Technical standards requirements – what to consider?

Ruling issued by the Complaints Board for Public Procurement on 17 January 2023, Fitness Engros A/S v the Danish Ministry of Defence Acquisition and Logistics Organisation

The case in brief

In September 2022, the Danish Ministry of Defence Acquisition and Logistics Organisation ("DALO") launched a public procurement procedure for the award of a framework agreement for the procurement and maintenance of training equipment for the Danish Armed Forces. The procurement documents included a description of the required training equipment and the technical specifications that the equipment had to fulfil. These specifications were based on a private-law technical standard developed by the International Weightlifting Federation (IWF).

It was a minimum requirement in the procurement documents that the tenderer's equipment had to be certified by the IWF – or, alternatively, that the tenderer could prove the relevant equipment's fulfilment of an equivalent standard. However, there was no information about the required form or content of the documentation, and DALO did not elaborate on this when asked by a tenderer during the procurement procedure. 

Fitness Engros A/S was among the tenderers submitting a tender before expiry of the deadline. Fitness Engros first included a statement from the manufacturer of the offered equipment from which appeared that the equipment met the IWF standards. However, DALO responded that the statement did not constitute sufficient evidence and requested additional documentation, e.g. an independent third-party certificate or audit report. Fitness Engros then submitted an audit statement which also confirmed that the offered products had the same specifications as set out in the IWF standard. DALO also rejected that statement as inadequate on the grounds that it was a mere "desktop opinion" and that the products offered had not actually been tested.

Following additional correspondence between Fitness Engros and DALO, DALO decided to reject Fitness Engros' tender as non-compliant. Fitness Engros then complained to the Danish Complaints Board for Public Procurement.

The complaint was filed on several grounds, including:

• that section 41 of the Public Procurement Act does not contain any legal basis for requiring fulfilment of a private-law standard;
• that the complainant's tender could not be rejected on the basis that the IWF standard was not met, as Fitness Engros had documented that the offered products met the technical requirements of the IWF standard;
• that it was unclear which part of the IWF standard that had to be fulfilled and how such fulfilment should be documented.

During the proceedings, it also turned out that only one European manufacturer had signed a licence agreement with IWF, namely DALO's existing supplier. Fitness Engros therefore also submitted that the aforesaid circumstances gave the existing supplier an undue competitive advantage.

Ruling issued by the Danish Complaints Board for Public Procurement

First and foremost, the Complaints Board concluded that there are only three European, two international and one Danish standardisation organisation that can set technical standards under Annex VII of the Procurement Directive. In the opinion of the Complaints Board, section 41(1)(ii) of the Danish Public Procurement Act only allows reference to standards set by one of those organisations. As the IWF is not one of the international, European or national standardisation organisations, the IWF certificate did not constitute a standard that could be referenced.

The next question was which requirements could be placed on the documentation, according to the procurement documents, to prove the equipment's fulfilment of an "equivalent" standard. Based on the wording of the requirement, the Complaints Board found that the contracting entity could only take into account whether the offered products met the substantive/qualitative technical specifications following from the IWF standard. However, it was not possible to infer a requirement that the products had to have been tested in accordance with the procedure used by the IWF in their certification scheme. The Complaints Board therefore found that DALO had not been entitled to reject Fitness Engros' statements.

Finally, the Complaints Board found that it had not been clear to the tenderers what could be considered sufficient documentation for an equivalent fulfilment of the IWF standard – especially because DALO had refused to recognise the manufacturer's own product information and the submitted audit statement, even though it did not appear from the tender documents that such documentation would be considered insufficient. Therefore, the Complaints Board found that DALO had discriminated between those tenderers who had paid for the IWF certificate and those who had not.

Due to this confusion, the Complaints Board found that the procurement documents could not form the basis for a lawful award. The complaint had been filed immediately after DALO had rejected Fitness Engros, and therefore no award had been made yet. Due to the Complaints Board's clear so-called fumus ruling, the procurement procedure was subsequently cancelled by DALO.

Our comments

The ruling is illustrative of the issues associated with the use of technical standards. First of all, the ruling shows that the possibility of referring to technical standards is very limited and actually only covers standards set by very few official organisations.

Therefore, if you still want to base your requirements specification (possibly partly) on a standard that has not been set by one of those organisations, you will generally have to describe the technical requirements appearing from the relevant standard directly in the procurement documents – typically in the requirements specification or the service description. In the specific ruling, the Complaints Board actually stated that the IWF standard could not in itself be deemed to be an expression of unreasonable requirements – and that, according to established practice, the contracting entity has a "very significant discretion" in specifying the requirements of the contract put out for tender. Therefore, it would probably have been unproblematic if DALO had described the content of the IWF standard's substantive and procedural requirements directly in its requirements specification in the procurement documents; also because apparently many manufacturers could easily fulfil these specifications, but 'just' did not have any 'IWF certification' for this.

The main problem in this case was, however, that the procurement documents from DALO were not sufficiently clear in terms of the tenderers' delivery or documentation obligations. If a contracting entity requires tenders to meet a certain standard "or the like" or be of "equivalent" quality, it is therefore important to consider carefully how this can be documented – otherwise, the contracting entity bears the risk of ambiguity in the procurement documents, which in the worst case can lead to cancellation of the procurement procedure.

Read the ruling issued by the Danish Complaints Board for Public Procurement on 17 January 2023 (in Danish).