How far can Member States push formal requirements in self-certifications? Will the CJEU give Member States a wake up call? (a propos AG Wathelet in C-46/15 )

In his Opinion of 3 March 2016 in Ambisig, C-46/15, EU:C:2016:137, Advocate General Wathelet explored the limits of the formal requirements that Member States can impose on self-certifications provided by tenderers in public procurement procedures. The case discusses the limits under the 2004 rules of EU public procurement, where the use of self-certification was certainly exceptional. However, it is interesting to consider this case as an opportunity for the Court of Justice of the European Union (CJEU) to give Member States a wake up call in the roll-out of the 2014 EU public procurement rules, where self-certification has pretty much become the rule rather than the exception. Not least, because AG Wathelet has invited the CJEU by engaging in arguments regarding the future rules.

Why will this ruling be relevant in the future?

Under the 2004 rules [specifically, Art 48(2)(a) of Dir 2004/18], economic operators taking part in public procurement procedures were allowed to furnish evidence of their technical abilities by one or more specified means of proof, which included a list of the principal deliveries effected or the main services provided in the past three years. If the contracting authority indicated that it wishes to receive such a list [Art 48(6) Dir 2004/18], evidence of delivery and services provided had to be be given in the form of certificates issued or countersigned by the competent authority that received the services or deliveries or, 'where the recipient was a private purchaser, by the purchaser’s certification or, failing this, simply by a declaration by the economic operator' [Art 48(2)(a)(ii) of Dir 2004/18, emphasis added]. Thus, the use of such self-declaration of private sector experience was foreseen as a mechanism of last resort or escape clause.  This has now been significantly amended in the 2014 rules.

On the one hand, the system now relies in the self-declarations underlying the European Single Procurement Document [ESPD, Art 59 Dir 2014/24 and , see Part IV, Section B, para (1a), fn 40], which allows economic operators to simply declare that they meet the the relevant selection criteria that have been set out by the contracting authority. Only at the request of the contracting authority, and ideally only if they are chosen for the award of the contract, must economic operators furnish certificates and means of proof backing up their self-declaration [Art 59(4) Dir 2014/24]. There is no doubt, then, that the system is one where self-declarations are now the norm.

Moreover, on the other hand, it should be taken into account that '[c]ontracting authorities shall indicate the required conditions of participation ... together with the appropriate means of proof, in the contract notice or in the invitation to confirm interest' [Art 58(5) Dir 2014/24]. Their choice of means of proof is however limited. Contracting authorities shall not require means of proof other than those referred to in Article 60 Dir 2014/24. For our purposes, according to the relevant provision, the requirement remains that evidence of the economic operators’ technical abilities may be provided by one or more of several specified means of proof, which include a list of the principal deliveries effected or the main services provided over at the most the past three years (Part II of Annex XII Dir 2014/24). However, there is no specific reference of the way in which these lists need to be backed up by economic operators. Thus, the rule disputed in Ambisig that where the recipient was a private purchaser, the economic operator must back-up the relevant entry in its experience list 'by the purchaser’s certification or, failing this, simply by a declaration by the economic operator ' is gone.

The question remains, though, how will Member States (or contracting authorities) deal with self-certifications of experience under the new rules at a practical level. It does not seem too far-fetched to assume that they will carry on as usual and require the same types of supporting (self)certifications that they are used to handle under the 2004 rules. Thus, an analysis of the Opinion of AG Wathelet in Ambisig is relevant, not only in relation to the already phasing out 2004 rules, but also for the proper roll-out of the 2014 rules.

The issues surrounding formalities in Ambisig under the 2004 rules

The dispute in Ambisig was multi-dimensional, particularly because the Portuguese interpretation of Art 48(2)(a)(ii) of Dir 2004/18 was rather complex (or rather, exceedingly formalistic) when it came to the possibility of accepting certifications from private purchasers, which was expressed in the following stylised terms in the contract notice of the procurement in dispute: In order to be selected, the candidates must submit the following application documents: ... a declaration by the client on headed, stamped paper confirming ... in accordance with the model declaration in Annex ... to this contract notice. The declaration must bear a signature certified by a notary, lawyer or other competent entity, specifying the capacity of the person signing.

