TITLE II
RULES ON PUBLIC CONTRACTS
CHAPTER I Procedures
Article 25 Conditions relating to the GPA and other international agreementsRoberto Caranta
In so far as they are covered by Annexes 1, 2, 4 and 5 and the General Notes to the European Union’s Appendix I to the GPA and by the other international agreements by which the Union is bound, contracting authorities shall accord to the works, supplies, services and economic operators of the signatories to those agreements treatment no less favourable than the treatment accorded to the works, supplies, services and economic operators of the Union.
Literature:
Anderson/Müller, The Revised Agreement on Government Procurement (GPA): Key Design Features and Significance for Global Trade and Development, 2017;
Arrowsmith/Anderson (eds.), The WTO Regime on Government Procurement: Challenge and Reform, World Trade Organization, 2011; Arrowsmith, Reviewing the GPA: The Role and Development of the Plurilateral Agreement after Doha, Journal of Int. Economic Law, 2002, p. 761; Arrowsmith/Linarelli/Wallace, Regulating Public Procurement. National and International Perspectives, 2000; Caroli Casavola, Global Rules for Public Procurement, in: Noguellou/Stelkens (eds.), Droit comparé des contrats publics.
Comparative Law on Public Contracts, 2010, p. 27; DawarI/Skalova, The Evolution of EU Public Procurement Rules and its Interface with WTO: SME Promotion and Policy Space, in: Olykke / Sanchez-Graells (eds.), Reformation or Deformation of the EU Public
Procurement Rules, 2016, p. 59; Kim, Political Institutions and the Government Procurement Agreement of the WTO, PPLR 2009, p. 1; Nwogwugwu, Towards the Harmonisation of International Procurement Policies and and Practices, PPLR 2005,
p. 131.
25. The GPA and other international agreements 1
International agreementsHau ptstichwort
Unterstichwort f./ff.
Today the public procurement regime in Europe is very much shaped as a cascade.1 Seen from the bottom you have national or domestic rules
which have to comply with EU rules which in turn have to comply with international agreements. The latter covers for instance bilateral free trade 1 The metaphor of the building blocks is also quite adequate in describing the situation: P. Trepte, Regulating Procurement, 2004, p. 37; only the cascade suggests a specific order among the different blocks.
agreements that contain commitments by the Union in the field of procurement as it was explicitly indicated in the amendments to the Commission’s proposal tabled by the European Parliament. One such case is the Free Trade Agreement negotiated with South Korea whose Article 9 relates to public procurement which is one target area according to Article 1 of the same Agreement. If the Transatlantic Trade and
Investment Partnership (T-TIP) Agreement currently being negotiated
between the EU and the US were ever to be concluded, this provision would indeed become very relevant.2 The reform proposal of the
Commission foresaw a specific annex to list these agreements and to be updated as necessary by the same Commission, but this idea was later dropped.
2
HauptstichwortG PA
Unterstichwort f./ff.
Among these international agreements the GPA – which is expressly mentioned – is indeed the most relevant.3 The GPA is a plurilateral
agreement signed in 1994 in Marrakesh within the framework of the WTO. Being a plurilateral agreement means that not all WTO members are parties to the GPA. At present, the parties mostly belong to the
developed world. Beside the EU and its 28 Member States parties are for instance Canada, Japan, the United States.4 Late in 2011 negotiations
were concluded on a new GPA. This revised agreement has entered into force on 6 April 2014 for those parties having already ratified it, among them the EU and the US. Some of the bilateral free trade agreements mentioned in the previous section – such as the one negotiated with South Korea – had anticipated the application of the revised GPA among the parties. Reference here will be to the revised GPA.5
2 On the current perspectives C.R. Yukins / M. Bowsher, Brexit and the Trump Election: Finding a Way Forward for Transnational Procurement. The Year That Changed Almost Everything, 4/2016 EPPPL 258 et seq.; Z. Raczkiewicz, Public Procurement within the Framework of a Transatlantic Trade and Investment Partnership, 4/2016 EPPPL 263 et seq., and R.D. Anderson / P. Pelletier, The Government Procurement Chapter of the Trans-Pacific Partnership Agreement: An Assessment of its Potential Impact, 4/2016 EPPPL 270 et seq.
3 See S. Arrowsmith/J. Linarelli/D. Wallace, Regulating Public Procurement. National and International Perspectives, 2000, p. 157 et seq.
4 See Council Decision 94/800/EC of 22 December 1994 concerning the
conclusion on behalf of theEuropean Community, as regards matters within its competence, of the Agreements reached in the Uruguay Round multilateral negotiations (1986 to 1994).
5 See R.D. Anderson/A.C. Müller, The Revised Agreement on Government Procurement (GPA): Key Design Features and Significance for Global Trade and Development, 2017 p. 1 ff. (available at https://www.wto.org/english/res_e/reser_e/ersd201704_e.pdf )
3
HauptstichwortG PA
Unterstichwort f./ff.
The obligations flowing from the GPA have acted as an inhibitor of further simplification and flexibility in the reform of EU law.6 The GPA is often referred to in the European
Commission Green Paper on the modernisation of EU public procurement policy Towards a more efficient European Procurement Market.7 For instance in order to
counter the pressure from some Member State to rise the thresholds the Commission objected that:8
“Any increase in the applicable thresholds in the EU would automatically involve a corresponding increase in all the agreements concluded by the EU (meaning not only in the GPA, but also in all other international agreements). This situation could in turn trigger requests for compensation from our partners. These requests could be quite significant”.
More generally:9
“A number of procedural requirements originate directly from the GPA and the bilateral agreements signed by the EU, such as the deadlines for different procedures, the conditions for using a negotiated procedure without publication or the publication of a contract award notice. Abandoning or changing these requirements would not be possible without a renegotiation of the EU’s international obligations”.
In the end, the Commission’s proposal for a new directive on public procurement accepted a ‘Lighter regime for sub-central contracting authorities’:
“In line with the WTO Government Procurement Agreement, the proposal provides a simplified procurement regime that applies to all contracting authorities below the central government level, such as local and regional authorities. These purchasers may use a prior information notice as a means of calling for competition. If they make use of this
6 See K. DawarI/M. Skalova, The Evolution of EU Public Procurement Rules and its Interface with WTO: SME Promotion and Policy Space, in: Olykke /Sanchez-Graells (eds.), Reformation or Deformation of the EU Public Procurement Rules, 2016, p. 59 et seq.; for instance with reference to thresholds A. Tokár, Institutional Report in: U. Neergaard, C. Jackson, G.S. Ølykke (eds.), Public Procurement Law: Limitations, Opportunities and Paradoxes. The XXVI FIDE Congress in Copenhagen, 2014 Congress Publications Vol. 3,2014, p. 211 et seq.
7 COM(2011) 15 final, at pp. 8, 10, 13 (twice), 16, 17 (three times), 20 (twice), 48, and 54 (four times, but within the same paragraph).
8 At p. 10, sub question 6; see the discussion by P. Telles, Public Procurement Financial Thresholds in the EU and their relationship with the GPA, 3/2016 EPPPL p. 205 ff.
faculty, they don’t have to publish a separate contract notice before launching the procurement procedure. They may also set certain time limits in a more flexible way by mutual agreement with participants”.10
4 HauptstichwortG PA Unterstichwortno n-discrimination f./ff.
Not unlike the EU rules, the GPA provisions aim at opening up to foreign competition domestic public procurement markets.11 Indeed already as
first thing in the preamble of the GPA the parties have recognised “the
need for an effective multilateral framework for government procurement, with a view to achieving greater liberalization and expansion of, and improving the framework for, the conduct of
international trade”. Recital 17 of the Public Sector Directive reiterates this by clarifying that:
“The aim of the GPA is to establish a multilateral framework of balanced rights and obligations relating to public contracts with a view to achieving the liberalisation and expansion of world trade”.
