Brief summary of the case

In January 2013, Banedanmark commenced a negotiated procedure for the construction of a new railway line between Copenhagen and Ringsted. In March 2013, Banedanmark preselected five companies, including a joint venture consisting of E. Pihl & Søn A/S and Per Aarsleff A/S. 

The day after the Danish Maritime and Commercial High Court's issue of a bankruptcy order against Pihl, the joint venture submitted its first bid (as the partnership JV Pihl - Aarsleff - TP 4 Urban Tunnels I/S) the day after. In October 2013, Banedanmark approved that Aarsleff could continue alone and in its own name and then decided in December 2013 to award the contract to Per Aarsleff A/S.

Following the award of the contract, MT Højgaard A/S and Züblin A/S that were among the other prequalified parties filed a complaint with the Danish Public Contracts Appeals Board against Banedanmark's award of the contract to Per Aarsleff A/S. 

In a ruling in part on suspensive effect in January 2014, the Danish Public Procurement Complaints Board found it likely that in a final ruling MT Højgaard A/S and Züblin A/S would be successful in their claim that Banedanmark's award of the contract to Per Aarsleff A/S was illegal as Per Aarsleff A/S had not been preselected alone for the contract put up for tender. However, the Danish Public Contracts Appeals Board decided to refer the issue to the Court of Justice of the European Union.

The Court of Justice of the European Union found in a ruling in May 2016 that generally there should be legal and substantive identity between the preselected entity and the entity submitting the tender but that changes may be allowed in order to ensure, in a negotiated procedure, adequate competition for the contract put up for tender. 

The Court did, however, state that it is a condition for the legality of any changes to a prequalified entity depends that 

• the continuing entity independently complies with the requirements for being prequalified, and
• the continued participation in the procurement procedure does not imply an impairment of the other participants' competitive position.

However, the national complaints bodies and courts, not the Court of Justice of the European Union, are to decide whether such conditions have been fulfilled in the specific case.  

The decision made by the Danish Public Contracts Appeals Board 

In a ruling of 20 June 2017, the Danish Public Contracts Appeals Board found that the above two conditions were fulfilled and that Banedanmark had therefore been entitled to allow Per Aarsleff A/S to continue in the award procedure alone. It was found to be indisputable that Per Aarsleff A/S independently fulfilled the conditions for being prequalified. 

Moreover, the Danish Public Contracts Appeals Board did not find that Per Aarsleff A/S's continued participation entailed an impairment of the other participants' competition position merely because the number of tenderers was not reduced by the bankruptcy.

Further, the Danish Public Contracts Appeals Board did not find that the fact that Per Aarsleff A/S had acquired 50 employees from E. Pihl & Søn A/S, including key persons in relation to the performance of the construction project, implied that Per Aarsleff A/S had been given a competitive advantage compared to the other tenderers. In addition to this, the other tenderers were in the same position as Per Aarsleff A/S in terms of employing the relevant key employees, which they also did to some extent according to the information provided.

Plesner's comments

The ruling is of general public importance as it concerns a very central question about the possibility of changing the identity or the composition of a preselected entity, which relatively often poses challenges in procurement processes. 

It has now been determined that it is not impossible to make changes to a prequalified entity, provided that the conditions listed by the Court of Justice of the European Union are fulfilled.

Read the decision made by the Danish Public Contracts Appeals Board (in Danish)