Public procurement law: a company spun-off from another may rely on references
A spin-off tradesperson business may, under certain circumstances, refer to previous references when submitting tenders. The Appellate Court of the City of Basel found the Building and Transport Department’s practice to be too strict and reprimanded it. However, the details of the spin-off should be fully disclosed to the Authority. According to the judges, all relevant documents must be submitted when the bid is submitted. Moreover, it was irrelevant whether the spin-off took place on the basis of the Mergers Act or by means of a transfer of assets.
Balex represented a trading firm that had emerged from a spin-off and referred to previous references in a public tender. The court compared the case with a hive-off, which under certain circumstances may invoke the credentials of the bankrupt company. In the specific case, the court criticised the fact that the trading firm had not provided any detailed information of the spin-off in the context of the submission, but had merely referred to the spin-off in a general manner in its documents. The judges held the view that, bearing in mind the principle of equal treatment and the peculiarities of the Submission Act, the Authority would not be obliged to make enquiries in such a situation.