Successful representation of the Kristiine District Administration in a major procurement dispute
Case
In June 2020, the Kristiine District Administration announced a public procurement process to find a contractor to perform maintenance work on the side streets and green areas of the Kristiine district. The estimated value of the procurement contract exceeded the international threshold, and a total of five tenders were submitted.
In October 2020, the contracting authority made its final decisions regarding the procurement procedure. These were subsequently challenged. The tenderer who came second challenged the contracting authority’s decisions regarding the successful tenderer’s compliance with the procedure and their declaration of success.
The dispute began with the Public Procurement Review Committee and proceeded to the Administrative Court. The subsequent proceedings reached the Supreme Court on two separate occasions. On the second occasion, the Supreme Court refused to hear the case, thereby upholding the legality of the Circuit Court’s decision. The Circuit Court had granted the appeal filed by the Kristiine District Administration, recognising the legality of its decisions in the procurement procedure.
The dispute centred on a fundamental disagreement between the parties regarding whether cross-subsidisation was permitted under the terms of the procurement, whether the successful tenderer's tender complied with these terms, and whether the cost of their tender was unreasonably low.
RASK partner Tarmo Peterson and co-head of the public procurement practice Keidi Kõiv represented the contracting authority in the dispute from the very first proceedings all the way through to the Supreme Court. By the end of the dispute, the courts agreed with the position defended by RASK that the contracting authority had acted lawfully in its decisions.
This procurement dispute was significant in several aspects:
In October 2020, the contracting authority made its final decisions regarding the procurement procedure. These were subsequently challenged. The tenderer who came second challenged the contracting authority’s decisions regarding the successful tenderer’s compliance with the procedure and their declaration of success.
The dispute began with the Public Procurement Review Committee and proceeded to the Administrative Court. The subsequent proceedings reached the Supreme Court on two separate occasions. On the second occasion, the Supreme Court refused to hear the case, thereby upholding the legality of the Circuit Court’s decision. The Circuit Court had granted the appeal filed by the Kristiine District Administration, recognising the legality of its decisions in the procurement procedure.
The dispute centred on a fundamental disagreement between the parties regarding whether cross-subsidisation was permitted under the terms of the procurement, whether the successful tenderer's tender complied with these terms, and whether the cost of their tender was unreasonably low.
RASK partner Tarmo Peterson and co-head of the public procurement practice Keidi Kõiv represented the contracting authority in the dispute from the very first proceedings all the way through to the Supreme Court. By the end of the dispute, the courts agreed with the position defended by RASK that the contracting authority had acted lawfully in its decisions.
This procurement dispute was significant in several aspects:
- In the context of the dispute, the courts thoroughly examined the extent of the contracting authority’s duty of care when verifying the reasonableness of a tender price, including the logic and realism of the explanations provided by the tenderer.
- In addition, the proceedings clarified the extent of the courts’ duty to review in a situation where certain data is withheld from the appellant on the grounds of trade secrets.