Public Procurement: Minimum requirements to the extent necessary

This article deals with a central topic in public procurement, minimum requirements, and presents the latest Danish practice about minimum requirements and discretionary elements.

The Danish Complaints Board for Procurement issued a ruling on the 22nd of Au-gust 2023, commenting on the fulfilment and suitability of a minimum requirement that had a discretionary element added to its fulfilment for the bidders in relation to their specific tendered solution.

The decision concerns a public tender for the supply of analytical equipment to hospitals as well as the performance of subsequent analyses.

In the tender documents, a minimum requirement stated: “Water treatment plants, providing water of the necessary quality and quantity to all geographies, must be included in the delivery to the extent necessary …

No additional requirements for the water treatment plants were specified in the tender documents, but during the tender process, a number of questions were asked about the plants, which the contracting authority answered in relation to current use, dimensions, etc., and it was further specified that a plant at a specific location was expected to be replaced, as it was of an older date.

The contracting authority concluded in its evaluation report that all minimum requirements were met, while the authority also noted that the winning bidder had chosen not to replace the water treatment plant that was expected to be re-placed.

A couple of months after the contract was awarded, a deselected bidder complained that 1) as the primary claim, that the winning bidder had not fulfilled the mini-mum requirement, 2) as a secondary claim, that the minimum requirement was unclear and unsuitable, and 3) that the winning bidder's bid was abnormally low. This article only concerns the first two claims, which the Complaints Board dealt with as one.

The Complaints Board's ruling

In its ruling, the Complaints Board emphasizes that the minimum requirement only stated that water treatment plants should be supplied to the extent necessary in relation to the tendered solution, which was supported by answers to questions during the questioning round.

On this basis, it was not excluded in the tender documents or during the tendering procedure that the bidders could use the existing water treatment plants, provided the bidders could ensure that the requirements to deliver water of the necessary water quality and quantity were met by the tendered solution.

The fact that the contracting authority had expressed an expectation of the re-placement of a certain system did not mean that the wording or meaning of the minimum requirement itself changed.

In addition, the Complaints Board states that the framework in the tender condi-tions corresponds with this approach and that the wording as a whole does not have an ambiguity that makes it unsuitable for bidders to make a bid.

Bird & Bird's comment

In Danish procurement law, it is by now firmly established that minimum re-quirements must have complete objectivity in their design, i.e. minimum re-quirements must be clear, precise and objectively ascertainable without room for interpretation or opportunity for subjective assessments.

Minimum requirements have been the focus (fully or partly) in a large number of cases over time in relation to the wording, application and interpretation of mini-mum requirements, which is why there are many contributions to the interpreta-tion of when a minimum requirement can or cannot be considered sufficiently clear and objective.

The main focus of the case in question was on the addition of the wording “to the extent necessary” in the tender conditions regarding the minimum requirement. The wording meant that the contracting authority made the fulfilment of the min-imum requirement dependent on the bidders' actual tendered solution and bid-ders could therefore choose not to meet the minimum requirement for the supply of water treatment plants.

There is no doubt that in this particular case, the tender documents could have benefited from a more detailed description of the existing water treatment plants, which the contracting authority also had the opportunity to elaborate on in subse-quent questions/answers during the tender process. However, the Complaints Board has allowed the fact that minimum requirements are only applicable in spe-cific situations or constellations in this case.

The ability to use a more flexible approach, where bidders are allowed to come up with their own specific solutions, seems both pragmatic and correct, and can help to ensure broader competition, as more bidders can adapt their offers to the solu-tion that actually provides the best quality for the money, rather than just having to comply with irrelevant minimum requirements.

It is, however, crucial that a legal situation is not created where the wording of tender conditions become too broad, so that contracting authorities ultimately cannot evaluate the bids received and thus cannot nominate the most economical-ly advantageous bid.

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