Reliance on Processing of Rights unacceptable in case of failure to follow European tender
Grossmann defense
Contracting authorities often successfully rely on legal processing in legal proceedings. In the Grossmann judgment, the European Court of Justice ruled that tenderers must adopt a proactive attitude and make objections to the tender known as quickly as possible. According to the European Court, a tenderer acts contrary to the objectives of speed and efficiency if he does not immediately make objections known, but waits until a (for the tenderer) unfavorable award decision has been taken and the error can no longer be corrected. If a tenderer does not complain in time, contracting authorities often invoke the considerations in this judgment. This is called a Grossman defense. Basically, a tenderer who complains too late has forfeited his rights to still be able to complain about defects in the tender. He should have done that sooner.
The Grossman defense is very often put forward by contracting authorities and the appeal is successful in most cases. If you, as a tenderer, have not submitted a timely complaint about a defect, there is a good chance that a court will honor an appeal to the Grossman defence. There are, however, exceptional cases, such as the Court of Central Netherlands.
Central Netherlands court case (ECLI:NL:RBMNE:2019:1299)
The tenderer argued that the contracting authority should proceed to retender the contract. This is because the value of the contract was higher than the European threshold value, but the contract was not put out to tender in Europe.
The judge in preliminary relief proceedings ruled that the tenderer was more likely to complain and that there was therefore a loss of rights. However, the provisional relief judge is of the opinion that in this case the appeal to legal processing is unacceptable according to standards of reasonableness and fairness.
The preliminary relief judge rules that if European tendering is not carried out while this should have been, , this will result in other providers being sidelined for the contract. In this way, the objective of procurement law – to promote competition optimally in order to obtain the best offer – will not be achieved. The preliminary relief judge considers that the competitive pressure is after all much less in a multiple private tender than in a European tender. The government must handle legal obligations, the spending of government money and the interests of third parties with due care. That is the issue in this case. The contracting authority would get away with it if no one can complain about it. Not third parties because they do not participate in the tender procedure and neither does the tenderer because he would have forfeited his rights. This could lead to contracting authorities circumventing their tendering obligation, as they could with impunity fail to organize a European tender. After all, tenderers will not easily complain that they want more competitors and that European tendering is therefore necessary. In view of the foregoing, the provisional relief judge concludes that the invocation of legal processing is unacceptable in the given circumstances according to standards of reasonableness and fairness.
Conclusion
Contracting authorities have a powerful weapon in their hands with the Grossman defense. This ruling shows that there are exceptional cases in which a Grossman defense is unsuccessful.