Provisional text

delivered on 12 September 2024 (1)

Case C-424/23

DYKA Plastics NV

Fluvius System Operator CV

(Request for a preliminary ruling from the Ondernemingsrechtbank Gent, afdeling Gent (Business Court, Ghent, Ghent Division, Belgium))

( Reference for a preliminary ruling – Public procurement – Directive 2014/24/EU – Article 42 – Technical specifications – Ways in which technical specifications may be formulated – Exhaustiveness of the list in Article 42(3) – Call for tenders in which works are required to be carried out using pipes made of clay or concrete – Exclusion of plastic pipes – Reference to types or to a specific production – Favouring or eliminating certain undertakings or certain products – Principles of equal treatment and transparency )

1.Fluvius System Operator CV (2) operates the municipal sewerage systems in the Flanders region (Belgium). In its works contracts for the construction or replacement of pipes, Fluvius requires by default that rainwater drainage pipes be made of concrete and that sewage drainage pipes be made of clay.

2.An undertaking engaged in the manufacture and distribution of plastic pipes brought an action before the referring court for an order requiring Fluvius to include, in general, plastic tubes in its contracts.

3.The referring court requests an interpretation of Article 42 of Directive 2014/24/EU, (3) a provision governing technical specifications in public contracts (in this case, works contracts).

4.The Court, which has previously interpreted the term ‘technical specifications’ in a number of judgments, (4) will need to develop its case-law in that respect in order to reply to the referring court.

5.Article 18 (‘Principles of procurement’) provides:

‘1. Contracting authorities shall treat economic operators equally and without discrimination and shall act in a transparent and proportionate manner. The design of the procurement shall not be made with the intention of excluding it from the scope of this Directive or of artificially narrowing competition. Competition shall be considered to be artificially narrowed where the design of the procurement is made with the intention of unduly favouring or disadvantaging certain economic operators. …’

6.Article 42 (‘Technical specifications’) reads:

‘1. The technical specifications as defined in point 1 of Annex VII shall be set out in the procurement documents. The technical specification shall lay down the characteristics required of a works, service or supply. …

3. Without prejudice to mandatory national technical rules, to the extent that they are compatible with Union law, the technical specifications shall be formulated in one of the following ways:

(a) in terms of performance or functional requirements, including environmental characteristics, provided that the parameters are sufficiently precise to allow tenderers to determine the subject-matter of the contract and to allow contracting authorities to award the contract;

(b) by reference to technical specifications and, in order of preference, to national standards transposing European standards, European Technical Assessments, common technical specifications, international standards, other technical reference systems established by the European standardisation bodies or – when any of those do not exist – national standards, national technical approvals or national technical specifications relating to the design, calculation and execution of the works and use of the supplies; each reference shall be accompanied by the words “or equivalent”;

(c) in terms of performance or functional requirements as referred to in point (a), with reference to the technical specifications referred to in point (b) as a means of presuming conformity with such performance or functional requirements;

(d) by reference to the technical specifications referred to in point (b) for certain characteristics, and by reference to the performance or functional requirements referred to in point (a) for other characteristics.

…’

7.Annex VII (‘Definition of certain technical specifications’) reads:

‘(1) “technical specification” means one of the following:

(a) in the case of public works contracts the totality of the technical prescriptions contained in particular in the procurement documents, defining the characteristics required of a material, product or supply, so that it fulfils the use for which it is intended by the contracting authority; those characteristics include levels of environmental and climate performance, design for all requirements (including accessibility for disabled persons) and conformity assessment, performance, safety or dimensions, including the procedures concerning quality assurance, terminology, symbols, testing and test methods, packaging, marking and labelling, user instructions and production processes and methods at any stage of the life cycle of the works; those characteristics also include rules relating to design and costing, the test, inspection and acceptance conditions for works and methods or techniques of construction and all other technical conditions which the contracting authority is in a position to prescribe, under general or specific regulations, in relation to the finished works and to the materials or parts which they involve;

…’

8.Recital 24 states:

‘Contracting entities that operate in the drinking water sector may also deal with other activities relating to water, such as projects in the field of hydraulic engineering, irrigation, land drainage or the disposal and treatment of sewage. In such case, contracting entities should be able to apply the procurement procedures provided for in this Directive in respect of all their activities relating to water, whichever part of the water cycle is concerned. …’

9.Article 10 (‘Water’) provides:

‘1. As far as water is concerned, this Directive shall apply to the following activities:

(a) the provision or operation of fixed networks intended to provide a service to the public in connection with the production, transport or distribution of drinking water;

(b) the supply of drinking water to such networks.

(a) hydraulic engineering projects, irrigation or land drainage, provided that the volume of water to be used for the supply of drinking water represents more than 20% of the total volume of water made available by such projects or irrigation or drainage installations,

(b) the disposal or treatment of sewage.

…’

10. Article 5(1) provides that a contracting authority may not design a public contract with the intention of excluding it from the scope of that Law or of artificially narrowing competition. Competition will be considered to be artificially narrowed where the design of the procurement is made with the intention of unduly favouring or disadvantaging certain economic operators.

11. Article 53(2), (3) and (4) essentially reproduces the wording of Article 42(2), (3) and (4) of Directive 2014/24.

II. Facts, dispute and questions referred for a preliminary ruling

12.Fluvius deals with the construction, operation and maintenance of municipal sewerage systems in the Flanders region.

13.In the tender documents for its public works contracts, Fluvius requires ‘by default’ that tenders be limited to pipes made of concrete (for the drainage of rainwater) or clay (for the drainage of sewage).

