On 11 January 2019, Tax-Fin-Lex’s tender for the award of a public contract concerning access to a legal information system was rejected by the Slovenian Ministry of the Interior, on the ground that the final price of this tender was EUR 0.00, which was considered contrary to the rules on public procurement.
Tax-Fin-Lex challenged this decision, which caused the Slovenian State Commission for the supervision of public procurement procedures to refer the question to the Court of Justice of the European Union.
In substance, it sought clarification as to whether Article 2(1)(5) of Directive 2014/24 - according to which public contracts are contracts concluded “for pecuniary interest” - must be interpreted as constituting a legal basis for rejecting a tenderer’s bid in a public procurement procedure on the sole ground that, since the price proposed in the tender is EUR 0.00, the contracting authority would provide no financial consideration, while by performing the contract the tenderer would merely obtain access to a new market and to references on which it could rely in subsequent calls for tenders.
In its judgment of 10 September 2020 (C-367/19), the Court of Justice replied that the mere fact that the award of the contract could be of economic value to the tenderer in that it would open up access to a new market or enable the tenderer to receive references is too uncertain and is therefore insufficient to characterise the contract as a contract “for pecuniary interest” within the meaning of Article 2(1)(5) of Directive 2014/24. However, the Court went on to rule that this provision cannot constitute a legal basis capable of justifying the rejection of a tender which proposes a price of EUR 0.00, because it defines the concept of “public contracts” merely for the purposes of specifying when Directive 2014/24 applies.
The Court of Justice underlined that, instead, where a contracting authority is presented with a tender which proposes a price of EUR 0.00, which could be classified as an abnormally low tender, it must follow the procedure provided for in Article 69 of Directive 2014/24. Under this provision, the contracting authority must ask the tenderer to explain the amount of the tender where it appears to be abnormally low. The explanation provided is to be used in the assessment as to whether the tender is reliable and enables the contracting authority to establish that, although the tenderer proposes a price of EUR 0.00, the tender at issue will not impair the proper performance of the contract. The contracting authority may reject such a tender only where the evidence supplied does not satisfactorily account for the low level of price or costs proposed.
In the light of this judgment, a tender cannot be automatically rejected on the sole ground that the price proposed is EUR 0.00. When they are presented with tenders that appear abnormally low, contracting authorities must always ensure compliance with the procedure laid down in Article 69 of Directive 2014/24, even where the price proposed is EUR 0.00.
Please contact Peter Teerlinck, Raluca Gherghinaru for further information about this case and/or for general legal advice relating to public procurement.