Download - A Guide to Public Procurement in CEE
-
8/13/2019 A Guide to Public Procurement in CEE
1/60
Love me tenderA guide to Public Procurement in CEE
www.allenovery.com
-
8/13/2019 A Guide to Public Procurement in CEE
2/60
-
8/13/2019 A Guide to Public Procurement in CEE
3/60
Contents
Introduction 04
Public Procurement in CEE
Potential for Growth? 06
Public Procurement Legislation in Central Europe More European or More Central? 08
Submitting a Bid 26
What is Happening Behind Closed Doors 36
Veni, Vidi but not Vici 40
Conclusion 52
www.allenovery.com
3
-
8/13/2019 A Guide to Public Procurement in CEE
4/60
Every business has a product or service to sell, andit is at the heart of any successful business that you
will nd the key elements that make it so: theability to oer a superior product in terms of
quality, eciency, design, innovation and reliability;and the ability to provide that product either more
cheaply than ones competitors, or at a price whichis amply justied by its superior features.
Small wonder then, that any business which trulybelieves in either the quality or the value for
money (or both) of its products gets upset when
told that, in a fair ght, a competitors productdelivered the same capability at a cheaper price or
delivered superior capability which justied its
higher price.
And then it begins was the ght really fair, wasthere a level playing eld, if there had been,
shouldn't we have won, was price the only
criterion (and if not why not, and if so why so),
did money change hands or was informationleaked about our price, were we disqualied on a
technicality, should the competition have beendisqualied for being non-compliant, why didnt
we win? In short, I want another go, and this
time I want to win.
So, in spite of the rather dry nature of public
procurement, in the end nothing gets abusinessperson hotter under the collar than the
perception that a tender was run badly, or worse
unfairly, or worst of all, illegally.
Part 1Introduction
A Guide to Public Procurement in CEE is not exactly a titlethat will have people dancing in the streets.
Nonetheless, scratch the surface and you will nd a topic whichtouches the hearts of many businesses in a way which is notimmediately apparent.
A guide to Public Procurement in CEE |20114
Allen & Overy LLP 2011
-
8/13/2019 A Guide to Public Procurement in CEE
5/60
nothing gets a businessperson hotterunder the collar than the perception
that a tender was run badly
When the dust settles, and the general feeling of being hard
done by fades, a bidder may realise that, had it prepared
itself better, it could have signicantly improved its chances
of a successful bid, or radically reduced the chances of its
disqualication. With a better understanding of the culture
and overall framework of tender procedures in CEE, it
could have organised itself much more quickly on the legal
and administrative side, lessened its chances of being
tripped up on a technicality, and got on with the business
of doing what it does best concentrating on presenting its
product in the most favourable light possible, and
demonstrating its inherent value for money.
Of course, in some circumstances, that is exactly what it
had already done, and it lost in circumstances that justify
a second look: a review, an appeal, a chance to ask why
and in some cases, an opportunity to have another goin a reconvened tender (or, most gratifying of all,
disqualication of a competitor and the wrenching back
of rst place to the challenger).
There is a disappointing side to the topic of public
procurement as well. In some of the countries in CEE,
many business people talk openly about the worsening of
corruption and the lack of transparency in tender processes,
be these tender rules that have been framed to favour a
particular bidder, tenders published in places where
outsiders could not possibly have been expected to have
been able to view the tender notice, or simply wheredemands for bribes have been made. It is worth spending
some time thinking practically about what steps can be
taken to reduce this worrying trend.
EU membership by itself does not seem to have been
enough to reverse this blight, and only the latest wave of
EU entrants have been placed under slightly tighter
supervision on the use of EU funds. If the panacea of EU
entry has failed to live up to expectations on the reduction
of corruption, what other measures could succeed?
There is some feedback that e-tenders/electronic auctionshave the capacity to signicantly increase transparency on
tenders, and the authors of this publication encourage
public authorities to press on with the implementation of
these systems. Another suggestion made in an earlier
version of this publication included the pre-vetting of
tender rules and this suggestion seems to have been taken
on board, for example in Hungary. Also, the idea of the list
of pre-qualied entities also removes much of the
uncertainty of being disqualied on a rather irrelevant
technicality, used for example in Slovakia.
As a result of the economic crisis, deeply felt at the time of
this publication, the pressures to deliver value for money
and the pressures to win new business are stronger than
ever. It is therefore doubly important not to throw away a
chance of new business through carelessness. Further, for
governments facing increasingly stretched public nances,
there is pressure to procure better value for money services,
and to ensure that public money is being spent wisely.With pressure on government budgets, governments must
also look for ways to proceed with public works not only
using public money, but private money too. These public
private partnership nance (PPP) projects are extremely
useful, but again care must be taken to understand how
public procurement law still impacts on these projects.
Whilst nominally the public regulations apply to PPP, the
more specic issues that arise when addressing PPP mean
that PPP could not be addressed fully in this publication.
However, many observations in this brochure will also
apply to PPP. This is particularly true for cases where bothpublic procurement and PPP are regulated under the same
law. This is the case for instance in Slovak procurement law
although this dual regulation has often been criticised. On
the other hand, in the Czech Republic and Poland PPP is
regulated by a separate act, but in both cases the act still
contains many references to public procurement law.
The objective of this publication is to provide a brief
overview of some of the main issues that we have identied
in the public procurement rules in CEE whilst advising our
clients in tender processes, as well as providing somepractical tips that may help in the bidding process either
to avoid disqualication, seek a review, or simply bid in the
future on a more informed basis.
www.allenovery.com
5
-
8/13/2019 A Guide to Public Procurement in CEE
6/60
Part 2Public Procurement in CEE Potential for Growth?
Public procurement legislation has recently
undergone substantial changes in the CEEregion. This is primarily as a result of the
harmonisation process which aims to transpose
the European public procurement directives intonational legal frameworks. The idea behind
harmonisation is to achieve a set of public
procurement rules that share the same principlesand modes of operation throughout Europe.
From the bidders point of view, harmonisationshould bring the advantage of being able to bidin dierent countries under comparable terms
and conditions, leading to a more advanced stateof preparedness, greater eciency, and savings
on bidding costs. As for contracting authorities,
the legislation aims to ensure that a transparent
and uniform set of rules governing the processof procurement of goods, works and services is
adopted, leading to more transparency, fewer
challenges and failed bids, and more successfullyconcluded tenders.
As a result of the legislative changes, public
procurement is an increasingly attractive area. Forexample, even in a comparatively small country
such as Slovakia, in 2010 the contractingauthorities awarded contracts in the total value ofapprox. EUR 3 billion and contracting entities
spent a further EUR 1,7 billion through tenders
conducted under public procurement rules.
The open market oers more opportunities
A guide to Public Procurement in CEE |20116
Allen & Overy LLP 2011
-
8/13/2019 A Guide to Public Procurement in CEE
7/60
1 except for Czech Republic where the value is from 2008
Public procurement is mainly used in
two areas, the rst in relation to
public sector entities seeking to
procure goods or services, and the
second in relation to sectors of the
economy. With regard to the rst area,
the provision of goods, services,
buildings and works for the state and
municipalities can be done only
through the public procurement
process. In the second area, publicprocurement will also apply to certain
specic sectors such as network
industries and transport.
The process of public procurement is
crucial for the construction market, in
particular the construction and
modernisation of roads. It is also
prevalent in environment protection
schemes, for example water
management projects including
sewage systems. In addition, public
procurement has a signicant impact
on other sectors of the economy in
which the state is an active player, for
example the provision of public
services in the health, energy and
defence sectors.
Despite the growing importance of
public procurement in the CEE
economy, and despite the legal
changes that have taken place, it
cannot be said that public
procurement is fully harmonised.
