Equal treatment and transparency are the fundamental principles governing public procurement law. The principles are clearly embedded in the Danish Public Procurement Act, which implements the Directive 2014/24/EU (hereinafter “the Directive”) on public procurement.[1] The Directive ought to ensure that those principles are given practical effect and public procurement is opened up to competition[2]. In addition, the Directive sometimes requires minimum or maximum harmonization, i.e., it sets minimum or maximum standards. However, the Article 288 TFEU recognizes that sometimes the legal systems in some Member States have already set higher standards, in which case they have the right to set higher standards than those set in the Directive[3]

One of the efforts to continuously pursue the abovementioned fundamental principles can be seen in Section 160 of Denmark’s Public Procurement Act: [4] 

(1) A contracting authority shall determine and describe the content of the tender document and all parts of the evaluation model. Specific parameters in the evaluation model may depend on the tenders received, but it must be unambiguous and described in advance how the parameters are determined. The parameters of the evaluation model may not depend on the tenders received in a manner based on the choice or assessment of the contracting authority after the opening of the tenders.

(2) An evaluation method described in the tender in accordance with paragraph 1 may not be overridden by the courts if it is transparent and complies with the principle of equal treatment. [5]

The provisions content

Roughly put, the provision stipulates an obligation for the contracting authority to publish its evaluation model in advance. An evaluation model is defined in the Danish Public Procurement Act as the tool(s) used by the contracting authority to collate tenderers’ responses to different award criteria in order to identify the most economically advantageous tender.[6] The provision obliges the contracting authority to define and describe all parts of the evaluation model in the procurement documents. This includes the manner in which the parameters in the evaluation model that are not specified in advance are determined. With the provision, contracting authorities still maintain a broad discretion in determining the evaluation model and setting the individual parameters, but the content of all parts of the evaluation model must be described in the procurement documents. However, this obligation does not originate from the Directive nor the case law of the Court of Justice of the European Union (hereinafter the “CJEU”).

In the Dimarso case[7], the question was whether the contracting authority was required in advance to establish and indicate the method of assessment or the weighting rules in the contract notice or documents in light of which the tenders would be assessed.[8]  The CJEU ruled that the contracting authority must be able to adjust the evaluation model and classify the tenders with regard to the case in hand and that no such obligation could be derived from neither Directive 2004/18 nor the CJEU’s case law. However, the CJEU stated that the evaluation model could not, in principle, be determined by the contracting authority after the opening of the tenders.[9] In this respect, the guidance given by the CJEU in Dimarso seems to be contradictory. The synthesis of the contracting authorities’ pre-tender obligation to determine the evaluation model and its post-tender prerogative of adjustment is not entirely clear.

The travaux preparatoires of Section 160 consider the raison d’être of the stipulation to reflect the Directive’s more robust demand for prior transparency in general.[10] Additionally, it explains that Section 160 does not implement any concrete article in the Directive but aims to “clarify” the principles set out in article 18 (1) of the Directive, which establishes the aforementioned principles of procurement law.[11] The provision thus stems from the Danish legislator’s wish to implement transparency in Danish procurement law. The development is closely tied to the practice of the Danish Complaints Board for Public Procurement. The provision also represents the legislator’s wish to implement greater transparency than what followed from the practice at the time of the provision’s introduction.[12]

It is, moreover, the point of the latest revision of the provision to correct a precedent set by the Danish Complaints Board.[13] Due to an ambiguity in the former wording of section 160, the ruling established that a contracting authority was not required to publish the gradient in a point-based evaluation model. Parts of an evaluation model could thus be kept secret, which was not the original intention of the provision and thus sparred the revision.[14]

On the other hand, the Danish legislator can be viewed as the virtuous member state going to greater lengths pursuant to the goals of the Directive. The Danish Association of Construction Clients (DACC)[15] presents another perspective: DACC uses Dimarso to argue that the provision is, in fact, a violation of EU law. Relying upon the afore paraphrased premises, it is the view that the Directive has given the contracting authorities -not the national legislator – the competence to assess the relevance of publishing the evaluation model and organizing the tender.

Section 160 and the fundamental principles have great effect in practice. In the DXC Technology Denmark case, the Danish Complaints Board for Public Procurement stated that it is a fundamental principle of procurement law that the contracting authority must clearly describe what is to be purchased in accordance with the principle of transparency and that the offers must be evaluated accordingly.[16] In this case, it was unclear what the contracting authority wanted due to the design of the tender. The tender invited offers on operation, maintenance, support, and further development of a current digital solution and secondarily an option to replace and implement a cheaper digital solution, including operation and maintenance. The evaluation method was an expression of confusion between the two offers because the calculation of the sub-criterion price merged the two offers by summing them. However, the evaluation model did not reflect the expected procurement because the calculation of the sub-criterion was not suitable for identifying the most economically advantageous tender, as the operation and maintenance remuneration was included twice in the calculation. Both section 160(1) and the principle of transparency in section 2 were found to have been infringed. The tender evaluation method provided by the contracting authority could therefore be disregarded under section 160(2). As a consequence, it is not entirely without reason or reasonable explanation, that the contracting authorities have expressed scepticism towards the said transparency agenda. It has been pointed out that Section 160 is administratively burdensome, at the expense of the contracting authority’s weighting of price and quality, and that it increases transaction cost and the risk of the evaluation model being unfit, resulting in more annulments of tenders.[17]

Equal treatment and transparency; two sides of the same coin?

