ombudsman was not convinced that a request for clarification would have led to an alteration of the offer and would have been in breach of principles of fair competition. He noted that, if the Evaluation Committee had made a request for clarification to SO.GI.N., SO.GI.N. could have proven, by making reference to the electronic spreadsheet submitted at the same time as the paper offer was submitted, exactly what they had offered. The "clarification" would not have resulted in any "alteration" to SO.GI.N.'s offer. It would, therefore, not have been contrary to the principles of fair competition, nor would it have affected the proper functioning of the tender process.

42. The Ombudsman was also not convinced that a request for clarification would have constituted a "correction of formal errors". The "correction" of an error assumes that an element of a bid would be changed. However, this was not the case as regards the SO.GI.N. bid, since any request for clarification would only have led SO.GI.N. to inform the Evaluation Committee of the precise bid which it had already submitted. SO.GI.N. would not have amended any part of that bid. Moreover, SO.GI.N. could have easily proven that the "clarification" of its bid did not constitute a "modification" of the said bid, by making reference to the electronic spreadsheet it submitted at the same time it submitted the paper version of the bid.

43. Third, while the Ombudsman agreed that the Evaluation Committee is not obliged to ask for clarification regarding each and every point which may be unclear in a bid, it would certainly be an abuse of its discretion, and therefore an instance of maladministration, if the Evaluation Committee failed to seek clarifications as regards an issue which was evidently unclear and which could prove decisive for the acceptance or rejection of a bid. The Ombudsman noted, in this respect, that the Evaluation Committee took the view the excessive size of the SO.GI.N. bid's budget was the decisive reason for the bid's rejection.

44. Further, the mere fact that SO.GI.N.'s bid exceeded the maximum budget of EUR 4 000 000 by only EUR 21 should, on its own, have led the Evaluation Committee to consider the need to clarify the bid with SO.GI.N.

45. In these circumstances, the Ombudsman took the view that, in the present case, the Evaluation Committee should have exercised its discretion to ask SO.GI.N. for clarifications in relation to SO.GI.N.'s bid or should had provided a convincing explanation as to why it did not do so. However, the Ombudsman noted, the Commission provided no explanation as regards why it did not exercise its discretion to ask for clarification.

46. The Ombudsman further noted that the Commission stated, in its opinion, that the rules applicable to procurements in the context of external relations foresee the need for ensuring the widest possible participation in competitive tendering. In this context, the Ombudsman noted, with concern, that, by failing to exercise its discretion to clarify SO.GI.N.'s bid, in the context of a tender procedure involving a significant amount of money (up to EUR 4 000 000), the Evaluation Committee excluded one of the only two bids which were technically compliant. This resulted in the tender being automatically awarded to the only remaining tenderer, without any further deliberation. While it is true that the other tenderer may, in any event, have eventually won the tender, even if SO.GI.N.'s bid had not been rejected[2], the Ombudsman did not exclude that the rejection of SO.GI.N.'s bid, at that stage, created a serious risk that the interests of the Commission, and, in a broader sense, the interests of protecting Community funds, would be compromised.

47. In light of the above, the Ombudsman considered that the Evaluation Committee was manifestly wrong when it failed to exercise its power of discretion to ask for clarification as regards SO.GI.N.'s bid. This failure resulted in the exclusion of the SO.GI.N. bid. He concluded that this could constitute an instance of maladministration.

48. As regards the complainant's point that the Evaluation Committee was in breach of Chapter 12.2 of the Instructions to tenderers, the Ombudsman noted that the Commission argued that, given that no obvious errors were noted in the fee rate, the Evaluation Committee was required, in accordance with Chapter 12.2 of the Instructions, to "correct" the total amount derived from the multiplication of the fee rate by the corresponding number of working days, rather than to "correct" the fee rate. Chapter 12.2 of the Instructions to Tenderers reads as follows:

"(...) Any arithmetical errors are corrected without prejudice to the tenderer such that, where there is a discrepancy between a fee rate and the total amount derived from the multiplication of the fee rate by the corresponding number of working days, the fee rate as quoted shall prevail, unless in the opinion of the Evaluation Committee there is an obvious error in the fee rate, in which event the total amount as quoted shall prevail and the fee rate shall be corrected."