Naturally, national dierences still
exist. Before entering a market with
the intention to bid on a public
procurement tender, it is advisable to
be acquainted with how the bidding
process operates specically in that
market, what the biggest challenges
are likely to be, and what problems a
bidder may face or should be aware
of. Proper knowledge of the public
procurement rules in advance maysave considerable time, costs and
unpleasant surprises it may even
save a bidder from rejection from a
tender altogether.
VALUE OF CONTRACTS AWARDED THROUGH THE PUBLIC
PROCUREMENT PROCESS IN INDIVIDUAL CEE COUNTRIES IN 20101
TOTAL
64.5 bn(Excluding Romania not available)
41.8 bnPoland
4.9 bnSlovakia
11.8 bnCzech Republic
6 bnHungary
www.allenovery.com
7
-
8/13/2019 A Guide to Public Procurement in CEE
8/60
Part 3Public Procurement Legislation in Central Europe More European or More Central?
(A few words about the rules for participating in a tender)
A guide to Public Procurement in CEE |20118
Allen & Overy LLP 2011
-
8/13/2019 A Guide to Public Procurement in CEE
9/60
3.1 Implementation of European public procurement rulesin CEE legislation
Over the last decade, on their journey of accession to the
EU and beyond, CEE countries have had to align their
respective national public procurement legislation (the
National PP Laws) with EU legislation. The results of this
process are two-fold. On the one hand, the National PP
Laws are a step towards adopting the principles which are
embedded in EU legislation: they have transposed a new
denition of the contracting authority, provided new
nancial limits for above-threshold and below-threshold
public contracts (having reference to the thresholds
specied in Article 7 of Directive 2004/18 and Article16 of Directive 2004/17), introduced processes for
challenging decisions and remedies (in line with
Directives 89/665 and 92/13), notications in tenders
and administration as well as providing numerous new
concepts that did not exist under previous legislation.
On the other hand, many practical issues (in particular
those that directly aect bidders) remain unchanged or in
certain respects have become even more burdensome.
In awarding public contracts, national contracting authorities
must adhere to national procedures, which must follow the
rules and principles set forth in Directive 2004/18 (also
known as the Public Sector Directive), which applies to
contracts awarded by the public sector, i.e. state authorities
(central, regional or local) and certain entities nanced or
controlled by the State (referred to as bodies governed by
public law), as well as Directive 2004/17 (also known as the
Utilities Directive) which deals with contracts awarded by
entities operating in the water, energy, transport and postal
service sectors (even if these entities are privately owned,but operate on the basis of special or exclusive rights
granted by a Member State). These directives introduce the
use of open, restricted and negotiated procedures and
competitive dialogue into the public procurement process,
which are further specied in national public procurement
legislation. The main features and scope of application of
the respective procedures in CEE are briey summarised in
the table at the end of this publication.
www.allenovery.com
9
-
8/13/2019 A Guide to Public Procurement in CEE
10/60
3.2 National problems remain
Lack of exibility of legal, nancial and technical standing
requirements of non-CEE bidders
The Slovak Public Procurement Act sets out general
requirements which must be complied with by the bidder
in order for it to participate in a tender. These
requirements concern the legal and nancial status of the
bidder as well as its technical capabilities. The problems
encountered under the Slovak tender requirements result
from the lack of exibility with regard to bidders from
outside Slovakia, and from a failure to consider more
generic drafting in favour of basing the legislation on
purely national concepts. This is because the Slovak Public
Procurement Act still requires documents to be recognisedunder Slovak legislation, which can in practice be very
dicult to achieve for bidders from outside Slovakia,
even in an equivalent form.
A good example of this inexibility is the requirement to
provide a document which proves that the bidder is subject
to no bankruptcy or liquidation proceedings and that a
petition for bankruptcy has not been dismissed due to lack
of assets. The document satisfying this requirement is, in
Slovakia, issued by the courts. However, in our experience,
a similar document is not issued in many otherjurisdictions because the courts in other jurisdictions
do not keep records of bankruptcy proceedings.
Furthermore, obtaining a document stating that there are
no litigation proceedings is very impractical as litigation
may be commenced in a number of courts in dierent
parts of the relevant country, or indeed, in many
dierent jurisdictions.
In general, a document that is not issued in the country of
the registered oce of the bidder may be substituted by an
adavit, but only if a suciently equivalent document isnot issued in that particular country. Without going into
too much theoretical detail on what is considered
suciently equivalent, the two examples above
demonstrate that satisfying the tender criteria may cost
the bidder considerable time and eort, trying to establish
how it can formally satisfy the requirements without any
guarantee that the documents which are eventually
produced will be satisfactory, or even give the contracting
authority the desired comfort that the document was
intended to provide.
With regard to nancial standing, tender rules often
stipulated that a set of accounts of the bidder should be
provided. As a result of the unclear nature of this
requirement, bidders often found themselves contemplating
whether or not they needed to prepare a full translation of
their annual reports. Fortunately, frequent clarication
requests made to the contracting authority usually revealed
that only nancial statements of the bidder needed to be
provided. Of course, where a bidding vehicle is only a
special purpose vehicle set up for the bid, in practice, the
bidder would have to assume that it should submit the
consolidated nancial statements of the group, which again
in practice may be onerous if the tender is time constrained(as it usually is). One of the ways that nancial standing can
be proven under the current wording of the Slovak Public
Procurement Act is by submitting the turnover gures solely
for activities which are relevant to the public procurement in
question. Although this is a welcome attempt to clarify the
problem described above, again a lack of certainty still leaves
the requirement open to interpretation and could result in a
bidder wasting valuable time trying to establish what it
should supply to satisfy this requirement. Furthermore, it
may be very dicult to calculate the revenue from such
activities and to separate those revenues from the revenues
derived from other business activities.
Slovakia
Allen & Overy LLP 2011
A guide to Public Procurement in CEE |201110
-
8/13/2019 A Guide to Public Procurement in CEE
11/60
afailure to consider more generic draftingin favour of basing the legislation on
purely national concepts
The list of technical requirements can be specied by the
contracting authority according to the specic needs of
the tender. Usually, a list of successfully completed
contracts which have a similar subject matter to that of
the tender will be required, with such list being conrmed
by the contracting authority or a client of the bidder.
However, clients in the private sector receiving goods or
services which are similar to or the same as those being
oered under the tender may understandably be reluctant
to provide references or divulge condential information,
particularly in the more sensitive areas of procurement.Additionally, the Public Procurement Act requires that the
references must concern the goods supplied or works/
services performed in the last three years. It is not clear,
though, whether the three-year period is to be calculated
from the day of the announcing the tender, or the date of
submitting the bids, or some other date.
In general, ambiguities such as those described above can
be resolved by requesting clarication from the contracting
authority. The problem is that even if the bidder asks its
questions swiftly after the contract notice is issued, thecontracting authority may wait with its answers until six
days before the deadline for submitting the bids (as it often
does). This may not leave sucient room for the bidders
to obtain the required documents if the explanation given
by the contracting authority shows that some additional
unexpected documents are required.
www.allenovery.com
11
-
8/13/2019 A Guide to Public Procurement in CEE
12/60
In Poland, the EC directives regarding public
procurement have already been fully implemented and
there is no longer any discrepancy between Polish and
European procurement law. Polish Public Procurement
Law means the Public Procurement Law dated 29 January
2004, as amended (consolidated text, J. L. 2010, No. 113,
item 759) (PPPL) has been amended to implement EC
directives and incorporate related amendments intended
to improve public procurement procedures, and in order
to reect the challenges connected with the current
economic situation.
Thanks to the implementation of EC Directives and the
amendments incorporated into the PPPL, Polish public
procurement law is quite friendly towards non-Polish
bidders. If some documents required in the tender
procedure are not issued in the bidders country of
residence, foreign bidders are entitled to submit equivalent
documents relating to the bid, provided these are issued by
proper public or private bodies in the bidders country.
