Judgments nº T-4/01 of Court of First Instance of the European Communities, Tuesday February 25, 2003

• Resolution Date: Tuesday February 25, 2003
• Issuing Organization: Court of First Instance of the European Communities
• Decision Number: T-4/01

JUDGMENT OF THE COURT OF FIRST INSTANCE (Fifth Chamber)

25 February 2003 (1) (Public works contracts - Directive 93/37/EEC - Contract documents - Award criteria - Statement of reasons in the award decision - Manifest errors of assessment - Non-contractual liability of the Community)

In Case T-4/01,

Renco SpA, established in Milan, Italy, represented by D. Philippe and F. Apruzzi, lawyers, with an address for service in Luxembourg,

applicant,

v

Council of the European Union, represented by F. Van Craeyenest and M. Arpio Santacruz, acting as Agents, assisted by J. Stuyck, lawyer,

defendant,

APPLICATION for compensation for damage allegedly suffered by the applicant as a result of the Council's decision not to award it the contract forming the subject-matter of invitation to tender No 107865 issued on 30 July 1999 (OJ 1999 S 146) for general renovation and maintenance works in the Council's buildings,

THE COURT OF FIRST INSTANCE

OF THE EUROPEAN COMMUNITIES (Fifth Chamber),

composed of: J.D. Cooke, President, R. García-Valdecasas and P. Lindh, Judges,

Registrar: D. Christensen, Administrator,

having regard to the written procedure and further to the hearing on 7 February 2002,

gives the following

Judgment

Legal context

1.

The award of public works contracts by the Council is governed by the provisions contained in the first section of Title IV (Articles 56 to 64a) of the Financial Regulation of 21 December 1977 applicable to the general budget of the European Communities (OJ 1977 L 356, p. 1), last amended before this action was brought by Council Regulation (EC, ECSC, Euratom) No 2673/1999 of 13 December 1999 (OJ 1999 L 326, p. 1).

2.

Under Article 56 of the Financial Regulation, ‘each institution shall comply with the same obligations as are imposed upon bodies in the Member States’ by the directives on public works contracts, when concluding contracts for which the amount involved is equal to or greater than the threshold provided for by those directives.

3.

In the present case the relevant legislation is Council Directive 93/37/EEC of 14 June 1993 concerning the coordination of procedures for the award of public works contracts (OJ 1993 L 199, p. 54), as amended by Directive 97/52/EC of the European Parliament and of the Council of 13 October 1997 (OJ 1997 L 328, p. 1).

4.

Article 8 of Directive 93/37, as amended by Directive 97/52, provides:

‘1. The contracting authority shall, within 15 days of the date on which a written request is received, inform any eliminated candidate or tenderer of the reasons for rejection of this application or his tender, and any tenderer who has made an admissible tender of the characteristics and relative advantages of the tender selected as well as the name of the successful tenderer.

...’

5.

Article 18 of Directive 93/37, as amended, provides:

‘Contracts shall be awarded on the basis of the criteria laid down [in Articles 30 to 32 of this Directive] ...’.

6.

Article 30 of Directive 93/37 provides:

‘1. The criteria on which the contracting authorities shall base the award of contracts shall be:

(a) either the lowest price only;

(b) or, when the award is made to the most economically advantageous tender, various criteria according to the contract: e.g. price, period for completion, running costs, profitability, technical merit.

2. In the case referred to in paragraph 1(b), the contracting authority shall state in the contract documents or in the contract notice all the criteria it intends to apply to the award, where possible in descending order of importance.

3. ...

4. If, for a given contract, tenders appear to be abnormally low in relation to the works, the contracting authority shall, before it may reject those tenders, request, in writing, details of the constituent elements of the tender which it considers relevant and shall verify those constituent elements taking account of the explanations received.

The contracting authority may take into consideration explanations which are justified on objective grounds including the economy of the construction method, or the technical solution chosen, or the exceptionally favourable conditions available to the tenderer for the execution of the work, or the originality of the work proposed by the tenderer.

...’

Facts

7.

