German jurisprudence: The mere suspicion of non-compliance with performance obligations is not sufficient for exclusion from the award procedure

Facts of the case

The contracting authority conducted an EU-wide competitive dialogue for a project related to a quantum computing initiative.

As part of the award procedure, it was stated as a condition for the performance of the contract, that applicant companies and their employees must ensure that all legal obligations applicable to them, in particular the legal requirements of export control law and with regard to ‘dual-use’, are complied with (par. 128 sec. 1 of the German Competition Act (GWB); Art. 18 sec. 2 Directive 2014/24/EU).

This included, for example, trade restrictions for dual-use goods in connection with Regulation No. 833/2014/EU concerning restrictive measures in view of Russia's actions destabilising the situation in Ukraine from 23/02/2024. The primary reason for this was to safeguard the security interests of the contracting authority by preventing the transfer of security-sensitive technologies to Russia.

One applicant was excluded from participating in the award procedure. In the opinion of the contracting authority, it had emerged that there were ‘export control concerns’ of such importance that the contract could not be awarded under any circumstances. The reasons for this were not disclosed (not even to the procurement tribunal) with reference to confidentiality protection.
The contracting authority also referred to a freely accessible internet search that it had carried out. In his opinion, this proved in particular that the applicant had worked closely with Russian organisations until Russia's invasion of Ukraine and was still currently employing Russian citizens. Therefore, the dual-use requirements could not be complied with when executing the contract. The applicant objected to this, in particular on the grounds that there were no export law concerns its company.

Decision of the 1st procurement tribunal of the German Bundeskartellamt (Federal Cartel Authority)

The application for review was successful. The exclusion due to deviation from the tender documents pursuant to par. 57 para. 1 no. 4 German Public Procurement Ordinance (VgV) (Article 56 Directive 2014/24/EU) due to non-compliance with the performance conditions was unlawful.

The intended performance conditions were permissible in principle. 

However, in order for a applicant to be excluded, the contracting authority, which is obliged to provide evidence and proof in this respect, must prove that it has the necessary certain knowledge of non-compliance with the special conditions for the performance of the contract. It would therefore have been necessary to prove that the applicant would export knowledge gained during the execution of the contract or already in the course of the award procedure to Russian organisations. However, non-compliance with the special conditions for the performance of the contract was not proven by the contracting authority to the required extent:

Concrete, verifiable facts are required to prove this, which allow conclusions to be drawn about the intended future non-compliance with obligations entered into with the submission of the offer.

The requirements for proving the grounds for exclusion are comparable to the general requirements for proving grounds for exclusion under par. 124 GWB (Art. 57 sec. 4 Directive 2014/24/EU).

Full proof is required, according to which in principle the full conviction in the sense of personal certainty of a specific fact is deemed to be true, which in itself overcomes possible doubts. Accordingly, the evidence can be proven, for example, by supporting documents, written documents or other objective evidence from which the facts for the future non-compliance with the conditions of fulfilment can be derived. The contracting authority may not base its decision on assertions ‘in the blue’ or suspicious circumstances.

Exclusion from the award procedure can therefore only be considered if there is reliable evidence about the deviation from the requirements pursuant to par. 128 (2) GWB.