These documents must be issued no earlier than six
months prior to the deadline for ling a request toparticipate in a bid, and no earlier than three months prior
to the deadline for ling an oer. As with other CEE
countries, ensuring equivalence may be problematic due to
the dierences in national legal systems, and in the event
of any uncertainty it is very important to contact the
contracting authority in advance and ask it to clarify what
is required in order to adequately satisfy the formalities.
In addition, under Polish law there is a very important
general rule stating that if the bidder's country does not
issue a certain type of document at all, it is sucient for
the bidder to make a declaration instead (in conrmation
of the information otherwise required to be proved by the
relevant document(s)) provided this is authorised by a
notary or made in a court or other administrative unit in
the bidder's country of residence. This rule plays a very
important role in practice, as its application resolves
many problems regarding documentation which occur in
other CEE countries.
The Public Procurement Act also contains very tight
deadlines for issuing a request for clarication of the
tender rules or documents being led during the tender
procedure. If the bidder wants to obtain clarication from
the contracting authority, it must submit the request by the
end of the day on which the mid-point of the term for
issuing the tender oer falls, i.e. halfway towards the
deadline. For equal to- or above-threshold orders, however,
the wording of the Public Procurement Act is ambiguous.
It is not clear how to establish the term for seekingclarication, as under the Act the deadline starts running
from the submission by the contracting authority of the
contract notice for ocial publication. In practice the
contract notice is published only approximately ve days
after its submission. Further, the unocial publication of
the material conditions of the contract prior to the ocial
publication of the contract notice in the ocial EU
journals is prohibited (for example on the contracting
Poland
Allen & Overy LLP 2011
A guide to Public Procurement in CEE |201112
-
8/13/2019 A Guide to Public Procurement in CEE
13/60
authoritys website or in the contracting authoritys seat).
The relevant deadline therefore only runs for about ve
days, leaving the bidders with very little chance to get
acquainted with the tender rules. This is not in accordance
with the goal of the Public Procurement Act and puts the
bidders in a dicult position.
On the other hand, while the material conditions of the
contract can be published only after the ocial publication
of the contract notice (in practice after the above-
mentioned ve days from the submission for publication),the contract notice itself can be unocially presented by
the contracting authority on the contracting authority's
website or in the contracting authoritys seat before
publishing the material conditions of the contract.
The contract notice involves most (although not all) of
the information regarding the bid. This unocial
publication of a contract notice may take place several
days earlier than the ocial publication of the material
conditions of the contract.
The result is that in practice this puts domestic bidders in
a more favourable position as they normally have access to
the contracting authoritys website (which is usually in the
Polish language) or they can easily visit the contracting
authoritys premises. Foreign bidders are in a worse
position as they usually derive their knowledge about a
tender only from ocial publications. Hence, domestic
bidders have several more days to prepare themselves for
the bid, which can be crucial in procedures where time is
of the essence.
www.allenovery.com
13
-
8/13/2019 A Guide to Public Procurement in CEE
14/60
HungaryThe Hungarian Public Procurement Act has been drafted
to ease the burden on foreign bidders, and help them to
provide the necessary documentation to full the bidding
criteria by allowing them to provide documents usually
issued for the same purpose in their home country.
In many cases, an adavit or a declaration under oath is
required or, if these are not recognised under local law, a
certicate issued by the competent court, authority or
professional association will suce, or even a declaration
notarised by a public notary. Certain certicates issued in
the jurisdiction of the bidder by the relevant authority,
such as a certicate of incorporation of the bidder or a
certicate issued by the tax authority that the bidder has
paid all taxes due, must be accepted by the contracting
authority. Similarly, a bid may not be refused on the
grounds that the proposal does not meet the technical
description and standards set out in the tender, provided
the bidder can prove that the proposal is equally t for
purpose. However, care must be taken to ensure the
equivalence of documents obtained abroad and the
documents required under the Hungarian PublicProcurement Act, as a failure to comply with the correct
criteria can still lead to the disqualication of the bidder.
In order to reduce this risk, it is advisable to make a
reference in the certicate or notarised declaration to the
relevant section of the Hungarian Public Procurement Act,
indicating that the document has been issued for the
purposes of complying with the relevant section of the act
and the ways in which it achieves compliance.
As with other CEE countries, ensuring equivalence may be
problematic due to the dierences in national legal
systems. Local lawyers may be able to advise on what may
be accepted by the contracting authority, and as elsewhere
one should contact the contracting authority in advance
and ask it to clarify what is required in order to adequately
satisfy the formalities.
As an example, on one occasion, a foreign investment
bank was unable to provide some bank account
information which was requested by the contractingauthority to certify its nancial good standing, due to
internal policies of the bank and applicable law.
Nevertheless, on this particular occasion, the contracting
authority was persuaded to accept an alternative means of
certication. The arguments presented to the contracting
authority were based on the general principle that bidders
must be treated on equal terms regardless of their
nationality, and that this principle must override such
technicalities. Therefore, if a bidder is simply not able to
comply with a formal requirement because it would lead to
an infringement of its domestic laws or regulations, analternative form of satisfaction must be accepted and the
requirement for equivalence in such cases must be
approached with a degree of exibility.
equivalence in these cases must beapproached with a degree of exibility
Allen & Overy LLP 2011
A guide to Public Procurement in CEE |201114
-
8/13/2019 A Guide to Public Procurement in CEE
15/60
Under the Czech Public Procurement Act, the situation is very
similar to Slovakia vis--vis non Czech bidders. With certain
exceptions, consideration is given to the legal regulations in the
country of the bidders incorporation. In other words, when
assessing the documents which are required by the Czech
Public Procurement Act, the foreign bidder may provide the
equivalent documents that are available in the bidders country.
However, unfortunately and all too often, it is dicult to assess
whether or not foreign documents evidencing certain facts
required by the Czech Public Procurement Act will be
satisfactory. It is obviously possible to raise this as an additional
question to the contracting authority and thus try to establish
whether a particular document will be considered as a suitable
equivalent, but, from our experience, the contracting authority
tends not to comment on the interpretation of applicable law
and such additional questions will likely remain unanswered.
For example, in a tender relating to the introduction of e-tolls
in the Czech Republic one of the bid requirements was that
the bidders team had to include a person authorised as a
construction engineer (in Czech: autorizovan inenr pro
pozemn stavby). It was likely that some bidders would nothave a suitable person authorised under Czech law, and in
that case, it would be necessary to establish what would be
the equivalent requirement in the bidders country of
incorporation. Whilst this appears to be a simple question at
rst sight, in fact it is a very dicult question to answer when
the applicable foreign countrys legislation is completely
dierent from Czech legislation (as it often is).
The contracting authority may to a certain extent request an
explanation of, or supplements to, any documents which are
to be submitted, but it is not obliged to do so. The contracting
authority is, however, required to disqualify a bidder that hasnot complied with the tender rules. Obviously, as in the other
CEE countries, there is constant tension between a
contracting authoritys desire to be transparent, but also to be
exible to a practical extent. A contracting authority may wish
to use its discretion to disregard insignicant technical errors,
but this can be a challenge when set against a backdrop of
legislation which obliges it to disqualify non-compliant bids.
No public ocial will want to be the person who exercises
discretion if it could later be argued that the letter of the law
obliged them to disqualify the bid.
An amendment has recently been made to the Czech Public
Procurement Act which came into eect in January 2010
and implements further EC principles, especially in relation
to the review of the public procurement process. In
particular, this amendment provides that any bidders who
submit information or a document that is misleading may
have to pay an administrative ne of up to CZK 10 million
and will be prohibited from participating in the public
procurement process for a period of three years. The
practical implications of this alteration remain to be seen
but it could prove to be draconian.
From a foreign bidders perspective, a brief mention should
also be made of the specic rules that apply to the defencesector. The eect of the Czech Act on Foreign Trade with
Military Material is that where public contracts for military
materials are concerned, only a company with its registered
seat in the Czech Republic could be eligible for the contract.
