Merging Pre-selected Candidates Are Still Eligible To Submit A Tender ...

In the recent Telecom Italia case (C-697/17), the Court of Justice was asked to clarify whether a pre-selected candidate that signs a merger agreement with another pre-selected candidate between the pre-selection and the submission phase, still meets the requirement of Article 28, paragraph 2 of the Public Procurement Directive according to which “only those economic operators invited to do so by the contracting authority following its assessment of information provided may submit a tender”.

In its judgment of 11 July 2019, the Court first underlined that it stems from the wording of Article 28, paragraph 2 of the Public Procurement Directive that, in the context of a restricted procedure, the tenderer submitting a tender must, in principle, be a pre-selected candidate.

The Court ruled that, in the case at hand, the tenderer had increased his capacity by acquiring one of the other pre-selected candidates. Therefore, the Court considered that the tenderer at issue had the same legal identity as the pre-selected economic operator.

However, the Court concluded that, due to the conclusion of a merger agreement with another pre-selected candidate and regardless whether the effects of the merger in question would only occur after the submission of the tenders, the tenderer at issue did not fulfil the economic identity requirement.

By way of consequence, the Court examined whether the fact that the pre-selected operator was not completely economically identical to the one submitting the tender violated the principle of equal treatment. To that extend, the Court acknowledged that a tenderer who increases his capacity still meets the requirements originally defined by the contracting authority. Additionally, the Court pointed out that in so far as the conduct of the tenderer is in line with the EU provisions guaranteeing a free competition within the internal market, the further participation of the tenderer may not be considered as detrimental to the competitive position of other tenderers. In the case at hand, the Commission had indeed already found the merger at issue to be in line with the Merger Regulation.

In view of the abovementioned considerations, the Court concluded that, in the context of a restricted procedure, Article 28, paragraph 2 of the Public Procurement Directive does not preclude the submission of a tender by a pre-selected candidate who signed a merger agreement with another pre-selected candidate.

Please contact Peter Teerlinck or Raluca Gherghinaru for further information on this case and/or for general advice on public procurement.