The Public Procurement Act (PPA) is suspended in relation to public procurement procedures with the following subjects:
- purchase of hygiene packages, disinfectants, medical devices and personal protective equipment necessary to provide for anti-epidemic measures;
- purchase of medical devices, medical and laboratory equipment necessary for the diagnosis and treatment of infected patients, consumables;
- assignment of pesticide and hospital waste disposal activities.
Term of PPA suspension
According to Article 1 of the State of Emergency Act for the period of the state of emergency only.
What does the derogation cover?
This derogation concerns only the assignment of public procurements, but not their execution.
Art. 13, para. 1, item 3 of the State of Emergency Act refers to “assignment of activities”, which limits the scope of the exception under the PPA exclusively to the assigning process.
The comments made during the second vote by the Legal Commission at the Parliament in their report on the State of Emergency Act are in this sense, as well.
During the state of emergency it is the legislator’s idea to reduce or eliminate time-consuming administrative burdens both – for participants and assigning authorities, when supplies of vital goods and services are assigned. Such burdens are created by the strict fulfilment of procedural formalities, which is not preferable for the public demands at the moment.
Also, in the sense that the purpose of the amendments relevant to the PPA is to accelerate only the assignment of tenders, is the following:
“§ 12. The assigning authorities which have not been obliged to implement the platform under Art. 39a, para. 1 of the Public Procurement Act prior to the entry into force of this act, shall implement the assignment procedures that have been applicable before November 1st, 2019 for public procurement procedures initiated up to one month after the lifting of the state of emergency.“
The platform mentioned above is the new means for assignment of tenders. Initially, the assigning authorities were obliged to gradually start assigning tenders via the platform as of November 1st, 2019. However, in practice, the process of “getting acquainted” with the platform and learning its working mechanisms took longer than expected. Hence, the initial deadline for the assigning authorities was extended to 01.01.2020. Then the term has once again been extended, not only because additional adaptation time was needed for the assigning authorities, but also due to the lack of adequate legal framework. The multiple extensions of the deadlines for implementation of the platform as basic means for assignment comes to show that the process requires time and human resources – both for assigning authorities and for participants. In the context of the current situation, such expenditure of resources is not appropriate.
Extension of time limits for PP execution
The argument in favour of the view that the inapplicability of the PPA concerns the assigning exclusively, but not the tenders’ performance, can also be derived from the provision of Art. 13, para. 2 of the State of Emergency Act, which regulates separately the performance of public procurements. This provision makes an exception to the general principle of the Public Procurement Act, that the public procurement agreements concluded can only be amended, except under special explicitly regulated circumstances. According to this second paragraph, it is the assignor is allowed at its own initiative, to extend the term for performance of tenders which have already been assigned for period “not exceeding the state of emergency duration“. It is important to emphasize here that this possibility of extension applies for tenders which have already been assigned, i.e. for procurements whose performance has started and is still pending during the state of emergency.
Will the performance of tenders assigned during the state of emergency continue after its lifting?
Yes. The exception from the applicability of the PPA regards only the assigning, but not the performance of tenders under Art. 13, para. 1 of the State of Emergency Act during the state of emergency. From this point of view, if the deadline specified by the assigning authority does not cover only the period exceeding the state of emergency duration, the participant assigned should keep on performing its tender obligations after the lifting, as well. Although the assignment procedure is conducted under regulations other than those specified in the PPA, it is a basic principle that tenders should be performed in compliance with the particular assignment – as instructed by the assigning authority.
Possible Harm to Economic Operators’ Interests
In practice, the amendments to the PPA give a rise to danger of favouring the assignees selected during the state of emergency in comparison with other economic operators who have been regularly assigned under the PPA.
Thus, it turns out that those who have undergone the aggravated tender procedures under the PPA are granted a carte blanche for extension of the performance term only by the duration of the state of emergency, whereas the other newly assigned entities (where the PPA is temporarily not applicable) are initially granted longer performance terms, which may continue indefinitely after lifting of the state of emergency.
Hence, it is likely that the consequences of the parallel application of the basic regime under the PPA and the temporary non-application regime could lead to unfair results and to a distortion of market competitiveness.
To some extent, this approach can be justified by the present existence of “urgent assignment” procedures, e.g. for performance of sectoral activities under “exceptional circumstances” within the meaning of para. 17 of the Additional Provisions to the PPA. This opportunity is mainly applicable when compliance with the normative deadlines, including the shortened ones, for open, restricted or other procedures cannot be fulfilled. For the same reason, the PPA occasionally provides that a preliminary notification or a preliminary invitation to participate in the tender needn’t be published by the assignor.
In summary, the conclusions are as follows:
- Until the lifting of the state of emergency, the PPA is not applicable only for the tenders’ assignment, but it still applies to the execution of public procurements.
- The execution of public procurements assigned as an exception should continue even after the state of emergency has been lifted, if performance term is longer.
- During the state of emergency, the possibility of extension applies for tenders which have already been assigned, i.e. for procurements whose performance has started and is still pending during the state of emergency.