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, which is now 'adjusted' to allow for the consideration of the experience of specific members of staff as an award criterion [reg.67(3)(b) PCR2015].
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 [reg.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' [reg.67(7)(a) PCR2015]. This needs to be connected to the general principle of competition in reg.18(2) PCR2015, 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.
I think that Art 67 Dir 2014/24 deserves quite extensive analysis and I have covered most of the issues I can identify in that provision in my Public Procurement and the EU Competition Rules, 2nd edn (Oxford, Hart, 2015) 378-391. They are too lengthy to repeat them here. Hence, I will only discuss the two main changes that Art 67 has brought about. I hope that, despite being limited, the comments will be interesting.
The sticky issue of separation between selection and award criteria
The interpretative case law has been clear in restricting the use of certain types of criteria for the determination of the offer with the best price-quality ratio (and, ultimately, of the most economically advantageous offer)—which, although relevant in general terms, are not tender-specific criteria. In the first place, as already mentioned, criteria of economic and financial standing and of technical capability, and criteria that concern the tenderers’ suitability to perform the contract in general terms do not have the status of award criteria—but must be considered qualitative selection criteria under the rules of the directives. As stressed by the EU judicature, ‘“award criteria” do not include criteria that are not aimed at identifying the tender which is economically the most advantageous, but are instead essentially linked to the evaluation of the tenderers’ ability to perform the contract in question’ [Case C-532/06 Lianakis  ECR I-251 30].
Therefore, ‘a contracting authority is precluded … from taking into account as “award criteria” rather than as “qualitative selection criteria” the tenderers’ experience, manpower and equipment, or their ability to perform the contract by the anticipated deadline’ [ibid, 32; see S Treumer, ‘The Distinction between Selection and Award Criteria in EC Public Procurement Law—A Rule without Exception’ (2009) 18 Public Procurement Law Review 103]. Hence, with no doubts, the case law of the CJEU prior to the entry into effect of the 2014 rules prevents contracting authorities from using the past experience of the tenderer as an award criterion [S Arrowsmith, The Law of Public and Utilities Procurement. Regulation in the EU and the UK, Vol. 1, 3rd edn (London, Sweet & Maxwell, 2014) 749-61].
However, it must be stressed that this has been the object of a significant reform in Directive 2014/24, given the specific introduction of a modified experience criterion that, according to article 67(2)(b), allows contraction authorities to determine the BPQR offer partially on the basis of the ‘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’. In that way, Directive 2014/24 decouples the treatment of the general experience of the tenderer as a qualitative selection criterion [art 58(4), where the CJEU case law applies full-force] from the assessment of more limited and specific aspects of experience evaluation clearly linked to the subject-matter of the contract, which allow for the specific experience of staff assigned to performing the contract to be taken into consideration at award stage, ‘where the quality of the staff assigned can have a significant impact on the level of performance of the contract’ [art 67(2)(b) dir 2014/24, which restricts, specifies or modifies the CJEU position].
The justification given by Directive 2014/24 for this change is that
Wherever the quality of the staff employed is relevant to the level of performance of the contract, contracting authorities should also be allowed to use as an award criterion the organisation, qualification and experience of the staff assigned to performing the contract in question, as this can affect the quality of contract performance and, as a result, the economic value of the tender. This might be the case, for example, in contracts for intellectual services such as consultancy or architectural services. Contracting authorities which make use of this possibility should ensure, by appropriate contractual means, that the staff assigned to contract performance effectively fulfill the specified quality standards and that such staff can only be replaced with the consent of the contracting authority which verifies that the replacement staff affords an equivalent level of quality [rec (94), emphasis added].
In my view, all of this indicates that the use of staff (specific) experience at award stage will need to be assessed under strict proportionality terms (particularly as the ‘significance’ of its impact on the level of performance of the contract is concerned), given that exceptions [art 67(2)(b)] to the general rules [art 58(4)] of Directive 2014/24 and the applicable interpretative case law need to be constructed strictly. Moreover, recourse to this sort of award criterion will still need to comply with general requirements and avoid distortions of competition such as first comer advantages for incumbent contractors.
Indeed, it must be stressed that admissible award criteria must in any case be tender-specific, or relate to the tender as such, not to the general qualities of the tenderer that have already (or should have) been analysed by the contracting authority in previous phases of the procedure. The EU judicature has been crystal clear in emphasising this limitation, by stressing that
it is settled case law that the quality of tenders must be evaluated on the basis of the tenders themselves and not on that of the experience acquired by the tenderers with the contracting authority in connection with previous contracts or on the basis of the selection criteria (such as the technical standing of candidates) which were checked at the stage of selecting applications and which cannot be taken into account again for the purpose of comparing the tenders [Case T-148/04 TQ3 Travel Solutions  ECR II-2627 86. See also Case 31/87 Beentjes  ECR 4635 15; and Case T-169/00 Esedra  ECR II-609 158.].
