GPP Training toolkit 3. Legal - PowerPoint Presentation

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GPP Training toolkit

3. Legal

Aspects of GPP

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2

GPP Training Toolkit

Module 1: Introduction

Module 3: Legal Aspects of GPP

Module 2: Strategic Aspects of GPP

Module 4: Needs Assessment

Module 5: Circular Procurement

Module 6

: Market Engagement

Module

3:

Legal Aspects of GPP

Module 7: Operational (Key sectors for GPP)

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Relevant sources of law

EU Treaty Principles

2014 Procurement Directives

The Link to the Subject-matter

Choice of procedures

Exclusion + selection of bidders

Technical specificationsAward criteria

Combining specifications and award criteriaContract performance clausesSummary and further guidance

Module 3: Legal aspects of GPP

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Content of Module 3

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Treaty on the Functioning of the EU (TFEU)

EU Procurement Directives: 2014/23/EU, 2014/24/EU and 2014/25/EU

EU Remedies Directives 89/665/EEC and 92/13/EEC as amended by 2007/66/EC and 2014/23/EU

EU sectoral legislation e.g. Clean Vehicles Directive, Energy Efficiency Directive

National implementing legislationCase law of Court of Justice of EU + national courts

WTO Government Procurement AgreementModule 3: Legal aspects of GPP

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Relevant sources of law

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Includes requirement of non-discrimination based on nationality

Applies to all procurement covered by directives or of certain cross-border interest

Does NOT

mean treating everyone the same – but treating them according to objective criteria

Module 3: Legal aspects of GPP

5EU Treaty

principles – Equal treatment

Definition of Equal Treatment

“comparable situations must not be treated differently and different situations must not be treated in the same way, unless such treatment is objectively justified."

- Joined Cases C-21/03 and C-34/03

Fabricom

Equal Treatment

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Developed to ensure compliance with principles of non-discrimination/equal treatment

Contracts must be advertised at the appropriate level depending on their value

Tender documents and all criteria applied must be clear to the

‘reasonably well-informed and normally diligent

’ tenderer (Case C-19/00 SIAC)Any changes to procedure must be notified to all bidders, and deadlines may need to be extended

Must notify bidders of reasons for rejection of bidModule 3: Legal aspects of GPP

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EU Treaty principles

Transparency

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Procurement criteria and decisions must:

be appropriate to achieve the objectives they pursue; and

not go beyond what is needed to attain those objectives.

Proportionality is relevant when deciding which GPP criteria to apply and how to evaluate the evidence that bidders provide.

Module 3: Legal aspects of GPP

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EU Treaty

principles

Proportionality

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Evidence of professional qualifications, labels and certificates from other member states must be taken into consideration

Important for GPP due to the need to take

equivalents

into account when evaluating compliance with criteria

Module 3: Legal aspects of GPP

8EU Treaty principles

Mutual recognition explained

“the principle of mutual recognition

makes it possible for the free movement of goods and services to be ensured without there being any need to harmonise the national legislation of the Member States"

- Case C-120/78

Rewe-Zentral

Mutual recognition

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These introduced important new provisions for GPP:

Module 3: Legal aspects of GPP

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2014 Procurement Directives

Ability to specify

production processes

and

methodsExtension of environmental management systems

Greater ability to rely on eco-labelsNew rules on

life-cycle costing

Ability to reject tenders which do not comply with environmental and social obligations

Ability to reject subcontractors who do not comply with environmental and social obligations

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The directives define common exclusion grounds for bidders. These relate to serious offences or problems in past performance – some of which are relevant to GPP

Selection

criteria can

also be used to identify which companies have appropriate

technical and professional ability to carry out a contract (including previous experience)

Exclusion and selection must be proportionate and based on pre-defined criteria

Module 3: Legal aspects of GPP

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2014 Directives

Exclusion + Selection

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Technical specifications are the

minimum requirements

which all tenders must meet, for example “All products must contain at least 65% recycled material”

