Swiss Supreme Court Tightens Rules For State Providers In Public Procurement Procedures

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Rihm Attorneys at law is a Swiss law practice with an international outlook and counseling focus around all aspects of entrepreneurship. For more than 30 years, the firm has advised and represented companies and entrepreneurs in complex transactions and restructurings, including technology transfer as well as in state court, arbitration and insolvency proceedings including mediation proceedings. Based in the centre of Zurich nearby Paradeplatz, Rihm Attorneys at law can draw upon a well-established global network of correspondent law firms in all major business centers. Through one of its partners, Prof. Dr. Karl Pilny, the firm has recently acquired a longstanding Asian practise. Our working languages are German, English, French, Italian, Japanese, Turkish, Serbo-Croatian and Albanian. According to Chambers, Best Lawyers and Who's Who Legal, Rihm Attorneys at law is leading in the fields of M&A, insolvency and employment & compensation benefits laws.
In January 2015, the Swiss Federal Communications Office (Bakom) invited for a public tender offer for the analysis of Swiss National Television's online offer.
Switzerland Antitrust/Competition Law
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In January 2015, the Swiss Federal Communications Office (Bakom) invited for a public tender offer for the analysis of Swiss National Television's online offer. Whilst the University of Zurich and Publicom AG, a private consultancy in Zürich, had each lodged an offer, Bakom granted the University of Zurich the analysis project as it had allegedly offered better terms and conditions. Publicom AG filed a complaint with the Swiss Federal Administrative Court (SFAC) and argued that the university's offer was was based on an non-acceptable cross-subsidisation by taxpayers. SFAC approved the complaint and rejected the matter back to the Bakom in 2016, which has now to examine anew whether the University of Zurich must be excluded from the public tender procedure because of alleged distorted competition.

"The Swiss Federal Supreme Court found sufficient evidence that the university's offer was based on cross-subsidisation, since the costs for its project manager were not included in the offer price."

The Swiss Federal Supreme Court shared SFAC's view in these days and rejected an appeal by the Federal Department of Environment, Transport, Energy and Communications (Uvek) against the decision rendered by SFAC, saying that any state supplier must comply with the constitutional principle of fair competition. This is the result of an interpretation of the Federal Law on Public Procurement, says the Swiss Federal Supreme Court, and thus contradicts Uvek's view that the law in question does not address this topic explicity. According to the Swiss Federal Supreme Court, an infringement of competition neutrality may be given if the offer of the state-owned supplier is based on a non-permitted cross-subsidization.

"Any state supplier must comply with the constitutional principle of fair competition."

In the specific case, the Swiss Federal Supreme Court found sufficient evidence that the University of Zurich's offer was based on cross-subsidisation, since the costs for the university project manager were not included in the offer price. Bakom will now have to do its homework, examine the university's offer again and, depending on the outcome of the review, must award the public contract to a competitor.

The decision of Switzerland's highest court will impact public tender procedures of Bakom and other public procurement agencies as the Swiss Federal Supreme Court announced to look more closely at state providers in the future if there were concrete concerns about competition neutrality. In other words, public procurement authorities will require governmental suppliers to give concrete evidence that there was no unacceptable cross-subsidization. If an infringement competition neutrality has been established, the public procurement authority has only limited discretion in not excluding the state supplier from the public procurement proceedings according to the Swiss Federal Supreme Court.

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Swiss Supreme Court Tightens Rules For State Providers In Public Procurement Procedures

Switzerland Antitrust/Competition Law
Contributor
Rihm Attorneys logo
Rihm Attorneys at law is a Swiss law practice with an international outlook and counseling focus around all aspects of entrepreneurship. For more than 30 years, the firm has advised and represented companies and entrepreneurs in complex transactions and restructurings, including technology transfer as well as in state court, arbitration and insolvency proceedings including mediation proceedings. Based in the centre of Zurich nearby Paradeplatz, Rihm Attorneys at law can draw upon a well-established global network of correspondent law firms in all major business centers. Through one of its partners, Prof. Dr. Karl Pilny, the firm has recently acquired a longstanding Asian practise. Our working languages are German, English, French, Italian, Japanese, Turkish, Serbo-Croatian and Albanian. According to Chambers, Best Lawyers and Who's Who Legal, Rihm Attorneys at law is leading in the fields of M&A, insolvency and employment & compensation benefits laws.
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