EU procurement

EU procurement

Every year over 250 thousand public administration bodies of the European Union expend about 18% of GDP for the purchase of goods, services and construction works. Polish entrepreneurs can take part in public procurement procedures in other EU Member States.

 

The Community Legislator has laid out in public procurement directives minimum consolidated rules that guarantee equal conditions for all entrepreneurs with offices registered on the EU territory on the Community public procurement market. These rules have been transposed to the national legislation and are applicable to bids with the monetary value exceeding a specified threshold (above-threshold procurement). The above-threshold procurement can be particularly attractive to foreign bidders in business terms.

Domestic regulations compliant with the general rules of the Community law apply to bids of lower value. Procedures applicable to bids not exceeding a determined treshold, that is below-threshold procurement, can be simplified compared to procedures applicable to pan-European procurement.

 

Rules applicable to all Community tenders:

- tender procedures cannot discriminate against any enterprise on the grounds of registration in another EU Member State;

- specification of ordered goods, services and construction works cannot contain specific labels, trademarks or patents;

- a contracting authority cannot refuse to accept supplementary documents (including certificates, diplomas) issued in another EU Member State, if such documents provide the same level of security;

- a contracting authority is obliged to make available all tender information to every interested entrepreneur, regardless of a company’s country of registration on the territory of EU.

 

Possibility to exclude an entrepreneur from the tender procedure

A public administration body can exclude an entrepreneur from the public procurement, if:

- a company is undergoing an insolvency or winding-up procedure;

- an entrepreneur has suspended the operation or a company is having its affairs administered by the courts;

- an entrepreneur defaults with due taxes or obligatory social insurance premiums;

- an entrepreneur has committed a serious violation of the law;

- an entrepreneur submits false declarations to the public administration body.

 

Publication of tender bids

In the case of above-threshold public procurement it is obligatory to publish:

- contract or competition notices – public authorities can publish notices at the national level, but they should also send them to the Publications Office of the European Union. A full notice is published in one of the official languages of the European Union, whereas a summary is translated into other languages;

- notices about awarding public procurement contracts, that is, informing the interested parties on the results of the public procurement.

 

As a rule, the public administration body awards the public procurement contract following the publication of an invitation to tender. Under extraordinary conditions, the body can award the procurement contract without the previous publication, that is:

- in the event of disasters caused by force majeure;

- orders that can be executed solely by a particular enterprise, due to exclusive rights or technical reasons;

- orders not covered by public procurement regulations, e.g. employment contracts, contracts of purchase or rental of existing buildings.

 

Public administration bodies can also publish other information, e.g. a notice about possible future tenders. In such case, the deadline for submitting and accepting tender bids can be shortened.

The deadline can be shortened also in the event of an online notice publication.

 

Criteria of awarding public procurement contracts

Public bodies may apply various criteria for the evaluation of bids, including the lowest price, technical parameters or considering environmental aspects. However, in every case a bidder should be notified on the evaluation criteria and their significance.

 

Transparency and confidentiality

A contracting authority commences the evaluation of submitted bids only after the deadline for application submission. Following the selection of a bid, a bidder should be immediately notified thereof. If a bid has been rejected, a bidder is entitled to a detailed explanation of the reasons for rejection.

A contracting authority is obliged to observe the confidentiality rule in the scope of data exchange and storage.

 

Technical specification

A technical specification constitutes a description of ordered goods, services or construction works. Additionally, it takes account of aspects related to environmental efficiency, design, safety, quality guarantee and compatibility assessment.

In the case of public procurement for construction works, the specification also contains required tests, controls and construction techniques.

Technical specifications should not include requirements concerning the use of particular labels, trademarks and patents.

 

Below you will find threshold amounts requiring the application of EU regulations. The amounts do not include VAT and have been effective since 1 January 2014:

 

 

 

Your Europe, http://www.europa.eu

 

The contents of the Directive of the European Parliament and of the Council 2014/24/EU of 26 February 2014 on public procurement, repealing the Directive 2004/18/EC (Official Journal of the European Union of 28 March 2014 L 94/65, hereinafter referred to as: Directive 2014/24) available here.

Thresholds in particular branches of the economy

In the case of public suppliers in the field of water management, energy, transport and postal services, the threshold for supplies and services amounts to EUR 414,000.

