Communication

The aim of the protection of market competition is primarily to create benefits for consumers and equal conditions for all entrepreneurs on the market, who, acting in accordance with the existing rules and competing on the market with the quality, price and innovation of their products and services, contribute to the overall development of the economy.

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CCA on competition in public procurement through non-discriminatory technical specifications

In spite of the fact that the implementation of the public procurement rules falls within the jurisdiction of other authorities – Ministry of the Economy and the State Commission for Supervision of Public Procurement – due to the growing number of queries about meeting the requirements set in the technical specifications, the Croatian Competition Agency (CCA) decided to publicly comment on the matter concerned exclusively within the meaning of competition rules.

The CCA follows the approach set forth by the Directive 2014/24/EU of the European Parliament and of the Council of 26 February 2014 on public procurement. Namely, Article 42 paragraph 5 of the Directive stipulates that where a contracting authority uses the option of referring to the technical specifications, it shall not reject a tender on the grounds that the works, supplies or services tendered for do not comply with the technical specifications to which it has referred, once the tenderer proves in its tender by any appropriate means, including the means of proof, that the solutions proposed satisfy in an equivalent manner the requirements defined by the technical specifications. Furthermore, Article 58 stipulates the election criteria that may relate to: suitability to pursue the professional activity, economic and financial standing and technical and professional ability of the tenderer. Pursuant to the Directive all requirements shall be related and proportionate to the subject-matter of the contract.

Within the meaning of competition rules the CCA stresses that it is crucial to ensure genuine end effective competition in public procurement procedures and to obey the so called competition principle within the meaning of Article 3 of the Public Procurement Act.

It is necessary to respect the guiding principles contained in competition rules ensuring a level playing field for all undertakings, i.e. to ensure equal conditions for access to and participation in the market (tender). Award criteria should be weighted as to ensure the best price-quality ratio of the works, supplies and services where each potential tenderer can make a bid under equal conditions.

The tender should be the result of competition. Therefore it is desirable for the contracting authority to set the criteria of the tender so as to avoid any distortion of competition and to ensure equal treatment of all economic operators, linked to the subject-matter of the contract and proportionate to its value and its objectives. In that sense, technical specifications shall afford equal access of economic operators to the procurement procedure and shall not have the effect of creating unjustified obstacles to the opening up of public procurement to competition. In other words, technical specifications may not be defined to the advantage of a certain economic operator or a group of economic operators or in a way that would completely exclude a certain economic operator or a group of economic operators from the public procurement procedure.

The contracting authorities are therefore advised to define the tender criteria so as to ensure that the solutions proposed satisfy in an equivalent manner the requirements defined by the technical specifications. Where the situation of exclusivity arises the contracting authority should decide whether the exclusivity responds to and justifies the subject matter of the contract. In addition, in the public procurement procedure economic operators should be offered the possibility to prove equivalence with the technical specifications by other appropriate means of proof.

Finally, the CCA points out the general disapplication of competition rules falling under its competence on public procurement procedures. Only exceptionally competition rules apply in case of so called bid rigging in public procurement procedures where joint bidding in public procurement procedures may be a prohibited practice in terms of competition law, particularly where bidders are engaged in collusive behaviour in submitting joint tenders, conclude illegal agreements fixing prices etc. If this proves to be the case, these agreements are considered hard core restrictions.