49. The Ombudsman considered that the above rule amounts to an exception allowing the Evaluation Committee to retain and evaluate a bid, even though it has been verified that the bid contains an arithmetical error. In such cases, where it is unclear whether the error concerns the fee rates, the working days, or the total amounts set out in the bid, the Evaluation Committee must consider that the fee rates are correct. It is only where there is an "obvious error" in the fee rate that the fee rates will be changed.

50. Such a rule appears to be in the interests of the institution, and in the interests of Community funds, since it allows a bid, in which an error has been verified to exist, to be retained.

51. However, the fact that the Instructions contain a rule allowing a bid to be retained, despite the fact that the existence of such an error has been verified, does not in any way exclude the possibility, and in certain circumstances such as those described in 48 and 49 above, the obligation, to seek clarifications in relation to bids. If such clarifications had been sought from SO.GI.N., the Evaluation Committee would have verified that, in the present circumstances, there was no arithmetical error to be "corrected".

52. In this respect, the Ombudsman underlined that the rules set out in Chapter 12.2 of the Instructions relate to a "correction" in either the fee rates or the total amounts quoted in a bid, rather than a "clarification" of the fee rates or the total amounts quoted in a bid. SO.GI.N. at no point in time requested that any change be made to its bid. Rather, SO.GI.N. requested that its bid, as submitted[3], be taken into account.

53. The Ombudsman also noted that Chapter 12.2 of the Instructions to Tenderers allows changes to be made either to the fee rate or to the total amount derived from the multiplication of the fee rate by the corresponding number of working days. However, the issue which required clarification as regards the SO.GI.N. bid did not concern the fee rate, or the total amount of each budget line, both of which were correctly set out in the paper version of the SO.GI.N. bid, but rather the precise amount of time to be worked (given that the time had been rounded off by the electronic spreadsheet which the Commission obliged tenderers to use). Therefore, the Ombudsman concluded that, in any event, Chapter 12.2 of the Instructions was not applicable in the present case. In this respect, no further inquires appeared to be necessary as regards the complainant's allegation that the rejection of its bid was in breach of chapter 12.2 of the Instructions to tenderers.

54. Furthermore, the Ombudsman considered whether the Evaluation Committee's not to exercise its power of discretion to ask for clarification as regards SO.GI.N.'s bid, which resulted in the exclusion of the SO.GI.N. bid and, in the Ombudsman's view, constituted an instance of maladministration, had the further effect of causing SO.GI.N. to lose a "serious chance" to win the tender. In this regard, the Ombudsman considered it relevant to take into account the fact that only two proposals had been deemed to comply with the technical requirements. In this connection, the Ombudsman noted that he was aware that obtaining the highest technical score does not constitute a guarantee that a bid will win a tender. He went on to point out, however, that, when seeking to evaluate whether SO.GI.N. had lost a "serious chance" to win the tender, he considered it relevant that the technical score assigned to the proposal submitted by SO.GI.N. was 100 points, and that this score was higher than the technical score assigned to the company which was awarded the contract (95.48 points).

55. The Ombudsman, therefore, arrived at the preliminary conclusion that, as a result of its unwarranted exclusion from the tender, SO.GI.N. lost a "serious chance" to win the tender. Accordingly, he made the following proposal for a friendly solution to the Commission:

The Commission should enter into direct contact with SO.GI.N in order to agree on adequate compensation for the loss of opportunity suffered by SO.GI.N. as a result of the unwarranted exclusion of its bid from the tender.

The arguments presented to the Ombudsman after his friendly solution proposal

Commission's reply to the letter of friendly solution

56. The Commission informed the Ombudsman that it could not accept the Ombudsman's proposal for a friendly solution for the following reasons.

57. As a preliminary observation, the Commission noted that SO.GI.N. generally used decimal numbers when referring to the number of days worked by short-term and long-term experts. Each time SO.GI.N. used decimals when entering the number of working days per month on the spreadsheet, the rounding off of the relevant figure was displayed in the screen.

