ICEL Belfast Public Procurement Law Conference
The Relationship between Public Procurement
Law and Competition Law
&
Practical Aspects of Public Procurement Law
outside the Courtroom
Dr Vincent J G Power
A&L Goodbody
14 October 2011
The Relationship between
Public Procurement Law
and Competition Law
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 “Competition: Commission fines members of lifts and
escalators cartels over €990 million
The European Commission has fined the Otis, KONE,
Schindler and ThyssenKrupp groups €992 million for
operating cartels for the installation and maintenance of
lifts and escalators in Belgium, Germany, Luxembourg
and the Netherlands, in clear violation of EC Treaty rules
that outlaw restrictive business practices….”
(21 February 2007)
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Public Procurement & Competition Law
 Relevance of the Relationship
» Specialisation
» Resolving the client’s issue
» Sub-sets of EU law
» Common topics
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Public Procurement & Competition Law
 Shared Objectives & Issues
» Efficiency
» Reducing costs
» Increasing competitiveness
» Creating an environment in which competition can
exist
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Public Procurement & Competition Law
 Shared Objectives & Issues
» Internal Market
» Open market economy with free competition
» Value for money
» Preventing protectionism
 Opening up markets
» Coöperatieve Vereniging VAOP u.a., and Vaop Oud Papier B.V
(29 September 2011)
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Public Procurement & Competition Law
 Shared Objectives & Issues
» Prohibiting discrimination
Corsica Ferries Italia Srl v Corpo dei Piloti del Porto di
Genova and Portuguese Airports
» Rewarding competitive undertakings and combating
anti-competitive or restrictive procedures
Rush Portuguesa Ldª v Office national d'immigration
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Public Procurement & Competition Law
 Divergences of Approach between Public
Procurement Law and Competition Law
» Cases where competition law and public procurement
law are pleaded in a case but only one regime applies
Consorzio Aziende Metano (Coname) v Comune di Cingia
de’ Botti
» Nature of the rules
» Areas of operation
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Public Procurement & Competition Law
 Public procurement law is often about facilitating
commerce while competition law tends more
towards regulating commerce
 Role of general principles
» SIAC, AG Jacobs, para.33
 National v EU remedies
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Public Procurement & Competition Law
 Storebaelt and Dundalk
 Public v private sectors?
 Economics?
 May One Regime Operate in the Absence of the
Other?
 What are the Merits of Invoking Competition Law
over Public Procurement Law?
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Public Procurement & Competition Law
 Administration of Competition Law and Public
Procurement Law in the European Commission
 Administration of Competition Law and Public
Procurement Law at the National Level
 Turning to a very practical issue…
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Public Procurement & Competition Law
 What Should Contracting Authorities watch out for in
terms of Competition Law?
» Introduction
» State Aid
» Services of General Economic Interest
» Application of Competition Law to the Contracting
Authority: Is the Contracting Authority an
Undertaking?
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Public Procurement & Competition Law

Anti-Competitive Arrangements
»
watch out for markets where the product is standardised and
unbranded;
»
be very careful of markets where there are few competitors;
»
watch out for phrases such as “standard practice”, “we are
cheaper than the industry norm” and so on;
»
watch out for “moving winners” – companies lose a tender but then
pick up another soon afterwards and this forms a pattern such that the
value of tenders generally won does not alter very much over time
(i.e., there is some pattern but nobody seems to be out of pocket);
»
suspicious pricing patterns;
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Public Procurement & Competition Law

Anti-Competitive Arrangements

suspiciously high bids by a preponderance of the bidders so as to
allow one (who has been “covered”) a clear run at winning the
competition;

do the bidders know each other?

do the bidders know how many bidders have been invited or
participating in the tender process?

has a bidder said or written something which was not in the public
domain and must have been learned from another bidder?
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Public Procurement & Competition Law

Anti-Competitive Arrangements
»
was a bid submitted by someone who was not invited to bid?
»
are the prices somewhat odd and perhaps signalling messages to
other tenders?
»
are documents similar or, at least, suspiciously similar (e.g.,
calculations, language)?
»
is there little or no entry into the market (i.e., the bidders know that
they are unlikely to be caught out by other bids from “left field”);
»
is information freely available and exchanged?
»
are trade associations involved in the process and are they
active/strong/well attended?
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Public Procurement & Competition Law

Anti-Competitive Arrangements
» is there little technological change?
» are the products simple?
» are competitions held infrequently?
» have there been any competition
cases/investigations in this sector?
» are there any signs of a lack of rivalry and genuine
competition?
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Public Procurement & Competition Law

Anti-Competitive Arrangements – types of “bids”
»
cover bidding where one bidder is selected to win and the
others “cover” that bidder by making higher bids or
unacceptable bids. This is also known as complementary,
courtesy, token or symbolic bidding;
»
bid suppression where there is a deliberate refraining from
bidding;
»
bid rotation where bids are rotated; and
»
market allocation
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Practical Aspects of Public
Procurement Law
outside the Courtroom
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The Psychology of Public Procurement
Law Practice
 Disappointed bidder is essentially going through a
grieving process
 Analysis undertaken by Elisabeth Kübler-Ross in her
1969 book On Death and Dying is particularly
relevant in the context of public procurement law
 The five stages of grieving and preparing for dying:
denial; anger; bargaining; depression; and
acceptance
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The Psychology of Public Procurement
Law Practice
William Congreve wrote in The Mourning Bride in
1697:
"Heaven has no rage like love to hatred turned
Nor hell a fury like a woman scorned."
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The Psychology of Public Procurement
Law Practice
 Whatever about the disappointed bidder, what about
the contracting authority?
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Understanding the Fundamental Nature
of Public Procurement Law
 Directives v Regulations
 Apparent precision v Ambiguity
 Flexibility v Rigidity
 Number of challenges
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Remedies Outside of Litigation
 Badgering
» Sufficient reasons in the Standstill letter should
minimise requests for further information and
protracted correspondence
» Debrief meetings – have their merits and pitfalls
» Dangers of drip feeding information
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Freedom of Information Requests
 Freedom of Information Requests are increasingly common
 Important for suppliers and purchasers to be aware of general
obligations under FOI
 Access to information under FOI may be more extensive than
under procurement legislation
 Is the public body subject to the FOI legislation/is information
covered by exceptions under FOI legislation
 Effect on the standstill period
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Invoking National Bodies
 Depending on the jurisdiction in question, there may
be a:
» national procurement agency which can be invoked
successfully;
» national competition agency which can be invoked
successfully (provided there is a competition law
aspect to the dispute).
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Invoking the European Commission
 Complaint may be made to the European
Commission
 Commission may initiate an investigation into an
alleged breach and may initiate enforcement
proceedings in the CJEU
 Enforcement proceedings against the Member State
rather than the contracting authority
 Pyrrhic Victory for complainant?
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Invoking the Media
and/or Political Machinery
 Wisdom of invoking the media or political machinery:
» May prompt a collapse of the tender or termination of
the award;
» Limited opportunity for success unless vulnerability
about the process.
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Conclusions
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ICEL Belfast Public Procurement Law Conference
The Relationship between Public Procurement
Law and Competition Law
&
Practical Aspects of Public Procurement Law
outside the Courtroom
Dr Vincent J G Power
A&L Goodbody
14 October 2011
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The Relationship between Public Procurement Law and