The background to the complaint

1. The complaint concerns the Commission's decision not to shortlist the complainant's application for a tender. The complainant is a company that led a consortium, which applied for a tender procedure launched by the European Commission (EuropeAid/131160/C/SER/Multi). The complainant challenged the way the Commission interpreted the selection criteria relating to the technical capacity of the candidates.

2. The selection criteria read as follows:

Point 21. 3 Technical capacity of candidate:

1. as regards the provision of preparatory support, candidates should have completed projects successfully (feasibility studies, design, technical assistance in tendering procedures, etc.) for at least 1 project in infrastructure for each of the 4 sectors (transport, energy, environment and social infrastructure) at regional or national level in the last 3 years prior to the submission deadline;

2. candidates should have completed successfully at least 1 TA contract of an amount for services of at least 1 000 000 EUR during the last 3 years prior to the submission deadline;

[...]

If more than 8 eligible candidates meet the above selection criteria, the relative strengths and weaknesses of the applications of these candidates must be re-examined to identify the 8 best applications for the tender procedure. The only factors which will be taken into consideration during this re-examination are: the priority order is:

1) number of projects according to point 21.3.1;

2) number of contracts according to point 21.3.2."

3. On 5 September 2011, before submitting its application, the complainant contacted the Commission requesting clarification regarding point 21.3.1. In particular, the complainant asked whether it could use, as an eligible reference, a successfully completed part of a project. The complainant added that it was able to submit documentary evidence related to the successfully completed part of a project (in accordance with the Practical Guide to contract procedures for EU external actions published on the EuropeAid web site (PRAG)).

4. In its reply to that e-mail, the Commission official contacted simply invited the complainant to consult the PRAG[1].

5. Section 2.4.11.1.3 of the PRAG, entitled "Verification of the technical and professional capacities of candidates or tenderers", sets out the following: "For service contracts it is possible for the candidate/tenderer to refer to a part of a project where the contract is not yet terminated, but then, only the part which is successfully completed may be used as reference and the candidate/tenderer needs to be able to submit documentary evidence of this part's successful completion (e.g. statement from the entity which ordered the service)."

6. The complainant thus considered that it was entitled to refer to successfully completed parts of uncompleted projects. As a result, the complainant submitted its application, presenting 15 references under point 21.3.1. Two of those references referred to successfully completed parts of uncompleted projects.

7. By letter of 15 November 2011, the Commission informed the complainant that, although his application complied with the technical capacity criterion, it was not among the eight best applications, following the re-examination of the number of projects according to point 21.3.1[2]. The complainant then asked the Commission to explain its position. In its reply to the complainant's request, the Commission explained that the complainant only presented 13 valid references, whereas the eight shortlisted candidates presented 15 valid references. It added that two of the references (references 1 and 7) presented by the complainant were not valid, as they did not refer to completed projects.

8. The complainant then wrote to the Commission challenging its decision. It pointed out that, according to the PRAG and the Commission's e-mail of 5 September 2011, it was entitled to include successfully completed parts of uncompleted projects. Its application should therefore have been shortlisted, as it contained 15 valid references. On 22 November 2011, the Commission replied that the Evaluation Committee had reached its decision taking into account the PRAG. It added that there was "no evidence in references 1 and 7 that the project has been successfully completed, even for part of it".

9. On 5 December 2011, arguing that the rejection of two references out of 15 had no legal basis, the complainant asked for a review of the Commission's decision to exclude it from participating in the tender. It pointed out, that according to the PRAG, it could refer to successfully completed parts of uncompleted projects without having to supply evidence at that stage of the procedure, since only successful tenderers had to supply supporting documents (of any of the projects they participated in) before the award of the contract[3].

