Does negotiated procedure allow authorities to negotiate mandatory tender requirements?

In Nordecon v Rahandusministeerium, The European Court was asked whether an authority is free to revise mandatory technical requirements included in its tender documentation.

09 December 2013

In the case of Nordecon v Rahandusministeerium (case C-561/12), the European Court was asked whether an authority is free to revise mandatory technical requirements included in its tender documentation as part of the negotiation process in the negotiated procedure under Article 30 of the Public Directive 2004/18.

The case has a strong practical flavour. Clearly where a bidder provides a solution which is contrary to the technical requirements in a tender, the inclination is to assume that bid cannot continue. However, if the non-compliant proposal is actually better than the authority’s technical requirements would allow the strong temptation must be to vary the procurement requirements to allow it. A fair-minded authority might then take great pains to make sure the other bidders had an adequate opportunity to revise their bids in light of the alternative proposal. Why should this be unfair? Why should the authority have to abandon the process and start again if it wants to consider the alternative proposal? This is, after all, the negotiated procedure aimed at cases where bidders may be able to help an authority focus its requirements.

Despite this practical attractiveness, the Court refused to allow such a negotiation. Where a requirement was mandatory in the tender, it remained mandatory and could not be negotiated away. To do so would undermine the entire nature of a mandatory requirement.

The lesson to take away for authorities, is to be very careful about what is specified to be mandatory in a negotiated process. If alternative proposals might be made, provide for them in the tender rather than fixing the parameters of the bids before the bidders’ first proposals are available.

The lesson for bidders is to comply with mandatory requirements even when a better solution presents itself. Bidders are all encouraged to be innovative. But not that innovative.

Simon Tilling is a member of Burges Salmon’s cross disciplinary Procurement team led by John Houlden.

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