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When I published my first entry into the Portuguese train tender , I received an email tipping me off to a potential other issue with it. The email argued that the maintenance shed which is part of the contract object would be used for the manufacturing of the trains and as such constitute illegal state aid.
The procurement procedure was launched in December 2021 and adopted a MEAT approach for the award criteria. It included a specific criterion worth 15% of the marks available for "Manufacturing/assembly bonus in Portugal using sheltered workshops." What matters, of course, is the manufacturing or assemby in Portugal.
On my previous post about *that* train tender in Portugal, I argued that it was quite possible the contract involved a State Aid angle but stopped short of making a more definitive or certain claim. So why would the others miss the opportunity that the Alstom-led consortium spotted?
This Monday I was cited again on Portuguese media about the illegality of the train tender for the new 117 trains that are being procured at the moment. It is not on the origin of the tenderer since that is not discriminated, but instead on the freedom for each economic operator to decide where and how those trainsets will be built.
In its assessment, it awarded the three offers the maximum grade possible for the local manufacturing criterion. Therefore, from the perspective of the company it is irrelevant where the trains are actually manufactured. They have no interest in determining where the manufacture occurs. To me, this is a sign of two things.
In light of existing rules, vendors can deter competition by driving prices down in competitive tenders. There is quite a substantial effort to participate in a publictender process, so most vendors have a limit to how many unsuccessful tenders they are willing to respond to before giving up.
As these common “green procurement” strategies are adopted by governments around the world, the UN Commission on International Trade Law (UNCITRAL) model law on publicprocurement , last revised in 2011, could be updated to facilitate implementation. Contractor ¶ 60 (Thomson Reuters, 2024).
Most Economically Advantageous Tender (MEAT) is the measure for selecting the best out of the incoming bids based on factors that are related to the subject matter of the contract. This criterion of selecting the tender was announced by European Parliament in January 2014. Tender Evaluation is done as an aggregate of both aspects.
Can public authorities procure fair trade products, or are they debarred from specifically referring to the fair trade qualities of those products under the publicprocurement directive (directive 2004/18/EC)? This is one of the issues underlying the judgment of the Court in Case C-368/10 Commission v. Netherlands.
Critical and urgent procurements, together with other procurements which may not have started as urgent, have become priorities, due to the volume of additional work created by the pandemic. This is likely to be harder for non-NHS contracting authorities to demonstrate unless the nature of the contract is for public health.
Public sector procurement also followed the Smith theory, where the lowest cost from a tendering process must deliver the best value. Procurement decisions were largely one-dimensional – with economic interests being the first choice. The weighting on environmental and social values continues is tempering pricing.
Transtejo, the public company who runs the ferries in Lisbon acquired 10 electric ferries to renew its fleet with the Portuguese Audit Court torpedoing the whole thing when running its legality assessment of the contract(s). The company doesn’t bite and both attempts fail.
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