On the face of it, the strict constraints of procurement law appear to offer little room for innovation and cooperation between the market and the tendering authorities. The Procurement Expertise Centre (Pianoo) nevertheless concluded in Elsevier magazine that there is increasing cooperation between public authorities and the private sector. In those public-private partnerships (PPPs) a public authority selects a partner to provide for certain needs. The public authority then stipulates requirements regarding the end result, but leaves it to its partner to decide how that result will be achieved. One of the examples given by Elsevier is a tendering procedure for “street lighting” rather than delivery of lampposts. That type of purchase offers far more room for creative and innovative solutions than a “traditional” tendering procedure.
PPPs are generally used in the building sector, but the call for more creative freedom for tenderers can be heard in other sectors as well. These past few months tendering procedures in the healthcare sector (for hospital orders and forensic care and for youth care in Rotterdam), for instance, have caused a stir. The question presents itself each time whether a tendering procedure offers sufficient room to adequately anticipate healthcare demands. That problem could be partly solved by offering healthcare providers more room to develop new initiatives.
But alternative types of procurement also present a number of possible pitfalls from a procurement law perspective. Greater freedom for tenderers is likely to make the tendering procedure less transparent and combining contracts may conflict with the prohibition of contract bundling.
It is apparent from a number of recent judgments that things are never as bad as they seem, provided that attention is paid to a number of points.
Best Value Procurement
An interesting trend these past few years is the rise of Best Value Procurement (“BVP”). In such tendering procedures, as in public-private partnerships, the focus is on the expertise of the tenderers and there is more room for them to implement the wishes of the contracting authority. But a contracting authority must ensure that the use of BVP is in keeping with the procurement law framework.
That framework is strict, as apparent from a judgment rendered by the Court of Gelderland. The municipality of Apeldoorn had issued a call for tenders for cleaning work based on the BVP method. One of the tenderers took legal action because the assessment had not been made in accordance with that method. The court first of all noted that, despite the choice for the BVP method, the contracting authority was bound by the procurement rules. One of the principal rules of procurement law is that the tendering procedure must be in keeping with the procedure described in the tender documents (which was recently confirmed in an Opinion for a Supreme Court judgment). It was irrelevant in that regard that the procedure described was not entirely in keeping with the BVP method.
Integraal Kankercentrum Nederland (“IKNL”) opted for the BVP method when procuring ICT services. In the legal action regarding that tendering procedure the judge was critical about the manner in which IKNL had applied the BVP method. IKNL had described its wishes and preferences regarding the ICT services in a fairly abstract manner, which made it difficult to assess whether bids were in keeping with those wishes and preferences. According to the judge, that gave rise to the risk of the contracting authority concocting reasons for a rejection in the implementation phase. That note of criticism did not lead to allowance of the claims filed, but does demonstrate that a clear description of both the contract and the assessment criteria is essential, also if tenderers are offered the room to present creative solutions.
Prohibition on bundling of contracts
Procurement law prohibits the unnecessary bundling of public contracts. Breach of that prohibition is a realistic concern in PPPs when several parts of a project are combined (such as design, realisation and maintenance). A recent judgment on a tendering procedure of the UWV (Employee Insurance Agency) shows that procurement law may nevertheless allow such bundling of contracts.
The UWV had published a call for tenders for eight different facility services (such as cleaning, hot and cold drinks, and security services) as one combined contract. Douwe Egberts challenged the structure of the tendering procedure, arguing that procurement law prohibited this bundling of contracts. The preliminary relief judge of the Amsterdam Court disallowed its claims. It was relevant in that regard that the UWV had sufficiently investigated the bundling of the contracts and had explained in the Call for Tenders why the contracts were being bundled. Provided that a contracting authority investigates and explains why the bundling is useful, the prohibition on the bundling of contracts therefore need not stand in the way of PPPs.
This case law demonstrates that it is essential to clearly describe the rules of the procurement procedure in the tender documents. Provided that the contracting authority follows those rules, it is definitely possible to organise the procedure in such a way as to stimulate creative and innovative tendering procedures.
