Public Procurement 2021 – major changes

1 January 2021 was the effective date of the new Public Procurement Law. The act which is currently in force introduces more precise provisions, simplifies tender procedures and increases protection of economic operators and subcontractors. 

The new regulation is more transparent and broader than the previous one – it includes 623 articles as compared to the previous 227. However, this does not mean a revolution in the Public Procurement Law – contracting authorities and economic operators are perfectly familiar with most of the provisions of the new act. Therefore, below we are describing the major changes of the act.

Public tenders – what changes from 2021?

• New public procurement threshold

According to the previous rules, public procurement procedures were applied from the threshold of EUR 30,000 net. At present, the legislator resigned from the need to convert amounts in EUR into PLN and set the basic threshold as a fixed value of PLN 130,000. The other thresholds for applying the provisions of the Public Procurement Law remained unchanged.

• Separate rules for domestic and EU public contracts

The new Public Procurement Law clearly differentiates the procedure for the so-called EU public contracts (i.e., with value over the EU thresholds) from the one for the so-called domestic public contracts – with lower values.

In the case of domestic public contracts the legislator increased importance of and emphasis on the negotiation procedures. The changes to the domestic procedures were aimed at increasing competitiveness of the procedures, minimising barriers for economic operators and simplifying and deformalising such contracts to the maximum extent.

Additionally, the new act removed the price inquiry procedure to the awarding of contracts for generally available services and deliveries. The open tender mode has also been eliminated for those procedures.

• Obligatory electronisation of domestic public contracts

Currently, in addition to complete electronisation for EU procedures (effective since 2018), the legislator introduced similar changes to domestic procedures. This means that starting from 1 January 2021 bids in all tender procedures have to be submitted electronically. What is important, submission of a bid in hard copy will result in its obligatory rejection.

• New “basic” procedure for domestic public contracts

The open tender contract award procedure, which was so far the most frequently encountered and used formula, was completely eliminated from domestic public contracts. Instead, the new act introduces a new procedure to the catalogue of domestic procedures – a basic procedure with three variants which significantly differ as regards the negotiation component – the first one does not permit for negotiations, the second one only in respect of bid evaluation criteria subject to assessment, and the third one in an even broader scope.

• Change of the rules of calculation of the time limit for asking questions to the Terms of Reference

An essential change was also made in respect of calculating the time limit for asking questions to the Terms of Reference. This deadline has been made stricter and expires four days before the bid submission deadline. The contracting authority is obliged to provide explanations immediately, but not later than two days before the bid submission deadline. If the contracting authority does not meet this deadline, it is obliged to extend the time limit for submission of bids. Extension of the deadline for bid submission in itself does not extend the time limit for asking questions.

• After the deadline the bid binding only upon consent

If no bid is selected during the bid term in the course of the domestic procedure (30 days), then the contracting authority may summon economic operators once to extend the bid term with possible extension of the bid deposit by another 30 days. If no bid is selected during that period, the contracting authority summons the economic operator with the highest evaluation to consent to their bid being selected under pain of bid rejection.

• Decreased amount of bid securities

In domestic public contracts contracting authorities may request bid deposits of up to 1.5% of the net value of the public contract, while in the case of EU procedures of up to 3% of the net value of the public contract.

• No limitations in respect of appeals to the National Appeals Chamber

The new act opens a way for economic operators to legal remedies regardless of the value of the subject-matter of the public contract and the nature of actions in the course of the public contract award procedure, which is an absolute novelty.

• Applying the procedure under the Public Procurement Law to social services below EU thresholds

The legislator has restored the obligation to apply the provisions of the Public Procurement Law to contracts for social services (in particular: legal, educational, training, postal, medical, personal and property security services) for public contracts below the EU thresholds.

• Increased role of public contract planning

The new act has introduced an obligation of updating plans of public procurement contract award procedures on an ongoing basis. The plans will be published in one place, i.e. in the Public Procurement Bulletin.

• New analytical obligations for procedures above EU thresholds

The legislator has imposed a number of obligations on the contracting authority to be fulfilled before the commencement of the procedure, including:

– Preparing an analysis of the needs and requirements including an investigation into the possibilities of satisfying identified needs with the use of contracting authority’s own resources and market research in respect of alternative means of satisfying identified needs and possible variants of public contract performance (or indication that there is only one possibility of contract performance);

– Specifying an estimated value of the public contract for each of the identified variants, possibility of division of the public contract into parts, planned procedure, possibility of taking into account social, environmental or innovative aspects;

– Identifying the risks related to the public contract award procedure and its execution.

