When should non-price criteria for bid evaluation be verified?
Some characteristics of the performance offered by a contractor can only be verified at the contract performance stage. But if such non-price criteria are supposed to be considered when evaluating bids, verification only at the stage of contract performance renders these criteria illusory, as the contractors compete on the basis of price anyway. So far, decisions from the National Appeal Chamber have allowed the use of such criteria. But on 18 December 2020, the Warsaw Regional Court issued a judgment holding that the characteristics of the performance offered by a contractor should be verified before selecting the most advantageous bid. Will this judgment change the approach taken by the National Appeal Chamber?
The most economically advantageous bid
In connection with introduction of the criterion of the “most economically advantageous tender” under the EU’s Classic Procurement Directive (2014/24/EU) and Poland’s Public Procurement Law, contracting authorities increasingly use non-price criteria for bid evaluation, i.e. quality criteria. They are intended to implement the principle of “best value for money”: the contracting authority can pay more for a service with characteristics important to it. The criterion of the most economically advantageous tender enables contracting authorities to pay greater attention to quality, innovation, and the social and environmental aspects of performance, taking into account price and cost.
“Illusory” criteria
However, the contracting authorities also use non-price criteria for bid evaluation, such as the contract completion date or warranty period, which can be verified in practice only at the contract performance stage. To support certain bid evaluation criteria, the contractors only submit declarations at the stage of the contract award procedure. Any failure to meet the performance characteristics offered is sanctioned by contractual penalties at the contract performance stage. In the case of such criteria, if all contractors offer the most advantageous performance parameters, such as the shortest contract term or the longest warranty period, ultimately the competition for the contract is based only on price.
The use of illusory criteria is particularly concerning to public contracting authorities, as Art. 246(1) of the Public Procurement Law states that as a rule, they must not use price as the sole criterion for evaluation of bids or as a criterion with a weight exceeding 60%.
Time for removal of malfunction or error as a criterion
Until recently, the Nation Appeal Chamber allowed for the possibility of verifying certain bid evaluation criteria only at the contract performance stage, but the judgment of the Warsaw Regional Court (currently the only court to which complaints against rulings of the National Appeal Chamber are lodged) of 18 December 2020 (case no. XXIII Ga 1350/20) may change this approach.
In that case, the court held that the non-price evaluation criterion of a “service availability level” of 30%, applied by the contracting authority, concerning guaranteed availability of services (defining how quickly defects will be removed) is not verifiable before selection of the most advantageous bid and affects only the bid price, and thus is unacceptable.
Verifiability before selecting the most advantageous bid: is it really necessary?
So, do the bid evaluation criteria have to be verifiable before a bid is selected, and is this requirement supported by the Public Procurement Law? According to the position taken by the court, many commonly used bid evaluation criteria, such as warranty period, guarantee period or contract completion date, which cannot be verified otherwise than during the performance of the contract, should be abandoned.
But it seems that the possibility of assessing such features of the contractor’s performance on the basis of a declaration should not be denied. This is because it constitutes a specific obligation of the contractor, which the contractor must fulfil at the stage of contract performance or face contractual penalties. Nor can it be considered that in the case of such criteria, the contract is being awarded solely on the basis of price, since contractors may refrain from declaring the most favourable parameters for a non-price criterion and propose a lower price instead.
Verification of the characteristics of the service offered should certainly take place before selection of the most advantageous bid, if possible in light of the nature of the criterion (e.g. when it concerns the organisation or the professional qualifications and experience of the persons designated to perform the contract). It would be desirable for contracting authorities to use non-price criteria when they translate into a real benefit for the contracting authority and are not used just to comply with Art. 246(1) of the Public Procurement Law.
Dr Katarzyna Śliwak, attorney-at-law, Infrastructure, Transport, Public Procurement & PPP practice, Wardyński & Partners