Thresholds for construction works orders

In the case of construction works orders the threshold amount is EUR 5,186,000.

Thresholds in countries outside the Euro zone

Contracting authorities outside the Euro zone execute orders in domestic currencies.The equivalent of thresholds has been indicated by the Community Legislator in the Communication of the European Commission, Ref. No 2013/C 366/01.

Communication of the European Commission EC 2013/C 366/01 (hereinafter referred to as: EC Communication) is available here.

 

The basic modes for awarding public procurement contracts in the European Union include an unlimited tender and a limited tender. A contracting authority can also award public procurement contract in a mode of negotiation with announcement, competitive dialogue or electronic auction.

 

Unlimited tender

As part of an open procedure each enterprise can submit a bid in the framework of a public tender. A minimum time frame for bid submission amounts to 52 days from the date of publication of a contract notice. However, if an initial contract notice has been published, the time frame for bid submission can be shortened to 36 days.

 

Limited tender

In the case of a limited public tender each enterprise can apply for participation in the procedure, however, only initially selected companies will be invited to tender.

The time frame for a request to participate in a tender amounts to 37 days from the date of publication of a contract notice. Afterwards, a contracting authority selects at least five candidates who meet the tender criteria. Candidates invited to submit bids do so within 40 days from the date of sending an invitation to tender. The time frame for bid submission may be shortened to 36 days, should an initial contract notice be published.

In exceptional cases a contracting authority may set a time limit of 15 days for the submission of a request to participate in a tender and a time limit of 10 days for bid submission. If a notice has been sent to a bidder by electronic means, the time frame for the submission of a request to participate in a tender may be shortened to 10 days as well.

 

A negotiation procedure

A contracting authority invites at least three entrepreneurs to take part in a negotiation procedure and negotiate terms of the contract.

Most contracting institutions decide for a negotiation procedure in the framework of public procurement only in specific cases, e.g. supply of goods exclusively for research purposes or performance of tests. In the case of procurement in water management, energy, transport and postal services sectors, the negotiation procedure can be recognized as a standard procedure applied by the contracting authority.

The time frame for a request to participate in a tender in the form of negotiation procedure amounts to 37 days from the date of publication of a contract notice. In exceptional cases the time frame can be shortened to 15 days and if a notice has been sent by electronic means - to 10 days.

Moreover, in exceptional cases a contracting authority can award a public procurement contract in the form of a negotiation procedure without a previous publication of a contract notice, e.g. if no bids have been submitted in an unlimited or limited procedure or if a procurement contract can be awarded only to a particular contractor for considered technical reasons.

 

Competitive dialogue

A competitive dialogue mode is often used at awarding public procurement contracts, e.g. large infrastructural projects or if a contracting authority cannot define technical specifications of the order in advance.

The time frame for a request to participate in a tender amounts to 37 days from the date of publication of a contract notice. A contracting authority should invite at least 3 entrepreneurs to participate in a dialogue during which technical, economic and legal aspects of an order are specified in detail. Following the dialogue the entrepreneurs submit their final bids.

The competitive dialogue mode does not apply to public procurement where a contracting authority is an entity providing public utility services in water management, energy, transport and postal services sectors.

 

Electronic auctions

A contracting authority can also award public procurement contract through an electronic auction. Before the beginning of an auction a contracting authority should carry out an initial assessment of bids to accept only those entrepreneurs who meet specified tender criteria to participate in the auction.

The request for participation in an auction should include the date and hour of the beginning of the auction and the number of auction rounds. The invitation should also indicate a mathematical formula according to which subsequent classifications will be created automatically. It is possible for a bidder to determine their position in a classification against competing bids in each of the auction rounds. The identity of competing bids is confidential.

The electronic auction mode does not apply to certain types of public contracts, including a construction works project.

 

Common Procurement Vocabulary (CPV) is a consolidated system of public procurement classification introduced for application in public procurement procedures executed in EU Member States on the basis of the Commission Regulation (EC) No 213/2008 of 28 November 2007 amending the Regulation (CE) No 2195/2002 of the European Parliament and of the Council on the Common Procurement Vocabulary (CPV) and Directives 2004/17/EC and 2004/18/EC of the European Parliament and of the Council on public procurement procedures, as regards the revision of the CPV.

The official CPV text is available in Polish here.

