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The Warsaw Voice » Law » December 16, 2009
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Public Procurement Law Amendments-Part 2
December 16, 2009   
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The coming weeks will bring big changes to the Public Procurement Act. Apart from the so-called minor amendment, which was discussed in the Voice issue of Oct. 23, Parliament has adopted further amendments to the Public Procurement Act, colloquially referred to as the "big amendment." The EU Directive on the right of appeal is thereby to be introduced into Polish law, the deadline for this being Dec. 20, 2009.

The fundamental changes concern the means of legal protection. These changes are revolutionary in nature; the institution of protest made by a contractor to the ordering party is to be abolished. The first line of defense in the arsenal of means of legal protection in public procurement procedures will thus be that of an appeal lodged with the National Chamber of Appeal (Krajowa Izba Odwoławcza-KIO). A complaint against a KIO verdict may be lodged with the district court. In other words, the system of means of legal protection consisting of protest, appeal and complaint is to be replaced by a two-step system with appeals being heard directly by the KIO and complaints going to the district court. This change has aroused a lot of controversy and is being widely commented upon. Due to the considerable increase in the fee for a district court complaint (which instead of the present zl.3,000 could, in certain cases, even come to zl.5 million), a KIO appeal could, in practice, prove to be not only the first but also the only means of legal protection. Due to such a considerable increase in complaint fees, a commensurate drop in the number of complaints against KIO rulings should be expected.

An equally critical approach should be adopted in relation to the "big amendment" solution to the excessive recourse to KIO appeals. Now, in principle, the KIO is to issue one-person rulings (currently it is a three-member panel that issues rulings). Only in matters that are particularly convoluted and abstruse will the KIO chairman consider appointing a three-member panel for recognition purposes. Considering the enhanced status of KIO rulings (given that an appeal is to become the first and, in practice, only means of legal protection), and that further competences are to be loaded onto the KIO (among others, the new clause by which in some cases the KIO is to rule on the invalidity of a contract) and the considerable degree of complication in cases currently coming up for recognition proceedings at the KIO, the reduction of ruling panels to one-judge institutions arouses grave reservations. Fears may also arise because of the question whether such a solution will not cause a lack of uniformity in KIO case law.

The "big amendment" also anticipates the abolition of art. 3.1.6 of the Public Procurement Act. Under this regulation, private entities (mainly funds, associations, private entrepreneurs) acting as ordering parties that placed orders for items partly financed by public funds, had to subject themselves to the public procurement law regime as a condition of receiving such auxiliary public funds. In practice, this related to EU funds. Thus, in principle, private entities awarding contracts financed by the EU will not have to apply the procedures prescribed in the public procurement law (with the exception of situations defined in art. 3. 1. 5 of the Public Procurement Act). However, entities awarding top-up financial resources for projects, may make them contingent on applying the principle of equal treatment, fair competition, and transparency (in other words, simplified, less formalized procedures), when spending such funds. This change has the aim of making the process of spending EU funds easier.

The "big amendment" also carries changes that relate to the application of procurement contracts with single bidders in Poland. This type of contract is negotiated and signed with only one bidder. The ordering party initiates proceedings by sending invitations to negotiate contractual terms and conditions with chosen firms. This single instance of what is basically a non-competitive contract-awarding scheme is designed for application in exceptional situations-the act enumerates the preconditions that must be in attendance for this method to be used. In practice, this method was abused so the "big amendment" gives the ordering parties wanting to award a single bidder contract the opportunity to inform of this intention by way of an advertisement-placed, depending on the value of the contract, in the Biuletyn Zamówień Publicznych public procurement bulletin or the EU's Tenders Electronic Daily (TED). The legislators are banking on this giving contractors the opportunity to learn of a public procurement at an early stage of proceedings, and that in turn will give them the chance to lodge an appeal with the National Chamber of Commerce (KIG) if they see grounds for suspicion that the Public Procurement Act is being infringed.

The "big amendment" is currently awaiting the president's signature and publication in the Journal of Laws. This Public Procurement Amendment Act of Dec. 2, 2009 will come into effect 30 days after its publication in the Journal of Laws.

Aldona Kowalczyk, counsel, head of Salans Public Procurement Law Practice
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