In practice, however, foreign companies usually establish a
Czech subsidiary to circumvent this provision. In the famous
Czech Pandur case, for example, a public contract on the
supply of armoured carriers was concluded between the
Czech Ministry of Defence and the Czech company Defendia
CZ, s.r.o., which is in fact indirectly owned by Austrian
companies General Dynamics European Land SystemsGmbH and Steyr-Daimler-Puch Spezialfahrzeug GmbH.
Czech Republic
www.allenovery.com
15
-
8/13/2019 A Guide to Public Procurement in CEE
16/60
Romanian public procurement law is reasonably exible
vis--vis non-Romanian bidders, who are permitted to
provide equivalent documents when participating in public
procurement procedures. Romanian contracting authorities
must consider equivalent documents from other
jurisdictions which prove the status of the bidders.
Nevertheless, it is always a good idea to check with the
contracting authority in advance if possible whether the
documents to be provided are sucient.
If there is uncertainty with respect to the status of the
bidders, the Romanian contracting authorities have the
right to request information directly from the authorities
that originally issued the documents submitted by the
bidders. If these documents are not usually issued in the
bidders country, the Romanian contracting authority must
accept a declaration on oath (adavit) instead. If a country
has no provision for declarations to be given on oath then
a declaration (declaratie autentica in Romanian) made by
the respective bidder before a public notary, competent
judicial or administrative authority or a competent
professional or trade body must be accepted.
Romania
Allen & Overy LLP 2011
A guide to Public Procurement in CEE |201116
-
8/13/2019 A Guide to Public Procurement in CEE
17/60
-
8/13/2019 A Guide to Public Procurement in CEE
18/60
PolandConcepts introduced in Poland, such as the framework
agreement and electronic auctions, are in general identical
to those in Slovakia.
In 2006 a new procedure of competitive dialogue was
introduced to the PPPL which is specically designed for
PPP projects. Although this should be considered positive,
there are legal concerns regarding the appropriateness
of the method of implementing this procedure into
Polish law which may have a negative impact on PPP
tendering procedures.Firstly, Polish law sets stricter rules than European law
in terms of the obligatory number of participants that the
contracting authority is obliged to invite to the dialogue
phase. Under the PPPL, if the value of the contract is
equal to or above-threshold, the contracting authority
needs to invite at least ve participants to the dialogue,
whereas the European requirement is at least three.
This solution may lead to greater costs for the contracting
authority. On the other hand, for the bidders the cost to
prepare a nal bid in a PPP project is also considerable.In this respect the method of implementing competitive
dialogue in Poland signicantly reduces the chance for each
bidder to be awarded the contract in comparison to if there
were only three bidders. Consequently, this may deter
enterprises from taking part in the procurement process.
Secondly, doubts remain whether under Polish law a
contracting authority is legally allowed to conduct a
competitive dialogue in stages.
Under EU law one of the key features of the competitive
dialogue procedure is that the contracting authority can
develop a competitive dialogue process that meets its
individual requirements. For example, a contracting
authority may wish to divide the dialogue phase into
two or more stages, reducing the number of solutions
and bidders involved at each stage on the basis of theaward criteria specied in the contract notice or a
descriptive document.
Polish regulations are silent in this respect and therefore
the contracting authorities may refrain from structuring
the dialogue phase in stages to the detriment of the
eectiveness of the tendering procedure.
Allen & Overy LLP 2011
A guide to Public Procurement in CEE |201118
-
8/13/2019 A Guide to Public Procurement in CEE
19/60
-
8/13/2019 A Guide to Public Procurement in CEE
20/60
The common concepts of abnormally low price or
impossible undertaking have been adopted by the
Hungarian Public Procurement Act, but their practical
meaning is dicult to discern. If these concepts are
established, they may lead to the disqualication of
bidders. The same applies to the requirement of
extreme urgency in the case of setting aside the
publication of a tender notice. The problem with these
concepts under Hungarian law is that the Public
Procurement Arbitration Committee (which acts as the
supervisory authority for public procurement proceedings)
adopts a case-by-case approach. While the purpose of this
approach is to ensure that all the relevant circumstances of
each individual case are considered, the drawback is that it
is very dicult to predict the outcome of an individual
case. We note nevertheless that as of September 2010 a
threshold has been applied when determining abnormally
low price. Under the new rule, if the price of a bid is at
least 15% lower than (i) the average price of all other bids,
(ii) the average price of all bids without considering the
highest and the lowest bid if more than three bids, and(iii) the estimated benchmark price if there is one bid,
then the price indicated in the bid shall be deemed as
abnormally low.
The Hungarian Public Procurement Act has also
introduced some technical improvements such as
electronic procedures, electronic auctions and a dynamic
procurement system. As a general rule, actions taken under
the procurement procedure may be performed using
electronic means (subject to certain conditions contained
in separate legislation). Notices must also be sent
electronically via the Public Procurement Advisory
Committee (the Advisory Committee) to the Oce for
the Ocial Publications of the European Communities.
The Hungarian Public Procurement Act also recognises
the concept of a framework agreement. As in Slovakia,
a framework agreement is made between one or more
contracting authorities and one or more (if more than one,
then at least three) bidders and sets out the key terms and
conditions (especially the prices and the quantity) of
the contracts to be awarded during a given period.
A framework agreement may endure for a maximum
period of four years. The terms of the contracts concluded
under the framework agreement may not exceed the terms
of the framework agreement.
Hungary
Allen & Overy LLP 2011
A guide to Public Procurement in CEE |201120
-
8/13/2019 A Guide to Public Procurement in CEE
21/60
New concepts introduced in Romania are in general
identical to those introduced in Slovakia, Hungary and
the Czech Republic, including the concepts of a framework
agreement, dynamic procurement system and an
electronic auction.
Romanian public procurement law provides that the
framework agreement may endure for a maximum period
of four years, and longer periods may be established only
in exceptional cases. Romanian public procurement law
does not provide any detailed description about what forma framework agreement should take, although it does set
out certain mandatory provisions that must be included.
Unless the subject matter of the framework agreement is
such that there is a limited number of eligible bidders
capable of entering into it, the contracting authority should
address the tender to at least three bidders.
In 2008 the Romanian government passed a decision
requiring Romanian contracting authorities to use
electronic systems for at least 20% of the total value of
tenders carried out by them. This decision failed to specifyany sanctions for non-compliance and was therefore
largely ineective. However, in 2009 a further decision
established that nes for non-compliance would be
incurred and we have seen a corresponding rise in the
number of procurements conducted by electronic means.
By November 2009 this number increased to 13%.
In 2010 the Romanian government passed another
decision requiring Romanian contracting authorities to
use electronic means for at least 40% of the total value
of tenders carried out by them.
Romania
www.allenovery.com
21
-
8/13/2019 A Guide to Public Procurement in CEE
22/60
Formal requirements, in particular with respect to a bid
submission, are often extremely detailed in CEE countries.
It should be noted that this can be misused to facilitate the
disqualication of unwanted bidders, since it is more or
less always questionable whether all formal requirements
have been precisely met by each bidder. Therefore, instead
of the legal framework providing a more transparent
process, the lack of clarity (or incorrect over-specication)
of tender requirements can lead to the opposite
eect a contracting authority disqualifying bidders for
minor administrative or technical failures to comply withthe bidding process. This may not always arise as a result
of an improper abuse by a contracting authority of the
formalistic requirements to engineer a pre-desired result
(as is inevitably feared by losing bidders), but is just as
likely to arise because the contracting authority fears that
to ignore formal non-compliance by a bidder would lead to
charges that the bidder in question had been favoured.
Contracting authorities may therefore nd themselves
trapped between the Scylla of feeling obliged to disqualify
formally non-compliant bids on a technicality, and the
Charybdis of appearing to engineer a win for a particular
bidder by disqualifying the other bidders on minor
grounds. Any system of public procurement rules which
can be developed to resolve this quandary will, therefore,
be most welcome to both bidders and contracting
authorities. While it is true that the contracting authority
may request the bidders to explain their oers, which
may include a request to correct minor formal errors or
supply missing documents, it is not clear when a
contracting authority is supposed to use this right and
which errors may be remedied in this way. It would be
useful to introduce a mandatory short cure period for
minor non-compliance, but inevitably there will be
diculties in dening what are minor or technical breaches
only, as well as objections from compliant bidders that they
see no reason why a non-compliant bid should be given a
second chance when their own bid has been compliant.
