Doctoral defence: Kadri Härginen “Due diligence obligations of a contracting authority under the EU public procurement law”

On 21 August at 11:00 Kadri Härginen will defend her doctoral thesis “Due diligence obligations of a contracting authority under the EU public procurement law” for obtaining the degree of Doctor of Philosophy (in Law).

Supervisors:
Associate Professor Carri Ginter, University of Tartu
Associate Professor Mari Ann Simovart, University of Tartu

Opponent:
Associate Professor Luke R. A. Butler, University of Nottingham (United Kingdom)

Summary
Public procurements are rightfully under constant media attention in Estonia because the public has the right to know how the rulers handle the common purse of all of us. All the more so as the amount of money spent on public procurement is very large every year. Sometimes errors in the organisation of public procurement lead ministers from their position, and recently there has been a lot of discussion about the strict recovery of euro subsidies due to mistakes made in public procurement. Jurisprudence provides examples where labour relations have been terminated due to errors of employees in complying with the rules of public procurement. In addition, employees of contracting authorities have been criminally punished for breaches of public procurement law. However, all these vital situations boil down to the question addressed in the doctoral thesis – what is a diligent contracting authority?

EU public procurement rules have been in place since 1971, so it could be assumed that this is no longer an innovative issue but a long-overdue one. However, this is not the case. European Union public procurement law does not answer this question today. The legal literature also lacks a comprehensive approach to the contracting authority's due diligence. On the contrary, legal scholars have mentioned the contracting authority’s due diligence at various incidental stages of the public procurement process. Thus, today, EU public procurement law lacks a common legal understanding of the contracting authority's due diligence as a concept. Therefore, in the course of my doctoral thesis, I analysed the judgments of the European Court of Justice dealing directly or indirectly with requirements for the diligence of the contracting authority. From their basis, I drew conclusions about the general nature, sources, and goals, as well as more precise elements of the concept of a diligent contracting authority.

I found that the contracting authority's due diligence in EU public procurement law is sector-specific organisational due diligence. It aims to ensure the functioning of the EU internal market through the implementation of the EU's public procurement principles. Thus, due diligence under EU law extends to contracting authorities as organisations, not to individuals, and is not a general obligation of human due diligence but an obligation that is activated in the context of EU public procurement law. In accordance with the objective of the contracting authority's due diligence, the actions of the contracting authority must always be motivated by the aim of always giving priority to the wider opening-up of the award of the contract to the EU internal market. Also, ensure that excluding tenderers from the public procurement process is not taken lightly. Although such a generalisation seems self-evident, the case law of the European Court of Justice provides a number of examples where contracting authorities make the same mistakes as they did 25 years ago. Since, in those examples, the rules have remained unchanged in the Directives, it must be concluded that the transfer of knowledge under procurement law is deficient. The fact that EU public procurement law does not lay down clear requirements for the diligence of the contracting authority in the directives plays a role in that.

The scope of the contracting authority's due diligence can be considered to be those situations which are not expressly regulated by the EU public procurement directives but to which the CJEU has extended the application of EU public procurement principles or to which EU public procurement principles clearly extend alongside the regulation of the directives. In this way, the contracting authority's due diligence is triggered, in particular, in borderline situations, where it is necessary to carefully analyse whether the public procurement rules apply and, if so, how to implement them independently on a discretionary basis without any instructions under the directives. The definite scope of the contracting authority's due diligence cannot be defined today. Contracting authorities need to take into account that its development is and will remain dynamic.

Examples of implementation of the contracting authority's due diligence include the conclusion of mixed contracts, whereby the simultaneous purpose of the transaction is the sale of an immovable property, but in which the state purchases services from the tenderer in the future or imposes special requirements on the future use of the immovable property. Also in a situation where the contracting authority wishes to apply exceptions or exceptional procurement procedures. The procurement of COVID-19 rapid tests by the Ministry of Education and Research can be considered one such example in the public domain, in which the debate boiled down to whether and how diligently the contracting authority should have predicted the subsequent waves of COVID-19 and the measures to prepare for them.

Defence can be also followed in Zoom: https://ut-ee.zoom.us/j/95655668746?pwd=TFU0bDJNTE5XeTUycTFSZk5qTG5Mdz09 (Meeting ID: 956 5566 8746, Passcode: 671270).