ECJ considers references to specific brands in invitations to tender

European Union

In SC Entreprise Focused Solutions SRL v Spitalul Judetean de Urgenta Alba Iulia (Case C-278/14, April 16 2015), the Court of Justice of the European Union (ECJ) has considered a request for a preliminary ruling concerning the interpretation of Article 23(8) of Directive 2004/18/EC on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts.

On November 20 2013 Spitalul Județean de Urgența Alba Iulia, a Romanian contracting authority, launched an online call for tenders for the conclusion of a contract for the supply of computing systems and equipment. The estimated value of the contract was approximately €58,600, excluding VAT (Lei259 750). The tender documentation stated that the processor was required to correspond "at least" to an "Intel Core i5 3.2 GHz or equivalent" processor.

The tender submitted by SC Enterprise Focused Solutions SRL (EFS) was rejected on the ground that it did not comply with the technical specifications of the contract. Indeed, the contracting authority noticed that Intel no longer produced nor supported first and second-generation Core i5 processors with a speed of 3.2 GHz – although these processors were still available on the market. Therefore, the contracting authority compared the processor offered by EFS to the third-generation Core i5 processor, whose performance is superior.

Within the framework of the complaint filed by EFS, the Alba Iulia Court of Appeal (Romania) decided to refer a question to the ECJ for a preliminary ruling on the interpretation of Article 23(8) of Directive 2004/18/EC. Under this provision, it is prohibited to refer to specific brands in invitations to tender; such reference is allowed only on an exceptional basis and shall be accompanied by the words “or equivalent”.

Since, in the present case, the technical specifications were defined by reference to a product of a particular brand which was no longer produced, the question was whether the contracting authority could modify this specification and refer to a comparable product of the same brand which had different characteristics.

The ECJ first noted that Directive 2004/18/EC was not applicable to the dispute in the main proceedings: this directive is applicable only to contracts whose value exceeds €200,000, exclusive of VAT; here, the contract at stake had a value of approximately €58,600.

The ECJ then declared that contracts whose value is below €200,000 and are not governed by Directive 2004/18/EC must nevertheless respect the fundamental rules and principles contained in the Treaty on the Functioning of the European Union, such as the principles of equal treatment and of non-discrimination on grounds of nationality and the consequent obligation of transparency, as long as those contracts have a certain cross-border interest.

Even though the referring court had not established the findings necessary for the ECJ to ascertain whether the dispute had a certain cross-border interest, the ECJ considered that it was in a position to give a useful answer. This suggests that the ECJ, which could have refused to answer in such a situation, really wanted to rule on this matter. The ECJ's answer was given subject to the proviso that a certain cross-border interest is established by the referring court.

In the ECJ’s view, the transparency obligation is aimed, notably, at precluding any risk of arbitrariness from the contracting authority. It implies that the contracting authority cannot disregard the conditions that it had itself imposed.

Applying the principle of equal treatment and the obligation of transparency, the ECJ concluded that the contracting authority cannot amend the technical specifications after publication of a contract notice and reject a tender which satisfies the requirements of the invitation to tender on grounds which are not set out in the tender specifications.

Consequently, the contracting authority should have compared the processors offered by EFS with the Intel Core i5 3.2 GHz, even though it was no longer produced, provided that the contract had a certain cross-border interest.

It is the first judgment of the ECJ on the issue of references to a brand in invitations to tender. Given the specifics of calls for tenders, this judgment confirms that one cannot unduly restrain tenderers for public works by referring to a particular brand. This was emphasised by the court, which chose to answer the question when it could have found it inadmissible.

Richard Milchior, Granrut Avocats, Paris

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