Consequently, the award criteria must be relevant from a tender-specific standpoint.
Restrictions Derived from Award Criteria that Result in de facto Exclusion of Tenders or the Advantage of Some Tenders over Others
Even if rules on qualitative selection and non-discrimination requirements are formally complied with in a given tender, the adoption of certain award criteria could generate the same results as an infringement of those rules. That could be the case if the award criteria or their weighting favoured tenders submitted by certain operators on the basis of conditions that could not have been used for the purposes of the qualitative selection of candidates or that automatically exclude de facto a significant number of tenders (or even restrict the number of compliant tenders to one).
For instance, they could do so by requiring the implementation of quality management systems for the purposes of the specific contract that would have proven excessive or irrelevant for the purposes of assessing the general suitability of the tenderer [however, this has been accepted as a proportionate requirement by the GC in Kieffer Omnitec v Commission, T-288/11, EU:T:2013:228; for criticism, see here]; or that exclude certain operators because they focus on requirements whose implementation would be impossible for tenderers that did not comply with these or other requirements beforehand, or whose partial implementation would not be economically viable with regard exclusively to the specific contract.
These sort of requirements are now potentially covered by article 67(2) of Directive 2014/24, given that it allows contracting authorities to include award criteria that do not relate ‘to an intrinsic characteristic of a product, that is to say something which forms part of the material substance thereof’ and, consequently, can focus on factors involved in the specific process of production, provision or trading or a specific process for another stage of their life cycle, ‘even where such factors do not form part of their material substance’ In these instances, it is still important to highlight that the adoption of such award criteria could generate significant distortions or restrictions of competition—without, it must be admitted, generating a substantial potential for discrimination and, currently, with an apparent legal coverage under article 67(2) of Directive 2014/24.
Therefore, in view of the requirements of the principle of competition, such a strategy should be significantly restricted and contracting authorities should guarantee that the award criteria and their weighting ensure equality of opportunity of all tenderers and, consequently, should not focus on or advantage compliance with criteria not restricted to the tender itself—ie, criteria that undertakings would be in a position to comply with or not depending on previous or general conditions unrelated (or not specifically related) to the subject-matter of the contract.
For instance, if certifying compliance with a given quality standard for the product required the previous certification of the general operations of the undertaking as being compliant with a more general quality control system, and the tender documents did not require tenderers to be certified under that standard—then, giving better evaluations to certified than to non-certified products would generate a distortion of competition by de facto excluding or reducing the chances of award to non-certified undertakings (which would not be in a position to get the products certified only for the purposes of the tender). Therefore, by indirectly advantaging or requiring compliance with a condition not imposed at the qualitative selection stage, which refers to more general conditions unrelated to the specific contract, the contracting authority would be distorting competition in a way that should be declared to run contrary to the directives.
Drawing the line between, on the one hand, justified award criteria related to production processes or elements related to other stages in the life cycle of the products or services and, on the other hand, excessive and unjustified requirements that de facto advantage certain competitors over others will be difficult. In my view, it should be conducted on the basis of a strict proportionality requirement aimed at preventing unjustified distortions of competition.
These issues were recently analysed (in general terms) by the CJEU in relation to requirements concerning corporate social responsibility policies and, more specifically, with a focus on requirements of compliance with ‘criteria of sustainability of purchases and socially responsible business’. These are requirements that clearly affect tenderers as a whole and are remotely related to the specific scope of the contract (where contracting authorities can, however, avail themselves from the use of social labels) [Commission v Netherlands, C-368/10, EU:C:2012:284 98-112]. In that regard, and in line with what is here submitted, it is important to stress that the CJEU rejected the possibility to consider such requirements as the establishment of minimum levels of professional or technical ability and emphasised that such type of considerations are incompatible with the rules of the procurement Directives when they are unrelated or go beyond the subject matter of the contract [ibid, 106-108].
Consequently, in order to avoid distortions of competition (and regardless of the creation of discriminatory situations), contracting authorities must refrain from setting such type of requirements as either selection or award criteria that result in de facto exclusion of tenders or the advantage of some tenders over others. In my opinion, the reasoning of the CJEU regarding those requirements at qualitative selection phase are transferable mutatis mutandis to their introduction as award criteria under article 67(2) of Directive 2014/24. Otherwise, the use of this new provision would further erode and damage the distinction between selection and award criteria, which the CJEU has recently emphasised and which, consequently, should be respected in the detailed application of the rules concerning award criteria [Spain v Commission, C-641/13 P, EU:C:2014:2264].