Round Table “Best Practice for Procurement of Services”

Current trends of the decisions of the European Court of Justice in connection with the public service

contracts

Lenka Krutáková EBRD-Consultant, WOLF THEISS

Kiev, November 2012

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Agenda

The difference between qualification and evaluation criteria in the EU law in connection with awarding the public service contracts

Comparison: UNCITRAL Model Law 2011 European Commission’s Green Paper on Procurement 2011

Case Law – relevant decisions of the ECJ and current trends Examples of various approaches of several EU Member States

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Evaluation of qualification criteria in the EU law Qualification – focused on the contractor Evaluation – focused on the bid Current EU Directives do not solve the problem of interchangeable

use of qualification and evaluation criteria Article 53 Directive 2004/18/EC:“The criteria on which the contracting authorities shall base the award of public

contracts shall be either:(a) when the award is made to the tender most economically advantageous from

the point of view of the contracting authority, various criteria linked to the subject-matter of the public contract in question, for example, quality, price, technical merit, aesthetic and functional characteristics, environmental characteristics, running costs, cost-effectiveness, after-sales service and technical assistance, delivery date and delivery period or period of completion, or

(b) the lowest price only.” New awarding directives

31.3.2012

UNCITRAL Model Law 2011 The 2011 Model Law replaces the 1994 UNCITRAL Model Law on

Procurement of Goods, Construction and Services The principles from the 1994 text have not been changed Chapter IV - Principal Method for Procurement of Services, Article

39 Criteria for the evaluation of proposals:

“the qualifications, experience, reputation, reliability and professional and managerial competence of the supplier or contractor and of the personnel to be involved in providing the services;

the effectiveness of the proposal submitted by the supplier or contractor in meeting the needs of the procuring entity;

the proposal price…”

41.3.2012

European Commission’s Green Paper on Procurement 2011 Questions 23, 24 and 25 “The separation between selection and award criteria guarantees

fairness and objectivity in the comparison of tenders. Allowing the inclusion of bidder-related criteria such as experience and qualification as contract award criteria could undermine the comparability of the factors to be taken into account and ultimately infringe the principle of equal treatment. The reliance on bidder related criteria could thus potentially also lead to distortions of competition. Proposals in that direction should therefore be envisaged, if at all, in limited circumstances only, e.g. for specific types of contracts, where the qualifications and CVs of available staff are particularly relevant.”

51.3.2012

ECJ case law regarding the qualification vs. evaluation criteria

C-31/87 Beentjes (20.9.1988)

C-324/93 Evans Medical (28.3.1995)

C-315/01 GAT (19.6.2003)

C-448/01 EVN (4.12.2008)

C-532/06 Lianakis (24.1.2008)

C-199/07 Commission vs. Greece (12.11.2009)

61.3.2012

C-31/87 Beentjes (20.9.1988) Case 31/87, Gebroeders Beentjes BV v State of the

Netherlands (15) “… the examination of the suitability of contractors to

carry out the contracts to be awarded and the awarding of the contract are two different operations (...) the directive provides that the contract is to be awarded after the contractor's suitability has been checked.”

(16) “… the possibility that examination of the tenderer' s suitability and the award of the contract may take place simultaneously, the two procedures are governed by different rules.”

(19) “Although the second alternative leaves it open to the authorities awarding contracts to choose the criteria on which they propose to base their award of the contract, their choice is limited to criteria aimed at identifying the offer which is economically the most advantageous …”

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C-324/93 Evans Medical (28.3.1995)

Case C-324/93, The Queen v Secretary of State for Home Department, ex parte Evans Medical Ltd and Macfarlan Smith Ltd.

ECJ judged whether it is possible to use as an evaluation criterion ability of the supplier to garant reliability and continuity of supplies in the country

(44) “It follows that reliability of supplies is one of the criteria which may be taken into account (...) in order to determine the most economically advantageous tender for a contract for the supply (...) of a product such as that in question in the main proceedings.”

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C-315/01 GAT (19.6.2003) Case C-315/01, Gesellschaft für Abfallentsorgungs-Technik GmbH

(GAT) v Österreichische Autobahnen und Schnellstraßen AG (ÖSAG)

ECJ judged whether it is possible to stipulate as an evaluation criterion references relevant to the public contract – only the quantity, not the quality or whether it satisfied the contracting party would be evaluated (66) “Furthermore, a simple list of references, such as that called for in the invitation to tender (...), which contains only the names and number of the suppliers' previous customers without other details relating to the deliveries effected to those customers cannot provide any information to identify the offer which is the most economically advantageous (...), and therefore cannot in any event constitute an award criterion within the meaning of that provision.”

