The following legislation regulates the procurement of government contracts in the Netherlands:
This legislation is based on EU directives.
The procurement regulation applies to the following contracting authorities:
Whether or not entities in the last category are contracting authorities depends on the following:
Private companies can also be subject to procurement regulations if they choose to purchase works, services or supplies from interested economic operators and follow a tender procedure. However, private companies are free to explicitly state that procurement law and the basic principles of public procurement (non-discrimination, equal treatment, transparency and proportionality) are not applicable.
Healthcare insurers are not subject to procurement regulation, but are obliged to observe the principle of transparency insofar as it concerns their healthcare procurement. Offering healthcare insurance to consumers is not subject to the procurement regulation.
According to the Dutch State, housing associations are not "contracting authorities" under the Public Procurement Act 2012 so are not subject to procurement regulation. However, the European Commission has initiated infringement proceedings against the Dutch government, stating that housing associations should be considered contracting authorities and therefore be bound to tender procedures in accordance with the applicable procurement law regulations. The European Court of Justice is yet to issue its ruling on this issue.
If a contracting authority wants to purchase a work, service or supply from a market participant, the contract that is concluded between the contracting authority and the market participant is subject to procurement regulation.
Based on the Public Procurement Act 2012, this only applies to contracts that have a value above the European minimum value thresholds, which are as follows:
Under these thresholds, the Works Procurement Regulations 2016 (ARW 2016) and the Proportionality Guide are applicable.
The Proportionality Guide states the value at which the national procedure, in principle, has to be applied by the contracting authority. For example, for services and supplies by the State, a closed tender (one on one) is only suggested when the contract value is below EUR30,000, while a private tender with only three interested parties is suggested at a contract value between EUR30,000 and EUR100,000.
It is not mandatory to use the thresholds in the Proportionality Guide. The type of national procedure adopted also depends on the following aspects:
However, if the contracting authority chooses to apply a procedure other than suggested in the Guide, this must be explained, under the so-called comply or explain principle.
Finally, a contracting authority can be subject to its own purchasing policy.
Tender procedures in the Netherlands are open to any interested economic operator, no matter the jurisdiction. However, if the contract value is lower than the European threshold, a contracting authority is allowed to select a few economic operators, at its discretion. In that case, it is possible for only Dutch economic operators to be invited to participate in a tender. However, the contracting authority is obliged to base its choice of which economic operators to invite on objective criteria.
The key obligations for a contracting authority under the procurement legislation are based on the basic principles of non-discrimination, equal treatment, transparency and proportionality, which need to be taken into account during the preparation of the tender procedure and the performance of the tender (procedure).
On the basis of the principle of equal treatment, for example, the contracting authorities may not favour or exclude SMEs in tender procedures, nor raise difficulties for economic operators in submitting a tender, which would breach the principles of non-discrimination and proportionality.
On the basis of the principle of transparency, it is for the contracting authority to define, in the notice of invitation to tender, the subject matter of the award procedure and the conditions governing it. The contracting authority has to adhere strictly to the conditions it has laid down in that notice and which have prompted the tenderers to take part in the procedure and submit a particular tender. In certain circumstances, failure to do so may lead to intervention in the contract concluded and to the imposition of an order, as a breach of the principle of equal treatment. In addition, based on the principle of transparency, the interim adjustment or removal of a requirement is not allowed.
Economic operators are bound by the following key obligations during the tender process.
Prior to concluding a tender contract, the contracting authority must publish a variety of messages via the publication module of TenderNed (www.tenderned.nl). The contracting authority is obliged to use this publication module and the standard forms on TenderNed. Herein, the contracting authority can publish (pre)announcements, notifications of award decisions, rectifications and notifications of the outcome of the procedure to the European Commission. The contracting authority can also publish advertisements on other websites, provided that the advertisement was published on TenderNed first.
Even when the work, service or supply was not purchased via a European tender procedure, the contracting authority can still publish advertisements on TenderNed.
If the contracting authority fails to announce a tender when it is obliged to do so, this may lead to the cancellation or invalidation of the tender procedure, or even to the annulment of the concluded contract. A contract concluded under these circumstances is voidable.
Type of Information Disclosed in the Advertisement
The information that must be disclosed in the advertisement will be stipulated in the standard forms, and includes the following:
The advertisement is therefore an almost complete description of the tender procedure.
The contracting authority can perform a preliminary market consultation before it launches the contract award procedure. The intensity of the preliminary market consultations depends on the type of contract, with high-security and/or complex tenders requiring a more intensive approach. With more routine contracts, online market research can be enough.
