11/09/2018

In a recent case, the Court of Justice of the European Union (CJEU) considered the question of when a tenderer must provide documentary proof that the products it will deliver are equivalent to those defined in the purchaser's technical specifications[1].

The case concerned a contract for the supply of spare parts for buses and trolley buses in Milan. The technical specification referred to a particular make compatible with the buses and trolley buses – Iveco/Fiat – but tenderers were permitted to submit tenders for either the Iveco/Fiat spare parts or equivalent spare parts. There were approximately 2,200 spare parts listed.

The procurement documents provided that where equivalent spare parts were to be supplied then proof of equivalence could be provided after commencement of the contract, on the occasion of the first delivery of a spare part. VAR, a supplier of equivalent spare parts, was awarded the contract. The other tenderer was Iveco which supplied original spare parts. Iveco challenged the decision to award the contract to VAR on the basis that VAR had failed to provide proof of equivalence in its tender.

The provision in the Directive[2] covering the situation where technical specifications refer to a specific make, source or process or "trademark, patents, types,…..origin or production"  requires purchasers to also specify equivalent products. This provision is silent on the question of when equivalence must be proved. For other types of technical specification – using standards or a functional approach or a combination - the Directive requires equivalence to be proved in the tender.

In his written Opinion on this case the Advocate General was heavily swayed by concerns about the need to open up competition and the potentially disproportionate requirement on tenderers to provide proof of equivalence – in this case in relation to approximately 2,200 products. He concluded that tenderers responding to technical specifications which referred to a specific make, source or process etc. did not have to provide proof of equivalence in their tenders.

The CJEU decided, however, that the requirement to provide proof of equivalence in the tender applies where a tender specification refers to a specific make, source or process etc.

The CJEU was concerned that leaving proof of equivalence to after submission of tenders would be in breach of equal treatment and transparency principles. It also identified potential breaches of procedural requirements concerning verification of tenders and informing tenderers of decisions.

 

Want to know more? Please contact Susie Smith.

 

[1]              C-14/17 VAR Srl, Azienda Trasporti Milanesi SpA (ATM) v Iveco Orecchia SpA ECLI:EU:C:2018:568   

[2]              Utilities Directive 2004/17/EC.