14.DYKA Plastics NV (‘DYKA’), a manufacturer and supplier of plastic pipes, argues that that requirement is discriminatory in that it prevents it from choosing to participate in calls for tender announced by Fluvius.

15.On a number of occasions, DYKA contacted Fluvius to complain about the unlawfulness of its public procurement policy:

– On 4 June 2020, it called on Fluvius to draw up its future calls for tender in such a way that it would be possible to offer plastic pipes in addition to clay and concrete pipes.

– On 7 October 2020, it asked Fluvius to specify the type of pipe which could be used in the contract entitled ‘Langeveldstraat Beringen’ (Langeveld Street, Beringen, Belgium) and whether plastic pipes were excluded for both the rainwater and the sewage drainage systems. If the answer was in the affirmative, it asked to be informed of the reasons for the exclusion.

16.On 15 October 2020, Fluvius replied that the tender could only include (porous) rainwater drainage pipes made of concrete and sewage pipes made of clay.

17.DYKA brought an action before the Ondernemingsrechtbank Gent, afdeling Gent (Business Court, Ghent, Ghent Division, Belgium), claiming that the use of technical specifications by Fluvius infringes the legislation on public procurement. The exclusion of plastic pipes from its calls for tender for works contracts, without stating any reasons, deprives DYKA of the possibility of being awarded any contracts, which clearly impedes competition. (6)

18.Fluvius, on the other hand, submits that its actions are lawful, because:

– Its contract documents do not stipulate a ‘single product’.

– There are a number of manufacturers and suppliers of clay and concrete pipes who are able to compete for the contract.

– The definition of the material that the sewage pipes must be made of comes within its discretionary powers.

– There are technical reasons justifying the choice of clay or concrete. Clay pipes have a lifespan of at least 100 years, whereas plastic pipes last for 50 years. Moreover, plastic pipes have a considerably higher proportion of defects and malfunctions than clay pipes, and their maintenance costs are much higher.

– From an environmental point of view, plastic pipes create difficulties which clay and concrete pipes do not. (7)

– It is reasonable, from a financial point of view and from the perspective of the contracting authority’s interests, to choose clay pipes rather than plastic pipes on a regular basis. However, plastic pipes are not completely excluded, since they must be used where, on account of a project’s technical features, the use of clay or concrete pipes is not recommended.

19.Against that background, the referring court referred the following questions to the Court of Justice for a preliminary ruling:

‘(1) Must Article 42(3) of Directive [2014/24] be interpreted as meaning that the list of ways in which the technical specifications must be formulated is of an exhaustive nature and that, a contracting authority consequently is obliged to formulate the technical specifications of its public contracts in one of the ways listed in that provision?

(2) Must Article 42(4) of Directive [2014/24] be interpreted as meaning that references to sewage pipes made of vitrified clay and concrete (depending on the specific type of sewage system) in the technical specifications of calls for tender are to be regarded as falling within one or more of the references listed in that provision, for example, as references to specific types, or to specific productions of pipes?

(3) Must Article 42(4) of Directive [2014/24] be interpreted as meaning that references in the technical specifications of calls for tender to a single product, for example, to sewage pipes made of vitrified clay and concrete (depending on the specific type of sewage system) as constituting specific technical solutions, already produce the effect required by that provision (namely “favouring or eliminating certain undertakings or certain products”) since they have the effect of excluding a priori and thus disadvantaging, undertakings which offer alternative solutions to the specified product, despite the fact that different undertakings in competition with each other are able to offer the prescribed specified product, or is it necessary that there be no competition whatsoever with regard to the product in question, for example, sewage pipes made of vitrified clay and concrete (depending on the specific type of sewage system) and that the effect referred to can therefore be said to exist only if the product in question is characteristic of one particular undertaking which alone offers it on the market?

(4) Must Article 42(2) of Directive [2014/24] be interpreted as meaning that an established infringement of Article 42(3) of Directive [2014/24] and/or of Article 42(4) of Directive [2014/24], by virtue of the unlawful use of references in the technical specifications of calls for tender, for example, to sewage pipes made of vitrified clay and concrete (depending on the specific type of sewage system), also at the outset implies an infringement of Article 42(2) of Directive [2014/24], as well as of the related Article 18(1) of Directive [2014/24?]’

III. Procedure before the Court

20.The request for a preliminary ruling was received at the Registry of the Court on 11 July 2023.

21.Written observations were lodged by DYKA, Fluvius, the Austrian and Czech Governments, and the European Commission.

22.DYKA, Fluvius and the Commission participated in the hearing held on 30 May 2024.

23.Although only the Commission referred to this question in the written part of the procedure, it is necessary to consider whether works contracts for the construction of public sewerage and rainwater drainage systems fall within the scope of Directive 2014/24 or Directive 2014/25.

24.The Commission differentiates between contracts under which Fluvius acts as the operator of the electricity and gas distribution networks (which are governed by Directive 2014/25) and contracts for the installation of sewerage systems (which are governed by Directive 2014/24).

25.However, I believe that that assertion requires verification by the referring court in order to confirm that Fluvius, as a contracting authority, does not carry on any of the activities referred to in Article 10(1) of Directive 2014/25 (operation of fixed networks intended to provide a service to the public in connection with the production, transport or distribution of drinking water, and the supply of drinking water to such networks).

26.If Fluvius were also involved in that part of the ‘water cycle’, the contracts at issue, which include works related to the disposal of sewage, would have to comply with Directive 2014/25, Article 10(2)(b) of which refers expressly to contracts of that kind.