The preliminary market consultations can help with the drawing up of contract specifications or in testing the feasibility and preconditions of the contract. Also, economic operators can give insight into possible solutions to a problem or the most suitable tender procedure.
The results of the preliminary market consultations must be made public. The advice received is used to draw up the contract specifications, the tender strategy and the choice of tender procedure. Economic operators cannot derive any rights from the information provided to them during the market consultation.
There are different procedures under Dutch public procurement legislation, some of which allow for negotiations between the economic operators and the contracting authority. In the case of negotiations, the contracting authority is always obliged to guarantee the main principles of equal treatment, non-discrimination, transparency and proportionality.
The open procedure and the restricted procedure are the two default procedures, whose use does not need to be justified by the authority. Whenever the authority decides to use any of the other procedures, it must justify this decision in the procurement documents.
Open Procedure
The open procedure starts with the publication of an advertisement inviting any interested economic operator to submit a tender. The economic operators need to submit their offers together with the information needed to assess the fulfilment of the selection criteria. The contracting authority will assess both the tenderer and the tender at the same time.
Restricted Procedure
The restricted procedure starts with the publication of an advertisement inviting any interested economic operator to submit a request to participate. In this phase, the economic operator must fulfil the eligibility requirements and selection criteria. They also need to declare that the exclusion grounds are not applicable to them.
After that, the contracting authority will select which economic operators shall submit a tender.
Negotiated Procedure with Prior Call for Competition
The negotiated procedure with prior call for competition can only be used in specific circumstances, as stated in the legislation. Economic operators will submit a request to participate at first. After that, the tender phase takes place and the selected economic operators may submit a tender, which is subject to negotiations with the contracting authority. After the negotiations, the economic operators must submit their final tender. Parties cannot negotiate about the minimum requirements and the award criteria.
Competitive Dialogue
The competitive dialogue offers scope for suitable economic operators to propose various solutions to meet the contracting authority's needs. During the dialogue, the contracting authority can work out the proposed solutions in more detail with these participants and ultimately determine which solutions best meet its needs. This happens mostly in two phases. At first, between three and five economic operators will be selected. In the next (dialogue) phase, the contracting authority can negotiate the best solution with the selected economic operators. Any aspect of the contract may be discussed during this phase. After choosing the winning tender, negotiations may follow with regard to the financial commitments or other conditions contained in the tender, with a view to finalising the terms of the public contract. Such negotiations must not alter the essential aspects of the tender or the requirements and rules indicated in the tender documents, and may not lead to any distortion of competition or to discrimination.
Innovation Partnership
The innovation partnership consists of three phases. An innovation partnership can be entered into with one or more economic operators. If the contracting authority concludes the innovation partnership with several companies, it can reduce the number of participants in each phase. The innovation partnership must be awarded on the basis of best value for money.
The first phase is the competition phase, in which the purpose for which the innovative solution is required is stated, alongside the minimum requirements that the innovative solution must meet. This description must make the contract sufficiently definable. The second phase includes negotiations, although there can be no negotiation with regard to the minimum requirements and the award criteria. The last phase is the research and development phase, in which the innovation partnership includes the realisation of the innovative solution, such as the development of a prototype, the production of a test series and the implementation of the pilot project. In this phase, according to intermediate targets, the number of partners may be reduced or the decision may be taken to terminate the innovation partnership. Reimbursement of the partners during the research and development phase takes place in appropriate instalments.
Competitive Procedure without Prior Call for Competition
This procedure can only be used in the following circumstances:
The contracting authority can negotiate with the economic operators concerned and draw up a report on the award of the contract. It has to announce the award decision and may then conclude the contract.
Under the Public Procurement Act 2012, the contracting authority is obliged to choose both the type of tender procedure and the number of economic operators that will be admitted to the tender on objective grounds. At the request of an economic operator, the contracting authority must be able to substantiate its choice in writing. The choice depends not only on the regulations, but also on the available budget and the purchasing needs of the contracting authority, with the principle being that the contracting authority chooses the most effective procedure that meets the purchasing needs of the organisation at the lowest cost. The contracting authority should keep the following matters in mind:
The Public Procurement Act 2012 states different timeframes for tender procedures. The timeframe for the tender procedure can be shortened if all the procurement documents are directly published at once and are made available electronically. This can save the contracting authority up to ten days.