• Using own names in the Description of Works under the Contract

The new act permits for the possibility of using own names in order to describe the works under the contract, supplemented by the phrase “or equivalent”, and having taken into account the criteria used for evaluation of equivalence. Proofs of equivalence constitute the content of the bid and have to be submitted with it.

• Decreased importance of the qualitative criteria of bid evaluation

The new act has maintained the obligation to apply non-price bid evaluation criteria at the level of at least 40%, while at the same time introducing a possibility of an easy change to the use of the price as the only evaluation criterion. The provisions only require that the contracting authority includes in the description of the works under the contract qualitative requirements referring to at least major elements of which the object of the contract is composed.

• Limitation of changes in the Terms of Reference and in the public procurement notice

The legislator has significantly limited the contracting authority’s right to change the content of the public procurement notice and the ToR, introducing a rule that if those changes significantly change the nature of the public contract, especially its scope, the contracting authority is obliged to cancel the procedure.

• New rules of bid opening

The legislator has deformalised the rules of bid opening. Currently, the contracting authority is able to open bids even on the next day following the expiry of the deadline for their submission (previously such conduct would result in invalidation of the tender procedure). Moreover, in the case of a breakdown of the IT system used by the contracting authority to conduct the procedure, it will be possible to open the bids after the breakdown has ceased.

Additionally, the new regulation does not provide for public opening of bids, but merely obliges the contracting authority to publish information in this regard on the website, such information concerning the details of the economic operator and the bid price offered by them only.

• Increased publicness of submitted documents

The new act obliges contracting authorities to immediately make available the bids submitted in the course of the procedure. Bids with enclosures are to be made available not later than within three days of their opening. As a matter of an exception from the disclosure rule, economic operators may expressly identify information as a business secret – but the legislator requires such an economic operator to present the contracting authority with justification to defend it when submitting the bid.

• Broader obligation of filing of impartiality statements

In accordance with the new provisions of the Public Procurement Law, not only individuals responsible for taking actions in the course of the procedure on the part of the contracting authority are obliged to submit a statement on impartiality, but this obligation has been also imposed on individuals awarding a public contract on behalf of the contracting authority – including concluding the public procurement contract (at the same time, specifying duration of exclusion grounds as one year from disclosure of such an instance). Thus, the scope of grounds for exclusion from the procedure has been extended in the case where a given person is in such a legal or factual relationship with the economic operator that there are reasonable doubts as to their impartiality or independence in relations to the procedure, due to the fact that they have a direct or an indirect financial, economic or personal interest in a particular conclusion of a given procedure.

• Changed exclusion prerequisites for economic operators

The legislator has left the division into obligatory and optional prerequisites for exclusion of economic operators from the procedure, shifting prerequisites related to economic operator’s provision of false or misleading information related to the grounds for exclusion, fulfillment of conditions or bid evaluation criteria to optional exclusion prerequisites. A complete novelty is the obligation to indicate optional prerequisites for economic operator’s exclusion applying to a given public procurement contract under paid of their non-application.

• Changed grounds for bid rejection

The new act modifies the list of grounds for bid rejection, indicating that:

– bids submitted after the specified deadline will be rejected (so far, the provisions of the act have not stated that);

– a bid submitted without a site inspection or without verification of the documents necessary for contract performance available at the contracting authority’s premises, if the contracting authority made bid submission conditional on meeting such requirements, will be rejected;

– a bid in which the economic operator did not gave their written consent to selection of their bid after the lapse of the bid term will be rejected;

– a bid prepared or delivered contrary to technical and organisational requirements with the use of means of electronic communication specified by the contracting authority will be rejected;

– a bid submitted by economic operators subject to exclusion or economic operators who failed to prove fulfillment of the participation conditions or failed to submit the required documents will be rejected (previously these constituted grounds for exclusion of an economic operator).

• Silent approval of the economic operator

The new act provides that the contracting authority may correct in the economic operator’s bid the so-called other irrelevant errors and lack of economic operator’s reaction to the summons to consent to error correction will be considered as a consent to such a correction. The time limit for giving the consent will be set by the contracting authority itself, and in the event that error correction is questioned, the bid of the economic operator will be rejected.