58. As a first argument, the Commission pointed out that the way in which the number of working days was quantified inevitably raised the question of the practicality of the data. The Commission gave two examples. In month 2, the Team Leader was to work 16.62292 days (this was rounded off to 17 days on the spreadsheet). The Long-term local senior expert was to work 37.24792 days (this was rounded off to 37 days on the spreadsheet).

59. As a second argument, the Commission pointed out that the generalised use of decimals by SO.GI.N was not without a purpose. The Commission argued that SO.GI.N calculated the number of working days and the fee rates so as to approach as much as possible to the maximum budget allowed. The Commission pointed out that, even if a tenderer has the right to seek to maximise the value of the contract, SO.GI.N.'s view that the Evaluation Committee should have corrected the printed version by replacing the rounded number of working days by the numbers with decimals as entered on the spreadsheet cannot be accepted.

60. As a third argument, the Commission also disagreed with the Ombudsman's interpretation of Article 28(6) of the General Conditions for Service Contracts for the European Community External Actions. The Commission did not agree that the purpose of Article 28(6) is only "for the purpose of invoicing", which seems to imply that the invoicing carried out after a contract is awarded could be dissociated from the price of a tender. In the Commission's view, tenderers cannot submit, in the context of a tender, prices that they will not be able to charge in case they are awarded the contract.

61. As a fourth argument, the Commission also reiterated its view that, if the Evaluation Committee had issued a request for clarification to SO.GI.N. at the time of the tender evaluation, this would have effectively led to an alteration of the offer concerning the number of working days and/or the fee rate, and would have therefore led a breach of the principle of fair competition. The changes deriving from a possible request for clarification would have, on the one hand, resulted in a significant alteration of the offer. On the other hand, although the principle of the widest possible competitive tendering had to be respected, a balance with the principles of transparency, equal treatment of tenderers and competition had also to be struck. The fact that SOGIN's offer only exceeded the maximum of EUR 4 000 000 by EUR 21 was irrelevant.

62. As a fifth argument, the Commission pointed out that, when it submitted its bid, SO.GI.N. had the possibility, , of pointing out the arithmetical errors appearing on the printed version of the 'Budget breakdown'. Since the worksheet of the 'Budget breakdown' and the 'Working days' are interrelated, amending the total number of working days in the budget breakdown would have implied amending the worksheet 'working days' attached to the financial offer to ensure consistency between the two of them. The Commission had also pointed out that SO.GI.N. was well aware that, although rounded off data were displayed on the spreadsheet, the spreadsheet calculated the total fee rate using the underlying value.

63. As a sixth argument, the Commission pointed out that, when the Evaluation Committee checks the financial offers, it verifies the calculation of the 'Budget breakdown' manually. Normally, it does not refer to the electronic version. As is clearly indicated in the Instructions to Tenderers, it is the paper version that prevails. What the Evaluation Committee normally does is to compare the budget breakdown with the table in the 'Number and estimated working days attached to the technical offer under the 'Organizations and methodology' section. In SO.GI.N.'s case, the Evaluation Committee verified that the number of working days appearing in the printed version of both documents coincided and that there were no discrepancies between them regarding the number of working days.

64. The Commission also argued that, even if it were admitted that decimals were acceptable, no instruction from the Commission would have been ignored if the tenderer had introduced in the paper version modifications in order to reflect the planned number of working days. Since the Instructions to tenderers clearly indicated that in case of discrepancy it was the paper version of the relevant offer that prevailed, nothing prevented SO.GI.N. from introducing the necessary corrections.

65. As seventh argument, the Commission stated that it did not share the Ombudsman interpretation of Article 21 and 24(2) of the General Conditions.

66. The reference made by Article 21 concerns the number of hours per day/per month during which experts may work. They are "fixed on the basis of the laws, regulations and customs of the beneficiary country and the requirements of the services". No conclusion can therefore be derived with regard to invoicing on pricing. The purpose of this provision is limited to reminding the contractor of its obligation to respect, as far as working hours are concerned and the labour laws of the beneficiary country in which the services are delivered.

67. According to Article 24(2):

"[F]or a fee-based contract, timesheet recording the days worked by the Consultant's personnel must be maintained by the Consultant. The amounts invoiced by the Consultant must correspond to these timesheets. In the case of long-time experts, these timesheets must record the number of days worked. In the case of short-time experts, these timesheets must record the number of hours worked (...)".