This translates into a general principle of non-discrimination, according to which contracting authorities of the States party to the GPA must treat foreign suppliers, goods and services in a way that is no less favourable than the way local suppliers, goods and services are treated (Article IV(1) and (2) of the revised GPA).12
5 HauptstichwortG PA UnterstichwortPr ocuring methods f./ff.
Instrumental to this end is the familiar combination of procedural rules and remedies. In the revised GPA the former are given a place of honour in Article IV on ‘General principles’. Under Article IV(4) – ‘Conduct of Procurement’–“A procuring entity shall conduct covered procurement in a transparent and impartial manner that: (a) is consistent with this
Agreement, using methods such as open tendering, selective tendering and limited tendering […]”. As it was the case with the old EU public procurement directives, the procedures are defined in Article I. Following 10 COM(2011) 896 final, at p. 8.
11 See Trepte 2004, p. 247 et seq.; Arrowsmith/Linarelli/Wallace 2000, p. 185.
12 It is discussed how far this allows for sustainability considerations: see L. Tosoni, The impact of the revised WTO Government Procurement Agreement in the EU procurement rules from a sustainability perspective 1/2013 EPPPL 41 et seq.
the alphabetical order: “limited tendering means a procurement method whereby the procuring entity contacts a supplier or suppliers of its choice” (litt. h); “open tendering means a procurement method whereby all interested suppliers may submit a tender” (litt. m), and “selective tendering means a procurement method whereby only qualified suppliers are invited by the procuring entity to submit a tender” (litt. q). These procedures basically correspond to those which in the EU are called ‘negotiated procedure without prior publication’, ‘open’ and ‘restricted’ procedures. Article XIII lists the exceptional grounds under which ‘limited tendering’ is allowed. The grounds are the familiar ones for which recourse to negotiated procedures were allowed under the old EU directives. Somewhat familiar provisions also concern qualification, technical specification, deadlines and so on. This is of course hardly surprising since it was already recalled that EU rules are often cast following the mould of the GPA. The revised GPA has also introduced some new provisions on different aspects of e-procurement.
6 HauptstichwortG PA UnterstichwortR emedies f./ff.
Concerning remedies, under Article XX the WTO Dispute Settlement
Understanding applies to Party to Party disputes, and indeed a limited number of cases concerning public procurement was thus adjudicated in the past.13
Moreover, and possibly more interestingly from the point of view of suppliers, ArticleXVIII provides that the Parties to the revised GPA must set up domestic review procedures. In words strongly reminiscent of Article 1 of Directive 89/665/EEC as revised by Directive 2007/66/EC, “a timely, effective, transparent
and non-discriminatory administrative or judicial review procedure through which a supplier may challenge a breach of the Agreement” must be organised at domestic level.14 Due process rules also apply in case the
complaint is heard by a review body which is not a court and whose decisions are not subject to judicial review. In line with international standards better suited to the contract implementation case, ArticleXVIII also provides that in the event of a complaint“the Party of the procuring
entity conducting the procurement shall encourage the entity and the supplier to seek resolution of the complaint through consultations”.
Obviously given the polycentric nature of award disputes, if the procuring entity changes its mind following the complaint, the supplier who was favoured in the first place will in turn raise a complaint. More sensibly
13 All information is available at
http://www.wto.org/english/tratop_e/gproc_e/disput_e.htm#gpadisputes; the weakness of this review system, is rightly stressed by Arrowsmith/Linarelli/Wallace 2000, p. 175. 14 Indeed EU law influenced the reformed GPA under this (and other) respects: K.
DawarI/M. Skalova, The Evolution of EU Public Procurement Rules and its Interface with WTO: SME Promotion and Policy Space, in: Olykke /Sanchez-Graells (eds.), Reformation or Deformation of the EU Public Procurement Rules, 2016, p. 60.
the revised GPA has taken on board from the European experience the standstill period. Rapid interim measures to preserve the supplier’s opportunity to participate in the procurement must be provided for. Corrective action or compensation for the loss or damages suffered, which may be limited to either the costs for the preparation of the tender or the costs relating to the challenge, or both, must be provided for in case the breach of GPA rules is to be established. Article XVIII has clearly benefited from the experience gained in Europe through the application of
Directive 89/665/EEC as revised by Directive 2007/66/EC (see below Part V).15
7 HauptstichwortG PA Unterstichwortco verage f./ff.
As it is the case with the EU directives, the GPA does not apply to all and every public procurement procedure. Only those procedures specified in the parties’ coverage schedules have to be carried out in accordance with the rules of the GPA.16 The coverage schedules are contained in
Appendix I to the GPA. The schedule of each party contains several annexes which define the concerned party’s commitments with respect to four dimensions of coverage, namely, the procuring entities, the goods and services (including, albeit in a separate Annex, construction services), the threshold values and the exceptions to the coverage. As a
consequence, the obligations of the Parties under the GPA have a variable shape, meaning that each of them has opened different sections of its domestic public procurement market.17 The overall picture, also taking
into account exceptions and derogations negotiated by the different parties, is very complicated. Basically, under the GPA the EU has committed itself to a coverage which is in line with EU secondary legislation. Article 25 of the new Public Sector Directive refers to the Annexes to the GPA covering central and sub-central government
(Annexes 1 and 2) and goods and services (Annex 4 and 5). Annex 3 lists other entities and is instead relevant under Article 43 of the Utilities Directive. The picture is complex enough, since for instance concerning services the EU followed the positive list system, and did the same concerning goods procured by defence ministries (with broad coverage including e.g. “Chapter 96: Brooms, brushes, powder-puffs and sieves’ even when purchased by a defence ministry). For the EU the GPA still does not cover the procurement of agricultural products made in
15 See the analysis in the papers collected by Treumer/Lichère (eds.), Enforcement of
the EU Public Procurement Rules, 2011.
16 See Arrowsmith/Linarelli/Wallace, Regulating Public Procurement. National and International Perspectives, 2000, p. 194 et seq.
17 See also R.D. Anderson/A.C. Müller, The Revised Agreement on Government Procurement (GPA): Key Design Features and Significance for Global Trade and Development, 2017 p. 8 et seq.
furtherance of agricultural support programmes and human feeding programmes (e.g. food aid including urgent relief aid), and the procurement for the acquisition, development, production or co-production of programme material by broadcasters and contracts for broadcasting time. 8 HauptstichwortIn ternational agreements Unterstichwort f./ff.
This having been said, it is submitted that Article 25 does not really belong to the Chapter on ‘procedures’. Contracting authorities are to use the procedures laid down in the Public Sector Directive, not those in the GPA. It is up to the EU institutions to make sure that the two do not diverge. It is arguable that they do not, and that the procedures laid down in the public sector directive are not just consistent with the international obligations of the EU but go beyond what is required from the EU. Contracting authorities of the Member States are required, when they purchase according to the EU procedures, to also comply with the GPA by not discriminating foreign suppliers, goods or services insofar as the GPA is applicable. Ideally, this should have been provided in a specific provision following Article 18 of the Public Sector Directive on the general principles or as a second paragraph of the same article or, but this would have been somewhat less elegant, in conjunction with Article 19 in the regime applicable to economic operators. As recital 17 puts it:
“For contracts covered by Annexes 1, 2, 4 and 5 and the General Notes to the European Union’s Appendix I to the GPA, as well as by other relevant international agreements by which the Union is bound, contracting authorities should fulfil the obligations under those agreements by applying this Directive to economic operators of third countries that are signatories to the agreements”.
