Duty of Equal Treatment

January 22nd, 2019

Regulation 18 of the Public Contracts Regulations sets out the EU principles of procurement. These include that contracting authorities “shall treat economic operators equally and without discrimination”. Comparable situations must not be treated differently. Different situations must not be treated in the same way, unless such treatment is objectively justified. The question whether or not there has been a breach of the principle is to be considered in context, and having regard

to the general purpose of ensuring the development of effective competition, leading to the selection of the best bid.

But what are “comparable” situations? This has been considered by Choudhury J in Abbvie Ltd v NHS England (2019) EWHC 61 (TCC). He said:-

“49. Of course, it is not the case that any difference between two contractors, however minor, would render them not comparable. In the procurement context, where different contractors will, almost of necessity, be in different competing positions, an approach to comparability based on ‘any’ difference would mean that no two contractors would ever be regarded as being in a comparable position. …

50. One area where the ECJ has accepted that contractors may not be in a comparable position is where, in a re-tendering exercise, one of the bidders is the incumbent provider: … The “inherent de facto advantage” of an incumbent provider over other providers was accepted as putting the incumbent in a different position such that differential treatment intended to neutralise the advantage enjoyed by the incumbent did not amount to a breach of the equal treatment principle. However, there are limits to that principle in that, … the advantage can only be neutralised to the extent that to do so is technically feasible, economically acceptable, and does not infringe the rights of the existing provider or a tenderer connected with that provider.”

“57. It is clear … that a contracting authority does not necessarily breach the equal treatment principle simply by selecting a scoring system which could favour one bidder as compared with an alternative scoring system. … award criteria are a matter of choice for the contracting authority.  That choice will reflect its views about what it considers valuable.  If, as a result, a bidder is more or less likely to win, and another more or less likely to lose, that does not in itself entail any breach of the equal treatment principle.”

“63. … the margin of appreciation is to be denied to the authority once a failure to confer equal treatment has been established.”

“67. However, if the difference in treatment falls outside of that margin and/or is considered to be ‘arbitrary or excessive’, then the Authority has no further margin of appreciation. The unequal treatment must be shown to be objectively justified and if it is not then the breach would be established. …

68. As to objective justification, the principles are well-established in that it must be shown that the treatment amounts to a proportionate means of achieving a legitimate aim. There is a dispute between the parties as to whether the aims in this case are “purely economic”. …”

Comments are closed.