By: Pontus Sörlin
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No hearing for three complaining companies after bus traffic procurement in Stockholm
Three companies consider that a procurement regarding bus traffic carried out by the Stockholm region is contrary to LUF and therefore apply for review in court. The Court of Appeal finds that a requirement for reasonable and sustainable prices is not so vague that it is contrary to the principles of equal treatment and transparency. Furthermore, the court considers that requirements regarding pricing where no absolute lower limit is stated do not constitute floor prices. In conclusion, requirements for cost specifications are not considered to be restrictive of competition when companies have submitted tenders despite the requirement.
Procurement equal treatment and transparency
The Stockholm Region conducts a procurement regarding bus traffic in accordance with the Act on Procurement in the Utilities Sectors (LUF). Three tenderers who were not accepted consider that the region handled the procurement procedure in an inadequate manner and therefore apply for review to the Administrative Court with a request that the procurement be changed or redone. One of the complaining tenderers is Keolis, who states that certain procurement requirements are unclear and therefore contravenes the principles of equal treatment and transparency in Chapter 4. 1 § LUF. The principle of equal treatment means that a contracting authority must treat all tenderers equally. The principle of transparency can be seen as a consequence of the principle of equal treatment and means, among other things, that the procurement conditions must be clear in order to avoid favoritism and arbitrariness on the part of the contracting authority.
Tender documents and competitive tenders
The procurement states that “all prices individually must be reasonable and sustainable over the contract period”. The Administrative Court shares Keoli’s opinion that the wording is unclear and thus contrary to the principles of equal treatment and transparency. Despite the fact that the region has given the tenderers the opportunity to submit comments on the tender documents prior to the submission of tenders, Keolis has not requested any clarification of the requirement for prices. Even if the requirement is unclear, the court therefore does not see that it has been shown that the design of the requirement affected Keolis’ ability to submit a competitive tender.
The principle of competition and floor prices
Keolis also believes that the requirement for reasonable and sustainable prices constitutes impermissible floor prices; that is, provisions that tenders below a certain price will not be accepted. The reason why floor prices are not permitted is that they are considered to prevent the contracting authority from making a correct assessment of whether the tender is taken seriously. Furthermore, the company states that the procurement is contrary to the competition principle in ch. § 2 LUF by setting requirements for tenderers to submit comprehensive cost specifications. According to Keolis, the requirement is restrictive of competition as there may be tenderers who do not wish to disclose such information.
Cost specifications and tendering
The Court states, without further justification, that the requirement regarding pricing does not constitute floor prices. Regarding the requirement for cost specifications, the court considers that it could have been regarded as restrictive of competition. However, with Keolis still submitting a tender, the court does not see that it has been shown that the requirement affected the company’s ability to participate in the procurement. Tenderers Arriva and Nobina are also applying for review without success with their reasoning. In summary, the court does not see it as having shown that the region has violated LUF in a way that made it difficult for any of the companies to participate in the submission of tenders. The Administrative Court thus finds no reason to intervene against the procurement. Keolis later appeals to the Court of Appeal, which takes the case to trial.
The Court of Appeal begins by examining whether the requirements regarding prices are contrary to the principle of equal treatment and transparency. In this context, the court believes that the principles mean that a normally careful and reasonably informed tenderer must be able to understand and interpret the information. Despite the fact that there is no definition or more detailed description of what is meant by “reasonable and sustainable prices”, the court notes that it appears from the procurement requirements that the region must assess whether the requirement is met using a calculation model. A more detailed description is also given of how the calculation model in question works. The Court also points out that neither Keolis nor any other potential tenderer made use of the opportunity to obtain clarifications from the procurement documents from the region before the end of the tender period. In summary, the Court of Appeal thus does not see it as proven that the requirement regarding price is so unclear that it is contrary to the principles.
The design of the price requirement
Regarding Keoli’s claim that the design of the price requirement constitutes floor prices, the court believes that this is not the case because no absolute lower limit is stated. The next question to be examined is whether the requirement for cost specifications is restrictive of competition. As Keolis, without question, submitted a tender despite the requirement, the Court of Appeal finds that the company has not shown that it has affected their ability to submit a competitive tender. The Court of Appeal thus also sees no reason to intervene against the procurement, which is why Keoli’s appeal is rejected.