Case C-427/13, Emmeci – transparent procurement in an Italian blackout?

Electronic auctions can be used to award contracts in the water, energy, transport and postal sectors of the economy. These auctions are governed by an EU Directive that stipulates contracting entities must simultaneously communicate information to all tenderers so that the tenderers can ascertain their relative rankings ‘at any moment’. The question here is whether an Italian auction complied with EU law when it had a 5 minute blackout in its final phase so that competitors could not ascertain their respective rankings.

Facts
Emmeci is an Italian company that supplies spare parts used in the maintenance of buses. Emmeci was invited to participate in a public procurement tendering procedure organised by Cotral, a bus company owned solely by the Province of Lazio.

The tendering procedure was for a 2-year ‘spare parts’ contract and because Cotral had decided to offer the contract to the company offering the lowest price it organised an electronic auction.

The terms of the auction were set out in advance. The auction would last no less than 20 minutes, and no more than 50 minutes. If after 20 minutes no offers had been tendered, then negotiations would be ended. Equally, in the event of a better offer being made by a tenderer, negotiations would be extended automatically, and the time to conclude the negotiations would be reset at 20 minutes. If within that 20 minute period even lower offers were made, then the auction would continue up until a point that was 5 minutes before the 50 minutes would elapse. At that point, all tenderers would be automatically alerted to the fact that the end of the auction was nigh, and all tenderers would be given one more chance to put in their final offer. During this last final phase when final offers could be made, tenderers were not allowed to see either their own place in a ranking-system nor could they see the tenders that had been made by the other tenderers. Only after the end of the auction would this information be disclosed.

Emmeci claimed that the 5-minute blackout was contrary to the principle of transparency, and contrary to the very wording of the applicable EU Directive, namely, Directive 2004/17/EC of the European Parliament and of the Council of 31 March 2004 coordinating the procurement procedures of entities operating in the water, energy, transport and postal services sectors (OJ [2004] L134/1).

Article 56(6) of the Directive provides:

Throughout each phase of an electronic auction the contracting entities shall instantaneously communicate to all tenderers sufficient information to enable them to ascertain their relative rankings at any moment. They may also communicate other information concerning other prices or values submitted, provided that that is stated in the specifications. They may also at any time announce the number of participants in that phase of the auction. In no case, however, may they disclose the identities of the tenderers during any phase of an electronic auction.

The ensuing dispute between Emmeci and Cotral was sent for arbitration to the Italian Authority for the Supervision of Public Contracts for works, services and supplies (otherwise known as ‘AVCP’ or the Autorità per la Vigilanza sui Contratti pubblici di lavori, servizi e forniture).

AVCP noted that the blackout rule was enshrined in a 2010 rule that supplemented a 2006 legislative decree governing electronic auctions. Since AVCP thought it was competent to use the preliminary reference procedure, it decided to ask the CJEU 2 questions about the compatibility of the Italian legislation with the EU Directive.

Questions Referred
According to the Curia website, the AVCP has asked:

1. Must Article 56 of Directive 2004/17/EC […] be interpreted as meaning that it is not permissible for the national legislature to allow contracting authorities to prevent competitors, during the final bid phase, from viewing their rankings or the bids made by other economic operators, and to postpone disclosure of that information until the end of the auction?
2. Do Article 56 of Directive 2004/17/EC and the principles of transparency and equal treatment preclude national legislation or administrative practices, such as those described in these proceedings, which provide for a five-minute ‘black-out’ in the final phase of the electronic auction, during which competitors are unable to ascertain their respective rankings?