Deregulated public procurement
A proposal to cut red tape for businesses in Poland could backfire against contractors in procurement appeals.
The proposed Act Amending Certain Acts to Deregulate Commercial and Administrative Law and Improve the Rules for Developing Commercial Law was posted to the Government Legislation Centre website on 5 April 2024, along with an explanatory memorandum and regulatory impact assessment. The consultation and opinion period for this act amending a number of areas of commercial law has already ended. The comments submitted in this process were published on 18 June 2024 along with responses from the proponent, the Minister of Development and Technology. It is apparent from the published materials that the bill will still be revised quite significantly.
Art. 34 of the bill would have a major impact on public procurement, particularly for proceedings before the National Appeal Chamber, including above all the introduction of remote hearings on a voluntary basis as well as preclusion of certain evidence in appeal proceedings. The remarks below reflect my own professional experience, but focusing on the issues raised in the comments submitted on this proposal.
I was surprised by the comments. Indeed, the market seems to have little problem with the proposal to introduce evidentiary preclusion in appeals, recognising in principle the need to present evidence earlier than at the hearing. I was also surprised by the controversy surrounding the proposed obligation of the contracting authority to file a response to a procurement appeal. But, to the chase.
Remote hearings
In principle, everyone seems to support the introduction of remote hearings, but the devil is in the details. Would these hearings have to be purely remote, or could they be hybrid? How will pleadings and evidence be transmitted during a remote hearing? Commentators have all noted the need to allow pleadings to be transmitted electronically even during a session or hearing. The minister promises to clarify that this type of delivery will be possible—in an earlier proposal it was not.
Additionally, the response to the comments clarified that in the case of a remote hearing or remote session, the panel of arbiters and the clerk must be present in the hearing room, while other participants, particularly the appellants and respondents in the appeal, may attend the hearing in person or via telecommunications. So the option will be left to the parties, but the details will be laid down in an executive regulation.
While remote hearings will help to reduce the cost of appeals and could be a great convenience for many, hybrid hearings will tend to put remote participants at a disadvantage. So if the form of participation is up to each party, we cannot expect remote attendance to be popular, especially among professional counsel.
Evidentiary preclusion
The bill would require evidence in a procurement appeal to be submitted when filing the appeal. This works to the detriment of contractors and is disproportionate to the need to ensure proper conduct of the hearing. There will still be two weeks between filing of the appeal and the hearing, and contractors would be barred from presenting evidence gathered during that time.
In response to the comments on evidentiary preclusion, the revised proposal would require submission of evidence no later than the day before the scheduled hearing date. Evidence could be submitted at the hearing only if could not have been presented earlier.
Considering that procurement appeals focus on essentially one hearing date, the requirement for the parties to submit evidence no later than the day before the hearing is necessary to allow the parties to comment on the evidence. Currently, parties can be surprised by evidence raised during the hearing, and while they have a right to comment on the evidence, they are not always able to do so in a proper and substantive manner, and certainly have no chance to present counterevidence unless they have planned for it in advance. Therefore, the need to submit evidence before the hearing is a step in the right direction. But in practice “the day before the hearing” would mean “by midnight before a hearing at 10 am the following day.” Thus “the day before” does not provide enough time to serve the purpose of the regulation. However, the obligation to enclose all evidence with filing of the appeal seems insupportable.
Contracting authorities’ obligation to file a response to the appeal
There are as many positions on this issue as there are commenters. Because the contracting authorities act in public procurement procedures with full awareness, after examining the documents essentially with no time limit or procedural pressure (time pressure may arise exclusively from the need to award the contract quickly), I would reject the argument that requiring them to file a response to an appeal places too great a burden on them. If they made a particular decision that was then challenged, they could take a position on the matter right away: either uphold their decision (with the justification they must have worked out when they made the decision) or change their decision (taking into account the allegations by the contractor, if they missed anything).
Therefore, it is surprising to see that organisations essentially representing contractors rather than contracting authorities, such as the Business Centre Club, regard the need to file a response to the appeal as an unnecessary burden on contracting authorities. For example, the president of the Social Insurance Institution (as a contracting authority) does not regard this requirement as risking prolongation of case resolution times, but only argues that contracting authorities should be given 7 days to prepare a response (it is planned to grant them 5 days). In turn, one of Poland’s largest contracting authorities, the General Directorate for National Roads and Motorways, reasonably argues that whether the contracting authority should be required to file a response to an appeal should depend on the nature of the appeal, as a response to the appeal will not always serve any purpose.
Responses to comments show that the planned deadline for filing a response to the appeal will be set by the president of the National Appeal Chamber, and the deadline will not be shorter than 5 days, but could be longer, taking into account for example the number and extent of the allegations on appeal. The obligation to file a response to the appeal is to be retained, as the proponent sees this as a consequence of the introduction of evidentiary preclusion and implementation of the adversarial principle in appeal proceedings.
I fully support the proposed solution and regard it as a reasonable balancing of the parties’ interests (the contracting authority and the appellant), but above all a solution forcing the contracting authority to face the consequences of its actions and allowing for better preparation of the appeal hearing. I would add that the comment made by the lobby group Employers of Poland that the response to the appeal be submitted within a certain time before the hearing date, not less than 3 days, is very reasonable, as this way the pleading will most fully meet its objectives. The appellant will be able to consider it and take it into account in its further actions during the appeal proceeding.
Is there a need to hear cases faster?
Employers of Poland also called for extending the period for the National Appeal Chamber to decide appeals, reflecting the other changes, from the current 15 days to 21 days. This comment was not taken into account, the proponent stating that it was an isolated view.
Adding my voice to the discussion, I should say that I support the Employers of Poland’s view in this regard. The desire to resolve cases quickly is understandable, but the quality of the decisions is paramount. Adding a few extra days to the timetable should not have a major impact on the situation of the parties, if in return they obtain an understandable and fair ruling, issued after thorough consideration of the evidence. And even without extension of the deadline for the National Appeal Chamber to decide the case, in practice appeal proceedings will become slightly longer as an inevitable result of other changes.
Anna Prigan, attorney-at-law, Infrastructure, Transport, Public Procurement & PPP Practice, Wardyński & Partners
