E S C L E uropean Society of Construction Law How to challenge a public contract award – and what about damages? The Swiss regulations

E S C LEuropean Society ofConstruction Law

How to challenge a public contract award – and what about damages?The Swiss regulations

www.unifr.ch/baurecht

Martin Beyeler

Dr. iur., Fürsprecher (Attorney-at-law / Zurich)

Institute for Swiss and International Construction LawUniversity of Freiburg Switzerland



Overview

1. Challenging Contract Awards under Swiss Lawa) Complaint procedureb) Court‘s decision

2. Challenging Contracts under Swiss Law?

3. Observation on the Cases


IntroductionThe Microsoft Case (still pending)

• Conclusion of contract (Vista / Office 2007 / Support)

• Publication of direct award (after conclusion)

• OSS firms challenge the award

• Court: prohibition of any procurementwhich is not absolutely necessary

• Court later: prohibition reversed, butreservation of further measures


Challenging Awards IThe Legal Framework

• EC Directives not applicable

• GPA / Bilateral Agreement

• GPA XX

• Provisional measures

• Annulment / Compensation


Challenging Awards IIFrom the award to the contract

(AwardDecision)

AwardPublication 10 / 20 days Conclusion

of Contract Execution


Standstill

Challenging Awards IIIAnnulment of Award

AwardPublication 10 / 20 days

Compla

int!

Provisionalmeasures?

No!

Conclusionof Contract

Annulmentof Award

Yes!

StandstillConfirmation

of Award

Standstill


Challenging Awards IVDeclaration of unlawfulness

Provisionalmeasures?

No!

Conclusionof ContractStandstill Execution

Complaint founded?

Yes!

No!

Declaration ofunlawfulness

Action for damages


Challenging Awards V„Effective Procedures“ (GPA XX:2)

• ‚Most important of all decisions‘

• Prognosis / Balance of interests

• Some courts write more, some less

• 70-90 % of all cases: no provisional measures

• No provisional measures: 95 % of withdrawals

effectiverelief

urgencyof conclusion


Challenging Contracts?Different Situations

What if the contract is concluded ...

• ... too early (during standstill)?

• ... without an award publication?

• ... with wrong contents or terms?

• ... for a too long period?

• ... with the wrong partner?


?Challenging Contracts?Various Solutions for one problem

• No consequences, no sanctions. – (No problem?)

• Per se-nullity or per se-ineffectiveness of contract.

• Contracting Authority is not entiteled to conclude.

• Courts can give orders with regard to the contract.

• Courts can annul the contract.

vs.


Observations on Case 1The Floors

• Award to the cheapest tender: standardized goods?

• Two prices, but only one blank space: formalism.

• No surface indicated: bidder questions.

• Price confirmation by Tenderer 2: equal treatment?

• Loss-reduction commitment applies!

• No compensation for loss of profit!


Observations on Case 2The Waterfront

• Rules on reservations

• Winter measures

• Always higher coststhan offered?

• If minor: legal award?

• If major: illegal award!

• (no loss of profit)


Observations on Case 3The Carpets

• ‚Overall estimate of the tender‘

• Rules on forfeiture of reprovals

• Minor disregard of specifications

• Alternative tenders

• Too few employees?

• Complaint unfounded


Observations on Case 4The Cleaning

• ‚Unreasonably low bid‘

• Rules on annulment

• Challenging an annulment

• Legal annulment

• Legal, but mala fide annulment: only damages

• Abusive annulment: correction (if possible)


The End

Thank you very muchfor your attention!

[email protected]

Documents

E S C L E uropean Society of Construction Law How to challenge a public contract award – and what about damages? The Swiss regulations