Member Article

The implementation process for the three new European directives (i.e. Directive 2014/24/EU of the European Parliament and of the Council of 26 February 2014 on public procurement. Directive 2014/23/EU of the European Parliament and of the Council of 26 February 2014 on the award of concession contracts. Directive 2014/25/EU of the European Parliament and of the Council of 26 February 2014 on procurement by entities operating in the water, energy, transport and postal services sectors) approved at the beginning of 2014 was completed with the adoption and promulgation of the implementing norms, with a delay of approximately one month from the mandatory deadline for implementation undertaken by Romania.

Some of the targets of the new directives are the simplification and flexibility of public procurement procedures and the guarantee of actual access of small and medium-sized enterprises to such procedures.

Similar to the European regulation, the Romanian legislator opted for three different regulations, as follows: the "classic" procurement (Law no. 98/2016 published in the Official Gazette no. 390/2016), the utilities (Law no. 99/2016 published in the Official Gazette no. 391/2016), the works and services concessions (Law no. 100/2016 published in the Official Gazette no. 392/2016). At the same time, the remedies in the public procurement field are subject to a different law (Law no. 101/2016 published in the Official Gazette no. 393/2016). All four aforementioned laws have entered into force on May 26, 2016 (i.e., three days from the publishing thereof in the Official Gazette).

The most important changes expected in the public procurement field are those provided by Law no. 98/2016 on public procurement and by Law no. 101/2016 on remedies and means of appeal in the award of public procurement contracts, utilities contracts and concession contracts and on the organization and operation of the National Council for Solving Complaints.

The award procedures

The thresholds

The award procedures provided by the new legislative framework are applicable in case of award of public procurement contracts/framework agreements whose estimated value, excluding VAT is equal to or greater than the following thresholds:

a) 23,227,215 lei for works contracts/framework contracts;

b) 600,129 lei for supply of products and services contracts/ frameworks contracts (in case of utilities contracts the threshold is 1,858,177 lei);

c) 3,334,050 lei for services contracts/frameworks contracts which have as subject matter social services or other specific services (in case of utilities contracts the threshold is of 4,445,400 lei).

In case of direct public procurements, the contracting authority shall be entitled procure directly products or services where the estimated value excluding VAT is less than 132,519 lei. In case of works contracts, the direct procurement may be possible if the estimated value excluding VAT is lower than 441,730 lei.

As a general note, the new law establishes the thresholds in lei, unlike the old regulation which established such thresholds in EUR; thus eliminating the risk caused by lei-euro fluctuations.

A new award procedure: innovation partnership

The innovation partnership is an award procedure used by the contracting authority in order to develop and subsequently procure an innovative product, service or innovative works, where the solutions available on the market at a certain moment do not meet the needs of the contracting authority.

Additionally, there are changes related to the other award procedures, several of them directed at the organization and application of the procedures. For example, the negotiated procedure is divided into competitive negotiation and negotiation without prior

Thus, the award procedures of the public procurement contracts/framework agreements, as well as the organization of solution contests, are as follows:

a) open procedure;

b) restricted procedure;

c) competitive procedure;

d) competitive dialogue;

e) innovation partnership;

f) negotiated procedure without prior publication;

g) solution contests;

h) the award procedure in case of social services or other specific services;

i) simplified procedure.

The division into lots becomes the rule and the exceptions should be justified

In order to eliminate the obstacles to participation in the procedures, especially in the case of small and medium-sized enterprises, the new law provides for the rule of division into lots, as well as other aspects related to the division into lots, such as the information that should be included in the tender notice.

Simplified regime for the award of the public procurement contracts/framework contracts on social and health services, certain legal services and other specific services

Certain types of contracts social services and other specific services are governed by a more “relaxed” system and a higher threshold (3,334,050 lei) above which certain rules must be respected.

These types of social services include, among others, health services, social and other related services, social-administrative services, educational services, cultural services, hotel and restaurant services, certain legal services, postal services etc. In case of award of such contracts, the contracting authority may choose to publish (i) a tender notice or (ii) an notice of intent that is permanently valid and (iii) an award notice of the contract (the publication of which can be made on a quarterly basis).