10. On 10 January 2012, the Commission replied. It stated that the procurement notice clearly specified that the Contracting Authority required references for completed projects. The reason for this request was that the Contracting Authority wished to treat all bidders equally. Thus, ongoing contracts were not considered to be acceptable references. In any case, it added, the bidder should have submitted written evidence to demonstrate the successful completion of a part of the contract. The complainant had, however, not done so. The Commission considered, in sum, that there was "no sufficient evidence that a separate project within these two ongoing contracts (references 1 and 7) was already completed and could be considered under the re-examination of the criteria 21.3.1". In particular, regarding reference 7, the Commission stated that it was not possible to distinguish any separate component which had been successfully completed. In addition, the Commission claimed that reference 7 would have also failed criterion 21.3.2, as the value of the claimed services provided was 717 750 EUR (25% of the contract value), and thereby under the 1 million EUR threshold of criterion 21.3.2.

11. Before turning to the Ombudsman, the complainant wrote to DG DEVCO requesting clarification regarding the PRAG. It asked questions concerning: 1) the meaning of the term "successfully completed", as used in the PRAG; 2) the possibility of using as references completed parts of ongoing projects; and 3) the obligation to submit supporting documents. On 7 February 2012, the Commission replied stating that, depending on the type of project, it was possible to refer to a partially completed service contract. However, in such cases, documentary evidence of the completion is necessary. Regarding documentary evidence, it specified that, under the new PRAG (published on 20 January 2012), supporting documents must be submitted by all shortlisted tenderers, while under the previous version of the PRAG, only the successful tenderer had to submit documents.

12. On 27 February 2012, the complainant turned to the Ombudsman.

The subject matter of the inquiry

13. The complainant put forward the following allegation and claim:

Allegation:

In evaluating the complainant's application the Commission committed a manifest error of assessment by failing to respect the criteria laid down in the procurement notice and the PRAG.

Supporting Arguments

1) The Commission erroneously refused to take into consideration successfully completed parts of uncompleted projects contrary to the PRAG and its own advice to the complainant.

2) The Commission wrongly considered that the complainant should have provided documentary evidence when submitting its application.

3) The Commission invoked an additional ground regarding the number of contracts according to point 21.3.2, belatedly and without respecting the principle of equality.

Claim:

The Commission should reassess the complainant's application.

The inquiry

14. On 28 March 2012, the Ombudsman asked the Commission for an opinion on the present complaint. In addition, he asked the Commission to clarify the following points: (a) the meaning of the wording "completed successfully" and the circumstances under which candidates may refer to successfully completed parts of ongoing projects; (b) the scope of application and the legal force of the PRAG; (c) the stage of the procedure at which tenderers are required to provide documentary evidence, and (d) the meaning of criterion 21.3.2 relating to the value of the claimed services.

15. On 13 July 2012, the Commission sent its opinion. The Ombudsman received the complainant's observations on that opinion on 10 September 2012.

The Ombudsman's analysis and conclusions

A. Alleged erroneous evaluation of the complainant's application and related claim

Arguments presented to the Ombudsman

16. In its opinion, the Commission explained how the Evaluation Committee carried out its tasks. It stated that, in line with the procurement notice, since more than eight candidates met the eligibility criteria, the Evaluation Committee proceeded with the assessment of the relative strengths and weaknesses of the applications in order to identify the eight best candidates to be invited to submit detailed offers. It added that eight candidates were shortlisted following the application of the first additional criterion (number of projects according to point 21.3.1). Consequently, there was no need to use the second additional criterion (number of contracts according to point 21.3.2).

17. According to the Commission, the Evaluation Committee was impartial and carried out its tasks in accordance with the procurement procedures. It took into account the quality of the applications submitted by the candidates. For the Evaluation Committee, the relative strengths of the complainant's application were less convincing than those of the eight shortlisted companies.

18. Regarding references 1 and 7 in the complainant's application, the Commission noted that the Evaluation Committee could not determine, on the basis of the information provided, whether a project or part of it was completed. It considered that it is up to the candidates to provide the Contracting Authority with sufficient, clearly-presented information, which would enable the Evaluation Committee to carry out its assessment. However, the complainant did not provide sufficiently clear information concerning which parts of the projects had been completed. The Evaluation Committee was therefore unable to conclude that the requirements concerning the technical capacity and the number of projects were as satisfactory as for the eight shortlisted candidates.

