Insights

HIGHLIGHT OF JURISPRUDENCE # 10 - OCTOBER 2021 | DECISION OF THE COURT OF AUDITORS | DENIAL OF APPROVAL

28/10/2021 Public Procurement

Exclusion of competitor for non-essential formalities

This month, we highlight the Decision of the Court of Auditors No. 23/2021, of 6 October, in which the approval of the Court of Auditors was refused in a contract subject to prior inspection because the contracting authority excluded a bidder for non-compliance with essential formalities.

In the case under analysis, it was a contract signed following an international public tender, in which the method established for the assessment of the legal award criterion was the price.

Within the scope of the contracting procedure, the contracting authority excluded a competitor for the following violations of the requirements of the Tender Program:

a) Lack of affixing a qualified digital signature on an Excel sheet; and

b) Lack of a duly legalized translation of the product's technical file, and lack of a declaration of prevalence over the respective originals.

Following the jurisprudence of the Court of Auditors, it was decided in this Decision that the situations referred to above constitute simple irregularities, relegated to the figure of non-essential formalities.

The Court of Auditors considered that it would be permissible for the bidder to present the signed document after the deadline for submitting proposals, considering that it would be "perfectly possible to compare the unsigned excel sheet with the one that he presents later with the signature attached".

And such supply would not affect competition and equal treatment among competitors. The Court understands that such principles would indeed be affected, if such power were not granted, in identical circumstances, to other competitors.

For equal reasons, the Court applies the same understanding to the non-delivery of a legalized translation and declaration of prevalence over the respective originals.

In other words, if it is possible for the bidder to remedy the irregularity through the presentation of documents whose versions can be easily compared, there should be no impediment to the bidder to present documents after the stage of presentation of the proposal documents.

What does the Public Contracts Code say?

Pursuant to article 57 of the Public Contracts Code, the tenderer must present with the tender all the necessary documents, signed by the tenderer or by a representative who has powers, under the terms defined in the tender program.

However, under the terms and for the purposes of the provisions of article 72 of the CCP, the jury may ask the competitors for any clarification on the proposals submitted that it deems necessary for the purposes of their analysis and evaluation. Such clarifications only become part of the proposals presented if:

a)      Do not contradict the elements contained in the documents that constitute them.

b)     Do not change or complete the respective attributes, which aim to make up for omissions that determine their exclusion.

In the opinion of the Court of Auditors, only the delivery of proposals without signature in which the author cannot be identified, or those in which their supply may have repercussions on the content of the proposal, constitute essential formalities. In addition, the Court of Auditors also states in this Judgment that, if price is the only criterion, there will be an interest in not ruling out proposals that could allow obtaining the goods or services provided for in the tender in better financial conditions.

The decision

The Court of Auditors considered that the contracting authority had committed an illegality by not having resorted to the supply system provided for in paragraph 3 of article 72 of the CCP. Such illegality is part of the grounds for refusal of approval, namely, due to alteration of the financial result.

And such behaviour constitutes a violation of the principles of good faith, good administration, and competition, with the consequent decision to refuse approval to the contract subject to prior inspection.

The full text of the Judgment is available at the Court of Auditors.

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