The pain threshold during preparatory work

The pain threshold during preparatory work

The Federal Administrative Court had to decide on such a case. Planning services were advertised. An entrepreneur had been involved in the project since 2016 and had prepared the water law submission documents. At the end of the procurement process, the client announced that this particular entrepreneur was in first place. A competitor, however, turned to the BVwG.

Disclosure is not always enough

The BVwG initially held generally that such preparatory work was likely to impair fair competition. However, this does not automatically mean - see Section 25 or, in the sector area, Section 198 of the Federal Procurement Act 2018 - the exclusion of the foreman. The client is initially obliged to take measures to enable fair competition, in particular by providing all documents that the foreman created or in which he was involved to all bidders.
The client also attempted to do this in the present case by disclosing the documents from the water law approval process.
But that's not always enough. The core of the preparatory work problem is whether the foreman, as the BVwG states, has “acquired specific knowledge of the facts, which [...] establishes a (non-compensable) competitive advantage”. That was the case here according to the BVwG.

Change in criteria and the consequences

Based on the original tender content, this probably would not have been a problem. But during the award process it apparently became necessary for the future contractor to also revise the submission planning - including the water law submission planning that the foreman had made. The client therefore expanded the subject matter of the service accordingly. And even more serious: He changed the award criteria in such a way that a qualitative sub-criterion called “submission planning modification” was added.
What ultimately led to the contested decision being overturned was the fact that the foreman was rated significantly better than the applicant competitor in this new criterion. Without this new criterion, the applicant would have come out on top, not the foreman. That was too much for the BVwG. It granted the request.

Criticism of the BVwG's approach

What is not entirely convincing about this decision, however, is the following: The BVwG stated that, in its opinion, the foreman's better rating in the "modification of submission planning" criterion was based on the fact that he had years of previous experience and knowledge of the location - and thus of the problem that had to be solved - which the other bidders could not have access to despite disclosing the documents.
However, the BVwG does not justify this view in any way, which is problematic in two respects. Firstly, it may well be that a bidder's better quality work is based on prior knowledge; However, it may also be that this bidder simply did a better job in the award process. Without an analysis of the content of the elaborations - which is completely missing from the BVwG decision - this remains speculation. And this leads to the second problem: This content analysis is essentially a question of fact, not a legal question, for which the BVwG would have had to appoint an expert. If the BVwG takes the legal view that the preparatory work problem is not just about whether a potential competitive advantage exists, but rather about whether the award procedure actually ended differently as a result, this would probably have been examined in more detail.

The author

Attorney Mag. Thomas Kurz is a lawyer at
Heid and Partner Rechtsanwälte GmbH, Kundmanngasse 21, A-1030 Vienna
www.heid-partner.at