 

The purpose of the CPV is to allow a clear-cut determination of the subject of procurement through the standardization of positions used by contracting institutions and entities at describing public contracts. The glossary includes the main and the supplementary one.

 

The main glossary

The main glossary is based on a structure of a tree covering codes consisting of 9 digits at the most, linked with phrases that constitute a description of supplies, services or construction works that form the subject of procurement.

A numerical code consists of 8 digits divided as follows:

- the first two digits specify areas (XX000000-Y);

- the first three digits specify groups (XXX00000-Y);

- the first four digits specify classes (XXXX0000-Y);

- the first five digits specify categories (XXXXX000-Y).

Each of the last three digits provides a higher level of precision in the framework of each category. The ninth digit is there to verify previous digits.

 

The supplementary glossary

The supplementary glossary is applicable in the event of extending the description of the subject of procurement. The positions consist of an alphanumerical code along with a corresponding phrase, which allows further clarification of the character or destination of ordered goods.

The alphanumerical code consists of:

- the first level containing a letter that corresponds to the section;

- the second level containing a letter that corresponds to the group;

- the third level containing three digits that correspond to divisions;

The ninth digit is there to verify previous digits.

Correspondence table (useful at comparing CPV categories to other nomenclatures).

 

In order to actively participate in the EU public procurement market, it is advisable to regularly monitor the EU tender base – Tenders Electronic Daily (TED): http://www.ted.europa.eu

TED is an online version of the Supplement to the Official Journal of the European Union where tender bids subject to Community regulations are published. TED offers free access to business opportunities and is updated five times a week. It contains around 1,500 public procurement notices.

TED gives an opportunity to view, browse and sort contract notices by country, region, branch and other criteria. Information on each document concerning the tender is published in 24 official languages of the EU.

In order to use the free TED base, you first need to fill an electronic registration form. Registration takes place in the European ECAS system (European Commission Authentication Service), which allows:

- access to the TED base, including the archive;

- personification of search profiles by individual needs of an entrepreneur;

- reception of notices by email, according to search profiles;

- adjustment of RSS channels to websites and RSS scanners.

EU tender database - Tenders Electronic Daily (TED)

 

Domestic public procurement databases

It is worth paying attention to free public procurement databases in different countries (also outside the EU), i.e. Information System for Public Procurement (SIMAP): http://www.simap.ted.europa.eu
SIMAP tender database

 

eCertis IT tool

The eCertis IT tool (eCertificate - International Market and Services), available here, is useful at searching for certificates and attestations that are frequently required in the context of public procurement award procedures in the EU Member States as well as Turkey, Norway, Iceland and Liechtenstein.

This tool is based on data made available by public authorities of different countries. However, we need to remember that the information included in eCertis does not constitute a legal advice; it has solely an instructive value.

eCertis (eCertificate - International Market and Services)

 

Control, suspension of a tender procedure

A bidder who has submitted a bid in the public procurement award procedure is entitled to request the control of the entire procedure in the light of the EU law. In selected Member States an additional requirement for submitting a request for control by a bidder to a tender managing institution may be introduced.

The request for control results in an immediate suspension of the tender procedure. The request is examined by an independent body. Within the period of examination and before the completion of the control a contracting authority is not allowed to conclude a contract with a bidder.

A bidder should have at least 10 days to submit a request for control from the date of receiving a refusal by email or fax and at least 15 days if the refusal has been sent by post. During the suspension period (10 or 15 days) a contracting authority is not allowed to conclude a contract with a bidder.

The suspension period does not apply, if:

- a previous publication of a contract notice was not required;

- a procurement contract has been awarded to one bidder;

- a procurement contract resulted from a framework contract.

 

The procurement contract awarded is found ineffective

The arbitration body may deem the awarded contract ineffective, if:

- a public body awarded the contract without a previous publication of a required contract notice;

- the right to seek redress by bidders has been limited or excluded (e.g. through excluding the suspension period);

- there are justified circumstances indicating discrimination against rejected bidders.

In some EU Member States public procurement contracts can remain effective even if a contract qualifies for ineffectiveness, e.g. when the execution of a contract is justified by the common public interest. Therefore, other penalties should be imposed on the contracting authority (e.g. fine) or the contract validity period should be shortened.

