Legal costs depended on the contracting entity's (lack of) information
The Complaints Board has established in a recent ruling that, in determining the legal costs of a complaint, it may be relevant to consider whether the complaint could have been avoided as a result of the contracting entity's conduct – if, for example, the contracting entity only after commencement of the complaints proceedings submits a claim that the complainant's tender was non-compliant. Read more about the case, which concerned a framework agreement for work and safety footwear for Danish defence personnel.
Ruling of the Danish Complaints Board for Public Procurement, dated 31 January 2020: LeBock Fodtøj ApS v the Danish Ministry of Defence Acquisition and Logistics Organisation
In February 2019, the Danish Ministry of Defence Acquisition and Logistics Organisation ("DALO") tendered a framework agreement for delivery of work and safety footwear for Danish defence personnel. It was a comprehensive assortment tender with an estimated value of DKK 120 million excluding VAT, and it was conducted as a public tender under the Danish Public Procurement Act. On expiry of the deadline, DALO had received a total of four tenders, including one from LeBock Fodtøj ApS and Bacher A/S.
DALO awarded the contract to Bacher, after which LeBock complained about the award decision. Some of the issues raised by LeBock's complaint were whether Bacher's tender was compliant and whether the evaluation of the tenders had been carried out in accordance with the described procedure.
Ruling of the Complaints Board
The Complaints Board found that the winning tender met the minimum requirements and was therefore compliant. DALO acknowledged during the case that they had made a mistake in the evaluation of Bacher's offer, which had received two points for a criterion for which they should rightly have received only one.
Furthermore, during the complaint proceedings, DALO stated that LeBock's offer was also non-compliant, as it failed to fulfil two minimum requirements. DALO had not informed LeBock of their non-compliance in connection with the award decision. As the Complaints Board agreed with DALO that LeBock's tender was non-compliant, there was no basis for deciding on the evaluation of the tender.
Although LeBock made DALO acknowledge errors in the procurement procedure, LeBock was not successful in its cancellation claim. Thus, LeBock was essentially deemed to be the loser in the case. Nevertheless, DALO was not awarded legal costs. The Complaints Board's decision on legal costs was based on the fact that DALO should have informed LeBock of their non-compliant tender already in connection with the evaluation of the tender and not as late as during the complaint proceedings.
Our opinion
The ruling shows that, prior to awarding the contract, the contracting entity ought of course to conduct such a thorough review of all tenders that the contracting entity is able to determine whether the tenders are compliant. If a tender is non-compliant and the contracting entity informs the tenderer thereof already at the time of the award decision, a complaint procedure may be avoided.
The lack of information about LeBock's non-compliant tender should possibly be seen in the context of the fact that the procurement procedure involved a large assortment of products and that it was accompanied by a number of minimum and evaluation requirements, for which reason it may have been difficult even for the contracting entity to understand the minimum requirements. As the contracting entity must of course conduct a thorough review of the compliance of all tenders, the contracting entity ought to always carefully consider which requirements constitute minimum requirements. This is especially true in large-scale procurement procedures where it may otherwise be difficult for the contracting entity to receive compliant offers. In this case, only one of four tenders was compliant.
Read the ruling issued by the Danish Complaints Board for Public Procurement (in Danish).
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