27.02.2015 | KPMG Law Insights

Public procurement law: Correction of incorrect tenders possible at any time

Dear Readers,

February is always a short month. Our newsletter adapts to this – at least in terms of the number of articles – for once. The reason is simple, but hopefully will convince you anyway: Not much happened in the month of February. The EU Commission has been reticent with news in the area of education and research, and there is nothing spectacular to report from the “Union framework front” either. But we still have a bit of “EU” for you: As part of the HORIZON 2020 funding program, there is further funding for top researchers who want to bring their innovations to market with the help of a financial injection from the EU.

We also do not want to withhold from you the fact that there has been a critical look at universities by the anti-corruption organization Transparency International. There are fears that the independence of universities will be jeopardized due to their – more or less close – relationships with business. So far so good, criticism can be made fruitful. But if e.g. contract research as a whole is placed under general suspicion because of the financial involvement of commercial enterprises, this is decidedly going too far. The German Rectors’ Conference thinks so, and so do we.

We wish you interesting reading!

Sincerely yours

Public Sector Team of KPMG Rechtsanwaltsgesellschaft mbH

Mathias Oberndörfer Dr. Anke Empting

Lawyer Attorney

Public procurement law: Incorrect tenders may be corrected at any stage of the procedure

The Higher Regional Court of Düsseldorf has given public contracting authorities a treat in its decision of January 12, 2015: A public contracting authority that discovers a significant error in the award documents before the contract is awarded may still correct it even if the tender has already taken place.

The fact that there is a fundamental right of the contracting authority to make corrections of significant errors in the award documents before awarding the contract is nothing new. Now, however, the OLG Düsseldorf has ruled that even a submission that has already taken place does not preclude such an error correction. This is because the contracting authority cannot, in principle, be obliged to award a contract on the basis of a call for tenders which it has identified as being defective. The decision as to how and to what extent the contracting authority rectifies an identified tendering error is subject to its freedom of design.

According to the court, first of all, there is a possibility for the contracting authority to postpone the entire procedure.

However, according to the OLG Düsseldorf, it is also conceivable that the contracting authority limits itself to individual sub-items in connection with the deferral if these sub-items do not influence the price structure of the overall offer in a relevant manner. If the order of bidders changes in a second bidding round, this must be accepted by the companies participating in the competition. This applies all the more so in the case of pure price competition, where even a minor deviation in the bid prices can be decisive for the award decision.

Here the minds of the jurisprudence divide

The Dresden Higher Regional Court sets clear limits as far as the relegation of the proceedings to partial positions and the resulting change of price structures is concerned. The limits consist of a so-called “de minimis threshold”. According to the Dresden Higher Regional Court in its ruling of July 23, 2013, if the price items to be corrected account for approx. 15% of the bid totals, it is necessary to obtain new bids in order to counteract distortions of competition.

However, the OLG Düsseldorf does not fully share this view: fair competition can no longer be guaranteed if the items affected by the change co-determine the price structure of the offers in other respects and affect the price structure of the offer in a relevant manner. In this respect, both courts go one way. The fork in the road here lies in the fact that the OLG Düsseldorf does not want to tie such an influence to a “threshold value” of approx. 15% of the bid amounts. It sees ambiguities arising already from the question on which basis such a “de minimis threshold” should be determined. For example, the average of the bids submitted could be used, or the best bid or the contract value estimated in advance by the contracting authority, which is generally not made public, could be used as a basis.

However, the OLG Düsseldorf also takes a critical view of the de minimis threshold set by the OLG Dresden because it does not see any substantive arguments that would make it seem plausible that individual prices of a bid have an influence on the other price components of the bid on the basis of their percentage share in the total contract value.

The Düsseldorf Higher Regional Court refrained from referring the matter to the Federal Court of Justice. Such a referral is intended by law whenever a Higher Regional Court wishes to deviate from the legal opinion of another Higher Regional Court. In this case, submission is therefore not necessary, since the question in dispute between the OLG in connection with the “de minimis threshold” is not relevant to the decision in the dispute.

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