 

Informal and free assistance of the European Public Procurement Network

The European Public Procurement Network (PPN) acts for the efficient execution of public procurement regulations owing to exchange of experiences between experts in the field of public procurement within the network. Another level of PPN work is cooperation in the sphere of informal settlement of international disputes resulting from the application of the provisions of the public procurement law. The European Commission maintains an observer status within the network and supports its activities.

The assistance offered by the European Public Procurement Network Contact Points is free of charge and based on an informal procedure. In order to receive the network’s assistance, you need to refer to the National Contact Point. Contact Points’ data (including PPN in Poland) are available here.

If an entrepreneur decides to formally seek redress (below), they can receive information on the procedure of submitting a complaint to the European Commission at the national PPN Contact Point as well.

Referring the case to the PPN National Contact Point does not result in the suspension of the tender procedure.

 

A complaint to the European Commission

A complaint to the European Commission as regards the violation of the Community law in the field of public procurement is a formal means of legal protection and control over the process of awarding public procurement contracts.

The complaint can question an activity or point out negligence of the contracting authority that violates a specific regulation or a rule of the EU law. A given conduct should infringe the provisions of Community Directves on public procurement. If the violation does not result or partially results from EU Directives, you need to refer to the provisions of the Treaty on the Functioning of the EU or case law of the European Court of Justice (ECT).

The information about the procedure of submitting a complaint to the EC is available at the European Commission’s website, also in Polish: http://www.ec.europa.eu

The complaint can be lodged in Polish, on applicant’s own or by an attorney. A complaint’s specimen is available on the abovementioned website of the EC.

Basic elements of the complaint lodged to the EC:

- entrepreneur’s contact details;

- indication of a contracting authority who, in an applicant’s opinion, has infringed the EU law;

- presentation of factual circumstances that form the basis of lodging a complaint;

- indication of legal regulations violated by the contracting authority;

- indication of requests previously referred to EC as well as EU authorities and bodies to date;

- indication whether EU funds used or wished to be used by the contracting authority have been involved in the tender;

- description of remedies or other means undertaken in the objective case as well as decisions and reimbursements, if any. Copies of judgments or decisions need to be attached.

 

EU Directives

EU Directives in the field of public procurement:

- new EU Directives (implementation date is due on 18 April 2016);

- Directive 2004/18/WE (a classic directive);

- Directive 2004/17/WE (a sectoral directive);

- Directives 2007/66/WE, 89/665/EWG, 92/13/EWG (remedies directives);

- Directive 2009/81/WE (a defence procurement directive)

- Directive 2014/55/UE (a Directive on electronic invoicing in public procurement);

- Directive 2013/16/UE (a directive issued due to the accession of Croatia to the European Union);

- Directive 2009/33/WE (on the promotion of clean and energy efficient vehicles).

 

EU Regulations

EU Regulations in the field of public procurement:

- in respect of the application thresholds for contract awarding procedures -Commission Regulation (EU) No 1336/2013 of 13 December 2013 amending Directives 2004/17/EC, 2004/18/EC and 2009/81/EC of the European Parliament and of the Council in respect of the application thresholds for the procedures for the awards of contract;

- on public procurement procedures, as regards the revision of the CPV - Commission Regulation (EC) No 213/2008 of 28 November 2007 amending Regulation (EC) No 2195/2002 of the European Parliament and of the Council on the Common Procurement Vocabulary (CPV) and Directives 2004/17/EC and 2004/18/EC of the European Parliament and of the Council on public procurement procedures, as regards the revision of the CPV;;

- Legislative proposal concerning the Regulation of the European Parliament and of the Council on the access of goods and services to the internal market of the European Market in public procurement and procedures supporting negotiations on access of European goods and services to the public procurement markets of third countries ;

- on forms used at the publication of notices – Commission Implementing Regulation No 842-2011 of 19 August 2011 establishing standard forms for the publication of notices in the field of public procurement and repealing Regulation (EC) No 1564/2005.

 

Resources of the Public Procurement Office of the Republic of Poland

Other documents in the field of public procurement:

 

Case law of the European Court of Justice (ECJ) in the field of, among others, public procurement is available through CURIA – a free electronic database: http://www.curia.europa.eu.

A browser is available in Polish and contains an overview of current and historical case law of the ECJ as well as the Court of First Instance and the Civil Service Tribunal.

The overview of current and historical case law of the ECJ is also available on Public Procurement Office website.

 

ECT case law overview since 2011

ECT 2015 case law overview