27.Subject to the referring court’s findings, although rules governing technical specifications are substantially the same in Directive 2014/24 (Article 42) and in Directive 2014/25 (Article 60), I shall focus on the interpretation of the former.

28.Contracting authorities must define in the contract documents they publish the characteristics of the works, services and supplies which they propose to obtain by way of public procurement. Those characteristics include the technical specifications of the products or services concerned.

29.A biased description of those technical specifications may, at the very least, amount to a significant ‘barrier to entry’ for certain tenderers and, in extreme cases, predetermine (including fraudulently) the final choice of the successful tenderer if characteristics of products or services are stipulated which that tenderer alone is in a position to supply.

30.The concern to avoid irregular practices and the aim of ‘allow[ing] public procurement to be open to competition’ led the EU legislature to lay down rules in this area.

31.The Court has held that ‘the Union legislation relating to technical specifications allows broad discretion for the contracting authority in the formulation of the technical specifications of a procurement contract.’ ‘That margin of appreciation is justified by the fact that the contracting authorities are better placed to know [their needs] and to determine the requirements necessary to achieve the desired results.’

32.In principle, therefore, the contracting authority’s margin of discretion when it comes to the inclusion of technical specifications in a contract enables it to choose the products and materials to be used to carry out the planned work.

33.However, the contracting authority’s freedom of choice will be affected, to a greater or lesser extent, depending on the subject-matter of the contract and the aim that it pursues:

– Where elements linked to the performance or to the function (functional requirements) of the components of works are involved, the margin of discretion is reduced. Functional requirements may extend to ‘environmental characteristics’. It is consistent with the aim of Directive 2014/24 that, in those circumstances, tenders should be open to the highest number of technical alternatives suitable for carrying out the desired function.

– On the other hand, in the case of activities in which other, not strictly objective, factors are paramount (for example, aesthetic factors or factors relating to suitability to the environment), the margin of discretion will be broader.

34.There are no aesthetic considerations in the main proceedings and the contracting authority’s decisions in relation to the permitted materials could be based, primarily, on performance criteria or on objective factors of a functional nature. However, it does not appear that those criteria and factors were set out in sufficient detail in the procurement documents, a matter which it falls to the referring court to examine.

35.In view of their importance, the technical specifications must, like the subject matter and the award criteria for the contract, be clearly determined from the beginning of the award procedure, that is to say, in the contract notice or in the tender specifications. That is the only way in which tenderers can understand their exact significance and interpret them in the same way.

36.The technical specifications to which Article 42(1) of Directive 2014/24 refers are those ‘defined’ in point 1 of Annex VII. Point 1(a) of that annex sets out the definition of ‘technical specification’ in works contracts.

37.In accordance with that definition, ‘technical specification’ means ‘the totality of the technical prescriptions contained in particular in the procurement documents, defining the characteristics required of a material, product or supply, so that it fulfils the use for which it is intended by the contracting authority’.

38.The referring court asks whether ‘the list of ways in which the technical specifications must be formulated’, set out in Article 42(3) of Directive 2014/24, is exhaustive.

39.The underlying premiss of the question is that the requirement that pipes be made of concrete or clay is, itself, a technical specification. The referring court, the parties to the proceedings, the intervening governments and the Commission accept that premiss, about which the referring court has raised no doubts.

40.However, at the hearing, a discussion arose in connection with that premiss, which was limited to the interpretation of point 1(a) of Annex VII to Directive 2014/24. It can be inferred from reading that point that only prescriptions defining the characteristics required of a material, product or supply may be construed as technical specifications, but not the requirement that works be carried out using a specified material.

41.In my view, a nominalist position should not be taken on that point. In the main proceedings, even with all the uncertainties resulting from omissions in the order for reference, the requirement that the pipes be made of concrete or clay refers to both a product (the pipes) and to one of its essential characteristics (that the material of which the pipes are made must be concrete or clay).

42.Understood in this way, I believe that it is possible to accept the premiss on which the reference for a preliminary ruling is based. Otherwise, the questions, as worded, would be hypothetical or superfluous.

43.The ‘ways’ of expressing the technical specifications, pursuant to Article 42(3) of Directive 2014/24, are set out in Article 42(3)(a), (b), (c) and (d). The Court has previously held that ‘the wording of Article 42(3) of Directive 2014/24 does not establish a hierarchy among the methods of formulation of technical specifications and does not prioritise either of those methods.’

44.The contracting authority must therefore use one or more of those methods. The phrase ‘shall be formulated in one of the following ways’ indicates that it is an exhaustive list. The legislature could have used non-restrictive terms (using adverbs like ‘principally’ or ‘in particular’) to allow additional methods but it opted for a prescriptive and exhaustive list.

45.The above considerations are sufficient to answer Question 1, as it is worded. The other usual criteria for interpretation (context and purpose of the provision) do not lend support to a different approach.

46.However, the observations of the parties to the dispute focus on a different issue from that raised, strictly speaking, in Question 1. That issue requires instead a determination of whether the obligatory use of concrete or clay pipes is covered by any of the methods in the exhaustive list set out in Article 42(3) of Directive 2014/24. DYKA argues that it is not.

47.If the Court agrees to participate in that debate, the first difficulty concerning its resolution is, as I have pointed out, the fact that the referring court has not set out in detail the wording of the tender specifications in relation to the technical specification at issue.

48.A reading of the order for reference does not reveal whether, in addition to the reference to concrete or clay pipes, the tender specifications contain (as would be logical) other stipulations, such as, for example, compliance with a particular rule or standard.