This raises many issues, particularly in relation with the impossibility to provide a mere self-declaration by the economic operator itself (which is no longer a legal issue under the 2014 rules). However, for the purposes of assessing the relevance of this case for the future, the relevant question before the CJEU, and towards which AG Wathelet's Opinion provides an interesting answer is as follows:

Must Article 48(2)(a)(ii), second indent, of Directive 2004/18 be interpreted to the effect that it precludes the application of rules laid down by the contracting authority, which, on pain of exclusion, require the private purchaser’s certification to contain authentication of the signature by a notary, lawyer or other competent entity?

In my view, for the reasons explained above, this will apply mutatis mutandi to any requirements applicable to certificates to be provided as back of an ESPD self-declaration of experience under the 2014 rules.

Interestingly, after engaging in another tripping exercise of law and language where a literal analysis of several language versions of the contested provision are compared and contrasted without reaching any firm position on its proper interpretation (for a recent previous case of such analysis, on that occasion by the General Court, see here), AG Wathelet considers the following:

62. First of all, the Court has consistently held that Article 48 of Directive 2004/18 establishes a closed system which limits the methods of assessment and verification available to contracting authorities and, therefore, limits their opportunities to lay down requirements.
63. The Court has also stated that even within the framework of an open system ... contracting authorities’ freedom is not unlimited and the aspects chosen must be ‘objectively such as to provide information on such standing … without, however, going beyond what is reasonably necessary for that purpose’.
64. The same considerations apply, a fortiori, to the requirements laid down in the closed evidential system under Article 48 of Directive 2004/18. In my opinion, requiring authentication of the signature of a private purchaser attesting to a delivery effected or a service provided by an economic operator who has applied for a contract goes beyond what is necessary to prove the technical ability of the operator in question and is excessively formalistic when compared to the straightforward declaration by the economic operator, which is the subsidiary form of evidence permitted under the second indent of Article 48(2)(a)(ii) of Directive 2004/18.
65. If the contracting authority has concerns about the veracity of the document submitted to it, it may also, in my view, request additional information to demonstrate the authenticity of the certification provided. Indeed, as part of the contextual analysis, it must be recalled that Article 45(2)(g) of Directive 2004/18 makes it possible to exclude from the contract any operator who ‘is guilty of serious misrepresentation in supplying the information required’ (Opinion in C-46/15, paras 62-65, references omitted, emphasis in italics in the original, emphasis in bold added).

AG Watheler's glimpse into the future

Remarkably, after carrying out a historical analysis of the way in which the 2004 rules came to have their wording, AG Wathelet uses the 2014 rules as an interpretation tool. Beyond the time-consistency (or not) of such an approach to statutory interpretation, his analysis includes policy arguments around the following considerations:

73. ... Directive 2014/24 ... goes even further in the sense of reducing evidential formalities by removing all references to certification by the purchaser.
74. From now on, Article 60(4) of that directive — which replaces Article 48(2) of Directive 2004/18 — simply provides that ‘evidence of the economic operators’ technical abilities may be provided by one or more of the means listed in Annex XII Part II, in accordance with the nature, quantity or importance, and use of the works, supplies or services’.
75. Under Annex XII Part II(a)(ii) of Directive 2014/24, the means of evidence attesting to economic operators’ technical abilities are ‘a list of the principal deliveries effected or the main services provided over at the most the past three years, with the sums, dates and recipients, whether public or private, involved. Where necessary in order to ensure an adequate level of competition, contracting authorities may indicate that evidence of relevant supplies or services delivered or performed more than three years before will be taken into account’. The need for this list to be accompanied by a certification from the purchaser has therefore disappeared.
76. Even though Directive 2014/24 does not apply to the dispute in the main proceedings, this new directive, which repeals Directive 2004/18, is relevant in that it expresses the current intention of the EU legislature. It may therefore be of assistance in ascertaining the current meaning of an earlier, similar provision, provided, however, that such interpretation is not contra legem.
77.  In the present case, it seems to me that Directives 92/50 and 2014/24 confirm the EU legislature’s continuing intention not to make evidence of the technical ability of an economic operator subject to any specific formality and do so in a way that does not conflict with the wording of the applicable provision.
78. In other words, viewed in its context and from a historical perspective, the second indent of Article 48(2)(a)(ii) of Directive 2004/18 imposes no other requirement than the assurance or confirmation, by the purchaser, that the service on which the economic operator relies with a view to securing the contract was actually provided (Opinion in C-46/15, paras 73-78, references omitted, emphasis added).

