Evicted candidates: what right to compensation in the event of recourse to an irregular procedure?
In this case, the Council of State provides useful details on the extent of the right to compensation of an ousted candidate when the irregularity affects the very choice of the procedure for awarding a contract launched by the public purchaser , as for example, in the event of irregular use of the competitive dialogue procedure for the award of a public contract or, as in the present case, in the award of a contract according to the procedure of delegation of public service to place of a public procurement procedure.
What you must remember :
Point n ° 1: Reminder of the legal framework of the rights to compensation of candidates irregularly ousted from the award of a public contract
In its judgment of February 28, 2020, Sté Régal des Iles, the Council of State specifies the legal framework for the rights to compensation of candidates irregularly ousted from the award of a public contract.
Continuing from its previous case law (CE October 14, 2019, Sté les Téléskis de la Croix Fry, n ° 418317), the Council of State firstly recalls that the loss of opportunity to obtain the contract is not compensable that as it is the direct consequence of the irregularity committed: the judge must thus verify on the one hand, that the irregularity invoked is the direct cause of the ouster of the ousted candidate; on the other hand, that there is a direct causal link between the resulting fault and the damage for which the candidate seeks compensation.
If these conditions are met, then the judge can sovereignly assess the graduation of the right to compensation according to the following grid: if the irregularity committed (1) if the ousted candidate was not without any chance of winning the contract, entitling him to reimbursement of the costs he incurred in presenting his offer, or (2) if this chance was serious, thus opening a right to be compensated for its shortfall including necessarily, since they have been included in its expenses, the costs of presentation of the offer.
The Council of State takes the opportunity to recall that in the event that the public purchaser renounces to conclude the contract for a reason of general interest, the candidate then loses all right to compensation.
Point n ° 2: The right to compensation in the event of the award of a contract according to an irregular procedure
The assessment of the loss of opportunity to obtain a contract at the end of a procedure as radically different as that which applies to public contracts when the procedure followed was that applicable to concessions seems difficult if not impossible.
However, the impossibility of assessing serious chances of obtaining a contract of a different nature or subject to a completely different procedure does not preclude finding that the irregularity of the choice of procedure has led the candidates to submit tenders in vain and therefore to incur costs in a competition which could not result in the fault of the public person.
This is the reason why the Council of State considers that the irregularity relating to the choice of procedure cannot lead the judge to exclude in principle any direct causal link between the irregularity and the damage caused by the eviction and may be entitled, at a minimum, to reimbursement of the costs incurred by the ousted candidate as soon as it is not established that his application or his offer would have been rejected.
Considering the following:
- It appears from the documents in the file submitted to the trial judges that the municipality of Saint-Benoît, by a notice of public call for competition published on July 30, 2013, launched an open procedure for entering into a delegation agreement of public service for the management of its municipal catering service. By letter dated 2 December 2013, the Régal des Iles company was informed by the mayor of this municipality that its offer had not been accepted. The Régal des Iles company presented an appeal to the administrative court of La Réunion to contest the validity of this contract, concluded on January 8, 2014 by the municipality of Saint-Benoît with the company SOGECCIR, accompanied by a claim for compensation an amount of 8,758,890 euros in compensation for its damage resulting, on the one hand, from its shortfall over ten years and, on the other hand, from the costs incurred for the presentation of its offer. By a judgment of March 31, 2016, rectified by an order of June 13, 2016, the administrative court of La Réunion, after having reclassified the disputed contract as a public market and found that it was affected by several vices having a character of a particular gravity, pronounced the termination of the contract from the first day of the sixth month following notification of the judgment and rejected the remainder of its request. By a judgment of October 8, 2018, the Bordeaux Administrative Court of Appeal dismissed the main appeal and the cross-appeal brought against this judgment, respectively, by the municipality of Saint-Benoît and the company Régal des Iles. The latter is appealing on points of law against this judgment in so far as it has dismissed its conclusions of cross-appeal seeking to order the municipality to pay him the sum of 8,758,890 euros.
When a candidate for the award of a public contract requests compensation for the damage resulting from his irregular eviction from this contract and there is a direct causal link between the fault resulting from the irregularity and the damage claimed by the Applicant because of his ouster, it is up to the judge to check whether or not the candidate had no chance of winning the contract. In the absence of any chance, he is not entitled to any compensation. Otherwise, he is entitled in principle to reimbursement of the costs he incurred in presenting his offer. It should also be investigated whether the irregularly ousted candidate had a serious chance of winning the contract concluded with another candidate. If this is the case, he is entitled to be compensated for his loss of earnings, necessarily including, since they have been included in his expenses, the costs of presentation of the offer, which therefore do not have to make the subject, unless otherwise stipulated in the contract, to specific compensation. On the other hand, the candidate cannot claim compensation for this shortfall if the public body renounces to conclude the contract for a reason of general interest.
It is clear from the statements in the judgment under appeal that, for reasons not disputed in the context of this appeal, the Bordeaux Administrative Court of Appeal redefined the contract for the delegation of public service in the public market and noted that this contract, concluded without the content and the conditions for implementing the selection criteria for tenders having been defined and without publication of a European level award notice, was affected by several flaws of a particularly serious nature .
- It appears from the documents in the file submitted to it that the court did not err in law nor misrepresented the documents in the file in finding that the irregularities mentioned above had not deprived Régal des Iles of a serious chance to win the contract in dispute, even though this company has, after the termination of the contract in dispute, concluded with the municipality of Saint-Benoît a public contract for the management of the municipal catering service. Nor did the court, which gave sufficient reasons for its judgment, disregard the significance of the applicant's submissions on this point.
- On the other hand, it appears from the documents in the file submitted to the trial judges that the Régal des Iles company was allowed to submit an offer in the context of the procedure for concluding the delegation contract in dispute, that this offer was ranked second position and, as has just been said, that the applicant company was awarded the public contract for the management of the municipal catering service in the municipality of Saint-Benoît. Under these conditions, the Bordeaux Administrative Court of Appeal misrepresented the documents in the file, stating, in order to reject the compensation claims of Régal des Iles for the costs it incurred to present its offer, that the irregular appeal to the procedure for handing over public service delegations by the municipality of Saint-Benoît was not likely to have had an impact on the eviction of the company Régal des Iles and that it was devoid of any chance of get this market.
- It follows from the foregoing that the Régal des Iles company is entitled to request the annulment of the judgment which it is attacking in so far as only that it has rejected its claims, presented by way of cross-appeal, seeking compensation for costs incurred in presenting its offer.
- It is necessary, in the circumstances of the case, to charge the municipality of Saint-Benoît the sum of 3,000 euros to be paid to the company Régal des Iles, under article L. 761- 1 of the code of administrative justice. The same provisions prevent an amount from being charged against the Régal des Iles company, which is not the losing party in this proceeding.
Article 1: The judgment of October 8, 2018 of the administrative court of appeal of Bordeaux is canceled as it rejected the conclusions of the company Régal des Iles tending to the compensation of the costs incurred for the presentation of its offer .
Article 2: The case is referred to this extent to the administrative court of appeal of Bordeaux.
Article 3: The town of Saint-Benoît will pay Régal des Iles a sum of 3,000 euros under article L. 761-1 of the Code of Administrative Justice. His conclusions presented on the same basis are dismissed.