Article 26 Choice of procedures
- 1. When awarding public contracts, contracting authorities shall apply the national procedures adjusted to be in conformity with this Directive, provided that, without prejudice to Article 32, a call for competition has been published in accordance with this Directive.
- 2. Member States shall provide that contracting authorities may apply open or restricted procedures as regulated in this Directive.
- 3. Member States shall provide that contracting authorities may apply innovation partnerships as regulated in this Directive.
- 4. Member States shall provide that contracting authorities may apply a competitive procedure with negotiation or a competitive dialogue in the following situations:
- (a)with regard to works, supplies or services fulfilling one or more of the following criteria:
- (i)the needs of the contracting authority cannot be met without adaptation of readily available solutions;
- (ii)they include design or innovative solutions;
- (iii)the contract cannot be awarded without prior negotiations because of specific circumstances related to the nature, the complexity or the legal and financial make-up or because of the risks attaching to them;
- (iv)the technical specifications cannot be established with sufficient precision by the contracting authority with reference to a standard, European Technical Assessment, common technical specification or technical reference within the meaning of points 2 to 5 of Annex VII;
- (b)with regard to works, supplies or services where, in response to an open or a restricted procedure, only irregular or unacceptable tenders are submitted. In such situations contracting authorities shall not be required to publish a contract notice where they include in the procedure all of, and only, the tenderers which satisfy the criteria set out in Articles 57 to 64 and which, during the prior open or restricted procedure, submitted tenders in accordance with the formal
requirements of the procurement procedure.
In particular, tenders which do not comply with the procurement documents, which were received late, where there is evidence of collusion or corruption, or which have been found by the contracting authority to be abnormally low, shall be considered as being irregular. In particular tenders submitted by tenderers that do not have the required qualifications, and tenders whose price exceeds the contracting authority’s budget as determined and documented prior to the launching of the procurement procedure shall be considered as unacceptable.
- 5. The call for competition shall be made by means of a contract notice pursuant to Article 49.
Where the contract is awarded by restricted procedure or competitive procedure with negotiation, Member States may provide, notwithstanding the first
subparagraph of this paragraph, that sub-central contracting authorities or specific categories thereof may make the call for competition by means of a prior information notice pursuant to Article 48(2).
Where the call for competition is made by means of a prior information notice pursuant to Article 48(2), economic operators having expressed their interest following the publication of the prior information notice shall subsequently be invited to confirm their interest in writing by means of an invitation to confirm interest in conformity with Article 54.
- 6. In the specific cases and circumstances referred to expressly in Article 32, Member States may provide that contracting authorities may apply a negotiated procedure without prior publication of a call for competition. Member States shall not
allow the application of that procedure in any other cases than those referred to in Article 32.
Literature:
Arrowsmith, The Law of Public and Utilities Procurement, 3rd ed. 2014; Bovis, EU Public
Procurement Law, 2nd ed. 2012; Burnett/Oder, Competitive Dialogue and Negotiated
Procedures. A Practical Guide, 2nd ed.2015; Burnett, The New Rules for Competitive
Dialogue and the Competitive Procedure with Negotiation in Directive 2014/24 – What Might They Mean for PPP?, in: EPPPL 2/2015, p. 62 et seq.; Davey, Procedures involving negotiations in the new Public Procurement Directive: key reforms to the grounds for use and the procedural rules’ PPLR 2014, p. 103 et seq.; González Garcia, Classic procurement Procedures, in: Trybus/Caranta/Edelstam (eds.), EU Public
Contract Law. Public Procurement and Beyond, 2014; Lichère, New Award Procedures, in: Trybus/Caranta/Edelstam (eds.), EU Public Contract Law. Public Procurement and Beyond, 2014; Lichère, Quid de la place nouvelle des procedures négociées et du dialogue competitive? Bulletin Juridique des Contrats Publics 2014, p. 164 et seq.; Semple, A Practical Guide to Public Procurement, 2015; Telles /Butler, Public
Procurement Award Procedures in Directive 2014/24/EU, in: Lichère/Caranta/Treumer (eds.), Modernising Public Procurement: The New Directive, 2014, p. 131 et seq.; Tokár, Institutional Report, in: Neergaard/Jackson/Ølykke (eds.), Public Procurement Law: Limitations, Opportunities and Paradoxes. The XXVI FIDE Congress in Copenhagen, 2014 Congress Publications, Vol. 3, 2014; Treumer, Flexible Procedures or Ban on Negotiations? Will More Negotiation Limit Access to the Procurement Market? in: Ølykke/Risvig/Tvarnø (eds.), EU Procurement Directives – modernisation growth & innovation, 2012, p. 135. 26. Choice of procedures 1 HauptstichwortA ward Procedures Unterstichwort f./ff.
As Abby Semple has rightly stressed, “The use of defined
procedures is the hallmark of procurement regulated under the EU directives”.18 Procedures are the life and soul of public
procurement law and this even more so with reference to supranational regimes.19 This is made plain by the traditional
formula of Recital 1 of the Public Sector Directive. Surely “The award of public contracts by or on behalf of Member States’ authorities has to comply with the principles of the Treaty on the Functioning of the European Union (TFEU)”. However, and this justifies EU legislation under the principle of subsidiarity,20
“for public contracts above a certain value, provisions should be drawn up coordinating national procurement procedures so as to ensure that those principles are given practical effect and public procurement is opened up to competition”.
This is echoed in the very first provision of the Public Sector Directive. Article 1(1) reaffirms that:
“This Directive establishes rules on the procedures for procurement by contracting authorities […]”.
What is relevant here is ‘award’ procedure. Award procedures are part of a wider procurement cycle which starts with purchasing activities,
planning, contract design and – passing through award procedures – hopefully ends in contract implementation. In this grand scheme of public procurement, award procedures are the phase going from publication of a contract notice to the award of the contract. Being moved by the urge to open up national public procurement markets to international
competition, the EU and other supra-national regimes such as the GPA tend to focus on the award phase of the procurement cycle. See on this the comment to Article 25. The EU regime is, however, somewhat special in that the procurement reform has brought important forays in both contract preparation and implementation. On this see specifically the comments on(see Public Sector Directive,Articles Art. 40 and, 41 and
Articles 70 and following respectively). Moreover, Article 31 on
innovation partnerships covers both award and contract implementation. 2 HauptstichwortA ward Procedures UnterstichwortR eform f./ff.
Compared with the 2004 directive, the new Public Sector Directive devotes one specific article to all award procedures, including the open and the restricted procedure. Article 26 is the true tête de chapitre of
19 Please refer to R. Caranta, The changes to the public contract directives and the story they tell about how EU law works, in: Common Market Law Review 2015, p. 450. 20 See COM(2011) 896 final, at p. 6; this has not gone without contestation even before the directive was approved: see notably S. Arrowsmith, The EC Procurement
Directives, National Procurement Policies and Better Governance, in: European Law Review 2002, p. 3 et seq.
Chapter I of Title II of the new directives dedicated to (award) procedures. Moreover the new directive now clearly distinguishes between the (award) procedures discussed here and techniques and instruments for electronic and aggregated procurement such as
framework agreements, dynamic purchasing systems, electronic auctions, electronic catalogues, central purchasing bodies and joint procurement.
