Portugal's plan for mandatory green public procurement

The Portuguese government is planning to introduce mandatory green public procurement criteria in the near future. It appears to be looking to do so no not with a change to the Public Contracts Code which is supposed to contain the bulk of the rules applicable to public procurement in the contract but instead via a resolution from the Council of Ministers (available as a draft for public discussion).

Resolutions from the Council of Ministers have a strange 'shapeshifting' nature whereby the nature of each one is dependent on its text instead of being pre-defined by law. Some amount to quasi legislation as a governmental decree of sorts, others are simply statements of fact or they can even amount to contractual instruments as well.

At the very least this particular draft resolution contains instructions binding to government departments as well as the wider public administration such as publicly owned companies for example. However, it will not be binding neither for local authorities nor the regional governments of Azores and Madeira.

The choice of this regulatory instrument is criticisable, after all, the government has an overall majority so why not amend the Code instead? For now, my feeling is that the Portuguese government is trying to wiggle itself out of EU law commitments but in a more discreet fashion than with previous attempts.

The Resolution is composed of a main part with the provisions on eco criteria that are to be applied from January 1st and a detailed Annex with the specific award criteria and contract performance clauses/technical specifications that are to be adopted for certain types of contracts. This means the public sector in Portugal will have less than 3 months to adapt to a fairly significant change in the way it carries out public procurement.

The Resolution

At the core of the Resolution we can find a three part classification for eco criteria that is applied in the Annex to both award criteria and contract performance clauses/technical specifications. Overall the choice of wording is not careful so these 'eco criteria' mean not only award criteria but also those contractual obligations and technical specifications.

The eco criteria are classified in the Resolution as either mandatory, recommended or optional.  The mandatory criteria are to be used except if they impose a 'sensitive restriction to competition', whereas the recommended can be set aside if 'duly justified' and the optional are self-explanatory.

The wording for mandatory eco criteria is problematic since instead of adopting the exact same wording of Art 18(1) para 2 of Directive 2014/24/EU it comes up with a slightly different expression to convey what should be the same message. If the text is not amended for the final version of the resolution then this provision needs to be interpreted with the meaning of 'artificially narrowing competition', at least for the contracts covered by the Directive. Furthermore, it seems this check is to be done by each contracting authority on a tender by tender basis, further increasing their compliance work or at the very least their compliance risk.

As for the recommended eco criteria, the current wording is even more troublesome. There is no reference to potential anti-competitive effects which may lead contracting authorities to think they are not to be assessed. This would be incorrect since Art 18(1) para 2 of Directive 2014/24/EU would be applicable here as well for the contracts covered. The second issue with the draft is to be found with the 'duly justified' exception. The wording implies here not that the decision must be reasoned since all administrative decisions in Portugal have to be reasoned, but instead that there is a heightened threshold of justification of the decision to be met. Where such threshold lies in practice I do not know but this is the kind of legal uncertainty that will create havoc in practice. There are no examples, guidelines or guidance to help contracting authorities assess if they meet this threshold or not.

It is clear to me that if the Government really sees value in mandating the use of green criteria in public procurement this classification should have been included directly in the Public Contracts Code instead of this Resolution.

Tomorrow I will look into the details of the Annex itself since it raises a few interesting questions as well.