COVID-19: Portugal is also flouting procurement rules to award contracts directly

As mentioned earlier in the blog, Portugal decided to change some of the rules regulating the use of the negotiated procedure without prior publication. At the time I warned the changes made a weak system even weaker and prone to abuse.

Yesterday I got wind on Twitter of a contract awarded directly to a company for the supply of face masks for 9 months, that is well into 2021. The grounds used for awarding the contract directly and without competition are the extreme urgency of the supply. Under the Portuguese Public Contracts Code this ground is to be found on Art. 24(1)(c) which transposes Article 32(2)(c) of Directive 2014/24/EU into national law.

The information provided by the contract award notice is not enough to glimpse into the decision-making process in full detail, but it is safe to make some assumptions and look into the consequences of awarding directly a supply contract for 9 months.

The negotiated procedure without prior publication (or direct award) is an exceptional procedure and subject to specific conditions of use. Article 24(1)(c) only allows a contracting authority to award contracts directly if a series of multiple requirements are met in full:

• Strict necessity
• Extreme urgency (not imputable to contracting authority)
• Unpredictability
• Impossibility of compliance with deadlines for regular procedures

The fact this is an exceptional procedure means these grounds need to be interpreted narrowly, as to minimise the usage in situations where another procedure could be used instead. This is so because there are other alternatives less damaging to the principles of transparency, equal treatment and competition and as such the law mandates they should be used instead if possible.

By looking at the information available the contract fails in two counts. First, the strict necessity and second the impossibility of complying with the deadlines for regular procedures. Regarding the first, it is not strictly necessary to award this contract for 9 months, since the concept of urgency requires immediacy, ie a need that is actual and not future. This is compounded by the counterfactual required by the impossibility of compliance with the timescales of other procedures. It is obvious that an urgent open/restricted procedure could be used relatively quickly to award a contract like this, perhaps not for the first two or three months of supply, but surely for the rest.

And if said attempt had failed (or was foiled by judicial review for example) then the contracting authority could use the direct award based on Article 24(1)(b) due to the failure of following the general procurement rules.

In Commission v Greece (Case C-250/07) paras 34-39 the CJEU established that the burden of proof for the grounds for use of the negotiated procedure is to be discharged by the contracting authority, meaning the authority will have to provide evidence that it is complying with all the requirements for the use of this procedure. Saying (as the contracting authority does) it did comply with the requirements does not mean it did nor that it had provided suitable evidence to back up its claims.

Taken those  requirements together, it is evident that the contract does not comply with the rules, rendering it illegal and subject to a declaration of ineffectiveness.