Regulation 18 – Principles of procurement

Commentary

Directive 2014/24/EU consolidates for the first time the “general principles of procurement” that have emerged from the case law of the CJEU into a specific provision, hence raising the relevance of compliance with these general principles where contracting authorities exercise their administrative discretion. Its not that Article 18 of Directive 2014/24/EU creates new principles, only that it enhances their visibility.

This approach could seem at first sight easier to fit in a civil law context than a common law approach to public procurement. However, it can hardly be doubted that English Administrative Law is based on general principles that are fundamentally aligned with those derived from EU Administrative Law )for discussion, see P Cane, Administrative Law, 5th edn, Clarendon Law Series (Oxford, OUP, 2011) 9-11).

Article 18(1) of Directive 2014/24/EU indeed sets out that procurement needs to be conducted in accordance with the principles of equality, non-discrimination, transparency, proportionality and competition. For discussion on the implicit existence of this principle under the previous set of EU rules, see A Sanchez-Graells, Competition and the Public Buyer Towards a More Competition-Oriented Procurement: The Principle of Competition Embedded in EC Public Procurement Directives (May 15, 2009).

Regulation 18 follows closely the first set of issues regulated in Article 18(1) of Directive 2014/24/EU and also determines that procurement needs to be conducted in accordance with the principles of equality, non-discrimination, transparency, proportionality and competition. In regards with the principle of competition, it is worth noting that paragraphs (2) and (3) of Regulation 18 adopt the same wording as Article 18(1)II of Directive 2014/24/EU, which carries the interpretative difficulties created by the EU rules. For discussion of the content of the principle of competition consolidated in Article 18(1) of Directive 2014/24/EU, see A Sanchez-Graells, Public procurement and the EU competition rules, 2nd end (Oxford, Hart, 2015) chapter 5.

The missing paragraph of Article 18(2)

On its part, Article 18(2) of Directive 2014/24/EU establishes an obligation for Member States to ensure the legality of procurement, particularly as compliance with applicable obligations in the fields of environmental, social and labour law established by international, EU and national law, as well as collective agreements. Article 18(2) however was not transposed explicitly by the PCR2015.

It may seem surprising that Regulation 18 does not include the content of Article 18(2) of Directive 2014/24/EU. However, a possible explanation is that the UK government has interpreted that the obligations it imposes are incumbent upon the State itself, which may make them unfit for incorporation into domestic regulations addressed at contracting authorities, because its wording establishes that “Member States shall take appropriate measures to ensure that in the performance of public contracts economic operators comply with …“. If that is the case, there is no evidence of specific legislation which would achieve this aim, perhaps because the UK Government considers its current provisions to be enough.

Such an omission does not create any gap in the transposition of the EU rules, particularly in view of the fact that Regulation 56(2) establishes the same duty/possibility as Article 56(2) of Directive 2014/24/EU for contracting authorities to “decide not to award a contract to the tenderer submitting the most economically advantageous tender where they have established that the tender does not comply with applicable obligations in the fields of environmental, social and labour law established by EU law, national law, collective agreements or by the international environmental, social and labour law provisions listed in Annex X to the Public Contracts Directive as amended from time to time.” This provision is itself problematic, so please see our commentary to Regulation 56.

Last modified: July 5, 2016 by Pedro Telles

18.—(1) Contracting authorities shall treat economic operators equally and without discrimination and shall act in a transparent and proportionate manner.

(2) The design of the procurement shall not be made with the intention of excluding it from the scope of this Part or of artificially narrowing competition.

(3) For that purpose, competition shall be considered to be artificially narrowed where the design of the procurement is made with the intention of unduly favouring or disadvantaging certain economic operators.