with the support of European CommissionDirectorate General V

Employment, Industrial Relations andSocial Affairs

PROMPTEX

THANKS

This guide could be carried out thanks to collaboration between

PROMPTEX(European federation for the promotion of procurement contracts textiles and leather)

(European Apparel and Textile Organisation) and the

(European Trade-Union Federation of the textile)

Mr Fausto Loren BUTRAGUENO (Aesmide / SPAIN)

Mr Ernesto JIMENEZ ASTORGA (Aesmide /SPAIN)

Mr Jose Miguel FIADERO (Aptima / PORTUGAL)

Mr Antonio LEITAO (Aptima / PORTUGAL)

Mr Carlo FORNARA (Citeco / ITALIA)

Mrs Daniela INGHIRAMI (Citeco / ITALIA)

Mr Jean-Marie AZEMA (Facim / FRANCE)

Mr Alain CHANOIS (Facim / FRANCE)

Mr Christian LANDAIS (Facim / FRANCE)

Mr Jean-François GRIBOMONT (Febeltex / BELGIUM)

Mr Jacques LANGLOIS (Promptex / FRANCE)

Mr Patrick ITSCHERT (FSE THC / BELGIUM)

PUBLIC PROCUREMENT AWARDING GUIDE FOR THE

CLOTHING-TEXTILE SECTOR

THE MOST COST-EFFECTIVE TENDER THANKS

INTRODUCTION ........................................................................................................ 2

TITLE 1 Concepts and objectives of the purchasing guide................................................... 2 1. Objectives............................................................................................................................ 2 2. Consequences of current measures ..................................................................................... 2 3. Presentation of textile/clothing procurement suppliers ....................................................... 4

TITLE 2 Using the guide .......................................................................................................... 6

CHAPTER I CURRENT LEGAL PROVISIONS .............................................. 7

TITLE 1 Legal Framework ...................................................................................................... 7

TITLE 2 WTO Public Procurement Agreement................................................................... 8

TITLE 3 Measurements in favour of European industry .................................................. 10

CHAPTER II THE MOST COST-EFFECTIVE TENDER: FOR THE PUBLIC PROCUREMENT AWARDING PROCEDURES .............................. 12

TITLE 1 Preliminary comments about the criteria ranking system .................................. 12 1. Provisions applicable to contracting authorities................................................................ 12 2. Exclusion cases ................................................................................................................. 14 3. Quality selection criteria ................................................................................................... 14 4. Weighting criteria.............................................................................................................. 14

TITLE 2 Contract awarding procedure: preliminary and awarding stage....................... 16 1. Preliminary stage: exclusion and selection criteria ........................................................... 16

1.1 First stage: Exclusion criteria .................................................................................... 17 1.2 Second stage: Selection criteria................................................................................. 18

2. Contract awarding period .................................................................................................. 19 2.1 Award procedure as distinct from the prospective bidder selection stage ................ 19 2.2 Review of tenders and weighting criteria.................................................................. 23

(a) Weighting of the quality value in the broadest sense in the light of the submission price ............................................................................................................................... 24 (b) Creating the criteria and obligations for "quantifying" the more or large qualitative value of the tender ............................................................................................................. 24

2.3 Simulation ................................................................................................................. 25

(a) Price assessment .................................................................................................... 25 (b) Assessment of the tender's qualitative value ......................................................... 26 (c) Final assessment .................................................................................................... 26

CHAPTER III ADVICE FOR PUBLIC PROCUREMENT IN THE SECURITY-DEFENCE SECTOR.......................................................................... 27

TITLE 1 Legislative provisions in the defence sector .......................................................... 27

TITLE 2 Items to take into consideration............................................................................. 28

TITLE 3 Review of tenders and contract awards ................................................................ 29

Annex 1: Preliminary stage and contract awarding Annex 2: Expression of the Needs Annex 3: Information Notice in the field of defence Annex 4: European Eco-Label for Textile Products

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INTRODUCTION The object of this guide is to allow participants in public contract awarding procedures in the clothing-textile sector, to take quality criteria into account so as to be able to take advantage of bidder’s professionalism and ability to provide the basic requirements such as: technical value, security, delivering time and after-sales service opportunities.

TITLE 1 Concepts and objectives of the purchasing guide

1. Objectives This guide is intended for participants in public contracts in the clothing-textile sector anxious to find a supplier offering good value for money, instead of more or less routinely making do with the bidder offering the lowest price. The aim is to provide a support tool, by helping them to determine their needs in this area more effectively. A precise definition of their needs will then target the most suitable bidder on the basis not only of the most competitive price but also, and above all, on the basis of competence and the ability to provide a top-quality compliant product. The guide's scope extends to all supply contracts in the clothing/textile sector.. In some cases, the reader’s attention will be drawn to certain criteria that should be applied in more specific areas, especially in security-defence and territorial protection matters. Finally, the guide features an easy-to-use- adapted assessment table, tailored to all the principals. The aim of this table is to provide public authorities with maximum leeway in the choice of criteria quality for the clothing-textile supplies. As well as allowing them to weight criteria according their own needs it also enables them to define the required balance between the price, the technical value and other criteria.

2. Consequences of current measures Within the framework of the former Council Directive 1993/36/EEC1 coordinating procedures for the award of public supply contracts, the constraints imposed on bidding companies distorts competition to the detriment of European suppliers. The latter were obliged, when they took part in an invitation to tender, to offer more expensive products or longer delivery periods whereas their European and non-European competitors that work in combination with non-European subcontractors, just needed to declare on oath their compliance with the public contract rules (Cf. article 45.3). It makes them more economically competitive.

1 replaced by Directive 2004/18/EC published in the Official Journal of the European Union- L 134 - April 30th, 2004 – Time limits required to implement it: January 31st, 2006)

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More specifically, efforts made in the clothing-textile sector, to provide safer, quality products, the suppliers came up against the public authorities' tendency to select cheaper companies, instead of being more concerned with quality and a follow-up of the products on offer. European suppliers' experience and professionalism have often had to give way to companies which did not hesitate to offer more competitive prices, to buy or have products made, via relocations or subcontracting to far-off, low-labour-cost companies. These companies did not necessarily fulfill the fundamental requirements concerning technical value, safety and the delivery periods, as well as after-service guarantees and technical assistance. In practice, the public purchasers generally sacrificed the entitlement which they have been offered by the Directive, to verify the technical capabilities of the tenders, so as to focus solely pecuniary considerations. Whereas European industrialists had to satisfy the requirements as regard standards, certificates and qualifications, much more than 50% of contracts was assigned to companies making their products in non-European Union countries. As the Social and ecological restrictions were different, these companies were able to offer cheaper prices. « Sritex won the invitation to tender for German military uniforms » PT Sritex, whose factory is located at Sukoharje (Java) and employs 12 000 workers, has just been selected to provide 500 000 military uniforms according to NATO standards for USD 10.5 million. After this first order, Mr Lukminto, executive chairman of this company, hopes to receive other orders for other NATO countries. It was quite a struggle winning this invitation to tender. The negotiations lasted two years and all the conditions set by the German Ministry for Defence were carefully controlled. This checking did not relate solely to the abilities of the factory, the quality of the production or the punctuality of the shipments, but also to the employees' working conditions (wages, employment of minors or not, industrial waste...). (Source : Bisnis Indonesia , March 4th, 1997)

In addition to the fact that these tendering methods ignored the spirit of the Community law, they created, for the public authority, a risk of losing initial quality, follow-up of the supply and recourse to the supplier in the event of a political or economic crisis involving the third country where the textiles used are manufactured (wool, cotton, polyester, polyamide...). More generally speaking, competition at the lowest price has the untoward impact of prompting bidders to reduce the infrastructure of their system of services and affects, in particular, control and the management of the quality of the products. In order to reduce the costs even further, the bidders were tempted to reduce the quality level by employing low cost labour and using and abusing relocations and subcontracting, to the detriment, in any event, of the quality of the products provided.

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The present framework of Directive 2004/18/EC on coordinating procedures for the award of public works, supply or services contracts should allow to contracting authorities overcome most of these difficulties.

3. Presentation of textile/clothing procurement suppliers

Public procurement suppliers are primarily divided into two groups within the textile-clothing sector : producers of fabric and manufacturers of clothing and equipment. They are mainly small and medium-sized companies with the following characteristics:

2001 Structural database for the textile-clothing sector2 (components and together)

Sector

Total for the

sector Turnover (Million Euro)

Manmade + Textiles Fibers

Nets Clothing

Textile + Clothing

97.500 28.500 70.300

196.300

Investment (Million Euro)

Nets textile

Clothing

Textile + Clothing

5.170 1.170

6.340

Works

Textile Nets

Clothing

Textile + Clothing

656.100 499.500 961.600

2.117.200

Companies

Textile

Nets Clothing

Textile + clothing

33.829 30.601 48.538

112.968

In practice, national consumers express their needs via specialized public purchasers, among which may be identified, all at the same time military personnel, police office and court employees, civil protection staff (firemen) and health staff.

