Amended Public Procurement Law published: Most new regulations enter into force on 28 July 2016!
The long-awaited amendment of Poland’s Public Procurement Law was published on 13 July 2016. Most of the new regulations enter into force after a 14-day grace period, i.e. on 28 July 2016. But the effectiveness of some of the changes is postponed because of the need to prepare for their entry into force. And certain issues will continue to be governed by the prior rules.
Application of prior rules
Public procurement proceedings and contests commenced before the effective date of the amendment and not yet completed will continue to be governed by the existing regulations. The same is true for appeals and complaints concerning those proceedings. The existing regulations will continue to apply to contracts concluded as a result of proceedings conducted under the existing regulations or as a result of proceedings commenced but not yet completed prior to entry into force of the amendment, and to contracts concluded on or after 28 July 2016 on the basis of framework agreements concluded before that date. There are some differences, however, with respect to the permissible modifications of procurement contracts.
Permissible contract amendments
The interim provisions concerning permissible amendments to public procurement contracts were revised significantly over the course of legislative work on the amendment. In the April 2016 version, the rule was that the parties to a contract concluded under the old state of the law may take advantage of the new regulations, but in a limited scope, that is, only in the case of essential additional orders, changes necessitated by external circumstances, and changes not exceeding 10% or 15% of the value of the original procurement.
However, the final wording of the amendment includes a quite different provision, permitting amendment of existing contracts in instances provided for in the prior wording of Art. 144 of the Public Procurement Law, i.e. when the contracting authority provided for the possibility of making such an amendment and specified the conditions for the amendment, as well as in instances where—oversimplifying somewhat—there are grounds for granting additional or supplementary orders.
It should be stressed in this context, however, that both the previous version and the current version of the interim regulations should not have a major impact on the practice with respect to amendment of contracts—even though the act introduces a significant change in the permissibility of contract amendments. The reason is that the rules for amendment of procurement contracts developed in recent years by the Court of Justice of the European Union (and ultimately codified in Art. 72 of Directive 2014/24/EU) will be fully applicable as well to contracts concluded under the act, whether before or after the amendment. This is because the interpretation of national law in light of the content and purpose of the directive must reflect the interpretation of the directive presented in the CJEU case law. (We wrote about this earlier in the report “Changes in Public Procurement Law” commenting on the proposed amendment.)
In-house procurements
“In-house” procurements, that is, contracts awarded by a public entity to another public entity, generated a great deal of controversy during the legislative work on the amendment. The final shape of the regulations was not determined until the last stage, after introduction of revisions to the amending bill by the Senate and approval of them by the Sejm at its session on 22 June 2016.
Significantly, the changes concerning the awarding of in-house contracts will not enter into force in July like most of the provisions of the amendment. Under Art. 22 of the amending act, they will enter into force on 1 January 2017 instead.
Gradual digitisation
The act includes major changes in the area of communications between contracting authorities and contractors. In the spirit of the times, and to help expedite and streamline communications, European lawmakers are moving toward complete digitisation of the public procurement system, and Polish lawmakers are following suit. We discussed the specific changes in an earlier article based on a draft of the amending act.
Ultimately, communications between contracting authorities and contractors are to be conducted exclusively in electronic form. But complete digitisation of public procurement will not happen on 28 July 2016. There is a long grace period, primarily to allow contracting authorities to prepare for the switch in technical and financial terms, as introduction of the obligation to communicate electronically will require additional activity on the part of both the contracting authority and the contractor, and introduction of new IT systems will require capital expenditures.
With this in mind, lawmakers have provided for gradual digitisation of public procurement. There are three notable dates in this respect:
- 18 April 2017—obligation of full digitisation of procedures organised by central contracting authorities
- 18 April 2018—filing of the European Single Procurement Document exclusively in electronic form, with filing in paper form still possible up until that date
- 18 October 2018—full digitisation of public procurement in all member states. Significantly, starting in 2018, digitisation is to apply not only to procurements at or above EU thresholds, but also procurements below the EU thresholds.
Monitoring of contract performance
The amendment introduces a form of supervision of contract performance not previously used under the regime of the Public Procurement Law (although it was used in the communist system), involving appointment of a team of people responsible for supervising performance. Appointment of such a team will be not just a right, but an obligation (“shall be appointed”) in the case of contracts for construction works and services whose value is equal to or greater than the PLN equivalent of EUR 1 million (about PLN 4.5 million). This form of supervision over contract performance is not provided for with respect to supply contracts.
This institution is included in a new section, Art. 20a, and enters into force at a different time than most of the amendment—6 months after publication. This means that the obligation to appoint a “team of people” under these rules will arise in January 2017.
Draft of new regulation on documents
It should be noted that this is not the end of the changes in regulations governing the public procurement system. On 5 July 2016 a draft of the new regulation on documents that contracting authorities can demand from contractors was published on the Government Legislative Centre website. This proposal has been circulated for public consultation and the rulemaking process is only at the initial stage.
The new regulation on documents, like the amended Public Procurement Law, is intended to implement Directives 2014/24/EU and 2014/25/EU. But work on the new regulations is certainly not expected to take as long as it took to amend the main act.
Hanna Drynkorn, Infrastructure, Transport, Public Procurement and Public-Private Partnership practices, Wardyński & Partners
