Case C-440/13, Croce Amica One Italia – ambulances, investigations and judicial jurisdiction in public procurement [judgment 2014, ECLI:EU:C:2014:2435]

If a contracting entity has provisionally awarded a public procurement contract to a company, then can it decide not to proceed with the final award of the contract on the basis that criminal investigations are pending against the company’s legal representative?

Facts
Emergency ambulance services in the Italian Region of Lombardia are provided by the publicly-owned ‘AREU’ [Azienda Regionale Emergenza Urgenza].

Acting as a contracting entity, the AREU decided to offer a 2-year contract to a company that could transport surgical teams, transplant patients, and biological materials such as blood.

Four companies decided to take part in the tendering procedure but in May 2011 the tender was provisionally awarded to just one of them, namely, the Croce Amica One Italia.

After the requisite financial and economic checks had been done, the AREU thought that the offer made by Croce Amica One Italia was actually too low. The AREU therefore asked for further information and clarification. It subsequently formed the view that there were anomalies in the offer.

In June 2011, it wrote to the Croce Amica One Italia informing them that the AREU had taken a negative decision towards the offer. Parallel to this, the State Prosecutor in Milan also impounded Croce Amica One Italia’s dossiers and documentation in the context of an investigation into alleged fraud by the company’s legal representative.

In September 2011, the AREU decided that in light of both the irregularities in the offer and the principle of good administration, it was definitely not going to award the contract to the Croce Amica One Italia. However, rather than run the tendering procedure anew, the AREU simply awarded the contract to the two remaining companies that had initially participated in the tendering procedure.

The AREU’s decision was challenged by both the Croce Amica One Italia and the Consorzio Lombardia Sanità. The challenge related to the Italian laws about investigating an abnormally low offer, and the rules for excluding companies from participating in a tendering procedure. The AREU’s response was a case couched in terms that the Italian rules were in the general interest, and they corresponded to principles of good administration.

The case was heard by the President of the District of Lombardia Administrative Law Court (the TAR Lombardia, otherwise known as the Tribunale Amministrativo Regionale per la Lombardia).

At the TAR Lombardia, attention shifted away from the Italian implementing legislation to the actual wording of the EU’s Directive 2004/18/EC on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts (OJ [2004] L134/114–240).

The relevant provision was Article 45, which not only relates to the ‘Personal situation of the candidate or tenderer’ but also provides that:

1. Any candidate or tenderer who has been the subject of a conviction by final judgment of which the contracting authority is aware for one or more of the reasons listed below shall be excluded from participation in a public contract:

(a) participation in a criminal organisation …
(b) corruption, …
(c) fraud …
(d) money laundering …

Member States shall specify, in accordance with their national law and having regard for Community law, the implementing conditions for this paragraph.
They may provide for a derogation from the requirement referred to in the first subparagraph for overriding requirements in the general interest….

The President of the TAR, Judge Mariuzzo, pointed out that the AREU’s decision should really have taken into account whether the representative’s personal situation had resulted in him being ‘the subject of a conviction by final judgment’. Doing so, would have been to act in accordance with the guidance issued by the Italian state regulator of public works contracts, the AVCP. Furthermore, he pointed out that the company’s legal representative still had not been convicted so Croce Amica One Italia should have been awarded the contract.

But the President was in a jurisdictional legal pickle. If he looked at the dispute as a procurement judge, then he could look at the Directive and the facts of the case and how the discretion of the contracting entity had been exercised. If, however, he looked at the dispute as an administrative law judge, then he could not sit in the chair of the contracting entity and he was confined to looking for illegality.

Questions Referred
According to the Curia website, the TAR Lombardia has asked:

1. Is it consistent with Community law for it to be permissible for a contracting authority, in the exercise of its power to withdraw a decision in relation to a public procurement procedure pursuant to Article 21d of Law No 241/1990, to decide not to proceed with the final award of the contract merely because criminal investigations are pending vis-à-vis the legal representative of the company to which the provisional award was made?

2. Is it consistent with Community law for there to be a derogation from the principle of the finality of findings of criminal liability, as expressed in Article 45 of Directive 2004/18/EC, […] on grounds of administrative expediency, relating to an area of administrative autonomy?

3. Is it consistent with Community law for there to be a derogation from the principle of the finality of findings of criminal liability, as expressed in Article 45 of Directive 2004/18/EC, where pending criminal investigations concern offences relating to the tendering procedure covered by the administrative decision adopted by way of self-protection?

4. Is it consistent with Community law for the decisions adopted by a contracting authority in matters of public procurement to be open to unlimited review by a national administrative court, in exercise of the jurisdiction conferred in matters relating to public procurement, covering the reliability and the suitability of the tender, and thus going above and beyond the limited cases of clear absurdity, irrationality, failure to state adequate reasons or error as to the facts?’