When suing your customers is good for business
At FSFE, we’re closely watching how the public sector goes about buying software. A lot of money changes hands here, so it’s worth paying attention, especially since a couple of studies have shown that public authorities frequently get the process wrong.
Fortunately, there are legal remedies available. If your company bids for a contract, and the offer is rejected, you can go to court if you feel treated unfairly. You can do the same if you think the call for tender is designed in a way that prevents your company from bidding for the contract in the first place.
There’s certainly a lot of unfairness out there. One of the most common mistakes that public bodies make is to use a brand name in a call for tender, such as saying “we want software from company X”. Under European rules (see Directive 2004/18/EC, para 23.8) , that’s illegal unless there’s no other way to describe what you’re looking for. In software, there almost always is such a way. If you’re looking for a word processor, you should say so, rather than asking for “Microsoft Word” or similar – otherwise you’re excluding competitors from bidding. And that’s illegal.
So there are clear rules, and there are lots of public bodies breaking them. Yet when I ask companies that offer Free Software or related services why they don’t go to court more frequently to appeal against such unlawful calls for tender, they often tell me “we don’t want to annoy our potential customers”. They’re afraid that if they sue a public body (for example, the European Commission) over a bad procurement action, they’ll never get any business from the Commission again.
But is that fear justified?
Our intern Natalia was looking at the EC’s own procurement practices the other day. The Commission’s desktop computers run on Windows XP. The necessary licenses are sourced through a contract with Fujitsu-Siemens from 2008, with a total final value just short of 49 million Euro. When the EC awarded that contract, an unsuccessful bidder sued (Case T-121/08, pdf). The bidder’s name? PC-Ware. That sounded familiar, and indeed: It’s the very same company that won a the 189 million Europe SACHA II contract from the European Commission in December 2010. That’s almost four times the total of the Fujitsu-Siemens contract.
Which goes to show that suing your customers can be, to paraphrase Neelie Kroes, a very smart business decision indeed.