See on this the comments to(see Public Sector Directive Articles Art. 33 and following). The distinction makes a lot of sense in that – as François Lichère correctly pointed out – techniques and instruments such as e-procurement tools may be used in conjunction with different award procedures.21 3 HauptstichwortA ward Procedures Unterstichwort f./ff.
Having all the procedures brought together under one provision
reinforces the notion that the award procedures listed therein are the only ones available to the Member States which as a consequence cannot devise new procedures. This clearly follows from the case law, the Court of Justice having held that “the procedures for the award of public
contracts that the Member States are permitted to use are listed exhaustively in Article 28 of that directive [2004/18/EC]”.22
4 HauptstichwortA ward procedures UnterstichwortIm plementation f./ff.
Supra-national public procurement regimes – the EU included – do not provide a comprehensive and definitive regulation of purchasing
activities. Their provisions have to be implemented and supplemented by provisions adopted at national and in some jurisdictions such as the UK at sub-national level. As it was rightly remarked in the Green paper which laid the ground for the reform, simplification of EU rules may be offset by increased complexity at national level possibly leading to very
21 F. Lichère, New Award Procedures, in: M. Trybus/R. Caranta/G. Edelstam (eds.):
EU Public Contract Law. Public Procurement and Beyond, 2014, p. 82.
22 Case C-299/08 Commission v France [2009] ECR I-11587, paragraph 28; the Court distinguished the situation under the (then) new directive when compared with an older one which was at the base of Joined Cases 27/86 to 29/86 CEI and Bellini [1987] ECR p. 3347; see also the conclusions by AG Mazák, paragraphs 12 ff.
divergent regimes within the internal market.23 The Commission and the
other EU law makers had to strike a careful balance between over-regulating public procurement and giving to much free rein to the Member States. It is up for debate on which side they erred, but the Commission went a long way in complying with the proportionality principle proposing a so-called a ‘tool box’ approach which was to allow Member State a maximum of flexibility in adapting the procedures and tools to their specific situation.24
5
HauptstichwortA ward procedures
Unterstichwort f./ff.
Basically, the system as envisaged under the tool box approach provided two standard forms of procedure (open and restricted procedure);
moreover, subject to certain conditions, additional procedures were foreseen (the competitive procedure with negotiation, the competitive dialogue and/or the innovation partnership, and a new form of procedure for innovative procurement). The legislative process has on the one hand watered down the conditions for having recourse to the additional
procedures and on the other hand has made their provisions mandatory for the Member States.25 The latter to a great extent translates into
transferring the choice as to the award procedure to be followed from the law maker to each contracting authority. This corresponds to a more general pattern in the new directive(s) which is “the emphasis they put on choices to be made by individual contracting authorities”.26 On the other
hand making the whole toolbox mandatory on the Member States
translates in a quite complex system27 (and for sure in one which goes the
opposite way from Sue Arrowsmith’s proposal for a simpler regime).28
The wisdom of compelling the Member States to implement the entire 23 COM(2011) 15 final, at p. 13; this is already the case as emerged from the evaluation report: see the reference in the explanatory memorandum accompanying the reform proposal COM(2011) 896 final, at p. 5; please refer also to Caranta, General Report, in: U. Neergaard/C. Jackson/G.S. Ølykke (eds.), Public Procurement Law: Limitations, Opportunities and Paradoxes. The XXVI FIDE Congress in Copenhagen, 2014 Congress Publications Vol. 3,2014, p. 97 et seq.
24 COM(2011) 896 final, at p. 6; see Caranta, The changes to the public contract directives and the story they tell about how EU law works, in: Common Market Law Review 2015, p. 455 et seq.
25 The change in the wording of Article 26 is rightly remarked by F. Lichère, Quid de la place nouvelle des procedures négociées et du dialogue competitive?
Bulletin Juridique des Contrats Publics 2014, p. 167.
26 A. Tokár, Institutional Report, in: U. Neergaard/C. Jackson/G.S. Ølykke (eds.), p.
218.
tool box in their domestic legislation can be doubted also because they have different conditions, and contracting authorities’ discretion is not everywhere a good thing.29
26.1. The preference for competitive procedures. 6
HauptstichwortA ward procedures
Unterstichwort f./ff.
The new Public Sector Directive reaffirms the order of preference among the different award procedures. Article 26(1) which was left as it was in the Commission proposal requires contracting authorities to have
recourse, as a general rule, to national procedures in line with those provided for in the directive which are opened by a call for competition. 7 Award proceduresHaup tstichwort UnterstichwortC ompetitive dialogue Competitive procedure with negotiations f./ff.
Indeed negotiated procedures, whether or not with prior publication, have always been considered to be an exception to the rule of having recourse to open or restricted procedures which are more conducive to the respect of the principles of non-discrimination and transparency.30 Simply put,
there was a ‘ban on negotiations’.31
28 S. Arrowsmith: Modernising the European Union’s public procurement regime: a blueprint for real simplicity and flexibility, PPLR 2012, p. 72; see Semple,A Practical Guide to Public Procurement p. 67.
29 See A. Tokár 2014, p. 218.
30 See C.H. Bovis, EU Public Procurement Law, 2nd ed. 2012, p. 92 and 398; see also
the critical assessment of this stance by K. Krüger, Ban-on-Negotiations in Tender Procedures: Undermining the Best Value for Money, in: K.V. Thai (ed.), International
Handbook of Public Procurement, 2009, p. 643 et seq.; some empirical data are presented by L. Chever/J. Moore, Negotiated Procedures Overrated? Evidence from France Questions the Commission’s Approach in the Latest Procurement Reforms, in: EPPPLR 2012, p. 228 et seq.; but see also the more nuanced remarks by M. Steinicke,
Public procurement and the negotiated procedure – A lesson to learn from U.S. Law?, in: Eur. Competition L. Rev., 2001, p. 331 et seq.
8 HauptstichwortA ward procedures Competitive dialogue Competitive procedure with negotiationsUnte rstichwort f./ff.
Directive 2004/18/EC did still conform to this pattern. Only competitive dialogue was added as a second award procedure suited in exceptional
circumstances (‘particularly complex’ contracts) only. Indeed, Article 28 of that directive provided that contracting authorities had to:
“award these public contracts by applying the open or restricted procedure. In the specific circumstances expressly provided for in Article 29, contracting authorities may award their public contracts by means of the competitive dialogue. In the specific cases and circumstances referred to expressly in Articles 30 and 31, they may apply a negotiated procedure, with or without publication of the contract notice”.
Competitive dialogue and negotiated procedures were all treated as exceptional.32 Moreover, under Article 29 (1) it was up to the Member
States to choose whether or not to implement the provisions on competitive dialogue.33
9 Award
proceduresHaup
Unterstichwort f./ff.
31 S. Treumer, Flexible Procedures or Ban on Negotiations? Will More Negotiation Limit Access to the Procurement Market?, in: G.S. Ølykke/C. Risvig Hansen/C.D. Tvarnø
(eds.), EU Procurement Directives – modernisation growth & innovation, 2012, p. 136; see also Caranta, The changes to the public contract directives and the story they tell about how EU law works, in: Common Market Law Review 2015, p. 451 et seq. 32 See for references P. Telles/L.R.A. Butler, Public Procurement Award Procedures in Directive 2014/24/EU, in: F. Lichère/R. Caranta/S. Treumer (eds.), Modernising Public Procurement: The New Directive, 2014, p. 132 and 144 et seq.; see also, with reference to the competitive dialogue, S. Treumer, The field of application of competitive dialogue, in: PPLR 2006, p. 312, and paragraph 16 of the opinion of AG Mazák in Case C-299/08 Commission v France [2009] ECR I-11587; the AG referred
to P. Trepte, Public Procurement in the EU. A Practioner’s Guide, 2nd ed., p. 427, fn.
