Judgment of 17th November 2023 of the SAC (case 210/18.4BELLE), Portugal
Article(s) in Directive 2014/24/EU: Art. 22 and 57
Topic: e-signature of offer; open tender; exclusion of tender; formality
Member State: PT
Court/rev. board: Supreme Administrative Court (SAC)
1. IMPLEMENTATION / RELEVANT NATIONAL LEGISLATION
Articles 57 and 72 (3), paragraph c) of the of the Portuguese Public Contracts Code (PCC), and article 54 of Law 96/2015, of 17th August (that regulates the availability and use of electronic public procurement platforms).
2. FACTS
This decision of the SAC (from 2021, but only published now) fixes “uniform jurisprudence” (uniformização de jurisprudência), following a request from the Public Prosecutor’s Office. Under Portuguese law, there is no system of precedent, therefore these rulings are not binding per se to other courts, or to the SAC itself, which can adopt different understandings in future cases. However, if there is a prior ruling under uniform jurisprudence and a court diverges from that understanding, the aggrieved party may always appeal to the SAC for a possible restatement of the uniform decision.
The case dates back to 2018, when, in an open procedure for a contract regarding public regular transport of passenger services, the excluded bidder challenged his exclusion. He had submitted several documents through a single file/document in PDF format, on which an electronic signature had been affixed. Based on a rule resulting from article 54(5) of Law 96/2015, of 17th August (which demands that documents are signed one by one), a big discussion arose as to whether a document should be considered electronically signed when a group of different documents is merged into a single PDF file, and then signed. Some argue that this does not comply with the law, therefore each document (i.e. each PDF file) should be signed autonomously.
3. JUDGMENT
The Court ruled that the legal interpretation of norms regulating procedures of strong bureaucratic and mass nature, aimed at a wide variety of legal subjects (which would be the case of procurement procedures), claims for a greater importance of the literal element of the law, considering, therefore, that, in these procedures, bureaucracy and formalism gain additional qualities and importance, namely, the defense of the principles of equality and non-discrimination.
Having said that, the SAC interpreted article 54(5) of Law 96/2015, of 17th August, in its most literal way, fixing “uniform jurisprudence” in the sense that the submission of a bid in a digitally signed PDF format file that merges several autonomous documents not electronically signed individually does not meet the individual signature requirement determined by this norm, nor by article 68 of the same Law, as well as article 57(4) of the PPCC.
In its reasoning, the Court also mentioned that, in this case, the principle of the rule of law is especially intense and that a change in the meaning of an explicit rule must result (only) from an express legislative change, not a hermeneutic operation of the contracting authority.
The decision, although supposedly “uniform”, is highly controversial and does not seem to be fully in line with other rulings from the SAC (taken before and after this ruling was issued).
The question in need of answer is the following: is the contracting authority obliged to accept an offer – with its documents – sent through a PDF file signed, electronically, just once?
Considering previous jurisprudence on electronic signatures from the SAC, this is a surprising decision, which gains importance since it fixes “uniform jurisprudence”, following doubts of interpretation from both the first and second instance courts.
The main norm, here, at stake, is article 54 (5) of Law 96/2015, of 17th august, which determines that “in electronic documents whose content is not susceptible to be represented as a written statement, including those that require computer processing to be converted into a representation as a written statement, namely compression, decompression, aggregation and disaggregation processes, a qualified electronic signature must be affixed in each of the electronic documents that constitute them, thus ensuring them the probative force of a signed private document, in accordance with article 376 of the Civil Code and article 3 (2) of Decree-Law 290-D/99, of 2nd August, amended and republished by Decree-Law 88/2009, of 9th April, under penalty of exclusion of the offer under the terms of article 146 of the Public Contracts Code”.
This is, undeniably, a complex norm to interpret. Not complex in its consequence, which is clear – the exclusion of the offer –, but on the interpretation of the several concepts of its first part.
In fact, the SAC dedicates a few paragraphs explaining the difference between a PDF file and a ZIP folder – showing how, more than ever, technical concepts and appliances are important for law practitioners. The discussion arose on the first two instances, having the SAC concluded that, in fact, a PDF file could not be compared with a ZIP folder for the purposes of offer submission, since both serve different purposes.
On this topic, the SAC noted that ZIP is a file format that reduces the space occupied by data and requires its own software to compress and decompress file data, to whom no encryption technology that ensures the integrity of the content is applied. On the other hand, the PDF file allows the transmission of very diverse types of content in a standardized way and produces an informative flow of metadata that ensures its non-corruption and integrity. In short, the PDF file allows the integrity and wholeness of the offer to be maintained, something that, according to the Court, does not happen with a ZIP folder.
What is interesting is that the SAC’s decision merges first and second instance’s court’s reasoning. From the second instance, the SAC draws the conclusion, already explained, that a PDF file is different from a ZIP folder; from the first instance, concludes that the legislator’s intention, in article 54 (5) of Law 96/2015, of 17th August, was to treat the same way both realities – requiring the signing of all documents, one by one, on both cases.
To support this conclusion, the SAC justifies with article 57 (4) of the PPCC (which determines that all documents of the offer must be signed by the bidder or its legal representative), arguing that i) it was the legislator’s intention to harmonize both this Law and the PCC; that ii) such scenario would be equivalent to have an envelope signed, and that iii) there was no valid justification for the presentation of the documents into a single file – making a subtle reference to the violation of the principle of equality between tenders if such a type of submission was to be accepted.
Article 57 (4) is not as clear as article 54 (5) of Law 96/2015, 17th August (lex specialis) on whether this obligation is – or not – individual for each document.
However, we can criticize the Court for treating, as equal, two different (from its understanding) realities. Maybe the SAC could have applied the irregularity sanction in this case, since it admits the integrity of the offer contained in a PDF file (meaning that the substantial concern is guaranteed). The decision lacks, from our point of view, balancing the literal element of the norms (which, despite appearances, is not crystal clear) with the principles of competition and proportionality, as well as the favor participationis principle (i.e. the idea that in case of doubt, competition should be maximized, including by way of admitting an offer in case of doubt regarding its compliance), all fundamental in Public Procurement.
All in all, the Court may have been too formalist on the interpretation of article 54 (5), disregarding not just the application of the principles, but possibly even the factual and technical aspects of electronic procurement.
Link to the original decision: https://diariodarepublica.pt/dr/detalhe/acordao-supremo-tribunal-administrativo/12-2023-224427501
