Recognition of official lists of approved economic operators and certification by certification bodies under Reg. 64 Public Contracts Regulations 2015

Reg.64 of the Public Contracts Regulations 2015 (PCR2015) transposes Article 64 of Directive 2014/24 regarding the rules applicable to the recognition of official lists of approved economic operators and certification by certification bodies for the purposes of qualitative selection. The UK (England and Wales) has decided not to create its own official list or certification system [reg.64(10) PCR2015] and, consequently, the rules only apply to the recognition in the UK of inscription in official lists or certification obtained in other Member States. In my view, the transposition is correct. Pedro has some interesting additional insights.

The following remarks are based on my Public Procurement and the EU Competition Rules, 2nd edn (Oxford, Hart, 2015)323-325, and focus on the text of the Directive. However, they are equally applicable to reg. 64 PCR2015. 

Official Lists of Contractors and Certification Systems. The same logic and criteria applied in the analysis of the rules relating to the qualitative selection of candidates and bidders are of relevance in the analysis of the rules regulating the establishment of official lists of contractors, suppliers or service providers,[1] or of systems of certification by public or private bodies complying with European certification standards within the meaning of Annex VII of Dir 2014/24.[2] 

Such registers[3] and certification systems are aimed at reducing administrative costs and at simplifying the documentation requirements involved in tender procedures,[4] allowing undertakings (or groups of undertakings) to register or get certified for a given period of time, and thereby comply with the formalities regarding professional, economic, financial, quality and environmental standing in all tenders developed during that period of time simply by producing proof of registration or certification (art 64(3) dir 2014/24).[5] They also provide partial or limited proof of suitability to contracting authorities of other Member States by the registered or certified contractors of the Member State holding the official list (art 64(4), 64(5) and 64(6)), and particularly ‘certified registration on official lists by the competent bodies or a certificate issued by the certification body shall constitute a presumption of suitability with regard to requirements for qualitative selection encompassed by the official list or certificate’, thereby partially carrying on this reduction of the administrative burden to the participation in cross-border tender procedures.

These systems can create significant competition problems, particularly depending on the domestic rules applicable by Member States as concerns the authorisation for private certification entities to operate in the market, or the tariffs and prices applicable to certification services, which can raise significant barriers of access to the procurement market. However, these are issues not covered by Dir 2014/24 and, consequently, are dealt with under the applicable competition rules.[6]

In order to guarantee the functionality of these registration and certification systems, Dir 2014/24 establishes certain additional rules—such as a prohibition of revision of information which can be deduced from the ensuing certificates by contracting authorities without justification (art 64(5)), the obligation to run the systems in a non-discriminatory manner (art 64(6)), the non-mandatory character of such systems for operators of other Member States, or the recognition of equivalent certificates and alternative means of proof (art 64(7) dir 2014/24). It also creates some additional mechanisms for the exchange of information between Member States in order to further reduce the administrative burden (art 64(8) dir 2014/24).

From a substantive point of view, it is worth noting that the requirements available to Member States in the design of such registration and certification systems are guided by the general rules and criteria regarding qualitative selection of candidates (art 64(2) dir 2014/24). This is a logical requirement, since these systems should be conceived as instances of (indirect) qualitative selection of bidders with potential effects over a large number of tenders. Indeed, as directed by article 64(2) of Dir 2014/24, Member States shall adapt the conditions for registration on these lists and for the issue of certificates by certification bodies to the relevant provisions regulating qualitative selection criteria, including the specific rules applicable to groups of undertakings. 

Therefore, in general terms, the same pro-competitive requirements already discussed apply here. Notwithstanding this general idea, registers of approved contractors and certification systems present an additional feature that seems to merit detailed analysis: the establishment of the categories or types of contracts, as well as the quantitative thresholds for which registration or certification is available. In this regard, it should be noted that nothing in Dir 2014/24 expressly regulates the categories and thresholds applicable to certification and registration procedures. Establishing excessively narrow or excessively broad categories for registration or certification might generate distortions of competition between registered and non-registered (or certified and non-certified) tenderers, as well as competition amongst tenderers included in each of these groups.

In this regard, it is submitted that an objective, transparent and competition-neutral way to organise the registration and certification systems is to adopt the classifications and descriptions contained in the Common Procurement Vocabulary (CPV)[7]—which, in my opinion, are binding on Member States for these purposes (art 4 in fine Commission Regulation 213/2008). In this regard, certification and registration for each activity and for each product should be available separately, without affecting the possibility of obtaining joint registration or certification for multiple activities and/or products by a single undertaking or group of undertakings. 

Also, the economic thresholds set for certification or registration—that is, the value of the contracts for which certification or registration is obtainable should not be set at excessively high levels—thereby limiting the competitive ability of undertakings in the high range of each of the categories. On the contrary, if possible, the system should allow for ‘continuous’ certification or registration—ie, for a continuous sliding scale of values, perhaps grouped at small intervals—so that each undertaking can get certified or registered to tender for contracts with a value up to whichever amount is proportionate to its particular economic and financial standing, without the need to meet specific minimum thresholds.[8]

In any case, it should be emphasised that the establishment of these registration and certification systems should not prevent unregistered or uncertified operators from proving that they meet the applicable professional, technical, economic, financial, quality and environmental requirements by means other than the relevant certificates—so that lack of registration or certification shall not per se determine the exclusion of interested undertakings from a given tender procedure.[9] Put otherwise, registration or certification cannot be used as a mandatory selection requirement by contracting authorities. This is specifically regulated with relation to economic operators from other Member States, who cannot be obliged to undergo such registration or certification in order to participate in a public contract (art 64(7) dir 2014/24). 