19. Regarding the obligation to provide written evidence to demonstrate the successful completion of a part of a contract, the Commission acknowledged that that obligation was introduced by the 2012 updated version of the PRAG and therefore was not applicable in the case of the complainant. The previous version of the PRAG provided that only successful tenderers had to supply documentary proof to support the information submitted in the application and the tender submission form before the award of the contract. It apologised for the error, but pointed out that this error did not influence the final decision not to include the complainant in the list of the eight best candidates.

20. Regarding the additional criterion, the Commission stated that the reasons for not short listing the complainant were explained in its letter of 22 November 2011. However, at the complainant's request, the Commission provided more detailed information, without changing the reasons for rejection. In reply to the Ombudsman's request for clarification regarding the meaning of criterion 21.3.2, it noted that this criterion intends to evaluate the capacity of each tenderer to manage substantial amounts of technical assistance. The Commission did not provide any information as to how the value of the claimed services is calculated.

21. The Commission also noted that, following the evaluation of the full tender dossiers submitted by the shortlisted tenderers, the contract was awarded on 18 April 2012.

22. In its observations on the Commission’s opinion, the complainant argued that the arguments put forward by the Commission gave rise to contradictions and led to confusion. In particular, the complainant pointed out that, according to the Commission, the Evaluation Committee made a comparative assessment of the strengths and weaknesses of the eligible candidates, taking into account the quality of the applications. By doing this, it identified the eight best candidates. However, in the complainant’s view, the Evaluation Committee should only have taken into consideration the two factors mentioned in the procurement notice, namely, the number of the projects (21.3.1) and the number of contracts (21.3.2). During the re-examination, it had to limit itself to these two elements and disregard other factors, such as the quality of the applications submitted, that were not part of the selection criteria. The complainant states that its view is corroborated by the wording used in the procurement notice :“The only factors which will be taken into consideration during this re-examination [...]”. (emphasis added).

23. The complainant further argued that, contrary to the Commission’s comments, it had submitted references 1 and 7 in a sufficiently clear manner and had provided all the requested information in the application form. It could not therefore accept the Commission’s argument that the information was not sufficient to enable the Evaluation Committee to identify the completed parts of the uncompleted projects that it had used as references. In particular, regarding reference 1, the complainant stated that it had clearly identified seven completed projects and provided a brief description for each of them. Regarding reference 7, it had clearly stated that 55% of the project was completed. The complainant added that it was in possession of written evidence relating to all its references that it would have submitted had it been shortlisted. Given that it could not have submitted any additional documents with the application form, the complainant wondered what more information it could have provided. In this respect, the complainant considered that the Commission’s arguments were rather vague, as the Commission did not specify what sort of information was missing from its application.

24. Regarding the obligation to provide written evidence, the complainant accepted the Commission’s apologies. However, it doubted whether this element did not influence the Commission’s decision not to shortlist it, since the Commission referred to the complainant’s failure to submit evidence in most of its original letters.

25. Regarding criterion 21.3.2, the complainant considered that this argument was not part of the Commission's initial assessment of its application, but was "invented" a posteriori. It also expressed doubts as to whether this criterion was equally applied to other applicants. The complainant also disagreed with the way the Commission calculated the value of the projects. It pointed out that, contrary to other procurement notices, the present one did not specify that the threshold of one million EUR had to be reached by the complainant's own participation in the project. It suggested that the threshold of one million EUR could be met by taking the value of the entire project into account.

26. Finally, the complainant noted that, even though the tender had already been awarded, it wished to retain its claim relating to the reassessment of its application and the re-opening of the procedure. In the alternative, it considered that it should receive compensation from the Commission.

The Ombudsman's assessment

27.  At the outset, the Ombudsman notes that he has continuously taken the view that it is for the administration organising a call for tenders to carry out a substantive assessment of the tenders submitted. The Ombudsman shall not substitute his own assessment for the assessment of the administration organising a call for tenders. His review can only involve assessing whether: (i) the institution fulfilled the essential procedural requirement of stating reasons for the rejection of a given bid; and (ii) those reasons are acceptable in light of the applicable tender specifications. In light of the complainant's allegation and related claim, the Ombudsman's inquiry in the present case is limited to assessing whether the Commission's assessment was invalidated by a manifest error of assessment, and whether it provided sufficient and adequate explanations to the complainant regarding its decision to reject the latter's application.