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2 Euratex, May 2002: basic data for Clothing-Textile Industry in the EU

Public purchases of clothing 1990-2000 in Community 7 countries (Germany, Belgium, Spain, France, UK,, Italy, Netherlands)

The figures indicate, by major purchasing services:

- Manpower with uniform (thousands of people in uniform) - Annual manufacturing capacity required (million minutes of work)

Fabric consumption by major services In the case of fabrics, the investigation related to the grouped purchases of textile fibers in the following way: Wool: wool fabrics and mixtures containing wool. Cotton: cotton fabrics and mixtures containing cotton. Artificial and synthetics: not included here are fabrics exclusively made in these fibers. (*)The estimates for this service are random because of the extreme decentralization of the supplies. For the hospital sector, according to a EUROCOTON survey, cotton consumption reveals 4 types of use of this fiber for quantities of the same order of magnitude. Bed linen 23.000 tonnes (approximately) Gas and gauze articles 11.000 t Bathroom linen 12.000 t Woven clothing 10.000 t 56.000 t Wool consumption in the hospital sector (covers) is much less important.

Services Number of countries 1000 Persons / millions of mn Post Office (5 countries) 543 / 78 Railways (5 countries) 535 / 36 Police (6 countries) 600 / 77 Firemen (6 countries) 1.361 / (3 countries) 96 Army (7 countries) 1.964 / 443 Known Value 5.003 730

Wool and mixtures Cotton and mixtures Artificials and Synthetics (Thousand of metres) (Thousand of metres) excluding mixtures (1.000 metres) Railways 1.860 2.180 103 Police 1.685 501 - Post Office 1.696 1.744 220 Firemen - 1.800 935 Army 4.590 15.699 1.140

Total 9.831 21.924 2.398

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TITLE 2 Using the guide

This guide is intended to offer information, training and decision-making tool for the relevant departments of national authorities, public purchasing departments, and supplier companies. It underlines the technical value and the quality standards, which will help them to identify bidders offering top-quality supplies.

The document makes a detailed review of the de facto and de jure items underpinning the assessment framework features in the appendices and guiding the public co-contracting parties in the use of the latter.

Chapter I shows the background to existing legal provisions, summarizing the provisions contained in the EC Council Directives of the European Community and in the communications the Commission has published in this area.

Chapter II presents the methods and criteria ranking systems allowing public purchasers to favour the most cost-effective tenders, while identifying, in the context of contract awarding procedure, the "preliminary stage", centred on exclusion and selection criteria for the bidders, and "the contract awarding phase", which includes the various criteria allowing public authorities to compare the various tenders and to identify, with the help of effective systems of weighting, the one that should selected as the most cost-effective.

Chapter III shows more specific advice for public contracts in the security-defence field, giving rise to particular rules and involving particular needs.

The guide closes with tables offering simulations of quantified comparisons according to of point weighting systems that could be favoured by the authorities according to their preferences.

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CHAPTER I CURRENT LEGAL PROVISIONS

TITLE 1 Legal Framework

According to article 2 of the Treaty of Rome, “the Community shall have as its task to promote throughout the Community a harmonious, balanced and sustainable development of economic activities, (…) social cohesion and solidarity among Member States”. The actions of the relevant authorities include the establishment of a system for ensuring undistorted competition in the Common Market, the strengthening of economic and social cohesion and the competitiveness of the Community industry and an environment policy (article 3).

Against this background its was decided to adopt Council Directive 93/36/EEC of June 14th, 1993, coordinating procedures for the award of public supply contracts, replaced by Directive 2004/18/EC on public contracts. Here is a reminder of the key provisions applied:

Contracting authorities should treat economic operators equally, in a non-discriminatory way and proceeding in a transparent fashion (article 2).

In order to ensure itself of the provided products' reliability, the contracting authority may

compel the bidder to indicate in his tender the share of the contract he intends to subcontract to third parties and any proposed subcontractors (article 25).

Similarly, with regard to the reliability of the bidder himself, the Directive states the

possibility of excluding from participating in the contract any supplier who would not fulfill the obligation relating to the payment of social security contributions and tax in accordance with legal provisions of the country in which he is established or with those of the country of the contracting authority (article 45,2 e & f).

More specifically, with regard to the technical and professional ability of the economic

operators, the Directive provides the possibility for the public authority to check the technical bidder’s abilities based in particular on a description of the technical equipment, measures used to ensure the quality and means of study and research for the company, on certificates established "by the official institutes or services in charge of the quality control, recognized as qualified and certifying the conformity of products effectively identified by references with certain specifications or standards" (article 48 c & h.ii).

Contracting authorities, can “when the products or services to be supplied are complex

or, exceptionally, are required for a special purpose”, carry out an inspection of the production capacities of the supplier (article 48 d).

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TITLE 2 WTO Public Procurement Agreement

It should moreover be stressed that "The Agreement"3 signed by WTO member countries on April 1994 in Marrakech, also envisages several public procurement provisions4. The following provisions are included.

The Member States can envisage a system of lists of qualified suppliers, filling a certain number of economic and technical conditions (article 8), with the qualification system implemented having to be objective and transparent;

The financial, commercial and technical capacity of a supplier shall be judged on the

basis both of that supplier's global business activity as well as of its activity in the territory of the contracting entity, with due regard to the legal relationship between the supply organizations (article 8. b)

The Agreement reinforces the rules guaranteeing non-discrimination and international fair competition: “In respect of the procurement covered by the Agreement, governments Parties to the Agreement are required to give the products, services and suppliers of any other Party to the Agreement treatment "no less favourable" than that they give to their domestic products, services and suppliers and not to discriminate between goods, services and suppliers of other Parties (Article III:1). Furthermore, each Party is required to ensure that its entities do not treat a locally-established supplier less favourably than another locally-established supplier on the basis of the degree of foreign affiliation or ownership and do not discriminate against a locally-established supplier on the basis of the country of production of the good or service being supplied (Article III:2).” Starting on May 1st, 2004, the WTO Government Procurement Agreement (GPA) was also applied to the new EU Member States (Cyprus, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia and Slovenia). Suppliers from the new countries have full access to the public procurement markets of the other GPA Parties (e.g. USA, Japan, Canada…) under the same conditions as other Member States. The WTO Government Procurement Committee approved the necessary modifications by its decision on April 23rd, 2004.

It should be pointed out that the Government Procurement Agreement and the EEC Directives represent two separate legal frameworks, with the Agreement applying to the relations between the European Union countries and non-EU countries, and not having, as is, direct legal force with regard to economic operators and of national administrations.

Directive 2004/18/EC also recalls that the coordinating provisions should guarantee Community suppliers conditions for participation in public procurement that are just as favourable as those reserved for economic operators from third countries which are signatories to the Agreement. 3 Final Act was signed the April 15th 2004 4 Approval of WTO public procurement agreement by the European Community pursuant to Decision 94/800/CE of the Council of December 22nd, 1994 among the multilateral negotiation agreements during the Uruguay Round (1986-1994)

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The Community's own procurement market is effectively open to foreign competition but, outside the GPA, European companies are often either, de facto or de jure, excluded from foreign procurement markets. In the WTO, the European Union therefore attaches great importance to other initiatives underway on the transparency of public procurement5.

5 January 31st 2003 - Communication from the European Communities to the WTO – Working group on transparency in public procurement

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TITLE 3 Measurements in favour of European industry

The various objections raised against the applicable European legislation as regards public procurement led the responsible authorities to give an opinion for more targeted development of this regulatory environment. Aware of the importance of the public contracts for the European economy, the Commission wants a true partnership to be forged between the Community, the Member States and industry (Communication n° (98) 143 of March 1st 1998).

In this perspective, in order to preserve a competitive European industry, the Commission considered that it was essential to reduce the rules and to relax the public contract award procedures:

Measures in favour of SMEs will necessarily involve eliminating several administrative formalities. To this end, the Commission intends to reinforce the reliability of contract award procedures through training focused on best practices and the know-how of the bidders, in order to reach a higher level of professionalism.

While preserving the principle of non-discrimination and the equal treatment of all

suppliers, the Commission intends to reward the bidder who provides the certificates required by the Directive 2004/18/EC, (articles 45 & 48) while envisaging, inter alia, for this latter, an exemption from certain constraints currently envisaged by the Directive and "which constitute an excessive burden for an entity which agreed to be subjected to the certificate".