As regards domestic economic operators, it is submitted that the anti-formalist logic applicable to the system of qualitative selection, as well as the mandates of the principle of competition and the principle of equality and non-discrimination, prevent contracting authorities from excluding domestic contractors due to the sole fact that they are not registered or certified for a given category of contracts.[10] In this regard, official lists of contractors and certification systems should be seen as an instrument aimed at easing and fostering participation in tender procedures, but cannot constitute barriers or impediments to access such procedures. Therefore, contracting authorities should be obliged to adopt a possibilistic approach and accept proof of compliance with the relevant professional, technical, economic, financial, quality and environmental requirements by means other than certification or registration (analogically, as regards the obligation to accept proof by means other than certification of compliance with quality and environmental standards, see arts 60 and 62 dir 2014/24).

[1] The practice of developing and keeping bidders’ mailing lists has long been used in some Member States. For a review of the use of the same technique in the US, see RE Lieblich, ‘Bidder Pre-Qualification: Theory in Search of Practice’ (1972) 5 Public Contract Law Journal 32; P Shnitzer, Government Contract Bidding, 3rd edn (Washington, Longman–Federal Publications, 1987) 4–9; and KM Jackson, ‘Prequalification and Qualification: Discouragement of New Competitors’ (1989–1990) 19 Public Contract Law Journal 702.
[2] See: S Arrowsmith, The Law of Public and Utilities Procurement. Regulation in the EU and the UK, Vol. 1, 3rd edn (London, Sweet & Maxwell, 2014) 1311–20;  PA Trepte, Public Procurement in the EU: A Practitioner’s Guide, 2nd edn (Oxford, Oxford University Press, 2007) 358–63; and C Bovis, EC Public Procurement: Case Law and Regulation (Oxford, Oxford University Press, 2006) 136–37, 170–71 and 231–32.
[3] For related discussion, see W Kostka, ‘Vendors' list for procurement following expressions of interest - a critical analysis of a new procurement mechanism for the EU institutions’ (2014) 23 Public Procurement Law Review 219–28.
[4] See: S Arrowsmith, ‘Framework Purchasing and Qualification Lists under the European Procurement Directives’ (part 1) (1999) 8 Public Procurement Law Review 115, 116.
[5] However, given the functional and anti-formalistic interpretation of the ECJ regarding the possibility to rely on the capacity of other entities, particularly in Case C-94/12 Swm Costruzioni 2 and Mannocchi Luigino [2013] pub. electr. EU:C:2013:646 35 and 36, the actual effectiveness of these systems and their continued existence can be queried. Indeed, it can be argued that certification systems should only cover ‘works with special requirements necessitating a certain capacity which cannot be obtained by combining the capacities of more than one operator’ as, otherwise, the whole certification system is completely superficial if the contracting authority must (as indeed it shall) accept any ‘jigsaw’ of (partial) certifications presented by a group of undertakings (or by an incapable main contractor that enters into subcontract agreements) in order to prove that they have sufficient (aggregate) economic, technical and financial standing.
[6] For a recent case where the CJEU rubber stamped the Italian minimum tariffs for certification in public procurement, subject to proportionality, see Case C-327/12 Soa Nazionale Costruttori [2013] pub. electr. EU:C:2013:827.
[7] Commission Regulation (EC) No 213/2008 of 28 November 2007 amending Regulation (EC) No 2195/2002 of the European Parliament and of the Council on the common procurement vocabulary (CPV) and Directives 2004/17/EC and 2004/18/EC of the European Parliament and of the Council on public procurement procedures, as regards the revision of the CPV (Regulation 213/2008) [2008] OJ L74/1.
[8] The only minimum threshold that could be relevant would be the setting of the threshold that triggers the application of the EU public procurement directives. However, if Member States opt for the development of a certification or registration system, they might as well also adopt it for procurement activities not covered by the directives (ie, procurement below thresholds) and, consequently, then, there would be no clear justification for the setting of minimum economic thresholds—other than, arguably, considerations related to the administrative costs of running the certification or registration system which, in this case, should be proportionate to the minimum thresholds set.
[9] Generally, on certain types of mandatory qualification lists and the undesirability of their restrictive effects—although based on the previous utilities directive—see S Arrowsmith, ‘Framework Purchasing and Qualification Lists under the European Procurement Directives’ (part 2) (1999) 8 Public Procurement Law Review 161, 171–80 and 185–86.
[10] Although based in the previous EU directives, see Arrowsmith, Framework Purchasing and Qualification Lists (part 2) (1999) 175–76, who found support for this argument in Case C-87/94 Commission v Belgium [1996] ECR I-2043 51–56, where the ECJ determined that ‘the principle of equality underlying the directive applies as much to domestic as to foreign firms’.