Public Contracts Regulations 2015 - Regulation 42

Regulation 42 - Technical Specifications

Regulation 42 establishes the rules on how contracting are to (or may) define the technical specifications for a public procurement procedure. In essence, it transposes Article 42 of Directive 2014/24/EU and codifies some technical specifications case law from the last few years, particularly the Dutch Coffee case (C-368/10 Commission vs Netherlands).

The Regulation is divided into three main parts: scope, formulation and application of technical specifications. As with many other articles, the content is more or less the same that we can find in Article 42, but presented on a completely different way.

Technical specifications scope

Paragraphs 2 to 7 establish the scope of what should be included in technical specifications. In addition to the traditional characteristics of what is being acquired, the Regulation establishes in a very detailed way that various performance indicators may be included as part of the specifications, thus constituting more of a list of examples than an actual mandatory rule. It increases complexity in the text, but reduces complexity in its application by expressly allowing said indicators to be used.

Furthermore, it is now expressly possible to specify processes or production methods as part of the specifications, as long as they are (i) linked to the subject-matter of the contract and (ii) proportionate. If memory serves me well, this is not exactly new and is the natural evolution of various cases such as the Concordia Bus, Weinstrom and to a certain extent the Dutch Coffee one.

Finally, as pointed out by Albert, the technical specifications may also specify if intellectual property is being transferred. This is an important point to take into consideration as Regulation 31 (Innovation Partnership) states that the parties need to deal with intellectual property but the competitive dialogue and competitive procedure with negotiation rules (Regulations 29 and 30) have no similar indication, although they can also be used for the procurement of innovative solutions. However, I am not entirely sure of the actual benefit of stating IP may be mentioned in the technical specifications: even without such caveat it was always possible to do so and honestly I would prefer a more prescriptive obligation instead.

Technical specifications formulation

Paragraphs 8 to 13 define how contracting authorities are to formulate the technical specifications. These paragraphs include accessibility rules as well as strong indications of the need to draft technical specifications in a way that does not distort competition (or in the parlance "shall not have the effect of creating unjustified obstacles to the opening up of public procurement to competition.") In addition, the usual tortuous contortionisms related with referring to brands, trademarks and "or equivalent" are still present and their use is now clearly established as exceptional. How will it be measured and controlled is anyone's guess...

The more interesting points of these paragraphs are the rules related to national technical rules and the nudge in favour of functional specifications. Regarding the fist, they are now permitted (if legal under EU law, yet another tautology...) but there is a clear preference for extra-national standards to be used in case detailed technical specifications are being drafted, creating a number of hoops to be overcome before contracting authorities can rely on national standards. This is where I think there is a clear nudge for performance or functional specifications with which I agree. The problem, as usual, will be to convince contracting authorities to lose control of the specifications and to draft them in a way that still allows for a meaningful "apples to apples" comparison.

Technical specifications application

Regulation 42 doubles down on the preference for performance or functional specifications in the final three paragraphs. Paragraph 14 states that even if the technical specifications are detailed enough, a non-confirming bid cannot be excluded in case the tenderer can prove that its solution solves the issue for the contracting authority in a equivalent way. Bearing in mind that procurement practice tends to follow a "painting by numbers" approach - hence the preference for using national standards - , I am dying to see how this will play out in practice and what will be the impact on judicial reviews.

Paragraphs 15 and 16 apply a similar logic in scenarios where functional specifications are used: if the tender refers to standards (except purely national standards are these are discriminatory) which are functionally equivalent, then the tender is compliant and shall not be excluded.

This is going to be fun.