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Public Procurement – revolution in tenders?

Public Procurement – revolution in tenders?

Currently a much-discussed topic which resonates particularly in professional public is announced revolution in public procurement consisting of an amendment to Public Procurement Act prepared by Deputy Prime Minister for Legislation and new regulation - Act on Judicial Protection in Public Procurement prepared by Ministry of Justice of the Slovak Republic which is directly linked to it. The new mentioned conception sparking widespread criticism because it changes a paradigm of Slovak public procurement system.

The philosophy and fundamental premise of new conception is not to relax the rules but to repeal them altogether. Such a proposal is really very surprising, since, given the rhetoric of the current government, everyone rather expected the rules to be tightened.

The most controversial proposal of amendment to the Public Procurement Act is the exclusion of so-called below-threshold contracts and low-value contracts from the entire public tender process which can only signal that the public administration is releasing itself from the obligation to behave transparently. If the changes were approved, about two thousand contracts a year would be without detailed public control and outside the Public Procurement Act, which reduces the room for public control of contracts. At the same time, the amendment fundamentally limits the powers of the Public Procurement Office, in particular cooperation with law enforcement authorities or the tax office in detecting violations of public procurement law. Another major change is the determination of the estimated value of the contract on the basis of data from a special information system, which is to use data from contracts published in the Central Register of Contracts. In such a case, there is a risk whether prices quoted in the Central Register of Contracts take into account the real price of the commodity on the market, or whether the conclusion of the contract was preceded by fair competition. 

Another of the key pillars of the declared "revolution" concerns the change of the body that will decide on redress in public procurement matters. In addition to the amendment to the valid Public Procurement Act, a completely new mentioned Act on Judicial Protection in Public Procurement is to be added. The abolition of review procedures, control mechanisms and powers of the Public Procurement Office is linked to the establishment of administrative courts, which are to perform many of these activities in a new way. The administrative courts should decide in three-member chambers, with one of the jurors to be from among those with only the required experience in public procurement but without judicial practice.

This is a very sensitive topic and at the same time an important part of our mutual functioning in relation to the business environment. Therefore, our law firm as a member of Slovak Compliance Circle joined and actively participated in elaborating objections to both acts under the aegis of American Chamber of Commerce in Slovakia, of which we are a member; and Rule of Law Initiative, which stands for the system of proper functioning of the rule of law. The main objective of these activities is to help improve of the Public Procurement Act with an impact on activities of our clients, so we provide our professional capacities on the topic. 

As the amendment to the Public Procurement Act has been at the stage of evaluating the comments of the inter-ministerial comment procedure since the beginning of the year and Act on Judicial Protection in Public Procurement is also in the inter-ministerial comment procedure, our engagement in legislation process including in professional discussion may contribute in part to the fact that the final form of these acts may ultimately be different from the first one submitted. We believe in the government's real interest in setting up public procurement in a way that makes the management of public resources more efficient and brings the process of amending the law to the right path, which will take into account number of relevant comments from the professional public.

Author:

JUDr. Mária Porubská Tökölyová, Associate at LANSKY, GANZGER + partner Bratislava