On May 29, 2024, the Higher Regional Court of Düsseldorf ruled in its decision (Ref.: Verg 35/23) that evaluation systems that assign zero points to the worst bid across the board — regardless of the actual qualitative gap to the competitors — violate the principle of economic efficiency and equal treatment.
Our video discussing the judgment:
The facts of the case
In the underlying procedure, Autobahn GmbH des Bundes put planning services for three bridge structures out to tender. The evaluation provided for a weighting of 40 % price and 60 % quality (project-specific solution approach).
The formula defined for the quality criterion was particularly controversial: the bidder with the highest score was to receive the full 5 points, while the bidder with the lowest score was to automatically receive 0 points. As there were ultimately only two bids eligible for evaluation, this meant that the applicant’s bid, which was slightly weaker in terms of quality (but lower in price), was left completely empty-handed in the performance criterion. Despite having the best price, it had no chance of being awarded the contract due to the “zero-point rating” in terms of quality.
Key point of the decision
The OLG Düsseldorf clarified that such an “all-or-nothing principle” exceeds the client’s broad scope of judgment. A key point of criticism is the violation of the principle of self-binding. By automatically awarding zero points to the lowest-rated tender, the previously announced weighting of the criteria — in this case 60% for quality — is effectively undermined and changed to the disadvantage of the bidder. This leads to an unequal evaluation, as the system no longer realistically reflects performance. One bid is overvalued while the other is undervalued, even if both could be very close in terms of quality.
The OLG Düsseldorf clarified that such an “all-or-nothing principle” exceeds the client’s broad scope of judgment. A key point of criticism is the violation of the principle of self-binding. By automatically awarding zero points to the lowest-rated tender, the previously announced weighting of the criteria — in this case 60% for quality — is effectively undermined and changed to the disadvantage of the bidder. This leads to an unequal evaluation, as the system no longer realistically reflects performance. One bid is overvalued while the other is undervalued, even if both could be very close in terms of quality.
The number of bidders is irrelevant. This illegality applies not only in the case of two bidders, but generally whenever the evaluation system ignores the actual points difference between the bids and penalizes the worst bid with zero points regardless of its relative quality. Despite this decision, the admissibility of zero points remains under certain conditions. The court emphasized that zero-point scores are not inadmissible per se. However, they must be linked to an objective standard, as is usual in price evaluation, for example, where only double the lowest price leads to zero points, instead of merely being based on the ranking of the bidders.
Tips for public clients
- Check interpolation: Make sure your scoring methodology reflects the actual performance gap. A linear gap between first and last place without looking at the points difference is risky.
- Set fixed reference points: Define a factual anchor point for the award of zero points (e.g. minimum requirements or a fictitious comparative offer) instead of penalizing the worst bidder in the field across the board.
- Sharpen documentation: Justify qualitative differences in detail in order to be able to demonstrate that the ranking is essentially based on factual considerations, even in the event of methodological errors in the system.
Tips for bidders and funding recipients
- Report the methodology at an early stage: If you recognize an “all-or-nothing system” in the tender documents that distorts competition, complain about this at an early stage in order to protect your rights.
- Be careful with the immediate appeal: In the event of court proceedings, make absolutely sure to explicitly apply for an extension of the prohibition on surcharging. A mere attack on the decision is not sufficient to prevent the award during the proceedings.
- Quality instead of standard: Don’t rely on a low price alone. Use the concepts for individual, project-specific solutions to avoid falling into the “zero-point zone” in the first place.