By way of example, in the Czech Republic and the Slovak
Republic, bids are, in most cases, to be delivered in a closed
envelope and bound in a specic way. The tender rules
often used to include extremely detailed requirements on
how to bind the bid documents together, such as which
laces are to be used, where and how to stamp/execute the
bound documents and the type of envelope to use, etc and
even minor non-compliance resulted in a bidder being
excluded from the tender process without the content of
its bid even being considered. Although the situationimproved recently and exclusion of bidders for purely
formal deciencies is much less frequent, a very careful,
even pedantic approach to preparation of the bid,
including compliance with the formal requirements set out
in the tender documents, is still strongly recommended.
Formalistic approach
Allen & Overy LLP 2011
A guide to Public Procurement in CEE |201122
-
8/13/2019 A Guide to Public Procurement in CEE
23/60
The Hungarian Public Procurement Act specically
describes the formalities a bid must comply with,
although the contracting authority may now set less strict
requirements in a tender and certain formal imperfections
may be also cured under specic circumstances. As of
1 April 2009 the contracting authorities must allow bidders
to le certain additional documents. This right is extended
to all bidders in a tender in accordance with the basic
principle of non-discrimination. Please note that the right
only relates to certain documents, including certicates
relating to the disqualication rules and formalcompliance. It is not extended to documents which form
part of the technical description of the bid or the basis of
its evaluation. In Poland, restrictive rules concerning
formal tender requirements have been loosened recently.
In eect, during the process of evaluating oers the
contracting authority may require that bidders explain their
oer. Furthermore, in the bidders oer the contracting
authority may correct: (i) obvious misprints; (ii) obvious
computational errors; or (iii) other errors which result in
inconsistencies with the tender terms and conditions, but
which do not cause essential modications to the bid.
By making such amendments, the contracting authority
cannot reject a bidders oer due to such minor
inconsistencies, unless it does not match the essential
terms of the contract.
In Romania there are also restrictive rules concerning
formal tender requirements such as those related to the ink
to be used for printing or writing the bids, the signing and
stamping of the documents, or to the submission of bids.
Romanian contracting authorities do not have the
discretion to waive breaches of these rules. Usually the
tender rules prepared by the contracting authorities
contain detailed formal requirements concerning the form
and submission of the tenders. It is also recommended that
the bid is presented together with a cover letter in a
specic form.
www.allenovery.com
23
-
8/13/2019 A Guide to Public Procurement in CEE
24/60
Complexity of applicable regulationsHungarian law is particularly dicult in the area of
public procurement since, in addition to the main
legislative source (the Hungarian Public Procurement Act),
there are a number of other regulations containing special
rules which apply to certain types of public procurement
procedure. For example, special rules apply to the
procurement of pharmaceutical products, procedures
involving state or professional secrets, and the
procurement of products for military, or police-related
purposes. Furthermore, special rules apply to certain
aspects of public works contracts and electronic
procurement. These rules are issued in the form of
government decrees and they must be taken into account
when a foreign bidder submits a bid in Hungary.
As of 1 January 2012, a new law on public procurement
will enter into eect (the New Law). While the New Law
will contain the same basic principles and procedures, the
aim was to ease procedural burden, improve transparency
and strengthen the competitiveness of small and
medium businesses.
In Romania there are also special rules governing certain
types of public procurement procedures, such as the award
of media advertising contracts. In addition, certain
categories of contracts, such as those included in the
category of state secrets according to the legislation on
classied information protection, or contracts which, if
performed, must be accompanied by special security
measures for protecting essential national interests, are
not carried out under the normal public procurement
procedures covered by the general law, but are instead
subject to special proceedings under special laws.
Allen & Overy LLP 2011
A guide to Public Procurement in CEE |201124
-
8/13/2019 A Guide to Public Procurement in CEE
25/60
-
8/13/2019 A Guide to Public Procurement in CEE
26/60
-
8/13/2019 A Guide to Public Procurement in CEE
27/60
4.1 Managing time and roles in preparing a bid
Preparation of a bid up to the point of its submission is a lengthy and complex processand therefore it requires good planning and management. Apart from substantive matters,attention must be paid to the formal aspects of the bid.
Knowing the tender rulesAlthough this may sound like an obvious rst step,
perhaps the most important task is to get acquainted with
the tender rules. Usually the tender rules are large
documents containing large amounts of information and
many requirements that must be carefully considered. It is
often the case that the tender rules are not well organised.
One subject may be discussed under several dierent
headings or information provided or requested may be
contradictory. Therefore attentive reading of the tender
rules is essential.
Having a good knowledge of the tender rules enables a
bidder to manage timing and to allocate responsibilities
accordingly. This will enable the bidder to ask for
information in respect of any rules and requirements
which may need further clarication. It also minimises the
risk of not fullling the formal and substantive criteria and
of missing deadlines.
Tip: It is recommended that the tender rules are discussed
between the members of the bidding team and legal
counsel. The bidding entity may be more aware of the
technical implications of the tender rules than legal counsel
are, whereas legal counsel may provide guidance on and
focus the bidders attention towards any legal or practical
issues. Joint examination of the tender rules by all
members of the team should enable the team to get
acquainted with the requirements and highlight potential
legal or technical risks which may require further attention.
It can also help to identify the equivalent documentation inthe home country of the bidder, where only local
specications are stated in the tender rules.
It is, in addition, important to continuously monitor and
evaluate the requirements throughout the tender process.
Whilst careful and critical evaluation of the tender rules
at an early stage is essential, it is useful to review the rules
regularly to ensure that they continue to be applied
practically in the light of subsequent knowledge
and practice acquired during the process of putting
together the bid.
www.allenovery.com
27
-
8/13/2019 A Guide to Public Procurement in CEE
28/60
Some of the key elements of the tender rules are the
requirements in relation to the bidding entity. The tender
rules may directly or indirectly contain requirements that
not all bidders may be able to satisfy. They contain legal,
nancial and technical requirements and may directly
require that the bidder has a certain licence or satises
specic turnover criteria. The tender rules may also set out
further indirect criteria, for example, by referring to a law
that contains other requirements such as obliging the
bidder to have a registered oce in the country of the
contracting authority. The contracting authority may also
require the bidder to establish a business association (a
special purpose vehicle), if it is reasonable to do so, for
the purpose of performing the contract.
Tip: The bidder should ensure that it is itself qualied to
submit a bid. If it is not, it will be necessary to immediately
start seeking alternative solutions, such as using a sub-
contractors credentials, entering into a consortium or
bidding through another entity.
The bid usually consists of a general part which relates to
documents concerning the legal, nancial and technical
standing of the bidder, and a specic part which includes
the proposal for the delivery of goods or the provision
of services that form the subject matter of the tender.
The documents must satisfy certain content requirements
as well as requirements in relation to form. It is therefore
necessary to clearly assign the tasks and responsibilities
to ensure that the documents contain what is required.
Get acquainted with the tender rulesThe team should clearly allocate responsibility to its
members for each task to be satised in order to obtain
the required documentation. Sometimes obtaining
documentation is purely a matter for legal counsel.
