Considerations for Appealing a Procurement Decision
A procurement decision does not always correspond to the expectations of the tenderer. A tenderer dissatisfied with the outcome of a procurement procedure may submit the legality of the decision for review by the Market Court and may, in addition or alternatively, request rectification directly from the contracting authority.
The time limit for appeal is 14 days, commencing from the date on which the procurement decision has been notified. Similarly, a request for rectification to the contracting authority must be submitted within the same 14-day period. It is therefore essential to note that the time limits for filing an appeal with the Market Court and for submitting a rectification request run concurrently. Consequently, a tenderer cannot await the outcome of a rectification request beyond the 14-day period, as this would result in the loss of the right to appeal to the Market Court. In practice, the contracting authority will rarely be able to fully process a rectification request within that timeframe.
In situations where the contracting authority has not issued any procurement decision, an appeal to the Market Court must be lodged within six months from the date of signing the contract. Such a situation may arise, for example, in the case of a direct award made without a competitive tendering procedure.
The Public Procurement Act also recognises situations in which the appeal period commences from “another decision of the contracting authority or other measure taken by the contracting authority,” provided that such decision or measure has affected the position of a candidate or tenderer. However, no appeal may be brought against decisions that relate solely to the preparation of the procurement procedure.
In the circumstances described above, the appeal period is 14 days from the date of notification of the relevant decision or measure. This provision is open to interpretation and there is limited case law on the matter. However, the Supreme Administrative Court decision KHO:2014:129 establishes that “the publication of a contract notice constituted a measure taken in the procurement procedure that affected the position of tenderers and, on that basis, could be subject to appeal under the provision in question.” This precedent suggests that even a call for tenders containing discriminatory conditions may be challenged independently within a two-week period from its publication.
Nevertheless, uncertainty remains as to which other measures taken during a procurement procedure sufficiently affect the position of a tenderer so as to give rise to an independent right of appeal prior to the actual procurement decision. It is advisable to seek legal counsel on such interpretative issues and, at the same time, to consider the most appropriate strategic timing for lodging an appeal.
It should be borne in mind that an unsuccessful appellant may be ordered to compensate the legal costs of the contracting authority in proceedings before the Market Court. This is particularly likely where the appeal is deemed unfounded and the court concludes that the contracting authority has acted in accordance with the procurement documents and applicable law. The use of legal assistance when considering an appeal to the Market Court is therefore well justified. Legal counsel can provide a realistic assessment of whether an appeal is warranted. Moreover, with the assistance of counsel, additional grounds of appeal and supporting arguments may be identified.
We offer legal assistance in reviewing procurement decisions and assessing potential grounds for appeal. Please contact our experts for further information.
