Decision of 30th March 2023 (case 01576/21.4BEPRT), Portugal
Article(s) in Directive 2014/24/EU: Arts. 42(2); 18(1)
Topic: technical specifications; principles of equal treatment, competition and proportionality; conditions restricting competition
Member State: PT
Court/rev. board: Supreme Administrative Court (SAC)
1. IMPLEMENTATION / RELEVANT NATIONAL LEGISLATION
Articles 49(2), 1-A(1) of the Portuguese Public Contracts Code (PCC)
2. FACTS
In 2020, a contracting authority launched an open procedure to award a contract for the purchase of an automated cleaner (a vehicle used in the cleaning of public roads and spaces) and related maintenance services.
The tender documents set forth a group of very detailed technical specifications to be complied with by the equipment (vehicle) to be offered by the bidders. One of the bidders raised the issue that these specifications, although not mentioning brands or models, were unduly restrictive of competition, since they were allegedly drafted in very close terms to the actual characteristics of a certain existing vehicle, which was, in the case at hand, the vehicle offered by the bidder which ultimately received the contract. For example, the tender documents specified that the water deposit of the vehicle should have “an approximate capacity of 600 litres”, and the vehicle offered a water deposit of 600 litres, and other similar situations.
3. JUDGMENT
The Supreme Administrative Court, following the decision of the lower courts, took the view that the technical specifications did indeed restrict competition, thereby invalidating the final decision of the tender. In the context of the justification of its decision, the Court explicitly invoked the European Court of Justice judgment of 25/10/2018, in case C-413/17, Roche Lietuva, paragraphs 29 ff.
The Court started by emphasizing that, as it is commonly recognized, contracting authorities have a wide margin of appreciation in defining the object of the contract and all the requirements they demand from bidders. This includes the design of technical specifications. However, the Court also notices that this margin of appreciation must comply not only with the general principles of competition, equal treatment, and proportionality, but also with specific rules that are aimed at maximizing competition. Examples of the latter are precisely the rules on technical specifications.
Approaching the facts of the case, the Court concluded, apparently with no hesitation, that “the technical specifications required were detailed and restrictive to such an extent that only the equipment supplied in the market by a single economic operator [the bidder which received the contract] could be said to meet them”. The specifications were so “singular and unique” that only a specific model of cleaning vehicle would be acceptable. As the Court pointed out, in many cases, the tender documents did not set the technical specifications using intervals or series of values, rather it specified with strict values certain characteristics (e.g., the speed of the vehicle or certain measurements of it). This method of drafting specifications did not allow for other existing vehicles, which were proven to be very similar in characteristics, to be admitted to the tender. For the Court (using expressions which are very close to EU directives and case law), technical specifications “must be drafted so as to avoid an artificial narrowing of competition through requirements which favor a given economic operator by reflecting the main characteristics of the supplies, services or works usually offered by that economic operator, and should therefore allow for offers which reflect the diversity of technical solutions existing in the market”. Since it was proven, in this case, that there were other similar vehicles which were excluded, the Court confirmed the decision of the lower courts which had invalidated the award decision.
Commentary: It is a generally shared notion that an important part of restrictions on full competition in public procurement result from excessively narrow requirements in the tender documents. Such requirements have a potential to harm competition, even if the procedure that is being used is adequately and transparently advertised, as is the case of an open procedure.
Less common, however, are court decisions that consider that specific provisions of the tender documents are so narrow that they breach the applicable principles and rules. This decision is relevant since it is one of those cases and also because it adds to several other Portuguese court decisions which have dealt with the same problem, sometimes invalidating, and sometimes upholding technical specifications that are accused of being too narrow. The courts seem to take a reasonable approach to this matter, by making a case-by-case assessment and not drawing automatic conclusions from the allegation of the existence of just one bidder in position to comply with the requirements. For example, in another important decision (Central Administrative Court of the North, 09/09/2016, proc. 34/15.0BEAVR), the Court considered that even though there was only one bidder which complied with a specific technical specification for the supply of goods, this was not unlawful in itself, since the contracting authority, in that case, demonstrated that specification was necessary to fulfil the public need for which the contract was drafted. But in another case (Central Administrative Court of the North, 04/11/2016, proc. 00426/16.8BEAVR), the Courts found that a situation in which there were two lots in the tender with different contents, and only one company could comply with the requirements of one of the lots, and only another company could comply with the requirements of the other lot, with no apparent public interest reason, was unlawful.
