KHO 2019:84, 26.6.2019
Article(s) in Directive 2014/24/EU: 33(2)
Topic: Framework agreements: identifying the contracting authorities
Member State: FI
Court/rev. board: Supreme Administrative Court
1. IMPLEMENTATION / RELEVANT NATIONAL LEGISLATION
Art. 33(2) of Directive 2014/24/EU was implemented by sections 42 and 43 of the Public Procurement and Concession Contracts Act (1397/2016). In section 42.4 it is stated in accordance with the wording of the Directive that contracts based on a framework agreement shall be made only between those contracting authorities clearly identified for this purpose in the framework agreement’s call for competition and those economic operators party to the framework agreement. However, unlike the wording art. 33(1) of the Directive requiring the envisaged quantity to be established, where appropriate, the Finnish Act defines framework agreements in a manner which also requires to establish the envisaged quantity “A framework agreement means an agreement between one or more contracting authorities and one or more economic operators, the purpose of which is to establish price, the quantity envisaged and other terms governing contracts to be awarded during a given period.”
Nonetheless as is specified also in Directive’s recital 60, contracting authorities are not obliged to procure their products, services or works through the framework agreement. Thus it is possible, according to the national legislative proposal of the Finnish government (that led to the adoption of Act 1397/2016), to indicate contracting authorities in the call for competition even though they would not use the framework. In the light of the legislative proposal’s reasonings, it remains unclear whether Government meant potential users of the framework agreement or those who have, prior to the contract award procedure, indicated their interest to join to the framework agreement in question. Nonetheless, according to the proposal, it is important that the award procedure of a framework agreement is based on as accurate information as possible on the users and the volumes thereof.
2. FACTS
In 2017 Hansel (the CPB for Finnish government) published a contract notice for a framework agreement on fuel and its container deliveries. In the call for competition Hansel attached a list of all 186 government departments and entities that were their clients and thus able to use the framework agreement in question.
One of the tenderers, Neste Markkinointi Oy, argued that Hansel failed to indicate the scale of the framework agreement in a clear enough way. It was further submitted that many of the 186 contracting authorities did not intend to purchase through the framework and some already had their own contracts on fuel. This however was not disclosed by Hansel. Hansel argued that under the procurement rules there is no obligation for all indicated contracting authorities to use the framework and that it is enough that they have attached a list of all potential users of the framework.
3. JUDGMENT
The overall value of the framework agreement was defined through a margin of 80 000 000 – 130 000 000 euros, which the Supreme Administrative Court considered to be clear. The Supreme Administrative Court stated that it was clear that Hansel was aware that not all its clients will use the framework agreement in question and that due to the data on numerous earlier framework agreements on fuel, Hansel should have had good knowledge of which contracting authorities will not use the framework agreement.
The Court thereafter concluded that Hansel had breached the procurement rules by not providing adequate and clear enough information on the framework agreement when suggesting a significant number of contracting authorities as users of the framework agreement, even though their earlier behavior and Hansel’s experience indicated that they would not use the framework agreement in question. The Court referred to the CJEU’s case C-216/17, Autorità Garante della Concorrenza e del Mercato – Antitrust and Coopservice and stressed the importance of adequate information in fulfilling the duties set out by the openness principle and securing the equal treatment and non-discrimination of economic operators. According to the Supreme Administrative Court, procurement documents shall have adequate information on the actual extent and scope of the framework agreement in question, including the users of the framework as well as the volumes of supplies and services, for the purposes of deciding one’s participation to contract award and tender preparation.
Even though in this case the Supreme Administrative Court did not specifically address the way Hansel had established the quantity and value of the framework, the Finnish practice has been for a long time such, that the value of framework agreements are given in a form of “non-binding estimates” as was the case also regarding this Hansel’s framework for fuel. The legal effect and justification of this Finnish practice on “non-binding” estimates can be questioned on the basis of afore-mentioned case C-216/17, Autorità Garante della Concorrenza e del Mercato – Antitrust and Coopservice, where CJEU clearly stated that 1) contracting authority has a duty to give an estimated value of the framework agreement and that 2) the estimated value given cannot be exceeded without a new award procedure.