(i) References to ongoing projects

28. The Ombudsman notes that, in the present case, the selection criteria laid down by the procurement notice referred to "successfully completed projects". However, the PRAG document, whose purpose is to provide all users with all the information necessary to undertake procurement, expressly allowed candidates to refer to a successfully completed part of a project where the contract had not yet terminated. If the term used in the notice was read in light of the PRAG, it could be reasonably assumed that references to successfully "completed" parts of ongoing projects were admissible. On the contrary, if the term used in the notice was perceived as a special clause or an express derogation from the PRAG, then it could be assumed that parts of projects could not be presented as references. Both interpretations appear to be reasonable. However, the Ombudsman considers that two important factors support the view that, in the present case, the first interpretation prevails.

29. First, the Ombudsman notes that, displaying diligence, the complainant sought clarifications from the Commission that references to successfully completed parts of ongoing projects were admissible. In a reply that could hardly comply with an administrative culture of service (see paragraph 43  below), an official from the Commission, without giving a direct, substantive reply to the question, stated curtly that the answer to the question was found in the PRAG. By making this reference to the PRAG, the official led the complainant to understand that the PRAG applied to the procedure in question. It was therefore reasonable for the complainant to interpret the procurement notice in light of the PRAG and to consider that it could validly submit ongoing projects as references.

30. Second, the Ombudsman is of the view that, since the PRAG is a set of published rules intended to be applied to all EU external aid contracts, these rules bind the Commission unless any derogation from the PRAG is clearly and expressly stated in the procurement notice. In the present case, if the Commission had wished to depart from the rule regarding completed parts of ongoing projects and to accept only references relating to completed projects, it should have included this requirement in a clear and unequivocal manner in the procurement notice. However, that was not the case.

31. In light of the above, the Ombudsman considers that the complainant was entitled to refer to completed parts of ongoing projects. Consequently, the Commission could not have validly rejected references 1 and 7, only because they refer to ongoing projects.

(ii) The complainant's failure to submit written evidence related to ongoing projects

32. In a number of its replies to the complainant, the Commission stated that the complainant failed to submit evidence of the successful completion of parts of the ongoing projects. However, both the PRAG and the application form clearly stated that documentary evidence would only be submitted by the awarded tenderer and that any additional documentation sent with an application would not be taken into consideration. This view was confirmed by DG Devco in its letter of 7 February 2012. In its opinion, the Commission acknowledged that the reference made in its letter of 10 January 2012 to the need to provide written evidence was wrong and apologised for it. It added, however, that this element did not influence its final decision not to shortlist the complainant.

33. In light of the wording of the PRAG and the Commission's opinion, it is clear that the complainant was under no obligation to submit written evidence. Consequently, the complainant's failure to submit written evidence was not a valid reason to reject references 1 and 7. However, the Ombudsman notes with satisfaction that the Commission acknowledged its error and apologised for it.

(iii) The quality of the complainant's application

34. In its opinion to the Ombudsman, the Commission, invoking the Contracting Authority's broad discretion, stated that references 1 and 7 were not provided in a manner that would enable the Evaluation Committee to conclude that the requirements under 21.3.1 "were as satisfactory as for the other 8 shortlisted candidates" and that "the relative strengths of the application of the complainant was less convincing than the 8 shortlisted candidates".

35. The Ombudsman notes that the Commission referred to the term "quality" of the applications for the first time in its opinion. In none of its previous communications with the complainant, did it refer to the relative strengths and weaknesses of the applications. As the complainant rightly pointed out, according to the procurement notice, the re-examination was based exclusively on two factors (i) the number of projects, and (ii) the number of contracts. The quality of the references and the relative strengths and weaknesses of the applications were not among the criteria mentioned in the notice. In addition, the Ombudsman shares the complainant’s view that the terms used by the Commission in its opinion are rather vague and do not allow the complainant fully to understand the reasons underpinning the Commission's assessment. In the Ombudsman's view, the Commission could not, therefore, justify its decision to reject the disputed references on the basis of the quality of the complainant’s application.