187.
33 For the choices and practices in some Member States see the contributions collected by S. Arrowsmith/S. Treumer, Competitive Dialogue in EU Procurement, 2012; see also M. Burnett/M. Oder, Competitive Dialogue and Negotiated Procedures. A Practical Guide, 2nd
tstichwort
The situation has in many respects changed with the new Public Sector Directive. Sure open and restricted procedures are still the two only ‘general’ award procedures. “This confirms their central importance, in the eyes of the Union institutions, for the improvement of the internal market”.34 Contracting authorities may freely choose among them. The
negotiated procedure without prior publication of a contract notice is still reserved for special situations which are regulated in Article 32. This notion is reinforced in Article 26 (6) which is analysed below.
10 Award
proceduresHaup tstichwort
Unterstichwort f./ff.
Recourse to one of the new procedures, the innovation partnership, is also limited to a special circumstance. But this circumstance is somewhat subjective. It is up to a contracting authority to make up its mind and decide to contribute to the creation of an innovative product, service or works.35 Possibly with more impact on public procurement practice, the
conditions allowing recourse to competitive dialogue have been to some extent watered down. Moreover, the same conditions open the way for contracting authorities to use what is possibly the main innovation in the reform of award procedures rules, namely the competitive procedure with negotiation. 11 Award proceduresHaup tstichwort UnterstichwortN egotiated procedure f./ff.
The reform has to some extent transplanted into the classic sector the approach which was previously reserved to the utilities and the defence sectors. Under Directive 2004/17/EC open, restricted and negotiated procedures were all general procedures, provided that a call for competition was made.36 Consequently, recourse to the negotiated
34 Tokár 2014, p. 214.
35 Telles/Butler 2014, p. 160 et seq.
36 See S. Torricelli, Utilities Procurement, in: Trybus/Caranta/Edelstam (eds.) 2014, pp. 241 ffet seq.
procedure without prior publication of a contract notice was limited to exceptional cases.37 Under Directive 2009/81/EC contracting authorities
are also given the choice between restricted, and negotiated procedure with prior publication of a contract notice.38
12 HauptstichwortA ward procedures Unterstichwortto ol box f./ff.
One is tempted to conclude that the ‘tool box’ now contains two truly general (or normal)39 award procedures (open and restricted), two
procedures which may be followed in many circumstances (competitive procedure with negotiations and competitive dialogue), and two truly exceptional procedures (innovation partnership and negotiated procedures without prior publication). Another way to see it, which is probably belied by the way Article 26(1) is drafted, would be to have the negotiated procedure without prior publication as the only truly exceptional award procedure, since the innovation partnership both involves a call for competition and the conditions for its use are not really very well defined. Indeed a number of rules concerning both the
competitive procedure with negotiations and the competitive dialogue and the innovation partnership are drafted in a very similar if not identical way.40 Along similar lines Telles and Butler distinguish between
‘standard’, ‘special’ and ‘exceptional’ procedures. The open and
restricted procedures which may be used in any circumstance and for any type of contract are truly ‘standard’. Competitive procedure with
negotiations, competitive dialogue and innovation partnership have a special nature because they can be chosen only according to specific grounds for use. The negotiated procedure without prior publication is exceptional because it is a final option for contracting authorities when everything else fails.41
37 Case C-250/07 Commission v Greece [2009] ECR I-4369.
38
See
J. Gonzáles Garcia,
Classic procurement
Procedures, in: Trybus/Caranta/Edelstam (eds.), 2014, p. 65;
see for more details
L.R.A. Butler,Transatlantic Defence
Procurement: EU and US Defence Procurement
Regulation in the Transatlantic Defence Market, 2017, p.
123 et seq., and M. Trybus,
Buying Defence and Security in Europe:The EU Defence and Security Procurement Directive in Context, 2014, p. 310 et seq.
.
39 Bovis 2012, p. 92 et seq.
40 See also F. Lichère, Quid de la place nouvelle des procedures négociées et du dialogue competitive? Bulletin Juridique des Contrats Publics 2014, p. 164 et seq. 41 P. Telles/L.R.A. Butler, Public Procurement Award Procedures in Directive 2014/24/EU, in: F. Lichère/R. Caranta/S. Treumer (eds.), Modernising Public
13 HauptstichwortA ward procedures Unterstichwortch oice f./ff.
In the end choice of procedure “largely becomes a question of strategy for the contracting authority, taking account of the different time and
resources commitments required by each procedure, and the structure for competition which it provides”.42
26.2. Open and restricted procedures 14 Award proceduresHaup tstichwort UnterstichwortO pen procedure Restricted procedure f./ff.
Article 26(2) replicates in a different context the rule which was laid down in Article 28 of Directive 2004/18/EU and in the provisions that preceded it. Contracting authorities may always choose between open and restricted procedures. The definitions and detailed rules concerning these two procedures are analysed in the comments under Article 27 and 28 respectively. 15 HauptstichwortA ward procedures Restricted procedureUnters tichwort f./ff.
EU law does neither direct nor nudge the choice between open and restricted procedures. As to the reasons which may militate in favour of choosing a restricted procedure the high degree of complexity has been mentioned. It has been rightly maintained that those economic operators having been pre-selected are more eager to shoulder the costs related to drafting complex tenders since the limited number of competitors invited raises the chances each of them has of being awarded the contract.
Conversely, those economic operators which have not been pre-selected are at least spared the costs of drafting the tender. More generally, Procurement: The New Directive, 2014, p. 133.
42 Semple A Practical Guide to Public Procurement p. 69; se also the table on time limits at p. 71.
however, for contracting authorities it is easier and less costly to decide between a limited number of preselected candidates, making restricted procedures attractive any time a too large participation in the award procedure is to be feared.43 26.3. Innovation partnership 16 HauptstichwortA ward procedures UnterstichwortIn novation partnership f./ff.
With reference to the innovation partnership Article 26(3) very much replicates the formula of Article 26(2) which concerns open and restricted procedures. It does it to such an extent that the two provisions might well have been merged. The reason they were kept apart in the proposal of the Commission was that, in the view of the Commission, which was shared by the Council, the Member States were left free to decide whether or not to allow recourse to the innovation partnership. As the provision stands now, Member States must provide for the innovation partnership in their domestic legislation. It is left to each contracting authority to decide – within the limits laid down in Article 31 – if and when to set up an innovation partnership. As it will be discussed in more general terms in the comments concerning the next paragraph, the Member States may, however, seek to, more or less, direct the use of this discretion by contracting authorities.
26.4. Conditions for applying a competitive procedure with negotiations or a competitive dialogue 17 HauptstichwortA ward procedures Competitive dialogue Competitive procedure with negotiationsUnte rstichwort f./ff.
