What is the significance of the participant’s acceptance of the competition documentation?

I was prompted to take up this issue by a hearing before an administrative court, in which I had the opportunity to participate as a representative of the complainant – an applicant applying for funding under one of the programmes financed, for a change, from national funds and implemented by the National Centre for Research and Development. One of many arguments presented during the hearing was that the rules of procedure on the basis of which the competition procedure was conducted were flawed (it was a situation in which the rules of procedure did not provide for removing extreme discrepancies in assessments of individual experts, and also did not take into account the need to justify the assessment carried out within the framework of the so-called panel of experts).

After the hearing was closed, in the oral reasons for the decision, the court presented the following view. Namely, in the court’s opinion, the allegations raised against the provisions of the rules of conducting a competition cannot be effective, if the applicant himself accepted its content earlier, when deciding to enter the competition.

I consider the above view to be flawed and detrimental from the point of view of the effectiveness of judicial-administrative control of project assessment. The problem with the control of the legality of the evaluations of projects financed from the European funds is that the vast majority of normative patterns of control of the legality of these evaluations are found in the acts of the so-called implementation system, including, among others, the rules of conducting the competition, instructions for filling in the applications, guidelines or guides to the criteria. The situation is similar in the case of national funding systems, where also part of the regulations concerning the way the competition is run is regulated at the level of such acts. Without wishing to elaborate on the issue of the binding force of such provisions and deriving rights and obligations for applicants from them, I would like to refer in this respect to the judgment of the Constitutional Tribunal of 11.12.2011, ref. no. P 1/11, the recent judgment of the Constitutional Tribunal SK 50/13 and extensive literature on the subject, which has already been cited on this blog on numerous occasions.

In this post, however, I would like to dispel the view according to which acceptance of the provisions of the competition rules (or other competition documentation) causes its content to escape review of its legality by an administrative court. This view is presented in the jurisprudence (including the most recent) of administrative courts. As an example, one can cite e.g. the judgement of the WSA in Wrocław of 8.5.2014, ref. no. III SA/Wr208/14 – which points out that the Managing Authority has been given the authority to define a specific procedure for the assessment of projects applying for funding. This procedure is of a competition nature, the rules of which are specified in the regulations and repeated in the announcement of the competition. And, most importantly, the rules of the competition are the same for everyone and cannot be altered to suit the needs of individual beneficiaries, and everyone, by entering the competition, agrees to those rules. For this reason alone – the applicant’s questioning of the rules of the competition – in which she took part – is unjustified.
The above view, which is also presented in other decisions of administrative courts (e.g. the judgment of the WSA in Warsaw of 10.5.2013, V SA/Wa954/13), is supported by an older view of the NSA (judgment of 2.3.2011, ref. II GSK 177/11), where it was indicated that the acts issued by the managing institution concerning the assessments and requirements of the competition documentation relating to the criteria of the evaluation of applications performed by this institution (i.e. Regulations of the competition, criteria of project selection) are not the provisions of universally binding law. Their function is to achieve statutory objectives, i.e. the efficient and fair conduct of the competition. Therefore, when entering a competition, the applicant must be aware of the competition rules, as they are published and available to everyone in the same way. Each competition participant accepts the rules of the competition and in his/her further actions in the competition procedure, in order to obtain assistance, must precisely adhere to those rules.
Administrative courts, however, referring to the above view of the Supreme Administrative Court, disregard the further part of the Supreme Administrative Court’s statement on the matter. Meanwhile, in the next fragment of the justification of its standpoint, NSA points out that the assessment of the project must take into account all circumstances resulting from the documentation presented by the beneficiary, which the managing authority should take into account and comprehensively consider, bearing in mind first of all the objectives contained in Article 26, paragraph 2 of the Act on the Principles of Development Policy. This is because the requirements specified in the acts issued by the managing authority must be compliant with statutory requirements and must be confronted with these statutory requirements in the process of project verification.
The above passage is, in my opinion, crucial for the discussed issue. This is because the control of the legality of the project evaluation should first of all include the control of compliance of the provisions of the implementation system with the generally applicable regulations. Only in the situation, when this control gives a positive result in the sense, that the provisions of the execution system are deemed compliant with universally binding regulations, it is possible to assume, finding its source in the general obligation to take care of one’s own matters, that the acceptance of the lawful provisions of the competition documentation binds the competition participant to them (I am leaving aside here the issue of the documentation’s location outside the system of sources of universally binding law).
If, on the other hand, the assessment was performed incorrectly, and the reason for that incorrectness were certain mistakes in the regulations, e.g. the lack of a procedure for removing significant discrepancies between the experts’ assessments (as a result of which one expert awarded, for example, 0 points in the project), the competition participant is bound by them. brak procedury usuwania istotnych rozbieżności pomiędzy ocenami ekspertów (wskutek czego jeden z ekspertów przyznał projektowi np. 0 punktów a drugi 100 punktów zaś organ mechanicznie uśrednił wynik), brak szczegółowych regulacji odnoszących się do sposobu przyznawania punktów, nadmierny formalizm objawiający się np. The lack of detailed regulations concerning the method of awarding points, excessive formalism manifested, for example, in a specific (only) method of submitting documents by the applicant or a specific method of calculating time limits (e.g. the time limit of 7 days for submitting an appeal calculated until the day of submitting the appeal only in the office of the institution), in my opinion, we can speak of such a defect in the competition documentation, which will cause the evaluation to be unlawful.