This will be the case when a document needs to be
drafted by legal counsel and then simply signed by a
representative of the bidder, or if the document is issued
by another body and its content needs to be reviewed or
discussed with legal counsel. The technical team may, on
the other hand, be more heavily involved in obtaining
references from business partners and technical
certicates, etc. The in-house legal counsels of the bidder
are important as they will have a deep understanding of
the business of the bidder, and the way in which the
bidder customarily conducts itself during tenders. They
may have to monitor or implement internal guidelines as
to the form and content of documents, the level of
Identication of the bidder Checklist of tasks & responsibility
Allen & Overy LLP 2011
A guide to Public Procurement in CEE |201128
-
8/13/2019 A Guide to Public Procurement in CEE
29/60
acceptable risk, the appropriate level of decision-making
(for example, they will decide when a decision requires
approval at a more senior level or requires approval from
the board), ensure formal compliance with internal
guidelines when giving undertakings, representations,
adavits, bid bonds and internal compliance generally.
Last but not least, the in-house legal counsel may have to
co-ordinate the execution of the relevant documents on
behalf of the bidder and ensure that signatories will be
available when needed.
Timing is also crucial and obtaining certain documents
may be a time-consuming process. Formal requirements
will also place an extra burden on the bidder, for instance
documents may require notarisation or an apostille, or may
need to be translated and certied. Final compilation of
the bid also needs time as bidders understandably wish to
present the bid in an attractive format, and the physical
process of binding and sealing the bid tends to take more
time than expected.
Tip: The preparation of a bid is a process involving a large
team of people, including not only a technical and legal
team but also third parties such as state bodies and
business partners of the bidder, etc. In addition to
obtaining the required documents, which takes a
considerable amount of time, documents will also need to
be translated, veried by a notary and may have to satisfy
further requirements. It is therefore recommended that the
timetable for submitting a bid is prepared some time in
advance and, to the extent possible, followed scrupulously.
Additionally, consideration should be given to the practical
execution of the bid itself, such as: where will the bid be
compiled; who will be signing it; how will last minute
changes to the bid documents be implemented (and will
there be a person on standby authorised under a power of
attorney to sign changes); who will actually deliver the bid
(and is legal counsel actually going to be accepted as the
deliverer of the bid or does an authorised representative of
the bidder have to physically deliver the package); is there
enough time for printing, binding and delivery of the bid;
has the delivery address and the time for delivery
(even the trac situation) been double checked, etc.
Consideration should also be given to administrative
matters such as: are the envelopes and boxes big enough
to contain the bid; are the boxes properly labelled; are the
relevant parts of the bid in the proper envelopes if they
are required to be separated, etc. Responsibility for all
these elements should be clearly allocated.
It is crucial to allow sucient time for the preparation
of the bid. The drafting of the declarations and the
procurement of the necessary certicates is a time-consuming process. Care must be taken to draft the
necessary powers of attorney granted by foreign bidders to
the person representing them. It should be considered in
advance whether someone representing a foreign bidder
will need to be present in person to sign the necessary
declarations before a local notary.
It is crucial to allow sucient timefor the preparation of the bid
www.allenovery.com
29
-
8/13/2019 A Guide to Public Procurement in CEE
30/60
A question often arises as to whether a bid must be
submitted in two languages, i.e. the language of the
home jurisdiction of the bidder, as well as the local
language. For foreign bidders, good corporate governance
would dictate that the bid must be available in the native
language of the directors/decision makers of the bidder so
that they can understand what they are submitting.
However, where there are t ime limitations, and, for
example, only the local language version has been properly
formatted and nally checked, it seems perfectly acceptable
to submit the bid in the local language only, with no ocialtranslation, unless the tender rules stipulate otherwise.
Unocial translations can be made available internally so
that the bidders directors can sign o on the submitted
bid, but this unocial version would not have to be
submitted, as long as the local language version is properly
submitted (again, unless the tender rules say otherwise).
In Slovakia, bids must be submitted in the ocial language,
i.e. Slovak. However, this means that for foreign bidders all
corporate, economic and technical standing documentation
will always be in its original language as well as in Slovak.The other part of the bid, i.e. the contract element, must
be in Slovak but it is not necessary to submit it in the
original language as well.
In general, the same is true in Poland. Under the PPPL all
the proceedings are to be held in Polish. However, it is left
to the discretion of the contracting authority whether or
not to allow certain documents to be submitted in one of
the languages of international trade or in the language of
the country in which the order will be granted. If there is
no such decision, all the documents must be submitted inboth the original bidders language and in a translation
which is certied by the bidder.
In Hungary, the language(s) of the public procurement
procedure may be chosen by the contracting authority, but
foreign bidders can expect that the language for the
procedure will be Hungarian. Even if the contracting
authority has chosen an alternative language, the tender
notice and the documentation must also be made available
in Hungarian and the bidders must always be given the
option to prepare their bids in Hungarian. If there is a
discrepancy between the Hungarian and foreign language
versions of a document, the Hungarian version will prevail.
These rules evidently favour national bidders.
In Romania, the language of the public procurement
procedure is left to the sole discretion of the contracting
authority, and must be specied in the contract notice.
Unsurprisingly, foreign bidders should expect that the
language selected by the contracting authority
will be Romanian.
In addition to the logistical requirement of translating bid
documents, some documents need to be translated
ocially, i.e. translated by an authorised translator, or also
presented in the original language and accompanied by a
translation, depending on the requirements specied in the
tender documentation.
The Slovak Public Procurement Act does not specify
whether a certied translation of the bid documents is
required. In our experience, however, contracting
authorities generally apply a more formalistic interpretation
of the law and therefore we would suggest using a certied
translator to minimise the risk of being disqualied.
Sometimes documents in Czech are permitted in Slovak
tenders. In Hungary translation requests may be submittedto the National Translating and Translation Certifying
4.2 Translations
Allen & Overy LLP 2011
A guide to Public Procurement in CEE |201130
-
8/13/2019 A Guide to Public Procurement in CEE
31/60
Oce (in Hungarian: Orszgos Fordt s Fordtshitelest
Iroda) if the bidder wants to ensure that it submits a
certied translation. In the Czech Republic the language of
the bid will be determined by the tender rules published by
the contracting authority. However, in practice it would be
fairly exceptional for languages other than Czech (and
Slovak) to be permitted. If the bid has to be led in Czech
(which means that the whole communication during the
tender process will be carried out in Czech, including
additional questions and answers to those questions), any
documents in a foreign language must be translated intoCzech by a certied Czech translator.
As the number of documents that need to be translated
will be considerable, and their content will often be very
technical and complex (and therefore require more time to
translate), obtaining translations can take a substantial
amount of time. In some countries, there are a limited
number of translators qualied in certain languages,
such as Dutch.
It may well be the case that, although the tender rules
require a translation, the whole document in question will
not need to be translated and instead an extract containing
the relevant information will be sucient. This is usually
the case with nancial standing requirements and with
documents such as nancial statements, where the
contracting authority has conrmed that only certain data
from the nancial statements needs to be translated.
Tip: It is recommended that once the nal form of the bid
documentations wording is approved, the documents are
sent immediately for translation. In the event of any doubt,
it is suggested that the bidder claries the language
requirements with the contracting authority. Allow an hour
per page for translation and be aware that if you submit a
last minute four-page document to be translated one
hour before the bid delivery deadline, you may not make it
in time. Also, while in urgent cases the ocial translation
may be produced within a very short period, the price paid
for these urgent translations is likely to be very high.Bidders may also nd that obtaining a fee quote from
the translator may be dicult because the translator will
require details of the document to be translated which may
not always be possible to provide, simply because when
the quote is requested, the local lawyer has not yet seen
the document. It is therefore advisable to request details
(especially the length or likely length) of the document
from the members of the team in order to be able to
obtain a reasonable estimation of translation costs.
Finally, when preparing drafts of documents, send
electronic scans of originals well in advance to the
translator as this takes less time than sending copies by
post. When doing this, take care to ensure that the nal
translations correspond to the nal version and not the
older drafts.
www.allenovery.com
31
-
8/13/2019 A Guide to Public Procurement in CEE
32/60
4.3 Communicate with the contracting authorityto clarify the tender rules
Bidders should consider using opportunities to
communicate with the contracting authority, but
must be careful not to disclose their identity.
