The EU Court of Justice (ECJ) did in a recent ruling from April this year (C-568/24) deal with an element in the public procurement process, which is of importance globally. What is known as technical specifications have the purpose of describing to the market in terms of minimum requirements what the public buyer requires. It also provides a basis for this buyer to verify that what is being procured is actually what is required.
Disputes between bidders and public buyers concerning technical specifications are typically about whether specifications are sufficiently precise or whether specifications on the other hand are so specific, that they could be seen as artificially restricting competition for the benefit of one or more bidders. In the first situation, too much discretion is left to the public buyer when evaluating bids. In the second situation, the procedure lets itself open to discrimination challenges.
The ECJ ruling is about hospital procurement of surgical robots and with focus on technical specifications. The ruling dealt with a different type of dispute, namely whether the tender material should also explain the reasons behind the specific requirements included in the technical specifications. It would in other words be required not just that the requirements were precise and objective in themselves. It should also be clarified why these particular requirements had been set up in the first place.
In preparation of the procurement process the public buyer had as part of the market review clarified that there are two types of surgical robots, namely, a monobloc type where the robot arms are arranged as one unit and a modular type where the robot arms are individually arranged. The technical specifications required that the robots were modular and this therefore excluded bids based on the monobloc type.
The technical specifications included the following: ‘Robot assisted surgical equipment, modular and mobile, with at least four modules with independent robotic arms and certified for use for at least the following specialities: general surgery, gynaecology, urology and thoracic surgery. The equipment must be able to be placed in the operating block without any special arrangements being necessary and permit a hybrid approach to [surgical] intervention, and switch rapidly to and from classical laparoscopic surgery to robot-assisted surgery each time that is necessary during a [surgical] procedure. The equipment must be able to be used continuously.
A bidder complained that the limitation to modular types of robots was unnecessarily restrictive and argued specifically that the specifications did not allow for alternative equivalent solutions (“or equivalent”). The lack of such possibility was criticised as not compliant with specific provisions in the relevant EU directive.[1]
In defence of limiting specifications to an exact type the hospital explained that only modular robots would be sufficiently flexible and mobile to be used in the concrete hospital environment with its small and scattered operating theatres. In the words of the hospital: “The nature of those rooms required a robot that is configured flexibly and is appropriate for the available space, with limited weight and footprint, which did not correspond to the characteristics of a monobloc type of robot.”
These justifications were not mentioned in the technical specifications or anywhere else in the tender material. Another question referred to the Court was whether technical specifications require justification and whether such justification must be explained “in advance” in the tender material. It was especially queried whether the principles of transparency had been infringed in relation to interested bidders by the lack of such justification.
The Court did on the basis of its existing ECJ case-law point out that:
“The principle of transparency merely requires (..) that the documentation relating to the call for tenders be clear, precise and unequivocal, without going so far as to require contracting authorities, at the date of publication of the contract notice concerned, to state specifically all the objective justifications underpinning each technical specification referred to in the tender specifications”.
Consequently, the Court excluded that the principle of transparency had been infringed. Looking furthermore at the wording of relevant provisions of the EU directive at issue[2] the Court could not otherwise find any basis for a requirement that the tender material should include not just technical specifications as such but also a justification for such specifications.
This does not mean that such a justification could not otherwise be demanded by public buyers. This would especially be relevant in case of very detailed specifications. The Court pointed out that the application of the principle of proportionality would require the public buyer on request to justify why that level of detail in the technical specifications concerned is necessary to attain the objectives pursued. However, this does not imply an obligation for the public buyer to automatically include such justification in the tender material.
The Court ends up by making the observation that such “automatics” “… would be liable to upset the balance sought by the EU legislature between the rights and obligations of tenderers and those of contracting authorities. It would have the effect of requiring the contracting authority to give a detailed justification for each specific requirement, providing information relating to the needs which it seeks to satisfy and as to the basis upon which it drew up the technical specifications. In certain cases, such an obligation to state reasons would have the effect of placing a particularly heavy, or even disproportionate, administrative burden on the contracting authority concerned and of calling into question the broad discretion conferred on it in determining its needs and in formulating the technical specifications of a contract”.
Comment:
The Court makes clear that a procuring authority must in accordance with the principle of proportionality be able on request to demonstrate that its technical specifications do not go further than what is strictly necessary. What the Court points out is that this does not translate into a general obligation to automatically always include such justification in tender material. Such an obligation could in the view of the Court be understood as opening up for discussing alternative and “better” specifications and thus fly in the face of the discretion allowed for the public buyer.
The Court also points at the administrative burden that such an automatic obligation would entail. Practically speaking, the obligation would need to address all elements in technical specifications, such as performance, dimensions, energy consumption, solidity etc. This would of course include elements that at the end of the day might never be questioned by bidders.
Thus, the principle of transparency does according to the Court not require such automatic obligation. However, in view of the increased emphasis on competition in public procurement, it is reasonable to ask whether the introduction of “automatism” along these lines should be considered. After all, it might encourage a more cautious and considered approach to formulating technical specifications leading to wider scope for competition.
A more straightforward solution is already in the books, so to say. The existing obligation in certain cases to add “or equivalent” when specifications are allowed to refer to specific types, brands etc. could be extended and, most importantly, effectively implemented. This would likely motivate public buyers to avoid references to types etc. and in this manner avoid difficult evaluations of the equivalence of alternative bids.
Reverting to the concrete technical specifications for the surgical robots, the focus on a specific type of robot is obviously based on the assumption that all robots of this type would necessarily be more moveable than the other. This is confirmed by other sources, according to which modular surgical robots use separate, movable robotic arms or interchangeable tools instead of one large, fixed machine. This design, it is explained, lets hospitals easily move the arms between operating rooms or use only the specific number of arms needed for a procedure.
The text of the technical specifications themselves introduce a certain ambivalence. Thus, the text of the technical specifications includes in addition to “modular” terms like “mobile” and the ability “ to be placed in the operating block without any special arrangements being necessary”. This could strictly speaking be understood by implication that not all modular robots are mobile and flexible. Otherwise, why would the additional terms be required.
[1] See Note 2. This aspect of the ruling rely on specific details of the EU rules.
[2] See Directive 2014/24/EU on public procurement