49.Fluvius rectified that omission at the hearing, at the request of the Court. Fluvius stated that its tender specifications not only include a reference to concrete or clay but also to other features of the pipes, as well as references to Belgian technical standards on pipe systems.

50.On the basis of that assertion (which the referring court must also verify), it is possible to address the question of whether the technical specification at issue in the dispute falls under one or more of the points of Article 42(3) of Directive 2014/24.

51.The contract specifications at issue will be covered by this point if they impose certain performance or functional requirements on the pipes. That would be the case if they were to include stipulations relating to, for example, the pipes’ rigidity, ability to withstand temperature changes, stability, impermeability, environmental characteristics or other physical or mechanical properties.

52.Fluvius claims that the technical specification at issue is based on requirements relating to the lifespan of the material used and its maintenance costs, and environmental requirements (recyclability, waste production and the incorporation of waste into the subsoil). Those are, therefore, performance or functional requirements.

53.As I pointed out above, the Court has not been provided with sufficient information about the wording of the tender specifications. The referring court merely states that Fluvius did not set out in the specifications any performance or functional requirements relating to the pipes that allow for other technical solutions.

54.If the referring court’s assessment of that matter were to be accepted, the contract documents would not include sufficiently detailed functional requirements and therefore Article 42(3)(a) of Directive 2014/24 would not be applicable. That provision provides that the parameters (of technical specifications formulated in terms of performance or functional requirements) must be sufficiently precise to allow tenderers to determine the subject-matter of the contract.

55.Fluvius and the Commission argue that the specification at issue falls under Article 42(3)(b) of Directive 2014/24. DYKA argues that it does not.

56.Fluvius and the Commission submit that point (b) differentiates between references to ‘technical specifications’, on the one hand, and ‘standards’, on the other. As regards the former, under Annex VII, point 1, the mere identification of the required characteristics of a material or a product can be accepted as a technical specification.

57.There was an extensive debate at the hearing about the interpretation of the first part of Article 42(3)(b) of Directive 2014/24. Its wording could be described as tautologous in that it provides that ‘the technical specifications shall be formulated … by reference to technical specifications …’. Two positions are possible in that respect:

– The technical specifications to which Article 42(3)(b) of Directive 2014/24 refers encompass not only those described in the (national, European or international) ‘standards’ or ‘reference systems’ mentioned in that point but also other requirements that are out with such standards and systems but which specify ‘the characteristics required’ of a material or a product.

– Conversely, the only technical specifications to which Article 42(3)(b) of Directive 2014/24 refers are those which are standardised.

that is, which refer to (national, European or international) ‘standards’ or ‘reference systems’. That follows from paragraph 87 of the judgment in <i>Klaipėdos</i>.

58.In truth, that debate loses some of its relevance (or retains that relevance in purely abstract or academic terms) if it is accepted, as Fluvius maintained at the hearing, that the contract documents drawn up by it included explicit references to Belgian technical standards. If that is the case, I believe that those documents would set out the technical specifications of the works contract using the <i>formulation</i> in Article 42(3)(b) of Directive 2014/24.

59.In any event, not shying away from an abstract debate, I believe that the first of the two opposing positions better reflects the provision (although there are sound arguments in favour of both). Two reasons lead me to propose that approach.

60.First, the restriction of point (b) to <i>standardised</i> technical specifications would amount to excluding <i>non-standardised</i> specifications, that is, all the other technical requirements that a contracting authority may include in its contractual documents without referring to predetermined technical standards.

61.As the Commission stated at the hearing, nothing precludes works contracts from including technical stipulations which, while complying with the definition in point 1(a) of Annex VII to Directive 2014/24, are not expressed by reference to technical standards or in terms of performance or functional requirements; in fact, this is commonplace. Adopting the second position set out would mean that such stipulations could not be categorised under any of the points of Article 42(3) of Directive 2014/24.

62.Second, Annex VII to Directive 2014/24 defines the meaning of ‘technical specification’, to which Article 42(1) of the directive refers. The formulations (or ‘ways’) in which those specifications must be expressed are specified in Article 42(3) but the definition itself, as regards works contracts, is set out in point 1(a) of Annex VII.

63.From that perspective, a prescription ‘… defining the characteristics required of a material [or a], product’, as stated in point 1(a) of Annex VII to Directive 2014/24, can be categorised as a technical specification and, therefore, fall under the first part of Article 42(3)(b) of the directive, even if, I repeat, it does not refer to any technical standard.

3. <i><b>Interim conclusion</b></i>

64. In short:

– The answer to Question 1 is that the list of ways in which technical specifications are to be formulated, laid down in Article 42(3) of Directive 2014/24, is exhaustive.

– For the purposes of replying to that question, it is unnecessary to determine which point of that provision covers the technical specification at issue, a matter which will depend on the contents of the contract documents.

65.Questions 2 and 3, which may be examined together, concern the interpretation of Article 42(4) of Directive 2014/24.

66.By those questions, the referring court asks whether the references to clay and concrete pipes:

– ‘[Fall] within one or more of the references listed in that provision, for example, as references to specific types, or to specific productions of pipes’.

– ‘Already produce the effect … [of] “favouring or eliminating certain undertakings or certain products”’, excluding a priori undertakings which offer alternative solutions, or, on the other hand, ‘the effect referred to can … be said to exist only if the product in question is characteristic of one particular undertaking which alone offers it on the market’.