Consequently, the use of working hours for timesheets is in any case exclusively foreseen for short-term experts, even though for purposes of invoicing they are not even used since seven hours worked by short-term experts amounts to one day worked.

68. Having also analysed the rest of contractual documents sent to the tenderers for the purpose of submitting their bid, the Commission considered that only full working days are considered. In fact, with regard to the time input of experts, point 6.1 of the terms of Reference states that:

"(...) it is recommended that the precise time input of the experts be left to the discretion of tenderers. However, it may be useful to indentify some absolute minima for the contribution of key experts to be considered appropriate (...) Performance of the contract (and therefore payment) is based on working days only. The consultant will only be paid for days actually worked on the basis of daily fee rate contained in the budget breakdown (...)".

69. Furthermore, point 4.2 of the Instructions to tenderers deals with the issue of working days and instructs tenderers to "enter the estimated number of working days for each category ox expert during the period of execution of the contract in the third worksheet ('working days')". This instruction is complemented with another comment that is displayed in the spreadsheet itself indicating that the tenderer has to enter "the estimated numbers of working days for each month of the period of execution for each category of expert".

70. In the Commission's view, the above provisions show that full working days are exclusively considered. Furthermore, this position is strengthened by the fact that, in more than three years of the use of the relevant spreadsheet in the budget breakdown for tender, the Commission was informed about the existence of problems for the very first time, when the complainant did so.

The fact that the Commission, following the present complaint, decided to make an explicit reference to the need to use full numbers when expressing working days, did not mean an acknowledgment of responsibility by the Commission. This was exclusively aimed at avoiding the repetition of the problem encountered in the present case.

The complainant's observations on the Commission's reply

71. In a message of 16 October 2008, the complainant maintained all the points made in the original complaint and in the observations on the Commission's opinion.

72. The complainant emphasised that SO.GI.N. submitted an electronic and a paper version of its financial offer. The paper version was obtained by printing the electronic version of the financial offer and it was therefore the same. The apparent inconsistence between the two versions of the same offer was due to the fact that the column "Estimated Number of Working Days" of the Excel spreadsheet allowed one to see only rounded-up figures. However, the relevant algorithm, which was used to calculate the amounts introduced in the Excel spreadsheet, took account of decimal figures. Furthermore, and in order to avoid any misunderstanding, it has to be noted that the protected Excel spreadsheet contains a note according to which: "this worksheet is protected. Only the following data should be entered in this column: please enter the rate for each category of experts. (...)". When verifying the offer submitted by SO.GI.N., the Evaluation Committee had manually multiplied the figures contained in the relevant table, without taking into account that the Excel spreadsheet only shows figures that had been automatically rounded up by the programme imposed by the Commission.

The Ombudsman's assessment after his friendly solution proposal

73. The Ombudsman will deal together with the first and second arguments put forward by the Commission in response to his proposal for a friendly solution. These arguments are that (i) the way in which SO.GI.N. number quantified working days was not practical, and (ii) SO.GI.N used decimals so as to approach as much as possible to the maximum budget allowed (see paragraphs 58 and 59 above).

74. The Ombudsman first of all points out that it cannot be presumed that the reason why SO.GI.N. used fractions of days for certain tasks described in its bid was only to approach, as much as possible, the maximum budget allowed. In effect, the Ombudsman considers it reasonable to presume that certain tasks of experts (for example, attending meetings) could not be efficiently subdivided into units of whole days[4]. In any event, the Ombudsman notes that, as a general principle, tenderers are fully entitled to structure bids so as to approach as much as possible to the maximum budget allowed. In addition, the Ombudsman notes that the Commission's argument essentially involves speculation on the Commission's part as regards the practicality of certain aspects of the SO.GI.N. bid (the Commission cites the example of a team leader who was to work 16.62292 days (rounded off to 17 days on the spreadsheet) and the example of a long-term local senior expert who was to work 37.24792 days (rounded off to 37 days on the spreadsheet). The Ombudsman notes, however, that the potential instance of maladministration identified by the Ombudsman in his proposal for a friendly solution concerned the failure of the Evaluation Committee to exercise its power of discretion to ask for clarification from SO.GI.N. as regards its bid. By failing to do so, the Committee made (erroneous) assumptions as regards the true nature of the SO.GI.N. bid (it wrongly assumed that an arithmetical error had been made). The argument put forward by the Commission, namely, that there are doubts as regards the practicality of the certain aspects of the SO.GI.N. bid, does not in any way imply that the Committee should not have sought clarifications from SO.GI.N. Indeed, the Ombudsman notes, the argument that there are doubts as regards the practicality of the certain aspects of the SO.GI.N. bid reinforces the argument that the Committee should have sought clarification from SO.GI.N. as regards the meaning of its bid. Therefore, the Ombudsman considers that the Commission's arguments are either irrelevant or not well-grounded.

