Invalidation of tenders. Violation of the bidding procedure. Violation of the bidding procedure. Challenging bidding results.
Joining the concession agreement is an attractive project for market participants. The participants in the tender try not to lose the right to conclude such an agreement, even if their application is rejected as drawn up in violation or if they fail to meet the criteria of the tender. It is possible to challenge the results of tenders in court, in the antimonopoly body, referring to the restriction of competition in the tender documentation or violation of the tendering procedure, incorrect assessment of the bidder's application. Courts regularly consider claims for declaring tenders unlawful, but not in every case they see violations.
The plot of the case:
In the tender for concluding a concession agreement with respect to heat supply facilities conducted by the Administration of the municipality, the application of KrasEco JSC was rejected for several reasons: the bidder indicated indicators of the “basic (minimum) level of operating expenses” and “the maximum amount of expenses for creation and (or) reconstruction of the object of the concession agreement ”, thereby violating the requirements of the Federal Law“ On Concession Agreements ”and the tender document tatsii.
The participant decided to challenge the results of the competition, the decision of the first instance was in his favor: the bidding was declared illegal. The court of appeal changed the approach, the decision taken at the auction remained valid.
Judicial act: Resolution 3 of the AAS of 12.19.2018 in case No. A33-32353 / 2017
Court findings:
1. Bidding may be invalidated at the suit of the person concerned. Moreover, if the applicant’s rights have not been violated or cannot be restored by declaring the bidding illegal, even if the bidding procedure has been violated, the transaction concluded as a result of the bidding cannot be invalidated.
2. Only those tenders that were conducted with significant violations that affected the result of the bidding may be deemed illegal.
3. The company-participant committed violations in terms of indicating the normative level of profit not in the form of numerical values, but in the form of a link to the Forecast of socio-economic development of the Russian Federation. The court indicated that in this case it is impossible to compare the applicant’s competitive bid with the applications of other participants, the normative profit level is not established by the Forecast of socio-economic development of the Russian Federation.
4. The basic level of operating expenses in the participant’s application is less than the minimum criterion established in the tender documentation. The basic level of operating expenses is established by the regulatory body; it does not change during the entire regulatory period. Accordingly, the applicant indicated a parameter that did not correspond to the established one.
5. The marginal costs for the creation / reconstruction of the object of the concession agreement are indicated not in accordance with the competitive criteria, if we consider them in relation to the years. However, the total amount of marginal costs for the period of operation of the object of the concession agreement declared by the participant exceeds the established by the Administration. In this part, the applicant did not violate the requirements of the tender documentation.
6. However, even if one of the violations revealed by the commission is refuted, there are other violations on the participant’s account that would not allow him to participate in the competition, and therefore the commission’s decision to reject the application was justified and fair. The rights of the participant are not violated.
7. The applicant did not prove that during the competition there were significant violations that led to restriction of competition, incorrect determination of the winner.
Comments:
1) Contesting the results of the competition is the main part of disputes in the field of public-private partnership. Bidders suggest a violation of antitrust requirements and restrict competition if they are not allowed to bid. The reasons lie either in the criteria for the tender documentation, then the question arises whether the criteria established in such documentation restrict competition, or in the applicability of the criteria to the applications of candidates. At this stage, there may be violations by the commission, providing individual participants with competitive advantages.
2) In this case, the question of incorrect criteria, which were the basis for the selection of participants in the contest, was not raised. The contest results are disputed solely due to the fact that the bidder made violations when submitting the application. Courts have confirmed violations.
3) It is noteworthy that, despite the refutation of one of the comments, the court still recognized the participant as not having the right to win. For such disputes, the provisions of Article 11, 449 of the Civil Code of the Russian Federation, from which it follows that a violation of the rules for tendering does not entail an automatic cancellation of tenders if the participant who appealed the results of the tender due to some circumstances could not claim victory in any case.
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