Concerning more particularly public procurement in the safety-defence sector, the

Commission considers that it is of key importance to take into account the specificity of this sector and to fix, consequently, rules guaranteeing the security of supplies, while furthermore ensuring respect for the social and environmental criteria, that cannot be disassociated from public procurement rules (cf. below, chapter III).

Lastly, it is necessary to stress that the European Economic and Social Committee has given an opinion on the “Communication from the Commission to the Council on the Plan of action to increase the competitiveness of the European textile and clothing industry”6:

“The Committee takes the view that this plan of action should concentrate primarily on fields where the European Union is directly competent, namely: - An external trade policy based on reciprocity, in which the priority must be to ensure wider access to third country markets for European products. - A completed internal market, particularly in terms of standards and the opening up of public contracts. - Strengthened monitoring to prevent dumping and illicit trade practices, and promotion of a charter for fair trade at international level. - An active link between liberalization of trade for the benefit of developing countries and respect for basic social rights as defined in the ILO agreements.”

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106 Opinion of the EESC : OJ C 214 July 10th, 1998

A High Level Group was set up in February, 2004 by the European Commissioner in charge of enterprise policy and the European Commissioner in charge of Trade, to formulate recommendations on initiatives to improve the conditions for the competitiveness of the European textile and clothing industry.7 In the Commission Communication dated October 13rd 20048, with reference to the High Level Group report, the Commission services invite the Member States' national and/or regional public authorities to:

- take into consideration criteria other than price alone in their purchasing decisions on public procurement. Member States are invited to make use of option a) of article 53 of Directive 2004/18/EC. In doing so, Member States may find guidance in the none legally binding manual of the Commission Services on “environmental public procurement”9.

- clearly indicate the various criteria and their weighting when publishing calls for tender.

7 SEC(2004) 1240 of 13.10.2004 “Textiles and Clothing after 2005- Recommendations of the High Level Group for textiles and clothing” 8 « The Challenge of 2005 – European textiles and Clothing in a quota free environment » published on June 30th of 2004

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119 SEC(2004) 1050 final of 18.08.2004

CHAPTER II THE MOST COST-EFFECTIVE TENDER: FOR THE

PUBLIC PROCUREMENT AWARDING PROCEDURES The public contracting authorities often tend to appoint bidders according to purely financial considerations, by not sufficiently favouring the quality and the follow-up of the products on offer. In particular, they are deprived, then in practice of their entitlement under article 48 of Directive 2004/18/EC to check the technical capabilities of the bidders, or turning to importing dealers, deprived of technical tools, or by limiting their control activities to checking tax certificates. By way of an example, it is obvious that a sector as relevant as that of the supply of textile and clothing equipment related to safety defence products, justifies that particular considerations and appreciations are reserved for the quality of the supplies, and in particular for security of supply and follow-up in the event of a military conflict. Lastly, the attention of the public authorities must be drawn to the provisions in article 52 of Directive 2004/18/CE concerning the advisability of having recourse to official lists of approved suppliers, when the technical character of the supply contract justifies this. In this context, it is necessary to support the procedures by restricted invitation to tender, according to lists of approved suppliers, whose capacities it has been possible to check with a maximum of effectiveness.

TITLE 1 Preliminary comments about the criteria ranking system

1. Provisions applicable to contracting authorities

Contracting authorities can refer the bidders to the relevant departments of the national authorities in question, with which they will be able to obtain information about the obligations relating to the provisions for protection and the working conditions whose application is compulsory, as well in their connection with their subcontractors. The contracting authority must, moreover, make sure that the bidders have effectively taken account of these provisions, while requiring the bidders to indicate them in their initial tenders. The technical specifications to which the supplies must correspond will be expressly indicated in the general documents or the specifications. This refers to all the technical specifications which define the necessary characteristics of a supply. These technical specifications can lead to the requirement that the products are realised in order to reach required level of performance.

Directive 2004/18/EC's annex 6 specifies technical specification, in the case of public supply or services contracts, means “a specification in a document defining the required characteristics of a product or a service, such as quality levels,

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environmental performance10 levels, design for all requirements (including accessibility for disabled persons) and conformity assessment, performance, use of the product, safety11 or dimensions, including requirements relevant to the product as regards the name under which the product is sold, terminology, symbols, testing and test methods, packaging, marking and labelling, user instructions, production processes and methods and conformity assessment procedures ».

The eco-labels can easily prove that they comply with the technical specifications but do

not have however to require that bidders be registered in an eco-label scheme. Directive 2004/18/EC in article 23.6 explains how the contracting authorities can use the detailed specifications of the eco-labels or some of its parts12, when they determine environmental characteristics in terms of functional performance or requirements on condition:

- those specifications are appropriate to define the characteristics of the supplies or services forming the subject of the contract - the requirements for the label are drawn up on the basis of scientific information, - the eco-labels are adopted using a procedure in which all stakeholders, such as government bodies, consumers, manufacturers, distributors and environmental organisations can participate, and - they are accessible to all interested parties.

The contracting authorities can indicate that the products which feature an eco-label are presumed to comply with the technical specifications defined in the contract documents. If the exclusive contract object is to cater for an expressed need, it may also contribute to the protection of the environment. The inclusion of all or a part of environmental requirements is therefore possible.

It should be stressed that it may be possible to lay down special conditions relating to the performance of a contract, provided that these are compatible with Community law and are indicated in the contract notice or in the specifications (article 26). The conditions governing the performance of a contract may, in particular, concern social and environmental considerations. These contract’s requirements may not result in discrimination in favour of contractors and should be linked to the contract’s performance. Lastly, when the supply contract relates to particular products, for example in with the field of safety defence, the bidder’s technical ability must be the subject of increased checks. The contracting authorities will be able to limit the bidders to those already registered on official lists approved suppliers or, on the assumption that new candidates suppliers announce themselves, to require of their share, before any awarding, the supply of significant samples, in terms of quantity and quality. There may also be a requirement to limit initial awarding to trial batches relating only to a small part of the market in question (cf. will infra, chapter III).

10 Buying Green! A guide to environmental public procurement – SEC(2004) 1050- 18.8.2004. Non legally binding document - Commission Staff Working Document. 11 The industrialists may use as a reference, for example, the reference system Öko Tex Standard 100 (www.oeko-tex.com) in terms of security of technical requirements to wear (“injurious substances which may have dangerous effect on human health”), thus guaranteeing high security standard to human bodies.

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1312 Cf. as example the European eco-label (www.eco-label.com). Cf. annex.

2. Exclusion cases

The cases of exclusion must be determined in a precise way, in the light of the rules contained in the Directives, but the contracting authorities can exclude the candidates who have not respected the national law or are guilty of serious professional misconduct (violation of social legislation, a violation which constitutes an offence affecting professional morality, which the State Member is free to determine itself, in so far as this definition is in conformity with Community law).

3. Quality selection criteria ♦ The requirements relating to economic and financial capacity must be objectively necessary, in order to prove aptitude from a strictly economic and financial point of view of the bidders within the framework of the specific contract. The public authorities are invited to exert their power of appreciation in an effective way, while not being limited to only one formal verification of the documents provided by the bidders. ♦ With regard to the technical capabilities, it is necessary to refer to the exhaustive list of article 47 of the Directive (experience and know-how...), but the public authorities can - to be effective, they must - check the qualification of the staff in order to prevent a risk of non-quality. Control of the technical capability cannot however result in requiring a "social capacity" on the part of the bidder. On the other hand, a social criterion could be taken into account, in the light of the ILO agreements, in a later phase of the procedure, as an additional award criterion (cf. above). In the same way, with regard to the possibility of including environmental considerations in public contracts, the requirements which do not have any relationship with the product or the service itself, for example, a requirement referring to the way a company is managed, are not technical specifications within the meaning of the "Public Procurement" Directives and cannot thus be imposed. Let us cite an example: “the use in the offices of the recycled paper company, the application of a particular method with regard to the waste processing, the use of means of transport by rail for the delivery of the requested products”. On the other hand, the environmental constraints could, if necessary, be taken into account by way of additional criterion in the comparative phase of the tenders for the award of the contract.

4. Weighting criteria The weighting of criteria is now the rule of policy when awarding a contract on the basis of the most cost-effective bid. Article 53 of Directive 2004/18/EC states that “Where, in the opinion of the contracting authority, weighting is not possible for demonstrable reasons, the contracting authority shall indicate in the contract notice or contract documents the criteria in descending order of importance.”

