Public Procurement Newsletter No. 3/2013

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New Amendments to the Public Procurement Legislation

Law no. 193/2013 regarding the approval of Government Emergency Ordinance 77/2012 amending and supplementing Government Emergency Ordinance 34/2006 on the award of public procurement contracts, public works concession contracts and services concession contracts (“Law 193/2013”, “GEO 77/2012” and “GEO 34/2006”, respectively) was published in the Official Gazette no. 387 of June 28, 2013.

Law 193/2013 became effective on July 1, 2013, and brought a series of amendments to the previous legal regime. We will hereinafter present the most significant changes.

(a) Qualification of autonomous administration and national companies as contracting authorities

According to the new modifications set forth by Law 193/2013, autonomous administrations and national companies/ corporations having their capital fully or mostly owned by a central, regional or local state body – public authority or public institution – or by another public entity, are no longer considered contracting authorities in the understanding of GEO 34/2006.

Nevertheless, autonomous administrations or national companies/corporations having their capital fully or mostly owned by a state body that do not fall under the provisions of Articles 8 or 9 of GEO 34/2006, (regarding contracting authorities and the scope of GEO 34/2006) must draft internal procedural rules for awarding supply/services/works contracts the value of which exceeds the maximum threshold for direct procurements (as such was modified – please see point b. below), in order to ensure the observance of the principles of non-discrimination, equal treatment, transparency, proportionality and mutual recognition. The internal procedural rules will be approved by the tutelary authority.

(b) Increment of the value thresholds for direct procurements

The former threshold of 15.000 EUR applicable to direct procurements of products, services or works by contracting authorities was increased. According to the new provisions, the estimated value of the direct procurement cannot exceed the equivalent in RON of:

(1) 30.000 EUR (without VAT) for each products/services procurement;

(2) 100.000 EUR (without VAT) for each procurement of works.

(c) Broadening of the scope of GEO 34/2006

According to the modifications set forth by Law 193/2013, the services of research and archaeological discharge for the archaeological heritage and archaeological sites, are no longer excepted from the application of GEO 34/2006.

(d) The removal of the attributions of the National Authority for Regulating and Monitoring Public Procurement regarding the possibility of annulling public procurement contracts, public works concession or services concession contracts

By the entering into force of Law 193/2013, art. 2961 of GEO 34/2006 was entirely repealed, which regulated the right of the National Authority for Regulating and Monitoring Public Procurement (“NARMPP”) to request the competent court of law to acknowledge the fact that the contracts or framework agreements are null and void according to the law, in the situations formerly set forth by the GEO 34/2006.

(e) The removal of the condition of authentic form for the firm commitment of support from a third party

The provisions of GEO 34/2006 regarding the economical and financial capacity support, as well as the technical and professional capacity support of the bidder/candidate by a supporting third party have been modified, removing the condition that the firm commitment of support of a third party must be concluded in authenticated form.

(f) Clarifications regarding the scope of the support of third parties

The modified provisions of GEO 34/2006 expressly state that the support of a third party cannot target the following:

(1) the certification of observance of quality standards;

(2) the certification of observance of the environmental protection standards.

(g) Qualification criteria for unusual/abnormal low-priced offers

An offer will be considered having an apparently unusual/abnormal low price by reference to the provided products, works or services if the offered price (without VAT) represents less than 80% of the estimated value of the respective contract, whereas the former regulated threshold was of 70%.

Moreover, the new threshold of 80% applies in all cases, including in case there are at least 5 offers in the award procedure that are not unacceptable or non-conformant. Before the entry into force of Law no. 193/2013, in this situation a separate threshold was provided, representing 85% of the calculated average between the admissible submitted offers, excluding the lowest and highest financial offers.

In addition, when an offer has an apparently unusual low price due to a granted state aid, the “reasonable” period established by the contracting authority for the bidder to prove that the state aid was legally obtained cannot be less than 3 days.

(h) Regulation of the possibility of the resolution of disputes regarding the performance of contracts under GEO 34/2006 by arbitration

Art. 2881 of GEO 34/2006, introduced by Law 193/2013, expressly states that the contractual parties may agree that the disputes arising from or in relation to the performance of the contract may be resolved through arbitration.

(i) Modifications regarding applicable contraventions and sanctions

The new provisions have brought certain amendments to the sanctioning regime provided by GEO 34/2006:

(1) Harsher sanctions were introduced for two of the contraventions provided by GEO 34/2006, by raising the limits of the applicable fines, as follows:

  • breach of the provisions of art. 23 of GEO 34/2006 – stating that the contracting authority does not have the right to divide a public procurement agreement in separate agreements of smaller value or to use calculating methods that would lead to a sub-evaluation of the estimated value of the public procurement agreement, so as to elude the application of the provisions of GEO 34/2006 that set forth obligations of the contracting authority by reference to value thresholds – is sanctioned with a fine in the range of RON 50,000 to 100,000. Previously, this contravention was sanctioned with a fine in the range of RON 40,000 to 80,000;
  • breach of the publicity rules provided by GEO 34/2006 regarding the award notice is sanctioned with a fine in the range of RON 20,000 to 100,000. Previously, this contravention was sanctioned with a fine in the range of RON 20,000 to 40,000

(2) Law no. 193/2013 introduced a distinction between the sanctioning regime for contracts whose estimated value is below the value thresholds provided at art. 55 para. 2 as opposed to contracts whose estimated value is higher. Thus, for contracts which have an estimated value lower than the thresholds provided by art. 55 para. (2) of GEO 34/2006, namely EUR 130,000, EUR 400,000 or EUR 5,000,000, the sanction for these contraventions consists in a fine of 50% of the sums provided in art. 294 paras. (2), (3), (31) and (4) of GEO 34/2006;

(3) In case of contracts financed with European funds and/or correspondent national public funds, with the exception of the beneficiaries of the National Program for Rural Development 2007-2013, the provisions of GEO 34/2006 regarding the sanctioning of contraventions and the payment mechanism thereof is applied only to the contraventions that do not represent a transgression according to the provisions of the appendix to GEO no. 66/2011 regarding the prevention, ascertainment and sanctioning of the irregularities arisen in the obtaining and use of the European funds and/or correspondent national funds. In this case, the findings of NARMPP in the process of monitoring the awarding procedure of the public procurement agreement are transmitted to the competent authorities with attributions in the management of European funds.

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