CELEX: 62003TJ0160
Language: en
Date: 2005-03-17 00:00:00
Title: Judgment of the Court of First Instance (Fifth Chamber) of 17 March 2005.#AFCon Management Consultants, Patrick Mc Mullin and Seamus O'Grady v Commission of the European Communities.#Tacis Programme - Invitation to tender - Irregularities in the tendering procedure - Action for damages.#Case T-160/03.

Case T-160/03
      AFCon Management Consultants and Others 
      v
      Commission of the European Communities
      (Tacis Programme – Invitation to tender – Irregularities in the tendering procedure – Action for damages)
      Judgment of the Court of First Instance (Fifth Chamber), 17 March 2005 
      Summary of the Judgment
      1.     Non-contractual liability – Conditions – Unlawfulness – Damage – Causal link 
      (Art. 288, second para., EC)
      2.     European Communities’ public procurement – Award of a contract as a result of an invitation to tender – Authority of the institutions
            with respect to the conduct of the tendering procedure – Conflict of interests between a tenderer and a member of the committee
            for the evaluation of the tenders – Commission’s discretion – Limits – Infringement of the principles of sound administration
            and equal treatment – Incurring of Community liability
      (Art. 288 EC)
      3.     European Communities’ public procurement – Tendering procedure – Expenses incurred by a tenderer – Right to compensation –
            None – Exception – Infringement of Community law 
      1.     Community law recognises a right to reparation where three conditions are met: the rule of law infringed must be intended
         to confer rights on individuals; the breach must be sufficiently serious; and there must be a direct causal link between the
         breach of the obligation resting on the author of the act and the damage sustained by the injured parties.
      
      (see para. 31)
      2.     In accordance with the principles of sound administration and equal treatment, the Commission must, as far as concerns public
         procurement, after the discovery of a conflict of interests between a member of the evaluation committee and one of the tenderers,
         act with due diligence and on the basis of all the relevant information when formulating and adopting its decision on the
         outcome of the procedure for the award of the tender at issue. The Commission is required to ensure at each stage of a tendering
         procedure equal treatment and, thereby, equality of opportunity for all the tenderers. 
      
      In that regard, it has some discretion as regards the measures to be taken in respect of the conduct of the procedure. However,
         where it does not investigate whether there is any collusion between one of the tenderers and a member of the evaluation committee,
         the Commission exceeds that discretion and manifestly and gravely disregards the limits on that discretion. Therefore, it
         commits an unlawful act which is liable to cause the Community to incur liability.
      
      (see paras 75, 77, 79, 93)
      3.     Economic operators must bear the economic risks inherent in their activities which, as regards a tendering procedure, include,
         in particular, the costs relating to preparation of the tender. The expenses thus incurred therefore remain the responsibility
         of the undertaking which chose to take part in the procedure, since the opportunity to compete for a contract does not involve
         any certainty as to the outcome of the procedure. It follows that the charges and expenses incurred by a tenderer in connection
         with his participation in a tendering procedure cannot in principle constitute damage which is capable of being remedied by
         an award of damages.
      
      However, Article 24 of the General Regulations for Tenders and the Award of Service Contracts financed from Phare/Tacis Funds
         cannot, without potentially undermining the principles of legal certainty and of protection of legitimate expectations, apply
         in cases where an infringement of Community law in the conduct of the tendering procedure has affected a tenderer’s chances
         of being awarded the contract. Where the tenderer’s chances have been prejudiced, he must be compensated for the loss relating
         to the costs incurred in participating in the procedure.
      
      (see paras 98, 102)

      
      
      
      
      
      
      
      
      
      
      
      
      
      
      
            
            JUDGMENT OF THE COURT OF FIRST INSTANCE (Fifth Chamber)17 March 2005(1)
         
         
               (Tacis Programme  –  Invitation to tender  –  Irregularities in the tendering procedure  –  Action for damages)
               
             In Case T-160/03,
            
            
            AFCon Management Consultants, established in Bray (Ireland),Patrick Mc Mullin,  resident in Bray,  Seamus O'Grady,  resident in Bray,represented by B. O'Connor, solicitor, and I. Carreño, lawyer, 
            
            
            applicants,
            
            v
            Commission of the European Communities, represented by J. Enegren and F. Hoffmeister, acting as Agents, with an address for service in Luxembourg, 
            
            defendant,
            
             APPLICATION for compensation for the damage allegedly suffered as a result of irregularities in the tendering procedure for
            a project financed by the Tacis programme (‘Project FDRUS 9902 – Agricultural extension services in South Russia’),
            
            
            THE COURT OF FIRST INSTANCEOF THE EUROPEAN COMMUNITIES (Fifth Chamber),
            
            
             composed of P. Lindh, President, R. García-Valdecasas and J.D. Cooke, Judges,
            
             Registrar: D. Christensen, Administrator,
            
            
            
         gives the following
         
         
         Judgment
            
               Facts
            
         
         1
            
          AFCon Management Consultants (‘AFCon’) is a consultancy company specialising in agricultural projects in countries whose economies
         are in transition. Mr Mc Mullin and Mr O’Grady are the directors, shareholders and founding members of the company (together
         with AFCon ‘the applicants’).
         
         
         
         2
            
          On 28 May 1999, the Commission launched a restrictive tender procedure within the Tacis programme for the supply of technical
         assistance services, entitled ‘Agricultural Extension Services in South Russia’ reference FDRUS 9902 (‘the tender at issue’).
         
         
         
         
         3
            
          On 29 July 1999, the evaluation committee drew up a list of ten companies from the 21 firms which had expressed interest in
         that call for tenders. The ten companies were then invited to submit a tender.
         
         
         
         4
            
          On 16 and 17 December 1999, the evaluation committee met to evaluate the eight tenders received (‘the first evaluation’).
         The committee considered the tender of the GFA – Gesellschaft für Agrarprojekte mbH (‘GFA-Agrar’) and Stoas Agri-projects
         Foundation (‘Stoas’) consortium to be the best. AFCon’s tender came in second place.
         
         
         
         5
            
          The Commission subsequently discovered that a conflict of interests existed as between a member of the evaluation committee
         and the GFA-Agrar and Stoas consortium (‘GFA’). That member, Mr A, was employed by Agriment International BV, a subsidiary
         of Stoas. The Commission ended its association with Mr A and informed him that it would no longer require his services.
         
         
         
         6
            
          Because of that conflict of interests, the Commission, on 3 March 2000, decided to cancel the first evaluation and to appoint
         a committee of new members to carry out a second evaluation. The Commission informed the tenderers of that decision by letter
         of 28 March 2000.
         
         
         
         7
            
          On 15 and 16 May 2000, the evaluation committee carried out a second tender evaluation (‘the second evaluation’). At the end
         of that evaluation, GFA’s tender was ranked first. GFA’s technical proposal scored 72.69 % (third place); its financial proposal
         was EUR 2 131 870 (first place). AFCon’s tender was ranked second with a technical proposal scoring 75.32 % (first place)
         and a financial proposal of EUR 2  499 750 (sixth place).
         
         
         
         8
            
          In August 2000, the Commission awarded the tender to GFA. It informed AFCon of that by letter of 17 August 2000.
         
         
         
         9
            
          On 9 October 2000, AFCon complained to the Commission that the tender procedure had been mismanaged. It maintained that GFA’s
         financial proposal was below the market rate. The Commission rejected that complaint on 9 November 2000. 
         
