In a procurement of a framework agreement, a municipality specified the works divided into various quantitative intervals. In the tenders, the economic operators were to state their price per unit (unit price) for these various intervals. As an obligatory requirement, it was stated that the price per unit for a larger interval was not to be higher than the price per unit for a smaller interval for the same type of work. One economic operator’s tender was rejected due to its failure to meet this requirement.
The Supreme Administrative Court found that a contracting authority has relatively extensive freedom to determine the specifics of the obligatory requirements to apply for a certain procurement. However, the requirements must be formulated such that they are compatible with the basic principles for public procurement, inter alia that economic operators are treated equally, and otherwise in accordance with procurement legislation.
In case HFD 2018 reported case no. 50, the Court found that it is not compatible with procurement law to apply a floor price. This was explained such that an obligatory requirement for a certain lowest price prevents economic operators from competing on the basis of price since tenders under the floor price are automatically excluded. Such a procedure can thus lead to the economic operators being treated differently. The Court also pointed out that a floor price entails that the contracting authority lacks the ability to assess submitted tenders under conditions of effective competition and determine whether a tender with a low price is genuine. A tender perceived by the contracting authority to be based on an abnormally low price is thus to instead be evaluated in accordance with an inter partes procedure as prescribed in the provisions regarding abnormally low tenders.
In the case at hand, The Supreme Administrative Court also found that the obligatory requirement entailed that the economic operators were not entirely free to price their tenders. On the other hand, the requirement did not set an absolute lower limit for the offered prices. Accordingly, the requirement did not prevent the economic operators from competing on the basis of price. The requirement was also not designed in such a way that it led to an automatically rejection of abnormally low tenders. The requirement thus differed in a decisive manner from that examined in case HFD 2018 reported case no. 50 and could not be deemed to be in conflict with the principle of equal treatment or the provisions regarding abnormally low tenders. The municipality thus acted correctly in rejecting the tender.
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