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Supreme Court of Denmark

Local authorities had not acted negligently when cancelling a tender procedure 

Case no. 185/2009
Judgment 18. August 2011
 

ISS Facility Services A/S
and
Confederation of Danish Industries
vs.
The Municipality of Silkeborg

Intervener: Local Government Denmark (LGDK)

Local authorities had not acted negligently when cancelling a tender procedure 

The case concerned the issue of whether the Municipality of Silkeborg was entitled to cancel the tender procedure concerning cleaning services at the schools in Silkeborg and instead continue to perform these services itself. At the time when it was decided to cancel the tender, bids had already been submitted, and it was clear that ISS's bid was the most economically advantageous bid.

The Supreme Court noted that in connection with tender procedures under both EU and Danish law, an awarding authority is generally entitled to cancel the tender procedure, with the effect that none of the bids submitted will be accepted, unless otherwise stipulated in the terms of the invitation to tender or otherwise required in the circumstances. However, the purpose of such cancellation must not be in contravention of the equal treatment principle in EU public procurement law or otherwise be deemed to be unfair.

The Supreme Court found that the Municipality of Silkeborg had not, in the terms of the invitation to tender, assumed an obligation to contract, and that the Municipality had not on any other basis created a reasonable expectation in this respect. In addition, the Supreme Court found that the Municipality's decision to cancel the tender procedure with a view to continuing to perform the services itself could not be regarded as being in contravention of the equal treatment principle in public procurement law, just as the decision could not be regarded as being unfair. Furthermore, there was no basis for regarding the decision as being in contravention of the requirement for openness in the terms of the invitation to tender etc. (the transparency principle).

The High Court had reached the same conclusion.

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