         
         
         10
            
          By letters of 18 December 2000 and 31 January 2001, AFCon alleged that GFA had infringed the tendering rules. By letter of
         28 February 2001, the Commission rejected that allegation. 
         
         
         
         11
            
          By letter of 15 March 2001, AFCon repeated that GFA’s proposal was in breach of the procedure for the award of Tacis contracts.
         The Commission did not reply to that letter.
         
         
         
         12
            
          On 15 May 2001, AFCon made a complaint to the European Ombudsman. According to that complaint:
         
         
         
          
         –
            GFA’s financial proposal was in breach of the tendering rules (first complaint);
         
         
         
         
          
         –
            having discovered a conflict of interests, the Commission failed to take the measures required by the rules governing the
               award of contracts (second complaint);
            
         
         
         
         
          
         –
            the Commission infringed the tendering rules by allowing the successful tenderer to replace the majority of its long-term
               experts by other persons within weeks of the signature of the contract (third complaint). 
            
         
         
         
         
         
         13
            
          In his decision of 22 April 2002 (Decision 834/2001/GG), the Ombudsman held that only the first complaint was well founded.
         In that regard he stated:
         ‘It is good administrative practice in tender procedures for the administration to adhere to the rules established for these
         procedures. … By allowing tenderers to include experts’ fees under reimbursable items in the present case, the Commission
         failed to comply with the rules applicable to the tender and the aim pursued by these rules. This constitutes an instance
         of maladministration.’
         
         
         
         14
            
          As regards the second and third complaints, the Ombudsman concluded that there was no maladministration on the part of the
         Commission. 
         
         
         
         15
            
          By letter of 25 May 2002, AFCon claimed that the Commission should pay it the following amounts by way of compensation for
         harm suffered as a result of not having been awarded the contract:
         
         
         
          
         –
            loss of profit:					EUR 624 937 
         
         
         
         
          
         –
            loss of ‘project profile’:			EUR 600 000 
         
         
         
         
          
         –
            loss of ‘professional development’: 		EUR 150 000.
         
         
         
         
         
         16
            
          The Commission rejected that claim by letter of 25 July 2002.
         
         
         
         17
            
          By letter of 13 September 2002, AFCon requested the Commission to send it a number of documents pertaining to the procedure
         for the award of the tender at issue. The Commission acceded to that request on 3 October 2002, other than in respect of the
         evaluation committee’s evaluation reports and minutes and competitors’ bids, which fell under the exceptions provided for,
         respectively, in the second subparagraph of Article 4(3) and Article 4(1)(b) of Regulation (EC) No 1049/2001 of the European
         Parliament and of the Council of 30 May 2001 regarding public access to European Parliament, Council and Commission documents
         (OJ 2001 L 145, p. 43).
         
         
         
         18
            
          By letter of 11 October 2002, AFCon made a confirmatory application under Regulation No 1049/2001. It requested access to
         various documents relating to the tendering procedure at issue.
         
         
         
         19
            
          By letter of 22 November 2002, the Commission granted access to certain documents and, as to the remainder, upheld its refusal
         to provide the documents requested.
         
         
         
         20
            
          At the same time, in a letter of 4 September 2002 sent to Mr Byrne, Member of the Commission, the Irish Minister of State
         for European Affairs, Mr D. Roche, expressed support for AFCon and asked the Commission to find a solution to the dispute
         with AFCon. 
         
         
         
         21
            
          By letters of 10 October and 4 November 2002, the Commission restated its position on the legality of the tender procedure
         at issue.
         
         
         
         22
            
          On 15 November 2002, Mr B. Crowley, a member of the European Parliament, put a written question (3365/02) to the Commission
         about the award of the contract at issue. Mr Patten, a member of the Commission, replied to it on 23 December 2002. Mr Crowley
         subsequently sent a letter to Mr Patten, to which the latter responded on 3 April 2003. 
         
         
         
         23
            
          By letter of 18 February 2003, Mr Roche wrote a second time to Mr Byrne in support of AFCon. By letter of 8 April 2003, Mr
         Byrne restated the Commission’s position.
         
         Procedure
         
         24
            
          By application lodged at the Court Registry on 12 May 2003, the applicants brought the present action.
         
         
         
         25
            
          Upon hearing the report of the Judge-Rapporteur, the Court (Fifth Chamber) decided to open the oral procedure and, as measures
         of organisation of procedure as provided for in Article 64 of the Rules of Procedure of the Court of First Instance, put questions
         in writing to the parties and asked the Commission to produce certain documents. The parties complied with those requests
         within the prescribed time-limits.
         
         
         
         26
            
          The parties submitted oral argument and answered the questions put by the Court at the hearing on 6 July 2004.
         
         Forms of order sought 
         
         27
            
          The applicants claim that the Court should:
         
         
         
          
         –
            order the Commission to pay damages in respect of the loss suffered as a result of the breach of the tendering procedure for
               the Tacis FDRUS 9902 project, plus compensatory interest, from the date on which the loss materialised;
            
         
         
         
         
          
         –
            order the Commission to pay interest on the damages from the date of judgment;
         
         
         
         
          
         –
            order the Commission to produce certain documents relating to the procedure for evaluating the tenders;
         
         
         
         
          
         –
            order the Commission to pay the costs.
         
         
         
         
         
         28
            
          The Commission contends that the Court should:
         
         
         
          
         –
            dismiss the application; 
         
         
         
         
          
         –
            order the applicants to pay the costs.
         
         
         
         Law 
          A – The request for measures of inquiry
         
         29
            
          The applicants have asked the Court to order the Commission, under Article 65(b) of the Rules of Procedure, to produce certain
         documents relating to the tender procedure and, if necessary, to hear witnesses.
         
         
         
         30
            
          The Court, in the context of measures of organisation of procedure, requested the Commission, inter alia, to produce information
         concerning the tenderers’ bids and the documentation relating to the first and second evaluations. Those requests coincide
         in the main with the applicants’ requests for measures of inquiry. Therefore, the Court finds that the information in the
         documents before it is sufficient for it to give judgment in the proceedings without ordering the production of further documents
         or the hearing of witnesses.
         
         
          B – The claim for compensation 
         
         31
            
          Community law recognises a right to reparation where three conditions are met: the rule of law infringed must be intended
         to confer rights on individuals; the breach must be sufficiently serious; and there must be a direct causal link between the
         breach of the obligation resting on the author of the act and the damage sustained by the injured parties (Joined Cases C-46/93
         and C-48/93 Brasserie du Pêcheur and Factortame [1996] ECR I-1029, paragraph 51; and Case C‑352/98 P Bergaderm and Goupil v Commission [2000] ECR I-5291, paragraphs 41 and 42).
         
         
         
         32
            
          It is necessary to ascertain whether the applicants have established that the various conditions were met in this instance.
         
