Exclusion grounds and the Dutch certificate of conduct for tenders (GVA): what to prove and when

What are exclusion grounds?

Exclusion grounds are situations in which a buyer may or must keep you out of a tender, however good your bid is. They come from article 57 of the EU procurement directive 2014/24/EU and are set out in articles 2.86 to 2.89 of the Aanbestedingswet 2012, the Dutch Public Procurement Act. The buyer checks them before the selection criteria and the award criteria. How that order works is explained in selection criteria and knock-outs.

There are two kinds: mandatory and discretionary. The difference is who has a choice. On a mandatory ground, the buyer must exclude you. On a discretionary ground, it may, but only if it included that ground in the tender documents in advance.

Which exclusion grounds are mandatory?

Exclusion is mandatory after a final conviction for, among other things, participation in a criminal organisation, bribery, fraud, terrorist offences, money laundering and child labour (article 2.86 of the Dutch act). This also applies when the person convicted is not the company itself but a member of its management or supervisory body.

Exclusion is also mandatory when a final and binding judicial or administrative decision has established that you did not pay your taxes or social security contributions (article 2.86, paragraph 4). There is a way out: if you have since paid or entered into a payment arrangement, the ground does not apply (paragraph 5). For small amounts, the buyer may decide not to exclude you (article 2.86a).

Which exclusion grounds are discretionary?

Article 2.87 of the Dutch act lists the grounds a buyer may apply. These are the main ones for a bidder. They only apply if they are in the tender documents, so check there.

• IntegrityGrave professional misconductA serious error in the course of your profession that calls your integrity into question. The Dutch Proportionality Guide asks buyers to apply this ground very restrictively.
• Past contractSignificant deficienciesSignificant or persistent deficiencies in a previous contract that led to early termination, damages or a comparable sanction.
• FinancialBankruptcy and similarBankruptcy, insolvency or a comparably poor financial situation.
• RulesEnvironment, social and labourBreaches of obligations under environmental, social and labour law, and failure to meet tax obligations.
• CompetitionAgreements and interestsAgreements that distort competition, or a conflict of interest.
• StatementsFalse informationFalse or misleading statements in the tender procedure.

On a discretionary ground, too, the buyer must act proportionately. Rule 3.5 A of the Proportionality Guide says it only applies grounds that are relevant to the contract.

How long does a conviction or failing count?

For the mandatory grounds, a conviction counts for five years. The buyer only looks at judgments that became final in the five years before you submit your bid or request to participate (article 2.86, paragraph 7, of the Dutch act). For several discretionary grounds, article 2.87, paragraph 2, says that only cases in the three years before that moment count: breaches of obligations, grave professional misconduct, a competition law decision, deficiencies in an earlier contract and unpaid taxes or contributions. The EU directive sets three years from the event as the maximum for discretionary grounds (article 57, paragraph 7).

When do you have to prove what?

When you bid, you prove nothing yet. In part III of the European Single Procurement Document, called the UEA in the Netherlands, you declare that no exclusion grounds apply to you. It is a self-declaration. Later in the procedure the buyer asks for the actual evidence, usually from the company it intends to award the contract to.

That sounds like a delay, but it is a trap. If you win, you usually get a deadline to deliver the documents, and it can be short. In a case before the Dutch Public Procurement Expert Committee (advice 548), a bidder did not deliver the GVA and the tax statement within the seven days it had been given. The buyer was allowed to declare the bid invalid. With a processing time of weeks at Justis, you will not meet such a deadline if you only apply then. How far you can still repair a missing document is covered in an error in your bid.

The ESPD asks for a promise. The GVA has to be there when you need it.

What is the certificate of conduct for tenders (GVA)?

The Gedragsverklaring Aanbesteden is a statement showing that you may bid on a public tender. It is issued by Justis, an agency of the Dutch Ministry of Justice and Security. The law accepts it as evidence for the mandatory exclusion grounds and for the discretionary grounds of grave professional misconduct and final competition law decisions (article 2.89). Buyers are not required to ask for it, but in practice they often do.

Justis checks the Dutch judicial records. It screens the company itself, its Dutch directors and Dutch employees in key positions. A former director who left in the twelve months before the application and still holds a policy-making role is included. Companies under foreign law cannot apply for a GVA, because Justis holds no records on them. Read the tender documents to see what a foreign bidder is asked to provide instead.

