In a judgment delivered by the Court of Justice of the European Union in June 2024 in Case C-737/22, Staten og Kommunernes Indkøbsservice A/S v BibMedia A/S, the Court ruled that awarding a contract to a party that came second in bidding, on condition it matches the most economically advantageous bid, may be compatible with EU public procurement law.
Staten og Kommunernes Indkøbsservice (SKI) is a central purchasing body owned by both the state and the Association of Municipalities (Kommunernes Landsforening). Its purpose was to centrally publicly procurement goods and services on behalf of its owners, which, in the case, was a public contract relating to the provision of library materials and related preparatory services. The body had divided the procurement into two lots, one for ‘Danish books and sheet music (East)’ and another for ‘Danish books and sheet music (West)’.
The proposed decision of the purchasing body was to offer Lot 1 (east) to one tenderer, BibMedia, and Lot 2 (West) to another tenderer (Audio Visionary Music A/S (AVM)), but only if AVM were to deliver and perform the services on condition that it was at the price offered by BibMedia. The sole awarding criteria was the lowest price. AVM were informed of this condition, upon which AVM agreed to lower the price that BibMedia had put forward.
The referring national court, the High Court of Eastern Denmark (Østre Landsret), had made a reference for a preliminary ruling request clarification on the interpretation of Article 18(1) of Directive 2014/24 on public procurement.
Article 18(1) of the Directive provides,
‘Contracting authorities shall treat economic operators equally and without discrimination and shall act in a transparent and proportionate manner.
The design of the procurement shall not be made with the intention of excluding it from the scope of this Directive or of artificially narrowing competition. Competition shall be considered to be artificially narrowed where the design of the procurement is made with the intention of unduly favouring or disadvantaging certain economic operators.’
On the facts of the case, which can be read in the judgment, the Court ruled that Article 18(1) of the Directive 2014/24/had to be interpreted as meaning that,
‘the principles of equal treatment and transparency set out in that provision do not preclude, in a procedure for the award of a public contract divided into lots, the tenderer which has submitted the second most economically advantageous tender from being awarded, in accordance with the terms set out in the procurement documents, a lot on the condition that that tenderer accepts to deliver the supplies and perform the services relating to that lot at the same price as that offered by the tenderer which submitted the most economically advantageous tender and which has therefore been awarded another, larger lot of that contract.’
In layman’s language, this means that the awarding a contract to a party that came second in bidding, on condition it matches the most economically advantageous bid, may be compatible with EU public procurement law, subject to conditions.
The judgment of the Court in Case C-737/22, Staten og Kommunernes Indkøbsservice A/S v BibMedia A/S is available here.