Public Procurement Newsletter No. 1/2012

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I. Legislative News in Domestic Law

1. New amendments to the public procurement legislation

Law 279/2011 for the amendment and supplementation of Government Emergency Ordinance 34/2006 concerning the award of public procurement contracts, public works concession contracts and services concession contracts (“Law 279/2011” and “GEO 34/2006”) was published in Official Gazette 872/2011.

Law 279/2011 brings a series of amendments and clarifications to the public procurement legislation, of which we mention the following news of interest:

(1) The definition of “public – public partnership” which involves the joint performance of a project by two or several national and/or international public entities and which is governed by the rules in the public procurement field.

(2) The express indication of the fact that any association of one or several contracting authorities has the capacity of contracting authority (the associations made by the contracting authorities provided at letter d) or e) of Art. 8 of GEO 34/2006 being also expressly included).

(3) The limitation of the obligation (of the contracting authority) to request the establishment of the bid bond only for those procurements for which the publication of a notice or invitation of participation is mandatory.

(4) The insertion of an express provision stipulating that, if the estimated value, VAT excluded, of the public procurement contract to be awarded is below the relevant value thresholds provided by the public procurement legislation (in Art. 124 of GEO 34/2006), the application of the call for tender procedure is regulated as being an obligation of the contracting authority and not a right thereof. If the respective thresholds are exceeded, the contracting authority must award the contract by applying the open tender or the restricted tender procedure.

(5) The stricter regulation of the position of the supporting third party, by establishing certain interdictions concerning its possibility to participate in the public procurement procedures. The new interdictions concern both the conflict of interests and the situation in which the supporting third party would wish to submit, within the same procedure, a separate bid from the one it supports. Thus, an economic operator cannot submit an individual/joint bid and at the same time be nominated as supporting third party for another bid. In addition, the supporting third party should not be in the situations which determine the exclusion from the award procedure provided by Art. 181 letters a), c1) and d) of GEO 34/2006.

(6) The provision of the express interdiction to assign the obligations of the contracting parties of a public procurement contract, only the assignment of the receivables born under such contract being permitted.

(7) The qualification and selection criteria indicated in the invitation/notice of participation must be the same as the ones indicated in the award documentation, and, any modification and/or supplementation of the qualification and selection criteria leads to the cancellation of the award procedure, except for the modifications disposed by the NCSC decision.

(8) In the case of the negotiation procedure without the prior publication of a participation notice, if the purchase of additional works or services is necessary, the exception which permitted the supplementation of the works and services by up to 50% of the value of the initial contract was eliminated. Thus, the additional works or services should never exceed the threshold of 20% of the value of the initial contract, a threshold which constituted the rule also before the modifications brought by Law 279/2011.

(9) The provision of the NCSC’s obligation to resolve the objection on the merits, irrespective whether there are also other cases pending on the docket of the courts of law, with respect to the same award procedure.

(10) The limitation of the cases in which the contracting authority will retain an amount from the bid bond of the opponent who filed an objection with the NCSC, to the case of dismissal of the objection for lack of merit.

(11) The introduction of new contraventions, as follows: (i) the breach of the publicity rules with respect to the award notice and (ii) the failure of the contracting authority to request the information necessary for the assessment of the bids presenting an abnormally low price.

(12) The extension of the statute of limitations with respect to the application of the civil fine from 24 months to 36 months from the date the action was committed.

(13) The regulation of two new cases in which ANRMAP is entitled to ask the court of law to find the absolute nullity of a public procurement contract: (i) the failure to respect/the modification of the qualification and selection criteria and/or of the assessment factors set forth in the invitation of participation/contract notice and (ii) the amendment of the contract led to the decrease of benefits, and, as the case may be, of the assessment factors based on which the bid was declared winner.

(14) The express stipulation in the public procurement legislation of the possibility for the court to suspend, at ANRMAP’s request, and in fully justified cases, the performance of the public procurement contract, with respect to which, ANRMAP asked the court to find the absolute nullity.

