Regulation 55 – Informing candidates and tenderers

Commentary

Regulation 55 PCR2015 establishes debriefing obligations on contracting authorities and establishes minimum requirements of information to candidates and tenderers. Hence, it transposes the same requirements under Article 55 of Directive 2014/24/EU. Regulation 55 defines the timings and kind of information tenderers are entitled to receive at the end of their participation in a procurement procedure, particularly in case they were unsuccessful. The obligations for the contracting authority cover both the decision to conclude or not a procedure and the grounds on which the decision was taken. This Regulation is a perfect example of the underlying tensions between the principles of transparency and competition in public procurement.

The rules impose transparency and information requirements at two levels and a very important exception. At a general level, Regulation 55(1) PCR2015 requires contracting authorities to inform each candidate and tenderer shall as soon as possible of decisions reached concerning the conclusion of the tender process. This arises regardless of the reason that brings the procedure to an end, be it positive due to the award of a contract, the conclusion a framework agreement, or the admittance to a dynamic purchasing system; or negative, including any decision not to conclude a framework agreement, not to award a contract for which there has been a call for competition, to recommence the procedure, or not to implement a dynamic purchasing system. These decisions need to indicate the grounds on which they are adopted.

At a particular level and upon request from the candidate or tenderer concerned, Regulation 55(2) PCR2015 requires contracting authorities to inform as quickly as possible, and in any event within 15 days from receipt of a written request of the specific circumstances concerning their participation in the process. In particular, contracting authorities shall inform:

(a) any unsuccessful candidate of the reasons for the rejection of its request to participate;

(b) any unsuccessful tenderer of the reasons for the rejection of its tender, including, for the cases referred to in Regulation 42(14) and (15) PCR2015, the reasons for its decision of non-equivalence or its decision that the works, supplies or services do not meet the performance or functional requirements;

(c) any tenderer that has made an admissible tender of the characteristics and relative advantages of the tender selected as well as the name of the successful tenderer or the parties to the framework agreement; and

(d) any tenderer that has made an admissible tender of the conduct and progress of negotiations and dialogue with tenderers.

In our view, grounds (c) and (d) are particularly problematic because the general logic of allowing candidates and tenderers to access the information they need to assess and, eventually, challenge the decision by the contracting authority affects third party information.

Given the obvious concerns about disclosure of sensitive information (for discussion on confidentiality, see Regulation 21 PCR2015), Regulation 55(3) PCR2015 allows contracting authorities to decide to withhold certain information where its release would impede law enforcement or would otherwise be contrary to the public interest; would prejudice the legitimate commercial interests of a particular economic operator, whether public or private; or might prejudice fair competition between economic operators. 

A proper understanding of this provision and the way it should be interpreted and applied, in conjunction with Regulation 18(2) and (3) PCR2015 establishing the principle of competition, is fundamental to understand the impact of excessive of transparency in public procurement and its knock-on effect on the ease of cartelisation of public procurement markets (for discussion, see A Sanchez-Graells, “The Difficult Balance between Transparency and Competition in Public Procurement: Some Recent Trends in the Case Law of the European Courts and a Look at the New Directives” (2013) University of Leicester School of Law Research Paper No. 13-11). Moreover, the future entry into force of Directive 2016/943/EU on the protection of undisclosed know-how and business information (trade secrets) against their unlawful acquisition, use and disclosure may also complicate the analysis, not least due to its explicit reference to the obligation of contracting authorities to keep know how and trade secrets confidential in the setting of procurement procedures.

However, in practice, there is also a risk of abuse of this possibility to withhold information in a way that reduces the tenderers’ ability to challenge procurement decisions. Contrary to the argument that excessive transparency can alter competition in the market, it can also be argued that disclosing more information will actually make the market less imperfect by providing the same level of information to all interested players in the market. It would significantly change the market dynamics. Furthermore, less information creates opportunity for arbitrage which economic operators have been benefiting from over the years.

A test case on this should be Portugal where since 2009 all (read: most) contracts awarded below thresholds are published online and have to follow e-procurement from cradle to grave. Technically contracts above thresholds should have been published as well but a clear obligation is more recent than 2009 and was part of the bailout programme Portugal benefited from. So far, no evidence coming from the country supports the claim collusion is rampant, although the authors are not aware at the time of writing of any specific research on collusion in public procurement having been conducted in Portugal since the introduction of the reporting obligation. Absence of evidence is different from evidence of absence, but there are two data points that are important to take into account: SME participation rates are going up and prices have allegedly come down in some sectors, indicating at least a modest increase in competition.

A final point to consider, beyond the issue of the competitive or anticompetitive effects of information disclosure at debriefing stage is that these requirements can be complicated due to the interplay between substantive procurement rules and the rules on remedies, which trigger the application of the procedural guarantees derived from the right to good administration under Article 41 of the Charter of Fundamental Rights of the European Union, which includes a strengthened obligation to provide reasons so as to enable affected parties to exercise their right of access to justice under Article 47 of the same instrument. For in-depth discussion, please see A Sanchez-Graells, “‘If it Ain’t Broke, Don’t Fix It’? EU Requirements of Administrative Oversight and Judicial Protection for Public Contracts”, in S Torricelli & F Folliot Lalliot (eds), Administrative oversight and judicial protection for public contracts (Larcier, 2017).

Proposed citation: Albert Sanchez-Graells & Pedro Telles, (2016) Commentary to the Public Contracts Regulations 2015, available at: www.pcr2015.uk.

Last modified: September 5, 2016 by Pedro Telles

55.—(1) Contracting authorities shall as soon as possible inform each candidate and tenderer of decisions reached concerning the conclusion of a framework agreement, the award of a contract or admittance to a dynamic purchasing system, including the grounds for any decision—

(a) not to conclude a framework agreement,

(b) not to award a contract for which there has been a call for competition,

(c) to recommence the procedure, or

(d) not to implement a dynamic purchasing system.

(2) On request from the candidate or tenderer concerned, the contracting authority shall as quickly as possible, and in any event within 15 days from receipt of a written request, inform—

(a) any unsuccessful candidate of the reasons for the rejection of its request to participate;

(b) any unsuccessful tenderer of the reasons for the rejection of its tender, including, for the cases referred to in regulation 42(14) and (15), the reasons for its decision of non-equivalence or its decision that the works, supplies or services do not meet the performance or functional requirements;

(c) any tenderer that has made an admissible tender of the characteristics and relative advantages of the tender selected as well as the name of the successful tenderer or the parties to the framework agreement;

(d) any tenderer that has made an admissible tender of the conduct and progress of negotiations and dialogue with tenderers.

(3) Contracting authorities may decide to withhold certain information referred to in paragraphs (1) and (2) where the release of such information—

(a) would impede law enforcement or would otherwise be contrary to the public interest;

(b) would prejudice the legitimate commercial interests of a particular economic operator, whether public or private; or

(c) might prejudice fair competition between economic operators.