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Professionalisation of public procurement

Professionalisation of public procurement

One of the primary objectives of the amendment was to introduce professionalisation into the public procurement process, which should guarantee increasing professionalism in public procurement and good governance. The proposed amendment defines the basic forms of professionalization of public procurement, namely (i) centralization of purchasing and joint procurement, which are part of the current legislation, and the introduction of a new platform through the institute of (ii) a professional guarantor for public procurement, with a kind of sub-category being the so-called registered person.

The amendment hereby introduces an obligation for contracting authorities, contracting entities and persons under Section 8 - subsidised persons to carry out public procurement activities through an expert guarantor for public procurement (over-limit and under-limit contracts). Exceptions to this obligation are the procedure for awarding low-value contracts, the acquisition of goods, services and works through a central procurement organisation, design contests and several others.

The expert guarantor is a natural or legal person authorised to perform procedural acts related to public procurement. At the same time, this person must be registered in the list of expert guarantors available on the UVO website. As regards a legal person - expert guarantor, it may perform the activity of expert guarantor only if at least one person authorised to act on its behalf is registered in the list of expert guarantors.

In relation to the prerequisites for entry into the list of professional guarantors, the amendment clarifies the requirements in relation to professional experience and in the passing of examinations. In cases where the applicant demonstrates sufficient professional experience - the successful implementation of at least ten procurement procedures or concessions over a period of ten years, in which he/she has covered defined acts, it is not necessary to pass the examinations. However, the amendment defines a range of procedures that cannot be counted in the assessment of professional experience for the purposes of automatic enrolment. 

The basic activities that the law defines for a professional guarantor include e.g.:

  • assessing the eligibility of the use of an exemption from the scope of the Act, 
  • assessing the conclusion of amendments to contracts, 
  • assessing compliance with the rules for determining the presumed value of a prohibition,
  • assessing the conditions of participation/criteria for the evaluation of tenders, 
  • cooperating in the drafting of the description of the subject-matter of the contract, 
  • ensuring the preparation of tender documents, 
  • launching the call for tenders, 
  • ensuring communication with economic operators and 
  • ensuring other procedural acts within the public procurement process.

The law allows for a single procurement procedure to be carried out by several expert guarantors, but the individual activities must be clearly and unambiguously divided among these expert guarantors. This means that the contracting authority or contracting entity may use the services of several expert guarantors in the course of a procurement procedure, each of whom will carry out different activities.

The amendment dropped the originally proposed obligation to take out liability insurance for applicants for registration on the list of professional guarantors. It will be at the discretion of the individual contracting authority or contracting entity whether to make use of the possibility to require insurance cover from the professional guarantor, with a limit of liability insurance of no less than EUR 100 000.

The Act provides the Office for Public Procurement with a range of sanctions that it will be entitled to impose for individual breaches of the Public Procurement Act, such as warning the professional guarantor, ordering an examination of the professional guarantor, imposing a fine and, last but not least, removing the professional guarantor from the list. The most serious consequence is removal from the list of expert guarantors, which may also result in a fine of up to EUR 10,000 being imposed on the expert guarantor. In the event of removal from the list of expert guarantors due to repeated serious breaches of the Public Procurement Act, it is possible to reapply for registration after a period of one year has elapsed since the removal.

The amendment to the Act defines the possibility for the contracting authority to carry out this procedure through an expert guarantor or a so-called registered person, specifically for the procedure of awarding a low-value contract.  A registered person is a natural person entered in the list of registered persons. The prerequisite for entry on the list of registered persons is successful completion of the examination. The registered persons will constitute a special category of professionals dedicated exclusively to the award of low-value contracts.

Changes to review procedures

In order to speed up the procurement process, it has been proposed to modify the procedural provisions of the review procedures, including the procedure for the review of actions prior to the signature of the contract on the basis of objections.

Formally, the review procedures include a request for redress and procurement oversight.

The application for redress as a means of review can be categorised as ex ante, as it is a means of possible redress in the process preceding the conclusion of the contract with the successful tenderer, directly with the person who awarded the contract. This means that the request for redress is not decided by the Public Procurement Office but by the person who caused the injury itself.

A fundamental change in this institution is that the amendment no longer allows the same applicant to submit repeatedly an identical request for redress. The contracting authority will now no longer deal with such a request. However, this does not preclude the possibility for other applicants to submit a request for redress in the same case.

