Decision of the Spanish Supreme Court, December 9, 2021 (RJ 2022, 310) ECLI:ES:TS:2021:4631
Article(s) in Directive 2014/24/EU: Art. 67, Art. 76
Topic: Geographical proximity as an award criterion of a public contract vs. principles of equal treatment and non-discrimination. Relationship between Directive 2014/24/EU and Directive 2008/98/EC.
Member State: Spain
Court/rev. board: Supreme Court
1. IMPLEMENTATION / RELEVANT NATIONAL LEGISLATION
Art. 67 of Directive 2014/24/EU is implemented by Arts. 145 and 146 of the Law 9/2017, of November 8, on Public Sector Contracts (hereinafter, LCSP). In turn, the content of Art. 76 of Directive 2014/24/EU is in part, implemented by Art. 132 of LCSP, regarding the principles of equal treatment, transparency, and competition. In this point, the transposition respects the aim of Directive 2014/24/EU.
The Judgment of the Spanish Supreme Court, December 9, 2021, (RJ 2022, 310) -ECLI:ES:TS:2021:4631, derives from the appeal, filed by a company, against an award criterion included in the procurement specifications of a “service contract for the collection, transport and disposal of hospital waste of the Basque Health Service”.
The contested award criterion proposed that the offer of a company would obtain points depending on the geographical proximity that they guaranteed to the waste management plant.
An economic operator appealed this criterion before the Courts, stating its illegality, since it favored the companies’ established in the Autonomous Community of the Basque Country. And this because it awarded up to seven points (out of a total of one hundred) to companies that had a waste management plant (considering for these purposes that management is only treatment, and not storage) that was very close to the capitals of the Historical Territories of the Basque Country.
The appellant argued that companies that met this requirement were known to the Basque Health Service at the time the tender was launched, since the Autonomous Community of the Basque Country publishes a list of authorized facilities for the management of hazardous waste. And the companies that had authorized management plants for the treatment of medical waste were only two, and one of them was the one already providing the contracted services to the contracting authority.
The appellant company challenged this clause before the Contentious-Administrative Jurisdiction on the grounds that it would turn out to be a condition of unjustified territorial roots, and that, therefore, it was contrary to the principle of equal treatment and non-discrimination between bidders. In particular, the appellant considered that the award criterion was against the different national and European legal provisions in which this principle is reflected, as well as the jurisprudence and the doctrine that interpret it.
The Supreme Court considered that the appeal had an objective interest for jurisprudence’s formation, clarifying whether granting a higher score to the facilities closest to the capitals in a contract whose purpose was the management of hospital waste (specifically, its collection, transport, and disposal) is in accordance, or not, with the principle of equality and non-discrimination that governs public procurement.
The appellant explained that this award criterion went against the principle of equal treatment and non-discrimination between bidders, which is an inalienable requirement. For this reason, it considered that the conditions of territorial roots must be considered null and void.
The Supreme Court explains that the analysis of this question should be approached taking into consideration the service referred to in the contract – the transfer and management of waste destined for disposal –, as there is a specific regulation that affects the way in which this service is to be provided and, consequently, the criteria that should prevail in the adjudication process. That is the reason why the Supreme Court understands that it is necessary to consider the provisions of Directive 2008/98/EC of the European Parliament and of the Council of November 19, which regulates the criteria and principles that must govern waste treatment; its article 16 establishes self-sufficiency and proximity as relevant principles when proceeding with waste management.
Ultimately, the Spanish Supreme Court highlights that art. 16 of Directive 2008/98/EC, of November 19, establishes, with respect to waste destined for disposal, the application of the principles of self-sufficiency and proximity in relation to the transfer and treatment of said waste. This implies that, both the plans of the Member States and their administrative action, including contractual action, must promote the creation and use of a network that allows the disposal of waste in the closest facilities. The jurisprudence of the CJEU also supports this.
Besides, the Supreme Court recalls CJEU’s Judgements of March 4, 2010 (Case C-297/08 European Commission v. Italian Republic) and December 12, 2013 (C-292/12), regarding the interpretation and application of the previous art. 5 of Directive 2006/12/EC, which corresponds to the current art. 16 of the Directive. The Court expressly reproduces parts of those decisions to justify that Member States must plan the existence of their waste disposal facilities so that they are as close as possible to the centers where they are produced. In addition, according to the CJEU, they are authorized to regulate or organize the management of the waste referred to in Article 16 of Directive 2008/98 in such a way that it is treated in the closest suitable facility. For those reasons, it cannot be understood that the introduction of an award criterion in a contract for hospital waste collection, transport and disposal services that scores (and therefore gives priority to) the proximity of a facility with respect to the place where it is generates the waste, may be considered contrary to Community law., being protected, on the contrary, by the principle of proximity set forth in the Union regulations, as it has been interpreted by the CJEU.
In short, the Supreme Court values that the principle of proximity is one of the principles that governs the management of the waste that is the object of the tendered contract and is directly related to the principle of correcting pollution at its source.
On the other hand, the Supreme Court also relies on the principles of equal treatment and non-discrimination between bidders and their compatibility with a clause that prioritizes proximity. The Court explains that, in the jurisprudence relating to Community directives on public procurement, the Court of Justice has specified that the principle of equal treatment of bidders is intended to ensure that all bidders have the same opportunities when formulating the content of their bids, regardless of their nationality (see in this regard the judgment of 25 April 1996, Commission v Belgium, C-87/94, ECR p. I-2043, paragraphs 33 and 54).
But, in parallel, the above must be consistent with current Directive 2008/98/EC of the European Parliament and of the Council, of 19th November, which means Member States must adopt the necessary measures to ensure that waste management is carried out without endangering human health and without damaging the environment (art. 13 of the Directive), establishing that the management of waste intended for disposal must follow the principles of self-sufficiency and proximity, contained in art. 16 of the Directive, in the terms set forth above.
Thus, although there is a general principle of equality and non-discrimination in public contracts, this does not prevent the principle of proximity of the facilities from being one of the scoring criteria for this type of contract, thus prioritizing the objectives set forth in Directive 2008/98/EC, specifically aimed at regulating the treatment and management of waste. There is, therefore, a reason of general interest to prioritize the criterion of proximity in the award of this type of contract, without introducing any discrimination based on the nationality or the registered office of the bidding company, since both companies belonging to other Member States and those with their registered office in other Autonomous Communities may not only compete, but also benefit from this scaling criterion for reasons of proximity, as long as that their management plants are located at the distances indicated in the disputed clause.
Finally, The Supreme Court also explains that it must be taken into consideration that the weighting of the score for reasons of proximity to the management facilities only reaches 7% in a global weighting, so it cannot be considered disproportionate.
So, in response to the question of appeal raised, The Supreme Court concludes that the use of an award criterion in a contract for hospital waste collection, transport and disposal services that scores (and therefore gives priority to) the proximity of a facility regarding the place where the waste is generated, cannot be considered contrary to community law. On the contrary, it is protected by the principle of proximity contained in the Union regulations, as it has been interpreted by the Court of Justice of the European Union, and in national regulations, without any violation of the principle of equality and non-discrimination.