EU Directive 2004/18 Article 23 John Gelder ICIS DA, Berlin: June 2008

Introduction Following an article in the ICIS Newsletter (August 2006), a series of questions on this Directive, with background material, was submitted to the EC. A response was received in February 2008 from Ward Moehlmann, a (young) lawyer working for the EC on Public Procurement Policy. –“I took the liberty of answering them in a general and abstract way.”

Avoiding unjustified obstacles Q1a.What is an ‘obstacle’? Is a proprietary specification seen as an obstacle? Is aesthetics seen as an obstacle? Q1b.Under what circumstances is an 'obstacle' justified? A1a. In general, it must be remarked that the Directive has been written from the perspective of the European Internal Market. The Directive wants to remove barriers to the free movement of services and the freedom of establishment. It is in this context that Article 23 of the Directive applies. The Article contains specific obligations for the contracting authorities. However, outside the scope of application of the Directive, the principles underpinning these obligations apply. The general principle is that the technical specifications must be drawn up in such a way that the contracting authority does not exclude equivalent works, products and services which meet its functional requirements. In this regard, Article 23 paragraph 2 of the Directive states that the 'Technical specifications shall afford equal access for tenderers and not have the effect of creating unjustified obstacles to the opening up of public procurement to competition.' A1b.Article 23 of the Directive lays down the framework to assess whether there is equal access and whether there are 'unjustified' obstacles.

Technical specifications Q2a.Does A apply to products or elements or both? Does B apply to products or elements or both? Q2b.Why, for B, are referenced standards not mentioned (e.g. for structural or fire performance)? Are they not permitted for performance specification? Q2c.Is a hybrid specification including all the first three options not permitted? Keeping this in mind Article 23 paragraph 3 gives the contracting authority several possibilities to formulate the technical specifications in the tender documents. The contracting authority can choose, depending on the contract, either of them. A2b.With regard to your question 2b, the answer is that if there are performances or functional based standards they would fall under paragraph 3, a). Please see also in this sense also paragraph 5 of Article 23. A2c.Under the condition that the Directive and the Treaty principles are met with, 'hybrid specification' is allowed. It is thus possible, for instance, to define electro- magnetic characteristics by reference to a standard, environmental performance in terms of functionalities and/or performance and fire safety properties in terms of performance with reference to a given standard.

The tender documents Q3a.The 'documents' presumably include the drawings as well as the specification? Q3b.Is it significant that tender documents are referred to, rather than contract documents, i.e. are contract documents not covered by the Directive? The purpose of the Directive is, as is said above, that the contracting authority applies, under the conditions set out in the Directive, a European tender procedure. Annex VI also states that the technical specifications are contained 'in particular in the tender documents'. This is completed by the provisions of Art. 23, paragraph 1, according to which "technical specifications... shall be set out in the contract documentation, such as contract notices, contract documents or additional documents." Q3b.Whether indicated in "the tender documents" or in "contract documents", it should be kept in mind that, in general, it is not allowed to change, during or after the tender procedure, the essential terms of the contract.

Specifying brands Q4a.When would one legitimately (justified by subject matter) need to specify brand? Q4b.When would one legitimately (a precise and intelligible description not otherwise possible) need to specify brand? Article 23, paragraph 8 of the Directive states that technical specifications shall not refer to a specific make or source, or a particular process, or to trade marks, patents, types or a specific origin or production with the effect of favouring or eliminating certain undertakings or certain products. This is the general rule. Exceptions to this rule must be interpreted in a restrictive way. Q4a.There are two exceptions. It can be justified by the subject matter in question and such a reference can be allowed on an exceptional basis, where a sufficiently precise and intelligible description of the subject matter of the contract pursuant to paragraphs 3 and 4 is not possible. In that case such reference shall be accompanied by the words 'or equivalent'.

Legitimate brand specifications Q5a.Can brands be specified if the designer wants to define property qualities that are different to those set by a standard? Q5b.Can brands be specified if the designer wants to define properties that are not set by a standard? Q5c.Can brands be specified if the designer wants to match a brand already used in an existing facility or in related facilities? Q5d.Can brands be specified if the designer is required to use a brand by local authorities? Q5e.Can brands be specified if the designer wants to define appearance precisely? Q5f.If specifying brands, would the designer be required to record the rationale? If so, where and how? While the general rule is clear, it is difficult to assess if in certain cases an exception can be made, while a specific knowledge of the market/products/services in question is needed. In general, the examples mentioned in your questions do not seem to satisfy the conditions mentioned.

‘Or equivalent’ Q6a.Can 'or equivalent' be deleted from the Directive? Q6b.If not, would a general statement in the preambles to the specification, applying 'or equivalent' to all mentions of standards and brands, be acceptable? It is necessary to add the words 'or equivalent' to references to specifications mentioned in Annex VI and to references to a specific make or source, or a particular process, or to trade marks, patents, types or a specific origin or production. The directive states this expressly. It also states that this is needed at each reference (Article 23 paragraph 3 sub a and 8). I may add that as this obligation ensues directly from the provisions and principles of the Treaty, it also applies to contracts whose value is below the thresholds established by the Directives, see the Court's Order of 3 December 2001 in Case C- 59/00 (Mousten Vestergaard).

Aesthetics Q7a.Does the Directive exclude specification of aesthetics for manufactured products, as sometimes argued?

Mistrusting designers Q8a.Why does the Directive infer that the designer’s choice of brand is not to be trusted, but the contractor’s is? Q8b.If a designer is novated across to the contractor, or is in a partnership or joint venture with a contractor (e.g. as part of a UK Private Finance Initiative consortium), is he then free to choose brands?

Rules for substitution Q9a.If such provisions are in place, would outright specification of brands and standards be acceptable?