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Technical specifications in public procurement: The foundation of a fair process or ambivalence about equivalence?

February 2025

Introduction

Technical specifications are the foundation of any procurement exercise. They define the needs of the contracting authority, shape competition, and ultimately determine the quality and value of the goods, services, or works procured.

The Law Society v Legal Services Commission [2010] EWHC 352 highlighted that specifications are not mere technicalities; rather, they set the rules of the competition and can be subject to judicial scrutiny when they distort (or risk distorting) the procurement process.  Likewise, procurement guidance consistently emphasises that poorly drafted specifications can lead to reduced market participation, legal challenges, and suboptimal contract performance.

2024 saw significant developments in public procurement law, particularly in relation to technical specifications. The DYKA Plastics Case C-424/23 provided crucial clarification on how specifications must be drafted to ensure fair competition, while the Procurement Act 2023 introduced fundamental changes in how public contracts are structured and awarded. Given their central role, legal practitioners and procurement professionals must engage more closely with specifications rather than delegating them as “too technical.” This update summarises the key legal issues arising from DYKA Plastics and the Procurement Act 2023, providing practical guidance for contracting authorities and bidders.

Why should UK contracting authorities care about DYKA Plastics?

While the UK is no longer bound by the rulings of the Court of Justice of the European Union (CJEU) following Brexit, the DYKA Plastics case remains highly relevant for UK procurement law. First, UK procurement rules—including the Procurement Act 2023—are still based on principles that closely mirror those of EU procurement law, particularly regarding transparency, non-discrimination, and competition. As such, UK courts may continue to look to EU case law for persuasive authority when interpreting similar legal provisions.

Second, UK businesses bidding for contracts in the EU (or UK contracting authorities working with EU suppliers) must still comply with EU procurement rules, making DYKA Plastics an important reference point for cross-border procurement. Additionally, the UK’s Trade and Cooperation Agreement (TCA) with the EU requires a level playing field in procurement, meaning that UK authorities cannot ignore key EU legal developments without risking compliance issues in international tenders.

The DYKA Plastics ruling: key takeaways on technical specifications

The CJEU in DYKA Plastics Case C-424/23 ruled that contracting authorities must not artificially restrict competition by requiring specific materials in public contracts unless they include the phrase “or equivalent” or can justify the restriction as essential to the contract’s purpose.

The case concerned Fluvius System Operator CV, a Belgian contracting authority, which required sewage pipes to be made from vitrified clay or concrete, effectively excluding plastic alternatives. DYKA Plastics, a manufacturer of plastic pipes, challenged this requirement as anti-competitive. The Court found that:

• Article 42(3) of Directive 2014/24/EU provides an exhaustive list of methods for formulating specifications. Authorities must draft specifications in terms of functional or performance criteria, reference technical standards with “or equivalent”, or combine both approaches.
• Article 42(4) prohibits unjustified restrictions: authorities cannot specify a particular material unless no alternative meets the functional requirements. Where a reference to a specific product or material is made, it must be followed by “or equivalent.”
• Automatic breach of competition rules: if specifications exclude certain suppliers or materials without justification, this automatically violates Article 42(2) and Article 18(1) of Directive 2014/24/EU, which require open and non-discriminatory procurement.

Fluvius defended its specification for vitrified clay and concrete pipes by arguing that the requirement was justified on the basis of sustainability and technical performance. Specifically, Fluvius contended that:

• Sustainability concerns: it claimed that the materials specified (vitrified clay and concrete) were more environmentally sustainable than plastic alternatives.
• Technical performance and durability: Fluvius asserted that these materials provided superior long-term durability, particularly in the context of sewage and rainwater drainage.
• Procurement discretion: it maintained that contracting authorities should have broad discretion to define technical specifications based on their experience and needs.

The Court rejected Fluvius’ arguments because:

1. The specification did not include “or equivalent”
   • Even if sustainability and durability were valid concerns, the failure to include “or equivalent“ meant the specification automatically breached EU procurement law. The CJEU ruled that unless an objective justification exists, contracting authorities must allow equivalent alternatives.
2. No evidence that plastic pipes were inadequate
   • Fluvius did not provide a compelling case that plastic pipes could not meet the necessary functional or performance requirements. Instead, it appeared to impose a blanket exclusion, which artificially narrowed competition.
3. Failure to use functional or performance-based criteria
   • The Court emphasised that contracting authorities should first consider defining their requirements in terms of functional or performance characteristics. Fluvius failed to demonstrate why its goal (e.g., durability or sustainability) could not be met using a more neutral specification approach.

