Using past performance as an award criterion in EU public procurement.

Abstract

The outcome of a procurement process largely depends upon how it was designed e.g. the terms and conditions that evaluates on what criteria a supplier is awarded a contract. In private sector procurement, evaluation of past performance is natural part of the evaluation process procurement. In public procurement there are more limited possibilities to evaluate past performance based on the rules and regulations that need be adhered. During 2020-2022 the Swedish National Transport Administration conducted 30 procurement pilots where they used past results from a performance assessing tool as award criterion in the evaluation of tenders. The purpose of the research presented here is to gain knowledge of how past performance can be used an award criteria within the boundaries of the EU public procurement directive. More specifically, can a evaluations from tool developed for assessing supplier performance during a project implementation, be used as an award criterion in the procurement of forthcoming projects. Ever since the ruling from Court of Justice of the European Union (CJEU) in the Lianakis case C-532/06, experts and courts have argued about where the limit is for allowing evaluation of suppliers past performance. A nuanced interpretation is that evaluation of past performance is allowed if the evaluation is focused on factors that gives an added value in identifying the best bid and not only evaluates the supplier’s general ability. The result of this study showed that is possible from both a legal as well as a procurement process perspective to evaluate past performance in public procurement. However, the system used needs to design in a way that is clear and non-ambiguous. Further, there is a challenge of how to assess new suppliers in a market where there is no past performance to evaluate. There are ways of doing this but needs to be done within the boundaries of public procurement principles set by the EU directives.