Search
Contact
26.10.2018 | KPMG Law Insights

Procurement law: special urgency needs a reason

Dear Readers,

as the political education, research and funding landscape has also become extremely active in the last quarter of this year, this newsletter also thrives on reports around education and research. Take a look at our articles for news on higher education policy, innovations in the funding area, and the results of a study commissioned by the Federal Ministry of Education and Research on the study situation and student orientation.

We had the impression that those of you who are interested in procurement law have been somewhat neglected so far. Therefore, the focus of this newsletter is on public procurement law with new and exciting decisions from case law that are important for universities and research institutions.

We would very much appreciate your feedback on the areas we have covered so far – are these sufficient for you in the context of your daily work? Are there possibly any topics you would like to have discussed as well? Do not hesitate and feel free to call us about it or write a short feedback by mail.

We wish you interesting reading!

Sincerely yours

Public Sector Team of KPMG Rechtsanwaltsgesellschaft mbH

Mathias Oberndörfer Dr. Anke Empting

Lawyer Attorney

In its decision of September 24, 2014, the OLG Celle clarifies that a lack of an urgent reason for choosing the negotiated procedure without a competitive bidding process is not already apparent because the urgency was not substantiated in more detail by the contracting authority.

The contracting authority invited tenders for new main engines for a police coastal boat using the “accelerated negotiated procedure without competitive bidding”. It then sent the tender documents to three selected bidders, including the applicant and the respondent. The award documents indicated that the information requirement was to be waived “due to the particular urgency”. The tender documents did not contain any further explicit justification for the selected procedure.

The applicant learned via the public announcement that the bid was awarded to the respondent. Thereupon, the applicant objected to the award of the contract and criticized the choice of the negotiated procedure without a competitive bidding process as well as the waiver of prior information of the bidders. The contracting authority rejected the complaints. After unsuccessful initiation of the review procedure, the applicant filed an immediate appeal with the request to declare the award invalid and to order the respondent and contracting authority to conduct the award procedure again.

Lack of urgency was not apparent

With success! Contrary to the opinion of the Procurement Chamber, the applicant was not precluded with its complaints regarding the incorrect choice of procedure and the lack of prior information. Thus, according to the tender documents, the applicant could not have recognized that the choice of the negotiated procedure without a competitive bidding process was erroneous. Rather, the documents merely showed that the client had assumed the conditions for a special urgency after examination. The mere fact that the tender documents did not contain a concrete justification for the urgency would not lead to a recognizability of the violation of procurement law.

Moreover, the bidders in an award procedure are not obliged to question the specific reasons for the choice of procedure made with the contracting authority or to raise a suspicion.

Despite the primacy of the open procedure, it can be observed time and again in practice that public contracting authorities resort to the negotiated procedure without a closer legal examination. However, the decision of the OLG Celle shows that such a premature recourse to the negotiated procedure is associated with considerable legal risks. Public contracting authorities are therefore strongly advised to exercise the greatest possible care when selecting the type of procedure. In particular, the requirements of urgency to justify a negotiated procedure without publication are only met in very rare exceptional cases.

 

“Take-up threshold” is 20 percent price gap

In its decision of September 25, 2014, the Munich Higher Regional Court (OLG) stipulated that the so-called “catch threshold”, above which a contracting authority must investigate a possible discrepancy between the service offered and the bid price, must be a price difference of 20 percent between the most favorable bid and the next highest bid.

This involved a tender for a service contract for the cleaning of a building. Bidders should provide a price for cleaning services as an hourly billing rate. Based on a predefined scheme, the calculation was to be presented, whereby the bidders had to take into account compliance with the minimum collectively agreed wages – now also quite common after the introduction of the tariff compliance and award laws of the federal states.

Without further ado, the client excluded the previous contractor from the award procedure, which did not suit the latter. As a result, the previous contractor moved to the Procurement Chamber and initiated review proceedings.

The decision of the instances

Both the Procurement Chamber and the Munich Higher Regional Court ruled in favor of the previous contractor, and its bid could not be excluded.