I am not sure that AG Wathelet's consideration in para 75 would necessarily be the natural interpretation of Annex XII Part II(a)(ii) of Directive 2014/24, because contracting authorities may well be tempted to consider that the Directive does not actually exclude any mechanisms of certification from the purchaser (it simply just not foresees them) and, in any case, they could be tempted to exercise their prerogative to 'invite economic operators to supplement or clarify the certificates received' [Art 59(4) in fine Dir 2014/24] by requesting similarly formalised (private) purchaser certifications. Thus, his interpretation, which I personally very much share, runs against that possibility and an explicit endorsement by the CJEU would be most welcome.

In any case, what is clear is that, in AG Wathelet (and my) opinion, the 2004 and ad maiorem the 2014 EU public procurement rules preclude 'the application of rules laid down by a contracting authority which, on pain of exclusion, require the private purchaser’s certification to bear a signature certified by a notary, lawyer or other competent entity'. We can just hope that the CJEU will endorse this approach.

European Single Procurement Document under Reg. 59 Public Contracts Regulations 2015

Reg.59 of the Public Contracts Regulations 2015 (PCR2015) transposes Article 59 of Directive 2014/24 concerning the European Single Procurement Document (ESPD), which attempts to reduce the red tape involved in the participation of public procurement processes. Article 59 of Dir 2014/24 introduces a significant attempt to flexibilise documentary requirements and to reduce red tape in public procurement by means of the ESPD (ie a collection of self-declarations) and other facilitating measures [for discussion, including the abandoned proposal for a European Procurement Passport, see A Sanchez Graells, “Are the Procurement Rules a Barrier for Cross-Border Trade within the European Market? — A View on Proposals to Lower that Barrier and Spur Growth” in C Tvarnø, GS Ølykke & C Risvig Hansen (eds), EU Public Procurement: Modernisation, Growth and Innovation (Copenhagen, DJØF, 2012) 107, 121-126]. Pedro is quite optimistic about the advantages of the system. As I discuss below, I am much less so.

Under this new system, economic operators will be able to submit an ESPD ‘consisting of an updated self-declaration as preliminary evidence in replacement of certificates issued by public authorities or third parties confirming’ that they are not affected by exclusion grounds, that they meet selection and short-listing criteria (as applicable) and that they will be able to produce hard documentary evidence of such circumstances without delay, upon request of the contracting authority [art 59(1)]. 

Indeed, the ESPD ‘shall consist of a formal statement by the economic operator that the relevant ground for exclusion does not apply and/or that the relevant selection criterion is fulfilled and shall provide the relevant information as required by the contracting authority. The ESPD shall further identify the public authority or third party responsible for establishing the supporting documents and contain a formal statement to the effect that the economic operator will be able, upon request and without delay, to provide those supporting documents’. 

Moreover, where the contracting authority can obtain the supporting documents directly by accessing a database pursuant to Art 59(5) odf Dir 2014/24, the self-declaration shall also contain the information required for this purpose, such as the internet address of the database, any identification data and, where applicable, the necessary declaration of consent. In order to try to increase the advantages of the ESPD, it is conceived as a ‘reusable’ instrument, so that ‘[e]conomic operators may reuse an ESPD which has already been used in a previous procurement procedure, provided that they confirm that the information contained therein continues to be correct’.

The contracting authority will then be free to request submission of such documents at any point of the process where this appears necessary to ensure the proper conduct of the procedure and, in any case, shall require them from the chosen contractor prior to awarding the contract, unless it already possesses these documents or can obtain these documents or the relevant information by accessing a national database [art 59(4)]. 

