A 17 November 2022 judgment helps contracting authorities strike the right balance between protecting confidential information in the tender document and the transparency requirements applicable in public procurement procedures (case C-54/21).
The Polish National Water Management Authority (the “Authority”) recently carried out a public procurement procedure for the purpose of developing projects relating to the environmental management of certain river basin districts. The contract was awarded to CDM Smith, but Antea brought an action before the Polish courts for the annulment of this award decision, on the grounds that the Authority had failed to disclose the information communicated to it by other applicants with regard to their tenders. The Authority contested Antea’s claims, essentially relying on the allegedly confidential nature of the information at issue.
This caused the National Appeal Chamber (Poland) to refer questions to the Court of Justice (the “Court”) for a preliminary ruling. The Court answered these questions in its 17 November 2022 judgment (case C-54/21).
In substance, the National Appeal Chamber sought clarification as to how the Authority should reconcile its obligations, deriving from EU law, to protect the confidential information provided in the tenders, at the same time as ensuring the transparency of the procurement procedure and providing the data needed to exercise review rights against award decisions.
Some key takeaways from the judgment can be found in the lines below:
Confidential data are not limited to trade secrets
Under Polish legislation, trade secrets must, at the request of the tenderers holding them, be treated confidentially, while any other information submitted by the tenderers to the contracting authority must be made public. In this respect, the Court ruled that Member States are free to limit the scope of the obligation to treat information as confidential on the basis of the concept of “trade secrets” as defined by EU law. However, national legislation must allow contracting authorities to exceptionally refuse to disclose information which, while not covered by this concept of trade secrets, must remain inaccessible pursuant to an interest or objective protected by EU public procurement law, such as the legitimate commercial interests of a public or private economic operator, or fair competition.
Granting any confidentiality application as a matter of course is contrary to EU law
In its referral, the National Appeal Chamber underlined that any application for confidential treatment of data provided by tenderers would systematically be granted by the Polish contracting authorities as a matter of course. The Court stressed that such a practice would be in contradiction with EU law. Indeed, a contracting authority cannot be bound simply by an economic operator’s claim that the information submitted is confidential. This authority must state reasons in this respect, and it must also, to the extent possible, communicate the essential content of the data concerned to any unsuccessful tenderer that requests such data.
The Court provides specific guidance on certain types of information
The information at issue in the dispute before the Polish courts included (i) the relevant experience of other tenderers and the references relating thereto, (ii) the identity and professional qualifications of the people that they put forward to perform the contract or the sub-contractors and (iii) the design of the projects to be performed under the public contract and the manner of performance of that contract. In this respect, the Court ruled that the contracting authority must assess whether that information has a commercial value outside the scope of the public contract in question, where its disclosure might undermine legitimate commercial concerns or fair competition. The contracting authority may, moreover, refuse to grant access to that information where, even though it does not have such commercial value, its disclosure would impede law enforcement or would be contrary to the public interest. A contracting authority must, where full access to information is refused, grant that tenderer access to the essential content of that information, so that observance of the right to an effective remedy is ensured.
In its judgment, the Court provided specific clarification as to whether data that falls into each of these categories of information should be treated as confidential. For instance, a tenderer’s experience is not, as a general rule, secret, while the design of the projects planned to be carried out under the public contract and the description of the manner of performance of the contract may be treated as confidential, either because of an intellectual property right or because of a commercial value independent of such intellectual property right.
Misclassifying data as confidential can prevent legal remedies from being time-barred
One of the National Appeal Chamber’s questions concerned the consequences to be drawn from the refusal to disclose information that was wrongly classified as confidential by the contracting authority, to an unsuccessful tenderer challenging a decision awarding a public contract. According to the Court, in such a case, it is for the national courts to assess whether the failure to disclose that information means that the applicant is not able to bring an effective action against that award decision, and to redress any infringement of the right to an effective remedy. Where national law does not allow such a redress in the context of pending proceedings, national courts must either annul that award decision or find that the applicant may bring a fresh action against the award decision already taken, with the time limit for doing so starting only from such time as the applicant has access to all the information that was wrongly classified as confidential.
Please contact Peter Teerlinck or Raluca Gherghinaru for further information about this case and/or for general legal advice relating to public procurement law.