         
          1. The unlawfulness of the Commission’s conduct 
         
         33
            
          The applicants claim, in essence, that there are three irregularities. First, GFA’s bid did not comply with the rules of the
         tender at issue. Second, the Commission took account of unlawful criteria in the evaluation. Third, the Commission did not
         take the requisite measures once it had discovered there to be a conflict of interests. 
         
         
          a) The lawfulness of GFA’s tender
          Arguments of the parties
         
         
         34
            
          The applicants submit that GFA’s bid failed to comply with the rules of the tender at issue. Those rules include:
         
         
         
          
         –
            instructions to tenderers (European Commission, SCR(E) Tacis, version of 22 June 1999), in particular point C.2.1;
         
         
         
         
          
         –
            guidelines for the preparation of the technical and financial proposal (European Commission, SCR(E) Tacis, January 1999 version)
               (‘the guidelines’), in particular, the provisions relating to the preparation of Annexes B (‘Organisation and methods’) and
               D (‘Breakdown of prices for Tacis contracts’);
            
         
         
         
         
          
         –
            terms of reference for the tender at issue (European Commission, ‘Technical assistance to economic reform in the food and
               agriculture sector, Terms of reference for a project: Russia “Agricultural extension services in South Russia – Farm extension
               project”’, of 4 June 1999).
            
         
         
         
         
         
         35
            
          In the applicants’ submission, it is clear from those rules that the financial proposal must correspond to the technical proposal
         and show the remuneration of the persons responsible for training activities in the heading attributed to that purpose.
         
         
         
         36
            
          Those rules are unambiguous. They are intended to place all tenders on an equal footing in order that a comparison may be
         made. The rules were confirmed by the Commission’s practice in a similar project which was contemporaneous with the project
         in question (FDRUS 9901).
         
         
         
         37
            
          GFA infringed those rules because:
         
         
         
          
         –
            the number of man-days given in its technical proposal is higher than the number referred to in its financial proposal;
         
         
         
         
          
         –
            in its financial proposal, GFA allocated a part of the remuneration for persons responsible for training to the heading ‘reimbursable
               expenses’, which is normally reserved for the reimbursement of costs relating to training activities ‘such as flights, per diem  for trainees, registration fees etc.’.
            
         
         
         
         
         
         38
            
          GFA thus succeeded in reducing the amount of its financial proposal. The differences between the two proposals are as follows:
         
         
         Technical Proposal 
                  
               
               Financial Proposal
                  
               
               Difference
                  
               
            2 687 man-days (EU experts)
                  
               
               2 200 man-days (EU experts)
                  
               
               (487) man-days
                  
               
            4 615 man-days (local experts)
                  
               
               2 250 man-days (local experts)
                  
               
               (2 365) man-days
                  
               
            5 300 man-days (support staff)
                  
               
               3 500 man-days (support staff)
                  
               
               (1 800) man-days
                  
               
            Total  12 602 man-days
                  
               
               7 950 man-days
                  
               
               (4 652) man-days
                  
               
             Those differences were allocated to reimbursable expenses.
         
         
         39
            
          The applicants submit that the Ombudsman, in substance, endorsed their argument when he found that the fact that the Commission
         had allowed GFA, in breach of the relevant tender rules, to include training fees as expenses within the heading restricted
         to reimbursable items constituted an instance of maladministration.
         
         
         
         40
            
          Finally, the applicants submit that their criticisms were borne out by the difficulties which the Commission encountered while
         GFA was performing the contract.
         
         
         
         41
            
          The applicants conclude from those matters that the Commission, in failing to exclude GFA on account of the irregularities,
         infringed the principles of equal treatment, of proportionality and of legitimate expectations.
         
         
         
         42
            
          The Commission contends that the way in which GFA presented its tender was not unlawful, since:
         
         
         
          
         –
            the rules on which the applicants rely are not legally binding; they do not unequivocally prescribe how experts’ fees are
               to be presented in the financial proposal;
            
         
         
         
         
          
         –
            Article 117 of the Financial Regulation of 21 December 1997 applicable to the general budget of the European Communities (OJ
               1977 L 356, p. 1), as amended by Council Regulation (EC, ECSC, Euratom) No 2548/98 of 23 November 1998 (OJ 1998 L 320, p.
               1; ‘the Financial Regulation’), and Council Regulation (Euratom, EC) No 1279/96 of 25 June 1996 concerning the provision of
               assistance to economic reform and recovery in the New Independent States and Mongolia (OJ 1996 L 165, p. 1) (Article 7 and
               Annex III) contain no specific rules on the allocation of training fees to the heading reserved for reimbursable expenses;
            
         
         
         
         
          
         –
            the Commission does not have an established practice in this regard and therefore the applicants cannot rely on an infringement
               of the principle of legitimate expectations;
            
         
         
         
         
          
         –
            since the allocation of training fees to reimbursable expenses was not specifically prohibited, GFA could perfectly well use
               that method;
            
         
         
         
         
          
         –
            GFA’s presentation of its tender did not distort any comparison of the tenders, since the evaluators were in a position to
               take into account in their comparative assessment the fact that the trainers’ fees had been treated as reimbursable expenses;
            
         
         
         
         
          
         –
            the Ombudsman’s finding is not decisive;
         
         
         
         
          
         –
            circumstances subsequent to the award of the tender, in particular the performance of the contract, are irrelevant.
         
         
         
          Findings of the Court
         
         
         43
            
          Point C.2.1 of the instructions to tenderers provides: 
         ‘Breakdown of prices should be prepared in accordance with the format of Annex D of the draft contract and prices must be
         expressed in euros. Tenders in any other currency or an incorrect presentation of the breakdown of prices may lead to the
         rejection of the tender.’
         
         
         
         44
            
          Annex D to the guidelines contains an introductory section which sets out the method to be followed in presenting the tender.
         It also includes a form consisting of a table intended for the tenderers’ data. The table contains the following four main
         headings:
         
         ‘1.
             Fees, including 
         
         
               a) Western experts
                  
               
         
         
         
               b) Local experts 
                  
               
         
         
         
               c) Support staff
                  
               
         
         
         
         2.
            Per diem
         
         
         3.
            Direct expenses 
         
         
         4.
            Reimbursable expenses’.
         
         
         
         
         45
            
          According to the guidelines:
         ‘The following notes are provided to assist tenderers in the preparation of Annex D (financial breakdown). … Where these guidelines
         are not followed, the tenderer is advised to justify deviations through an explanatory note. … 
          4. … The figures given in Annex D (for each category or individual expert) should exactly reflect the figures in the time
         allocation chart (time spent on the project for each expert) submitted as part of Annex B (summary input of staff).’
         
         
         
         46
            
          The Commission thus stated clearly and unequivocally that there was to be an ‘exact’ correspondence between the data in Annex
         B and those in Annex D, with any inconsistencies to be justified by an explanatory note.
         
         
         
         47
            
          The principle that the financial proposal and the technical proposal should tally is also mentioned in the explanatory notes
         preceding the form in Annex B to the guidelines, which state: 
         ‘Important: Above summary must be consistent with the input given in the breakdown of remuneration – Annex D.’
         
         
         
         48
            
          In order to ascertain whether GFA’s tender complied with those provisions, it must be borne in mind that, as regards the ‘training’
         section, GFA’s technical proposal (Annex A) gave the following figures:
         
         
         Table 1
         
         Input (man-days)
                  
               
               Technical assistance 
                  
               
               Training
                   Replication Dissemination
                  
               
               Total
                  
               
            EU experts 
                  
               
               2 200 
                  
               
               487
                  
               
               2 687
                  
               
            Local experts 
                  
               
               2 250 
                  
               
               2 365 
                  
               
               4 615
                  
               
            Support staff
                  
               
               3 500 
                  
               
               1 800 
                  
               
               5 300
                  
               
            Total
                  
               
               7 950
                  
               
               4 652
                  
               
               12 602
                  
               
            
         49
            
          In the financial proposal (Annex D) GFA put forward the following figures under the heading ‘A. Fees’:
         
         
         Table 2
         
             
               Input (man-days)
                  
               
               Amount EUR
                  
               
            EU experts
                  
               
               2 200
                  
               
               821 000
                  
               
            Local experts
                  
               
               2 250
                  
               
               58 750
                  
               
            Support staff
                  
               
               3 500
                  
               
               61 250
                  
               
            Total
                  
               
               7 950
                  
               
               941 000
                  
               
            
         50
            
          The number of man-days (7 950) is 4 652 lower than the figure given in the technical proposal (12 602). 
         
