Trust is a fragile thing. Easy to break, easy to lose, and one of the hardest things to ever get back.

– English proverb

Join us for an insightful panel discussion on “A Question of Trust and Cooperation,” where we will delve into the crucial role of trust in public procurement systems and the legal frameworks that support them. This panel will address how trust influences the dynamics of public procurement processes, the willingness of companies to participate and appeal decisions, and the legal remedies available when trust is compromised.

We will explore the reputational risks associated with appealing procurement decisions and the procedural hurdles that often deter companies from seeking redress. Additionally, we will examine the application of the private law concept of culpa in contrahendo doctrine within EU public procurement law, which emphasizes the necessity for good faith in negotiations.

Our panellists will provide insights into how enhancing trust and cooperation can lead to fairer and more efficient public procurement systems, benefiting all stakeholders involved. Don’t miss this opportunity to engage with experts and contribute to the dialogue on improving trust and cooperation in public procurement.

• Paper 1: “Navigating Trust in the Public Procurement Judicial Remedy System”  – Presented by Kirsi-Maria Halonen
• Paper 2: “Culpa in Contrahendo Doctrine and Public Procurement Law” Presented by Marta Andhov and Michal Kania

Paper 1: “Navigating Trust in the Public Procurement Judicial Remedy System”

Authored by Pirkko Heikkinen & Kirsi-Maria Halonen

Abstract

The public procurement remedies system is designed to enforce procurement rules and provide effective remedies for economic operators when these rules are infringed. However, the decision to appeal against procurement decisions can significantly impact the reputation of companies, affecting their future business opportunities. This paper explores the factors influencing companies’ decisions to appeal or not appeal against procurement decisions and examines the role of trust in the judicial review system.

Previous studies have highlighted the reputational risks associated with appeals, showing that companies often withdraw appeals to preserve business relationships. Building on this, we conducted a new study involving a random sample of Finnish companies to understand why some companies choose not to appeal despite potential procurement rule violations. Our findings reveal that trust in the judicial review system is crucial, with many companies expressing little or no trust in its ability to correct errors. This lack of trust has a significant negative impact on companies’ willingness to participate in public procurement tenders.

Our study identifies key reasons for the decline in trust, including perceptions of favoritism and the high costs and lengthy processes of litigation. The research suggests that addressing these issues could improve trust in the procurement remedies system. One potential solution is to increase the availability of anonymous complaint mechanisms and enhance the role of procurement monitoring authorities. These measures could mitigate reputational risks and encourage greater participation in public procurement, thereby enhancing competition and efficiency.

Overall, this paper contributes to the understanding of trust in public procurement and its impact on judicial review effectiveness, highlighting the need for reforms to address reputational concerns and improve the procurement process.

Paper 2: Culpa in Contrahendo Doctrine and Public Procurement Law

Authored by Marta Andhov, Michal Kania, Arnel Saljic and Torkil Schrøder-Hansen

Abstract

This paper explores the application of the private law concept of culpa in contrahendo doctrine within the context of EU public procurement law. As public procurement processes grow increasingly complex, incorporating sustainability concerns and advanced technological solutions, the reliance on negotiated procedures has intensified. When negotiations fail or are conducted in bad faith, economic operators often face significant financial losses. 

The paper examines whether economic operators can seek damages under private commercial law doctrines, specifically culpa in contrahendo, alongside public procurement law. This doctrine, which entails liability for misconduct during contract negotiations, requires parties to negotiate in good faith and may provide grounds for damages even when no formal contract is concluded. 

Through a hypothetical scenario and analysis of legal frameworks in various EU Member States, the paper investigates the intersection of public procurement law and private contract law, proposing potential legal remedies for economic operators mistreated in procurement processes. The findings suggest that while EU public procurement law provides a basis for damages claims, in investigated Member States, there is room for integrating culpa in contrahendo to enhance protection for economic operators, ensuring fairness and trust in public procurement negotiations.