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The award criteria mentioned in the documents must be necessarily linked to the subject-matter of the contract: they can be different from those listed by the Directive, but must be objective and intrinsic to the contract, such as security of supply for a contract to supply textiles for the army. According to recent Court of Justice case law the, contracting authorities can apply an additional condition relating to the fight against unemployment, provided that this condition is in line with all the principles of Community law, and that the authorities have to consider two or more economically equivalent tenders. Thus, a contracting authority can, after the tenders have been the subject of an evaluation on the basis of economical criteria, and to decide between tenders considered to be equivalent, award the contract to the company which begins, for example, to implement positive actions in favour of a specific category of people (for example, training young people on a building site, providing employment opportunities...), provided this condition does not have a direct or indirect discriminatory impact and is the subject of a suitable disclosure. On February 1995, the Nord-Pas-de-Calais Region launched a certain number public works contracts with restricted invitations to tender relating to the completion of contracts for modernisation and maintenance works in schools over a period of 10 years. The 14 contract notices published specified selection criteria for companies and award criteria, the latter including the quality/price ratio of the technical answer and services, the time-limit for completion of construction and renovation works , and an additional criterion relating to employment. Disputing this last additional criterion, the European Commission initiated proceedings against the French State in the European Communities Court of Justice , with the reason that taking into account that employment-related projects may be regarded as a condition of performance for the purpose of the rule in Beentjes (Case 31/87 Beentjes v Netherlands State [1988] ECR 4635, paragraphs 28 and 37), that possibility was not characterised as an award criterion in the contract notices in question in accordance with the European Directive coordinating procedures for the award of public works contracts, award criteria must be based either on the lowest price or on the most cost-effective tender. Pursuant to its judgement of September 26th 2000, the European Communities Court of Justice rejected the Commission argument, and admitted thus implicitly that the criteria related to the fight against unemployment may be an additional awarding criterion, by considering that the law «does not preclude any possibility for the contracting authorities to use as a criterion a condition linked to the fight against unemployment provided that condition is consistent with all the fundamental principles of Community law, in particular the principle of non-discrimination (...) ». The Court adds that the implementation of an additional criterion must be applied in conformity with all the procedural rules laid down in that Directive, in particular the rules on advertising, and that an award criterion linked to the fight against unemployment must be expressly mentioned in the contract notice so that contractors may become aware of its existence. (Source : ECCJ, Commission vs France , September 26th 2000, C-225/98) Another example, even more recent, can be proposed in the case known as “the Finnish buses” in connection with the award of public contracts on the basis of environmental considerations. Within the framework of the award of its urban public transport network, the town of Helsinki had launched an invitation to tender and had awarded the contract to the bidders presenting the most cost-effective tender in the light of the overall price sought and in relation, in particular, to the quality of the

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buses in terms of environmental protection. An unsuccessful bidder disputed the final choice before the national court, which decided to refer the case to the European Communities Justice Court about the question of whether Community legislation, relating to public contracts, authorized the public authority to take into account criteria of an ecological nature among the criteria of the contract to be concluded? Accordingly following the reasoning of its Advocate General and the opinion of the Commission which had intervened in the procedure, the Court answered positively to this question, independently of the applicable Directives, while laying down certain conditions: all these types of criteria must be expressly mentioned in the contract documents or the tender notice, and have to be consistent with all the fundamental principles of Community law, in particular the principle of non-discrimination. The Court also recalled that the criteria for awarding a public contract to the most cost-effective tender are not listed in a restrictive way, nor do they necessarily have to be of a purely economic nature.

Moreover, the judge pointed out that the Amsterdam Treaty now compels the Community legislator to include environmental protection requirements in the definition and the implementation of this policy, including thus that of the public contracts.

(Source: ECCJ, September 17th 2002, case n° C-513/99; comments of Stéphane Rodrigues, “A little more ‘green’ in the public contracts", Echos, September 29th, 2002).

TITLE 2 Contract awarding procedure: preliminary and awarding stage

1. Preliminary stage: exclusion and selection criteria

Cf table featured in annex n° 1

On the assumption of a contract with open procedure, the preliminary phase is characterized by the fact that the contracting authority does not put forth any value judgment as for the level or the quality of the competitors, such as they arise from the documents communicated in support of the respective applicants. At this stage of the procedure, it is necessary to check the materiality of the documents joined to the tenders certifying the absence of causes of exclusion or the presence of the documents certifying the financial, economic and technical ability of the bidders. It is only when the bidders have successfully passed this preliminary examination, because of fulfilling the above mentioned minimal requirements that their tenders will be then taken into account and will be compared.

If a contract is being allotted by restricted procedure, the principles are similar: if the selection of the candidates takes place in an autonomous way, the authority will check, initially, the absence of cause of exclusion suitable for the personal situation of each candidate, then, in the second stage, the references required to appreciate their financial, economic and technical capacities.

Lastly, after having rejected the candidates not fulfilling the minimal requirements imposed in the contract notice, the contracting authority chooses the companies which, after evaluation, will have been considered to be most suited and will thus be invited to present a tender.

The phase prior to the award of the contract may thus be summarized in two stages:

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1.1 First stage: Exclusion criteria As soon as the candidates' files are received, the contracting authority checks if the consideration of files he receives are feasible in the light of Community law. The criteria listed in Directive 2004/18/EC and below, in an exhaustive way, are strictly interpreted and entitle the contracting authority to exclude from participating in the contract any supplier that:

is bankrupt or is being wound up, where his affairs are being administered by the court,

where he has entered into an arrangement with creditors, where he has suspended business activities or is in any similar situation arising from a similar procedure under national laws and regulations;

is the subject of proceedings for a declaration of bankruptcy, for an order for compulsory

winding up or administration by the court or of an arrangement with creditors or of any other similar proceedings under national laws and regulations;

has been convicted by a judgment which has the force of res judicata in accordance with

the legal provisions of the country of any offence concerning his professional conduct or has been guilty of serious professional misconduct proven by any means which the contracting authorities can demonstrate;

Thus, a bidder who was the subject of a judgment having force of res judicata considered for non-observance of the national legislation concerning, for example, the ban on illegal work, can be excluded from a public contract awarding procedure. A contracting authority will be able, for example, to exclude a national bidder who would not have implemented measures in favour of equal opportunities, as laid down in national legislation, insofar as the non-observance of such legislation represents a serious fault in this same Member State.

has not fulfilled obligations relating to the payment of social security contributions in

accordance with the legal provisions of the country in which he is established or with those of the country of the contracting authority;

has not fulfilled obligations relating to the payment of taxes in accordance with the legal

provisions of the country in which he is established or with those of the country of the contracting authority;

is guilty of serious misrepresentation in supplying the information required or has not

supplied such information.

has demonstrated its inclusion in one of the professional or trade registers. A contracting authority may automatically reject bidders on the basis of reasons such as involvement in a criminal organisation, corruption and certain cases of fraud.

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1.2 Second stage: Selection criteria The selection criteria are assessed in the light, a) of the candidate’s economic and financial ability, and b) according to his technical capability. Experience has shown that the public authorities are often limited to a primarily formal examination of the documents given by the bidders. It is appropriate that there is an effective examination of the selection criteria after specific checking of the information provided. Otherwise, in conformity with the legal texts, there is no real selection, but just one administrative formality.

With regard to economical and financial capacity, the supplier’s references on this point are not listed in a restrictive way by the Directives. However, any other reference required by the contracting authority must be objectively necessary in order to prove the aptitude from a strictly economic and financial point of view of the bidders within the framework of the specific contract.

♦

By way of example, the following references can make it possible to certify the financial and economic capacity of the supplier:

appropriate statements from banks or, where appropriate, evidence of relevant

professional risk indemnity insurance; presentation of balance-sheets or extracts from the balance-sheets, where publication of

the balance-sheet is required under the law of the country in which the economic operator is established;

a statement concerning the undertaking's overall turnover and, where appropriate, of

turnover in the area covered by the contract for a maximum of the last three financial years available, in accordance with the date when the undertaking was set up or the economic operator started trading, as far as the information on these turnovers is available.

The contract notice will have to specify which of these references is chosen by the contracting authority or, if necessary, specify the references not reproduced above, but which are objectively necessary in order to prove the economic and financial capacity of the supplier in the framework of a given contract.

With regard to the technical and /or professional ability of the supplier, it is justified in particular by the following means:

♦

a list of the principal deliveries undertaken or the main services provided in the past three

years, with the sums, dates and, public or private recipients; indication of the technicians or technical bodies involved, whether or not belonging

directly to the economic operator's undertaking, especially those responsible for quality control;

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18

a description of the technical facilities and measures used by the supplier or service provider for ensuring quality and the undertaking's study and research facilities;

a check carried out by the contracting authorities when the products or services to be

supplied are intricate;

samples, descriptions and/or photographs, the authenticity of which must be certified if the contracting authority so requests;

certificates drawn up by official quality control institutions or agencies of recognized

competence certifying the conformity of products clearly identified by references to specifications or standards.