This is because – in order to justify the exclusion – a disproportion between the service offered and the bid price would have had to be established. In order to be able to make this determination, it would be necessary to reach the so-called take-up threshold in the amount of 20 percent price difference between the most favorable and the next best offer. However, this threshold had not been reached here. In addition, the offer in dispute here was only about 9 percent below the average in terms of its price. This also speaks against a disproportion which could have led to exclusion.

Aline Heurley, KPMG Rechtsanwaltsgesellschaft mbH, Düsseldorf

T 0211 4155597-160; aheurley@kpmg-law.com

Dr. Anke Empting, KPMG Rechtsanwaltsgesellschaft mbH, Düsseldorf

T 0211 4155597-161; aempting@kpmg-law.com

Julia Paul, KPMG Rechtsanwaltsgesellschaft mbH, Düsseldorf

T 0211 4155597-163; juliapaul@kpmg-law.com

Explore #more

08.12.2023 | PR Publications

Payout can be risky

In the current issue of Personalwirtschaft from 30.11.2023, there is a guest article by Stefan Middendorf and Gracjan Modrzyk. Some companies are once again…

07.12.2023 | PR Publications

Institutional Money – It’s all in the mix

Institutional Money 04/2023 discusses the opportunities offered by the Neighborhood Fund. The fund is ideal for real estate investors, as it is not limited to

01.12.2023 | PR Publications

WiWo: Best of Legal Awards – Philipp Glock Leader of the Year

On Thursday evening, WirtschaftsWoche honored outstanding projects and minds from consulting firms and law firms in Düsseldorf and celebrated the second Best of Professional Night…

29.11.2023 | KPMG Law Insights

Energy transition also opens up business opportunities

The energy industry’s complex, capital-intensive transformation process offers investors and banks a great deal of potential By Lars Christian Mahler and Marc Goldberg for Börsen-Zeitung,…

29.11.2023 | KPMG Law Insights

Guest article in ZURe – AI and the legal department of tomorrow

The current issue of ZURe (p. 48 ff.) contains a guest article by KPMG Partner Sina Steidel-Küster (Regional Director Southwest, Head of Stuttgart office) and…

29.11.2023 | KPMG Law Insights, KPMG Law Insights

Key Facts about the new draft of the “Data Act

On February 23, 2022, the EU Commission presented the new draft of the so-called Data Act, the “Regulation on harmonized rules for fair access to…

21.11.2023 |

Guest article in ZURe on the implementation of CSRD reporting in SMEs

The current issue of ZURe (p. 34 ff.) contains a guest article by Lena Plato (Director Legal & Compliance, FLABEG Automotive Group GmbH), KPMG Law…

20.11.2023 | Press releases

Statement by KPMG Law experts in Handelsblatt on the topic of sustainability cooperation in antitrust law

In the Handelsblatt, KPMG Law expert Jonas Brueckner is quoted in detail on the subject of cooperation in terms of sustainability. Until this summer, there…

15.11.2023 |

Legal 500 – Country Comparative Guide Germany

Gerrit Rixen and Jonas Brueckner provide an overview of the relevant legal regulations in the area of Competition & Litigation in a practical guide on…

14.11.2023 | Press releases

Tax and Law at a glance – New issue of the digital magazine “Talk

“Talk” stands for Tax and Law Compass, because that’s what the digital magazine wants to be: a navigation aid to the legal and tax aspects…

Contact

Mathias Oberndörfer

Geschäftsführer
Mitglied des Vorstands Service Tax - KPMG AG Wirt­schafts­prüfungs­gesell­schaft

Theodor-Heuss-Straße 5
70174 Stuttgart

tel: +49 711 781923410
moberndoerfer@kpmg-law.com

© 2023 KPMG Law Rechtsanwaltsgesellschaft mbH, associated with KPMG AG Wirtschaftsprüfungsgesellschaft, a public limited company under German law and a member of the global KPMG organisation of independent member firms affiliated with KPMG International Limited, a Private English Company Limited by Guarantee. All rights reserved. For more details on the structure of KPMG’s global organisation, please visit https://home.kpmg/governance.

 KPMG International does not provide services to clients. No member firm is authorised to bind or contract KPMG International or any other member firm to any third party, just as KPMG International is not authorised to bind or contract any other member firm.

Scroll