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Exclusion of Bids Due to Conflict of Interest

on Monday, 20 May 2019.

In a recent decision in Sopra Steria Group SA v European Parliament [1] , the General Court of the European Courts of Justice considered conflicts of interest at bidder level.

While there have been few such cases to date, the issue is being more widely reported and so we have summarised the key points of the case below.

Background

The European Parliament issued an invitation to tender limiting bidders from tendering for certain lots when they had already bid for certain other lots in order to ensure sufficient competition. Tenderers were also required to declare any potential conflicts of interest without delay.

Two consortia, A and B, submitted tenders for Lots 2 and 3 respectively. Another consortium, C, submitted a tender for Lot 4. The winning bidder of Lot 4 would ultimately be required to evaluate the services provided by the winners of Lots 2 and 3.

After A, B and C had been informed that they had been successful in their respective bids, it became apparent that a member of consortias A and B had acquired a majority shareholding, and the majority of voting rights, in a company whose subsidiary was a member of C. The two companies had also begun operating under the joint name of 'Sopra Steria Group SA'.

C withdrew its tender for Lot 4 following the European Parliament's suspension of the procurement process. The European Parliament accepted this withdrawal but also rejected both A and B's bids on the basis that:

  • A, B and C had become one and the same economic operator following the merger and had consequently submitted tenders for incompatible lots
  • the merger had created a potential conflict of interest that should have been reported to the European Parliament

The General Court rejected Sopra Steria Group SA's claim against exclusion and confirmed the European Parliament's decision.

Points to Consider

This case highlights a tenderer's duty to inform the relevant contracting authority of any changes to their group structure during the tender process, even where these changes occur after tenders have been submitted. Furthermore, a contracting authority's failure to undertake due diligence will not in itself justify a failure to inform them of any such changes.  


For more information please contact Stephanie Rickard in our Procurement team on 0117 314 5675.

[1] Case number T-182/15, Judgment of 9 April 2019