2. Contract awarding period

2.1 Award procedure as distinct from the prospective bidder selection stage

The European Directives authorize two types of criteria for the award of public contracts, namely that of the lowest price and that of the most cost-effective tender. In this guide, only this last criterion will be considered. The quality criteria and the assessment frameworks proposed in this respect are completely optional. It features the joint recommendations of a working group13 made up of experts comprising representatives of federations of companies active in public supply contracts in the textile-clothing sector, meeting at European level.

In the case of a contract awarded to the most cost-effective tender, the contracting authority must indicate in the specifications or in the contract documents, all award criteria for which it envisages the use in decreasing order of importance assigned to them.

The upshot is that the contracting authority is required to envisage all the criteria which it intends to use at the time of the tenders evaluation, and cannot, at the time of the evaluation, use other criteria than those envisaged in the contract notice or the specifications.

Directive 2004/18/EC lists, by way of an example, a certain number of criteria as a basis

for the contracting authorities to compare the tenders and to thus identify which would be the most advantageous one from an economic standpoint:

- quality - price - technical value - aesthetic and functional characteristics

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19

13 Members of the working group: FEBELTEX and FSETHC (Belgium), FACIM (France), ATI/CITECO and SMI/CITECO (Italy), AESMIDE (Spain) and APTIMA (Portugal) and PROMPTEX (Europe)

- environmental characteristics - running costs - cost-effectiveness - after-sales service and technical assistance - delivery date and delivery period or period of completion

In the case of a non- exhaustive list, the public authority can thus envisage in the contract notice or specifications any other award criteria specific to the textile supply contract in question. Thus, on the assumption of a contract the security-defence sector and territorial protection, the security of supply criterion should be retained.

The European Communities Court Of Justice was asked to consider preliminary rulings in the context of dispute between English companies and the UK Home Affairs Department, on the occasion of imports of a consignment of diamorphine from the Netherlands. Pursuant to the 1961 Convention on Narcotic Drugs, the Secretary of State prohibited imports of diamorphine and allowed Macfarlan to have the exclusive right to manufacture the product and Evans to have the exclusive right to process the product for medical use and marketing within the United Kingdom. This practice was justified by the need to avoid the risk of this substance being diverted towards illicit trading activities and to guaranteeing security of supply in the United Kingdom. Pursuant to a judgment of March 28th 1995, the Court recalled that the choice of the most cost-effective tender leaves it up to the public authorities to decide on the choice of contract award criteria they intend to retain, but this choice cannot focus on criteria aiming at identifying the most cost-effective tender:« It follows that security of supply is one of the criteria which may be taken into account under article 25 of the Directive in order to determine the most cost-effective tender for a contract for the supply, to the authorities concerned, of a product such as that in question in the main action. However, in such a case security of supply must be clearly indicated as a criterion for the award of a contract, in accordance with article 25 al.2 of Directive » (Source: CECJ., March 28th 1995, Case n° C-324/93, Evans Medical and Macfarlan Smith, Rec. 1995, I, p. 597).

It appears essential to ensure the compliance with the criteria of transparency and traceability of the elements appearing in the tenders, in particular as to the place of production and the system of subcontracting.

On such an assumption, the public authority invites the bidders required to provide all specified information as to the place of making, manufacture or creation of the products presented in their tender and takes account, in the evaluation of these tenders, owing to the fact that the production of certain materials and supplies could be done, directly or indirectly, if necessary by way of subcontracting, in third countries, which present a more or less large degree of security as to the observance of the delivery periods, the technical assistant and the after-sales service in general.

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The example to be taken will be the specifications for several public contracts involving military clothing organized by Swedish Ministry for defence, which requires in particular: - under the heading of "qualifications", the indication of the geographical site for the production of the raw materials and complete details of the manufacturer(s), that could not be modified afterwards without the express permission of the public purchaser; - under the heading of "other information", the indication of the working conditions at the manufacturing site, with these conditions having to respect, at the very least, ILO agreements on the minimum age, the prohibition of child labour, the prohibition of forced labour, a fair remuneration, non-discrimination, as well as the right of association and trade-union freedom. (Source: Public contracts of the Swedish Ministry for Defence, S.E - Stockholm "Filed jackets, filed trousers and twill", n° 2001/S-128-087169 of July 6th 2001; idem "naval combat jackets and trousers defensory", n°2002/S-217-172371 of November 8th 2002.)

Generally speaking, and in respect of all the awarding criteria,, consideration has to be given to the technical value of the subcontractors, and the principal suppliers, with regard to all the criteria related to the tender’s qualitative value.

Criteria bringing into play social and environmental considerations that can be used for

choosing the most cost-effective tender, on condition however, following the example other criteria, that they involve an economic advantage suitable for the service covered by the contract, for the direct benefit of the contracting authority.

Social Considerations: ♦

This one should does not have to fear requiring bidders to prove that the working conditions of their staff, are in conformity with the national legislation and/or the collective agreements in force in their countries. In the absence of legal provisions or collective agreements specific to this subject, lists of members of staff and plans can provide adequate information about the type of staff employed, the working hours and the period of time covered by the services.

An interpretative Communication of 200114 explained how Community law (EC Treaty and public procurement Directives) offered numerous opportunities to public purchasers seeking to integrate social considerations into public procurement procedures and recalled the scope for applying further condition relating to the fight against unemployment when awarding a contract, provided that this condition is in line with all the fundamental principles of Community law, and that the authorities have to consider two or more economically equivalent bids and that this criterion does not have a direct or indirect implications for the bidders from other Community Member States 15. On the assumption that the production of certain supplies would be subcontracted by suppliers located in non- European Union countries, the tenders should contain, in an appendix, a short presentation of the social legislation of the relevant country, in

14 COM (2001) 0566 final

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2115 Judgment of the Court of Justice in Case 225/98 - September 26th 2000

particular comprising valid details about the working week, the prohibition or not of child labour, on the prevention or otherwise of illegal work, and the respect for humans rights plus equal treatment for men and women. The public authorities should check, in particular, to see if suppliers, and particularly their possible subcontractors, actually respect, at the very least, the social legislation enshrined in ILO agreements. In any event, such an additional criterion must be expressly mentioned in the contract notice, so that the bidders are informed of the existence of such a condition.

Environmental considerations : ♦

In the Commission's interpretative Communication of July 4th 200116, the EU's executive body clarified how environmental concerns may be taken into account at each separate stage of the contract award procedure. The Court of Justice went further by clarifying these provisions in particular case-law concerning award criteria 17 which clarifies the possibilities for the contracting authorities to meet the needs of the public in question, including in the environmental area. Directive 2004/18/EC explicitly allows the use of environmental considerations which specifically refer to Court of Justice case law. All award criteria should meet four conditions:

- a link with the subject matter of the contract These criteria are determined on the basis of the object of the contract since they must allow the level of performance offered by each tender to be assessed in the light of the object of the contract, as defined in the technical specifications, and the value for money of each tender to be assessed. There may be a link between the requirements in the technical specifications and the award criteria. The technical specifications define the required level to be met. Contracting authorities can decide that any products performing better than the minimum level may be granted extra points to be distributed at the award stage.

- be specific and objectively quantifiable. - must have been previously advertised in contract notices - must respect Community law

A practical guide on green public procurement, as a follow up to the interpretative Communication, was produce by the Commission services .

The award criteria may take the following form:

- impact on employment in the European Union Member States and on vocational training for young people, as well as the social constraints imposed by the legislation of the country in which the supplier or the subcontractor, in the event of, is established (in particular, concerning the working week, the prohibition of child labour and illegal work, the respect for humans rights and equality between men and women); the public authorities can check in particular to if the suppliers, and particularly their possible subcontractors, actually respect, at the very least, the social legislation enshrined in ILO agreements 87. 98, 29, 105, 100, 111, 138 and 94.

16 COM (2002) 274 final

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2217 ECCJ C-513/99 – September 17th, 2002.

It should also be pointed out that ILO agreements forming the minimum standard to be observed by the suppliers and all their subcontractors. (Parl. European Doc, op cit. 298.409 p.46/95). - ecological natural of the production, in particular possibilities for recycling of packaging and the use of more or less polluting materials at the time of the production, as well as the environmental constraints imposed by the legislation of the country in which the supplier and his possible subcontractors are established.