67.Article 42(4) of Directive 2014/24 prohibits the technical specifications of a contract from including certain <i>references</i> which are considered, in principle, directly or indirectly to prejudice the opening up of public procurement to competition. The prohibition applies ‘unless justified by the subject-matter of the contract’.

68.Those references are also permitted, on an exceptional basis, ‘where a sufficiently precise and intelligible description of the subject-matter of the contract pursuant to paragraph 3 is not possible.’

69.The parties and those intervening in the reference have divided views on these two questions:

– DYKA submits that pipes made of clay or concrete constitute both a ‘type’ (as a particular category of the pipes used to build sewers) and a ‘specific production’ (since they must be manufactured using a specific industrial production process for each category).

– Fluvius maintains that the prohibition applies only where the contract documents stipulate exclusivity or a <i>single</i> product, thereby favouring the undertaking which produces that product. On the other hand, it is not applicable where the product required is manufactured by a number of undertakings.

– In the Austrian Government’s submission, the terms ‘concrete’ and ‘clay’ do not describe a specific product but rather materials whose production processes and characteristics may take various forms.

– The Czech Government argues that the reference is not intended to favour or eliminate certain undertakings or certain products.

– The Commission submits that agreement that the reference to the <i>material</i> used to make the pipes is a technical specification would amount to acceptance of a broad interpretation. In the absence of a legislative definition, the Commission examines the ordinary meaning of the terms ‘type’ and ‘specific production’ and concludes that it is not covered by either of them.

70.I shall deal with these questions by analysing the scope of the prohibition and the permitted exceptions before going on to apply that analysis to the main proceedings.

71.As I have already stated, Article 42(4) of Directive 2014/24 prohibits the inclusion of certain <i>references</i> in the technical specifications of a contract. In so far as is important for these proceedings, the references in question are those relating to ‘types or a specific origin or production with the effect of favouring or eliminating certain undertakings or certain products.’

72.In my view, the reference to clay and concrete as mandatory materials, in accordance with the contract documents, denotes a ‘type’ of pipe or a ‘specific production’. As DYKA asserts, clay and concrete are not natural materials (like wood) but rather materials ‘produced’ as a result of a specific artificial manufacturing process. The choice of those materials logically benefits producers and suppliers of clay and concrete pipes and has the (unavoidable) <i>effect</i> of eliminating anyone offering pipes made of plastic or any other material.

73.Contrary to the argument put forward by Fluvius, I believe that the prohibition applies not only where the specifications lead to the selection of a <i>single</i> manufacturer but also where they restrict the class of candidates to <i>several</i> manufacturers (in other words, all manufacturers who make concrete or clay pipes) and eliminate those who make plastic pipes.

74.Thus, the referring court could take the view that, in objective terms, the reference in the contract documents to sewage pipes made of concrete or clay falls within the scope of the prohibition. It remains to be seen whether that reference is nevertheless justified.

(a) <i><b>Justification based on the </b><b>subject-matter</b><b> of the contract</b></i>

75.Under Article 42(4) of Directive 2014/24, the prohibition at issue may be overcome where ‘justified by the subject-matter of the contract’.

76.Admittedly, in certain circumstances, the subject-matter of the contract will inevitably predetermine the selection of one of the components of the works while simultaneously excluding others.

77.If a contracting authority wishes to rely on that provision, it must explain why the subject-matter of the contract <i>justifies</i> the presence of a technical specification which, in principle, does not comply with Article 42(4) of Directive 2014/24.

78.I believe that that explanation must appear in the procurement documents. Those are the documents in which the contracting authority must inform (future tenderers) of the reasons why the subject-matter of the contract calls for that specification rather than any other. That is the only way in which interested parties can decide whether they meet the specifications or whether to challenge them.

(b) <i><b>Reference permitted on an exceptional basis on the grounds that it is impossible to provide a detailed description of the </b><b>subject-matter</b><b> of the contract</b></i>

79.Article 42(4) of Directive 2014/24 provides that one of the prohibited references is to be permitted, on an exceptional basis, ‘where a sufficiently precise and intelligible description of the subject-matter of the contract pursuant to paragraph 3 is not possible.’

80.It is for the referring court to determine whether, in the light of the subject-matter of the contract, the contracting authority stipulated a permissible level of requirements with regard to the products or the materials used to manufacture those products. The contracting authority is free to set that level of requirements but must justify, in a precise and intelligible manner, why its decision is based on the subject-matter of the contract.

81.Again, the lack (in the order for reference) of information about the detailed wording of the tender specifications prevents a determination of whether or not the specifications included a precise and intelligible description. The referring court alone is in a position to determine this and to decide whether or not it was possible for the contracting authority to include it in the contract documents.

(c) <i><b>The words ‘or equivalent’</b></i>

82.Article 42 of Directive 2014/24 provides in two of its paragraphs that references to technical specifications must be accompanied by the ‘words “or equivalent”’: those paragraphs are 3(b), <i>in fine</i>, and 4, <i>in fine</i>.

83.The aim of that twofold provision is to afford economic operators equal access to the procurement procedure The contents of technical specifications must not involve ‘[the creation of] unjustified obstacles to the opening up of public procurement to competition.’

84.Specifically because it is liable to favour certain producers and eliminate others, the exception in Article 42(4) of Directive 2014/24 is mitigated by the requirement that the reference be accompanied by the words ‘or equivalent’. The provision lays down two conditions: a) the reference must be necessary to provide a sufficiently precise and intelligible description of the subject-matter of the contract; and b) it must be accompanied by the words ‘or equivalent’.