(iv) The complainant's failure to demonstrate which parts of the ongoing contracts had been completed

36. In its letter of 10 January 2012, the Commission noted that there was no sufficient evidence that a part of the ongoing projects was already completed. The Ombudsman notes that all applications had to be submitted using a standard application form, which was provided by the Commission. Under heading 6 of the application form, entitled "Experience", applicants were required to complete a table using the format provided, in order to summarise information regarding projects related to the contract in question. They could submit up to 15 references. A page was provided for each reference.  The information requested included the project title, the name of the legal entity, the country, the overall project value, the proportion carried out by the legal entity, the number of staff provided, starting and ending dates, the name of the client and the origin of funding. In a larger side section, applicants were required to fill in a detailed description of the project and information on the type of services provided.

37. The Ombudsman notes that the complainant used the standard form to submit its application. Regarding reference 1, entitled "Infrastructure Projects Facility-Technical Assistance Window in the Western Balkans", the complainant identified seven separate projects and expressly stated that these were completed on 30 June 2011. It divided the projects into sectors (environment, social infrastructure, transport and energy) and provided their official titles and reference numbers. The Ombudsman cannot, therefore, share the Commission’s view that it was not clear which parts of this project were completed. In sum, the complainant clearly indicated the number and the nature of the completed parts of the project used as reference 1.

38. However, the Ombudsman cannot share the complainant's view regarding reference 7. In its application form, the complainant stated that 55% of the project was completed. Under the title "type of services provided", it referred to the different tasks to be fulfilled under the project's two components. However, it did not indicate, expressly, which of these specific tasks or components had already been completed. Indeed, the way the information is presented could well be understood as implying that 55% of each of the two components had been completed. In sum, the information provided is not clear. The Ombudsman, therefore, considers that the Commission's position that it was impossible to distinguish any separate component regarding reference 7 is justified. The Commission was therefore right to reject reference 7 under 21.3.1.

iv) Reference 7 was not validly invoked under criterion 21.3.2

39. In its letter rejecting the complainant's request for review, the Commission used, as an additional argument, the fact that Reference 7 would have also failed criterion 21.3.2, as the value of the claimed services provided was under the 1 million EUR threshold of criterion 21.3.2. Reference 7 concerned a project of an overall value of 2 900 000 EUR. According to the complainant, 55% of that project had been completed. The proportion carried out by the complainant was established at 45%. The Commission calculated the value of the services carried out by the complainant by subtracting the participation of the complainant's partner from the overall value the uncompleted part. The complainant challenged both this methodology and the fact that the Commission referred to this criterion.

40. The Ombudsman considers that, while the complainant's argument regarding the arbitrary character of the calculation is not grounded, there are serious doubts as to whether this criterion was actually part of the assessment carried out by the Evaluation Committee. In fact, he notes that the procurement notice states that, in case more than eight eligible candidates met the selection criteria, the Evaluation Committee would re-examine the offers on the basis of two additional criteria, by order of priority: 1) the number of projects according to point 21.3.1; and 2) number of contracts according to point 21.3.2. In other words, if the Evaluation Committee was able to identify the best eight candidates on the sole basis of the first criterion, then it would not proceed to examine the second one. That is what apparently happened in the present case, as the Commission confirmed in its opinion[4]. It follows, therefore, that the Evaluation Committee did not assess applications under criterion 21.3.2. As the Ombudsman has already highlighted, an institution cannot put forward additional reasons for rejecting the complainant's bid, if these reasons were not taken into consideration by the Evaluation Committee[5]. The additional argument regarding point 21.3.2 should not therefore have been put forward by the Commission as an additional argument for rejecting the complainant's application.