Lastly, insofar as a public authority must check the composition of tender it receives, it may, in the event of a tender that is exceptional low compared with the service, reject the latter, without however being bound by this. In Member States that adopted provisions for this purpose, the contracting authorities could nevertheless be compelled to reject the abnormally low tenders because of the non-observance of the rules on employment or labour law, for example. Prior to any rejection decision, the public authority must, however, ask for written details about the composition of the tenders which it considers advisable and check this composition by taking account of the justifications provided. These justifications can be related to the economic of the manufacturing process, to the technical solutions adopted, the exceptionally favourable conditions available to the bidder to provide the products, or with the innovation nature of the bidders project.

2.2 Review of tenders and weighting criteria The tenders - and the award on the basis of the contract - should be assessed in the light of the price suggested by the bidders18, while varying upwards or downwards according to a weighting system involving points assigned according to the observance, or otherwise, of the imposed criteria imposed in the contract documents or the contract notice. Two stages are singled out: The weightings of the various criteria suggested below, as well as the number of columns and the value of the points allotted to each criterion are provided purely for illustrative purposes, with each contracting authority obviously being free to adapt them according to its priorities. This system of criteria and points is already widely used by many Member States in multiple fields when it is a question of comparing tenders for a public contract or, in a more general way, the merits of the applications for a public utility.

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18 Subject to the assumptions of abnormally low tenders controls by the provisions of article 55 of Directive 2004/18/EC of April, 31. It should be stressed here that the contracting authority, before being able to reject these tenders, is required to ask for written writing details of about constituent parts of the tenders which it considers relevant and to check this composition by taking account of the justifications provided.

(a) Weighting of the quality value in the broadest sense in the light of the submission price

The relative weighting allotted to all the criteria constituting the technical value depends on the contracting authority and its priorities. Three options can be proposed by way of example:

A 50 (price) /50 (qualitative value) weighting in the sense that the price and tender quality criteria are put on the same footing;

A 70 (price)/30 (qualitative value) weighting in the sense that the price is regarded as the

most important factor, the quality of the tender being considered here only in a limited way, equal to a third of the points;

A 30 (price)/70 (qualitative value) weighting in the sense that the quality of the tender is

regarded as essential, the price being considered here only in a limited way, equal to a third of the points.

If necessary, a triple weighting (40/30/30 or 40/40/20) can be applied when a quality criteria should ideally be put forward, taking into account the object of the contract. For example, if the delivery period criterion were to be regarded by the contracting authority as essential, it might merit a specific weighting; [(e.g. 40 (price) /40 (qualitative value) /20 (time of delivery)].

(b) Creating the criteria and obligations for "quantifying" the more or large qualitative value of the tender

In the support of this list, a set of points must be used to allot a more or less large weighting for each criterion imposed, in the sense that the bidder who does not respect, or hardly respects, one or the other of these criteria, would be taxed negatively with the corresponding number of points. The lists of various candidates would be then compared and the contract would be allocated objectively to the bidder with the highest number of points. The following table can thus be proposed, with the weightings laid down obviously being subject to modification in one direction or another according to the public authority's options:

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Very

satisfactory Satisfactory Normal Hardly

satisfactory Not at all

Quality of products

6 5 4 -2 -3

Delivery time

6 5 4 -2 -3

Technical Value 6 5 4 -2 -3

After-sales service and technical assistance (including capacity for replenishment)

6 5 4 -2 -3

Transparency and traceability

6 5 4 -2 -3

Aesthetic and functional character

5 4 3 -1 -3

Cost effectiveness

5 4 3 -1 -3

Profitability

5 4 3 -1 -3

Security of supply 5 4 3 -1 -3

Additional Criterion: Impact on employment

+4

Additional criterion: ecological character of production

+4

2.3 Simulation On the assumption that the method, the choice of the criteria and weightings suggested are approved, a simulation of the use of such a grid of points is proposed below:

(a) Price assessment Taking as a working hypothesis, a 50/50 weighting between the price and the qualitative value of the tenders: Example according to 3 bidding companies whose tenders have been regarded as admissible at the end of the preliminary phase, subsequent to an examination of the exclusion and selection criteria:

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- Company A: price suggested: 100 000 Euro = 50 points (lowest price) - Company B: price suggested: 110 000 Euro (10 % higher than the lowest tender) = 45

points (10 % to be deduced from the maximum number of points) - Company C: price suggested: 120 000 Euro (20 % higher than the lowest price) = 40

points (20 % to be deduced from the maximum number of points)

(b) Assessment of the tender's qualitative value - Company A: working hypothesis: criteria considered to be "normal", with, however,

transparency and traceability of the "un satisfactory" products and "unsatisfactory" security of supply also = 22 points

- Company B: working hypothesis: "satisfactory" criteria all, except "normal" after-sales

service and technical assistance and "unsatisfactory" security of supply = 35 points - Company C: working hypothesis: "satisfactory" criteria all, except transparency and

traceability of the products "very satisfactory" and two additional criteria "satisfactory" = 50 points

(c) Final assessment - Company A: 50 points (price) + 22 points (quality) = 72 points - Company B: 45 points (price) + 35 points (quality) = 80 points - Company C: 40 points (price) + 50 points (quality) = 90 points The tender should thus be allotted to company C, because of its clear superiority in the field of technical value.

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CHAPTER III ADVICE FOR PUBLIC PROCUREMENT IN THE

SECURITY-DEFENCE SECTOR

TITLE 1 Legislative provisions in the defence sector Article 296 (example article 223) of the Treaty establishing the European Community lays down the possibility for derogations when they are in the “essential interests of the security of the Member States connected with the production of or trade in arms, munitions and war material”. A Commission communication dated December 14th 1997 the implementation of the Union’s strategy on defence-related industries, addressed to the Council, the European Parliament, the Economic and Social Committee and the Committee of the Regions, aims at distributing the defence supplies in the three following categories:

- Products intended for the armed forces, but not for military use, therefore not covered, by article 223 of the EC Treaty nor by article 2 of Directive 93/36/EC (article 14 of Directive 2004/18/EC); (market declared secret, protection of vital interest, national security, etc)

- Products intended for the armed forces and military use, but not constituting "highly

sensitive defence equipment ". The textile-clothing sector19 falls more specifically into this category;

- Highly sensitive equipment covered by the scope of article 223 of the EC Treaty.

The level of intra-Community trade in defence equipment is surprisingly low compared with the Member States total acquisitions. In this respect this sector has characteristics related to public contracts lato sensu, in the sense that the confidentiality of significant military information is vital for the national interest, and thus for the interests of the Community. The Commission therefore recognizes that this characteristic can be a source of constraints for competition and for the relations between consumers and suppliers, who are more closely linked than usual

Taking into account these elements, the Commission thus adopted an action plan for the defence related-industries20, whose objectives are, inter alia, to preserve the technical and industrial basis of defence and create the necessary preconditions for a European security and defence identity: « The defense technological and industrial base including technological know-how, R&D facilities, a skilled work-force, manufacturing facilities and marketing and export capacity, is a vital strategic asset for Europe and needs therefore to be consolidated and preserved. Some very important reasons for this are:

- It is a pre-requisite for the establishment of a genuine European Security and Defence Identity;

19 In order to check that such products intended for the forces of defence and security are indeed for military use, the contracting authorities could use objective criteria, such as the existence of specific notices formulated by the purchasing engineering departments, or the use required of materials equipped with particular qualities (for example, fire resistance, ballistic protection, protection NBC (nuclear power-biological-chemical) or infra-red non-reflexivity). Cf. annex: Information note in defence field

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2720 Action Plan for the defence-related industry proposed by the European Commission - COM (97) 583 final - Appendix II, p. 2.

- It is necessary for the preservation and the development of a key technological and industrial base which is of importance both for military and civil purposes; - It is an important factor for employment, particularly in specific European regions, and for many SMEs”

TITLE 2 Items to take into consideration In this context, it is essential, for public contracts concluded in the security-defence sector, to take into account in particular criteria such as the delivery periods, security of supply and absolute transparency of the possible recourse to subcontractors. Several recent events serve to remind us that a bidder who would have his textile product realised in a non-European Community Member States, could see his supplies dry up from one day to the next if the place of manufacture were to be in a potential enemy country. « Bundeswehr lässt Kampfanzüge in Jugoslavien nähen » In 1998 combat uniforms for the German army were manufactured in Serbia. A German company, which was to deliver military clothing according to a public contract, would have charged a Yugoslav company for this production in the capacity as subcontractor. Although no legal provision was violated on this occasion, several parties rightly criticised the inconsistent approach of the German authorities, which were ready to begin a military action under the aegis of NATO against Serb President M.Milosevic, while supporting his regime as a result of paying huge sums of money within the framework of public contracts in a sector as significant as army clothing. After this incident, the German federal army procurement department was asked not to place any order involving Serb firms. Moreover, the authorities should take care, in a more general way, to announce all contracts utilizing protagonists outside the NATO area. (Source : Süddeutsche Zeitung, March 3rd 1998, « Serben stellen Uniformen für die Bundeswehr her »; Der Spiegel 37/1998 : « Bundeswehr- Anrüchiges Geschäft ».)

