Whether or not to certify public contractors lies within the discretion of each European Union member state. Such lists operate, for example, in Czechia and Germany.
The primary goals that guided the drafters of the bill in Poland were:
- To greatly reduce the time required to prepare a bid, and
- To foster professionalism and transparency in the contractor vetting process.
There is no doubt that assessing the ability of contractors to perform the contract and confirming the absence of grounds for exclusion from the proceedings are the foundations of the examination of bids by contracting authorities. Therefore, along with all its accompanying regulations, the eventual enactment of the bill will have far-reaching consequences for the overall public procurement market in Poland.
Despite the momentous impact the bill may have on one of the key industries in the economy, the bill contains many dubious solutions, and lacks a lot of essential information.
Scope of certification
Pursuant to the Public Procurement Law of 11 September 2019, contractors wishing to participate in the proceedings and win a public contract must meet the conditions for participation in the proceedings set by the contracting authority. Under Art. 112(2), these conditions may pertain to the contractor’s:
- Capacity to conduct business
- Authority to conduct a specific business or professional activity, as specified in separate provisions
- Economic or financial situation
- Technical or professional capacity.
Additionally, contractors must not be subject to exclusion under mandatory grounds set forth in Art. 108 of the Public Procurement Law or optional grounds set forth pursuant to Art. 109.
Art. 3 of the bill provides that the certification will encompass both the contractor’s ability to properly perform the contract (referred to in the bill as “certification of contractor’s capability”), as well as the absence of grounds for exclusion from the contract award procedure, as referred to in Art. 108(1)(1)–(5) and (2) and Art. 109(1)(1)–(5) and (7)–(10) of the Public Procurement Law (referred to in the bill as “certification of non-exclusion”).
Certification of the contractor’s capability
The scope of the certification of a contractor’s ability to properly perform the contract may cause the most controversy. It is no secret that contracting authorities set the terms and conditions of contracts extremely widely and diversely. They are determined based on the individual needs of the contracting authority and are intended to allow for the necessary vetting of the contractor’s ability to perform the contract.
The bill proposes to move away from contract terms set in this way and require contracting authorities instead to use “capability levels.” Under Art. 5(4) of the bill, “Capability levels refer to the possession of certain technical or professional capabilities necessary for proper performance of the contract.”
But the bill does not answer the toughest questions about the nature or scale of these capabilities. The bill only indicates that the levels will be set by the minister for economy, by way of a regulation, and will be “related to the award of a contract for construction works, taking into consideration the need to assign to these levels the requirements corresponding to the conditions for participation in the procedure” (Art. 5(4)). The same applies to capability levels for services and supplies.
The explanatory memorandum to the bill shows that, at first, certification is not intended to cover all types of construction works. Nor will it ultimately cover all types of procurement. It will apply to contracts to which the capability levels described in the regulations apply.
Of vital importance, the capability levels will have to be applied by all contracting authorities. Only via a far-reaching exception will they be able to apply other terms for participation in the proceedings—only when justified by the specifics of the contract, in particular when the subject matter of the contract does not correspond to any of the capability levels defined in the bill.
Certification of non-exclusion
The bill gives the contractor the opportunity to apply for vetting of:
- Mandatory grounds for exclusion set forth in Art. 108 (1)(1)–(5) or (2) of the Public Procurement Law
- Selected optional grounds for exclusion, set forth in Art. 109(1)(1)–(5) and (7)–(10) of the Public Procurement Law, together with the foregoing mandatory grounds for exclusion referred to in Art. 108(1)(1)–(5).
At the same time, the bill provides for the possibility of obtaining a certificate despite the failure to prove the absence of grounds for exclusion. In such a situation, the contractor will have to prove to the certifying entity that it has met all of the conditions indicated in Art. 23(1) of the bill. These conditions are identical to those in Art. 110 of the Public Procurement Law, which deals with “self-cleaning” (internal remedial measures).
Thus, the proposed act also provides for the institution of taking internal remedial measures.
When issued, a certificate would create a presumption of the absence of grounds for the contractor’s exclusion from the contract award procedure or to dispute the contractor’s ability to duly perform the contract, to the extent stated in the certificate and for the period for which the certificate is issued.
The accuracy of the information in the certificate may be questioned only in case of reasonable doubt, in particular when it is apparent from the documents submitted in connection with the procurement procedure in which the certificate is submitted. A certificate issued to a contractor could not be challenged if the contractor does not submit the certificate in the specific contract award procedure.
Validity of certificate
The certificate is to be issued for three years. This is a very long time, which is difficult to reconcile with the Regulation of the Minister of Development, Labour and Technology of 23 December 2020 on subjective evidence and other documents or statements that a contracting authority may require from a contractor.
For example, the documents confirming the contractor’s financial capacity may not be up to date. One such document is information from a bank or credit union confirming the balance of the contractor’s funds or its creditworthiness. Such a document must be issued no earlier than three months before submission. But under the certification rules, a contractor might be able to raise funds in its account for the sole purpose of obtaining a certificate, but not maintain that balance for the next three years, as it could still demonstrate compliance with the condition for the duration of the certificate. Contractors without a certificate would not have this option (although obtaining a certificate is optional, not mandatory).
One of the overriding principles of public procurement is the equality of contractors, under Art. 16(1) of the Public Procurement Law. Given the clear preference for certified contractors, this principle would be violated to the disadvantage of contractors not holding a certificate.
Legal protection measures
In the procedure for obtaining a certificate, only the contractor applying for the certificate would be a party. Other contractors could not challenge issuance of the certificate in the procedure before the certification body. However, this is not ruled out by way of proceedings before the National Appeal Chamber or the Public Procurement Court in a given procurement procedure.
If a contractor does not obtain the certificate, it will only be able to request reconsideration of the application. For example, it will not be able to appeal to the National Appeal Chamber or the Public Procurement Court. Therefore, review of the correctness of a decision to deny certification will be limited.
Impact on the Public Procurement Law
The biggest impact of the proposed act on the Public Procurement Law will be the provisions on setting conditions for participation in proceedings. Under the proposed wording, Art. 112 of the Public Procurement Law would be amended to add the following sentence: “The conditions for participation in the proceedings referred to in par. 2(4) shall be determined using the corresponding capability levels specified in the provisions issued pursuant to Art. 5(4) or (5) of the Act on Certification of Public Procurement Contractors and Amending Certain Other Acts.”
Additionally, in the terms of reference for contracts, the contracting authorities will have to indicate potential reasons for not applying capability levels when defining the conditions for participation in the proceedings.
In addition to the foregoing regulations on setting capability levels, the bill would make a number of other changes to the Public Procurement Law, but these are mainly of a housekeeping nature and concern taking into consideration a new document, such as a certificate, in the contracting authorities’ calls for filing documents (e.g. Art. 126 or 128 of the Public Procurement Law).
Streamlining of public procurement procedures is a legitimate goal, and the Public Procurement Law needs to be amended. In principle, the introduction of contractor’s certification should increase the sense of stability and certainty among participants in the public procurement market.
However, the proposed certification act presents many problematic issues. First and foremost, these relate to the certificate covering the contractor’s ability to duly perform the contract, used to demonstrate compliance with the conditions for participation in the procedure referred to in Art. 112(2) of the Public Procurement Law.
To comprehensively assess the bill and the direction of Polish lawmakers’ activities in the area of contractor certification, the drafts of other regulations to be issued under the bill would also have to be reviewed. Unfortunately, they have not yet been published.
Rafał Świerzbiński, attorney-at-law, Infrastructure, Transport, Public Procurement & PPP practice, Wardyński & Partners