85.The EU legislature is concerned that technical specifications may ‘artificially [narrow] down competition through requirements that favour a specific economic operator by mirroring key characteristics of the supplies, services or works habitually offered by that economic operator’.

86.That precautionary measure complies with the principle laid down in the second subparagraph of Article 18(1) of Directive 2014/24: ‘… Competition shall be considered to be artificially narrowed where the design of the procurement is made with the intention of unduly favouring or disadvantaging certain economic operators.’

87.The requirement that, in the abovementioned situations, contract documents must include the words ‘or equivalent’ is, therefore, undeniably aimed at facilitating the widest opening up of public procurement to competition. Manufacturers and suppliers of materials or products equivalent to those designated by the contracting authority may rely on those words in order to participate, as tenderers, in the procedure for selection of a contractor.

88.The Court has emphasised the importance of those words: ‘the failure to add the words “or equivalent” after the designation, in the contract documents, of a particular product, may not only deter economic operators using systems similar to that product from taking part in the procurement procedure, but may also impede the flow of imports in intra-Union trade, by reserving the contract exclusively to suppliers intending to use the product specifically indicated’. Omission of the equivalence clause may also infringe provisions of primary law, in the case of contracts which do not exceed the threshold laid down in the procurement directives.

89.Those words also benefit the contracting authority, in so far as a tenderer may offer it equally valid technical alternatives which may not have occurred to that contracting authority.

3. <i><b>Application of those criteria to the main proceedings</b></i>

90.Proceeding on the basis which I have just set out above, it is possible to reply to the referring court that, in accordance with Article 42(4) of Directive 2014/24, the requirement that pipes for the drainage of rainwater and sewage must be made of concrete and clay, respectively, constitutes a <i>reference</i> to specific types or specific forms of production.

91. That reply must be supplemented by adding that that <i>reference</i>:

– Creates, by itself, the effect of favouring or eliminating certain undertakings or certain products, without it being necessary for a single manufacturer of the product to exist on the market.

– May be permitted if it is justified by the subject-matter of the contract; the contracting authority must provide that justification in the contract documents.

–May also be permitted if it was not possible to provide a sufficiently precise and intelligible description of the subject-matter of the contract, pursuant to Article 42(3) of Directive 2014/24.

–Must be accompanied by the words ‘or equivalent’, unless the subject-matter of the contract is unavoidably dependent on the use of a component of the works which it is not objectively possible to replace with another equivalent component.

92.In particular, given that part of the dispute has focused on the clause ‘or equivalent’, I agree with DYKA that the limitation of technical solutions to the list defined by Fluvius undermines competition and innovation, the favouring of which is referred to in recital 74 of Directive 2014/24. New technical proposals of materials which equal or exceed the properties of clay or concrete pipes would themselves be suitable for optimising the outcome of the public procurement procedure.

93.I believe that the contracting authority is not entitled a priori to rule out the existence of pipes made from products equivalent to clay and concrete. As the Commission has pointed out, the referring court does not take a view in the order for reference on whether some pipes (those made of plastic) are comparable with others (those made of concrete and clay).

94.I believe, therefore, like DYKA and the Commission, that economic operators must be given the opportunity to prove that the performance of their pipes is equal to or better than pipes made of concrete or clay, especially where the former comply with European standards relating to their technical criteria.

95.Where appropriate, the contracting authority must decide a posteriori, giving reasons, why the product offered as an alternative does or does not satisfy the performance level required for a specific contract.

96.The final question seeks to clarify whether the infringement of Article 42(3) and (4) (or either of them) of Directive 2014/24 also entails the infringement of Article 42(2) and Article 18(1) of that directive.

97.The Court has held that Article 42(2) of Directive 2014/24 ‘implements the principle of equality of treatment set out in the first subparagraph of Article 18(1) of that directive for the purpose of the formulation of technical specifications. According to this provision, contracting authorities are to treat economic operators equally and without discrimination and are to act in a transparent and proportionate manner.’

98.I believe, therefore, like DYKA and the Commission, that the infringement of Article 42(3) or (4) of Directive 2014/24 also entails the infringement of Article 42(2). Further, since Article 42(2), in turn, particularises Article 18(1) of the same directive, an infringement of the latter provision also occurs.

99.In the light of the foregoing considerations, I propose that the Court of Justice reply to the Ondernemingsrechtbank Gent, afdeling Gent (Business Court, Ghent, Ghent Division, Belgium) in the following terms:

Article 42(2), (3) and (4) of Directive 2014/24/EU of the European Parliament and of the Council of 26 February 2014 on public procurement and repealing Directive 2004/18/EC

must be interpreted as meaning that:

(1) The list of ways in which technical specifications must be formulated, laid down in Article 42(3) of Directive 2014/24, is mandatory and exhaustive.

(2) In accordance with Article 42(4) of Directive 2014/24, the requirement that pipes for the drainage of rainwater and sewage must be made of concrete and clay, respectively, constitutes a reference to specific types or specific forms of production. That reference:

–Creates, by itself, the effect of favouring or eliminating certain undertakings or certain products, without it being necessary for a single manufacturer of the product to exist on the market.

–May be permitted if it is justified by the subject-matter of the contract; the contracting authority must provide that justification in the contract documents.

–May also be permitted if it was not possible to provide a sufficiently precise and intelligible description of the subject-matter of the contract, pursuant to Article 42(3) of Directive 2014/24.

–Must be accompanied by the words ‘or equivalent’, unless the subject-matter of the contract is unavoidably dependent on the use of a component of the works which it is not objectively possible to replace with another equivalent component.