In this specific field, it is thus essential that the public authorities check the characteristics of the bidders concerning the manufacture of the materials, and particularly the place of manufacture. As we mentioned earlier on, it is advisable to limit the bidders to those already registered on official lists of approved suppliers and, before admitting new potential suppliers, requiring them to supply relevant samples and very precise information concerning the possible places of manufacture for their materials.

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TITLE 3 Review of tenders and contract awards As for the review of tenders and the award of the contracts, it is obvious that the criteria of technical value, delivery periods, and above all the transparency and traceability of the products, as well as security of the supply, must be singled out in particular. Thus, compared to the examples of weighting mentioned above, a specific textile supply contract in the field of security-defence could give place to a following weighting: - 25 (price) ; - 25 (qualitative value) ; - 25 (transparency and traceability of products) ; - 25 (security of the supply chain) The following weightings could be proposed for these particular contracts: Very

satisfactory Satisfactory Normal Hardly

satisfactory Not at all

Security of supply

7 5 3 -2 -5

Transparency and traceability

7 5 3 -2 -5

Delivery time 6 5 4 -2 -3

Quality of products

6 5 4 -2 -3

Technical Value 6 5 4 -2 -3

After-sales service and technical assistance (including capacity for replenishment)

6 5 4 -2 -3

Aesthetic and functional character

5 4 3 -1 -3

Cost effectiveness

5 4 3 -1 -3

Profitability 5 4 3 -1 -3

Additional Criterion: Impact on employment

+4

Additional criterion: ecological character of production

+4

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Annex 1 FIRST STAGE: PRELIMINARY STAGE (art. 47 et 48 of Directive 2004/18/EC) a) Exclusion criteria The bidder : 1. is bankrupt or is being wound up, where his affairs are being administered by the court,

where he has entered into an arrangement with creditors, where he has suspended business activities or is in any similar situation arising from a similar procedure under national laws and regulations

2. is the subject of proceedings for a declaration of bankruptcy 3. has been convicted by a judgment which has the force of res judicata 4. has been guilty of serious professional misconduct proven by any means which the

contracting authorities can demonstrate 5. has not fulfilled obligations relating to the payment of social security contributions 6. has not fulfilled obligations relating to the payment of taxes and charges 7. is guilty of false statements or has not provided the information required b) Selection criteria a) Economic and financial capacity The bidder must provide the following evidence

statements from banks, presentation of balance-sheets, a statement on the undertaking's overall turnover

Other references objectively necessary in order to prove the aptitude of the bidders within the framework of a specific contract from a strictly economic point of view

b) Technical ability The bidder must provide the following evidence:

list of principal deliveries undertaken or the main services provided in the past three years, with the sums, dates and recipients, whether public or private, involved.

description of the technical facilities and measures used by the supplier or service provider for ensuring quality and the undertaking's study and research facilities;

indication of the technicians or technical bodies involved, especially those responsible for quality control

samples, descriptions and/or photographs certificates drawn up by official quality control institutions or agencies check carried out by the contracting authorities when the product is intricate or is

required for a special purpose

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STAGE 2 : CONTRACT AWARDING PROCEDURE (article 53 of Directive 2004/18/EC) Assessment of the individual tender in the light of the contract award criteria and the requirements established imperatively in the specifications of the tender appearing in the schedule of conditions or the contract notice. The contract awarding procedure is based on:

a) the most cost-effective tender selected on the basis of the price and the technical value in the broadest sense of the term, according to a weighting intended to distribute the weight from these two principal criteria (for example: 50/50; 70/30; 30/70).

The technical value allowing the more or less high quality of the tender to be determined according to the following criteria, according to a quantified weighting, more or less important for each one of them, according to the object of the contract and the priority options of the public authority:

Quality of products Technical value After-sales service and technical assistance Transparency and traceability of products Delivery period Running cost Effectiveness cost Aesthetic and functional characteristics Environmental characteristics Security of the supply chain Any variable criterion according to the contract in question which relates to all the

elements to do with the advantage that the tender offers for the public authority within the framework of a given contract. They will of necessity have to be objective criteria corresponding to the qualities of service forming the subject of the contract and are involved in the choice of the most cost-effective tender (for example, the security of supply criterion for the products related to health) and provided that these criteria respect the general principles of Community legislation, in particular the principle of non-discrimination.

Additional awarding criteria: - fight against unemployment and social constraints in the country of production - ecological character of the production and environmental constraints imposed by the country of production

b) the lowest price only

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Annex 2

EXPRESSION OF THE NEEDS

The sole objective of a public supply contract is to accommodate precisely a need expressed by a public authority. Consequently, the definition of this need is an essential activity in the contract awarding procedure This is reflected by the observance of several successive phases governed by European Directives. With a view to being satisfied any need must be: IDENTIFIED Internal information procedures

IDENTIFIED Essential nature and characters

ASSESSED, DEMARCATED Quantity, Quality

TAKEN INTO ACCOUNT, APPRECIATED

Choice of procedure

TRANSLATED, EXPRESSED Publicity (national, European), contracts documents (level of quality, standardization)

PROGRAMME Payment, completion dates

SATISFIED Distribution to users

For the public authority it is a question of determining the quantitative and qualitative evaluation of supplies to be realised. An illustrative notice must show, if possible before the beginning of the financial year, all the achievements under consideration during 12 months of a financial year. This first notice (PROGRAM) is confined to specifying the essential elements; the second notice (CALL FOR APPLICANTS) will specify the month for launching the procedure, the qualitative requirements, and the exclusion and selection criteria which will be confirmed during the last stage, the invitation to tender. The quantitative assessment of the supplies necessary, if it is relatively easy, will determine, according to the estimated unit cost, the purchasing procedure implemented. The documents relative to each supply will, moreover, have to refer the technical specifications.

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Within the meaning of the European Directives, the concept of technical specification covers all the technical specifications defining the necessary characteristics of a supply. Objectively, these specifications must make it possible to objectively characterize a supply in such manner that it is suitable for the intended use. They are written in term of results, performances or functional requirements. The reference to specifications prescribing a given trademark must remain exceptional and systematically accompanied with the scope for equivalence. In order to refrain from restricting or distorting competition they should impose the choice of building contractor.

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EXCLUSION CRITERIA

The aforementioned list of criteria is exhaustive but the public authority is not compelled to require that all the criteria be met. (Directive 20014/18/EC) On the other hand, any criterion mentioned by the public authority requires the production of an official document to justify the situation of the candidate. As soon as a supplier is likely to have a part of his contract carried out by one or more subcontractors, he has to meet the same criteria, and with the same requirement as the candidate.

(Invitation to tender

references) Retained criteria

EXCLUSION CRITERIA

YES

NO

CO

NFO

RM

ING

NO

N-C

ON

FOR

MIN

G

OB

SER

VA

TIO

NS

Status regarding bankruptcy, liquidation, cessation of activities, bankruptcy proceedings, preventive legal settlement (arrangement with creditors) or similar situation

Proceedings for bankruptcy, liquidation, bankruptcy proceedings, preventive legal settlement or similar situation

Judgment for offence affecting professional character

Non-payment of social security contributions

Non-payment of taxes and charges

False statements regards aforementioned information

Inclusion in the trade register (professional) or equivalent

A bidder who has been convicted via a final judgment may be rejected automatically (participation in a criminal organization, corruption and certain cases of fraud and corruption).

Up-dated in January 2005

34

AWARD OF THE CONTRACT

The search for the most cost-effective tender is an obligation for the public contracting authorities. Within this framework the price is no longer the chief factor.

Consequently, it is up to the public authority, according to the object of the contract, to determine which is the set of criteria best adapted to this search. These criteria must be defined and ranked at an early date.. During the initial stage, there is a need to specify the relative weighting which will be implemented to determine the most cost-effective tender. Each public authority is responsible for the list of criteria used as well as the weighting system applied. The following table is thus only one example of what may be one of the components to help make a decision about awarding a public supply contract.