Furthermore, a new statutory possibility is introduced for the Public Procurement Authority to carry out a review to determine whether there are grounds for initiating a formal procurement oversight process. At the same time, in order to verify information about a particular public procurement received by the Authority, e.g. in a complaint from a third party, the Authority will be entitled to request facts or information, to request things, documents or documents not only from the contracting authority itself but also from public authorities, natural or legal persons.

Last but not least, as a result of the acceleration and streamlining of the use of EU funds, the obligation for the contracting authority to request the Public Procurement Office to carry out a review of the actions of the auditee prior to the conclusion of the contract in the case of above-the-limit contracts and concessions partially financed from EU funds is deleted. The review of EU-funded public procurement will thus only take place after the contract has been signed with the successful tenderer.

Objections

The new legislation introduces the most significant changes within the institution of objections, which will affect all entities participating in the public procurement process. 

In order to prevent speculative behavior of economic operators, the submitter has decided to reintroduce the institute of "manifestly unfounded objection", which was already proposed in 2019. This means that in the event of a manifestly unfounded objection, the Public Procurement Office will terminate the procedure and the person who lodges such an objection will be liable for the damage caused to the other party. The Office shall also impose on such entity the obligation to pay the costs incurred by the Office in connection with the preparation of the expert opinion or expert report.

An objection shall be considered manifestly unfounded if it is manifestly intended to abuse the right or to exercise or defend the right arbitrarily and unsuccessfully or to lead to unreasonable delays in the procedure for reviewing the acts of the inspected party. 

In this context, it should be noted that, although at first sight it is a preventive instrument, on the other hand, it may have the psychological effect of discouraging economic operators from exercising the rights guaranteed by the European directives under the threat of forfeiture of the entire security, including the costs of the proceedings.

The amendment significantly expands the scope of cases where the possibility to object will be excluded. These cases are:

  • for the award of works contracts where the estimated value of the contract is equal to or less than EUR 800 000,
  • in the award of sub-limit contracts by contracting authorities for the supply of goods or services, irrespective of the amount of the estimated value of the contract, or sub-limit concessions.

In this context, it is also important to draw attention to the amended regulation of the interim measure, through which the Public Procurement Office may suspend the procedure of the audited party in the event of objections being lodged. For works contracts with an estimated value of between EUR 800 000 and EUR 3 000 000, it will no longer be possible to issue an interim measure. 

In the context of the regulation of objections, it should be pointed out that objections against the procedure for awarding a sub-limit contract for construction works with an estimated contract value between EUR 800 000 and EUR 3 000 000 will not have a suspensive effect in relation to the possibility of concluding the contract and it will be up to the contracting authority whether to wait for the decision of the Office for the Protection of Competition and not to conclude the contract, or to conclude the contract with the consequences (e.g. imposition of a fine for an administrative offence). The Public Procurement Office will no longer issue a so-called review opinion (elimination of the illegal situation / cancellation of the public procurement) but will decide by a so-called declaratory opinion, in which it will state the individual violations of the law and decide on the imposition of the appropriate sanction. 

As regards the entities entitled to lodge objections, it should be noted that in the case of a group of suppliers, objections after the expiry of the time limit for the submission of tenders shall be lodged on behalf of the group as a whole - a member of a group of suppliers is only entitled to lodge objections provided that he lodges objections on behalf of all the members of the group of suppliers.

The bail provisions have also been revised in the context of the lodging of objections. First of all, it is important to note that the deposit must be credited to the Office's account no later than the second working day following receipt of the objections.

Forfeiture of the full amount of the deposit will only occur if the Public Procurement Office rejects the objections in their entirety. It follows that if the Office upholds the complainant's objections in part, it will return the deposit to the complainant in full. 

One of the fundamental changes concerning the opposition procedure is the impossibility of lodging an appeal against the decision of the Public Procurement Office, since the opposition procedure will no longer be a single instance procedure. The decisions of the Office will be reviewable by the court, with the Regional Court in Trnava having causal jurisdiction. The statutory time limit for bringing an action is 30 days from the date of receipt of the Authority's decision.

At our law firm, we are intensively involved in the issue of public procurement and closely monitor every change in this area. If you need any legal assistance not only in the field of public procurement, do not hesitate to contact us.