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C-448/01 EVN (4.12.2008)

Case C-448/01, EVN AG and Wienstrom GmbH v Republic of Austria

(70) “… the reliability of supplies can, in principle, be one of the award criterion amongst the award criteria used to determine the most economically advantageous tender”

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C-532/06 Lianakis (24.1.2008) Case C-532/06, Lianakis v Dimos Alexandroupolis Subject matter of the public contract was a study related to record of lands,

urban development and implementation measures for the part of the Alexandroupolis city

Following evaluation criteria were used in this Case: the proven experience of the expert on projects carried out over the last

three years; the firm’s manpower and equipment; and the ability to complete the project by the anticipated deadline, together

with the firm’s commitments and its professional potential “Therefore, ‘award criteria’ do not include criteria that are not aimed at

identifying the tender which is economically the most advantageous, but are instead essentially linked to the evaluation of the tenderers’ ability to perform the contract in question.”

ECJ stated that the above criteria are qualification requirements and cannot be used as evaluation criteria

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C-199/07 Commission vs. Greece (12.11.2009)

Case C-199/07, Commission of the European Communities v Hellenic Republic

The subject matter of the public contract was elaboration of the study in connection with the construction and electromechanical projects related to construction of railway station

Following evaluation criteria were used in this Case: specific and general experience, in particular design work on similar

projects either by consultancy firms or consultants and their scientific staff real capacity to conduct a study within the timescale planned together with

obligations assumed regarding the carrying-out of other studies and the specific scientific and operational staff proposed to conduct the study in question as well as the equipment in relation to the object of the study

ECJ stated that the above criteria are qualification requirements and cannot be used as evaluation criteria

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France Folliott-Lalliot, L.: The separation between the qualification phase

and the award phase in French procurement law, Public Procurement Law Review (PPLR) 2009

The French law strictly separates the qualification and evaluation phases and does not allow any crossovers

131.3.2012

Denmark Treumer, S.: The distinction between selection and award criteria

in EC public procurement law: the Danish approach, Public Procurement Law Review (PPLR) 2009

So called flexible approach is being applied. It relates to services of a complex nature, especially services with

a narrow tie between qualification of the employees, managers, quality control, etc. and quality obtained by the contracting authority and narrow correlation to the certainty of supply

The qualification and evaluation criteria must not be identical. A criteria that can identify the most appropriate offer must be added

E.g. experiences with similar projects, reliability of supplies, CVs of the employees

141.3.2012

Italy Comba, M. E.: Selection and award criteria in Italian public

procurement law, Public Procurement Law Review (PPLR) 2009

After the European Commission criticism in 2007, the praxis was changed

Only criteria related to quality of the bid can be used. E.g. “method and organization of work or consistence of the team that shall perform the project”

Distinction between “industrial” services and high specialized services (“cases when the contracting authority is buying experiences”)

“The contractor is the bid” Intellectual services are not regarded to be public contracts

151.3.2012

Belgium Timmermans, W., Bruynickx, T.: Selection and award criteria in

Belgian procurement law, Public Procurement Law Review (PPLR) 2009

Quite a strict approach, exemptions permitted when following conditions are fulfilled:

the evaluation criteria are defined in the way not to evaluate the contractor, but the bid (not all employees of the contractor, only the team that will perform the project),

a very specialized team must be required, it shall be clear from the documentation that the quality of

services or supplies and of the bid is related to the quality of the team that shall perform the project

Permitted in case B.CEC, 2008 (assistance in preparation of the awarding procedures

161.3.2012

Germany Rubach-Larsen, A.: Selection and award criteria from German

public procurement law perspective, Public Procurement Law Review (PPLR) 2009

VOF – decree on awarding of services that are performed as free profession – using qualification criteria as evaluation criteria is generally permissible

Generally – qualification can be evaluation criteria if a project is evaluating general abilities of the contractor

Many court decisions, even after the Lianakis case The possibility of evaluation of qualification is perceived as a

better solution – otherwise very strict evaluation criteria would have to be set

171.3.2012

Czech Republic Criticism of the impossibility to evaluate qualification in evincible

cases (very often the only criterion for intellectual/advisory services is the lowest price only)

Need for novelization of the national law?

181.3.2012

Thank you for your attention!

191.3.2012

Contact

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Mgr. PhDr. Lenka KrutakovaTel: + 420 234 765 111Fax: +420 234 765 110E-Mail: lenka.krutakova@wolftheiss.com

WOLF THEISS advokati s.r.o.Pobrezni 394/12186 00 PragueCzech Republic