ECOLOGY ADDITIONAL CRITERION Environment

FINANCE Banking references Objectively useful references

ORIGIN Of ½ products

PRODUCTION location, capacity, plant

QUALITY ISO certification, specific approval

SECURITY OF SUPPLY Meeting deadlines

SOCIAL ADDITIONAL CRITERION

TECHNICAL Former deliveries Range produced Samples

PRICE TRANSPARENCY Detailed tendering price framework

REQUIREMENTS

WEIGHTING

PROCESS

Up-dated in January 2005

35

Annex 3: Background Note regarding the defence sector In order to prevent any excessive use of the exemption, provided for by article 296 TEC, for purchases in the security-defence sector, the Commission recently proposed a consultative Green Paper21 on more open and efficient contract so as to help EU defence industries to become more competitive, by providing guidance on how EC Treaty exceptions and requirements should be interpreted (conditions defined by the case law of the Court) and conditions provided for by the European Treaty. Internal Market Commissioner Frits Bolkestein said: “This is a win-win-win situation: more efficient defence procurement, new opportunities for SMEs and more competitive EU industry. Defence cannot be lumped together under general procurement rules. But contracts for supplies such as boots and food often do not raise national security issues. With the exception of obviously sensitive areas, this is probably true of much more military equipment. We are exploring how to extend the benefits of more open procurement to those contracts.” A new legal framework would be recommended via a new legal instrument such as a special Directive taking account of the special characteristics of this sector. (cf. Directive of 1990 in the water, energy and transport sectors). It would apply to defence procurement currently falling within the scope of existing Directives but it would contain rules better suited to their specific nature. It would seek three main objectives :

- greater legal certainty, since it would improve the classification of contracts : those covered by current Directives; those covered by the new Directive; and those excluded from any Community rules. This Directive could however take account of some particular protective items (bullet-proof jackets, NBC, infra-red…) against the risk of individual constraints and may give rise to a restricted procedure.

- more information at Community level on the contracts in question, and therefore greater opening up of markets to allow European defence industries to participate equally in calls for invitations in all Member States ;

- the introduction of the necessary flexibility for the awarding of these contracts by the creation of a set of rules suited to the specific features of such contracts ;

The Green Paper specifies that a such instrument can also serve as a reference point should a Member State decide not to make use of the derogation provided for by article 296 TEC even though it would be entitled to do so.

Up-dated in January 2005

3621 COM (2004) 608 final

Commission Decision 2002/371/EC of 15 May 2002. O.J. n° L 133 of 18.5.2002Criteria valid until 31 May 2007Previous criteria valid until 31 May 2003

The textile and clothing industry is facing new chal-

lenges following the globalisation of the world economy

and the competition of fast-growing Asian markets. In

order to stay in the business, companies have to look for

differentiating factors by designing high-value textiles

and clothing.

In an increasingly health- and environmental-conscious

world, a product that is able to prove that it is better for the

environment and health by a trustworthy label can help you

to make a difference in the eyes of customers. By adding an

additional proof of quality, it may help you to compete on

quality without necessarily increasing your costs.

Already, a number of companies and retailers use this

label for household linen.

The European eco-label, which is the only sign of

environmental quality both certified by an independ-

ent organisation and valid throughout Europe, pres-

ents a unique opportunity to satisfy your customers’

expectations.

GIVE YOUR PRODUCT A CREDIBLE SIGN OF ENVIRONMENTAL EXCELLENCE …

APPLY NOW FOR THE EUROPEAN ECO-LABEL.

Applies to all textile products including textile clothing and accessories, fibres, yarn and fabrics and

interior textiles except wall and floor coverings.

P R O D U C T F A C T S H E E T

The European eco-labelfor textile products

Putting the eco-label on your products means that they have the following assets:

• Reduced water and air pollution during fibre production

• Limited use of substances harmful to the environment and in particular to the aquatic

environment and health

• Guarantee of shrink resistance during washing and drying

• Guarantee of colour resistance to perspiration, washing, wet and dry rubbing and light

exposure

• Whole production chain covered

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This fact sheet is for general information only. For more detailed information on the criteria as well as information on who to contact in your country in order to apply for the label, please consult the web site:

http://europa.eu.int/ecolabel

The following tests shall be carried out either on dyed yarn, final fabrics or final product:■ Dimensional changes during washing and drying: 8% for knitted products, 8% for terry towelling, 6% for other woven products,

2% removable and washable curtain and furniture fabric.■ Colour fastness to perspiration (acid, alkaline), washing, wet rubbing, dry rubbing, light (see criteria).

Fibres

Limitation of toxic residues in fibres■ Acrylic: Acrylonitrile < 1.5 mg/kg.■ Cotton: residues of certain pesticides < 0.05 ppm. ■ Elastane and polyurethane: no organotin compounds.■ Greasy wool and other keratin fibres: limitations of

certain pesticides.■ Man-made cellulose: AOX < 250 ppm.■ Polyester: Antinomy < 260 ppm.■ Polypropylene: no lead based pigments.

Reduction of air pollution during fibre process■ Acrylic: acrylonitrile < 1g/kg.■ Elastane and polyurethane: aromatic diisocyanates

< 5 mg/kg.■ Man-made cellulose: S < 120g/kg (filament)

and 30g/kg (staple). ■ Polyamide: N2O < 10g/kg polyamide 6 and < 50g/kg

polyamide 6.6. ■ Polyester: VOCs < 1.2g/kg.

Reduction of water pollution during fibre process■ Flax and other bast fibres: COD/TOC from water

retting reduced by at least 75% (hemp) and 95%(flax, other).

■ Viscose: Zn < 0.3g/kg.■ Cupro: Cu < 0.1 ppm. ■ Greasy wool and other keratin fibres: COD < 60g/kg,

75% reduction of COD, off-site treatment. If on-sitetreatment, COD < 5g/kg, 6 < ph < 9 and temperature< 40 °C.

AOX: chlorinated compounds.COD: Chemical Oxygen Demand.VOC: Volatile Organic Compounds.

Limitation of the use of substances harmful for the environment in particular aquatic environment and health■ 90% of carding and spinning oil, lubricants and finishes for primary spinning

and 95% of sizeing preparations, detergents, fabrics softeners and weightcomplexing agents shall be sufficiently biodegradable or eliminable.

■ Polycyclic aromatic hydrocarbons (PaH) in mineral oils <1%.■ No cerium compounds, halogenated carriers. ■ No heavy metals and formaldehyde in stripping and depigmentation.■ No APEOs, DTDMAC, DSDMAC, DHTDMAC, EDTA, LAS, DTPA, chrome

mordant dyeing.■ AOX emissions from bleaching agents < 40 mg Cl/kg (100 mg in certain

cases).■ Level of impurities in dyes (in ppm):

Ag <100. Ba < 100. Co < 500. Se < 20. Fe < 2500.As < 50. Cd < 20. Cr < 100. Cu < 250. Hg < 4. Ni < 200. Pb < 100. Sb < 50. Sn < 250. Zn < 1500. Mn < 1000.

■ Level of impurities in pigments (in ppm):As < 50. Cd < 50. Cr < 100. Hg < 25. Pb < 100. Sb < 250. Zn < 1000.Ba < 100. Se < 100.

■ No chlorophenols, PCB and organotin compounds during transportation orstorage.

■ No biocidal or biostatic products active during use phase.■ Discharge to the water of metal complex dyes based on Cu, Cr or Ni:

max. 20% (cellulose dyeing), 7% (other dyeing process). After treatment:Cu < 75 mg/kg (fibre, yarn, fabric), Cr < 50 mg/kg, Ni < 75 mg/kg.

■ No azo dyes that cleave to a list of aromatic amines.■ No dyes classified as carcinogenic, mutagenic, toxic for reproduction

according to Dir. 67/548/EEC.■ No potentially sensitising dyes if fastness to perspiration > 4. ■ Printing pastes < 5% VOCs. No plastisol based printing. ■ Formaldehyde < 30 ppm for products in direct contact with the skin,

300 ppm for others. ■ COD from wet-processing < 25g/kg. If on-site treatment, 6 < pH < 9 and

temperature < 40°C.■ No flame retardants or finishing substances containing > 0.1% of sub-

stances classified as carcinogenic, mutagenic, toxic for reproduction anddangerous for the environment according to Directive 67/548/EEC.

■ Shrink resistant finishes only allowed for wool slivers.■ Coatings, laminates and membranes: no plasticizers or solvents assigned a

list of R-phases according to Directive 67/548/EEC.

ECOLOGICAL CRITERIA

Water pollution

Spinning

Production, use and end of life

PERFORMANCE AND DURABILITY CRITERIA

To receive the EU eco-label, textile products must meet the following ecological and performance criteria

Life cycle analysis

Air pollutionNatural fibres (cotton, wools…)

Man-made fibres:polyester, acrylic….)

Packaging

Air pollution

Dangeroussubstances Weaving

Knitting

DyeingPrinting Finishing

Dangeroussubstances

Making up

Water pollution

Packaging&

Distribution

Clothes, accessoriesInterior textile, fibres

Yarn & fabrics

LandfillIncineration

European Commission