Another argument raised by the courts in such a situation, that making an exception for the applicant by applying (or not applying) a specific provision of the competition dossier to his project will result in a breach of the principle of equal access to aid, is unacceptable. First, the principle of equal access to aid cannot be understood in such a way that it will legitimise an identified defect in the competition dossier. For this would lead to an absurd situation in which an illegal provision of the regulations is tolerated only because it applies to all participants in the competition. Secondly, it should be borne in mind that, like the applicant who has decided to use the appeal procedure to assert his or her rights, the other participants in the competition may also challenge such a defective provision of the competition dossier. Thirdly, it is the body that issued the faulty decision that is obliged to apply the principle of equal access to aid – a court verdict stating a certain defectiveness of e.g. the regulations should not only become the basis for the body to change the decision in this one case, but it should cause the change of such faulty decision for all the applicants. The change of the defective content of the rules of procedure as a consequence of an administrative court judgement made in an individual case cannot be equated with a breach of the principle of equal access to aid.

To sum up, it is worth noting this trend in the line of rulings of administrative courts, which, although recognises the importance of the act of acceptance of the competition documentation by the participant, such acceptance does not release from the obligation of compliance of this documentation with the generally applicable law.
– Instruction for filling in the application for co-financing, specifying in point „m” the method of confirming the submitted documents – appendices delivered to B. in the manner specified in the Rules for Conducting the Competition in the form of paper copies must be certified as true copies of the original by the Applicant or a person/people authorised to represent the Applicant on each page of the document (…) – introduces requirements not provided for in the Act on Certain Forms of Support for Innovative Activity. This does not mean, of course, that the Applicant entering the competition should not be guided by the requirements of the Competition Regulations and the Instructions for filling in the application for co-financing, after all, when entering the competition, the Applicant declares the knowledge and application of the Regulations, and therefore should comply with their criteria in the most careful manner possible. Nevertheless, the institution assessing the project – as the Supreme Administrative Court emphasised in its judgment of 19 February 2013. – should not limit itself to mechanically checking whether the documents have been submitted in accordance with the Manual, but must go deeper and examine whether the data which are required by statutory regulations and solutions of the regulations have been presented and documented in a manner which does not raise any doubts. (Judgment of the WSA in Warsaw of 9.5.2013, ref. no. V SA/Wa 1006/13).
– Such giving of the legal basis for the decision by the Court of First Instance and its explanation, which in fact amounts to a literal quotation of excerpts from the Instruction for filling in the application and the Criteria Guide and repetition of the position of the Minister of Economy (…) based on these materials, without recognition of the case in its entirety or even without recognition of the allegations of the complaint, should be assessed critically. Meanwhile, the Instruction is not at all unambiguous (judgment of the NSA of 15.5.2014, ref. II GSK 1038/14).
– The above enumeration may be closed with the view of the NSA according to which: „Any interpretative loopholes in the content of the project assessment criteria contained in the Rules of Competition and „creative interpretation” of the provisions of the Expenditure Eligibility Manual are inadmissible precisely because these 'sources of law’, which a party agrees to apply when entering a competition, can only constitute a lawful standard of assessment if they are consistent with the provisions of universally binding law. Therefore, their ambiguity results in the evaluation of the project being conducted in a manner that violates the law, as the generally applicable law, i.e. the A.s.p.r., requires equal access to assistance and transparency of the rules applied in the evaluation. Determining the content of the rules applied in the appraisal by the appraisal body by way of interpretation properly excludes the recognition that they are transparent. (Judgment of the Supreme Administrative Court of 12.3.2013, ref. no. II GSK 234/13)
Interestingly, in the written justification of the judgment, the court did not repeat the view presented orally, which I mentioned at the beginning, but limited itself to stating that the evaluation of the project was not sufficiently justified (which, inter alia, was a consequence of defects in the regulations) – this argument was decisive for revoking the decision of the authority. For those interested, the reference number of the judgment: V SA/Wa 612/14.
As an aside, it is worth mentioning that this judgment also presented a view according to which the provisions of the KPA do not apply to competition proceedings conducted by NCBR. This view – which is most likely an emanation of the views of the NCBR itself – was criticised by the Supreme Administrative Court in its judgment of 27.8.2014, ref. II GSK 1075/13. However, this is already a topic for a separate entry.