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The Warsaw Voice » Law » October 22, 2008
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What's New in Public Procurement?
October 22, 2008   
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Changes coming in this year are shaking up the arcane
little world of public procurement and should introduce greater efficiency and transparency. The Public Procurement Amendment Act (PPA) passed on Sept. 4, 2008 aims to bring Poland's law in this area in line with the EU legal system.

Let's take a closer look at the PPA
The new regulations state that the ordering party may change the notice placed in the Public Procurement Bulletin or in the Office of Official Publication of the European Communities as it sees fit. Previously, after the notice had appeared, it was impossible to change the description of the object of contract, conditions for participation or evaluation criteria. This may reduce the number of canceled tenders. Any change does however obligate the ordering party to extend the deadline for applications or bids if contractors need time to make alterations. With significant changes or if the notice concerns EU procurement, the PPA sets forth statutory time frames.

The Public Procurement Office now must maintain a blacklist of contractors on www.uzp.gov.pl. To appear, a contractor must have caused damage through failure to (properly) perform an order, with the damage confirmed by a legally binding court ruling in the last three years. Blacklisted contractors are barred from public procurement.

One of the most important amendments anticipates introducing the possibility of providing supplementary proxies. Previously, contractors that submitted an incorrect proxy were barred from public procurement and had no opportunity to supplement the proxy.

The amendment allows changes in the Terms of Reference, especially regarding conditions for participating in procurement proceedings, the assessment criteria for bids and the manner of fulfillment (with some restrictions). This should help avoid the hitherto frequent cancellations of tender on technicalities. To reduce the number of tenders rejected for trivial reasons (e.g. due to small mistakes in estimates), the PPA obligates the ordering party to correct any inconsistencies of the offer with the Terms of Reference which do not cause significant changes in the content of the offer.

One alleged problem with procurement has been that contractors have conspired to intentionally avoid submitting documents so as to cause contracts to be awarded to the contractor quoting the highest price. The PPA threatens with loss of deposit any contractors failing to supplement documents when requested unless they can show good reason.

Another new feature is that a contractor can unilaterally extend the period it is bound by its offer. Hence, the contractor may be bound by the offer even without a motion by the ordering party.

The amendment anticipates a change of deadlines for lodging protests. The basic deadline is currently 10 days, and in proceedings concerning values below EU thresholds, it is seven days. The appeals deadline has been extended to 10 days from the submission of the resolution of protest or expiry of the time frame for the resolution of protest. The five-day deadline for appeals relating to procurement below EU thresholds has been left unchanged.

There is a right of appeal against rulings on protests in all proceedings with estimated values equal to or exceeding EU thresholds. The threshold for construction work is very high at 5,150,000 euros. In 'sub-threshold' proceedings, appeals may only be lodged in relation to certain activities, e.g. choice of some procedures, exclusion of contractors or rejection of offers.

Currently, the ordering party has at least 10 days from the delivery of the notification on the choice of offer to conclude a public contract. For procurements at below EU thresholds there is a seven-day minimal deadline. Failure to meet the above deadlines triggers absolute nullification of the contract, with the exception of situations in which only one bid has been received.

The amendment contains provisions on changes to contracts that have already been signed. Such changes are admissible, but only if the ordering party anticipated the possibility of doing so in the notice or the Terms of Reference and stated the conditions for such changes.

The legislator has discontinued automatic follow-up controls in favor of summary controls in the event there is a justified suspicion of a violation of the PPA. A summary control may be instigated within four years of the end of the proceedings. Prior to the conclusion of a contract controls shall only consider procurements co-financed with EU funds.

The PPA amendment comes into effect on Oct. 24, 2008.

Aldona Kowalczyk, Anna Rudowald
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