Bidders have the right to request clarication from the
contracting authority of the tender rules or any other
related documents and the contracting authority is under
a statutory obligation to notify all bidders (not only the
bidder who submitted the question) of any clarication it
provides. Moreover, in some countries, for example in
Poland, the contracting authority may also convene a
bidders meeting in order to clarify any doubts and
uncertainty arising from the tender rules and documents.
The clarication of tender rules gives the bidder the
opportunity to conrm or clarify requirements under the
tender rules so that they can successfully satisfy the
requirement in question. Be aware that attention should be
paid to the wording of each question as the answers are
disclosed to the other bidders and unless the question is
carefully drafted, it may give other bidders information
that a bidder may not wish to disclose (including enabling
the other bidders to deduce the identity of the bidderasking the question).
Tip: In addition to the suggestions above, a general
recommendation is to phrase each question clearly to avoid
any ambiguous interpretation of the question by the
contracting authority. Use closed rather than open
questions to ensure that the response you receive addresses
your question rather than straying into general territory
and not answering the question directly. Divide questions
up clearly and do not try to ask several questions at once
within a single question as this will make it more
dicult for the contracting authority to answer each
question specically.
The ability to submit questions is usually subject to tight
deadlines so care must be taken to submit them in time.
For example, in Hungary additional information may be
requested no later than ten calendar days prior to the
deadline for submitting the bids and the additional
information must be provided no later than six calendar
days prior to the deadline. The procurer may extend this
deadline if it is not able to give additional information in
time. Please note that sometimes the number of questions
which may be led is limited.
Allen & Overy LLP 2011
A guide to Public Procurement in CEE |201132
-
8/13/2019 A Guide to Public Procurement in CEE
33/60
4.4 Be very attentive not only to thesubstantive but also the formal requirements
Bidders should pay attention to formal requirements
such as the format of the documents submitted and the
structure of the bid, etc.
Not only the substance but also the form of the bid is
regulated by law and the tender rules, and therefore it is of
crucial importance to get the formal requirements right.
The rst set of formal requirements primarily concerns the
documents that form part of the bid, such as who will
issue and sign the document, whether the document needs
to be an original or a copy, whether the signature is to be
veried by a notary and whether the document is to beaccompanied by a certied translation, etc.
Once the documents have been prepared, the second set
of formal requirements usually addresses the form in
which the bid itself should be organised, such as whether
it should it be presented in binders, whether it should be
submitted with a cover letter and whether it needs to be
made available electronically as well as in hard copy, etc.
The bid is usually submitted in a sealed envelope
containing the required information. The question as
to whether a power of attorney is required for the
submission of the bid documents should also be
addressed. The formal requirements may, of course,
also arise further along in the bid process, for instance in
relation to the submission of requests for clarication of
the tender rules, the opening of envelopes containing the
bids and the submission of additional explanations of
the bids, etc.
Tip: As the formal requirements are equally as important asthe substantive ones, it is strongly recommended that due
attention is paid to these requirements so that the risk of
disqualication for non-compliance is minimised.
phrase each question clearlyuse closed rather than open questions
divide questions up clearly
www.allenovery.com
33
-
8/13/2019 A Guide to Public Procurement in CEE
34/60
(a) Ensure that the entire team familiarises itself with
the tender rules.
(b) Have a team meeting and draft a bid timetable,
highlight time-consuming requirements and areas for
clarication, and delegate responsibility for each task
to an appropriate team member.
(c) Commence, as soon as practicable, any necessary
clarication procedures.
(d) Identify (or establish, if necessary) the appropriatebidding vehicle.
(e) Ensure that the logistics of the bid submission are
arranged well in advance. This should include:
(i) Liaising with appropriate translators, and
forewarning them of the timing and length of
impending translations;
(ii) Liaising with and forewarning appropriate
public notaries;
(iii) Contacting courier services to establish how long
it will take to transport the nal bid documents;
(iv) Ordering the appropriate stationery such as laces,
labels, boxes, bindings, etc and discussing
printing and binding times with printers (if
appropriate); and
(v) Establishing the anticipated location and
availability of key personnel (i.e. directors/
signatories) at the time of the bid submission, and
if necessary obtain authorisations and powers of
attorney if others are to act on their behalf.
(f ) Continually monitor the progress of the bid in light of
the timetable and deadlines. Conduct regular all-party
conference calls to discuss new issues, the progress of
the document collation, and any communications
with the contracting authority.
(g) Observe and record the progress of the bid and the
actions of the parties involved in it, to ensure a
well-prepared appeal, should one become necessary.
(h) Check regularly that all substantive and formal
requirements of the bid will be satised. Do not panic
if things go wrong (always have a plan B), and, where
possible, try to be exible and creative.
4.5 Checklist for a successful bid
Allen & Overy LLP 2011
A guide to Public Procurement in CEE |201134
-
8/13/2019 A Guide to Public Procurement in CEE
35/60
Dont panic if things go wrong
www.allenovery.com
35
-
8/13/2019 A Guide to Public Procurement in CEE
36/60
Part 5What is Happening Behind Closed Doors
(Evaluation of bids)
A guide to Public Procurement in CEE |201136
Allen & Overy LLP 2011
-
8/13/2019 A Guide to Public Procurement in CEE
37/60
5.1 Independent expert evaluation
Under the dierent CEE legislation, the evaluation process
is part of the tender process in which the bidder is generally
not an active participant. The evaluation process is not
public (except for the envelope-opening session in which
the bidders representatives are allowed to participate). The
bids are evaluated by an evaluation committee on the basis
of criteria specied by law or in the tender rules. Once the
evaluation process has been nalised, the evaluation
committee will distribute the results of the tender.
In Slovakia, the evaluation committee must comprise at
least three experts. It will examine whether the bids are incompliance with the tender notice, the tender rules and the
Slovak Public Procurement Act. The bidder may be required
to clarify its bid if requested to do so by the evaluation
committee. The clarication request will usually concern
parts of the bid which are unclear, or which appear to be
inconsistent. The evaluation committee must also request
clarication of the price if it appears to be abnormally low
and the bidder must prepare the clarication within the time
period specied in the tender rules or in the request for
clarication. The clarication is not a means by which the
submitted bid can be amended, and serves only to explain
existing elements of the bid which are unclear. Any attempt
to make the bid more advantageous should be rejected by
the evaluation committee.
The award criteria may be either the lowest price or most
economically advantageous tender, the former being used
much more frequently than the latter. This is perhaps a
result of the higher transparency of awarding on the basis
of lowest price, or also because the use of the most
economically advantageous tender criterion requires more
eort and expertise on the part of the contracting authority.
Such an approach is in our view rather unfortunate as
especially in case of more complex contracts, the lowest
price often fails to bring the best value for money for the
contracting authority. Better education of the contracting
authorities as well as guidance from the Public Procurement
Oce on how to use the most economically advantageous
tender criterion to evaluate the bids could help to make its
use more wide-spread.
In Poland, an evaluation committee must be appointed if
the contract is equal to or above the limit for an above-
threshold order, having reference to the thresholds
specied in Article 7 of Directive 2004/18 and Article 16
of Directive 2004/17. Otherwise the appointment of an
evaluation committee is left to the sole discretion of the
contracting authority.The evaluation committee must comprise at least three
members. In some cases, when special knowledge is
required, the committee may appoint an external expert.
The committee examines whether the bids are in
compliance with the tender notice, the contracting
authoritys requirements and applicable law. In addition, the
committee prepares and conducts the tender, and
undertakes all actions relating to communicating with the
bidders and clarication procedures etc. Once the tender is
concluded, the evaluation committee must issue a tender
protocol, which sets out its decision and the considerationsthat were taken into account, similar in many respects to
minutes from a shareholders meeting. The evaluation
criteria will be either the lowest price or the most
economically advantageous bid. The nal decision regarding
the award of a contract is left to the contracting authority.
The evaluation committee plays an advisory role only.
