What you need to know
- The Court of Justice of the European Union (CJEU) case concerned the interpretation of Article 42 of Directive 2014/24 on public procurement.
- Article 42 sets out the rules governing the use of technical specifications in procurement documents. It also provides that technical specifications must not refer to a particular make or source of product, or to a process associated with a particular economic operator, unless such reference is justified by the subject matter of the public contract.
- The CJEU clarified that, in principle, there are two exceptions to this general rule:
- Where it is not possible to create a sufficiently precise or intelligible description of the contract’s subject matter. In that case, the words “or equivalent” must accompany the reference.
- Where the subject matter of the contract justifies reference being made to a specific make or source of product. This reference must flow “inevitably” from the subject matter of the contract.
Background
A hospital in Cluj, Romania, published a call for tenders in February 2024. The tender related to the award of a public contract for the supply, installation and commissioning of a surgical robot. The procurement documentation associated with the competition contained several technical specifications for the surgical robot, including that it must:
- Be modular and mobile
- Have at least four modules with independent robotic arms
- Be suitable for use in several specified surgery types
- Be capable of being placed in the hospital’s operating block without the need for any special arrangements
- Allow for a hybrid approach to surgical intervention, and
- Be capable of readily switching from classical laparoscopic surgery to robot-assisted surgery
Notably, the hospital did not express in the procurement documents that it would accept products which met ‘equivalent’ technical specifications for the purposes of this competition.
Sof Medica, a manufacturer of monobloc-type surgical robots, took issue with these technical specifications. It argued that the specifications favoured manufacturers of modular-type surgical robots and excluded manufacturers of monobloc-type designs. The hospital contended that the technical specifications were justified. The hospital argued that its operating theatres were incompatible with the monobloc-type surgical robot due to their size and configuration.
In the case of public supply contracts, technical specifications are used to define the required characteristics of a product. This includes the quality, design performance and dimensions desired by the contracting authority. Article 42(4) of the Directive provides that, unless justified by the subject matter of a public contract, technical specifications must not refer to a specific:
- Product make
- Product source, or
- Process associated with a particular economic operator
Judgment
The matter was referred to the CJEU for clarification through the preliminary reference procedure. This allows national courts to refer questions on the interpretation of EU law to the CJEU where necessary to decide a case.
The CJEU clarified that there are two exceptions to the prohibition on referring to a specific make or source of product in technical specifications, as outlined in Article 42(4) of the Directive:
- In circumstances where it is not possible to create a sufficiently precise or intelligible description of the contract’s subject matter from the performance and/or functional requirements listed in Article 42(3)(a) and (b) of the Directive. In this scenario, the words “or equivalent” must accompany the contracting authority’s reference to a particular make or source of product.
- In circumstances where the subject matter of the contract itself justifies reference being made to a specific make or source of product. In this scenario, the phrase “or equivalent” does not need to be included in the technical specifications.
In its judgment, the CJEU focused on the second exception. Given the Article 42(2) obligation to ensure effective competition in public procurement, the CJEU noted that the second exception must be interpreted restrictively. Therefore, it must only be relied on when the need for a specific make or source of product flows “inevitably” from the subject matter of the public contract.
In the present case, the CJEU expressed doubts as to the requirements referred to in the tender specifications relating to:
- The modular and mobile character of the surgical robot
- Its weight
- Its footprint, and
- The arrangement of the arms of the surgical robot
The court noted that those requirements relate to a ‘type’ of product or to a ‘specific production’ which may have ‘the effect of favouring or eliminating certain businesses or certain products’, within the meaning of Article 42(4) of the Directive.
The CJEU referred the matter back to the Romanian national court to conduct its own substantive analysis on whether those requirements could be said to flow “inevitably” from the subject matter of the contract. In so doing, the CJEU specified that, if the national court was not satisfied that these technical specifications flowed inevitably from the subject matter of the surgical robot contract, then they would need to be accompanied by the phrase “or equivalent”.
On a separate point, the CJEU clarified the position on transparency and equal treatment. It confirmed that those principles do not require a contracting authority to provide the objective justification for including a technical specification at the time of publication of a contract notice.
Conclusion
The CJEU’s judgment confirms that contracting authorities can only refer to a specific make or source of product, or to a process associated with a particular economic operator, in very limited circumstances. The judgment clarifies that contracting authorities are only permitted to do so where:
- It is not possible to create a sufficiently precise or intelligible description of the contract’s subject matter
- The subject matter of the contract justifies reference being made to a specific make or source of product, provided such reference flows “inevitably” from the subject matter of the contract.
Helpfully, the CJEU also confirms that the words “or equivalent” only need to accompany the reference where limb 1 is being relied on.
Contracting authorities must take care in drafting technical specifications to ensure that they comply with the strict requirements of Article 42 of the Directive. In particular, the technical specifications should not have the effect of favouring or eliminating certain companies or certain products.
For more information and expert advice, contact a member of our Public Procurement team.
The content of this article is provided for information purposes only and does not constitute legal or other advice.