         
         
         51
            
          However, it is clear from the actual terms of GFA’s financial proposal that that difference arises because those 4 652 man-days
         have been treated as reimbursable expenses. 
         
         
         
         52
            
          GFA’s financial proposal restates, in a footnote and an accompanying explanatory note, the data given in the technical proposal,
         which have been set out above (Table 1). That note explains that the difference between the two proposals arises because of
         the treatment of the costs of the fees of the staff responsible for training, replication and dissemination. GFA’s financial
         proposal also contains a table giving a detailed description of all the reimbursable expenses relating to those activities.
         It is clear from that table that in total 4 652 man-days were thus included as reimbursable expenses with a total value of
         EUR 282 425. Contrary to the applicants’ contention, the difference between the financial proposal and the technical proposal
         is therefore purely formal and it does not impede an effective comparison of the various tenderers’ bids.
         
         
         
         53
            
          Furthermore, GFA’s financial proposal included, in compliance with the terms of reference, supplies to the value of EUR 500 000 for
         training and EUR 200 000 for activities relating to replication and dissemination.
         
         
         
         54
            
          Consequently, the Court must reject the complaints that the Commission acted unlawfully in failing to reject GFA’s tender
         because of the alleged disparities between the technical proposal and the financial proposal.
         
         
          b) The use of unlawful criteria in the evaluation
          Arguments of the parties
         
         
         55
            
          The applicants complain that the Commission allowed the evaluators to take account, in the second evaluation, of AFCon’s previous
         experience on Tacis projects, in breach of the applicable rules. Point 3 of Annex III to Regulation No 1279/96, and point
         3 of Annex IV to Council Regulation (EC, Euratom) No 99/2000 of 29 December 1999 concerning the provision of assistance to
         the partner States in Eastern Europe and Central Asia (OJ 2000 L 12, p. 1), provide that ‘specific experience of the tenderer
         in Tacis shall not be taken into account’ in the evaluation of tenders. By virtue of those provisions, the tender is evaluated
         solely ‘on the basis of a weighing of technical quality against price[; t]he weighing of the two criteria shall be announced
         in each invitation to tender, [and t]he technical evaluation shall be carried out according, in particular, to the following
         criteria: organisation, time schedule, methods and plan of work proposed for providing the services, the qualifications, experience,
         skills of the staff proposed for the provision of the services and the use made of local companies or experts, their integration
         into the project, and their contribution to the sustainability of the project results’.
         
         
         
         56
            
          In this instance, one of the members of the committee which conducted the second evaluation, Mr G. Rea, thought that the existing
         advisory centres established by Mr Mc Mullin and AFCon in the Tacis project FDRUS 9405 ‘Support to individually operated farms
         in Russia’, between 1996 and 1998, were not operational at the time of the interview and were not providing technical advice.
         That statement, which was incorrect, influenced the other evaluators.
         
         
         
         57
            
          Having obtained, pursuant to measures of organisation of procedure, disclosure of various documents relating to the work of
         the evaluation committee, the applicants claimed at the hearing that one of the evaluators, Ms K. Karttunen, specifically
         mentioned in her report that she had taken into account the fact that AFCon had no experience in other projects in Russia.
         
         
         
         58
            
          The Commission denies that there was any irregularity whatsoever. It acknowledges that it is required, under Annex III, point
         3, of Regulation No 1279/96, not to take into account the experience of the tenderers in other Tacis projects.
         
         
         
         59
            
          In this instance, the evaluation committee heard each tenderer in connection with its technical proposal. No general list
         of questions was prepared for that purpose; the interviews differed from one tenderer to the other. During the interview Mr
         Mc Mullin had an opportunity to rebut any statement detrimental to AFCon.
         
          Findings of the Court 
         
         
         60
            
          The complaints relating to the consideration of AFCon’s experience in earlier projects funded by the Tacis programme are not
         sufficiently established.
         
         
         
         61
            
          The documentation relating to the evaluation of the tenders, produced to the Court following measures of organisation of procedure,
         does not establish that the members of the evaluation committee included in the criteria for evaluating the tenders the earlier
         experience of the tenderers in respect of projects financed by the Tacis programme. It is clear from the documents headed
         ‘Detailed Technical Evaluation per Tenderer’ that the evaluation committee took as its basis eight objective criteria relating
         to the experts’ experience, the project’s approach and the involvement of local experts. Moreover, the evaluators’ note relating
         to the evaluation of AFCon’s tender does not contain any negative appraisal about an alleged lack of experience or difficulties
         previously encountered in the implementation of Tacis programme projects. Thus, the members of the evaluation committee noted,
         as one of the strong points of AFCon’s tender, the strength of the team leader and his experience in the region covered by
         the project. Among the weak points, the members of the evaluation committee noted, in particular, that the team leader had
         only limited Russian language skills and that, in general, the tender seemed too ambitious and, in some respects, too rigid.
         
         
         
         62
            
          As regards the arguments relating to the comments which Mr Rea is alleged to have made, it must be stated that in his final
         report he did not make any remarks at all about any difficulties which AFCon had encountered in previous projects.
         
         
         
         63
            
          Likewise, the report of the external evaluator, Ms Karttunen, to which the applicants referred at the hearing, contains no
         negative comments about AFCon’s earlier experience in Tacis programme projects. That report drew attention, in particular,
         to the experience gained in Russia by the team leader whilst stating that in the interview ‘he was not transparent regarding
         the current situation of the existing Farm Advisory Centres in the project area’.
         
         
         
         64
            
          Consequently, it is sufficient to state that the applicants have not established that the Commission relied on a negative
         assessment of AFCon’s experience in earlier Tacis-programme projects when evaluating AFCon’s tender. Therefore, the complaints
         relating to the unlawfulness of the criteria used in evaluating AFCon’s tender must be rejected.
         
         
          c) The consequences of the conflict of interests
          Arguments of the parties
         
         
         65
            
          The applicants complain that the Commission failed to draw conclusions from the conflict of interests between a member of
         the evaluation committee, Mr A, and one of the tenderers, GFA. They submit, in essence, that the Commission did not act with
         due diligence once it had discovered that there was a conflict of interests and that it should not have allowed GFA to take
         part in the next stage of the tendering procedure. 
         
         
         
         66
            
          As regards the first of those criticisms, the applicants maintain that the Commission did not use its discretion in a responsible
         manner when it refused to consider taking disciplinary action with regard to both Mr A and GFA. The Commission did not consider
         excluding GFA even though it had been informed by the Chairman of the evaluation committee of the links between GFA and one
         of the members of the evaluation committee. They are also in doubt as to whether the Commission tried to find out if GFA knew
         that Mr A was a member of the evaluation committee. Having analysed all the documentation relating to the tendering procedure,
         which was provided to them following the measures of organisation of procedure ordered by the Court, the applicants stated
         at the hearing that there was no evidence from which it could be concluded that the Commission had even asked itself whether
         disciplinary measures should be taken with regard to GFA.
         
