Procurement lacked ceiling volume – must be redone
Procurement lacked ceiling volume – must be redone
A company that has participated in a public procurement is of the opinion that the terms and conditions of the procurement are contrary to the principles of equal treatment and transparency in Chapter 4. Section 1 of the Law on Public Procurement on the grounds that no ceiling volume was specified. However, the region that has been in charge of the procurement has stated an estimated value of how many services may be called off and believes that it constitutes a ceiling volume. However, the Administrative Court of Appeal finds that the region has not been sufficiently clear that the stated value is to be seen as a ceiling volume and that the procurement terms are therefore contrary to the principles of equal treatment and transparency.
Region Västerbotten is conducting a procurement process for agreements with several companies regarding investigations of neuropsychiatric disabilities in children and adolescents. The company Moment Psykologi is not accepted as a supplier and applies for a review by the Administrative Court as it considers that the procurement terms were unclear. According to the company, the ambiguity lies mainly in the fact that the region has not specified a ceiling volume, i.e. the highest number of investigations that can be called off by an assumed supplier. The company argues that the terms and conditions of the procurement are therefore contrary to the EU law principles of equal treatment and transparency, which are expressed in Chapter 4. Section 1 of the Public Procurement Act (LOU).
The principle of equal treatment means that all competing suppliers must be given the same conditions in public procurement. The principle of openness means that procurements must be characterised by openness and predictability and can be seen as a consequence of the principle of equal treatment – the purpose is to counteract the risk of favouritism and arbitrariness on the part of the procurer. Since Moment Psykologi believes that these principles have not been followed, the company believes that the procurement should be redone in accordance with Chapter 20. SECTION 6 OF THE PUBLIC PROCUREMENT ACT. Furthermore, the company claims that it is entitled to damages under Chapter 20. 20 § LOU as the region’s lack of clarity made it difficult to state a competitive tender, which led to, or risked leading to, financial damage.
The Administrative Court begins by examining whether the region has stated a ceiling volume or not.
The terms of the procurement state that the volume can be estimated at approximately 20 to 50 procurements per year and that the contract may run for 4 years. According to the region, this means that the ceiling volume is a total of 200 investigations. In a ruling from the Court of Justice of the European Union, the so-called Coopservice case, statements are made about, among other things, ceiling volumes in public procurements.
Statements in the decision have come to be interpreted as meaning that a total estimated value, which is what is at issue in the present case, may constitute a ceiling volume. In this case, however, it must be clearly stated in the terms and conditions of the procurement that the total estimated value is to be seen as a ceiling volume. The Administrative Court considers that the region has not been clear that this is the case, which means that no ceiling volume has been specified.
The region claims that it has been impossible to estimate exactly how many services will be called off and that it has therefore not been possible to specify a ceiling volume. The Court of First Instance points out that the obligation to indicate a ceiling volume does not require a precise calculation of requirements. On the contrary, it is sufficient to provide a realistic estimate, on the basis of the information available, of the maximum quantity that may be called off. Since the region has not presented any information indicating that there were obstacles to making such a calculation, the Administrative Court considers that there was an obligation to state the ceiling volume. The fact that the region has not done so is therefore deemed to be contrary to the principles of equal treatment and openness in Chapter 4. 1 § LOU. In the light of the above reasoning, the court finds that the region has violated fundamental principles of procurement law in a way that means that the procurement must be redone in accordance with Chapter 20. SECTION 6 OF THE PUBLIC PROCUREMENT ACT.Furthermore, it is considered that the unclear design of the procurement terms must have affected Moment Psykologi’s ability to design a competitive tender. The Administrative Court therefore considers that the company has suffered financial damage, or risked suffering such damage, which entails a right to damages under Chapter 20. SECTION 20 OF THE PUBLIC PROCUREMENT ACT. The region appeals to the Administrative Court of Appeal, which takes up the case.However, as the Administrative Court of Appeal essentially agrees with the lower court’s assessment, the judgment stands.