In abstracto, the principles of equal treatment and transparency saturate European public procurement law in all aspects. The principles are, on this basis, considered to apply at all stages of a call for tenders, as well as to the performance of the public contract. In concreto, the Danish Procurement Act can be considered an implementation of these principles. On this basis and considering the Member States’ general obligations to interpret its law in conformity with EU law, the principles of the Danish Procurement Act must therefore be interpreted in accordance with the TFEU and the Directive.

It follows from the principle of equal treatment that similar situations must not be treated differently and that different situations must not be treated in the same way unless such different treatment is objectively justified and proportionate. This means that discrimination between candidates and tenderers is possible only where objectively justified.[18] Thus, the principle of equal treatment must be read in conjunction with the general prohibition on discrimination in Article 18 TFEU.[19] From a procurement law perspective, it expresses a fundamental prohibition on preference being given to national tenderers or applicants whenever the contracting authorities award a contract.[20]This entails that the range of beneficiaries expands in relation to a concrete tender: The contracting authority’s obligations according to the principle of equal treatment apply not only to candidates and tenderers but also to economic operators who could potentially have chosen to participate in the tender.[21] Consequently, the principle’s scope is, in theory, far-reaching.

In practice, the principle will accordingly be applied to settle cases on different issues and at all tendering stages. A few examples are illustrative; they may be contrary to the principle of equal treatment

• if a bidder has acted as an advisor to the contracting authority in the preparation and organization of a call for tenders[22],
• if the contracting authority has had previous experience with a bidder[23] or
• where the tender documents are tailor-made to a specific bidder.[24]

As an enabler of equal treatment, the principle of transparency has been developed in the case law of the CJEU:

“The principle of transparency which is its (re. principle of equal treatment) corollary is essentially intended to preclude any risk of favouritism or arbitrariness on the part of the contracting authority. It implies that all the conditions and detailed rules of the award procedure must be drawn up in a clear, precise, and unequivocal manner in the notice or contract documents (…)“.[25]

In recognition that the equal treatment paradigm is inherently at the risk of remaining merely a state of de jure – it is necessary to apply the principle of transparency, thereby ensuring its de facto operability. As aptly put by the CJEU, equal treatment is the necessary corollary. The tenderers’ opportunity to check if the contracts have been awarded in accordance with the prescribed evaluation model ensures the models’ normative efficacy on the contracting authority at all stages of the awarding process and thereby ensuring equal treatment.

The transparency principle has a double function. Firstly – as described in the above-cited premise – it requires clarity and precision in the award procedure and the contract notice. The assessments of clarity and precision are made on a sort of professional bonus pater standard, whereas the evaluation models are subject to an assessment based on whether “(…) reasonably informed tenderers exercising ordinary care can understand their exact significance and interpret them in the same way.“[26] Secondly, there should be publicity and transparency around the tender itself so that economic operators have the opportunity to express their interest in supplying the contracting authority with the tendered supply.[27] This also prevents the contracting authority from procuring from suppliers for whom the contracting authority may have a prior preference. Inconsistencies may cause a given contract to be considered invalid after the awarding of a contract.[28]

In relation to section 160 of the Danish Public Procurement Act, the courts may override the evaluation method if it violates the said principles. E.g., in the case of the Seelco v University of Copenhagen[29], the University had violated both principles by merging several qualitative criteria, which were very different in terms of content, into a common, qualitative sub­criterion and by only publishing the overall weighting for these criteria in advance.

Types of evaluation models

As already described, the contracting authority has a wide discretionary margin regarding how the evaluation model is composed. It is not a requirement that it is described mathematically.[30] However, the preparatory works indicate that the contracting authority must be able to attest that the evaluation has been made in accordance with the prescribed model[31] and provides that the parameters must be objectively ascertainable.[32] The most frequently used evaluation models are, respectively, the point and price evaluation models:[33]

1. The point evaluation model roughly consists of the contracting authority awarding each tenderer points in several subcriteria. The tenderer with the most points wins[34].
2. In the case of price evaluation models, points for quality are converted into prices, which are weighted together with the offer prices in the evaluation of which offer has the best price/quality ratio.[35]

Example

To illustrate the above, an enclosure to an invitation to tender from the Danish Meteorological Institute (DMI) concerning two dual-pol C-band radars, which are instruments that help project the weather, can be presented. It is stated that the award criteria are “best price-quality ratio,” and price and quality weigh 50 % each. Each tender is evaluated by receiving a mark on both price and quality from 1-5.

The price marks are given for a range of subcriteria as follows:

The Tenderer with the lowest Evaluation Price among all conditional tenders will get the mark 5. All other tenderers will be rated on a linear scale, where tenders with an Evaluation Price + 50 % or higher as the lowest Evaluation Price will get the mark 1. Marks for other tenders are calculated by application of this formula: Mark= 5 – ((5-1) / 50 %) * (total price of other tenderer – lowest total price) / low total price.

