Decision n. 457733, Council of State, 24.03.2022, Société EPI et autres, classé B
Article(s) in Directive 2014/24/EU: Art. 56, Art. 57 (4)(f) and (i), Art. 67 (3) and (4)
Topic: Exclusion from an award procedure because undue influence
Member State: France
Court/rev. board: Conseil d’Etat
1. IMPLEMENTATION / RELEVANT NATIONAL LEGISLATION
Art. 57(4)(f) and (i) of Directive 2014/24/EU was implemented by the Public Procurement and Concessions contracts Code (thereafter PPCCC), Art. L. 2141-8. Art. 56 of Directive 2014/24/EU was implemented by the PPCCC, Art. L. 2152-1 and Art. L. 2152-2. The wording of national legislation regarding the non-mandatory exclusion grounds due to conflict of interests and earlier participation to the planning of contract award in question, and regarding the irregular or inappropriate tender, is similar to the wording of the Directive.
If the decision concerns concessions (PPCCC, art. L. 3123-8, art. L. 3124-2 et art. L. 3123-3), the solution can be transposed to public procurement.
The city of Ramatuelle, which holds the concession for the Pampelonne beach from the State, launched a consultation to award a sub-concession for works and public bathing services for the operation of a section of this beach from 2022 to 2030. The bid of the company “EPI plage de Pampelonne” came in second place, the lot having been awarded to the company EPI. The judge of the Toulon administrative court considered that the corporate name of the EPI company (the prospective winner of the sub-concession contract in dispute) created a “serious risk of confusion” with the company owning the hotel of the same name, the sole shareholder of the EPI plage de Pampelonne company, which was also a candidate, in view of the strong reputation of this establishment, which was also the owner of the “EPI Plage” brand. He deduced that the conceding authority should have excluded the EPI company from the award procedure or, at the very least, requested its observations based on Article L. 3123-11 of the Public Procurement Code. EPI and the municipality of Ramatuelle then appealed to the Conseil d’Etat insofar as the exclusion of a candidate from a procedure for awarding a concession contract requires that, within the framework of the award procedure in question or in other award procedures, the candidate has undertaken to influence the award of the contract, the buyer’s decision-making, and has not established, in response to the buyer’s request to this end, that his professionalism and reliability can no longer be called into question and his participation in the procedure is not such as to undermine equal treatment between candidates.
Firstly, the judgment extends to concessions the broad interpretation of the exclusion ground relating to influence that the Conseil d’Etat had retained in its judgment Département des Bouches-du-Rhône concerning public procurement contracts (CE 24 June 2019, no. 428866, Rec.). It, indeed, adopted a constructive – not to say audacious – interpretation of the provisions of the directive and their transposition into the Public Procurement Code, a reading which seems to imply that only the disputed award procedure should be concerned: L. 3123-8 of the PPCCC provides that “The contracting authority may exclude from the procedure for awarding a concession contract persons who have undertaken to unduly influence the conceding authority’s decision-making process or to obtain confidential information likely to give them an undue advantage during the procedure for awarding the concession contract, or who have provided misleading information likely to have a decisive influence on the decisions to exclude, select or award”. However, for the Conseil d’Etat, “the provisions cited in the previous point allow the contracting authority to exclude from the procedure for awarding a concession contract a person who can be considered, in view of precise and detailed elements, as having, in the context of the award procedure in question or in the context of other recent award procedures, undertaken to influence the buyer’s decision and has not established, in response to the buyer’s request to that end, that its professionalism and reliability can no longer be called into question and that its participation in the procedure is not such as to undermine the equal treatment of candidates” (emphasis added). One can note the clerical error relating to “the buyer” regarding a concession contract, but also the vagueness relating to the assessment of the “recent” nature of the procedures. On the other hand, it seems that only procedures carried out by the contracting authority in question (and not by other contracting authorities) can be concerned.
Secondly, the Conseil d’Etat sanctioned the judge of first instance of the precontractual remedy for ruling that the corporate name of the prospective winner of the sub-concession contract in dispute created a “serious risk of confusion” with another company that was also a candidate and should have led to its exclusion. For the Conseil d’Etat, “the choice by an economic operator of a corporate name cannot, on the sole ground that it is likely to lead to a risk of confusion with another company which is also a candidate for the award of the sub-concession in dispute, justify its exclusion”. It is true that the first hypothesis of influence, that of undue influence on the decision-making process, as in the Département des Bouches-du-Rhône’s judgment (corruption, in this case), was not in question, but the third one relating to ‘misleading information likely to have a determining influence’. Nevertheless, we can support the Conseil d’Etat,because a simple risk of confusion, even if maintained by a candidate, cannot be considered as false information. It should be noted, in passing, that neither the Conseil d’Etat nor the rapporteur public reproached the judge of first instance for having required the contracting authority to exclude the candidate. This clearly confirms that the grounds for exclusion referred to as “at the discretion of the purchaser” does not always allow for full discretion to exclude.
Thirdly, after cassation, the Conseil d’Etat examined the various grounds for annulment of the award procedure and found the successful candidate’s bid to be irregular due to the failure to comply with the specifications regarding the distribution of the restaurant area/sunbathing area. But it is by examining all the other grounds, in order to determine at which stage the award procedure should be resumed, that it is led to specify the place of the projected operating account. In its decision in Commune de Cannes (8 April 2019, n° 425373), the Conseil d’Etat ruled that a sub-criterion relating to the estimated turnover during the term of the concession was based solely on the declarations of the tenderers, without any contractual commitment on their part and without any possibility for the public authority to check its accuracy, and that it was, therefore, not likely to enable the selection of the best tender in terms of the overall economic advantage for the contracting authority. The judgment under review, without calling this case law into question, nevertheless specifies that the EPC may constitute an element of assessment that is linked to the criterion of “quality and consistency of the bid in financial terms”.
Fourthly, the Conseil d’Etat considers that EPI plage de Pampelonne, whose bid was ranked second behind EPI following the examination of the final bids, is not likely to have been harmed by any shortcomings relating to EPI’s bid, since EPI’s bid had to be rejected because of its irregularity. This was not the position of the rapporteur public, who considered that, for certain “transversal” failures, such as the selection criteria, the solution could be different. Indeed, in the event of the elimination of the first offer, the evaluation methods could lead to the offer initially ranked second not finishing first. The Conseil d’Etat preferred not to go into the refinement of this reasoning, at least in this case.