The award criteria used for the award of such contracts are best value for money or best value for costs

The purpose of the European Single Procurement Document and e-Certis database

In order to decrease the administrative/bureaucratic difficulties, both for bidders who prepare the documents for the award procedure and for authorities who evaluate the offers, the law provides for the possibility of submitting the European Single Procurement Document (ESPD), which consists of an updated affidavit as preliminary proof to certify that the economic operators involved in the procedures meet certain qualification and selection criteria.

At the same time, it is desired that relevant information on economic operators be updated in e-Certis database created by the European Commission for consultation by the contracting authorities.

The authorities shall require from the winning bidder the supporting documents for such affidavit. Also, such documents could be requested from bidders/candidates during the procedure.

The purpose of the implementation of the system shall be achieved only if the authorities shall not abuse the possibility to request supporting documents from bidders during the procedures and shall focus on requesting such documents in particular from the winning bidders.

Stricter rules regarding subcontractors

According to the new regulation, the bidder/candidate must specify in his offer or in the participation request the part(s) of the contract intended to be subcontracted and the identification data for the proposed subcontractors.

The nominated subcontractors must not be in the situation where they would be excluded for failure to fulfill the criteria regarding eligibility. Thus, as opposed to the current situation (where the subcontractor verifications are relatively limited, the most important verification consisting in the absence of conflicts of interest), according to the new law, the subcontractors must comply with the provisions regarding exclusion grounds for failure to fulfill the eligibility criteria.

Moreover, the possibility of replacing a subcontractor as well as the supporting third party which could be excluded for failure to comply with the eligibility criteria (and in case of a third party also for failure to comply with the relevant criteria of capacity) is possible subject to specific conditions.

Although the new regulation transposes the corresponding grounds of the directive, detailing the limits of such possibility could be useful in order to avoid unequal treatment between bidders that have supporting third parties and/or subcontractors and other bidders (for the latter, the limits within which they could change their offer during the evaluation is debatable).

The provisions concerning the technical and financial support could raise interpretation issues and implementation problems because important aspects often encountered in practice are not covered under the law. 

Evaluation of tenders

The possibility of using personnel’s qualifications and experience as an evaluation factor under certain conditions.

The reasons for exclusion are more detailed

Compared to the previous regulation, the grounds for exclusion from the procedure also include breach of the obligation to pay taxes or contributions to the budget, but only in certain cases and under certain conditions. Thus, an economic operator is not excluded from the award procedure when the amount of such taxes, fees and contributions to the consolidated budget is less than 4,000 lei or is higher than 4,000 lei but less than 5% of total sum of taxes and contributions owed by the economic operator at their latest due date.

Also, if prior to the decision of exclusion, the economic operator fulfills its obligations by paying such taxes or by other means of performance thereof or if it benefits, according to the law, from a scheduling or other facilities for the payment thereof, the law provides that the economic operator shall not be excluded from the procedure

Also, the entries into insolvency proceedings or liquidation or under judicial supervision or for termination of its activity represent other grounds for exclusion.

As regards the offenses which trigger the exclusion from the procedure, the new regulation directly lists and indicates the offenses that trigger the sanction of exclusion from the procedure: the constitution of an organized criminal group, certain corruption offenses and offenses similar to corruption, certain offences against the financial interests of the European Union, acts of terrorism, offenses of money laundering and financing of terrorism, offenses related to trafficking and exploitation of vulnerable persons or fraud within the meaning of Article 1 of the Convention on the protection of the financial interests of the European Communities of 27 November 1995.

The awarding criteria

The contracting authority determines the most profitable offer from an economic perspective based on the awarding criteria and the evaluation factors set out in the tender documentation.

The contracting authority has the right to apply one of the following award criteria in order to determine the most profitable tender:

a) the lowest price;

b) the lowest cost;

c) the best value for money;

d) the best value for cost.

Unlike the previous regulation, the contracting authority shall not use the lowest cost / lowest price as an award criterion in every situation, since for certain categories of works or services (e.g. very complex activities, works or services related to transport infrastructure projects) this criterion might not be used.