75. As regards the third argument put forward by the Commission (see paragraph 60 above), namely, that tenderers cannot submit, in the context of a tender, prices that they will not be able to charge in case they are awarded the contract (namely, invoices in fractions of euros), the Ombudsman agrees that the invoicing after a contract is awarded cannot be dissociated from the prices quoted in a tender. In sum, tenderers cannot submit bids which would require them, subsequently, to submit invoices in fractions of euros. The Ombudsman has carefully reviewed the whole file. He has found no instance of any price quoted in fraction of euros. In sum, the Ombudsman notes that the use of fractions of days by the complainant when making its bid did not give rise, in any case, to pricing in fractions of euros. Rather, the use of fractions of days by the complainant always gave rise to price calculations in whole euros. Therefore, the Ombudsman does not consider that the Commission's argument is well-grounded.

76. As regards the fourth argument put forward by the Commission (see paragraph 61 above), namely, that a request for clarification would have led to an alteration of the offer concerning the number of working days and/or the fee rate of SO.GI.N., thereby breaching the principle of fair competition between bidders, the Ombudsman first of all agrees that it is a central characteristic of a tender process that a bid cannot be "altered" once the bid has been submitted. The purpose of this rule is to ensure proper competition between bidders (proper competition could not take place if bidders could reduce their bids to take account of the knowledge they acquire of the bids of other bidders). The Ombudsman underlines, however, that SO.GI.N. could not have used an opportunity to clarify its bid in order to alter its bid, given that SO.GI.N. had, at the time it submitted its bid on paper, also submitted the electronic version of the bid. The electronic version of the bid contained the precise working days submitted by SO.GI.N. (some of which were in fractions of days). There could, thus, have been no alteration of the SO.GI.N. bid if a request for clarification had been made by the Evaluation Committee. Therefore, the Ombudsman does not consider that the Commission's argument is well-grounded.

77. In its fifth argument (see paragraph 62 above), the Commission states that SO.GI.N. had the possibility, when it submitted its bid, of pointing out the "arithmetical errors" appearing on the printed version of the 'Budget breakdown'.

78. The Ombudsman, first of all, considers it useful to clarify that the printed version of the SO.GI.N. bid did not contain "arithmetical errors" as such[5]. Rather, the difficulties that arose with the printed version of the SO.GI.N. bid were presentational (namely, the numbers of working days were presented as whole numbers on the printed version, whereas they were introduced into the software programme as fractions by SO.GI.N.)[6].

79. Further, the Ombudsman notes that an obligation on an Evaluation Committee to seek clarification of a bid cannot be subject to a rule that clarifications are only required when an interested party brings the need for clarification to the attention of the Evaluation Committee. Rather the Ombudsman is of the view that an Evaluation Committee should seek clarification of a bid whenever, for whatever reason, it becomes evident to it that a clarification is necessary. In this context, it is certainly the case that SO.GI.N. could have specifically drawn the Commission's attention to the presentational problem when it submitted its bid. This would certainly have facilitated the Evaluation Committee in identifying the presentational problem and, thereafter, in clarifying the SO.GI.N. bid with SO.GI.N. However, even though SO.GI.N. did not draw the Commission's attention to the presentational problem, this does not imply that it was not possible for the Evaluation Committee to arrive, on its own, at the conclusion that a clarification was necessary. As regards whether the Evaluation Committee had sufficient information to indentify that that there was a need for clarification, which should have then led it to seek clarification from SO.GI.N., the Ombudsman notes that the Evaluation Committee did identify anomalies in the printed version of the SO.GI.N (upon identifying these anomalies, it then proceeded to modify what it thought were arithmetical errors in the calculations in the bid). This proves that the Evaluation Committee was indeed aware of anomalies in the printed version of SO.GI.N. bid, even though SO.GI.N. did not specifically draw the Commission's attention to the presentational problem when it submitted its bid. As such, the Evaluation Committee did have sufficient grounds to seek clarifications from SO.GI.N. However, rather than seeking a clarification from SO.GI.N., it proceeded, without consulting with SO.GI.N., to make an assumption as regards the nature of the anomaly (it assumed that the SO.GI.N. bid contained arithmetical errors). On that basis, it unilaterally modified the SO.GI.N. bid. Therefore, the Ombudsman does not consider that the Commission's argument is well-grounded.

