LEADELL Pilv achieved successful results in court proceeding related to disregarding of public procurement
Attorney-at-law Epp Lumiste of the LEADELL Pilv Law Office successfully represented a client in Tartu Administrative Court. Initially the client (provider of catering services) submitted an appeal to the Public Procurement Appeals Committee (PPAC) requesting to detect that a contract for the free use of canteen premises of a school located in Tartu was void in the part where the Tartu City Government ordered catering services from a competitor of the appellant while the city government failed to conclude the contract in accordance with the requirements of the Public Procurement Act.
With the decision of PPAC, the appeal of the LEADELL Pilv client was satisfied and it was ascertained that the contract concluded between the Tartu City Government and the competitor was void. At the same time, considering the remarkable public interest that can be damaged by the void contract, PPAC shortened the validation of the contract for the free use of school canteen premises to two years, as from entering into force. Thus PPAC shortened the term of the contract by 3 years.
Tartu city appealed the decision of PPAC to the Tartu Administrative Court but on 13 October 2016 the court refused to satisfy the appeal and confirmed that the term of the contract that had not been concluded in accordance with the rules provided for in the Public Procurement Act was subject to shortened.
The verdict has been clearly commented by PPAC stating that regardless of labelling of the process as free use of premises, it is necessary to proceed from the actual content of the contract. In a case of mixed contracts (for example, free use of premises together with ordering of services), it is necessary to proceed from the main aim of the contract. If the contract is mainly related to the provision of services, the procurer is subject to organise a public procurement. If the main goal is the free use of premises, then it is allowed to proceed from the regulation for disposition of city property.
Although the decision of the administrative court as well as the decision of PPAC have entered into force, the Tartu City Government has not annulled other similar contracts at its own initiative. Therefore the client of the LEADELL Pilv Law Office was forced to turn to the PPAC once again. On 19 December 2016 the PPAC satisfied the submitted appeals and shortened the terms of the concluded contracts by 3 years.