On the 1st of July 2019, a change was introduced into the public procurement legislation: Udbudsloven, for EU tenders within building and construction. The change does, at first glance, not appear to have significant implications for either contracting parties or tenderer within building and construction.
The two-envelope system is a separation of the main criteria price and quality. The idea is to make it possible for the contracting party to ensure that both main criteria are valued objectively and independently, with the quality criteria being handled prior to any knowledge or engagement with the price. The two-envelope system is already applied to some EU tenders, but the new change of the public procurement legislation makes its application mandatory under certain circumstances.
Firstly, the change only takes effect within the building and construction industry.
Secondly, it only relates to EU tenders above the value of 350 mil. DKK.
Thirdly, the criteria are then further narrowed by the categorization of the assessment criteria by the contracting party.
An examination of the changes’ relevance was made by the Danish Law firm Horten and Kromann Reumert, who have researched the implication on contracts from 2018. Horten and Kromann Reumerts research revealed that had the change been implemented in 2018, only two cases would require the use of the new two-envelope system. Furthermore, Kromann Reumerts notes that while the two-envelope system have not been a legal requirement within the building and constructions industry prior to the change, it is already being applied within EU tenders by the contracting party, when a separation of the evaluation criteria of price and quality is deemed beneficial.
The effect of this new legal requirement, of the two-envelope system, remains to be seen, but if only two cases per year will be affected, the significance will be very narrow, if not unimportant. The low number of relevant cases may prove to be the judge of the change, rather than the two-envelope system itself.