The quality marks are given for a range of subcriteria as follows:

Moreover, DMI will reach its conclusion as follows:

For each Tenderer, DMI will calculate a weighted average of total points ((marks for price*0,5) +(marks for quality*0,5)).

The tenderer with the highest weighted average of total points is considered to have submitted the tender with the “best price-quality ratio”.

This way, sellers of dual-pol C-band radars are sure to be treated equally.

Conclusion

To state that this newly-introduced obligation to publish the evaluation method reflects the spirit of the procurement directives would definitely be an understatement. However, this new obligation should additionally be saluted on other grounds. Specifically, contextualizing the Danish legislator’s willingness to expand the directives’ transparency obligations, it emerges as an action clearly going against the tide. In contrast with the ‘good student’ Danish legislator that decided to enrich the transparency palette, the data on the transposition of 2014 vague of directives illustrate fatigue among national legislators, visible in the form of close-to-the-deadline transposition and in copy-pasting of the directives’ provisions into national law. A compliant transposition, no less.

[1] Lov 2015-12-15 nr. 1564 Udbudsloven.

[2] Recital 1 of Directive 2014/24/EU.

[3] This is, however, disputed by the DACC in relation to section 160, cf. below.

[4] The obligation was inserted in Lov 2015-12-15 nr. 1564 Udbudsloven, but has been amended with Lov 2019-03-05 nr. 204 Om Ændring af Udbudsloven (Offentliggørelse af alle dele af evalueringsmodellen og krav om evaluering af kvalitet uden kendskab til pris ved visse større bygge­ og anlægskontrakter).

[5] Please note that this is merely an informative and not an official translation.

[6] The Danish Public Procurement Act section 24 (39).

[7] CJEU, Case C-6/15 TNS Dimarso, ECLI:EU:C:2016:555

[8] Ibid, para. 37.

[9] Ibid, paras. 28-30.

[10] Folketingstidende A, lovforslag nr. L 19, 2015-16, s. 183.

[11] The Directive’s article is implemented in the Danish Public Procurement Act, section 2.  For commentary on Article 18 Directive 20014/24/EU please see: Andhov, M., & Risvig Hammer, C. (2021). Article 18. In R. Caranta & A. Sanchez-Graells (Eds.), European Public Procurement: Commentary on Directive 2014/24/EU (1st ed., pp. 182–207). Edward Elgar Publishing.

[12] Steen Treumer, m.fl., Udbudsretten, s. 296 (1.udg, 2019)

[13] See footnote 4.

[14] KfU 2017-08-08, Konkurrence- og Forbrugerstyrelsen v. Region Midtjylland; and Forslag til Lov om ændring af udbudsloven (2018/1 LSF 125), s. 5

[15] DACC is an interest group representing professional construction clients in Denmark.

[16] KfU 2021-07-14, DXC Technology Denmark v. Danish Court of Justice v/Land Registry.

[17] Høringsnotat vedrørende fremsættelse af forslag til ændring af ud- budsloven (DEC I), pg. 4.

[18] Folketingstidende A, lovforslag nr. L 19, 2015-16, s. 57.

[19] Steen Treumer, m.fl., Udbudsretten, s. 39 (1.udg, 2019).

[20] E.g. C-360/96, Gemente Arnhem, pr. 42.

[21] Folketingstidende A, lovforslag nr. L 19, 2015-16, s. 57.

[22] KfU 2010-08-06 and KfU 2014-10-03.

[23] KfU 2019-12-18 J!Zlrns Rutetrafik A/5 v Nordjyllands Trafikselskab.

[24] U 2012.3232 V.

[25] CJEU, Case C-496/99, P Cas Succhi Di Frutta vs Commission, ECLI:EU:C:2004:236, para. 111.

[26] CJEU, Case C‑42/13, Cartiera Dell’Adda, OJ C 7, 12.1.2015, p. 3–4, para. 44

[27] Steen Treumer, m.fl., Udbudsretten, s. 44 f. (1.udg, 2019).

[28] KfU 2018-07-24, Albertslund Tømrer og Snedker A/S mod Hillerød Kommune and section 17 in the Danish Act on the Danish procurement complaints board.

[29] KfU 2019-03-12, Seelco Danmark A/S mod Københavns Universitet.

[30] Ibid., s. 184.

[31] Ibid.

[32] Folketingstidende A, L 125 Forslag til lov om ændring af udbudsloven, s. 8.

[33] Konkurrence- og forbrugerstyrelsen, Evalueringsmodeller; Praktisk vejledning til offentlige indkøbere (2019). In the original procurement act, it was presupposed that the most frequently used evaluation models would be divided into three different models, but the so-called prose model is not used in practice, and neither of the models is mentioned in the preparatory works to the amendment.

[34] Konkurrence- og forbrugerstyrelsen, Evalueringsmodeller; Praktisk vejledning til offentlige indkøbere (2019), s. 20.

[35] Ibid, s. 15