Call for tenders may not impose ecolabel, court rules
By Sophie Mosca | Thursday 10 May 2012
A public authority may include as a condition for the award of a public contract that the products to be supplied must be environment-friendly and socially responsible, but it must do so using detailed technical specifications rather than referring to ecolabels or specific labels. The Netherlands thus learns the price of failing to comply with procedures as a result of its commitment to ‘sustainable’ products. The EU Court of Justice ruled against The Hague, on 10 May, for infringement of Directive 2004/18 on public procurement and spelled out for the first time how a public authority may use sustainability criteria in tender procedures for public contracts (Case C-368/10).
In 2008, the Dutch province of North Holland published a contract notice for the supply and management of coffee and tea dispensing machines that included a reference for these products to the private labels Max Havelaar (which promotes the marketing of fair trade products) and EKO (which certifies that the product is made up of at least 95% ingredients from organic agricultural production). Shortly after publishing the notice, it added in an information notice that other labels would also be accepted “in so far as the criteria are equivalent or identical”.
For the European Commission, the use of references to these two labels in the technical specifications and of various terms in the tender documents runs counter to the directive because it creates discrimination against certain tenderers.
The court had to rule in this case between “internal market requirements and environmental and social concerns while taking account of the practical requirements of procedures for the award of public contracts,” summed up Advocate-General Juliane Kokott in his opinion.
DETAILED TECHNICAL SPECIFICATIONS
While technical specifications for the products covered by the contract may be worded in terms of functional performance or conditions, such as environmental characteristics, it is incompatible with EU law to require that certain products to be provided bear an ecolabel. The province of North Holland should have included in its specifications for the contract the detailed specifications defined by that ecolabel and not merely a reference to the label.
With regard to the phase of selecting tenders to determine which was the most economically advantageous, the court held that the directive permits contracting authorities to choose criteria meant to guarantee that products result from fair trade because this concerns part of the purpose of the contract. However, by granting a certain number of points to products that bear a given label, the Dutch province established an award criterion that is incompatible with the directive. It should have listed the criteria that underlie such labels (in the technical specifications) and allowed tenderers to provide evidence through all appropriate means, not just a label, that the product fulfils the criteria.
The EU court also held that by requiring bidders to “comply with criteria of sustainable purchases” and “socially responsible business” the province established a minimum level of technical capacity not authorised by the directive. It also considered that the Dutch public authority lacked precision on these obligations in both the contract notice and the tender specifications relating to the conditions and arrangements for the contract award procedure, whereas the directive obliges authorities to provide information on the award criteria in a clear, precise and unequivocal manner.
“It is incompatible with EU law to require that certain products to be provided bear an ecolabel”