UK: European Court Clarifies Use Of Technical Specifications In Healthcare Tenders

Last week, the CJEU gave its decision in another procurement case in the healthcare area, Case C 413/17 Roche Lietuva UAB. The case concerned the scope of technical specifications included as part of a tender by the Polyclinic for the Dainava District of Kaunas in Lithuania. The tender set out details of the medical diagnostic equipment and materials the authority wished to procure. Roche claimed that the specifications unreasonably restricted competition among suppliers due to their high specificity, and that in reality, the specifications corresponded to the products of certain manufacturers and excluded others.

The question referred to the Court concerned the limits to the margin of appreciation of a contracting authority to set out specifications in the tender, based on the quality of testing and the value of healthcare that it needs. The Court set out a useful summary of when technical specifications can be included in a tender and the principles for applying such specifications.

Technical specifications

Under EU public procurement rules, Directive 2014/24/EC, technical specifications, defining the required characteristics of a product or service, can be included as part of a tender. The Court noted that the legislation allows broad discretion to the contracting authority in setting technical specifications, as the contracting authorities are better placed to know which supplies they need, and to determine the requirements necessary to achieve the desired results. However, the Directive does set out limits that the contracting authority must comply with, described by the Court as follows:

  • Technical specifications must afford equal access of economic operators to the procurement procedure, and should not have the effect of creating unjustified obstacles to the opening up of the procurement to competition.
  • Contracting authorities must treat economic operators equally and without discrimination and must act in a transparent and proportionate manner.
  • The design of a procurement must not be made with the intention of excluding it from the scope of the Directive, or of artificially narrowing competition. The Court clarified that competition is artificially narrowed where the design unduly favours or disadvantages certain economic operators, for example, by listing requirements that mirror key characteristics of a specific operator's supplies, services or works.
  • The more detailed the technical specifications, the higher the risk of favouring the products of a given manufacturer.
  • It is possible to refer to a specific make or source, or a particular process, which describes the products or services provided by a specific economic operator, or to trade marks or patents, if this is justified by the subject matter. Any such reference should be accompanied by the words 'or equivalent'.
  • The level of detail of the technical specifications must comply with the principle of proportionality, meaning the detail is necessary to achieve the desired objectives. However, in the area of public health, it is for the Member States to determine the degree of protection they wish to afford to public health, and the way in which that protection is to be achieved.

Having set out these general principles, the European Court asked the referring court to apply these principles to the technical specifications at issue, and to decide whether they complied with the principles of equality and proportionality, or whether they indirectly favoured certain tenderers.

Comment

In the field of healthcare, there are many circumstances where patent protection or technical differences between products mean there is no "equivalent" product, and so only one product, and one economic operator, will be able to respond to the specifications. However, this case serves as a reminder to contracting authorities that any restriction on the number of operators that can meet the specifications, and therefore reply to a tender, must be justified and in line with the principles of procurement law.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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