Open Tender Procedure
When all of the procurement documents are directly published online, the economic operators have at least 45 days to submit their tenders. If the contracting authority does not publish all the documents at once (or not electronically), the time for economic operators to submit their tenders is extended by five days. When the contracting authority announces the tender between 52 days and 12 months ahead, the economic operators have 29 days to submit their tender. If submitting the tender can be done electronically, the time for submitting the tender can be shortened by five days (ie, 40 days without pre-announcement and 24 days with pre-announcement).
Restricted Tender Procedure and Negotiated Procedure with Prior Call for Competition
The phase up to submitting the request to participate will take at least 30 days. After the selection phase, the timeframes are the same as in the public tender procedure.
Competitive Dialogue and Innovation Partnership
The contracting authority must give economic operators 30 days to submit their request to participate. After the evaluation of the requests, no statutory time limits apply.
Pursuant to the Public Procurement Act 2012, the contracting authority can ask for the following eligibility requirements:
The Proportionality Guide states that a contracting authority shall only use eligibility requirements where such relate to the actual risks involved in the contract or to the desired competence(s). If the contracting authority chooses a multiple private tender procedure, it shall only request eligibility requirements when it does not yet know if the economic operators will comply with these requirements.
Besides the eligibility requirements, the contracting authority is obliged to use the European Single Procurement Document for the exclusion grounds. The contracting authority is free to add optional exclusion grounds, as stated in EU Directive 2014/24.
In a multiple private tender procedure, it is possible for a contracting authority to invite only a small number of qualified suppliers. This procedure can only be applied when the value of the contract is below the European threshold. The qualified economic operators must be chosen on objective grounds (see 2.4 Choice/Conditions of a Tender Procedure).
The contracting authority must invite a minimum of three economic operators and a maximum of five.
The contracting authority shall award the contract to the most economically advantageous tender. This will be determined by the contracting authority on the following criteria:
In principle, the contracting authority must use "best value for money" as a criterion. If it wishes to award the contract based on lowest cost or lowest price, this decision must be substantiated in the tender documents, under the comply or explain principle.
The assessment criteria on which the economic operators are selected and tenders are evaluated need to be communicated in the tender documents or the advertisement, together with the specifications, requirements and wishes. In a non-public procedure, these documents are usually called the selection and award guidelines, while in a public procedure they are usually called the descriptive document or specifications.
The contracting authority satisfies its obligation to state reasons when, in the first instance, it limits itself to informing the parties who have not been selected immediately of the rejection by means of a simple and unreasoned communication.
The contracting authority must provide a reasoned explanation of the rejection within 15 days to the party that has not been selected, if such is requested by that party. The minimum information that must be included in the explanation is not specified but could include an indication of the manner in which the applications have been assessed and the grounds on which the contracting authority has reached the conclusion that the economic operator must be excluded or rejected. If the rejection takes place on the basis of selection criteria, it follows from the principle of transparency that the characteristics and advantages of the selected economic operators should also be stated.
In most cases, the motivation is provided directly instead of waiting for the economic operator’s written request for explanation.
The Public Procurement Act 2012 requires a contracting authority to provide a sufficiently reasoned explanation of the reasons for its decision in the award decision. This offers rejected economic operators the opportunity to consider, within the standstill period, whether objecting to a rejection would be useful. Such explanation should be sent at the same time the award is announced.
The rejection must therefore include the relevant reasons for the decision and the standstill period for the final award decision. If the rejection does not meet either of these conditions, even after the standstill period, an economic operator can start preliminary proceedings to set aside the contract. The period only begins the day after the date on which the notification of the award decision was sent to the tenderers. It is not permitted to supplement the grounds for the decision after the announcement of the provisional award, so it is better to state the reasons broadly and to restart the standstill period when substantive additions are made to the grounds for the decision.
A notice of rejection should include the following details:
As stated in 3.2 Obligation to Notify Interested Parties Who Have Not Been Selected, a standstill period is mandatory and should last a minimum of 20 calendar days (the so-called Alcatel period). In deviation thereof, a standstill period is not required if:
In a multiple private tender procedure, the Proportionality Guide advises a standstill period of between seven and ten calendar days (see 2.8 Restriction of Participation in a Procurement Process).
The contracting authority appoints an evaluation committee to evaluate the tenders. In the Netherlands, there is no authority that reviews this awarding decision: it is up to the economic operators to see if the award decision is in line with the legislation and the tender documents. If that is not the case, the economic operators can appeal the award decision in preliminary relief proceedings to challenge the decision.
Economic operators or other interested parties (such as trade associations) can also file a complaint with the Commission of Public Procurement Experts (Commissie van Aanbestedingsexperts). This can only be done after a complaint is first filed at the complaints office of the contracting authority and, apparently, the complaint was not handled satisfactorily. However, a letter or complaint to the contracting authority will not suspend the award decision.