• Changed bid examination

The new act provides for a possibility of application of a reverse procedure for bid evaluation in the case of public contract over EU thresholds. If the economic operator evaluated the highest fails to prove fulfillment of the conditions or lack of grounds for exclusion, the contracting authority is obliged to repeat examination and evaluation of the remining bids – i.e., it has to send a summons to submit subjective documents of the economic operator and continue this procedure by the time the contract is awarded or procedure cancelled. A novelty is the possibility to request in such a case the SEPD (Single European Procurement Document) only within the scope of this procedure. Moreover, the act has changed the manner of examination of strikingly low prices, excluding from the assessment base of the bid arithmetic mean ratio bids not submitted on time and subject to rejection.

• Simultaneous notification of economic operators

The new act provides for an obligation of  simultaneous notification about selection of the most favourable bid (with information about the awarded points) and provision of information about bid rejection.

• Compulsory competition

When the value of the contract exceeds EU thresholds, authorities contracting architectural design or architectural and construction services are obliged to run a competition before the public procurement procedure, except for contracts awarded under the negotiation procedure and with regard to designing for linear objects.

• Content of the public procurement contract

The legislator has amended a number of provisions aimed at equalising the positions of the parties to the contract and specifying the rules governing the shaping of the relations between them. The detailed scope of the amendments will be discussed in a separate article, but it needs to be indicated that they concern, among others:

– Introduction of a list of prohibited clauses which concern, among others, a prohibition on determination of liability of the economic operator for delay, a possibility for the contracting authority to limit the scope of the contract without specification of the minimum value or volume of performance of the parties;

– Indication of obligatory contractual clauses, rules of specifying the contract performance deadline;

– Introduction of rules of indexation of economic operator’s remuneration;

– Introduction of rules ewaluacji realizacji umowy;

– Introduction of an obligation to use advance payments or partial payments in the case of contracts which last more than 12 months.

• Change in the institution of the option right

The legislator specified that the option rights (i.e., the right to extend the scope of the contract) may be exercised only on the condition that such an option was provided and specified in the notice or documents of the contract and its basic rules will be specified, i.e. type and maximum value of the option, circumstances of its use.

• Decreased security of due performance of the contract

The new act significantly lowers the threshold of the amount of the security which may be requested by the contracting authority to 5% of the price. 10% of the security is permitted only when this is justified by the object of the contract or existence of the risk related to contract performance described in the documentation.

Additionally, the contracting authority may return the security in whole already after contract performance and in part after performance of a contract part, if it provided for such a possibility. Furthermore, the legislator provided that the contracting authority may specify a return of 30% of the retained amount after the lapse of the guarantee (previously this right applied to warranty).

• Changes to legal remedies

The new act has facilitated access of the parties to the public procurement procedure to legal remedies, including by:

– Extending the right to appeal in domestic procedures;

– Stating that the right to means of challenge is given also in the case of social services, regardless of the value of the contract;

– Lowering the amount of the court fee for the complaint to the regional court to three times the amount of the fee;

– Creating one public procurement court examining complaints against the decisions of the National Appeals Chamber – Regional Court in Warsaw;

– Opening the right to file a cassation appeal to the Supreme Court also for the parties to the appeal proceedings.

• Changes with regard to consortia

The new act limits the possibility of using the experience of the partner jointly participating in the tender procedure – the contract will be performed by the entrepreneur who actually gained such experience. Additionally, the new act provides that already at the stage of presentation of the bid or the request for admission to participate in the tender procedure consortia are obliged to submit a separate statement concerning competence of consortium members.

• Using third-party experience

The legislator has provided for a limitation in the right to use the potential of third-party entities for performance of a public contract, directly prohibiting an economic operator invoking the potential of a third-party entity from changing the original decision in this regard after submission of the bid or the request for admission to participate in the tender procedure.

• Additional documents submitted with the bid

The new act enables contracting authorities to require that the documents confirming compliance with the requirements (i.e., the Description of Works under the Contract, bid evaluation criteria, requirements concerning contract performance) are submitted with the bid rather than only after the relevant summons. Thus, all economic operators and not the ones evaluated the highest will be obliged to prepared the documents referred to above.

As shown in the above article, the Public Procurement Law has evolved in 2021. This has undoubtedly been the greatest change since 2004 which requires that entities participating in public procurement contract award procedures without delay become familiar with the changes and train individuals responsible for public procurement contracts in respect of the changes made. This is the more important that in accordance with the interim provisions in the event that a procedure was commenced after 1 January 2021, it will be subject to the provisions of the new act. This means that all new procedures will be subject to the new regime.

Author:

Paweł Góra
Legal Adviser
TGC Corporate Lawyers

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