Regulation 67 – Contract award criteria

Commentary

Regulation 67 PCR2015 transposes Art. 67 of Directive 2014/24/EU regarding the rules applicable to the selection and application of award criteria. It establishes the way that contract award criteria are to be developed and used by contracting criteria when awarding contracts. The Regulation is very descriptive and provides a number of helpful pointers for contracting authorities (paragraphs 3 and 5). Overall the Regulation seems to be a reasonable attempt to a “holistic” view of what should constitute an award criterion, clarifying what can and cannot be used for awarding contracts.

The main rule of Regulation 67 is that pretty much anything can constitute an award criteria, as long as it is connected with the subject matter of the contract (paragraph 2) and it does not destroy competition (paragraph 7). This includes any element from the life cycle of what is being bought including production processes. Price only is still possible as part of this new more holistic approach to contract award. It is not mentioned explicitly but it is not forbidden either.

The 2014 EU rules (and now the PCR2015) introduce some significant changes on this crucial issue and, primarily, aim to erode the traditional distinction between selection and award criteria derived from Lianakis [Case C-532/06 Lianakis [2008] ECR I-251 30], which is now ‘adjusted’ to allow for the consideration of the experience of specific members of staff as an award criterion (Regulation 67(3)(b) PCR2015).  However, said possibility is only limited to the actual members of staff which will be involved in the performance of the contract and subject to the strict proportionality test. In consequence, the criterion must be specific enough to be relevant to the particular contract at hand.

They also aim at furthering the flexibility given by the CJEU in the Dutch coffee case, and therefore allowing for the use of ‘invisible’ factors as award criteria even where those factors do not form part of the material substance of the works, supplies or services covered by the contract, provided that they are involved in either (a) the specific process of production, provision or trading of those works, supplies or services, or (b) a specific process for another stage of their life cycle (Regulation 67(5) PCR2015). 

Nonetheless, or precisely as an important check to that increased flexibility, the new rules keep the classical pro-competitive requirement whereby award criteria ‘shall ensure the possibility of effective competition‘ (Regulation 67(7)(a) PCR2015). This needs to be connected to the general principle of competition in Regulation 18(2) PCR12015, and it is not hard to foresee that a significant number of cases where infringement of the general principle is raised will be concerned with issues with award criteria and/or their interpretation and application.

Article 67 of Directive 2014/24/EU deserves quite extensive analysis, which is available in A Sanchez Graells Public Procurement and the EU Competition Rules, 2nd edn (Oxford, Hart, 2015) 378-391.

Last modified: December 5, 2016 by Pedro Telles

67.—(1) Contracting authorities shall base the award of public contracts on the most economically advantageous tender assessed from the point of view of the contracting authority.

(2) That tender shall be identified on the basis of the price or cost, using a cost-effectiveness approach, such as life-cycle costing in accordance with regulation 68, and may include the best price-quality ratio, which shall be assessed on the basis of criteria, such as qualitative, environmental and/or social aspects, linked to the subject-matter of the public contract in question.

(3) Such criteria may comprise, for example—

(a)quality, including technical merit, aesthetic and functional characteristics, accessibility, design for all users, social, environmental and innovative characteristics and trading and its conditions;

(b)organisation, qualification and experience of staff assigned to performing the contract, where the quality of the staff assigned can have a significant impact on the level of performance of the contract; or

(c)after-sales service and technical assistance, delivery conditions such as delivery date, delivery process and delivery period or period of completion.

(4) The cost element may also take the form of a fixed price or cost on the basis of which economic operators will compete on quality criteria only.

(5) Award criteria shall be considered to be linked to the subject-matter of the public contract where they relate to the works, supplies or services to be provided under that contract in any respect and at any stage of their life cycle, including factors involved in—

(a)the specific process of production, provision or trading of those works, supplies or services, or

(b)a specific process for another stage of their life cycle,

even where those factors do not form part of their material substance.

(6) Award criteria shall not have the effect of conferring an unrestricted freedom of choice on the contracting authority.

(7) Award criteria shall—

(a)ensure the possibility of effective competition; and

(b)be accompanied by specifications that allow the information provided by the tenderers to be effectively verified in order to assess how well the tenders meet the award criteria.

(8) In case of doubt, contracting authorities shall verify effectively the accuracy of the information and proof provided by the tenderers.

Weighting

(9) The contracting authority shall specify, in the procurement documents, the relative weighting which it gives to each of the criteria chosen to determine the most economically advantageous tender, except where this is identified on the basis of price alone.

(10) Those weightings may be expressed by providing for a range with an appropriate maximum spread.

(11) Where weighting is not possible for objective reasons, the contracting authority shall indicate the criteria in decreasing order of importance.