2. The publication of the Commission Regulation (EU) No. 1251/2011 concerning the increase of certain value thresholds applicable within the public procurement procedures starting from January 1, 2012.

According to the information transmitted by ANRMAP, on the basis of Commission Regulation (EU) No. 1251/2011 (adopted on November 30, 2011) amending Directives 2004/17/EC, 2004/18/EC and 2009/81/EC of the European Parliament and of the Council, the applicable thresholds for the procedures for the award of procurement contracts will have the following values:

  • the value of EUR 125,000 (from Art. 55, para. (2), letter a) and Art. 57 of GEO 34/2006) will be replaced by the value of EUR 130,000;
  • the value of EUR 193,000 (from Art. 9, letter c)1 of GEO 34/2006) will be replaced by the value of EUR 200,000;
  • the value of EUR 387,000 (from Art. 55, para. (2), letter b) and Art. 57 of GEO 34/2006) will be replaced by the value of EUR 400,000;
  • the value of EUR 4,845,000 (from Art. 9, letter c), Art. 51, para. (1), letter c), Art. 55, para. (2), letter c), and Art. 57 of GEO 34/2006) will be replaced by the value of EUR 5,000,000

3. Public procurement contracts in the light of the New Civil Code 

The New Civil Code (NCC), adopted by Law 287/2009 and entered into force on October 1, 2011, as well as Law 71/2011 for the application of NCC, do not directly regard the public procurement field.

However, considering that the regime of the public procurement contracts, defined in the public procurement legislation as commercial contracts, is supplemented by the provisions of the generally applicable law, the novelties brought by NCC should not be overlooked.

In the public procurement field, the contracting authorities use the contract templates made available on the website of the National Authority for Regulating and Monitoring of Public Procurement („ANRMAP”) or older templates, such as the ones recommended in the annexes of Order 155/2006 of the president of ANRMAP (currently repealed).

In these circumstances, the following aspects must be of interest both for the contracting authorities and for the bidders:

  • Pursuant to Art. 1175 of NCC, when the essential clauses of the contract are drafted by one of the parties, the contract is an adhesion contract, and pursuant to Art. 1269 (2) of NCC, the stipulations of the adhesion contracts will be interpreted against the party that proposed them. Given that in most award procedures, the contracting authority is the one imposing the essential clauses of the contract, there is a risk that such clauses imposed by the authority may be interpreted against its interests, if these clauses are not clear. Therefore, it is advisable to draft the provisions of the public procurement contract in a clear manner. In addition, if the contract provides in favor of the contracting authority the limitation of liability, the right to unilaterally terminate the contract, to suspend the performance of the obligations or which provide, to the detriment of the other party, the loss of rights or of the benefit of the term, the limitation of the right to raise objections, the restriction of the freedom to conclude contracts with other persons, it is advisable to obtain the bidders’ express acceptance with respect to such clauses
  • In the light of the legal stipulation of Art. 1271 of NCC of the possibility granted to the concerned party to benefit from the effects of the unforeseeability, if the costs related to the performance of the contract became excessive due to an exceptional change of circumstances, which would render completely unjust the obligation of such party to perform its undertaken obligation, it is not excluded that the compatibility of such provisions with the regime of public procurement contracts be debated in the future, given the existence of the special provisions in the public procurement field, with respect to the adjustment of the price of the contract, and, according to the case-law of the European Court of Justice, the possibility to amend a public procurement contract during its performance must be taken into consideration in very strict terms (given that any significant modification of the initial elements of the public procurement contract can be qualified as a new award, which should be made in conformity with the procedures provided by the public procurement legislation)
  • In order for a forfeiture clause inserted into a public procurement contract to be fully effective, one must also take into consideration the provisions of Art. 1553 of NCC, which governs the forfeiture clause, imposing the obligation to expressly provide in the contract the obligations whose non-performance triggers the termination by operation of law of the contract, in order for it to be effective. Therefore, in order to ensure the applicability of the forfeiture clause, the contractual obligations whose non-performance would trigger the annulment/termination of the contract should be indicated

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