This is the first in a series of public procurement frequently asked questions which we will publish on a bi-monthly basis. If you have any queries you would like to see addressed in future issues, please get in touch with a member of our team – firstname.lastname@example.org
1: IS IT PERMISSIBLE TO USE A STAGED EVALUATION PROCESS IN AN OPEN PROCUREMENT PROCEDURE?
When advising contracting authorities on their procurement processes, a question that we are often asked is whether it is permissible to include, as part of an open procurement procedure, a process which allows for a reduction in the number of bidders where tenders do not meet certain minimum technical (or quality) requirements.
An open procurement procedure has generally been seen as a one stage process only, where all tenders that comply with the selection criteria are fully evaluated according to the published award criteria.This is in contrast to other procurement procedures (e.g. competitive procedure with negotiation, competitive dialogue procedure and innovation partnership procedure) which often consist of multiple evaluation stages and in which a reduction in the number of tenders (often in successive stages) is common place.
There is express authority in Directive EU 2014/24/EU ("the Directive"), and also in the Public Contracts Regulations 2015 ("PCR 2015"), for a multi-stage approach to be undertaken in those other procurement procedures mentioned above. Although that express authority is not included in the provisions concerning the open procurement procedure, the approach is not excluded by either the Directive or the PCR 2015.
Although some contracting authorities have taken the view that they are able to include a staged evaluation process where those bidders who do not meet certain minimum technical requirements (for example minimum threshold scores), we have also seen a reluctance by other contracting authorities to adopt this approach.
However, in September 2018, the Court of Justice of the European Union ("CJEU") delivered a ruling in the case of Montte SL v Musikene (Case C-546/16) which clarified that when using an open procedure it is permissible to exclude tenders at an initial stage based on technical (or quality) criteria, and to only permit those who pass that stage to have their tenders assessed at a second evaluation stage.
In its judgment the CJEU ruled:
In making these decisions the CJEU noted, amongst other things, the following points:
Whilst, in our experience, a number of contracting authorities have previously taken a pragmatic approach in this regard, this case does provide a helpful clarification for contracting authorities who have been unsure as to whether they can legitimately use a multiple stage evaluation process under the open procurement procedure.
Using such an approach in relation to the open procurement procedure will make it easier for contracting authorities to eliminate bidders based on the contracting authority's particular requirements, in an efficient and structured manner.
One important point to note is that this approach is not intended to limit the number of tenders subjected to further evaluation, as would be the case, for example, in a competitive dialogue procedure where a contracting authority decides to limit the number of tenders taken through to the next stage. There is always the possibility that all submitted tenders meet the minimum requirements and therefore proceed to the next stage. Rather this approach is meant to allow those who do not meet certain minimum requirements to be removed earlier in the process. In the Montte SL v Musikene case, the CJEU seemed to attach importance to the fact that the contracting authority could only eliminate bidders which failed to achieve the minimum score and it did not have the discretion to eliminate bidders which met the minimum requirements by selecting only the "best tenders" to go through to the second stage.
In light of this, it would seem sensible that any criteria set by contracting authorities for the elimination of bidders at the first stage of an open procedure are absolute criteria (i.e. the use of minimum score thresholds). However, when setting such absolute criteria, contracting authorities should always bear in mind the relevant risks and issues of adopting its preferred approach.
For example, adopting an overall minimum threshold for the quality criteria could mean that some bidders meet this overall threshold having scored very highly in one or more areas but very poorly in another area; or if using scoring hurdles for individual quality questions, where only bids which score a specified minimum score in certain requirements will be considered. A contracting authority needs to be wary of adopting this approach for all quality criteria, especially if there are some criteria that are less important to it, otherwise the risk is that an otherwise strong bid is excluded on fairly minor grounds.
Also, whilst this case confirms it is permissible for such an evaluation process to result in only one bidder remaining in the process, this outcome may not achieve a contracting authority's ultimate procurement objectives including value for money considerations. The contracting authority could find itself in a situation where it does not wish to accept the remaining tender and therefore has to restart the whole procurement process.
The CJEU certainly noted that if there is only one tender left for the contracting authority to consider, following the technical evaluation, the contracting authority is in no way required to accept that tender and that it is open to the contracting authority to terminate the procedure and start a new procurement procedure with different award criteria.
When devising any procurement process, a contracting authority should always bear in mind the general principles of equal treatment, transparency and proportionality, and also be mindful of its obligations under regulation 67 (Contract Award Criteria) of the PCR 2015, including the requirement to ensure the possibility of effective competition. Contracting authorities should also seek appropriate advice if there is any doubt as to whether a proposed procedure is compliant with the PCR 2015.
If you have any queries, please do not hesitate to contact a member of our Commercial Team.
Here you will find all the latest news as it happens. If it’s news and it involves Acuity, one of our clients or our CSR activities this is the place to come.Back to news