The state has no right of action against the state in procurement
The state has no right of action against the state in procurement
Umeå University is bidding in a public tender carried out by the National Board of Health and Welfare. However, the Board chooses another provider. The university considers that the procurement process was not carried out correctly and therefore applies to the court for a review of the board’s decision under the Public Procurement Act.The Supreme Administrative Court finds that both parties are part of the same legal entity as they are both parts of the State. This leads the Court to conclude that the public procurement law is not applicable and that review is therefore not possible. Nor does the university have standing on any other ground, since parties belonging to the same legal entity cannot enter into binding contracts in the Court’s view. The case is therefore dismissed as inadmissible without examining the correctness of the procurement procedure.
The National Board of Health and Welfare is conducting a public procurement of framework agreements for, among other things, research-related services. Umeå University submits a tender but the National Board of Health and Welfare decides to award the contracts to another supplier. However, the university does not consider that the procurement process was carried out correctly and therefore turns to the Administrative Court (AC) for a review. Review is regulated in Chapter 20.Section 4 of the Public Procurement Act (LOU) and allows the court to review the correctness of a decision taken by an administrative authority. However, the National Board of Health and Welfare argues that the university has no standing because both parties are part of the state, which means that they are part of the same legal entity.
The FR shares the assessment of the National Board of Health and Welfare that the parties are part of the same legal entity.As the Court considers that the applicability of the LOU is based on the existence of two separate entities, it finds that the university cannot apply for review. The case is therefore dismissed as inadmissible without examining the correctness of the procurement procedure. Umeå University appeals to the Administrative Court of Appeal (KR) and claims that the case should be referred back to the FR for examination of the merits. KR examines the issue on the basis of Chapter 20. 4 and 6 §§ LOU, which regulate the conditions under which suppliers can apply for review and how the court should handle reviews. The provisions state, inter alia, that the parties to a review procedure shall be a contracting authority on the one hand and a supplier on the other. Therefore, in order to determine whether Umeå University is entitled to apply for review, the Court examines whether it is to be considered a supplier under the LOU.
According to Chapter 1. 16 § LOU, a supplier is someone who provides, for example, goods or services on the market.Furthermore, the concept of supplier must be interpreted in the light of the EU procurement directives, according to the Court. The Directive states that the concept should be given a broad meaning and cover all providers of goods and services on the market, regardless of the legal form they have chosen for their activities. Furthermore, the Directive aims to promote competition by ensuring that as many tenderers as possible participate in the procurement process. Consequently, the Court finds that it is most consistent with the rules and purpose of the Directive that Umeå University be considered a supplier under the LOU. The university is therefore entitled to have the National Board of Health and Welfare’s decision reviewed, and the case is referred back to the FR.
However, the National Board of Health and Welfare is appealing to the Supreme Administrative Court, which is reviewing the case. At the outset, the Court states that it is ultimately EU law that sets the limits in this matter. However, unlike the KR, the HFD considers that it is clear from the case law of the CJEU that the procurement rules only apply to contracts concluded between a contracting authority and a completely independent supplier. The Court therefore finds that the LOU is not applicable to the contract between the National Board of Health and Welfare and Umeå University.
However, the university argues that they should have standing even if the LOU is not applicable. This position is partly based on the fact that their only other option for redress is to turn to the government, which would not be an appropriate solution according to the university. However, the Court states that a prerequisite for standing is also that the parties are able to enter into binding agreements with each other. As this is impossible as they are part of the same legal entity, Umeå University has no legal standing against the National Board of Health and Welfare. The action is therefore inadmissible without examining the merits of the handling of the contract by the National Board of Health and Welfare.