In two recent rulings the Swedish Supreme Administrative Court establishes that the requirement to specify a maximum estimated volume in public procurements shall apply to all types of framework agreements. The court also clarifies requirements on competing tenderers’ right of action following a violation of the procurement rules.
The question on how maximum estimated volumes must be drafted in public procurements has lately been acknowledged by the European Court of Justice – especially in connection to the ECJ’s judgement in case C-216/17 (“The Coopservice-case”) and case C-23/20 (“The Simonsen & Weel-case”). In these cases, the ECJ established that a contracting authority must be clear on what maximum estimated volume a procuring entity will be able to order when it at a later stage enters into a framework agreement with a supplier.
However, it has been debated if the case-law of the ECJ is sufficiently clear and if the previously mentioned requirement is relevant to all kinds of framework agreements. This has led to incoherent interpretations when Swedish authorities and courts have applied these rules in procurement cases.
Now, the Swedish Supreme Administrative Court has, through two parallel judgements, established that the requirement that maximum estimated volumes should be clearly stated in the procurement documentation and that this principle applies also on framework agreements.
In one of the cases, a group of Swedish municipalities, thorough wholly owned companies, and following a procurement proceeding, had entered into a framework agreement on printing services. The procurement documentation contained historical volumes and estimates on the procuring entities’ needs – but it did not include an upper, maximum, limit on the amount that could be ordered. One of the tenderers then appealed the contract award decision. The appellant submitted that the absence of a concrete maximum estimated volume in the documentation had damaged its bid, since it would have done a different calculation and submitted a more competitive price in the procurement had it been aware of a maximum volume.
The second case concerned a framework agreement on flooring works. The agreement had been concluded with three tenderers for two separate geographical areas. The tenderers had been ranked in a certain order. The supplier who received the lowest ranking appealed the contract award decision and stated that the lack of a maximum estimated volume in the documentation had violated public procurement rules to the detriment of that company.
In both cases, the Supreme Administrative Court held that the authorities had not met the requirements laid down in public procurement law as they had failed to identify maximum estimated volumes. The court stated that nothing in the Simonsen & Weel-ruling indicates that the requirement on establishing a maximum estimated volume would not be generally applicable to framework agreements. According to the court, this requirement is applicable on both procurements concerning framework agreements with one supplier and procurements concerning framework agreements with more than one supplier. The fact that the procuring entities had provided documentation on historical volumes and estimated volumes was not sufficient.
The rulings also include questions concerning the damage assessment when a contract award decision has been appealed. The Supreme Administrative Court states that it is for the supplier to establish how the procuring entity has hampered the supplier’s possibilities to compete in the procurement process. According to the court, the supplier must show that it has acted in order to avoid damage, for example by demanding clarifications of the procurement documentation from the procuring authority within the time limits set. If the supplier has failed to do so, a legal imperfection of a substantive nature in the procurement documentation cannot be assumed to have created any risks of damage for the supplier. Since the suppliers in the current cases did not ask for clarifications of the procurement documentation, the Supreme Administrative Court held that both suppliers had failed to demonstrate any harm.