80. As regards the sixth argument (see paragraph 63 above), namely, that the Instructions to tenderers clearly indicate that it is the paper version that prevails in case of a discrepancy between the paper and the electronic versions, the Ombudsman again underlines that he does not question the fact that, in case of a discrepancy between the paper version and the electronic version, it is the paper version that prevails. Indeed, the Ombudsman has not asked the Commission to consider that the electronic version of the SO.GI.N. bid prevails over the paper version of the bid. Rather, the Ombudsman is of the view that the Evaluation Committee did recognise that there was an anomaly in the paper version of the SO.GI.N. bid, namely, that the number of working days on the printed version of the SO.GI.N. bid, multiplied by the fee rate, did not correspond to the total amount noted on the SO.GI.N. bid. Faced with this anomaly, the Evaluation Committee chose, unilaterally, to make an assumption as regards the nature of the anomaly. It assumed that there was an arithmetical error and proceeded to "correct" it. The Ombudsman is of the view that the Evaluation Committee, once it recognised the anomaly, should have, in accordance with session 3.3.9.3. and 3.3.10.2 of the Practical Guide, sought clarifications from SO.GI.N. The only role of the electronic version of the SO.GI.N. bid in such circumstances would be to corroborate the clarifications of SO.GI.N. as regards the number of working days in its bid.

81. As regards the seventh argument, namely, that the Commission does not share the Ombudsman's interpretation of Articles 21 and 24(2) of the General Conditions, the Ombudsman notes that the Commission has put forward no valid reasoning to support its position. The Ombudsman recalls that he did not find any general prohibition on the use of decimal points as regards the recording of days worked. Indeed, while Article 24(2) states that "[i]n the case of long-time experts, these timesheets must record the number of days worked', this does not necessarily mean full working days. It can also mean, for example, half days. Furthermore, Article 21 makes reference to the number of hours worked and Article 24(2) of the General Conditions explicitly refers to the number of hours worked in the case of short-time experts. This necessarily implies the possibility that tenderers could submit bids in fractions of days. The fact that some tenderers may not have used this possibility does not in any way imply that the possibility does not exist.

82. The Ombudsman again underlines that it is important, in order to ensure (a) respect for principles of fair competition, and (b) the proper functioning of a tender process, tenderers cannot be allowed to "alter" bids once the relevant deadline has passed. However, he emphasises again that, if it had been requested to do so by the Evaluation Committee, SO.GI.N. could have proven, by making reference to the electronic spreadsheet, which was submitted at the same time the paper offer was submitted, exactly what it had offered.

83. The Ombudsman maintains his point that any request for clarification made to SO.GI.N. would only have led SO.GI.N. to inform the Evaluation Committee of the precise bid which it had already submitted. SO.GI.N. could not have "amended" any part of the bid which had already been submitted. SO.GI.N., and the Evaluation Committee, could easily have proven that the "clarification" of the SO.GI.N. bid did not constitute a "modification" of the SO.GI.N. bid. They could have done so by cross-checking the clarification with the electronic spreadsheet submitted by SO.GI.N. at the same time SO.GI.N. submitted the paper version of the bid.

84. The Ombudsman considers that the Commission has not put forward any convincing argument that the "clarification" that the Evaluation Committee could have asked of SO.GI.N. would have resulted in an "alteration" to SO.GI.N.'s bid. Thus, there is no evidence that such a "clarification" would have been contrary to the principles of fair competition.

