The essay competition ‘If I could change one thing in public procurement regulation, I would …’ may have come at the wrong time, or perhaps the topic was more difficult than it first seemed … or perhaps the prize was not as much of an incentive as I thought. There were not very many submissions. In fact, the standard track for practitioners and academics ended up deserted. Conversely, the student track attracted some interesting thoughts and I am delighted to publish today the winning essay by Džeina Gaile.*
The essay reflects the complexity of practically implementing principles-based approaches to procurement regulation, as well as the not smaller difficulties in providing statutory rules or detailed guidance to flesh out those principles. The balance between generality and actionability of procurement rules is a constant challenge for regulators, and one at the forefront of the UK’s reform of its procurement rulebook, which moved on to the next stage after the Government’s response to the Green Paper consultation in December 2021 (on which I hope to comment before too long). So hopefully you will agree that the essay is timely and interesting. Happy reading.
If I could change one thing in public procurement regulation, I would …
…provide the contracting authorities with a more detailed regulation on how the principle of equal treatment of tenderers should be applied in case of tender deficiencies and errors.
The public procurement process involves many stages and one of them is the tender evaluation. As in every process driven by human action, errors can be found in the documents made by both the contracting authorities and tenderers. The regulation of Article 56(3) of the Directive 2014/24/EU aims to help the contracting authorities to deal with errors that are found in the information submitted by the economic operators, allowing for additional regulation by the Member States. However, the Directive’s regulation is quite general, and many aspects remain unclear.
Of course, tender clarification could be regarded as a purely practical problem that is not important enough to be dealt with in the procurement legal regulation.
However, one should not forget that as a result of the clarification the tender is either rejected or clarified (and the tenderer may further win the procurement). This decision has a direct effect on the results of the procurement. From this point of view, it should be clear that the result of a more or less strict approach regarding clarification of tenders impacts the whole procurement system.
There is also a line of the case-law of the Court of Justice of the European Union on the issue, showing that it can be complex - ‘Storebaelt’ (C-243/89), ‘Slovensko’ (C-599/10), ‘Manova’ (C-336/12), ‘Esaprojekt’ (C-387/14), ‘Klaipėdos regiono atliekų tvarkymo centras’ (C‑927/19) and others. Since “the scope of the contracting authority’s power to allow the successful tenderer subsequently to supplement or clarify its initial tender depends on compliance with the provisions of Article 56(3) of Directive 2014/24, having regard, in particular, to the requirements of the principle of equal treatment” (C‑927/19, para 94), and equal treatment is a general principle of law, there should not be many differences in its application in case of different contracting authorities or EU Member States.
Nevertheless, if there are no specific guidelines on how to proceed with the errors, it is almost impossible to ensure that in practice these situations are dealt with similarly. Many factors are contributing to such differences.
For example, each procurement procedure contains different regulations and consequently each tender contains a lot of information on many aspects. And errors can be found almost anywhere, from how the information is stored in the electronic purchasing system to what type of product will be delivered and what is the name and qualification of the proposed expert. The contracting authority must consider, for example, whether the procurement requirements were clear, what type of information is missing, what is the “essence of the tender”, does the contracting authority has discretion or duty to ask for additional information, what shall be done with the answer, etc.
Additionally, every day many procurement procedures are organized by procurement experts and other persons, each having a different experience and qualification. For example, in Latvia at the beginning of the year 2021 there were 1,621 registered users of the procurement publication system, and 3,677 open procedures in the “classic procurement sector” were organized in the first nine months of the year 2021 (data from webpage of the Procurement Monitoring Bureau of Latvia). Presuming that in each of those open procedures at least one tender contained an error that would require an evaluation of the case-law for at least one hour to understand whether it is allowed to clarify this error, there were 3,677 hours or 459 working days spent trying to solve an issue that is quite vaguely regulated in the procurement directives.
And, even after years of studies and work as a procurement practitioner, the author herself cannot with a high level of confidence say that she would always be able to conclude whether it is allowed to correct the specific error. Although one could argue that there is an easy, comprehensive, and understandable system of criteria to apply, based on the case-law of the Court of Justice of the European Union, just not fully discovered by the author, the procurement process is performed by many thousand people in the whole EU. It would be quite optimistic to say that all persons dealing with these situations are able or qualified to perform a legal analysis to conclude how the principle of equal treatment should be applied in each specific situation. And it also impacts the effectiveness of the procedures, if each found error requires an in-depth legal analysis.
Overall, this leads to a conclusion that there could be an important, common, and challenging aspect of a procurement process that has a significant effect on its results. However, many persons that must solve this issue on an everyday basis are not always equipped with the needed guidance on how to solve it and just try to do their best with different results. Therefore, additional regulation on this aspect maybe could improve the situation.
Džeina Gaile
My name is Džeina Gaile and I am a doctoral student at the University of Latvia. My research focuses on clarification of a submitted tender, but I am interested in many aspects of public procurement. Therefore, I am supplementing my knowledge as often as I can and have a Master of Laws in Public Procurement Law and Policy with Distinction from the University of Nottingham. I also have been practicing procurement and am working as a lawyer for a contracting authority. In a few words, a bit of a “procurement geek”. In my free time, I enjoy walks with my dog, concerts, and social dancing.
