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How to challenge a public contract award – and what about damages? The Swiss regulations

E S C L E uropean Society of Construction Law. How to challenge a public contract award – and what about damages? The Swiss regulations. Martin Beyeler. Dr. iur., Fürsprecher (Attorney-at-law / Zurich) Institute for Swiss and International Construction Law University of Freiburg Switzerland.

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How to challenge a public contract award – and what about damages? The Swiss regulations

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  1. E S C L European Society ofConstruction Law How to challenge a public contract award – and what about damages? The Swiss regulations Martin Beyeler Dr. iur., Fürsprecher (Attorney-at-law / Zurich) Institute for Swiss and International Construction Law University of Freiburg Switzerland www.unifr.ch/baurecht

  2. Overview • Challenging Contract Awards under Swiss Law • Complaint procedure • Court‘s decision • Challenging Contracts under Swiss Law? • Observation on the Cases

  3. IntroductionThe Microsoft Case (still pending) • Conclusion of contract (Vista / Office 2007 / Support) • Publication of direct award (after conclusion) • OSS firms challenge the award • Court: prohibition of any procurementwhich is not absolutely necessary • Court later: prohibition reversed, butreservation of further measures

  4. Challenging Awards IThe Legal Framework • EC Directives not applicable • GPA / Bilateral Agreement • GPA XX • Provisional measures • Annulment / Compensation

  5. Challenging Awards IIFrom the award to the contract (AwardDecision) AwardPublication Conclusionof Contract 10 / 20 days Execution

  6. Provisional measures? No! Conclusionof Contract Challenging Awards IIIAnnulment of Award Annulment of Award Standstill Confirmation of Award Yes! Complaint! AwardPublication 10 / 20 days Standstill Standstill

  7. Action for damages Declaration of unlawfulness Yes! Provisional measures? Complaint founded? No! No! Conclusionof Contract Execution Standstill Challenging Awards IVDeclaration of unlawfulness

  8. urgency of conclusion effective relief Challenging Awards V„Effective Procedures“ (GPA XX:2) • ‚Most important of all decisions‘ • Prognosis / Balance of interests • Some courts write more, some less • 70-90 % of all cases: no provisional measures • No provisional measures: 95 % of withdrawals

  9. Challenging Contracts?Different Situations What if the contract is concluded ... • ... too early (during standstill)? • ... without an award publication? • ... with wrong contents or terms? • ... for a too long period? • ... with the wrong partner?

  10. Challenging Contracts?Various Solutions for one problem ? • No consequences, no sanctions. – (No problem?) • Per se-nullity or per se-ineffectiveness of contract. • Contracting Authority is not entiteled to conclude. • Courts can give orders with regard to the contract. • Courts can annul the contract. vs.

  11. Observations on Case 1The Floors • Award to the cheapest tender: standardized goods? • Two prices, but only one blank space: formalism. • No surface indicated: bidder questions. • Price confirmation by Tenderer 2: equal treatment? • Loss-reduction commitment applies! • No compensation for loss of profit!

  12. Observations on Case 2The Waterfront • Rules on reservations • Winter measures • Always higher coststhan offered? • If minor: legal award? • If major: illegal award! • (no loss of profit)

  13. Observations on Case 3The Carpets • ‚Overall estimate of the tender‘ • Rules on forfeiture of reprovals • Minor disregard of specifications • Alternative tenders • Too few employees? • Complaint unfounded

  14. Observations on Case 4The Cleaning • ‚Unreasonably low bid‘ • Rules on annulment • Challenging an annulment • Legal annulment • Legal, but mala fide annulment: only damages • Abusive annulment: correction (if possible)

  15. The End Thank you very muchfor your attention! martin.beyeler@sbh-law.ch

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