THE HIGH COURT
			2000 No. 79 MCA 

REVIEW OF AWARD OF PUBLIC CONTRACTS
BETWEEN
WHELAN GROUP (ENNIS) LIMITED
			APPLICANT
AND
CLARE COUNTY COUNCIL
			RESPONDENT

JUDGMENT of Mr. Justice Kelly delivered the 9th day of March, 2001
INTRODUCTION
Major road improvement works are planned for the Newmarket-on-Fergus area of County Clare.  These improvements will involve the construction of 9 kilometres of dual carriageway, 3 kilometres of single carriageway, 5 bridges and 3 underpasses.  The value of these works is estimated at £25 million and the work will take 28 months to complete.
In these proceedings, the applicant (Whelan Group) challenges the manner in which the respondent (the County Council) has implemented the provisions of E.U. Directive 93/37 (the Directive) concerning these proposed works.
It is common case that the County Council opted to operate the restricted procedure provided for in the Directive.  No complaint is made in respect of that decision.  However, Whelan Group says that certain of the technical specifications of the preselection criteria in the restricted procedure as operated contain discriminatory requirements.  In particular, they contend that the requirement that a contractor shall, as a minimum, have satisfactorily completed an individual road works project to the value of £10 million, excluding VAT, within the period 1995 - 1999 is discriminatory.  This requirement, it is said, has the effect of insuring that only the largest construction undertakings within the European Union or the State could compete for this work.  This, it is said, infringes principles of E.U. Public Procurement Law and in particular those which prohibit discrimination, inequality of treatment, lack of transparency and lack of proportionality.
In due course I will examine these contentions but first it is necessary to set out the background to the matter in some detail.  

THE PROCEDURE
In February, 2000, the County Council published in the Official Journal and in the Irish Independent a contract notice in respect of the proposed works. That notice made it clear that the County Council was adopting the restricted procedure for the award of the contract.
Paragraph 10 of the notice, which dealt with qualifications, read as follows:-
“The suitability of contractors, not excluded under Article 24 of Council Directive 93/37/EEC, shall be determined in accordance with the criteria referred to in Articles 26 - 28 of Council Directive 93/37/EEC.  Applicants will be required to complete the prequalification questionnaire, which is available from the address stated in 6(b).  The questionnaire sets out the minimum level of technical and economic capacities required for those wishing to participate.  Information required concerning the contractor’s financial and economic standing and technical knowledge and ability will be given in the prequalification questionnaire.”

The contract notice also made it clear that not less than five applicants would be invited to tender, following the pre-qualification process.  Whelan Group obtained the pre-qualification questionnaire from the County Council’s consulting engineers and, having completed it, returned it to the County Council.
The pre-qualification questionnaire gave the reason for adopting the restricted procedure by reference to the financial scale and technical complexity of the project.  It was said that the use of the restricted procedure was to ensure that all tenderers invited to tender would be of adequate financial and economic standing and have the technical capability of carrying out the works.  Detailed evidence is contained in the affidavits as to the background to the adoption of the restricted procedure.  It is not necessary for me to explore this aspect of the matter further since Whelan Group makes no complaint in this application as to the use of the restricted procedure.

THE REQUIREMENT AND ITS BACKGROUND
The County Council has, in conjunction with the National Roads Authority, been involved in the design and construction of roads in Co. Clare in accordance with the National Plan for Roads.  In co-operation with a number of other local authorities in the region, a regional design office was set up in Co. Limerick.  The idea behind this was to establish a group of professionals to assist in work relating to national primary roads.  A steering committee was established once a particular project was identified.  The committee involved in the project in suit was comprised of a representative of the consulting engineers, a regional manager from the National Roads Authority, a representative from the Regional Design Office and a senior engineer from the County Council.  This committee recommended the adoption of the restricted procedure.  But it went further.  It recommended the adoption of a minimum criterion relating to the value of other projects carried out by potential tenderers.  This gave rise to the adoption of a condition that a contractor would be required, as a minimum, to have satisfactorily completed an individual road works project to the value of £10 million pounds within the period 1995-1999.  In this regard it is to be noted that the advice which had been received from the consulting engineers was to the effect that a potential tenderer ought to have completed at least one road works project with a value exceeding £15 million pounds.  This advice was not accepted.  In adopting the requirement which is contested in these proceedings a number of matters were taken into account.  They were that
(a)	 the scheme was similar in value and scale to the Limerick South Ring Road Phase I contract which contained similar criteria
(b)	the custom and practise of the National Roads Authority was to apply a factor of ½ to  to the estimated value of the project and
(c)	it was considered that a contractor who had not carried out works to the specified value could have such difficulty in obtaining a bond that the project might be delayed.