The failure of Fluvius’ defence provides valuable lessons on how authorities should draft specifications:

• Authorities must justify restrictive material choices: if a contracting authority prefers a specific material, it must show that no other material can meet the performance requirements.
• The phrase “or equivalent” is a legal safeguard: if a specific product, brand, or material is referenced, authorities must allow equivalents unless they can objectively prove why no alternative exists.
• Use of functional and performance-based specifications is encouraged: the ruling reaffirms the preference for drafting performance-driven specifications rather than material-based requirements.
• Greater legal risk under both EU and UK rules: while the UK Procurement Act 2023 (discussed in more detail below) provides more discretion, authorities still risk legal challenge if they fail to define clear, non-discriminatory equivalence criteria.

Many of the Court’s findings in DYKA Plastics are uncontroversial. Since the UNIX case, it has been well established that it is impermissible to use a trade mark as part of a specification unless accompanied by “or equivalent.” Similarly, in Commission v Ireland (Case C-45/87) (the Irish Pipes Case), the CJEU ruled that it was unlawful for Dundalk Urban District Council to require pipes of Irish origin, as this distorted competition and violated procurement rules. The DYKA Plastics ruling reaffirms these long-standing principles, reinforcing the need for neutral, performance-based criteria in procurement documentation. Importantly, the case also confirms the feasibility of a mixed approach, allowing contracting authorities to use both functional requirements and reference to standards in technical specifications, provided that competition is not artificially restricted.

Did the Court in DYKA Plastics clarify or sidestep equivalence?

One of the most difficult challenges in procurement law is determining when an alternative product is truly equivalent to what has been specified. This issue is central to many procurement disputes, yet courts often hesitate to provide concrete guidance, leaving authorities to navigate it on their own. The DYKA Plastics case is no exception.

The Court confirmed the principle that where a contracting authority references a specific material, it must allow equivalent alternatives unless a clear and objective justification exists. This reinforces long-standing procurement rules and aligns with earlier cases, such as Commission v Ireland (Case C-45/87), which held that restricting procurement to Irish-made pipes was unlawful.

However, the Court did not provide substantive guidance on how equivalence should be assessed in practice. It simply ruled that Fluvius should have considered plastic pipes as an equivalent alternative, without addressing:

• How a contracting authority should determine equivalence, particularly where material properties, durability, or sustainability considerations come into play.
• Whether contracting authorities have discretion in rejecting alternatives, provided they document objective reasons.
• What burden of proof suppliers must meet to demonstrate that a proposed alternative meets the required functional or technical standard.

This lack of clarity means that while the ruling strengthens the obligation to allow equivalence, it leaves open the practical question of how authorities should evaluate and apply it. As a result, contracting authorities remain exposed to challenge if they reject alternatives based on unclear or inconsistent criteria.

The DYKA Plastics case ultimately reaffirms the requirement to allow equivalence, but it sidesteps the deeper question of what makes something truly equivalent, leaving authorities to grapple with this challenge under their respective legal frameworks. This gap in legal certainty is particularly important under the UK’s Procurement Act 2023, where contracting authorities have more discretion to determine equivalence but must also ensure their decisions are defensible and transparent.

The UK Government’s guidance on technical specifications under the Act acknowledges that assessing equivalence is one of the most difficult areas for procurement professionals. It advises authorities to:

• Define equivalence criteria clearly in the procurement documents, reducing ambiguity.
• Set objective, measurable standards for assessment, ensuring consistency.
• Justify rejections of alternatives transparently, documenting why a particular product does not meet the required performance or functional outcome.

By following this structured approach, authorities can mitigate legal risk and ensure compliance with both competition principles and value-for-money considerations, reducing the likelihood of disputes.

The EU Approach vs. the UK Procurement Act 2023: a comparative analysis

The EU approach under Directive 2014/24 and the UK approach under the Procurement Act 2023 share common principles but diverge in key areas.