         
         
         67
            
          The applicant’s second criticism is that the Commission failed to comply with its obligation to manage Tacis-funded projects
         properly by failing to sanction GFA and by allowing the consortium to take part in the second evaluation. The fact that Mr
         A was employed full-time by one of the members of the GFA consortium should have prompted the Commission to exclude both the
         committee member concerned and the relevant tenderer. 
         
         
         
         68
            
          The Commission contends that it acted lawfully and did not stray beyond the limits of its broad discretion.
         
         
         
         69
            
          In the absence of any evidence establishing that GFA sought to use Mr A’s presence on the evaluation committee to influence
         the procedure for the award of the contract, the Commission contends that there is no rule which would have allowed it to
         exclude or sanction GFA. Indeed, Article 114(1) of the Financial Regulation provides: 
         ‘Participation in tendering procedures shall be open on equal terms to all natural and legal persons coming within the scope
         of application of the Treaties and to all natural and legal persons in the recipient State.’ 
         
         
         
         70
            
          Therefore, GFA could easily have challenged, as a breach of Article 114(1) of the Financial Regulation, any decision to exclude
         it from the tender at issue. Furthermore, the Commission contends that by reason of the proportionality principle it can exclude
         an undertaking from a tender procedure only in exceptional circumstances.
         
         
         
         71
            
          The conflict of interests was solely attributable to the evaluator. He infringed Article 12(4) of the General Regulations
         for Tenders and the Award of Service Contracts financed from Phare/Tacis funds. He was not connected to GFA but to one of
         the firms in the consortium. Since GFA had no authority over the evaluator, the conflict of interests could not be imputed
         to GFA.
         
         
         
         72
            
          What is more, the exclusion of GFA would have unduly advantaged AFCon, in breach of the principle of equal treatment.
         
         
         
         73
            
          Having excluded Mr A from its proceedings, the evaluation committee did not select AFCon. Although the Beneficiary Representative
         for the tender at issue was in favour of recommending that AFCon be awarded the contract, the three other members were against
         such an outcome.
         
          Findings of the Court 
         
         
         74
            
          The fact that a person who helps to evaluate and select tenders for a public contract has the contract awarded to him is highly
         questionable and constitutes a chargeable offence under the criminal law of several Member States, regard being had to the
         principle of equal treatment in the award of public contracts, the concern for sound financial management of Community funds
         and the prevention of fraud (Case T‑277/97 Ismeri Europa  v Court of Auditors [1999] ECR II-1825, paragraph 112).
         
         
         
         75
            
          After the discovery of a conflict of interests between a member of the evaluation committee and one of the tenderers, the
         Commission must act with due diligence and on the basis of all the relevant information when formulating and adopting its
         decision on the outcome of the procedure for the award of the tender at issue. That obligation derives in particular from
         the principles of sound administration and equal treatment (see, by analogy, Case T‑231/97 New Europe Consulting and Brown v Commission [1999] ECR II-2403, paragraph 41). The Commission is required to ensure at each stage of a tendering procedure equal treatment
         and, thereby, equality of opportunity for all the tenderers (see, to that effect, Case C‑496/99 P Commission v CAS Succhi di Frutta [2004] ECR I‑0000, paragraph 108, and Case T‑145/98 ADT Projekt v Commission [2000] ECR II‑387, paragraph 164).
         
         
         
         76
            
          It is necessary to examine whether, in this instance, the Commission acted in accordance with that obligation. 
         
         
         
         77
            
          In that regard, where a conflict of interests between one of the tenderers and a member of the committee responsible for evaluating
         the tenders comes to light, the Commission has some discretion to determine the measures which must be taken in respect of
         the conduct of the subsequent stages of the procedure for the award of the tender. 
         
         
         
         78
            
          It is not disputed that, once it had been put on notice by the Chairman of the Evaluation Committee, the Commission did not
         investigate the links between Mr A and GFA in order to satisfy itself that GFA did not seek to influence the evaluation committee’s
         proceedings. The Commission confirmed at the hearing that there was no evidence suggesting that GFA sought to influence the
         proceedings, using one of its employees sitting on the evaluation committee as an intermediary. In response to the Court’s
         questions, the Commission none the less stated that it had taken no measures of inquiry in order to ascertain whether GFA
         and Mr A had collaborated during the tendering procedure. The Commission insisted on the fact that, in the absence of anything
         giving it grounds for suspecting there to have been fraud, there was no reason to investigate GFA’s role. 
         
         
         
         79
            
          Given the circumstances of the present case, such an assessment is manifestly incorrect. Since it had failed to investigate
         whether there was any collusion between GFA and Mr A, the Commission in fact had no grounds for ruling out, with any reasonable
         degree of certainty, the possibility that GFA had sought to influence the tendering procedure. Rather, a number of objective
         and consistent factors should have led the Commission to take particular care and to consider the possibility that there was
         collusion between GFA and Mr A. Those factors reasonably gave grounds for forming the view that the conflict of interests
         could have arisen not merely as the result of a combination of circumstances but as the result of a fraudulent intention.
         
         
         
         
         80
            
          In the first place, it is necessary to stress the seriousness of the terms in which the Chairman of the evaluation committee
         criticised the questionable nature of the first evaluation. He proposed in a note of 4 January 2000 that the evaluation should
         be cancelled and that a further evaluation should take place before a committee with a different membership. The Chairman
         of the evaluation committee had, in particular, drawn attention to the ‘highly questionable’ nature of the results of the
         first evaluation owing to the fact that Mr A was then working ‘as team leader in a Dutch Government sponsored project in Ukraine
         being implemented by Agriment International, a member of Stoas Holding Group’. 
         
         
         
         81
            
          In addition to that conflict of interests, the Chairman of the evaluation committee also pointed out that there were signs
         that Mr A had, in fact, sought to give preferential treatment to GFA to the detriment of the other tenderers. The note stated
         that ‘Mr A [had] placed the companies that the other three evaluators [had] ranked either first or second in fourth or fifth
         position’. He added that ‘[t]aking these issues together, there are significant suspicions of a “Conflict of Interest” and
         resulting preferential markings for the GFA/Stoas partnership’. 
         
         
         
         82
            
          The Chairman of the evaluation committee had also stated that GFA’s financial proposal of EUR 2.13 million ‘was significantly
         below those of the first and second companies’ and that ‘such a low offer could be interpreted as a form of dumping’. It is
         thus clear from the statements and findings of the Chairman of the evaluation committee that the questionable nature of GFA’s
         tender derived not only from the conflict of interests resulting from the presence of an employee of the consortium on the
         committee but also from the fact that its financial proposal was abnormally low.
         
         
         
         83
            
          In the second place, the circumstances were such as to give reasonable grounds for doubting that the conflict of interests
         in which Mr A found himself arose purely by chance or could be attributed exclusively to his negligence. 
         
         
         
         84
            
          To start with, Mr A had failed to tell the Commission of his activities within the Stoas Group. Thus, when he applied for
         the post of external evaluator and in the course of the evaluation committee’s subsequent work, Mr A did not disclose that
         he was carrying out managerial tasks for the Stoas Group in connection with an agricultural assistance project (see the note
         of 4 January 2000). The relevance of such information for the purposes of Mr A’s appointment as an evaluator was particularly
         obvious given that the tender FDRUS 9902 concerned agricultural assistance services showing certain similarities with those
         for which Mr A was responsible in Ukraine. 
         
