The court will have to re-assess the requirement stipulated in the procurement to ascertain subcontractor’s ability to execute the contract
2 March, 2016
On 26 February, the Department of Administrative Cases of the Supreme Court revoked and transferred for new adjudication to the Administrative district court a case, in which the first instance court had recognised the decision of the Procurement Monitoring Bureau in the part regarding indication included in tender regulation to a supplier to prove subcontractor’s ability to execute the supplier’s demands to be unlawful.
The dispute in the case is on whether legal provisions allow that contracting institution may impose in specifications on public procurement procedure an obligation to a bidder, who grounds on possibilities provided by other businessmen, to enter into company contract with these businessmen or to establish general partnership with them, before granting the right to conclude public procurement contract. The dispute also concerns the question whether the contracting institution may request information from the bidder regarding financial and economic situation of businessmen, whose abilities the bidder relies on.
The Supreme Court, grounding on the judgement given by the Court of Justice of the European Union to reference for preliminary ruling, recognised that an institution may not impose an obligation to a bidder, who grounds on possibilities provided by other businessmen, to enter into company contract with these businessmen or to establish general partnership with them, before granting the right to conclude public procurement contract. At the same time, the Supreme recognised that authorities must verify not only supplier’s, but also subcontractors’ ability to execute the contract. The authority may ascertain not only financial and economic situation of the bidder, but also to request such information about companies, whose abilities the bidder relies on.
Factual circumstances of the case are following:
Municipality of Talsi district organised procurement procedure – an open tender “Improvement of the road infrastructure in the City of Talsi in order to promote accessibility, round 1”. The applicant, company “Ostas celtnieks” Ltd., contested several requirements of tender regulation to the Procurement Monitoring Bureau. By the decision of the Bureau of 13 February 2012, applicant’s objections were satisfied in particular points. The applicant appealed to the court, asking to recognise the decision of the Bureau as unlawful in part regarding several points, where the court did not satisfy the applicant’s objections.
By the judgement of 7 May 2013, the Administrative district court partly satisfied the application, having recognised the decision of the Bureau as unlawful in the part.
Information prepared by Baiba Kataja, the Press secretary of the Supreme Court
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