Tenders which do not comply with technical specifications must be rejected

Module 3: Legal aspects of GPP11

2014 Directives

Technical Specifications

There are various ways to formulate technical specifications, including performance-based or functional specifications (see Module 4)

Specifications may relate to any life-cycle stage, e.g. production methods

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Under the directives, all contracts must be awarded on the basis of “most economically advantageous tender” (

MEAT

)

This allows a combination of cost (including life-cycle cost) and qualitative criteria to be set by the contracting authority

Environmental characteristics can be evaluated, provided these are

linked to the subject-matter

Life-cycle costing can be used to calculate the true cost of ownership, including environmental costs

Module 3: Legal aspects of GPP

122014 Directives

Award Criteria

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Module 3: Legal aspects of GPP

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2014 Directives

Contract performance clauses may include GPP elements – for example:

To regulate how goods are packaged and delivered

In a service contract (e.g. cleaning, catering) how waste and recycling are managed

In a works contract, responsibility of the main contractor and subcontractors for environmental protection

Contract performance clauses must be

linked to the subject-matter

and advertised in advance.

Contract performance

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Selection criteria, technical specifications, award criteria and contract clauses must all be

linked to the subject-matter of the

contract

Important for GPP as this limits the ability to look at the overall practices of a bidding company

Module 3: Legal aspects of GPP

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The Link to the Subject-matter (LtSM)

Definition of LtSM

“[criteria which]relate to the works, supplies or services to be provided under that contract in any respect and at any stage of their life cycle, including factors involved in:

(a) the specific process of production, provision or trading of those works, supplies or services; or

(b) a specific process for another stage of their life cycle, even where such factors do not form part of their material substance.” (Art. 67)

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Module 3: Legal aspects of GPP

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Defining the subject-matter of the contract

Contracting authorities are free to define the subject matter of each contract, and can do so in a way which explicitly includes environmental objectives

The definition will affect the scope of GPP criteria which you can apply

Choice between service or supply contract may also be important

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Module 3: Legal aspects of GPP

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Examples of criteria which are/are not

LtSM

In a contract for supply of uniforms, a requirement that the uniforms be made from organic cotton

In

a contract for cleaning services, extra marks available for the use of eco-labelled products

A requirement that a company have in place supply chain management measures which address specific environmental concerns (e.g. safe handling of chemicals)

In

a contract for supply of uniforms, a requirement that suppliers only use organic cotton in all

of their productsIn a cleaning services contract, extra marks for companies which use eco-labelled products in

all of their contractsA requirement that a company engage in ‘sustainable purchasing’ (without further definition)

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Open Procedure

– bids can be submitted by any operator

Module 3: Legal aspects of GPP

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Choice of procedures

Restricted Procedure

– at least five bidders are selected based on objective criteria

Competitive Procedure with Negotiation

– at least three bidders are selected based on objective criteria; bids can be negotiated

Competitive Dialogue

– at least three participants are chosen to develop solutions based on a description of the authority’s requirements

Innovation Partnership

– at least three partners are chosen to develop goods or services which do not yet exist on the market, using a phased contract structure.

Five procedures are available under the directives:

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Module 3: Legal aspects of GPP

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Impact of procedure on GPP

Choice of procedure is important because it determines

who will be able to compete

for your contract and how you apply certain criteria

If previous experience or other aspects of technical capacity are particularly important for a contract, the open procedure may not be the most appropriate

Keep in mind that GPP may add to the complexity of a tender, so it is vital to

allow sufficient time

for bidders to respond

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Competitive procedure with negotiation

,

competitive dialogue

and

innovation partnership offer more flexibility than open/restricted proceduresThis flexibility can be useful for GPP, especially if it is difficult to write a detailed technical specification due to lack of market knowledge

Another way to address this problem is to engage in market engagement (see Module 6)

Module 3: Legal aspects of GPP

19Benefits of flexible procedures

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The 2014 directives prescribe certain

mandatory

and

discretionary

grounds for excluding bidders. The most relevant for the purposes of GPP are:Non-compliance with applicable national, EU or international environmental laws

