Public contracts connected with COVID-19 not subject to the rigours of the Public Procurement Law
The pandemic requires immediate response and rapid launch of solutions for combating the coronavirus and its socio-economic impacts. Thus the Anti-Crisis Act includes provisions allowing contracts for fighting the pandemic to be awarded without following lengthy formal procedures.
Modification of contracts and contractual penalties in public contracts in the face of the pandemic
As a result of the pandemic, many planned and existing contracts have been paralysed. The uncertain situation forces the parties to cease performing contracts or at least poses barriers to performance. In this situation, can they change the contract? Will they have to pay contractual penalties and damages? The Anti-Crisis Act comes to their aid.
Digitalisation against the crisis
Public procurement is one of the biggest driving forces of the economy. Contract performance during the epidemic may be impeded, but ongoing public procurement proceedings should not be stopped just because people are currently working mainly at home.
Despite the pandemic, the National Appeal Chamber can (and must) function
In Poland, the National Appeal Chamber upholds the effectiveness of the rules guaranteeing transparent and non-discriminatory access to public procurement contracts within the EU. Member states are required to ensure contractors the consideration of review procedures concerning the award of public contracts, as is clear from the Remedies Directive.
Coronavirus: A new reality in public procurement
The coronavirus pandemic is already affecting contractors carrying out public projects and other contracts under the public procurement regime. With the dynamic development of the situation, there is a risk that negative consequences will go even further. The current situation affects not only the performance of contracts but also ongoing and future public procurement procedures.
European Commission tightens the use of CPV codes
A numbering system known as Common Procurement Vocabulary (CPV) codes has been in force across the EU since 2008. The system was designed to identify the subject matter of public contracts in various member states and thus encourage contractors from throughout the EU to bid in tenders of interest to them. For years the CPV codes fulfilled this role, but recently it was noted that contracting authorities were increasingly assigning erroneous CPV codes to contracts. Thus the European Commission decided to tighten the CPV code system. Contract announcements assigning erroneous codes will no longer be published on the TED platform (Tenders Electronic Daily supplement to the Official Journal of the EU).
EU Procurement Law 2020 thresholds lowered
EU thresholds and the average EU exchange rate for conversion of EUR thresholds into PLN will be lower from 1 January 2020, which means that some current contracts in Poland will exceed the EU thresholds.
In-house procurement may not be compatible with EU law
The award of an in-house procurement satisfying the conditions laid down in Art. 12(1)(a)–(c) of Directive 2014/24/EU is not necessarily consistent with European Union law, the Court of Justice of the European Union held in the judgment of 3 October 2019 in Case C-285/18, Kauno miesto savivaldybè. This ruling is not controversial, nor does it change the principles developed over the years for excluding internal procurement from the regime of the procurement directives. Nonetheless, it gives contractors an additional argument for challenging contracting authorities’ decisions ignoring such basic principles as transparency.
Subcontractors can’t always get paid directly by the contracting authority
Under Art. 143c(1) of the Public Procurement Law, the contracting authority is required to make direct payment to a subcontractor approved by the contracting authority if the subcontractor does not receive payment due from the general contractor. This regulation has provided greater protection to subcontractors under public contracts, but in certain situations it may be difficult to obtain this protection.
New Public Procurement Law: Mediation and conciliation at the Court of Arbitration at the General Counsel to the Republic of Poland—good or bad solution?
Under the proposed new Public Procurement Law, in the event of a dispute involving performance of a public contract, amicable resolution of the dispute would be handled by the Court of Arbitration at the General Counsel to the Republic of Poland. But the proposal generates legal doubts.
Public procurement deadlines must be realistic
Terms of reference should set contract performance deadlines that are possible to keep for completion of the contract and individual stages. It is better to specify these periods in years, months and days than as a specific date. However, if the contracting authority set specific dates which became impossible to meet after submission of the bids, it should modify them accordingly when signing the contract, reflecting the amount of time taken into account by contractors at the stage of submission of bids.
Substitute performance and party substitution in a public procurement contract
A party substitution in a contract concluded under the Public Procurement Law is possible if the contracting authority explicitly provided for the possibility of such a change in the contract announcement and specified the conditions for such a change. Whether a contractual provision authorising the contracting authority to entrust the performance of the contract to a third party (substitute performance) can be regarded as a review clause allowing for party substitution is an interesting issue in public procurement practice.
