EU court: late tax payment cannot save bidder; consortium may drop member

A member's payment of established tax debts after the participation-request deadline does not lift the mandatory exclusion ground applicable to it.Europa But the authority cannot discard the whole consortium without first examining whether the tainted member can be droppedEuropa. That is the balance the Court of Justice struck on 12 November 2026Europa in ETS e.a. v Rete Ferroviaria Italiana (C-268/25).

Rete Ferroviaria Italiana ran a restricted procedure for a rail-transport contract worth an estimated 298,924,044 euros. The temporary consortium ETS e.a. ranked first for three lots. The authority then questioned Sub-Service, a member, about its tax debts and informed ETS, the lead, the same day. Sub-Service could not show it had acted before the tender deadline; afterwards, but before the award, it obtained relief and paid in fullEuropa. ETS offered to exclude Sub-Service with its tender unchanged. The authority excluded the whole consortium instead and awarded the contract to the runner-up.

The exclusion rested on three tax infringements finally established against Sub-Service before the deadlineEuropa, through recovery notices for 2016, 2018 and 2019, for a total above the Italian threshold. Under Article 94(6) of the Italian code, such an operator is automatically excluded unless extinction, payment or a binding commitment to pay occurred before the tender deadlineEuropa; under Article 97, a consortium avoids exclusion only if it disclosed a pre-existing ground before tendering and took timely exclusion or replacement measures.

On the first point the Court endorsed a strict deadlineEuropa. The mandatory tax-exclusion ground in Article 57(2) of Directive 2014/24 ceases to apply once the operator has paid or concluded a binding agreement to pay, including interest and finesEuropa, but that paragraph sets no express time limitEuropa. The limit follows from Article 57(3), second subparagraph, which lets Member States derogate where exclusion would be manifestly disproportionate, notably where the operator learned the exact amount due when it could no longer act before the participation-request deadlineEuropa. That exception would be meaningless if payment at any time before the award lifted the ground. The self-cleaning mechanism in Article 57(6) covers the grounds in paragraphs 1 and 4, not the tax ground in paragraph 2Europa. The strict reading protects public finances and rewards bidders that settle taxes before the deadline.

On the second point the Court gave the consortium a second chance. Article 79(2), second subparagraph, second sentence, of Directive 2014/25 requires the contracting entity to demand replacement of a relied-on entity hit by an invoked mandatory exclusion groundEuropa, and the fourth subparagraph extends that logic to consortia relying on a member's capacitiesEuropa. Replacement necessarily happens after the participation request is submitted, since only then can the entity verify the tender. A national rule that bars exclusion or replacement of the member, so the whole consortium is out with no examination of the circumstances, therefore breaches those provisions read with proportionalityEuropa, even where the consortium learned of the pre-existing ground only through the authority's findingsEuropa.

That second chance has two limits. The authority must weigh what the consortium, especially its lead, could have done to detect the groundEuropa, and should exclude the group if the lead breached its duty of diligence so the group cannot be regarded as honest and reliableEuropa. The referring court must assess the false European Single Procurement Document declaration and the means ETS had to verify compliance. Bare exclusion without a substitute is allowed only if the consortium still meets the selection criteria without amounting to a new tenderEuropa.

The legal basis is Article 57(2) and (3) of Directive 2014/24 and Articles 79(2), 80(1) and 36(1) of Directive 2014/25Europa.