Supplier's informational advantage in procurement - not sufficient for intervention without demonstrated harm

On June 20, 2024, the Administrative Court of Appeal in Sundsvall decided a case concerning so-called "consultant conflict of interest" and the obligation to point out deficiencies (case no. 2540–23). The issue in the case was whether the suppliers could submit bids on equal terms or whether one supplier, due to participating in the preparations for the current procurement, had gained an undue competitive advantage over the applicant supplier, thereby suffering harm, and whether the supplier should have pointed out that the bidding period was too short. 

Background

Gävle Hamn AB conducted a renewed competition from a framework agreement for the replacement of an OFA line. The bidding period was initially 13 days but was extended to 20 days at the request of a bidder. Bids were submitted by two framework agreement suppliers, after which one was awarded the contract. The other supplier applied for a review, citing that the bidding period provided by Gävle Hamn was not reasonable and that there was a consultant conflict of interest with the other supplier. The applicant supplier claimed that the winning supplier had completely different conditions for calculating and pricing its bid, which resulted in an undue competitive advantage. 

The Administrative Court of Appeal's Judgment 

Regarding the objection that the bidding period was not reasonable, the court noted that the applicant supplier had refrained from pointing out the deficiency during the bidding period. The fact that another bidder requested an extension did not constitute an acceptable reason for the applicant supplier to refrain from pointing this out during the bidding period if the supplier still considered the bidding period too short. The Administrative Court of Appeal therefore judged that there were no grounds to intervene in the procurement on that basis. Regarding the objection of consultant conflict of interest, the court noted that the winning supplier had participated in the preparation and thereby had more information than other potential bidders. Furthermore, the court noted that this in itself did not imply a presumption that this supplier had a competitive advantage that distorted competition. The decisive factor was instead whether the applicant supplier had shown that the winning supplier's informational advantage was such that other suppliers could not submit an equally competitive bid. The Administrative Court of Appeal judged that the applicant supplier had not sufficiently concretely demonstrated how the winning supplier's informational advantage had unduly affected the procurement or given the winning supplier competitive advantages, and therefore there were no grounds to intervene in the procurement.

Summary Conclusions from the Judgment

In the judgment, the applicant supplier is burdened with proving both the informational advantage itself and that it constitutes an undue competitive advantage that has concretely caused the applicant supplier harm. Often, the supplier applying for a review in this situation lacks all the information needed to concretely demonstrate the impact of an informational advantage. It is also, for natural reasons, difficult to prove the exact extent of the information provided during the preparatory phase and the benefit it has given the supplier in designing the bid. The requirements for an applicant supplier to be able to show when there is an undue competitive advantage due to an informational advantage appear, based on the above judgment, to be high and may be difficult to meet in individual cases.