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The Warsaw Voice » Law » December 2, 2009
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Changes in Public Procurement Law (1)
December 2, 2009   
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Aldona Kowalczyk, counsel, head of Salans Public Procurement Law Practice

The last lap of the year has proved to be a time of hectic work on amendments to the Public Procurement Law (PPL). The lower house adopted the so-called "minor" amendment to the PPL Sept. 25. But not all of it will become law 14 days after its official announcement. The exception will be the new regulations on questions related to the specification of significant conditions of procurement (SIWZ). These will come into force on the day of their announcement. The coming changes are of significance to contractors.

These changes may be divided into two groups: those that rationalize the existing solutions and those that improve the situation for contractors. The most important of the first group are the changes that affect the ability of contractors to query SIWZs (the conditions for making tender bids) and the costs of complaints to court against the National Chamber of Appeal (KIO) ruling. In the second group, the most significant changes concern the possibility of an ordering party giving an advance payment and the possibility of depending on the knowledge, experience etc. of other entities when making a bid, irrespective of the legal relationships that may bind them together.

One of the most significant amendments concerns SIWZ-related queries. So far, the regulations allowed contractors to submit SIWZ-related queries no later than 6 days before the tender submission deadline. Frequently, this led to a situation in which ordering parties that wished to fulfill the obligation to answer questions were forced to extend the deadline. The new regulations obligate the ordering party to answer exclusively those questions from contractors that come in no later than by the end of the halfway stage between the formal announcement of the invitation to tender and the cutoff date for making bids. Otherwise, or when queries concern issues that have already been clarified, the ordering party does not have to respond.

The legislators deemed existing regulations-under which, irrespective of the value of the procurement, the cost of the complaint (appeal) against the KIO ruling always came to zl.3,000-to be irrational. Further to the amended PPL, the court fee for the complaint is to be five times the value of the fee for the proceedings before KIO. In the case of a complaint concerning the activities of the ordering party, made after the opening of the offer (e.g. the choice of offer), the entry fee is to be 5 percent of the value of the procurement but no more than zl.5 million. Thus the upper court fee level for a complaint is attained with procurements worth zl.100 million and over. The above solution will most probably cause large-scale reductions in the number of complaints lodged for KIO rulings and by the same token will enhance the rank of the KIO rulings.

The PPL amendment clearly settles and confirms the possibility of the ordering party proffering an advance payment on account of the contractor's remuneration. Previously, the PPL did not regulate this issue. But the amendment also brings in certain restrictions in this area. Advances may be granted when procurements relate to: a) building works or b) projects financed out of EU funds or with the participation of other foreign sources that are non-refundable. The above restrictions in granting advances do not, however, relate to so-called self-governing bodies or entities for which such a self-governing body is a founding or supervisory body.

The amendment also lays clear emphasis on the possibility given to contractors to highlight their knowledge and experience as well as their own technical and human resource potential, and their financial capacities through association with other entities with which they would be cooperating in their projects, irrespective of the formal legal relationships that bind them. "Other entities" may therefore be, for example, subcontractors or companies belonging to the contractor's capital group. Moreover, if, for justifiable reasons, a contractor is unable to present documents relating to his financial and economic condition as required by the ordering party, he will have the right to present an alternative document which gives sufficient confirmation of fulfillment of the ordering party's condition of bidding for tender.

The amendment also ameliorates the ban on modifying contracts under Public Procurement Law art. 144. The restrictions imposed by this regulation (the need to anticipate changes and conditions of changes in SIWZ announcements) are now to apply only to significant contract changes.

But that is not all that is changing in the Public Procurement Law. We shall describe its so-called "big" amendment in the next edition.

Aldona Kowalczyk, with input from Marcin Woliński
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