In the Czech Republic, for most award procedures the
contracting authority must establish an expert committee in
which at least one third of its members are competent
professionals in relation to the subject of the tender.
The expert committee evaluates the bids to assess ifthey comply with the law and whether they meet the
requirements of the contracting authority.
www.allenovery.com
37
-
8/13/2019 A Guide to Public Procurement in CEE
38/60
Generally speaking, the criteria used to evaluate the
bids will be either the most economically advantageous
tender or the lowest price. The committee will rank the bids
in order of preference and prepare a Bid Evaluation Report
which is available to the bidders on request up until the
point at which the contract is entered into.
In Hungary, as in Slovakia, the contracting authority in
certain cases must establish an evaluation committee
consisting of at least three experts. The committee will
prepare a written opinion and make a recommendation, on
behalf of the contracting authority, for the person or thebody making the nal decision in relation to the public
procurement procedure.
The contracting authority may decide to award the contract
to the bidder oering either the lowest price or the most
economically advantageous bid. If the contracting authority
chooses the latter option, it must determine the evaluation
factors on which to assess the tender. Each evaluation
factor must have a multiplier relating to the relative
importance of the category together with a minimum and
maximum amount of points which each category may be
awarded. The contracting authority has freedom in termsof the way in which the factors and the multipliers are
determined. However, this freedom is subject to certain
restrictions, for example all factors must be related to the
subject matter of the contract and the evaluation system
must not lead to the double counting of the same criteria.
The contracting authority must give each bidder the
opportunity to submit subsequent documents or certicates
under the same terms and conditions. Subsequent
disclosure may relate to any certicates in connection with
disqualication rules, qualication requirements and
documents prescribed in the tender notice, in addition todisclosure required to remedy any formal discrepancy.
Those parts of the bid not aected by subsequent
disclosure must remain unaltered. The bidder may also be
asked to clarify unclear statements contained in declarations
or certicates which relate to disqualication rules,
qualication requirements or documents prescribed in the
tender notice. Such clarication must not result in the bid
being amended. The bidder may also be requested to clarify
whether the price appears to be abnormally low or high, or
whether an element of the bid may be impossible. The
contracting authority must reject the bid if it nds the
explanation given by the bidder unacceptable or
economically unfeasible and each bidder must be
simultaneously informed of requests made for subsequent
disclosure or clarication by the contracting authority.
The tender shall be declared unsuccessful if (i) no bid is
submitted, (ii) all bids submitted are invalid, (iii) the bidder
became unable to perform or (iv) one of the bidders
corrupted the procurement procedure.
In Romania, it is the contracting authoritys responsibility
to establish an evaluation committee which will award the
contract. The evaluation committee will examine whether
the bids comply with the requirements set out in the tenderrules. The contracting authority may propose that some
internal and/or external experts are appointed as members
of the evaluation committee. Again, the award criteria can
be either the lowest price or the most economically
advantageous bid. If the price oered seems to be
unjustiably low, the evaluation committee must request
additional details and explanations from the relevant bidder
before rejecting its bid. Once the evaluation process is
completed, the evaluation committee must prepare the
Bids Evaluation Report (Raportul Procedurii de Atribuire
in Romanian).
Allen & Overy LLP 2011
A guide to Public Procurement in CEE |201138
-
8/13/2019 A Guide to Public Procurement in CEE
39/60
5.2 Problems with challenging the evaluation process
Relevant legislation may set out rules for the appointment
of evaluation committee members, the procedure to be
followed when submitting requests for clarication of bids,
as well as the fact that the evaluation process is not public.
Apart from these rules, the actual evaluation of the bids is
left to the evaluation committee members. In practice, the
lack of legal rules governing how the evaluation process
should be performed has proven problematic for bidders
who want to challenge the results of the tender.
For example, a bidder may wish to challenge the result of a
tender on the basis that it has doubts about the adequate
examination of its bid by the evaluation committee. Such
doubts may arise, for example, if numerous bids are
submitted to the contracting authority, the subject matter
of the tender relates to a complex system or the
preparation of the bids requires several months of work,
and yet the evaluation committee arrives at a decision
within a very short period of time. The rapid delivery of
results may raise doubts that the evaluation committee has
had sucient time even to read all of the bids. Although
this may be raised as one of the grounds to challenge the
results, it may be surprising to learn that this objection
does not necessarily have the benet of being based on any
concrete provision of law.
The evaluation rules may, however, also stem from the
tender rules. It is therefore necessary to observe the
evaluation process in light of the tender requirements and
to consider basing any challenge to the tender results on
these requirements.
www.allenovery.com
39
-
8/13/2019 A Guide to Public Procurement in CEE
40/60
Part 6Veni, Vidi but not Vici
Despite putting a large amount of time and eort into the preparation ofthe bid, ultimately tender results depend on the evaluation by the contractingauthority, and so a bidder may nd that events do not play out as anticipated(i.e. it does not win). Bidders as well as contracting authorities can makemistakes, and there are plenty of opportunities to make them.
a bidder may nd that events do not play out as anticipatedIn cases where a bidder may have a genuine complaint, the
law does allow for certain complaints to be made against
the decision given in respect of a tender. Below is a brief
summary of remedies available to the bidder. We have also
included aspects that should be borne in mind when
making a complaint.
A general comment relevant in all CEE countries is that
the deadlines for submission of all complaints are quite
tight. The situation has been improved somewhat by the
implementation of the Remedies Directives (Directives
89/665 and 92/13), which provides for a 10 day
standstill period after selection of the successful bidder,
during which the contracting authority may not proceed to
conclude the contract with that bidder, in order to allow
for the possibility of challenges to the decision. Even so,
however, the timeframe during which complaints must be
submitted by unsuccessful bidders varies between member
states, and may be as little as ve days in some cases (e.g. in
Poland for certain types of bids), despite the fact that the
standstill period lasts for 10 days. This is a very short
timeframe within which to collect all the necessaryinformation and documentation and to construct an
argument for the sought after remedy. The reaction of
the bidder must therefore be very prompt.
Without being unduly pessimistic about the tender results
during the bidding process, it is helpful for a bidder to
continue to be very attentive to the actions of the
contracting authority and to observe any potential non-
compliance of the contracting authority with respect to
the law and the tender rules, as it may be more dicult to
examine retrospectively whether there was any aspect of
the contracting authoritys conduct that could form the
basis of an appeal.
It is also essential, especially in cases where the bidder is a
multinational company, to ensure that the originals of the
relevant authorisations are delivered to the bidders
lawyers in due time. It may be that the appropriate power
of attorney is not delivered on time owing to a directors
travels, meetings and more important duties, etc,
and the remedy is rejected by the contracting authority
on the grounds of the formal defect, namely the power
to represent the bidder in the remedy proceedings
being questioned.
(How to challenge the bid results)
A guide to Public Procurement in CEE |201140
Allen & Overy LLP 2011
-
8/13/2019 A Guide to Public Procurement in CEE
41/60
Appeal to the contracting authority
(request for remedy)
The rst step when challenging the tender result is to turn
to the contracting authority itself. Within ten days of the
result being delivered, the unsuccessful bidder must le a
request for a remedy to the contracting authority if it
wishes to make a complaint. The contracting authority
then has seven days to decide whether or not it will allow
the claim of the bidder. In our experience, contracting
authorities are generally not willing to allow the bidder'sclaim, and so the usefulness of this remedy appears
questionable. However, making this request for a remedy
is a prerequisite to the other available remedies.
Second instance appeal to the Public Procurement
Ofce (objection)
If the contracting authority rejects the request for a
remedy or if it does not decide whether to conrm or
deny the claim in time, the bidder has a right to object
by making a second instance appeal to the Public
Procurement Oce. On the basis of an objection thePublic Procurement Oce may, for example, order a
re-evaluation of the bids or, depending on the materiality
of the alleged breach by the contracting authority, even
cancel the tender. The objection has a sus