In that regard, it is worth stressing that, as a complementary facilitating measure, Art 59(5) of Dir 2014/24 foresees that: ‘economic operators shall not be required to submit supporting documents or other documentary evidence where and in so far as the contracting authority has the possibility of obtaining the certificates or the relevant information directly by accessing a national database in any Member State that is available free of charge, such as a national procurement register, a virtual company dossier, an electronic document storage system or a pre-qualification system. For [that] purpose … Member States shall ensure that databases which contain relevant information on economic operators and which may be consulted by their contracting authorities may also be consulted, under the same conditions, by contracting authorities of other Member States’. 

As a complement, and according to Art 59(6) of Dir 2014/24, ‘Member States shall make available and up-to-date in e-Certis a complete list of databases containing relevant information on economic operators which can be consulted by contracting authorities from other Member States. Upon request, Member States shall communicate to other Member States any information related to the databases referred to in this Article’. Moreover, according to Art 61(1) of Dir 2014/24, ‘With a view to facilitating cross-border tendering, Member States shall ensure that the information concerning certificates and other forms of documentary evidence introduced in e-Certis established by the Commission is constantly kept up-to-date’.

It should be recalled that failure to provide the required documentation in support of the self-declarations submitted by the economic operator will constitute a discretionary ground for exclusion [art 57(4)(h)], which the contracting authority can apply any time [art 57(5)]. In that regard, the system seems too lenient towards the failure to support any of the prior declarations. Under the initial 2011 proposal for a new Directive, it would generate an impediment to award under Art 68, now suppressed. Indeed, it is hard to understand why contracting authorities would be free to award the contract to an economic operator that cannot support its own self-declarations and how that would not infringe the principles of transparency, equal treatment and non-distortion of competition. In my view, this should constitute a case of mandatory exclusion of the economic operator concerned, unless there were good reasons beyond its control that prevented it from submitting the required documentation.

More generally, in my view, this rather revolutionary proposal (revolutionary at least for countries with ‘traditional’ administrative procedure regulations) for the acceptance of the ESPD (rectius, ‘mere’ self-declarations) clearly has the potential to reduce the costs of participating in the tender for unsuccessful bidders (increasing the incentive to participate), but generates a relatively small advantage for successful bidders (only a time gain, and of an uncertain length at that), increases the length of the procedure (there is no regulation concerning the time that the authority must give the successful tenderer to produce the requested documents prior to award) and generates a risk of potential award to non-compliant bidders that would require second or ulterior awards (with the corresponding difficulties regarding the need to ensure that other bidders keep their offers open, new award notices, etc). These risks are identified in the Commission's Impact Assessment of the Proposal for a Directive of the European Parliament and of the Council on Public Procurement (page 70), but simply dismissed on the hope that self-declarations would bring a significant reduction of time and costs and a potential automatisation of selection and award procedures. I do not think is a proper assessment of the issues that will likely arise in practice.
In any case, in order to complete this proposal, I think that it would be necessary to set speedy but reasonable time limits to produce the requested documents and to strengthen the consequences of failing to produce supporting evidence for the self-declarations, which should not only be an impediment to award, but also be clearly identified as a ground for mandatory exclusion.

Moreover, failure to back a self-declaration / ESPD submission should be expressly set as a head of damage that allows contracting authorities to recover any additional expenses derived from the need to proceed to a second-best, delayed award of the contract (without excluding the eventual enforcement of criminal law provisions regarding deceit or other types of fraud under applicable national laws). 

Also, rules on annulment of the awarded contract and other sanctions are needed for those instances where the discovery of the falsity of the documents occurs after contract award—since this case is not fully covered by the provision of Art 73(b) of Dir 2014/24, which only requires that contracting authorities have the possibility to terminate a public contract during its term, where it turns out that ‘the contractor has, at the time of contract award, been in one of the situations referred to in Article 57(1) and should therefore have been excluded from the procurement procedure’. 

Hence, if the self-declaration that the economic contractor has been unable to support is not concerned with Art 57(1), there is not even an indirect way to challenge (at least clearly) the award of the contract despite the infringement of Art 59(4) of Dir 2014/24. In my opinion, challenges under domestic contract rules governing misrepresentations or falsity in private documents should be available in this case, but it would have been desirable that the new rules included a specific termination clause in this case in Art 73.