Legality and Constitutional Compliance in Public Procurement
1. Background
In Judgment No. 006-17-SEP-CC, within Case No. 1445-13-EP, the Constitutional Court, on January 11, 2017, when resolving the Extraordinary Protection Action filed by the Esmeraldas Port Authority — APE — not only made it clear that, in public procurement matters, the constitutional rights of contractors may be violated, and that, in such cases, ordinary judicial remedies are ineffective and inadequate, but also stated that it is unconstitutional for the law to prohibit contractors from filing constitutional guarantees.
The Constitutional Court upheld the judgment of the Provincial Court of Justice of Esmeraldas, which had revoked the judgment of the first-instance constitutional judge that had declared inadmissible the protection action filed by the contractor against the contract liquidation.
The contractor did not challenge the declaration of unilateral termination through constitutional proceedings, but rather through the contentious-administrative route.
By upholding the judgment of the Provincial Court, the Constitutional Court rendered ineffective and without legal value the administrative act issued by APE regarding the physical, accounting, and financial valuation adopted after the declaration of unilateral termination, because the contractor’s right to due process had been violated, since the contractor was not physically present for such valuation.
2. Due Process and Legal Certainty
One of the guarantees of the right to due process is found in Article 76(1) of the Constitution, which requires judicial and administrative authorities to “guarantee compliance with the rules and the rights of the parties.”
This guarantee “is closely related to the right to legal certainty” under Article 82 of the Constitution, which has been broadly developed by the Constitutional Court as the minimum condition of predictability of substantive and procedural rules, according to Judgment No. 010-14-SEP-CC.
Judicial protection of legal certainty may take place “both in constitutional and ordinary proceedings, depending on the source of law that has been violated,” according to Judgment No. 016-13-SEP-CC.
The Constitutional Court concluded that “the control of the application and interpretation of infra-constitutional rules is not part of the scope of review through an Extraordinary Protection Action,” according to Judgments No. 126-14-SEP-CC and No. 020-13-SEP-CC.
The Court also stated that, within an Extraordinary Protection Action, it is not possible to “analyze the application or interpretation of Articles 94 and 95 of the Organic Law of the National Public Procurement System, as claimed by the petitioner — APE.”
In matters of Extraordinary Protection Actions, the scope of legal certainty extends to the review of the legal application of constitutional provisions.
3. Constitutional Rights, Adequate and Effective Judicial Remedies, and Burden of Proof
“The burden of proving the adequacy and effectiveness of ordinary proceedings does not fall on the claimant, but on the judge, at the moment in which the judge determines whether the violation was effectively verified in the case submitted for review.”
“The protection action does not constitute a mechanism that overlaps with or replaces ordinary judicial instances,” nor may it be used to “invade the powers related to legality review,” according to Judgment No. 140-12-SEP-CC.
The Constitutional Court stated that “the contentious-administrative route is not, and cannot be considered, an adequate avenue to remedy violations of constitutional rights, just as the protection action is not an avenue to review the legality of administrative acts.”
“The distinction between the object of the protection action and the challenge proceedings before the contentious-administrative jurisdiction does not lie in the challenged act, but in its consequence,” according to Judgment No. 041-13-SEP-CC.
“The protection action is the appropriate constitutional guarantee to resolve the existence of violations of constitutional rights.”
“One same act or omission may simultaneously generate the violation of a subjective right or legal entitlement and the disregard of a constitutional right.”
“For the admissibility of the protection action, it must be verified that the matters subject to such action exceed the typical characteristics of legality and, consequently, need to be protected within the constitutional sphere, for which purpose the protection action is the suitable jurisdictional guarantee.”
4. Two Administrative Acts and the Judicial Route
There are two administrative acts at issue between APE and the contractor: the declaration of unilateral termination and the subsequent contract liquidation.
“The fact that the first act was challenged through the contentious-administrative route does not condition or oblige the claimant to challenge dissimilar and subsequent acts through the same judicial route, nor does it undermine the argument that the ordinary judicial route is inadequate or ineffective when filing a protection action.”
The activation of this action is not subject to the condition that “the claimant has not used ordinary routes to challenge previous acts, even when those acts come from the same public authority or from the same administrative process.”
The claimant did not dispute the early termination of the contract, but rather the effects generated by a subsequent administrative act granting a deadline to pay the performance bond and advance payment guarantees.
The contractor’s right to due process was violated because the liquidation was not carried out in the contractor’s presence, preventing the contractor from defending itself.
The issue raised in the protection action was therefore constitutional in nature.
5. Unconstitutionality of a Legal Provision
Within the Extraordinary Protection Action, the Constitutional Court declared, on its own motion, the unconstitutionality of the seventh paragraph of Article 102 of the Organic Law of the National Public Procurement System, which stated that “public procurement processes are not subject to constitutional actions.” This provision had been incorporated by law on October 14, 2013.
The Court did so within its powers in proceedings of unconstitutionality by connection, in order to avoid returning to the old residuality scheme, under which ordinary remedies had to be exhausted before filing constitutional actions.
The Court also did so to prevent a claimant from being deprived of being judged by the competent judge when constitutional rights are at stake.
The Constitutional Court also considered that the legal provision restricted access to justice.
Furthermore, the Court clarified that such legal limitation was not in force when the contractor filed the protection action in March 2013.