Regulation 66 – Reduction of the number of tenders and solutions

Commentary

Regulation 66 PCR transposes Article 66 of Directive 2014/24/EU on the rules on reduction of the number of tenders and solutions. The content of Article 44(4) of Directive 2004/18/EC has been moved to Article 66 of Directive 2014/24/EU. In very close connection to the situation regarding Regulation 65, this is an area where the new rules fundamentally provide for continuity of the previous system.

Regulation 66 allows for a reduction of tenders (competitive procedure with negotiation) or solutions (competitive dialogue) in accordance with the award criteria stated in the procurement documents. Paragraph 2 of this regulation includes a competition protection exception by stating that the reduction needs to take into account the number coming to the final stage must guarantee genuine competition, “in so far as there are enough tenders, solutions or qualified candidates”. This approach is subject to criticism for three reasons.

First, if there are at least 2 qualified tenders or solutions then in consequence they can never be reduced to one during the final stage. Effectively, that may mean (especially in competitive dialogue where it is relatively easy for the contracting authority be convinced by a specific solution during the dialogue stage) that ‘dead horses’ will be kept in the running just to function as threat of competition leading to transaction and opportunity costs to be laid at the back of economic operators. It is simply unfair (and illegal in jurisdictions where bona fides is important) to keep economic operators in a procedure where they have zero chances to win, as sacrificial lambs in the altar of a semblance of competition. For further discussion, see P Telles, Competitive Dialogue in Portugal and Spain (2010), available at http://ssrn.com/abstract=2308502.

The second reason is that this limitation only applies “in the final stage”, thus apparently allowing the contracting authority to reduce candidates/solutions/tenders to one in the previous stages.

The third reason is also connected with “in the final stage” part of paragraph 2. It is not clear how “qualified candidates” can be excluded in any procedure “in the final stage”. Tenders can be excluded for multiple reasons but candidates? Unless they become unqualified (it may happen) but then this paragraph would not be applicable in the first place.

It seems that what paragraph 2 wanted to stress is that the reductions should not lead to a final stage with only a single economic operator.

A final critical note for the scope of Regulation 66. While both the competitive procedure with negotiation and competitive dialogue are covered, the innovation partnership is not. It is conceivable the same issues might arise in this procedure, but it appears they are left unregulated.

 

Proposed citation: Albert Sanchez-Graells & Pedro Telles, (2016) Commentary to the Public Contracts Regulations 2015, available at: www.pcr2015.uk.

 

Last modified: September 5, 2016 by Pedro Telles

66.—(1) Where contracting authorities exercise the option of reducing the number of tenders to be negotiated in accordance with regulation 29(19) and (20) or of solutions to be discussed in accordance with regulation 30(12) and (13), they shall do so by applying the award criteria stated in the procurement documents.

(2) In the final stage, the number arrived at shall make for genuine competition in so far as there are enough tenders, solutions or qualified candidates.