THE QUESTIONNAIRE
Having decided to apply the stipulation in question the County Council prepared a pre-qualification questionnaire which had to be answered by all potential tenderers.  In the introduction to it, it pointed out that because of the financial scale and technical complexity of the project the invitation to tender was by means of the restricted procedure so as to ensure “that all tenderers invited to tender shall be of adequate financial and economic standing and have the technical capacity of carrying out the works”.
The questionnaire also drew attention to the fact that any contractor who did not comply with the specified minimum pre-qualification criteria would be excluded from further consideration.
Under the legend “Works Carried Out” the questionnaire provided as follows:-
“The minimum relevant experience shall be judged on the Contractor’s record during the period 1995 to 1999 inclusive.  Evidence of that record shall be furnished, with the attached pre-qualification questionnaire.  The Contractor shall, as a minimum, have satisfactorily completed:
Roadworks project, value exceeding IR£10,000,000, excl. VAT for any one individual project”.

Section D(1) of the questionnaire asked the contractor to “give details of the Candidates experience on up to five Road and Bridge civil engineering contracts, similar in type to this Project, which the Candidate has directly carried out in the years 1995 to 1999 inclusive”.
In response to that question the Applicant answered as follows:-
“Project Title: Road and Bridge Works
Description of Contract: to the value of IR£11,900,000
Date Contract Awarded: in 1999”

In section D 2 the contractor was asked:-
“Has the Candidate undertaken building and civil engineering project or projects, within the years 1995 to 1999 inclusive comprising of:
Roadworks project of value not less than IR£10,000,000 exclusive of VAT on an individual project?”

Whelan Group answered yes to that question and indicated that the work consisted of road and bridge works for the County Councils of Cork, Limerick and Offaly to the value of IR£11,900,000.
On examination of the questionnaire, however, it was discovered that this was an incorrect answer because Whelan Group had not carried out an individual project to the value of not less than £10,000,000.  The largest contract value of works carried out had a tender price of £3.9 million pounds (exclusive of V.A.T.).  Because of this, the County Council took the view that the minimum criteria specified in the questionnaire had not been met and consequently did not invite Whelan Group to submit a tender.  It is because of that that these proceedings have been brought.

Grounds
Whelan Group in its amended statement grounding the application specified the following grounds:-
“The Respondent has applied the criteria complained of in an arbitrary and discriminatory manner and has breached the principle of equality of treatment underlying the Directive.
The exclusion of the Applicant from the list of contractors deemed to have the technical capability to carry out the proposed works because the Applicant had not completed a road works project exceeding £10 million for any one individual project within the years 1995 to 1999... breached the said principle of equality of treatment and was not authorised by the Directive or in particular Articles 18, 22 or 27 of the Directive but rather was ultra vires the Directive and the Articles of the Directive.
Further or alternatively the said criterion complained of upon which the Respondent excluded the Applicant was not determinative in fact of a contractors (sic.) technical capability and the application of the said criterion for the automatic exclusion of the Applicant was unreasonable, capricious and arbitrary.”

THE COUNCIL’S RESPONSE
The County Council accepts that it is obliged to comply with the terms of the Directive and that this prevents the applications of arbitrary or discriminatory criteria and furthermore that the Council is obliged to ensure equality of treatment for all potential contracting parties.  It says that the adoption of the qualification criteria by it is consistent with the terms of the Directive and that it is not in breach of any obligations owed to Whelan Group.  It says that the criteria set forth by it are objectively justified, non-discriminatory and respect the principle of equal treatment. 

SUBMISSIONS 
Both sides have referred to the European Procurement Guidelines in the course of their submissions.  Although that guide is expressed to have no legal value and does not necessarily represent the official position of the Commission, it nonetheless provides some assistance.  In dealing with the restricted procedure, which was adopted here, it says at paragraph 3.2 as follows:-
“A restricted procedure is one where, of the contractors who have expressed their interest following publication of the contract notice, only those so invited by the contracting authority may submit tenders.
Candidates invited to bid must be chosen, on the basis of the information on their personal standing and the information and formalities necessary for evaluating the minimum economic and technical conditions set out in the contract notice, from among those possessing the qualifications specified in Articles 24 to 29 of the Directive”.

