Pre-contractual judicial review: the truth is elsewhere

Sanction of the failure of a contracting entity to comply with its advertising and competition obligations before the judicial judge

In partnership with an excellent colleague (but nonetheless friend), Bréon Ducloyer Avocats has just had the pre-contractual interim relief judge of the Paris judicial court declare that a contracting entity has failed to comply with its advertising and competitive bidding obligations.

Pre-contractual summary proceedings before the judicial judge

While the administrative judge is competent to rule on disputes relating to the award and performance of administrative contracts, the same does not apply to disputes of the same nature concerning private law contracts. However, the awarding of many private law contracts is subject to the observance of prior advertising and competitive bidding measures, as is the case for public contracts falling within the jurisdiction of the administrative judge.

The European directives governing the public procurement of contracting authorities (2014/24/EU) and contracting entities (2014/25/EU) apply to contracts awarded by entities meeting these qualifications regardless of their legal status (state administration, local authority, public establishment, public company, economic interest grouping...).

Public procurement contracts are therefore not limited to administrative contracts and many of them are governed by private law, such as contracts concluded by private companies.

In this case, the public purchaser (contracting authority or entity) must take into account the specificity of private law when drafting the contract. For their part, candidates must bear in mind that the judicial courts have jurisdiction when they consider filing a pre-contractual summary procedure, whether during or after the award procedure.

The court with territorial jurisdiction, pursuant to the French Code of Judicial Organization, is in principle indicated in the contract notice published in the Official Journal of the European Union (OJEU) or in the French “Bulletin officiel des annonces des marchés publics” (BOAMP).

Unacceptable" tenders

In this case, a contracting entity constituted as a limited company had launched a tender procedure for the award of a framework agreement with purchase orders for the supply of network detection equipment and related services.

After several rounds of negotiation, the candidates submitted their best offers for the award of the various lots of this public contract.

However, some candidates were unpleasantly surprised to receive a letter informing them that their bids were "unacceptable" within the meaning of Article L. 2152-3 of the French Public Procurement Code, i.e. that they would exceed the budgetary appropriations allocated to the contract, as determined and established before the procedure was launched. As a result, these bids were deemed irregular and were not in principle ranked.

Surprised by this reason for rejection, even though the price levels had not been the subject of specific discussions during the negotiations, several unsuccessful candidates decided to request clarification from the contracting entity. A first candidate represented by the firm, followed later by a second one, therefore referred the matter to the pre-contractual judge of the Paris judicial court so that the latter could order the entity to comply with its obligations to advertise and invite competition.

Substitution of reasons

After the referral to the judge of the pre-contractual summary procedure, the unsuccessful candidates received new letters in which the contracting entity acknowledged that it had committed a "material error" by qualifying the unsuccessful offers as unacceptable. In these new letters, the contracting entity substituted new grounds for rejection, stating that the tenders submitted had indeed been ranked but that they had not been judged to be the most economically advantageous.

The law - in general - and the public procurement law - in particular - has this dizzying feature that it is possible - without blushing - to come back before the judge and explain that everything that had been stated was in fact materially wrong and that the truth - in all "transparency" - was elsewhere.

Faced with the need to verify compliance with the principles of transparency and equal treatment, the pre-contractual interim relief judge had to determine whether a breach had occurred in this case and what consequences, if any, should be drawn.

• At the end of a first instance (RG No.22/51285) - although initiated subsequently - the judge of the pre-contractual interim relief court considered that, in view of the numerous errors made by the contracting entity during the award of the lots of the disputed contract, the criticisms formulated by the applicant were "likely" and could thus demonstrate that the applicant was "likely to be prejudiced by an examination of the bids whose objective impartiality is in doubt". The judge therefore ordered the contracting entity, if it wished to continue with the award procedure for this contract, to resume the award procedure for several lots at the stage of analysis of the tenders.

• At the end of a second proceeding in which Bréon Ducloyer Avocats represented the applicant (RG No.22/50907), the judge of the pre-contractual summary proceedings of the judicial court (different from the first because of the meanders of the judicial calendar) went further. After having asked the contracting entity to communicate to the applicant the characteristics and advantages of the selected offers, he found that the former had not complied with its obligations. The contentious debates also showed that the analysis conducted by the purchaser was marred by numerous inconsistencies and that some of the rejected bids were in fact much more advantageous than the successful bids. The procedure having already been suspended, the judge therefore ordered the purchaser to pay the costs and compensation to the applicant on the basis of Article 700 of the French Code of Civil Procedure.

At the end of these two procedures, the contracting entity is free to resume the award procedure, provided that it complies with its obligations to advertise and invite competition.

In this case, it must apply the criteria for assessing the bids impartially and award the various disputed lots to the companies that submitted the most economically advantageous bids, without repeating the errors made during the first analysis. Otherwise, it could be exposed to new referrals to the judge of the pre-contractual summary procedure, or even to the engagement of its responsibility before the competent jurisdictions.