On December 19, the Department of Administrative Cases of the Senate suspended the proceedings in an administrative case, in which, among other things, there is a dispute regarding the way a customer should verify the possible unreasonable underprice of the procurement applicant's offer and the way a decision taken in this regard should be substantiated. The panel of senators had doubts about the interpretation of the legal norms of the European Union, thus the Senate addressed the Court of Justice of the European Union.

In the present case, there is a dispute between the applicant SIA "EUROCASH1" and the Procurement Monitoring Bureau as to whether the contracting entity SIA "Pauls Stradiņš Clinical University Hospital" in the public procurement of physical and technical security services had rightly recognized that the tender of the winner of the procurement AS "G4S Latvia" was not unreasonably underpriced. Within the framework of procurement, the customer suspected that the offer submitted by AS "G4S Latvia" could be unreasonably underpriced in terms of the offered price for technical security, so the customer requested this applicant to provide an explanation of the offered price. Having familiarized with the explanation provided by AS "G4S Latvia", the customer acknowledged that AS "G4S Latvia" had explained the price formation mechanism and the reasonableness of the offered price, therefore its offer could not be considered as unreasonably underpriced. After that, the customer recognized AS "G4S Latvia" as the winner of the procurement. The Procurement Monitoring Bureau left this decision unchanged.

The applicant does not agree with the decision, because she believes that the customer AS "G4S Latvia" should have recognized the offer as unreasonably underpriced. Having examined the applicant's application, the court of first instance recognized that, in the specific case, the customer had not properly evaluated the dubious offer and had not properly substantiated the decision which stated that the doubts about the possibly unjustified underprice of the offer have been dispelled. The Procurement Monitoring Bureau has filed a cassation complaint against the said decision.

In the present case, the Senate will have to decide what the customer's obligations are when verifying whether the tender offer is to be considered as unreasonably underpriced, and how the customer should substantiate the decision by which it is recognized that a specific offer is not to be deemed as unreasonably underpriced. In the present case, it will also be required to decide what the court's competence is in supervising such a customer's decision. The Senate has referred to the Court of Justice of the European Union the questions about whether the provisions of the Directive on public procurement can be interpreted in such a way that the customer himself/herself must make sure that the offered low price is not related to the fact that it does not include any specific eligible costs, or to non-compliance with the requirements that the supplier must comply with in terms of social rights, labour or environmental law. The Senate also requested the Court to clarify into how much detail the customer has to go when substantiating the decision and whether, according to the Directive, the customer, when deciding to recognize the offer as unreasonably underpriced, has the freedom of evaluation that allows the court to merely verify whether the substantiation given by the customer logically supports the conclusion that the offer is not unreasonably underpriced, and whether the customer has made obvious errors in taking this decision.

 

The interpretation of the legal norms of the European Union lies within the competence of the Court of Justice of the European Union; and if the Senate has doubts about the interpretation of the legal norms of the European Union applicable in a case, it is obliged to request the clarification to the Court of Justice of the European Union.

Senate decision in the case No SKA 222/2023; (A420250220)

 

Information prepared by Baiba Kataja, the Press Secretary of the Supreme Court

Tel.: +371 67020396; e-mail: baiba.kataja@at.gov.lv