Grave professional misconduct which renders integrity questionableSignificant/persistent deficiencies in performance under a prior contractMisrepresentation of any of the above or inability to submit supporting documents

Module 3: Legal aspects of GPP

20Grounds for exclusion

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The following considerations can be taken into account at selection stage, and are relevant for GPP:

Human and technical resources

Experience and referencesEducational and professional qualifications of staff

Environmental management systems and schemes (e.g. EMAS, ISO 14001)Supply chain management/tracking systems

Samples of productsConformity assessment certificates

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Selecting bidders

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Provide a structured and third-party certified way to manage environmental performance

EMAS and EN/ISO 14 001 are the most common systems in use in Europe

At selection stage, can request evidence of the environmental management measures which the operator will be able to apply for the contract

Other forms of evidence (such as an in-house system) must be considered where an operator has no access to third-party certification or no possibility to obtain it within the relevant time limits for reasons which are not attributable to it

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Environmental management systems

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Performance-based or functional specification

Describe characteristics required of the goods, services or works, including environmental characteristics and production processes or methods

Specification based on standards

Refer to European, international or national standards/ technical assessments – these must be accompanied by the words ‘or equivalent’

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Technical specifications

Under the directives there is a choice between:

OR a combination of these two approaches

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Technical specifications prescribe minimum requirements. This means that if a tender does not conform to the specifications, it must be rejected.

In some cases, contracting authorities wish to provide more flexibility while still ensuring they receive bids which meet their requirements.

Variants

can be used to allow bids which do not conform fully to the technical specifications to be considered, either instead of or in addition to fully compliant bids.

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Minimum requirements and variants

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Third party environmental labels can be referred to in specifications, award criteria, contract terms

Labels can reduce the amount of work involved in defining and verifying environmental aspects of tenders

In order to refer directly to a label, it must meet certain transparency and accessibility requirements

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Using labels in technical specifications

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they only concern criteria which are linked to the subject matter of the contract;

they are based on objectively verifiable and non-discriminatory criteria;

they are established using an open and transparent procedure in which all relevant stakeholders, incl. government bodies, consumers, social partners, manufacturers, distributors and non-governmental organisations, may participate;

they are accessible to all interested parties;

they are set by a third party over which the economic operator applying for the label cannot exercise a decisive influence

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Requirements for using labels in tenders

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Module 3: Legal aspects of GPP

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Examples of label criteria which can/can’t be included in tenders

A requirement for products to be tested for energy or water consumption, and to meet minimum efficiency standards

A requirement for the company to provide samples or technical information sheets for the product to be labelled

Requirements which are published on the website of the label

provider

A requirement for products to be tested at one particular facility or in one region/country

A requirement for the company to provide samples or information on

all

of its products or services

Requirements which are set by the company using the label itself, or which are not available to other operators

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Determine the winning bid from amongst those which meet the technical specifications

Combine cost (including life-cycle cost) and qualitative criteria to determine MEAT

Can include a range of environmental factors

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Award criteria

Award Criteria must…

be linked to the subject-matter of the contract;not confer an unrestricted freedom of choice on the contracting authority;ensure the possibility of effective competition;be expressly mentioned in the contract notice and tender documents, together with their weightings and any applicable sub-criteria; and

comply with the Treaty principles.

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The EU GPP criteria contain a range of suggested award criteria for each product/service group, e.g.:

Office

Buildings:

“Points will be awarded in proportion to the additional primary energy demand of the

building to be supplied/generated by localised renewable energy sources or high efficiency alternative systems.” Textiles: “

Points will be awarded in proportion to each 10 % improvement upon the minimum technical specification of certified IPM or organic cotton content”EU GPP criteria website

Module 3: Legal aspects of GPP

29Choosing environmental award criteria

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There is no minimum or maximum number of points which can be assigned to environmental award criteria

In Case C-448/01

EVN

Wienstrom

, the CJEU approved in principle an award criterion related to renewable energy weighted at 45%Consider the impact which different weightings and scoring methods will have on the evaluation, and if they provide bidders with an incentive to compete on environmental factors

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Weighting and scoring award criteria

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LCC allows comparison of the true costs of tenders

Covers costs borne by contracting authority or other users, e.g. acquisition, use, maintenance and end-of-life

Also environmental externalities, provided their monetary value can be determined and verified, e.g. greenhouse gas emissions

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Life-cycle costing (LCC)

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Must indicate method to be applied and data required from tenderers in the procurement documents. Method must be:

Based on objectively verifiable & non-discriminatory criteria;

Accessible to all interested parties;

Data required can be provided with reasonable effort by normally diligent economic operators, including operators from third countries.