Key updates from the UK Government’s Procurement Act 2023 guidance

• Equivalence assessments remain challenging: the UK guidance acknowledges that assessing equivalence is one of the most difficult areas for contracting authorities. Authorities must clearly define how they will assess equivalence and set objective criteria for this assessment.
• More flexibility but increased risk: unlike the strict formulation rules of Article 42(3) in EU law, UK authorities now have greater discretion to define specifications in the way that best suits their objectives, but this also means greater responsibility to justify their choices to avoid legal challenges.  DYKA Plastics suggests that there are limits to discretion: for example, if you specify an input because it has superior sustainability properties, you must have the evidence to back up your conclusion if challenged.  The Court may not be willing to stand back and respect your view.
• Recognition of international standards: UK contracting authorities must recognise internationally accepted standards but may reject equivalence if there is a justifiable reason for preferring a UK standard. This marks a key departure from EU law, which mandates acceptance of equivalent international standards unless an exception applies.
• Prohibition on overly design-specific requirements: the Act prohibits unnecessary references to specific design features unless performance-based criteria would be insufficient.

Key differences

Aspect	EU Approach (Directive 2014/24)	UK Approach (Procurement Act 2023)
Specification format	Performance-based or technical reference (strict)	More flexible but still encourages performance-based specifications
Reference to brands	Prohibited unless unavoidable; must include “or equivalent”	Discouraged but permitted if justified and must allow equivalence
Assessment of equivalence	Strictly requires allowance of equivalents in all cases	Contracting authority may determine equivalence case by case
Recognition of international standards	Mandated via EU harmonized standards	Required but with more discretion for UK authorities

The following are practical issues for contracting authorities:

1. Greater discretion but also more responsibility: UK authorities now have more freedom to set technical specifications but must ensure that their choices remain non-discriminatory and justifiable.
2. Assessing equivalence remains a challenge: the DYKA Plastics case and Procurement Act 2023 highlight the difficulty of determining when alternative products meet contract requirements. Authorities should implement clear and transparent criteria for assessing equivalence.
3. Potential for divergence in UK-EU procurement law: while the UK retains strong alignment with EU principles, its increased flexibility in defining specifications could lead to greater variation in approach over time.

It is submitted that the approach of the UK has been helpful to provide guidance to authorities on how to go about solving the equivalence conundrum.  The EU Commission should take note of this as part of its ongoing evaluation of the EU Procurement Directives, the effectiveness of which is currently under review.  In December 2024, the Commission launched a call for evidence and opened a public consultation to collect evidence, information, data, and feedback on how Public Procurement Directives 2014/23/EU, 2014/24/EU and 2014/25/EU have performed. 

Conclusion

The DYKA Plastics ruling and the Procurement Act 2023 reinforce the importance of open and fair specifications in public procurement. While both the EU and UK frameworks aim to promote fair competition, the UK’s new regime grants greater flexibility to contracting authorities. However, with this flexibility comes greater responsibility in defining fair and competitive specifications. Procurement professionals must stay vigilant in ensuring compliance, particularly in international procurements.

For UK and EU procurements, the DYKA Plastics teaches us that the more prescriptive a specification, the more work and legal risk the authority assumes because it must justify any restrictions on competition.  Where working on an extensive and complex project where there is not just one input (in this case, pipes) but multiple products (e.g. concrete, steel supports), the workload involved in setting such specifications could be extremely extensive and time consuming.  At the end of the day, public bodies may not be best placed to carry out the exercise.

Conversely, setting a functional specification shifts the burden:

• The authority must still ensure it’s clear and workable, so bidders can demonstrate compliance.
• It reduces legal exposure, since it is less likely to be seen as arbitrary or anti-competitive.
• It encourages innovation, allowing bidders to propose solutions beyond what the authority initially considered.

In this case, Fluvius ultimately boxed itself in by using a prescriptive specification without justification, leading to an automatic breach of procurement law.

A wholly functional specification significantly reduces, but does not eliminate, the need to assess equivalence. By focusing on performance criteria rather than specific materials or standards, authorities shift the challenge from justifying restrictions to ensuring clarity in defining functional requirements. This approach fosters innovation and mitigates legal risk, as bidders are not excluded based on arbitrary technical preferences. However, authorities must still ensure that the functional specification is precise enough to avoid ambiguity, ensuring that only solutions genuinely capable of meeting the contract’s needs qualify.  They must also be satisfied upfront that the functional specifications they have set will be suitable to deliver their intended outcome.

For more insights on how these developments may impact your procurement strategy, contact Paul Henty or your regular legal advisor.

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