Have Consortium Agreements been affected by latest ruling of the Danish Supreme Court?
Udbudsportalen’s lawyers have assessed and evaluated the implications of the ruling by the Danish Supreme Court on 27 of November. The ruling regards the creation of a consortium by the companies VKF Vejmarkering (now GVCO) and Eurostar. However, the ruling does not relate directly to the Danish law on public procurement: Udbudsloven, rather it focuses on the aspect of EU tenders related to competition. Thus, the ruling does not alter the status quo within EU-tenders. But it does highlight the restrictions on consortiums that are put in place by Danish Authorities, to ensure a healthy competition.
The case of VKF Vejmarkering and Eurostar regards an EU tender, which was compartmentalized into several sub-contracts, which were available for individual bids. The two companies created a consortium to provide a bid for the full contract and then subsequently split the contracts between them. The Supreme Court’s ruling stipulates that the illegal element of the consortium relates directly to the compagnie’s possibility of separately fulfilling the tender’s contractual obligations, relating to both the main and sub-contracts. The ruling furthermore concluded that the consortium was created only for sales purposes and therefore contorted the competition of the tender.
Thus, the ruling only carries implications for similar cases and does not relate to the creation of consortiums in general. However, it does inform companies that it is necessary to be aware of the requirements for consortiums that goes beyond the restrictions placed hereupon from the public procurement legislation: Udbudsloven.
Consortiums therefore remains a valid and recognized solution for small companies when bidding on EU-tenders in Denmark, however it should also be noted that likewise other forms of collaboration are available for companies wishing to avoid similar situations.