At paragraph 6.3 the guidelines further stipulate that:-
“In accordance with Article 22, in restricted and negotiated procedures contracting authorities select the candidates they will invite to submit a tender or to negotiate from among those with the qualifications specified in Articles 24 to 29, on the basis only of the information given relating to the contractor’s personal situation and of the information and formalities necessary for the evaluation of the minimum economic and technical conditions to be satisfied in accordance with the requirements set out in the notice.
N.B. Contracting authorities are not, however, obliged to invite all candidates to tender who satisfy the requisite conditions.  As explained below, the Directive allows them to restrict numbers, with the proviso that they apply the same, transparent and objective, qualitative selection criteria already established”.

Article 18 of the Directive provides as follows:-
“Contracts shall be awarded on the basis of the criteria laid down in Chapter 3 of this Title, taking into account Article 19, after the suitability of the contractors not excluded under Article 24 has been checked by contracting authorities in accordance with the criteria of economic and financial standing and of technical knowledge or ability referred to in Articles 26 to 29”.

Article 22, insofar as it is relevant, provides as follows:-
“1.	In restricted and negotiated procedures the contracting authorities shall, on the basis of information given relating to the contractors personal position as well as to the information and formalities necessary for the evaluation of the minimum conditions of an economic and technical nature to be fulfilled by him, select from among the candidates with the qualifications required by Articles 24 to 29 those whom they will invite to submit a tender or to negotiate”.

Article 27, insofar as it is relevant, provides as follows:-
“1.	Evidence of the contractor’s technical capability may be furnished by:  ....(b) a list of the works carried out over the past five years, accompanied by certificates of satisfactory execution for the most important works.  These certificates shall indicate the value, date and site of the works and shall specify whether they were carried out according to the rules of the trade and properly completed.  Where necessary, the competent authority shall submit these certificates to the contracting authority direct”.

Reliance was placed by the applicant upon the Commission Interpretive Communication on Concessions under Community Law in support of its contention that the stipulation in this case was in breach of the requirement of equality of treatment, lacked transparency and was disproportionate.  The Communication has this to say in relation to each of these contentions:

Under the heading of “Equality of treatment” it reads:-
“According to the established case law of the Court the general principle of equality of treatment, of which the prohibition of discrimination on grounds of nationality is merely a specific enunciation, is one of the fundamental principles of Community law.  This principle requires that similar situations shall not be treated differently unless differentiation is objectively justified.  
Moreover the Court asserted that the principle of equality of treatment, of which Articles 43 (ex52) and 49(ex59) of the Treaty are a particular expression,
 “forbids not only overt discrimination by reason of nationality ... but all covert forms of discrimination which, by the application of other criteria of differentiation, lead in fact to the same result.” 
The principle of equality of treatment implies in particular that all potential concessionaires know the rules in advance and that they apply to everybody in the same way.  The case law of the Court in particular the Raulin and Parliament/Council judgments, lays down that the principle of equality of treatment requires not only that conditions of access to an economic activity be non-discriminatory, but also that public authorities take all the measures required to ensure the exercise of this activity.
The Commission considers that it follows from this case law that the principle of open competition must be adhered to. In the Storebaelt und Walloon Buses judgments, the Court has (sic.) the occasion to set out the scope of the principle of equality of treatment in the area of public contracts, by asserting on the one hand that this principle requires that all offers conform to the tender specifications to guarantee an objective comparison between offers and, on the other hand, this principle is violated, and transparency of the procedure impaired, when an awarding entity takes account of changes to the initial offers of one tenderer who thereby obtains an advantage over his competitors.”  

Dealing with proportionality, the document has this to say:-
“The principle of proportionality is recognised by the established case law of the Court as “being part of the general principles of Community law”; it also binds national authorities in the application of Community law, even when these have a large area of discretion.
The principle of proportionality requires that any measure chosen should be both necessary and appropriate in the light of the objectives sought.  In choosing the measures to be taken, a Member State must adopt those which cause the least possible disruption to the pursuit of an economic activity ... .
Thus, for example, when selecting candidates, a Member State may not impose technical, professional or financial conditions which are excessive and disproportionate to the subject of the concession”.