85. The Ombudsman is of the view that the Evaluation Committee, given the discretionary power which it enjoyed when evaluating the relevant proposal, was not strictly obliged to ask for clarification from SO.GI.N as regards the anomalies which it understood to be present in the paper version of the bid. However, the Ombudsman had consistently maintained that a "discretionary power" is not the same as an arbitrary power. A public authority must always have good reasons for choosing one course of action rather than another. A normal part of exercising a discretionary power is to explain the reasons why a particular course of action has been chosen[7].

86. As stated in his proposal of friendly solution, the Ombudsman maintains his view that it was an abuse of discretion, and an instance of maladministration, for the Evaluation Committee to fail to seek clarifications as regards an issue which was evidently unclear and which proved decisive for the acceptance or rejection of a bid.

87. Article 3, paragraphs 5 and 6 of the Statute of the European Ombudsman:[8]

"5. As far as possible, the Ombudsman shall seek a solution with the institution or body concerned to eliminate the instance of maladministration and satisfy the complaint.

6. If the Ombudsman finds there has been maladministration, he shall inform the institution or body concerned, where appropriate making draft recommendations. The institution or body so informed shall send the Ombudsman a detailed opinion within three months."

88. In the present case, the Ombudsman made a proposal of friendly solution which the Commission rejected. In light of the Commission position, which he understands to be the definitive position of the institution, the Ombudsman does not consider it appropriate to make a draft recommendation. The Ombudsman will therefore close the case with a critical remark.

B. The complainant's claim

89. The contract, whose award was the object of the dispute between the complainant and the Commission had been already awarded to another tender, BCEOM French Engineering Consultants, even before SO.GI.N. was informed that its bid had been rejected. In light of this, and taking into account the fact that the award of the contract to the above company was not part of the present inquiry, the Ombudsman considered that the complainant's claim had been superseded by events and had become impossible to implement.

C. Conclusions

On the basis of his inquiries into this complaint, the Ombudsman makes the following critical remark:

The Ombudsman considers that the Evaluation Committee manifestly erred when it failed to exercise its power of discretion to ask for clarification as regards the SO.GI.N. bid. This failure resulted in the exclusion of the SO.GI.N. from the tender, thus depriving it of a "serious chance" to win the tender. This constitutes an instance of maladministration.

The complainant and the European Commission will be informed of this decision.

 

P. Nikiforos DIAMANDOUROS

Done in Strasbourg on 28 May 2009

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[1] The Ombudsman notes that, in its opinion, the Commission stated that point 12.2 of the Instructions to Tenderers read that "[a]ny arithmetical errors are corrected without prejudice to the tender". However, this reference was wrong since the original text reads: "[A]ny arithmetical errors are corrected without prejudice to the tenderer". (emphasis added)

[2] Nevertheless, the letter sent by the Commission to the complainant on 22 April 2005 states that the technical score assigned to the proposal submitted by SO.GI.N. (100 points) was higher than the technical score assigned to the company which was awarded the contract (95.48 points). The Ombudsman is, however, aware that obtaining the highest technical score does not constitute a guarantee of winning the tender.

[3] SO.GI.N. could easily prove any assertions made in response to a request for clarification, by making reference to the electronic spreadsheet it submitted at the same time it also submitted the paper version of the bid.

[4] Indeed, the Ombudsman questions the practicality of imposing a rule which would require that only full days be used in bids, given that this would constrain tenderers to use full day for tasks which, given their specific nature, cannot or must not necessarily be carried out in units of full days.

[5] See paragraph 53 above.

[6] The Commission, basing itself on the printed version of the bid, arrived at the conclusion that there were "arithmetical errors" in the 'Budget breakdown', and proceeded to recalculate the SO.GI.N. bid.

[7] See Decision of the European Ombudsman on complaint 995/98/OV against the European Commission dated 30 January 2001, at paragraph 1.7 (available on the website of the Ombudsman).

[8] Adopted by Parliament on 9 March and amended by its decisions of 14 March 2002 (OJ L 92, 9.4.2002, p. 13) and 18 June 2008 (OJ L 189, 17.7.2008, p. 25).