         
         
         85
            
          Further, Mr A, far from merely failing to disclose his activities within the Stoas Group, expressly stated that he was not
         linked, directly or indirectly, with any of the tenderers, either individually or in their capacity as members of a consortium.
         It is evident that on 16 December 1999 Mr A had signed a declaration of impartiality, in which he stated: 
         ‘I have no direct or indirect links with any of the Tenderers, whether individuals or members of a consortium, who have replied
         to the Tender Dossier, nor with any of the sub-contractors proposed. I confirm that, should I discover during the course of
         evaluation that such a link exists, I will declare this immediately and resign from the Evaluation Committee. I understand
         that if such a link is known to me and I have neglected to declare it, the European Commission may decide to cancel the Tendering
         in question and I may be exposed to liabilities.’
         
         
         
         86
            
          Finally, the questionable nature of the foregoing matters is reinforced by the fact that, once Mr A had begun to examine GFA’s
         tender, he could not claim to be unaware that he was in a situation which was incompatible with his undertaking to be impartial.
         The tender made it clear that Stoas was one of the members of the GFA consortium. Moreover, during the evaluation interview
         in which Mr A took part, GFA was represented by, inter alia, the director of the division responsible for the Stoas Group’s
         international activities, Mr B. Although he was thus face to face with a person with a highly responsible position in the
         group which was employing him, Mr A, in breach of the terms of his declaration of impartiality set out above, failed to disclose
         his links with the group and to resign from the evaluation committee.
         
         
         
         87
            
          In the third place, particular importance must be attached to the fact that the seriousness of the situation gave reasonable
         grounds for suspecting that there might be collusion between Mr A and GFA. 
         
         
         
         88
            
          First, it is reasonable to be in doubt as to the lawfulness of GFA’s conduct. As was stated above, GFA was represented during
         the evaluation interview by the director of the division responsible for the Stoas Group’s international activities, to which
         Mr A was answerable. According to GFA’s tender, the division for which Mr B was responsible consisted of just 25 people and
         the Commission could therefore reasonably assume that Mr B knew Mr A. Those facts should have prompted the Commission to ask
         itself why Mr B did not disclose the links which he had with one of the members of the evaluation committee. 
         
         
         
         89
            
          Second, Mr A was appointed by the Commission as an external expert at the beginning of September 1999, at a time when GFA
         had not yet submitted its tender. Although Mr A had not taken part in drawing up the terms of reference, it was conceivable
         that during the two months between his appointment as external evaluator and the date of submission of tenders he had been
         in contact with representatives of the GFA consortium. On that point, the Commission acknowledged at the hearing that if such
         contacts had taken place, it would then have been obliged to exclude GFA from the procedure for the award of the tender at
         issue. The Commission did not, however, attempt to question Mr A on this point.
         
         
         
         90
            
          It follows from the foregoing that the Commission, in failing to investigate the relations between Mr A and the GFA consortium,
         made a manifest error of assessment. In infringing the principle of sound administration in that way, the Commission also
         violated the principle of equal treatment as between tenderers, which requires it to examine each tender impartially and objectively
         in the light of the requirements and general principles governing the tendering procedure, in order to ensure that all the
         tenderers are afforded the same opportunities. 
         
         
         
         91
            
          The principle of equal treatment prohibits comparable situations from being treated differently and different situations from
         being treated alike, unless such treatment is objectively justified. In this instance, there were serious doubts as to the
         lawfulness of GFA’s tender. As long as those doubts subsisted, the consortium’s situation was different from that of all the
         other tenderers. By failing to open an inquiry aimed at putting an end to that situation, the Commission treated GFA in the
         same way as all the other tenderers, even though such treatment was not objectively justified. In infringing the principle
         of equal treatment in that way, the Commission violated a rule of law whose purpose is to confer rights on individuals.
         
         
         
         92
            
          However, since it has been established that the Commission failed to act with due diligence to take the steps needed to continue
         with the tendering procedure, the legality of the decision not to exclude GFA from the remainder of the procedure cannot be
         assessed. Whether the decision is lawful is directly dependent on the result of the inquiry which the Commission should have
         undertaken in order to satisfy itself that there was no collusion. Since the factual aspects of the case-file do not support
         a finding of such collusion, the Court must reject the complaints by which the applicants seek to show that the Commission
         should have excluded GFA from the tendering procedure.
         
         
         
         93
            
          As regards whether the illegality found is such as to cause the Community to incur liability, it is necessary to bear in mind
         that the decisive test for finding that a breach of Community law is sufficiently serious is whether the Community institution
         concerned manifestly and gravely disregarded the limits on its discretion (see Brasserie du Pêcheur and Factortame, cited above, paragraph 55, and Bergaderm and Goupil v Commission, cited above, paragraph 43). The Court therefore holds that, on account of the abovementioned circumstances of the conflict
         of interests and of the risk of fraud which it entails, the Commission’s omission is of a manifest and serious nature and
         is thus such as to cause the Community to incur liability.
         
         
          2. Damage and the causal connection
         
         94
            
          The applicants point to a number of heads of damage, namely: 
         
         
         
          
         –
            loss sustained in the tender procedure;
         
         
         
         
          
         –
            loss of profit;
         
         
         
         
          
         –
            loss of ‘profile’;
         
         
         
         
          
         –
            harm to AFCon’s reputation and that of its directors, Mr Mc Mullin and Mr O’Grady.
         
         
         
         
          a) Compensation for the harm corresponding to the losses sustained in the tender procedure
          Arguments of the parties
         
         
         95
            
          The applicants claim compensation for damage corresponding to the losses sustained as a result of their taking part in the
         tender procedure. This entails the costs which AFCon incurred to no effect when it submitted its tender and the costs relating
         to the complaints made to the Commission and the Ombudsman. Those losses consist of the remuneration of the staff employed
         in developing the project and of all the travel and subsistence expenses incurred as a consequence. On the basis of the unit
         costs indicated in AFCon’s financial proposal, the applicants calculate that damage at EUR 82 570.
         
         
         
         96
            
          The Commission challenges those claims. It contends that, if AFCon had been awarded the contract, the costs reimbursement
         of which is sought would still have necessarily been incurred. Consequently, the Commission cannot be liable for such losses.
         
          Findings of the Court
         
         
         97
            
          A distinction must be drawn between the loss represented by the costs and expenses incurred, on the one hand, in taking part
         in the tender procedure and, on the other, in challenging the legality of that procedure. 
         
         
         – Costs relating to the submission of AFCon’s tender
         
         
         98
            
          It must be borne in mind that economic operators must bear the economic risks inherent in their activities, regard being had
         to the circumstances of each particular case. As regards a tendering procedure, those economic risks include, in particular,
         the costs relating to preparation of the tender. The expenses thus incurred therefore remain the responsibility of the undertaking
         which chose to take part in the procedure, since the opportunity to compete for a contract does not involve any certainty
         as to the outcome of the procedure. In accordance with that principle, Article 24 of the General Regulations for Tenders and
         the Award of Service Contracts financed from Phare/Tacis Funds provides that in the event of closure or annulment of a tendering
         procedure, the tenderers are not entitled to compensation. It follows that the charges and expenses incurred by a tenderer
         in connection with his participation in a tendering procedure cannot in principle constitute damage which is capable of being
         remedied by an award of damages. However, the provision in question cannot, without potentially undermining the principles
         of legal certainty and of protection of legitimate expectations, apply in cases where an infringement of Community law in
         the conduct of the tendering procedure has affected a tenderer’s chances of being awarded the contract (Case T‑203/96 Embassy Limousines & Services v Parliament [1998] ECR II‑4239, paragraphs 75 and 97, and Case T‑13/96 TEAM v Commission [1998] ECR II‑4073, paragraphs 70 to 72).
         