The contract governed by the public procurement legislation

The execution of the public procurement contract

The previous legislation governed to a limited extent the performance stage of public procurement contracts (e.g. on amendments to price). The new regulation (similar to the provisions of the directive, also inspired from the case-law of CJEU) provides for the conditions and limitations under which a contract may be modified, including the replacement of the contractor, without the need for a new procedure.

Challenging the acts in the public procurement field

Challenging methods

The challenging methods are expressly and in detail provided i.e. either the administrative course (by submitting the claim to the National Council for Solving Complaints - "CNSC") or the judicial course (by submitting the appeal directly to the court, the jurisdiction shall be assigned to the court (the administrative and fiscal section) in whose area of jurisdiction is located the corporate seat of the contracting authority.

The regulation of the prior notification transmitted to the contracting authority as a mandatory and prior step before submitting the claim to CNSC or the court.

The deadline for requesting from the authority the remediation / revocation of the alleged breach of public procurement legislation is 10 days or 5 days (depending on the estimated value of the contract); this period shall be calculated by reference to a) the date claimant became aware of the authority's allegedly unlawful act or b) the publication date of the documentation in SEAP (if remedies are requested related to the content of the award documentation).

The deadlines for submitting the claims remain =10 days or 5 days (depending on the estimated value of the contract), but are calculated by reference to: a) the receipt date of the authority's unfavorable reply to the prior notification, b) the expiration of the three day term within which the authority should have replied to the preliminary notification, but did not do so or c) the date it became aware of the remedial measures as implemented.

Therefore, the complaint procedure necessarily involves two stages: the submission of the preliminary notification to the contracting authority whereby claimant requires the remediation of the alleged violations of the law, and subsequently the submission of the claim itself, either through the administrative venue (by submitting the claim to CNSC) or through the judicial venue (by submitting the appeal to the court).

The good conduct bond provided by the old framework is not provided in the new framework

The owed court fees

The submission of the claim to CNSC is free of charge.

The submission of the claim in court is charged according to the contract value, the court fees being relatively high. For example, for challenging the outcome of the award procedure of a contract worth 450.000 lei, the fee is of 9,000 lei, while for a contract worth 450,000,000 lei, the fee is approximately 35,160 lei. The non-pecuniary claims bear a fee of 450 lei, unlike the previous situation in which the fee was of 4 lei.

The claims against the CNSC decisions (except for those made by the contracting authorities) are charged 50% of the court fees provided for the claims filed with the courts and for non-pecuniary demands.

The appeals against the decisions of the courts solving the complaints (except for those made by the contracting authorities) are charged 50% of the fee established by law for claims submitted in courts.

The regulations currently in force regarding the court fees related to the judicial disputes on the award procedures have generated various interpretation problems. By the Decision no. 2 of 19/01/2015, ICCJ, in a law clarification appeal, had stated, inter alia, that "in this stage of the public procurement procedure, prior to the conclusion and performance of the public procurement contract, we are in the scenario governed by the (...) related to the non-pecuniary claims." From this perspective, the regulation of the court fees (by reference to the value of the contract) in the new law is likely to be problematic to the extent that the various methods of appeal (prior to the conclusion of the contract) should be qualified as non-pecuniary claims (to which a fixed fee is applicable, which is considerably lower in value than the various taxes that would arise if such were calculated by reference to the contract value).

Suspension of the causes

The suspension of the award procedure and / or of the performance of the contract is subject to the establishment, in advance, by the party who requested the suspension, of a security calculated by reference to the type of public procurement contract or concession contract and to its estimated value. Such security could reach 200,000 EUR.

Deadlines

Relatively expedient and short deadlines are established therein where different entities involved in public procurement disputes (claimants, authorities, CNSC, court) must perform the various obligations incumbent thereon. For example, the period between the date of publication of the tender notice to be published in the Official Journal of the European Union and the deadline for submission of tenders is approximately 30 days, depending on the award procedure.

Access to documents

The new law provides for the obligation of the contracting authority to allow unhindered access of any bidder / candidate to documents that are part of the public procurement documentation.