(3) The infringement of Article 42(3) or (4) of Directive 2014/24 also entails the infringement of Article 42(2) and Article 18(1) of that directive.

* * *

1 Original language: Spanish.

2 ‘Fluvius’. According to the order for reference, Fluvius is a company which operates under private law and has a number of public law entities as shareholders.

3 Directive 2014/24/EU of the European Parliament and of the Council of 26 February 2014 on public procurement and repealing Directive 2004/18/EC (OJ 2014 L 94, p. 65). Article 42 of that directive is substantially the same as Article 60 of Directive 2014/25/EU of the European Parliament and of the Council of 26 February 2014 on procurement by entities operating in the water, energy, transport and postal services sectors and repealing Directive 2004/17/EC (OJ 2014 L 94, p. 243).

4 Inter alia, judgments of 22 September 1988, Commission v Ireland (45/87, EU:C:1988:435); of 24 January 1995, Commission v Netherlands (C‑359/93, EU:C:1995:14); of 10 May 2012, Commission v Netherlands (C‑368/10, EU:C:2012:284); of 12 July 2018, VAR and ATM (C‑14/17, EU:C:2018:568); of 25 October 2018, Roche Lietuva (C‑413/17, EU:C:2018:865; ‘judgment in Roche Lietuva’); and of 7 September 2021, Klaipėdos regiono atliekų tvarkymo centras (C‑927/19, EU:C:2021:700; ‘judgment in Klaipėdos’). A number of those judgments refer to public procurement directives adopted prior to 2014.

5 Moniteur belge of 14 July 2016, p. 44167.

6 In its application, DYKA requests: (a) a declaration that Fluvius’ public procurement policy in respect of sewerage works infringes public procurement legislation; (b) an order requiring Fluvius to amend its contract documents, in particular the technical specifications; and (c) an order that Fluvius pay damages.

7 Fluvius states (paragraph 4 of its written observations) that rigid pipes are infinitely recyclable; plastic pipes are not. The latter have to be incinerated, which is not environmentally friendly, and are likely to release microplastics into the subsoil because they are subject to abrasion (a form of wear or erosion where microplastics become detached due to water friction). If it is necessary to replace them every 50 years, there is a risk that microplastics will remain in the ground (the pipes become brittle and deposit a residual fraction). That problem does not arise with rigid pipes made from natural materials, which are not harmful to the environment.

8 Paragraph 12 of its written observations. The other parties and the referring court focused attention on the interpretation of Article 42 of Directive 2014/24.

9 Among other factors, the referring court must determine whether, by reason of their amount, the contracts exceed the minimum threshold to which the relevant articles of both directives refer. At the hearing, Fluvius asserted that it does not operate in connection with the supply of drinking water.

10 In the judgment of 22 September 1988, Commission v Ireland (45/87, EU:C:1988:435), the Court dealt with a dispute concerning the inclusion in the specifications of a contract for the supply of water, of a technical specification relating to pipes. The dispute in that case concerned whether Council Directive 71/305/EEC of 26 July 1971 concerning the coordination of procedures for the award of public works contracts (OJ, English Special Edition 1971 (II), p. 682) was applicable. The Court held that it was not because ‘the actual wording of Article 3(5) is wholly unambiguous, in so far as it excludes public works contracts [awarded by the production, distribution, transmission or transportation services for water] from the scope of the directive’ (paragraph 10).

11 See recital 24 of Directive 2014/25, transcribed above.

12 I refer to my Opinion in VAR (C‑14/17, EU:C:2018:135), points 1 to 3.

13 Judgment in Roche Lietuva, paragraphs 29 and 30.

14 The order for reference does not provide sufficient information to make it possible to ascertain the contents of the contract documents. That omission makes it difficult for the Court to provide an answer.

15 See judgment of 5 April 2017, Borta (C‑298/15, EU:C:2017:266, paragraph 69), citing the judgments of 10 May 2012, Commission v Netherlands (C‑368/10, EU:C:2012:284), paragraphs 56, 88 and 109; of 6 November 2014, Cartiera dell’Adda (C‑42/13, EU:C:2014:2345, paragraph 44); and of 14 July 2016, TNS Dimarso (C‑6/15, EU:C:2016:555, paragraph 23).

16 As transcribed in point 6 of this Opinion.

17 Judgment in Roche Lietuva, paragraph 28.

18 The language versions I have consulted all use mandatory terms.

19 Having clarified that point, it should be stressed that Article 42(3) of Directive 2014/24 lists the ways of formulating technical specifications ‘without prejudice to mandatory national technical rules, to the extent that they are compatible with Union law’.

20 Paragraph 9 of its written observations.

21 Paragraph 4 of its written observations.

22 Paragraph 16 of the order for reference. The order appears to suggest that Fluvius raised its arguments concerning performance and functional requirements before the referring court but not during the procurement procedure.

23 Paragraphs 10 to 12 of its written observations.

24 Paragraphs 19 to 22 and 41 of its written observations.

25 The Court held in paragraph 87 of the judgment in Klaipėdos that, in accordance with Article 42(3) of Directive 2014/24, technical specifications are formulated in terms of performance or functional requirements, in particular those of an environmental nature, or by reference to technical standards. However, the Spanish-language version of the judgment uses the term ‘technical specifications’ where the other language versions use ‘technical standards’.

26 Paragraph 87 of the judgment in Klaipėdos could be regarded as an obiter dictum, which summarises the provision but does not give an exhaustive definition. This is what the Commission argued at the hearing.