         
         
         99
            
          In this instance, the applicants have established that there was a breach of Community law in the way the tendering procedure
         was conducted. That breach fundamentally undermined the tendering procedure and affected AFCon’s chances of securing the tender
         at issue.
         
         
         
         100
            
          If the Commission had conducted an inquiry into the links between GFA and Mr A, it is possible that it would have concluded
         that there was collusion such as to warrant the exclusion of GFA from the remainder of the tendering procedure. In that regard,
         it is noteworthy that the Commission actually acknowledged, at the hearing, that if an inquiry had produced such a result,
         it would have then been obliged to penalise GFA by excluding it from the procedure. 
         
         
         
         101
            
          In taking the decision to proceed with the tendering procedure without holding an inquiry, the Commission evaluated GFA’s
         tender and awarded the contract to it even though there were a number of signs all of which suggested that there might have
         been collusion with a member of the evaluation committee. In acting in that way and failing to satisfy itself that GFA’s participation
         entailed no irregularities, the Commission allowed GFA to remain in contention and accordingly undermined AFCon’s chances
         of being awarded the contract.
         
         
         
         102
            
          It is true that any tenderer who participates in a tendering procedure must, as a general rule, accept the risk that he will
         remain liable for the costs associated with submission of his tender in the event of the contract being awarded to one of
         his competitors. However, that risk is accepted on the presumption inherent in any call for tenders that the Commission will
         act impartially in accordance with the principles set out at paragraph 90 above in order to ensure equal treatment as between
         the tenderers. By allowing GFA to take part in spite of the signs mentioned above and by failing to open an inquiry, the Commission
         disregarded that presumption and directly prejudiced AFCon’s chances. Consequently, AFCon must be compensated for the loss
         relating to the costs incurred in participating in the procedure.
         
         
         
         103
            
          As regards quantum, the applicants assess their loss at EUR 31 070: in respect of costs incurred in a reconnaissance trip
         to south Russia (EUR 8 800), the time and costs entailed in preparing the tender (EUR 14 950) as well travel costs to Brussels
         in order to attend the two evaluation interviews (EUR 7 320). Since that estimate is not excessive, the loss sustained by
         AFCon in respect of costs relating to submission of its tender must be set at EUR 31 070.
         
         
         – Costs incurred in challenging the legality of the tendering procedure
         
         
         104
            
          It must be held that this loss is present, real and certain and flows directly from the unlawfulness of the conduct for which
         the Commission is criticised. The applicants have maintained that this head of damages amounts to EUR 51 500, an amount made
         up of the following elements:
         
         
         
          
         –
            resources allocated to the various complaints and proceedings other than this action instigated by AFCon following the award
               of the tender at issue to GFA (EUR 26 500);
            
         
         
         
         
          
         –
            expenses for travel and meetings in Russia, Ireland and Belgium with contacts, politicians and lawyers (EUR 25 000).
         
         
         
         
         
         105
            
          In relation to the expenses connected with travelling, meetings and lawyers, the applicants have adduced neither any material
         allowing the Court to verify that those expenses constitute loss for which reparation may be granted nor any evidence capable
         of substantiating their estimate. In the absence of proof, these expenses therefore cannot be taken into account when quantifying
         the loss sustained. 
         
         
         
         106
            
          There are two aspects to the estimate of the resources employed in the various complaints AFCon made to the Commission and
         the Ombudsman. 
         
         
         
         107
            
          The first concerns the number of fee days which AFCon spent defending its interests in order to challenge the legality of
         the tendering procedure. For the period between AFCon being notified of the award of the contract on 17 August 2000 and the
         final occasion on which Irish Minister of State for European Affairs contacted a member of the Commission to express support
         for AFCon in February 2003 that number is calculated at 28 fee-days. The daily rate of fees is set at EUR 500 by reference
         to the rate applied by AFCon in its financial proposal. That estimate does not appear excessive. Consequently, the loss sustained
         by AFCon and attributable to the time thus spent in defending its interests must be set at EUR 14 000.
         
         
         
         108
            
          The second aspect concerns research costs amounting to EUR 12 500. However, the applicants have not produced any material
         showing exactly what those costs covered or any documentation substantiating the amount claimed. Therefore, the claim in respect
         of the research allegedly carried out cannot be allowed.
         
         
         
         109
            
          Consequently, the Commission must be ordered to pay AFCon EUR 14 000 as compensation for the loss sustained on account of
         costs incurred by AFCon in defending its interests.
         
         
          b) Compensation for loss of profit
          Arguments of the parties
         
         
         110
            
          As loss of profit, the applicants claim 25% of the value of AFCon’s financial proposal, EUR 741 591. That amount corresponds
         to the profit margin which AFCon would have obtained if the contract had been awarded to it.
         
         
         
         111
            
          The Commission reserves its position on this calculation in the absence of any supporting evidence from AFCon.
         
          Findings of the Court 
         
         
         112
            
          The damage claimed in respect of loss of profit presupposes that AFCon was entitled to be awarded the contract. Even if the
         Commission had investigated the links between Mr A and GFA and had concluded that there was collusion such as to warrant GFA’s
         exclusion from the procedure, AFCon would not have been certain of securing the contract. 
         
         
         
         113
            
          The contracting authority is not bound by the evaluation committee’s proposal but has a broad discretion in assessing the
         factors to be taken into account for the purpose of deciding to award a contract (TEAM v Commission, cited above, paragraph 76). It is true that the applicants have cited in this regard the Court of Auditors’ Special Report
         No 16/2000 on tendering procedures for service contracts under the Phare and Tacis programmes, together with the Commission’s
         responses (OJ 2000 C 350, p. 1), from which it appears that out of 120 contracts entered into under those programmes the Commission
         followed the evaluation committee’s recommendation on 117 occasions. However, it cannot be concluded from those statistics
         that in this case the contract would definitely have been awarded to AFCon if GFA had been excluded from the procedure. 
         
         
         
         114
            
          Therefore, the damage represented by AFCon’s loss of profit is not real and certain but conjectural. Therefore it cannot be
         the subject of compensation.
         
         
          c) Compensation for loss of ‘profile’
          Arguments of the parties
         
         
         115
            
          The applicants claim that the award of the contract in question would have permitted AFCon to take part in other calls for
         tenders. After the tender procedure at issue, AFCon’s business began to collapse. The award of the tender at issue to GFA
         harmed both AFCon’s reputation and its business.
         
         
         
         116
            
          AFCon was automatically excluded from tendering in subsequent calls for tenders. From 2002, new rules on eligibility prevented
         AFCon from tendering, since the rules required tenderers to have an annual turnover and experience which AFCon no longer had.
         
         
         
         117
            
          The applicants provisionally estimate their loss of ‘profile’ at EUR 600 000. 
         
         
         
         118
            
          The Commission disputes those assertions, which it contends are not substantiated.
         