Article 26 necessarily goes into much more detail in defining the conditions allowing contracting authorities to have recourse to either a 43 See S. Treumer, The Selection of Qualified Firms to be Invited to Tender under the E.C. Procurement Directives, PPLR 1998, p. 147 et seq.; see also S. Arrowsmith: The
Law of Public and Utilities Procurement, 3rd ed. 2014, p. 669; Gonzáles Garcia 2014, p.
competitive procedure with negotiations or a competitive dialogue. It is important right from the outset to stress that these conditions are the same for the two procedures. The directive does not give any indication as to when one should be preferred over the other.44
18 HauptstichwortA ward procedures Competitive dialogue Competitive procedure with negotiationsUnte rstichwort f./ff.
However, the two procedures laid downforeseen in Article 29 and 30 for the competitive procedure with negotiations and the competitive dialogue
respectively are significantly differentiated.45 More into the details, the
minimum requirement are to be set at the start of the competitive procedure with negotiations but not at the start of the competitive dialogue. Award criteria must be ‘specified’ at the outset of the
competitive procedure with negotiation, but only ‘set out and defined’ at the outset of the competitive dialogue.46 Differently from the competitive
procedure with negotiations, there is no ‘initial tender’ in the competitive dialogue. Final tenders may be ‘clarified, specified, optimised’ in the competitive dialogue; they are simply evaluated in the competitive procedure with negotiation.47 Finally, the tender chosen may to some
extent be negotiated in a competitive dialogue procedure but it may not in a competitive procedure with negotiation. In the end, the procedure for 44 See also Lichère, New Award Procedures, in: Trybus/Caranta/Edelstam (eds.), EU Public Contract Law. Public Procurement and Beyond, 2014, p. 91; J. Davey,
Procedures involving negotiations in the new Public Procurement Directive: key reforms to the grounds for use and the procedural rules, in: PPLR 2014, p. 103.
45 How much the two procedures are different is very much debated: e.g. Burnett/Oder, 2015, spec. 197 et seq. and 220 et seq.; Lichère, Quid de la place nouvelle
des procedures négociées et du dialogue competitive?, in: Bulletin Juridique des Contrats Publics 2014, p. 168 et seq.; Telles/Butler 2014, p. 143; this debate extends the one that under Directive 2004/18/EC focused on the utility of the competitive dialogue: see S. Arrowsmith 2012, p. 76.
46 The difference is present in other linguistic versions of the two provisions: in French “précisent les critères d’attribution du marché“ and “indiquent et définissent également les critères d’attribution retenus”; in German “die Zuschlagskriterien spezifizieren” and “gleichzeitig erläutern und definieren sie in denselben Unterlagen die zugrunde gelegten Zuschlagskriterien”; in Italian “specificano i criteri per l’aggiudicazione dell’appalto” and “indicano e definiscono i criteri di aggiudicazione scelti”.
47 The practical relevance of this aspect is stressed by M. Burnett, The New Rules for Competitive Dialogue and the Competitive Procedure with Negotiation in Directive 2014/24 – What Might They Mean for PPP?, 2015, p. 70; see also Semple,A Practical Guide to Public Procurement, 2015 p. 75 et seq.
competitive dialogue is discretely less stringent than the one for the competitive procedure with negotiations. It is therefore submitted that for reason of legal certainty it makes sense for the EU institutions to have codified both these discretely distinct procedures.48
19 HauptstichwortA ward procedures Competitive dialogueUntersti chwort f./ff.
On this basis and keeping in mind that the binding sequences of award procedures have been designed to foster equal treatment and fair
competition among economic operators, it is submitted that in principle the competitive dialogue is still suited to particularly complex contracts, when contracting authorities are not even capable of setting minimum
standardsrequirements.49 Moreover, if the needs of a contracting authority
may be met by simply adapting readily available solutions (Article 26(4) (a)(i)) a recourse to a competitive dialogue would seem to be in breach of the proportionality (and competition)50 principle.51
20 HauptstichwortA ward procedure UnterstichwortC hoice f./ff.
As it was the case with the innovation partnership, the European Parliament pushed the Commission and the Council to accept that
Member States shall (rather than ‘may’) provide for both the competitive
procedure with negotiations and the competitive dialogue in their implementing legislation. Therefore, while in the proposal of the
Commission the ‘tool box’ approach meant that each Member State could choose those procedures which were considered more suited to their peculiar domestic situations, today it is to a large extent up to each contracting authority to pick up the tool it considers more appropriate to 48 The opposite opinion is, however, more often entertained: see for instance Telles – Butler 2014, p. 143; the debate involves also the innovation partnership. 49 See also C. Bovis, Introduction, in: C. Bovis (ed.), Research Handbook of EU Public Procurement Law, 2016, p. 9.
50 A less directive approach in M. Burnett/M. Oder, Competitive Dialogue and Negotiated Procedures. A Practical Guide, 2nd ed.2015, p. 213.
51 Albeit with reference to different aspects A. Sanchez-Graells, Truly Competitive Public Procurement as a Europe 2020 Lever: What Role for the Principle of Competition in Moderating Horizontal Policies?, in: 2016 European public Law 377 et seq.
the circumstances.52 This has rightly been criticised in that it facilitates
abuses in those countries where the commitment to legality is weak if not inexistent.53 It would, indeed, have been wiser to stick to the original
proposal by the Commission.54
21 HauptstichwortA ward procedures UnterstichwortC hoice f./ff.
To mitigate these risks it is submitted that, beside the enforcement of the specific safeguards which will be analysed in the comments on Article 29(5) and 30(3), in implementing Article 26(4) the Member States are empowered to direct the discretion of the contracting authorities by either listing situations in which the application of these two procedures or one of them is or is not advised and even is or is not allowed as a matter of national law.55 It is true that concerning award criteria the Court of Justice
in the Sintesi case held that:56
“the abstract and general fixing by the national legislature of a single criterion for the award of public works contracts deprives the contracting authorities of the possibility of taking into consideration the nature and specific characteristics of such contracts, taken in isolation, by choosing for each of them the criterion most likely to ensure free
competition and thus to ensure that the best tender will be accepted”.
One cannot rule out that a similar reasoning could be repeated with reference to the choice among award procedures. It seems to be
reasonable to anticipate that the more a domestic provision will be rigid in limiting or annulling the margin of choice of contracting authorities, the more the chances will be that such a provision might be found to be in breach of EU law. 22 HauptstichwortA ward procedures Competitive procedure with negotiationsUnte f./ff.
52 See Tokár 2014, p. 214; Telles/Butler 2014, p. 133.
53 E.g. R. Mastroianni, Italie, in: U. Neergaard/C. Jackson/G.S. Ølykke (eds.), Public Procurement Law: Limitations, Opportunities and Paradoxes. The XXVI FIDE Congress in Copenhagen, 2014 Congress Publications Vol. 3, 2014, p. 560; N. Popović/F. Kuhta, Croatia, ibidem, p. 272.
54 Caranta 2014, p. 173.
55 See generally on the power of Member States to adapt the procedures through national legislation Telles/Butler 2014, p. 132 et seq.; see however S. Arrowsmith, The
Law of Public and Utilities Procurement, 3rd ed. 2014, p. 869 et seq.
rstichwort
The EU lawmakers were under much pressure from various stakeholders – contracting authorities first among them – to introduce more flexible procedures involving negotiations.57 As the Green Paper preparing the
reform recalled:58
“Contracting authorities sometimes complain that the regulatory instruments provided by the EU rules are not fully adapted to their purchasing needs. In particular, they claim that leaner and/or more flexible procedures are needed”.
One of the major innovations in the new Public Sector Directive is indeed the competitive procedure with negotiations, which allows for
negotiations in a way so far unheard of in EU public procurement law.
