1. The principle of proportionality and the contents of a contract
Prof. dr. Monika Chao-Duivis
Director Institute of Construction Law/professor construction law TU Delft

2. Topics The law of procurement and the principle of proportionality
The EU directive
The Dutch law and the Proportionality Guide
The system of the Proportionality Guide
The Rules in the Proportionality Guide on contract conditions

3. The law of procurement and the principle of proportionality: The EU directive 2014/24 (1)
(1) The award of public contracts (….)has to comply with the principles of the Treaty on the Functioning of the European Union (TFEU), (….) as well as the principles deriving therefrom, such as (….) proportionality (….). (15)The performance of contracts by groups of economic operators may necessitate setting conditions which are not imposed on individual participants. Such conditions, which should be justified by objective reasons and be proportionate (….)

4. The law of procurement and the principle of proportionality: The EU directive 2014/24 (2)
(57) level of security required for the electronic means of communications
(101) facultative grounds for exclusion, contracting authorities should pay particular attention to the principle of proportionality

5. The law of procurement and the principle of proportionality: The EU directive 2014/24 (3)
(136) (….) the Union may adopt measures, in accordance with the principle of subsidiarity as set out in Article 5 of the Treaty on European Union. In accordance with the principle of proportionality, as set out in that Article, this Directive does not go beyond what is necessary in order to achieve that objective.

6. Article 18, EU Directive 2014/24 Principles of procurement
1. Contracting authorities shall treat economic operators equally and without discrimination and shall act in a transparent and proportionate manner.

7. Article 42, Technical specifications
(….) Those characteristics may also refer to the specific process or method of production or provision of the requested works, supplies or services or to a specific process for another stage of its life cycle even where such factors do not form part of their material substance provided that they are linked to the subject-matter of the contract and proportionate to its value and its objectives.

8. The Dutch law and the Proportionality Guide
The Law: art requires contracting agencies to only impose requirements, conditions and criteria that are reasonably proportionate to the subject of the contract

9. The following has to be taken into account in any case:
a. whether contracts are combined or not; b. the grounds for exclusion; c. the substance of the suitability requirements; d. the number of suitability requirements to be imposed; e. the deadlines to be set; f. the contract award criteria; g. compensation for the high costs of submitting a tender; h. the conditions of the agreement

10. The Proportionality Guide: in general
The aim of the Guide:
More uniformity in the use of criteria, conditions etc.
Guidance in actual situations where choices have to be made on procurement issues and on contract content
The system:
Comply or explain
The status of the Guide: mandatory or not?
The practice: the Guide is being applied

11. The Proportionality Guide and the content of contracts (1)
Rule 3.9A: The contracting authority allocates the risk to the party that can best control or influence the risk.
Rule 3.9B The contracting authority offers during the tendering procedure potential tenderers the opportunity to make suggestions for adjustments to the draft contract or to deviate from the purchase conditions.

12. The Proportionality Guide and the content of contracts (2)
Rule 3.9C: In cases where contract models or general terms and conditions exist for a particular type of contract and are drawn up jointly, the contracting authority will apply this in full.

13. The Proportionality Guide and the content of contracts (3)
3.9D:1. The contracting authority does not require liability which is in no way limited.
2. When assessing which limitation of liability is proportionate, the contracting authority will in any event take into consideration:
the risks that the contracting authority actually runs;
the usual liability requirement in the relevant branch or for the order in question by nature and size.

14. The Proportionality Guide and the content of contracts (4)
3.9E (Most beneficiary clause) A contracting authority does not require that a tenderer has to guarantee in advance that if a party other than the contracting authority in question receives a better price for the same product or service, the contracting authority must also receive it retroactively.

15. The Proportionality Guide and the content of contracts in Court
Procurement issues can be dealt with by:
The government court (ending in a verdict, marginal review)
The Committee of Public Procurement Experts (ending in an advice, full review)
The Committee has a leading role on how to deal with proportionality
Judges point at it for examples