By Notice No 107865, published on 30 July 1999 (OJ 1999 S 146), the General Secretariat of the Council issued a restricted invitation to tender for general renovation and maintenance works in the Council's buildings in Brussels; that notice replaced a notice published on 4 June 1999 (OJ 1999 S 107). The procedure was to result in the conclusion of a five-year framework contract, renewable for 12-month periods. It was also stated in the notice that ‘[i]n 1998, the cost of the general renovation and maintenance work was in the order of EUR 5 000 000’.

8.

The contract documents relating to the tendering procedure provided, in point IV.5 entitled ‘Selection criteria’:

‘(a) The [General Secretariat of the Council] shall select from among the tenders submitted the one which it considers the most advantageous in the light of the information provided by the undertaking. The following criteria are regarded as especially important:

- the conformity of the tender;

- the price of the tender;

- the experience and competence of the permanent team in providing services similar to those described in the contract documents;

- the experience and technical competence of the undertaking;

- the proposal made with regard to the safety coordinator;

- the quality of any subcontractors and suppliers proposed;

- the technical quality of the equipment and materials proposed;

- the measures proposed for observing the prescribed time-limits for completion.

...’

9.

The contract documents stipulated that the contract constituted a framework agreement which bound the two parties for general administrative and technical matters, and for the procedures for fixing prices, qualities and time-limits.

10.

The contract documents provided for three kinds of services. First, the contractor was to set up a permanent 16-man team covering various skills. Its role was to prepare, manage and coordinate the renovation and maintenance work and also to carry out part of it. Tenderers were required to state in part A of a summary the hourly rate for each member of the permanent team and the overall amount for the services of the permanent team based on an assumed total of 1 800 hours per member. The contract also included, in particular, two types of work. The first type of work covered renovation and maintenance works which were not yet defined by the Council. For those works, the tenderers were required to state, in part B of the summary, their price for each item in an illustrative list of services relating to labour and supply of materials. The second type of work covered seven items of work which the Council had already defined when it issued the invitation to tender, but which it subsequently might or might not decide to carry out. Tenderers were required to put in a price for those jobs in part C of the summary.

11.

According to the contract documents, the work carried out by the permanent team would be remunerated at the price determined by application of the contractual rates to the actual time worked, whereas the work on the various jobs under parts B and C of the summary would be remunerated according to the prices submitted. In the three above cases, tenderers were required to state their rates and prices taking account of the fact that at the time of invoicing a cost plus rate or multiplication factor would be applied for ‘the undertaking's general office costs’.

12.

The contract documents stated that the prices and rates for parts A, B and C of the summary did not include ‘services provided in the contractor's office or connected with it, such as (inter alia): indirect personnel costs in so far as they are not included in the rates; personnel management; general operating costs; general accounting costs; comprehensive site insurance and public liability insurance; the performance bond; the remuneration of company executives; staff training costs; the company's taxes [and] profits.’ The ‘general office costs’ as listed above were remunerated by a single cost plus rate or a multiplication factor which was to be fixed by the tenderers when they submitted their tenders and which would be applied to the prices and rates for the work covered by parts A, B and C of the summary. Furthermore, it is clear from the documents before the Court that, if the successful tenderer took on subcontractors to do the work, it was entitled to add to the prices charged by the subcontractors the cost plus rate quoted in its tender. The work in question could be the work provided for in the contract documents or work not so provided for.

13.

It should be noted that the prices quoted for parts A and B represented only the approximate cost of the work concerned over one year, whereas the price quoted for part C was the price of certain projects identified in the contract documents to be carried out during the term of the contract.

14.

On 28 October 1999, the candidates, eight in all, were informed that their applications to participate in the restricted tendering procedure had been accepted. Of those eight candidates, three submitted tenders conforming to the specifications: Strabag Benelux NV (‘Strabag’), Entreprises Louis De Waele (‘De Waele’) and the applicant.

15.

On 11 January 2000, the applicant submitted a tender in the amount of EUR 3 946 745.49 per annum. That tender was considered to conform to the provisions of the contract documents.

16.

Following an initial examination of the applicant's tender, the Council considered that some of the prices it contained seemedabnormally low and that othersdid not even [cover] the supply of...