How do you apply for a GVA, what does it cost and how long does it take?

You apply for the GVA at Justis, preferably online through Mijn Justis. It costs € 75, and for a company Justis decides within eight weeks, or later if it finds relevant records. There is no fast track. These are the steps.

1. 1Arrange eHerkenningApplying online requires eHerkenning, the Dutch business login, at level EH2+ or higher, with the authorisation “GVA: aanvraag Gedragsverklaring aanbesteden”. Without it you can send a paper form, which needs, among other things, an original extract from the trade register that is no more than fourteen days old.
2. 2Have an authorised representative applyThe application is made by a representative of the company who is authorised under the articles of association or a mandate, such as a director or partner. A sole proprietorship can also apply.
3. 3Pay the feeThe fee is € 75, exempt from VAT. Online you pay with iDEAL. Check the Justis website for the current fee.
4. 4Wait for the decisionFor a legal entity Justis decides within eight weeks, for a natural person within four. If Justis finds relevant records, the period is extended by another eight or four weeks. You can respond to a provisional decision with your view before it becomes final.
5. 5Receive it on paperThe GVA only exists on paper and is sent to the address registered with the Dutch Chamber of Commerce (KvK). It shows the registered company name, not your trade name. Scan it on arrival and note the date of issue.

How long is a certificate of conduct for tenders valid?

A GVA is valid for two years from the date of issue. The law puts it slightly differently: when you submit your bid, the certificate may be no more than two years old (article 2.89 of the Dutch act). A GVA that is still valid can therefore be used for several tenders, unless the documents ask otherwise.

Watch the reference date. Under the law, the date of submission counts. A GVA that expires just after you bid can then still meet the requirement. Some tender documents require evidence to be valid both at submission and at award, or not to be dated after submission. If the requirement is unclear, ask about it in the clarification round.

The other evidence: tax statement and trade register extract

Besides the GVA, buyers usually ask for two documents. The verklaring betalingsgedrag nakoming fiscale verplichtingen from the Dutch Tax Administration (Belastingdienst) shows that you meet your filing and payment obligations. You apply online or with a form. The Tax Administration aims to decide within a week, but says it can currently take about two weeks. When you submit your bid, it may be no more than six months old (article 2.89).

An extract from the trade register of the Dutch Chamber of Commerce (KvK) is one of the documents the law mentions as evidence (article 2.89), to show that you are not bankrupt or in a comparable situation. It too may be no more than six months old at submission. Because both documents expire quickly, you cannot keep them in stock like the GVA. Request them once you know you will bid, and check the date again just before the deadline.

What is self-cleaning?

Self-cleaning means that, despite an exclusion ground, you show that you are reliable again. Article 2.87a of the Dutch act gives you that opportunity. If the buyer finds your evidence sufficient, it does not exclude you. The Dutch act and the EU directive (article 57, paragraph 6) name three things you have to show.

• 1Damage compensatedYou have paid for the damage caused by the offence or misconduct, or undertaken to pay for it.
• 2Facts clarifiedYou have clarified the facts and circumstances by actively cooperating with the investigating authorities.
• 3Recurrence preventedYou have taken concrete technical, organisational and personnel measures to prevent further offences or misconduct.

If the buyer considers the measures insufficient, it must tell you why. Two limits apply. If a final judgment has excluded you from tenders, you cannot rely on self-cleaning for the duration of that exclusion. And you do not have to submit the evidence on your own initiative with your bid, unless the rules and the tender documents clearly require it, as the Court of Justice of the EU ruled in case C-387/19. If a ground applies to you, do not wait for the buyer to ask. Explain it in the ESPD and have the documents ready.

A mistake in the past does not have to mean exclusion. Keeping quiet about it can.

How to keep paperwork from costing you the contract

1. 1Keep a valid GVA in stockIf you bid regularly for Dutch public contracts, apply for a new GVA well before the old one is two years old. Allow eight weeks, and sixteen if Justis finds something.
2. 2Record when each document expiresGVA two years, tax statement and trade register extract six months. Keep track of those dates, for your consortium partners too.
3. 3Read the evidence requirementsWhich documents, how old, on which reference date and within what period after award. Put that period in your planning before the award decision arrives.
4. 4Check before you submitDoes what you declare in the ESPD match what you can prove later? Include it in your checks in the final week.

If you win, the request for evidence often comes around the provisional award. What else to do in that period is covered in after the award decision.