Maximum purchase under a framework agreement

Background

In November 2021, Region Midtjylland ("RM") published a call for tenders for a framework agreement concerning orthopaedic surgery under Title III of the Danish Public Procurement Act (i.e., the so-called "light regime"). The framework agreement consisted of two lots; one lot concerning upper extremity surgery (Lot No 1) and one lot concerning lower extremity surgery (Lot No 2).

It was stated in the contract notice that the estimated number of assessments/treatments under Lot No 1 was 3,600 assessments/treatments, while the maximum was 6,000 assessments/treatments. Correspondingly, it was stated in the contract notice that the estimated number of assessments/treatments under Lot No 2 was 2,400 assessments/treatments, while the maximum number was 4,000 assessments/treatments. 

In January 2022, RM decided to award both lots to Aleris-Hamlet A/S. Following this, an unsuccessful tenderer, Capio A/S ("Capio"), filed a complaint with the Danish Complaints Board for Public Procurement (the "Complaints Board"). Capio claimed, among other things, that RM had acted contrary to Section 2 of the Danish Public Procurement Act by setting an unreasonably high maximum number of assessments/treatments under each lot. 

During the complaint proceedings, RM submitted a memorandum from which it appeared that the maximum number of assessments/treatments had been set in recognition of the fact that the healthcare area is dynamic, and that predictability is therefore limited, as emphasised by the COVID-19 pandemic. At the same time, RM stated that the lots subject to the call for tender were to form part of the safeguarding of RM's obligations in connection with the reintroduction of the patients' guarantee which had been revoked during the COVID 19-epidemic.

The Danish Complaints Board for Public Procurement's decision

The decision concerns the question of whether the complaint was to be given suspensory effect, which implies that, on an initial basis, "there is something to" the complaint (fumus boni juris). The Complaints Board found that there was no indication that any of Capio's claims would be upheld and consequently did not grant suspensory effect to the complaint.

The Complaints Board referred to the CJEU's judgment of 17 June 2021 in the case C-23/20, Simonsen & Weel, and to the CJEU's judgment of 19 December 2018 in the case C216/17, Autoritá, according to which the contracting authority is obligated to state the maximum quantity or value of the contracts under the framework agreement in the contract notice. 

The Complaints Board stated that the contracting authority may exercise significant discretion when indicating the maximum quantity/value of a framework agreement, but that such discretion must be reasonable. Accordingly, the contracting authority must not increase the total maximum amount/value of a framework agreement artificially compared to its needs. However, when assessing whether a contracting authority has set an artificially high maximum quantity/value, it is within the discretion of the contracting authority to add a safety margin to the expected need.

In terms of RM, the Complaints Board then stated that there was no basis for establishing that RM had indicated an unreasonably high maximum number of assessments/treatments. Nor was there any basis for establishing that RM had exceeded the safety margin which RM was entitled to include when exercising their discretion. The Complaints Board referred to the memorandum prepared by RM and to the information provided by RM during the complaints proceedings about the reasons for the set maximum number of assessments/treatments.

Plesner's comments

In the Autoritá-case, and subsequently in the Simonsen & Weel-case, the CJEU found that the contracting authority is obligated to state, in the contract notice, the maximum quantity/value of the contracts under a framework agreement, and that the framework agreement no longer has any effect once the maximum quantity/value has been reached. This has given rise to uncertainty for contracting authorities, who would naturally like to ensure that a framework agreement concluded after a tender procedure does not lose its effect prior to expiry of the framework agreement.

Therefore, the Complaints Board's decision in the above case is interesting, as it contributes to the understanding of how to set the maximum quantity/value. The decision indicates that the contracting authority may exercise significant discretion when setting the maximum quantity/value, and that the contracting authority is entitled to add a safety margin without this being contrary to the procurement rules. However, the safety margin allowed will vary according to the uncertainties that apply within the specific scope of the framework agreement.

Furthermore, the decision shows that there may be a significant difference between the estimated and the maximum quantity/value without this being contrary to the procurement rules, when there are valid reasons. How large a difference that will be allowed depends on the specific circumstances. In the above case, the difference between the estimated and the maximum quantity/value was not too large in view of the specific uncertainties which applied within the area of health, including COVID-19.

Finally, the decision provides that it would be expedient for the contracting authority, as part of the preparation of a call for tenders for a framework agreement, to ensure written documentation for the contracting authority's considerations in terms of the indication of both the estimated and the maximum quantity/value, as this may become important during potential complaints proceedings.
 

Read the Danish Complaints Board for Procurement's decision (in Danish)