27 References ‘to a specific make or source, or a particular process which characterises the products or services provided by a specific economic operator, or to trade marks, patents, types or a specific origin or production’.

28 In view of the exceptional nature of that option, it must be interpreted narrowly. That is pointed out by the judgments of 12 July 2018, VAR and ATM (C‑14/17, EU:C:2018:568, paragraph 26), and in Roche Lietuva, paragraph 38.

29

The language versions I have looked at differ with regard to the (proposed) aim or (inherent) effect. Whereas the Spanish-language version refers to ‘aim’ (finalidad), the other language versions place the emphasis on ‘effect’. Thus the German-language version reads ‘Marken, Patente, Typen, einen bestimmten Ursprung oder eine bestimmte Produktion verwiesen werden, wenn dadurch bestimmte Unternehmen oder bestimmte Waren begünstigt oder ausgeschlossen werden’; the English-language version, ‘trade marks, patents, types or a specific origin or production with the effect of favouring or eliminating certain undertakings or certain products’; the French-language version, ‘une marque, à un brevet, à un type, à une origine ou à une production déterminée qui auraient pour effet de favoriser ou d’éliminer certaines entreprises ou certains produits’; the Italian-language version, ‘un marchio, a un brevetto o a un tipo, a un’origine o a una produzione specifica che avrebbero come effetto di favorire o eliminare talune imprese o taluni prodotti’; the Portuguese-language version, ‘marcas comerciais, patentes, tipos, origens ou modos de produção determinados que tenham por efeito favorecer ou eliminar determinadas empresas ou produtos’; and the Romanian-language version, ‘o marcă, la un brevet, la un tip, la o origine sau la o producție specifică, care ar avea ca efect favorizarea sau eliminarea anumitor întreprinderi sau produse’. In the light of that diversity, I am inclined to rule out the requirement of an intentional element, so that it will be sufficient if the effect is created of favouring or eliminating certain undertakings or certain products. That is the interpretation which best facilitates the attainment of the objective of opening up contracts up to competition.

30At the hearing, the example was given of a works contract for the restoration of a historic building, in which the specifications require the use of the same type of stone (from a specific source) as that used to construct the building at the relevant time. In that situation, the subject-matter of the contract justifies, per se, the reference to a specific product (stone from a particular quarry) to the exclusion of any other.

31The Court has held that, in certain situations, the contracting authority is subject to the obligation to state reasons for its decisions so that an interested party is able ‘to defend its rights and decide in full knowledge of the circumstances whether it is worthwhile to bring an action against those decisions’ and ‘to enable the courts to review the legality of those decisions’. See judgments in Klaipėdos, paragraph 120, citing earlier case-law, and of 21 December 2023, Infraestruturas de Portugal and Futrifer Indústrias Ferroviárias (C‑66/22, EU:C:2023:1016, paragraph 87).

32Article 42(2) of Directive 2014/24 and judgment in Roche Lietuva, paragraph 32.

33See, in relation to Article 60(4) of Directive 2014/25, judgment of 27 October 2022, Iveco Orecchia (C‑68/21 and C‑84/21, EU:C:2022:835, paragraph 87): ‘[that provision] allows, on an exceptional basis, technical specifications to refer to “trade marks, patents, types or a specific origin or production”, if that is necessary to provide a sufficiently precise and intelligible description of the subject-matter of the contract, and provided that such a reference is accompanied by the words “or equivalent”’.

34Recital 74 of Directive 2014/24. The enacting terms go further than the concern expressed by the recital since, as a rule, the elimination of ‘certain undertakings or certain products’ is also prohibited.

35Judgment in Roche Lietuva, paragraph 39. The Court confirmed in that judgment its ruling in the judgment of 24 January 1995, Commission v Netherlands (C‑359/93, EU:C:1995:14, paragraphs 27 and 28). In the latter judgment, the Court criticised the failure to include the words ‘or equivalent’ after the term UNIX, which was the only IT system permitted in the tender specifications.

36See, in that connection, the operative part of the order of 3 December 2001 in Vestergaard (C‑59/00, EU:C:2001:654): ‘Article 30 of the EC Treaty … precludes a contracting authority from including in the contract documents for a public works contract which does not exceed the threshold laid down in Council Directive 93/37/EEC of 14 June 1993 concerning the coordination of procedures for the award of public works contracts [(OJ 1993 L 199, p. 54)] a clause requiring the use in carrying out the contract of a product of a specified make, where that clause does not include the words “or equivalent”’. Also to that effect, see judgment of 22 September 1988, Commission v Ireland (45/87, EU:C:1988:435), on the requirement that pipes must comply with a specific Irish standard, without adding the words ‘or equivalent’.

37Paragraphs 48 to 51 of its written observations.

38Paragraph 13 of its written observations. The Commission observes that paragraph 7 of the order for reference merely sets out the position of Fluvius on that matter.

39DYKA relies (paragraph 19 of and Annex 1 to its written observations) on European Standard EN 476:2022 on general requirements for components used in drains and sewers. That standard lays down the general requirements to be respected in product standards for components such as pipes or fittings intended for use in drains and sewers. It applies to the conveyance of domestic wastewater, rainwater and surface water, and other wastewater acceptable for discharge into the system.

40Judgment of 25 October 2018, Roche Lietuva, paragraph 33.

41In its written observations (paragraph 28), Fluvius argues that, since it did not breach Article 42(3) and (4) of Directive 2014/24, the question is not relevant to the outcome of the dispute and therefore prefers not to examine it.