v) Confusing communications with the complainant

41.  The Ombudsman regrets that the Commission was not always clear in its various communications with the complainant. He points out that a brief overview of the reasons invoked by the Commission in its correspondence with the complainant and the Ombudsman leads to great confusion. In its initial letter of 17 November 2011, the Commission only referred to the fact that the projects were not completed, thus giving the impression that it did not take the references into account because the projects were ongoing. In its subsequent letter of 22 November, it stated that there was no evidence that the projects were successfully completed, even part of them. It appeared, therefore, that the problem was not the fact that the projects were ongoing, but that documentary evidence was missing. In its decision of 10 January 2012, it stated that ongoing contracts were not considered to be acceptable references. It also added, for the first time, that there was no sufficient evidence that a separate project within references 1 and 7 had already been completed. This was again confusing, given that at least reference 1 was adequately described, and given that the complainant had no need, at that time in the procedure, to provide any documentary evidence relating to the projects.

42. In its opinion to the Ombudsman, the Commission mainly referred to the fact that, as the complainant failed to provide sufficiently clear information, the Evaluation Committee could not determine whether the complainant met the requirements as satisfactorily as the other bidders. This explanation was valid as regards reference 7. It would have been preferable, the Ombudsman notes, if the Commission had provided this clear position to the complainant when the latter first contacted it.

43. The Ombudsman also regrets the fact that, when the complainant contacted a Commission official to ask for clarifications as regards the interpretation of the applicable rules, the official replied in a curt and unhelpful manner, by simply referring to the PRAG rules instead of responding to the complainant's direct and clear request.

44. The Ombudsman observes that the Commission replies, first, to  the complainant's requests while the complainant was preparing its bid, and, second, to the requests for the precise reasons that led the Commission to reject the bid, resulted in great confusion. The Ombudsman considers that, in doing so, the Commission did not behave in such a way as to meet the increasingly high standards of good administrative practice which the citizens expect from the Union institutions.

45. In light of all the above considerations, the Ombudsman concludes that, on one hand, the Commission's final decision not to include the complainant among the shortlisted tenderers was correct, because the complainant presented 14 valid references under criterion 21.3.1 (see above paragraphs 37-38), while the eight shortlisted candidates presented 15 references. Consequently, the complainant's allegation that the Commission erred in evaluating its application and the related claim cannot be sustained. On the other hand, however, the Ombudsman cannot overlook the fact that the Commission committed a number of irregularities in communicating with the complainant and in explaining the grounds for its decision not to shortlist its application. In the Ombudsman's view, even though these shortcomings had no impact on the validity of the Commission's final decision, they have a negative effect on the complainant's confidence in the EU institutions and constitute instances of maladministration. The Ombudsman will make a critical remark in this regard.

B. Conclusions

On the basis of his inquiry into this complaint, the Ombudsman closes it with the following critical remark:

Contrary to the requirements of good administrative practice, the Commission failed to provide the complainant, in a clear, coherent and unequivocal fashion, with adequate reasoning for its decision not to include it in the group of shortlisted tenderers.

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

 

P. Nikiforos Diamandouros

Done in Strasbourg on 9 January 2013

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[1] "La réponse est assez simple puisque vous pouvez vous référer au PRAG pour la réponse qui vous occupe".

[2] The procurement notice stated : "on the basis of the applications received, at least 4 and at most 8 candidates will be invited to submit detailed tenders for this contract."

[3] Under Section 2.4.11.1.1 establishing general principles of selection criteria, "For service and supply procedures, only successful tenderers have to supply proof documents to support the information submitted in the application/tender submission form before the award of the contract. For works procedures, however, the mentioned proofs have to be submitted in accordance with the tender dossier." The procurement notice also stated that:" Any additional documentation sent with an application will not be taken into consideration."

[4] "Eight candidates were selected for short-listing following the application of the first additional criterion. It was consequently not needed to use the second additional criterion mentioned in the procurement notice."

[5] Decision of the European Ombudsman closing the inquiry on complaint 1235/2008/ELB against the European Parliament, para 31.