Our firm successfully represented the State Health Services Organisation (SHSO) which is the largest healthcare provider in Cyprus, in a recourse before the Tenders Review Authority (TRA) regarding the award of a public tender for the supply of medical equipment and consumables for the needs of the biochemical laboratories of all the public hospitals of Cyprus.
The total value of the awarded contract was approximately 11,000,000 euros.
The Tender Review Authority accepted all our arguments and unanimously rejected the recourse.
The main points of the decision are set out below.
The applicant was the economic operator who submitted the lowest tender, but it had been excluded and its tender had been excluded and rejected by the SHSO because it did not meet several of the set selection criteria.
The applicant it its recourse before the TRA, challenged its exclusion and the legality of the award of the tender, claiming that procedural irregularities had taken place in the award procedure, that the terms of the tender had been set illegally and that the successful tenderer should also have been disqualified.
Our firm responded to all the allegations and legal arguments of the applicant explaining that the whole procedure and the award to the successful tenderer was properly made by the SHSO.
The TRA rejected the application stating that the SHSO was correct to exclude the applicant’s tender but also to proceed with the award to the successful tenderer.
This judgment is of particular importance not only because of its subject matter, but also because it confirms the TRA’s broad approach to what constitutes “legitimate interest” for submission of a recourse against a public tender. This approach was, until very recently, in almost complete contrast with the relevant case law of the Supreme Court on the same issue.
The TRA has long accepted the existence of a legitimate interest for the submission of a recourse against the award of a public tender even by tenderers whose tender was rightly excluded by the contracting authority. The position of the TRA was based on the very broad interpretation of “legitimate interest” in the field of public procurement given by the Court of Justice of the European Union in its relevant judgments (see. C‑100/12, Fastweb, C‑689/13, PFE και C-771/19 - NAMA and Others).
However, until very recently, despite the relevant case-law of the CJEU, the case-law of the Supreme Court of Cyprus allowed unsuccessful tenderers to challenge only their exclusion from a public tenders procedure but not the award to the successful tenderer. The Supreme court considered that only after the applicant’s exclusion had been overturned would they have a legitimate interest in challenging the award to the successful tenderer.
This interpretative approach was applied with rigour by the courts, since the existence of a legitimate interest of the applicant was not recognized even in cases of flagrant violation of the principle of equality, i.e. when the applicant invoked as a reason for exclusion of the successful tenderer the exact same reason for which the applicant itself was excluded (see. TRA ν. ELNIA Kokkinos Ltd (2017) 3 AAD 73). We note that the conflict between this Supreme Court decision and European public procurement law had been pointed out by the Administrative Court of first instance in several of its decisions, but it remained binding on lower courts.
This strict approach has been significantly toned down by a very recent judgment of the Supreme Constitutional Court issued in late October 2023, which, with reference to the relevant case law of the CJEU, now recognises the existence of a legitimate interest and allows the submission of a recourse by an unsuccessful tenderer in cases where the principle of equality is infringed.