See (see comments onPublic Sector Directive Article Art. 29). Moreover, the conditions allowing for recourse to this procedure and to the
competitive dialogue are quite relaxed, especially when compared to those which were provided under Article 29 of Directive 2004/18/EC with reference to the competitive dialogue.59 It is possibly too soon to say
whether these changes will be enough to assuage the concerns of contracting authorities with this particular procedure. Among the first reactions, some see the glass half full, others half empty.60 For instance
Steen Treumer holds that we are faced with a “truly remarkable widening of the scope of flexible tender procedures”.61
23 HauptstichwortA ward procedures Competitive dialogue Competitive procedure with negotiationsUnte rstichwort f./ff.
57 Please refer to Caranta, The changes to the public contract directives and the story
they tell about how EU law works, in: Common Market Law Review, p. 450. 58 COM(2011) 15 final, at p. 12.
59 See F. Lichère, Quid de la place nouvelle des procedures négociées et du dialogue competitive? Bulletin Juridique des Contrats Publics 2014, p. 166.
60 See for further references Caranta 2014, p. 171 et seq.
61 S. Treumer, Evolution of the EU Public Procurement Regime: The New Public Procurement Directive, in: F. Lichère/R. Caranta/S. Treumer (eds.), Modernising Public Procurement: The New Directive, 2014, p. 12 et seq.; see also M. Burnett, The
New Rules for Competitive Dialogue and the Competitive Procedure with Negotiation in Directive 2014/24 – What Might They Mean for PPP?, in: EPPPL 2/2015 p. 67.
Under Article 26 (4) contracting authorities may have recourse to either a competitive procedure with negotiations or a competitive dialogue in basically two different types of situations: when they do not (and possibly do not want to) buy ready-made off-the-shelf products or service (litt. a) and after having only received irregular or unacceptable tenders in a previous open or restricted procedure (litt. b). The conditions listed in Article 26 (4) are alternative rather than cumulative.62 The reader must be
cautioned that these conditions have rightly been characterised as ‘repetitive and overlapping’.63
24 HauptstichwortA ward procedures Competitive dialogue Competitive procedure with negotiationsUnte rstichwort Conditions f./ff.
The first situation is where the reform has changed the rules of play most. The two procedures may be used when one or more of the situations described in litt. a are present. This means that each one of them alone is sufficient to allow contracting authorities to forgo the legislative
preference for the open and restricted procedures. Of these conditions, some have been recast from the requirements laid down in Directive 2004/18/EC to enable recourse to the competitive dialogue. The more conservative proposal of the Commission had to a large extent conflated in what has become Article 26(4) the conditions which in Directive 2004/18/EC allowed for the use either of the negotiated procedures with prior publication of a contract notice or of the competitive dialogue. Moreover, it provided for different conditions concerning works procurements on the one hand and services or supplies on the other. Instead the Council has very much relaxed the legal requirements. The following analysis will start with the conditions somehow linked to those previously enabling recourse to the competitive dialogue rather than following the strict order of Article 26(4)(a).
25 HauptstichwortA ward procedures Competitive dialogue f./ff. 62 Telles/Butler 2014, p. 145.
Competitive procedure with negotiationsUnte rstichwort Particularly complex contracts
Under Article 29(1) of Directive 2004/18/EC competitive dialogue might have been used for the award of ‘particularly complex contracts’ when contracting authorities considered that “the use of the open or restricted procedure will not allow the award of the contract”. Under Article 1(11) (c) a public contract was considered to be ‘particularly complex’ where the contracting authorities were “not objectively able to define the
technical means in accordance with Article 23(3)(b), (c) or (d), capable of satisfying their needs or objectives, and/or […] not objectively able to specify the legal and/or financial make-up of a project”.64 This was often
the case with PPP.65 Article 23 of Directive 2004/18/EC provided for the
possibility to draft technical specifications in terms of performance or functional requirements. See now the comment on Article 42(3). 26 HauptstichwortA ward procedures Competitive dialogue Competitive procedure with negotiations ConditionsUnter stichwort f./ff.
The condition that it was not possible to draft technical specifications even in the guise of performance or functional requirements has now been transformed into the much less stringent condition of the
impossibility to refer to an established standard (litt. iv).66 Indeed, as
64 See the analysis by Treumer 2006, p. 310 et seq.
65 M. Burnett, The New Rules for Competitive Dialogue and the Competitive Procedure with Negotiation in Directive 2014/24 – What Might They Mean for PPP?, 2015 p. 65.
66 See also J. Davey, Procedures involving negotiations in the new Public
Procurement Directive: key reforms to the grounds for use and the procedural rules, in: PPLR 2014, p. 104;.
Article 42(3) makes clear, the reference to standards constitutes a more ‘mechanic’ or ‘static’ way, so to say, to draft technical specifications.67
27 HauptstichwortA ward procedures Competitive dialogue Competitive procedure with negotiations ConditionsUnter stichwort f./ff.
The objective impossibility to “specify the legal and/or financial make-up of a project” has instead been watered down to “specific circumstances related to the nature, the complexity or the legal and financial make-up or because of the risks attaching to them” which make it necessary to
negotiate the tenders (litt. iii).68 It is to be stressed that ‘complexity’ is
now a self-standing circumstance allowing recourse to one of the procedures considered here. By implication, complexity is no more required with reference to the legal and financial make-up requirement, and it is not required with regard to the inherently generic notion of ‘nature’. Reference to the ‘nature’ as well as to the ‘risks’ was already present in Article 30(1)(b) of Directive 2004/18/EC. However, the nature of the works, supplies, or services or the risks attaching thereto had to be such as not to permit prior overall pricing. This requirement has been omitted in the new Public Sector Directive. The risk, here, is that given its open-ended structure the clause might be translated not into a necessity to negotiate (itself a difficult notion to pinpoint precisely) but in a mere and speculative convenience to do so.
28 HauptstichwortA ward procedures Competitive dialogue Competitive procedure with negotiations Readily available f./ff.
67 Indeed as it has been remarked, “mandatory standards, taking time and compromise to be developed, tend to be antiquated”: M. Burgi, Specifications, in: Trybus/Caranta/Edelstam (eds.), 2014, p. 44.
68 See Lichère, Quid, 2014, p. 167; Telles/Butler 2014, p. 145 et seq; Arrowsmith 2014, p. 874 et seq.
solutionsUntersti chwort
Of the other two grounds listed in Article 26(4)(a) the one listed under litt. i is possibly the more objective and as such the one which could more easily lend itself to adjudication in a review procedure. Indeed, a
competitor – or the Commission in an infringement procedure – might very well prove that a readily available solution was in fact present on the (internal) market. A relevant case stemmed from an infringement
procedure brought against Germany because a Land had bought software for managing vehicle registration through a negotiated procedure without prior publication. The Court of Justice held that it was not proven that similar software could have been supplied by some other economic operator since no market research had been conducted at European level.69 29 HauptstichwortA ward procedures UnterstichwortC ompetitive dialogue Competitive procedure with negotiations Adaptation Variants f./ff.
The question is whether even the need of minimal or very limited adaptations of a readily available solution would be enough to allow contracting authorities to forgo the open and restricted procedures?70 On
the one hand, Article 42(3) still allows contracting authorities to draft ‘descriptive’ technical specifications by reference to existing standards. Moreover, Article 45 leaves to the contracting authorities to decide whether or not to allow variants, imposing on them some burdens for the sake of transparency if they decide to do so. By implication, contracting authorities very much retain the power not to allow variants and to pretend to be supplied with exactly the goods or services they have described in the contract documents rather than with alternatives or replacements. As a matter of fact the structure of Article 45 is different 69 Case C-275/08 Commission v Germany [2009] ECR I-168, paragraph 61.