Other Ways of Supervision
The auditor also plays a role in reviewing the tender procedure and the concluded agreement afterwards. Contracting authorities must account for the legitimacy of their decisions regarding procurement regulations. If such accounting is insufficient, the auditor may not issue a qualified opinion on the financial statements.
Third parties have the possibility to ask for information from contracting authorities based on the Government Information (Public Access) Act (Wet openbaarheid van bestuur). However, under the Public Procurement Act, contracting authorities are bound by the obligation not to disclose certain details of the procurement, such as the confidential information (eg, price or methods of operation) of the tenderers.
In the Public Procurement Act 2012, legal protection is regulated both before and after the conclusion of the contract. These rules supplement what is regulated in general in the Civil Code (tort (government) acts, annulment of contracts and actions for damages).
At preliminary relief proceedings, the economic operator can claim the following:
After the contract has been concluded between the contracting authority and the winner, an economic operator can claim annulment of the agreement or damages.
Annulment
Annulment of the agreement is possible if:
The annulment must be demanded within six months after the day on which the agreement was concluded. This period can be reduced by the contracting authority to 30 calendar days if:
Damages
An economic operator may claim damages from a contracting authority if it can prove that the contracting authority acted unlawfully towards it as a result of non-compliance or incorrect compliance with the procurement rules, and that it has suffered losses as a result. To this end, the economic operator must first prove that the contract would have been awarded to them if the contracting authority had tendered the contract in accordance with the applicable rules. This is usually not easy to achieve.
In addition, the economic operator must substantiate this damage; it may consist of a claim for compensation of costs incurred or loss of profit (negative and positive contractual interest).
It is possible to start preliminary relief proceedings and request suspension of the procedure in court (see 4.2 Remedies Available for Breach of Procurement Legislation). An economic operator also has the possibility to file a complaint at the contracting authority, but the latter is not obliged to suspend the procedure at that moment.
Only economic operators that are involved in the tender procedure can challenge the award decision. However, every economic operator that is interested in the contract can challenge the legitimacy of the tender procedure.
The time limits within which the economic operator can challenge an award decision are mentioned in the award decision. In principle, this is 20 days (the Alcatel period), although it can be seven (or ten) days in a multiple private tender procedure or a tender procedure for social and specific procedures. The Proportionality Guide states that the standstill period of 20 days is a minimum period; it may be possible and/or advisable to extend the period in certain circumstances, in the interest of both the contracting authority and the economic operators. Unfortunately, it is very rare for a standstill period to be longer than 20 days.
The award decision states the period within which a preliminary relief proceeding must be pending. The court hearing will be held within six to 12 weeks, and the judge will give their judgment two weeks after the hearing. Therefore, parties most often have a judgment within 17 weeks of the provisional award decision being sent.
Not all claims are made publicly available. Pursuant to the Dutch case law record, approximately 300 claims were filed in 2021.
The costs involved in challenging an award decision in a preliminary relief proceeding (ie, court fees, fixed legal costs) are approximately EUR2,000–2,500 for the unsuccessful party. There is no obligation to pay all costs of the attorney of the unsuccessful party; these are included in the fixed legal costs. The actual costs of legal assistance in summary proceedings can vary from EUR5,000 to EUR30,000, for each party.
As ruled by the CJEU, any substantial modification of the contract requires a new call for tenders, as the modified contract is then considered to be a new public contract. In any case, this is necessary if the amendment results in substantial differences between the original contract and the contract that was renegotiated by the parties. An amendment can be regarded as substantial if conditions are laid down that would have led to the admission of a different tender in the selection phase or a different assessment of the tenders. In that case, necessary measures should be taken to restore the transparency of the procedure, and a new procurement procedure will be the obvious choice. A mere textual clarification or a change in formalities is not a modification.
Nevertheless, (interim) modification of contracts after the award is only permissible under the following circumstances:
It is permissible to directly award contracts without prior publication of the tender under the following circumstances:
The highest judge of the Netherlands (Hoge Raad) decided on 26 November 2021 that, when governmental bodies issue plots of land, they should ensure a level playing field and a level of transparency for interested parties. Although this does not strictly fall under the scope of the Public Procurement Act, it has strong connections with procurement law. Therefore, in legal practice, the judgment is interpreted in light of the procurement law.
A new version of the Proportionality Guide came into effect on 1 January 2022, with the following important changes:
Furthermore, the Dutch parliament is considering a bill to strengthen the legal protection of economic operators in the context of tender procedures. This bill includes the following propositions:
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