However, the Court of Justice of the European Union (CJEU) ruled that it would be disproportionate to only grant for an exception in cases where it was “impossible” for the bidder to obtain the evidence required, or to insist that the evidence was signed off by a lawyer, notary or other “competent entity”, as required by AICP, the Portuguese contracting authority in this case.

The court said that making the worth of third party evidence dependent on somebody else would “introduce a formality likely not to unlock up public contracts to the broadest competition possible, but to restrict and limit the involvement of economic operators, in particular foreigners, in such contracts”.

“Because of the short season limits normally set for the submission of applications in contract notices and the divergences between the various national laws at to the authentication of the signature of documents, it cannot be excluded that numerous operators, above entire foreigners, may be dissuaded from submitting their tenders in view of the practical difficulty of producing, in the member state concerned by the procurement, a certification bearing a duly authenticated signature,” the court said.

“Consequently, the general scheme and purpose of [the 2004 public procurement directive] endorse the interpretation that the private purchaser’s ‘certification’ … requires only that a certificate drafted by that purchaser is produced and cannot be made subject to any other formality by the contracting authorities, such as the authentication of the purchaser’s signature by a competent entity,” it said.

Mapping company Ambisig had challenged AICP’s decision to exclude its application for a public tender because it had been unable to provide the third party evidence sought and had “failed to demonstrate or argue” that it was impossible or very difficult for it to do so. It had also challenged a term in the contract notice requiring the declaration to “endure a signature certified by a notary, lawyer or other competent entity, specifying the capacity of the person signing”.

Procurement expert Claire Gamage of Pinsent Masons, the law firm behind Out-Law.com, said that the case provided “some useful guidance” on the extent to which candidates could be excluded from procurement procedures, despite turning on the way in which Portugal had transposed the EU’s previous procurement rules.

“Contracting authorities may wish to grab steps to substantiate that tenderers possess the requisite skills and technical ability to perform the contract by way of imposing a requirement for bidders to provide evidence,” she said. “In such circumstances, it is clear that excluding a tenderer on the basis that he is unable to obtain, for example, certificates of satisfactory execution from previous customers will be considered disproportionate if the tenderer is capable to satisfy the authority that it has made reasonable attempts to obtain those certificates.”

“The question then becomes single of how far tenderers are expected to depart in terms of attempts to obtain this evidence, and at what point an authority will be satisfied that the tenderer has demonstrated that it will be very difficult to do so. The case does not discuss this factor in detail, and therefore such a scenario would essentially require some subjective consideration on the portion of the contracting authority. Contracting authorities should, however, endure in mind that they are below an obligation to act proportionately when excluding tenderers, and therefore any decision to exclude a bidder on this basis could potentially be challenged based on this principle,” she said.

Companies and other entities that regularly bid for public contracts in other EU jurisdictions may also discover the CJEU’s decision in this case helpful, Gamage added.

“Some EU member states may possess more conservative public procurement procedures which may be more bureaucratic or burdensome in comparison to bidding for contracts in the UK,” she said. “However, it is clear that the Commission is seeking to dissuade overly burdensome or bureaucratic requirements, as this can lead to a risk of foreign bidders being dissuaded from submitting a tender, and thus runs contrary to opening up competition within the EU.”