          Findings of the Court
         
         
         119
            
          The harm in respect of which reparation is sought is founded on the contention that the award of the tender at issue to GFA
         subsequently brought about a reduction in AFCon’s activity to the point that it was, de facto, excluded from tendering for projects comparable to the one at issue in this case. That contention is not substantiated.
         
         
         
         
         120
            
          Consequently, the Commission cannot incur liability for that head of damage.
         
         
          d) Compensation for the harm to AFCon’s reputation and that of its directors
          Arguments of the parties
         
         
         121
            
          The applicants maintain that AFCon’s reputation was harmed by the fact of not having been awarded the contract and by the
         unlawful manner in which the tendering procedure was conducted.
         
         
         
         122
            
          The Commission discredited AFCon’s technical and professional expertise. Its decision not to award the contract to AFCon has
         had wide-reaching repercussions, since, having been excluded from 27 tender procedures, AFCon has taken the decision not to
         tender for Phare and Tacis projects any more.
         
         
         
         123
            
          The applicants submit that those failures coincide with AFCon’s complaints in relation to the FDRUS 9902 project. They state
         that they have evidence showing that AFCon has been ‘blacklisted’. This head of damage is estimated at EUR 600 000 euros.
         
         
         
         124
            
          The applicants maintain that the harm to AFCon’s reputation also affects Mr Mc Mullin’s reputation and that of Mr O’Grady.
         They estimate this head of damage at EUR 75 000 per person.
         
         
         
         125
            
          The Commission submits that the applicants’ claims are not substantiated. Any number of reasons other than the fact that GFA
         was awarded the tender at issue can explain AFCon’s lack of success. It denies that a ‘blacklist’ exists. It also denies that
         it has caused any harm to Mr Mc Mullin’s reputation or to that of Mr O’Grady.
         
          Findings of the Court 
         
         
         126
            
          It must be stated that the applicants have not proved that a blacklist exists or that any comments or practices detrimental
         to AFCon’s reputation may be attributed to the Commission. Therefore, the harm alleged cannot be regarded as present, real
         and certain.
         
         
         
         127
            
          The claims relating to the harm which was allegedly caused to the reputations of Mr Mc Mullin and Mr O’Grady must be rejected
         on the same grounds.
         
         
          e) Interest
          Arguments of the parties
         
         
         128
            
          The applicants claim that the Court should increase the damages awarded by compensatory interest at a rate of 8% per annum,
         the rate currently applying in Ireland.
         
         
         
         129
            
          The applicants also claim that the Commission should be ordered to pay default interest, at the same rate, from the date of
         judgment in this action.
         
          Findings of the Court 
         
         
         130
            
          As regards the calculation of compensatory interest, such interest should start to run from the first day of the month following
         the month in which AFCon last took steps prior to commencing proceedings. Since that was during February 2003, the starting
         point must be fixed at 1 March 2003.
         
         
         
         131
            
          It is clear from the annexes to the application that, in their assessment of the harm they claim to have suffered, the applicants
         did not ask for compound interest. Therefore, in order to establish the amount which the Commission is to pay, simple interest
         must be applied.
         
         
         
         132
            
          The rate of compensatory interest must be calculated on the basis of the rate fixed by the European Central Bank for its principal
         refinancing operations, in force during the period concerned, increased by two percentage points, namely an annual rate of
         4%. As at the date of delivery of this judgment, the Commission’s debt to AFCon amounts to EUR 48 605, including interest.
         
         
         
         133
            
          To that sum must be added default interest from delivery of this judgment until full payment. The rate of default interest
         to be applied is calculated on the basis of the rate fixed by the European Central Bank for its principal refinancing operations,
         in force during the period concerned, increased by two percentage points. The amount of interest is to be calculated on the
         basis of compound interest.
         
         
         Costs
         134
            
          Under Article 87(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been
         applied for in the other party’s pleadings. Since the Commission has been unsuccessful, it must be ordered to pay the costs
         in accordance with the form of order sought by the applicants.
         
         
         On those grounds,
         
         
         
            
            THE COURT OF FIRST INSTANCE (Fifth Chamber)
         
         
          hereby:
         
            
            
             
               1.
                  Orders the Commission to pay AFCon the sum of EUR 48 605, together with interest thereon from delivery of this judgment until
                     full payment. The rate of interest to be applied is to be calculated on the basis of the European Central Bank’s rate for
                     its main refinancing operations, in force during the period concerned, plus two percentage points. The amount of interest
                     is to be calculated on the basis of compound interest;
                  
               
            
            
            
             
               2.
                  Dismisses the application as to the remainder;
               
            
            
            
             
               3.
                  Orders the Commission to pay the costs.
               
            
            
                  Lindh
               
               
                  García-Valdecasas
               
               
                  Cooke
               
            
                  
               
               
                  
               
               
                  
               
            
                  
               
               
                  
               
               
                  
               
            
                  
               
               
                  
               
               
                  
               
            
                  
               
               
                  
               
               
                  
               
            
            
            
            
            
            
            
            
         
         
          Delivered in open court in Luxembourg on 17 March 2005.
         
         
         
         
                  H. Jung
               
               
                  P. Lindh
               
            
         
         
         
                  Registrar
               
               
                  President
               
            
         
            Table of contents
         
         
                  Facts
                     
               
            
                  Procedure
                     
               
            
                  Forms of order sought
                     
               
            
                  Law
                     
               
            
                      
                        A –  The request for measures of inquiry
                     
               
            
                      
                        B –  The claim for compensation
                     
               
            
                          
                        1.  The unlawfulness of the Commission’s conduct
                     
               
            
                              
                        a)  The lawfulness of GFA’s tender
                     
               
            
                                  
                        Arguments of the parties
                     
               
            
                                  
                        Findings of the Court
                     
               
            
                              
                        b)  The use of unlawful criteria in the evaluation
                     
               
            
                                  
                        Arguments of the parties
                     
               
            
                                  
                        Findings of the Court
                     
               
            
                              
                        c)  The consequences of the conflict of interests
                     
               
            
                                  
                        Arguments of the parties
                     
               
            
                                  
                        Findings of the Court
                     
               
            
                          
                        2.  Damage and the causal connection
                     
               
            
                              
                        a)  Compensation for the harm corresponding to the losses sustained in the tender procedure
                     
               
            
                                  
                        Arguments of the parties
                     
               
            
                                  
                        Findings of the Court
                     
               
            
                                      
                        –  Costs relating to the submission of AFCon’s tender
                     
               
            
                                      
                        –  Costs incurred in challenging the legality of the tendering procedure
                     
               
            
                              
                        b)  Compensation for loss of profit
                     
               
            
                                  
                        Arguments of the parties
                     
               
            
                                  
                        Findings of the Court
                     
               
            
                              
                        c)  Compensation for loss of ‘profile’
                     
               
            
                                  
                        Arguments of the parties
                     
               
            
                                  
                        Findings of the Court
                     
               
            
                              
                        d)  Compensation for the harm to AFCon’s reputation and that of its directors
                     
               
            
                                  
                        Arguments of the parties
                     
               
            
                                  
                        Findings of the Court
                     
               
            
                              
                        e)  Interest
                     
               
            
                                  
                        Arguments of the parties
                     
               
            
                                  
                        Findings of the Court
                     
               
            
                  Costs
                     
               
            
      
          1 –
            
            Language of the case: English.