2016 was a turbulent year in procurement law: sweeping amendments to the Procurement Act, important decisions of the Dutch Supreme Court and the European Court of Justice, and an increasing emphasis on socially responsible procurement. The effects of these developments will be felt in 2017. We see the following trends emerging this year.
Increased flexibility
The amended Public Procurement Act gives contracting authorities greater leeway to choose for those procedures that suit their needs the most. The new act markedly expands the scope of application of special procedures. Previously, opting for the procedure of a competitive dialogue (in which a contracting authority enters into discussions with a number of selected tenderers to find the best solution) was limited to situations in which the contracting authorities wished to award “particularly complex” contracts. Due to the amendment, contracting authorities will have much more freedom to opt for a competitive dialogue when it is difficult to decide what the best solution is, or when it is not immediately clear what solutions are available in the market. Like the competitive negotiation procedure, the competitive dialogue procedure is expected to be used with increasing frequency in 2017. It is therefore important for both contracting authorities and tenderers to keep abreast of the opportunities and risks entailed by these special procedures.
Sustainability and innovation
On the one hand, sustainability and innovation goals have traditionally been quite difficult to reconcile with tendering procedures. Procuring a product is afterall subject to a separate, autonomous obligation to procure. Nevertheless, the legislator intends to take into account the effects of all procurement procedures on people, planet and profit/prosperity. The amended Public Procurement Act provides an interesting possibility for striving towards these goals, i.e. the innovation partnership procedure. In a nutshell, this procedure is made up of three phases: (1) the competition phase, in which one or more development partners are selected, (2) the development phase, in which the partners develop a solution, and (3) the commercial phase, in which one of the developed products is procured. Pre-eminently suited to the procurement of solutions that are not yet available on the market, the innovation partnership procedure will provide interesting opportunities for both tenderers and contracting authorities in 2017.
Restrictions
On the other hand, the amended Public Procurement Act also imposes restrictions on contracting authorities. Previously, service concessions were largely excluded from the scope of procurement rules. The amendments to the Public Procurement Act have altered that situation by applying a light procurement regime to service concessions. Although contracting authorities still have a great deal of freedom to set up a procedure, it is expected that more and more service concessions will be opened up to competition. In addition, it is important to bear in mind that contracting authorities can heavily restrict their own freedom in 2017 as well. In that regard the Court of Justice recently confirmed that a contracting authority must always adhere to the conditions that it has described in the tender specifications.
Damages in public procurement law?
Calls for actions for damages in relation to public procurement may well increase in 2017, following the Dutch Supreme Court’s judgment in autumn 2016 on the possibilities for intervening in a contract concluded following a public procurement procedure. Utrecht University had arranged a tender for the purchase of multifunctional printers. Xafax, one of the tenderers, disagreed with the terms of the tender but the interim judge ruled otherwise. After a contract had been concluded with another tenderer, Xafax filed an appeal for its termination. The Court of Appeal did grant the claim, but the Supreme Court recently set aside the judgment, ruling that contracts concluded following a public procurement procedure may only be altered in very limited statutorily prescribed instances. This makes it even more difficult than before to intervene in contracts which have been put out for tender. This will lead to situations in which public procurement contracts cannot be altered even if they have not been concluded in accordance with all the rules. In such cases, disadvantaged tenderers will have no recourse. One option could be to file an action for damages. Although this also raises a number of issues (how does a tenderer prove that it would have won the contract?), disadvantaged tenderers may conceivably use this option to obtain compensation.
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