The European Court of Justice has issued a large number of decisions related to EU Public Procurement. These rulings interpret the Directives and Treaty and can impact the way in which procurement is conducted. In the field of Green Public Procurement, the Court of Justice has issued several important rulings.
The disputed tender was for the supply of coffee machines and ingredients in which social and environmental requirements were included. The case centered on two labels, one relating to fair trade aspects of purchasing and the other to the organic production of ingredients.
The ruling confirmed that it was not possible to set a requirement that the supplied goods need to bear a specific label. According to the court , organic production could be a required as a technical specification, but it found that social criteria under the ‘Max Havelaar’ label could not, as they relate to the ‘conditions under which the supplier acquired them from the manufacturer’.
However, the Court held that it was acceptable to refer to aspects of the production process in contract award criteria, even where these do not form part of the material substance of the goods being purchased.
A recent judgment of the General Court has provided some insight into the approach to be taken by public authorities in assessing environmental management policies put forward by tenderers.
The European Environment Agency (EEA) awarded a contract for the provision of IT consultancy services. The contract was challenged on a number of grounds by an unsuccessful tenderer, including the use of an award criterion based on environmental policy.
10% of the marks at award stage were based on the 'General environmental policy of the company'. The unsuccessful tenderer argued that the assessment of this criterion was flawed, as the EEA awarded the highest marks to a company which had a third-party certified environmental management scheme.
The Court held that the EEA was entitled to apply its discretion in the way it assessed the evidence submitted by tenderers in response to this criterion. The fact that tenderers without a certificate did not all receive the same score was taken by the Court to indicate that the EEA had made a:
"...comparative assessment of the tenders, evaluating whether the environmental policies submitted by the tenderers were genuine, and that it found that only one of them had already put such a policy in place, whilst the others merely indicated good intentions in that respect." (para 76 of judgment)
The EEA was entitled to award differential marks on this basis, and the applicant's complaint in this regard was rejected.
This case provides guidance on a tricky aspect of assessing environmental criteria, which is how much leeway contracting authorities have in assessing what is 'equivalent' evidence. While third-party certification cannot generally be required, it may be treated as strong evidence of a company's environmental standards.
Two points to consider:
Nevertheless, the case provides insight into how assessment of environmental management measures can be properly carried out, and the role of third-party certification in this.
The disputed tender documents specified that bidders should supply electricity from renewable energy sources. Bidders had to prove that they had disposed of or would dispose of a minimum amount of electricity per year from renewable energy sources equivalent to the estimated annual consumption of the Austrian Federal Republic’s offices. In addition, an award criterion was included, with a weighting of 45%, with points to be awarded based on the amount of electricity from renewable sources which the bidder could supply in excess of the AFR’s estimated requirements.
The Court held that:
This case thus lays down two important parameters for the application of environmental award criteria as approved in the Helsinki Bus case. First, the criteria must be accompanied by requirements which enable the contracting authority to verify the information submitted regarding compliance with the environmental criteria. Second, award criteria must be related specifically to the subject-matter of the contract, and not to the general capacity of the economic operator. It should be noted that the Court did not foreclose the possibility of examining such capacity at the selection stage.
The origin of this case was the disputed award of a contract for renewing the bus network of Helsinki. The Court had to answer one main question: To what extent can environmental requirements be taken into consideration at the award stage of a contract and extra points awarded for them?
The Court confirmed the possibility of taking into consideration environmental award criteria when assessing the most economically advantageous tender. But the Court put four conditions on the use of such criteria:
The result of this case was an opening up of the possibilities for contracting authorities to include environmental award criteria in their tenders, provided the above four conditions are met. This position was reinforced by the specific inclusion of ‘environmental characteristics’ amongst the criteria which can be taken into account in award of contracts in Directives 2004/17/EC and 2004/18/EC (in Articles 55(1)a and 53(1)a respectively).