The applicant contends that the County Council is in breach of these obligations.  It asks for a series of declarations from the Court to this effect.  The effective  relief which it seeks is an order from the Court removing the requirement that a contractor shall have completed one individual project to the value of £10,000,000.  If that were to be done then the applicant would be in a position to be considered by the County Council for the award of the contract.

CONCLUSION
In my view the applicant is not entitled to the reliefs which it seeks.  The selection of the pre-qualification criterion which is sought to be impugned in these proceedings was made on the advice of an expert standing committee.  It took the view that this criterion was necessary having regard to the financial scale and technical complexity of the project.  It was taken in accordance with the practice determined by the National Roads Authority which took into account its experience nationally in relation to the use of the restricted tendering procedure.  The stipulation was included in order to ensure the technical capability of tenderers.  The stipulation sought to minimise the risk of delays to the project and the implications that would arise from that for public funds.  This criterion applied to all potential contractors and I cannot see how it can therefore be said to be discriminatory.  It is an objective criterion.  It is capable of objective assessment and application.  There is a rational basis for it.  It is transparent because every potential tenderer who was notified of the requirement had to comply with it.  It manifestly relates to economic and technical conditions.  The Directive does not attempt to set out the technical or economic criteria that are to be applied.  It indicates the references or methods of proof by which technical and economic criteria are to be judged.  That much is clear from the terms of the Directive itself and from the decisions of the European Court in Joined Cases 27 to 29/86, S A Constructinos et entreprises industrielles (CEI) -v- Societe cooperative ‘Association intercommunate pour les antoroutes des Ardennes’ [1987] E.C.R. 3347 and Case 31/87, Gebroeders Beentjes BV -v- State of the Netherlands [1988] E.C.R. 4635.  In the CEI case the Court stated (by reference to Directive 71/305 which was the predecessor of Directive 93 37) at pg. 15 of its judgment, p. 3373 of the report:-
“The directive therefore does not lay down a uniform and exhaustive body of Community rules.  But in the framework of the common rules which it contains, the Member States remain free to maintain or adopt substantive and procedural rules in regard to public works contracts on condition that they comply with all the relevant provisions of Community law and, in particular, the prohibitions flowing from the principles laid down in the Treaty in regard to the right of establishment and the freedom to provide services.
16.	The fixing in a Member State of a maximum value for works which may be 		carried out at one time is not contrary to the said principles and there is 		nothing to suggest that it has the effect of restricting access by contractors in 		the Community to public works contracts.
17.	In those circumstances, it must be held that as Community law now stands, 		there is no reason why the Member States, in the context of their powers in 		regard to public works contracts, should not fix a maximum value for works 		which may be carried out at one time.
18.	The reply to the national court should therefore be that a statement of the total 	value of the works awarded to a contractor may be required from tenderers as 	a reference within the meaning of Article 25 of Directive 71/305 and that 		neither that article nor any other provision of the directive precludes a 		Member State from fixing the value of the works which may be carried out at 		one time”.

Neither Articles 26 nor 27 of the Directive in suit here set out what the financial or technical criteria should be.  They provide methods for adducing evidence of compliance with those criteria.
In particular Article 27.1(b) recognises the liceity of a requirement that evidence be furnished in relation to a list of works carried out, which list can include the value, date and site of the works.  If the contracting authority is authorised to require and receive such evidence then it must be entitled to use criteria such as the value of works carried out in the previous five years as a pre-qualification criterion.  I do not see that the use of what the applicant has described as a “tick the box” approach was impermissible in the evaluation of whether or not an applicant has complied with a legitimate condition precedent.  I am fortified in this view by the express provisions of Article 22.  That recognises the use of minimum conditions as a basis for selecting candidates for the restricted procedure.  They can be of an  “economic and technical nature”.  As evidence can be sought as to the value of works performed by the contractor in the preceding five years it must be the case that the value of those works can be used as a minimum condition provided of course that there is an objective and non-discriminatory basis for choosing such a criterion.  In my view there is in this case both an objective and a non-discriminatory basis for choosing the criterion.  
There is in my view nothing to support the case of Whelan Group that the criterion chosen in this case does not relate to its technical ability.  It clearly does.
Finally I am satisfied that the condition specified in this case did not suffocate genuine competition.  True it is that the applicant is excluded because of its inability to comply with the condition in question but once the stipulation is proportionate, (as I believe it to be) and a rational basis exists for it and is applied objectively it does not in my opinion offend the requirements of Community law.
I therefore dismiss these proceedings.