Case T-160/03

AFCon Management Consultants and Others

v

Commission of the European Communities

(Tacis Programme – Invitation to tender – Irregularities in the tendering procedure – Action for damages)

Judgment of the Court of First Instance (Fifth Chamber), 17 March 2005

Summary of the Judgment

1. Non-contractual liability – Conditions – Unlawfulness – Damage – Causal link

(Art. 288, second para., EC)

2. European Communities’ public procurement – Award of a contract as a result of an invitation to tender – Authority of the institutions with respect to the conduct of the tendering procedure – Conflict of interests between a tenderer and a member of the committee for the evaluation of the tenders – Commission’s discretion – Limits – Infringement of the principles of sound administration and equal treatment – Incurring of Community liability

(Art. 288 EC)

3. European Communities’ public procurement – Tendering procedure – Expenses incurred by a tenderer – Right to compensation – None – Exception – Infringement of Community law

1. Community law recognises a right to reparation where three conditions are met: the rule of law infringed must be intended to confer rights on individuals; the breach must be sufficiently serious; and there must be a direct causal link between the breach of the obligation resting on the author of the act and the damage sustained by the injured parties.

(see para. 31)

2. In accordance with the principles of sound administration and equal treatment, the Commission must, as far as concerns public procurement, after the discovery of a conflict of interests between a member of the evaluation committee and one of the tenderers, act with due diligence and on the basis of all the relevant information when formulating and adopting its decision on the outcome of the procedure for the award of the tender at issue. The Commission is required to ensure at each stage of a tendering procedure equal treatment and, thereby, equality of opportunity for all the tenderers.

In that regard, it has some discretion as regards the measures to be taken in respect of the conduct of the procedure. However, where it does not investigate whether there is any collusion between one of the tenderers and a member of the evaluation committee, the Commission exceeds that discretion and manifestly and gravely disregards the limits on that discretion. Therefore, it commits an unlawful act which is liable to cause the Community to incur liability.

(see paras 75, 77, 79, 93)

3. Economic operators must bear the economic risks inherent in their activities which, as regards a tendering procedure, include, in particular, the costs relating to preparation of the tender. The expenses thus incurred therefore remain the responsibility of the undertaking which chose to take part in the procedure, since the opportunity to compete for a contract does not involve any certainty as to the outcome of the procedure. It follows that the charges and expenses incurred by a tenderer in connection with his participation in a tendering procedure cannot in principle constitute damage which is capable of being remedied by an award of damages.

However, Article 24 of the General Regulations for Tenders and the Award of Service Contracts financed from Phare/Tacis Funds cannot, without potentially undermining the principles of legal certainty and of protection of legitimate expectations, apply in cases where an infringement of Community law in the conduct of the tendering procedure has affected a tenderer’s chances of being awarded the contract. Where the tenderer’s chances have been prejudiced, he must be compensated for the loss relating to the costs incurred in participating in the procedure.

(see paras 98, 102)

JUDGMENT OF THE COURT OF FIRST INSTANCE (Fifth Chamber) 17 March 2005 (1)

(Tacis Programme – Invitation to tender – Irregularities in the tendering procedure – Action for damages)

In Case T-160/03,

applicants,

v

defendant,

APPLICATION for compensation for the damage allegedly suffered as a result of irregularities in the tendering procedure for a project financed by the Tacis programme (‘Project FDRUS 9902 – Agricultural extension services in South Russia’),

THE COURT OF FIRST INSTANCE OF THE EUROPEAN COMMUNITIES (Fifth Chamber),

composed of P. Lindh, President, R. García-Valdecasas and J.D. Cooke, Judges,

Registrar: D. Christensen, Administrator,

gives the following

‘It is good administrative practice in tender procedures for the administration to adhere to the rules established for these procedures. … By allowing tenderers to include experts’ fees under reimbursable items in the present case, the Commission failed to comply with the rules applicable to the tender and the aim pursued by these rules. This constitutes an instance of maladministration.’

A –

B –

1.a) The lawfulness of GFA’s tender

Arguments of the parties

Findings of the Court

‘Breakdown of prices should be prepared in accordance with the format of Annex D of the draft contract and prices must be expressed in euros. Tenders in any other currency or an incorrect presentation of the breakdown of prices may lead to the rejection of the tender.’

‘The following notes are provided to assist tenderers in the preparation of Annex D (financial breakdown). … Where these guidelines are not followed, the tenderer is advised to justify deviations through an explanatory note. …

4. … The figures given in Annex D (for each category or individual expert) should exactly reflect the figures in the time allocation chart (time spent on the project for each expert) submitted as part of Annex B (summary input of staff).’

‘Important: Above summary must be consistent with the input given in the breakdown of remuneration – Annex D.’

Replication Dissemination

b) The use of unlawful criteria in the evaluation

Arguments of the parties

Findings of the Court

c) The consequences of the conflict of interests

Arguments of the parties

‘Participation in tendering procedures shall be open on equal terms to all natural and legal persons coming within the scope of application of the Treaties and to all natural and legal persons in the recipient State.’

Findings of the Court

‘I have no direct or indirect links with any of the Tenderers, whether individuals or members of a consortium, who have replied to the Tender Dossier, nor with any of the sub-contractors proposed. I confirm that, should I discover during the course of evaluation that such a link exists, I will declare this immediately and resign from the Evaluation Committee. I understand that if such a link is known to me and I have neglected to declare it, the European Commission may decide to cancel the Tendering in question and I may be exposed to liabilities.’

2.a) Compensation for the harm corresponding to the losses sustained in the tender procedure

Arguments of the parties

Findings of the Court

– Costs relating to the submission of AFCon’s tender

– Costs incurred in challenging the legality of the tendering procedure

b) Compensation for loss of profit

Arguments of the parties

Findings of the Court

c) Compensation for loss of ‘profile’

Arguments of the parties

Findings of the Court

d) Compensation for the harm to AFCon’s reputation and that of its directors

Arguments of the parties

Findings of the Court

e) Interest

Arguments of the parties

Findings of the Court

On those grounds,

THE COURT OF FIRST INSTANCE (Fifth Chamber)

hereby:

Lindh

García-Valdecasas

Cooke

Delivered in open court in Luxembourg on 17 March 2005.

H. Jung

P. Lindh

Registrar

President