Where a common EU methodology has been developed, must apply this (currently only applies under Clean Vehicles Directive

)

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LCC requirements

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In some cases, a tender with a very low price may not respect environmental obligations (e.g. to dispose of waste properly)

Such tenders must be investigated to determine the reason for the low price and confirm whether they meet all legal requirements

Bidders must be given an opportunity to explain their pricing

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Abnormally low tenders

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Technical Specifications

Can be functional or based on standards

Cannot be waived unless variants permittedBest for ensuring that all bids will meet minimum environmental standards

Award Criteria

Can address wide range of environmental factorsAssign marks for better performance

Best for stimulating the market to provide more sustainable solutionsModule 3: Legal aspects of GPP

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Specifications vs award criteria

In GPP, specifications and award criteria are often combined to target environmental performance. It is important to distinguish between their roles:

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To ensure that GPP commitments are respected in the delivery of contracts, it is vital to include robust contract performance terms

These must be linked to the subject-matter of the contract & advertised in advance in the notice or tender documents

Bidders may be asked to confirm their acceptance of the terms during the tender procedure

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Contract performance clauses for GPP

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GPP contract clauses should be specific to the

requirements of the tender, not “one size fits all”

Examples:

Supply contract

– type of packaging and duty on the supplier to recycle/reuse it; frequency of deliveries; type of vehicle used for deliveryService contract

– staff training in environmental aspects of contract; monitoring and reporting environmental impacts; applying an EMSWorks contract – management of waste, energy and water on construction site; third-party certification for buildings or civil engineering works

Module 3: Legal aspects of GPP

36Setting contract performance clauses

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GPP contract clauses should always include the following:

What

needs to be done

Who needs to do it

How it will be monitored

Third party audits/monitoring/certification may be appropriate in some casesIncentives and/or penalties may be included to further motivate GPP performance

Module 3: Legal aspects of GPP

37Enforcing contract performance clauses

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Module 3: Legal aspects of GPP

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Summary of Module 3

GPP is governed by the

EU procurement directives, Treaty principles, case law and national legislation

Equal

treatment, transparency, proportionality

and mutual recognition must be applied

The 2014 procurement directives allow GPP to be applied throughout the tender process

The

link to the subject-matter requirement sets a limit to what bidders can be asked for

GPP can be applied in each of the five procedures

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Exclusion and selection

of bidders may include environmental aspects

Technical

specifications can set minimum environmental requirements, including by reference to third-party

labelsAward criteria are used to evaluate performance above and beyond the minimum requirements, and may include

life-cycle costingContract performance clauses should enforce GPP commitments, and be specific to each contract

Module 3: Legal aspects of GPP

39Summary of Module 3 continued

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Module 3: Legal aspects of GPP

Further guidance

GPP Helpdesk

For further support on GPP, contact the EU’s free

Helpdesk

Buying Green

(3

rd edition, 2016)EU GPP criteria

Good Practice Examples

Circular Procurement Guidance

(2017)

Toolkit developed for the European Commission by ICLEI - Local Governments for

Sustainability

Module Author:

Public Procurement Analysis

Owner

, Editor:

European Commission, DG Environment,

2019

Photos:

courtesy of Pixabay.com under Creative Commons CCO

Disclaimer:

This

toolkit

is an indicative document of the Commission services and cannot be considered binding to this institution in any way. Neither the European Commission nor any person acting on behalf of the Commission is responsible for the use that might be made of the

information

in this document

.