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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