70 See also Burnett, The New Rules for Competitive Dialogue and the Competitive
Procedure with Negotiation in Directive 2014/24 – What Might They Mean for PPP?, in: EPPPL 2/2015 p. 67 et seq.; Arrowsmith 2014, p. 880 et seq.
from that of Article 46 on the division of contracts into lots which requires contracting authorities to state reasons why they decide not to subdivide a contract they intend to award. On this basis, one could
conclude the contracting authorities may rather make use of a competitive procedure with negotiation (a competitive dialogue would not be
appropriate when limited adaptations are enough to meet the needs of the contracting authority) than allowing variants if they do not want too. The advantages of such an approach for contracting authorities would be the possibility to discuss the suitability of alternatives or replacements with the suppliers, rather than simply – and more rigidly – to take or reject them following the approach embodies in Article 45. On the other hand, Article 42(5) makes it a duty for contracting authorities to accept goods or services which, while not complying with the standards, still satisfy in an equivalent manner the requirements defined in the technical
specifications. More generally, the principle of proportionality seems to oblige contracting authorities not to reject tenders which show a
minimum degree of variation, provided of course that the tenderers are ready to adapt the goods or services and shoulder the costs.71 Given that
the competitive procedure with negotiation is not a ‘general’ procedure but is still an exception to the preference for open or restricted procedures
in the end the preferred solution is that contracting authorities should allow variants when minimal or very limited adaptations of a readily available solution are needed rather than go through a competitive procedure with negotiations. The proportionality principle also points to this solution. 30 HauptstichwortA ward procedures Competitive dialogue Competitive procedure with negotiations DesignUnterstic hwort f./ff.
Finally we come to ‘design’ (litt. ii). This is probably Article 26(4)(a) at its laxest72 The last (in the order chosen here) among the permissible
grounds mentioned in Article 26(3) is again very lax (litt. ii) since “there appears to be no de minimis or majority value test so that it is presumed that any requirement for design or innovation qualifies, however
peripheral”.73 Contracting authorities are empowered to apply a
competitive procedure with negotiations or a competitive dialogue when the contract either involves design or innovative solutions. If trying to 71 On the proportionality principle as applied to public procurement law see Semple,
A Practical Guide to Public Procurement 2015, p. 51 et seq. 72 See also Davey 2014, p. 105.
distinguish innovative solutions from the adaptation of readily available solutions discussed in the previous paragraph one can surmise that the former requires more innovative thinking. But of course the distinction is subtle and in the end irrelevant since the grounds can be referred to cumulatively. From another point of view one may also wonder how to make the distinction between an innovative solution and an ‘innovative product, service or works’ the need for which allows contracting
authorities to set up an innovation partnership. The answer is so elusive that one could think of the panoply of EU award procedures as a luxuriant and overgrown jungle rather than as a tool box.74 Once more the wisdom
of compelling the Member States to implement the entire tool box in their domestic legislation can be doubted.75
31 HauptstichwortA ward procedures Competitive dialogue Competitive procedure with negotiations DesignUnterstic hwort f./ff.
Finally we come to ‘design’ (litt. ii). This is probably Article 26(4)(a) at its laxest.76All works procurements potentially involve design.77 Under
Article 2(6) of the Public Sector Directive “‘public works contracts’ means public contracts having as their object one of the following: (a) the execution or both the design and execution, of works […]”. It is up to the contracting authority to decide whether to have a design component in the contract. Given that in Article 26(4)(a)(ii) the conjunction ‘or’ separates ‘design’ from ‘innovative solutions’ the design does not need to be necessitated by the absence of a ready made alternative, or by complex problems or even by the desire of the contracting authority to contribute to the creation of something new. Recital 43 confirms this in that it
indicates that “For works contracts, such situations include works that are not standard buildings or where works includes design or innovative
73 L.R.A. Butler, Innovation in Public Procurement: Towards the “Innovation Union”,
in: F. Lichère/R. Caranta/S. Treumer (eds.), Modernising Public Procurement: The New Directive, 2014, p. 373 et seq.
74 E.g. Telles/Butler 2014, 133. 75 See A. Tokár 2014, p. 218. 76 See also Davey 2014, p. 105.
solutions”. Standard works do not need to include innovative solutions. Design is enough. 32 HauptstichwortA ward procedures Competitive dialogue Competitive procedure with negotiations DesignUnterstic hwort f./ff.
Similarly, concerning services, the contracting authority may well provide for a design component. With some contracts, such as those relating to software and more generally to IT, it is even difficult to think of a contract not involving design. Recital 43 attests to this. The use of a competitive procedure with negotiation or competitive dialogue is likely to be of value for services or supplies that require adaptation or design efforts. Such adaptation or design efforts are considered
“particularly necessary in the case of complex purchases such as sophisticated products, intellectual services, for example some consultancy services, architectural services or engineering services, or major information and communications technology (ICT) projects. In those cases, negotiations may be necessary to guarantee that the supply or service in question corresponds to the needs of the contracting authority”.
This does not mean they might not be useful in other circumstances.78 In the end, the
only line in the sand is that the two procedures should not be used only in respect of “off-the-shelf services or supplies that can be provided by many different operators on the market”. 33 HauptstichwortA ward procedures Competitive dialogue Competitive procedure with negotiations DesignUnterstic hwort f./ff.
78 See Davey 2014, p. 106; see also with reference to Recital 31 of Directive 2004/18/EC, Lichère 2014, p. 87.
One could well wonder whether this lax clause referring to design might in the end accommodate the mix of design and execution which was the substance of the French provisions on the marchés de définition which were
found to be inconsistent with EU law by the Court of Justice following an infringement proceeding brought by the Commission.79 One somewhat
formal – not to say formalistic – problem is that under French law two award procedures were concluded, one after the other (a marché d’exécution
following the marché de definition).80 This would have rather characterised
the procedure as an award following a design contest (see today Article 32 (4) and Articles 78 to 82). Or it might now assimilate it to an
innovation partnership under Article 31.81 There was a more substantial
issue, which arose from the very lax conditions provided by French law to allow recourse to a marché de definition. It could be used when the
contracting authority was “unable to specify the aims and performances which the contract must meet, the techniques to be used, and the human and material resources required” (“n’est pas en mesure de préciser les buts et performances à atteindre, les techniques à utiliser, les moyens en personnel et en matériel à mettre en œuvre”). This goes much beyond what is allowed even now under Article 29(1) for the competitive
procedure with negotiation, since the contracting authority must set down the minimum requirements. And, as both the Court of Justice and
Advocate general Mazák remarked, this went (and goes) well beyond what is allowed under what has become Article 30(2) since in
competitive dialogue contracting authorities shall set out and define their needs and requirements.82 Reference to both the need for an innovative
product and minimum requirement are also requested under Article 31(1) concerning the innovation partnership.
34 HauptstichwortA ward procedures Competitive dialogue Competitive procedure with negotiations DesignUnterstic hwort f./ff.
Setting for the moment aside the question of the existence of a duty to give reasons which will be discussed in the next section, it is difficult to 79 Case C-299/08 Commission v France [2009] ECR I-11587.
80 Both AG Mazák and the Court of Justice however relied very much on this: see paragraphs 22 and 37 respectively.
81 Butler 2014, p. 374 et seq.
