The contractor must comply with the contract
By signing a public procurement contract, the contractor undertakes to perform the contract not only in compliance with the wording of the contract, but also in compliance with the contractor’s tender and the terms of reference for the procurement. The quality provided by the contractor must meet the expectations of the contracting authority.
Sometimes contracts are regarded as “public” not just because they are financed at public expense. The public context of contracts is broader when a contract to be awarded involves the performance of services for citizens or the contract is to be performed in public space and the method of performance will affect the quality of life of citizens. Does the voice of citizens unsatisfied with the way services are performed under a public contract carry any weight at all?
When is a public contract improperly performed?
The procedure for award of a public contract ends upon signing of the contract. The rules for performance of the contract are governed by the contract as signed, and it is also in the contract that mechanisms should be sought for disciplining contractors who fail to comply with the terms of the contract. But what can citizens do when they believe that a public contract is not being performed properly?
The mere fact that the apparent way in which the contract is being performed is objectively ineffective does not automatically mean that the contractor is truly performing the contract defectively. It must be borne in mind that the contractor has only the duties imposed on it by the contracting authority. Thus it may happen that even though better and more effective methods of performing the contract exist, the contractor cannot be required to apply them because this is not expressly included among the duties assigned to the contractor. The best solutions are usually more expensive, and the contractor is required to do only what it promised to do in the tender it submitted for the contract.
Citizens can review the contract
It isn’t all that rare for the conditions of performance of a public contract not to be mentioned in the tender documentation, even though it might be expected that they would be specified by the contracting authority.
To check whether the contracting authority properly specified the conditions of a public contract or if the contractor is properly performing the contract, every citizen has a right to review both the contract and the tender documentation from the procurement procedure under which a specific contract was awarded.
Public contracts are public information and accessible to any interested person via the right of access to public information. The documents can be reviewed at the location of the contracting authority, or photocopies can be requested. Some contracting authorities leave the tender documentation on their website after the procedure is over, meaning that some of the documents are available online even after the tender is decided.
One element of the terms of reference for a procurement is a draft of the contract to be concluded with the selected contractor (or at least the essential terms of the future contract). If certain provisions are included in the draft, then they will also be included in the final contract.
But it should also be borne in mind that the contract itself does not necessarily provide full knowledge of the contractor’s obligations. The complete picture can be determined from a combined analysis of all the documents making up the contract, including the tender documentation and the tender submitted by the contractor.
Penalties for the contractor
But what can the public do if they are sure that the contractor is not living up to its offer? The first thing is to notify the contracting authority. A scrupulous contracting authority will apply mechanisms to impose discipline on the contractor. When citizens intervene, it can help the contracting authority monitor the performance of the contract.
What measures can the contracting authority pursue to correct irregularities by the contractor? These are measures provided for in the contract or generally applicable regulations.
The contract may allow the contracting authority to assess contractual penalties for certain violations. The contract may also entitle the contracting authority to terminate the contract if the contractor fails to perform certain duties.
But if the contract does not contain such provisions, the relevant provisions of the Civil Code on performance of obligations and the consequences of non-performance will apply. In certain instances, these provisions give the contracting authority additional grounds to terminate the contract and seek damages for losses arising out of improper performance of the contractor’s obligations.
Exclusion from procurement procedures
It should also be borne in mind that a contractor that has caused a loss by failing to perform a public contract properly or has been required to pay a contractual penalty is excluded from other contract award procedures if the loss or the obligation to pay a contractual penalty is 5% or more of the value of the contract and is confirmed by a judgment that became legally final within 3 years before commencement of the other procurement procedure. Thus a contractor which fails to pay a contractual penalty or make up a loss voluntarily is at risk of losing the possibility of taking part in public tenders for 3 years.
Contractors are also excluded from procurement procedures if the specific contracting authority has terminated a contract with the contractor for reasons attributable to the contractor. If the value of the unperformed portion of the procurement was 5% or more of the contract value, the contractor will lose the right to seek the award of further contracts from that contracting authority for 3 years.
The voice of the citizens does count
Therefore, if a trash collector fails to provide containers for sorting of waste that meet the required specifications, or the contractor for road works performs its tasks sluggishly, it is worthwhile to pass this information on to the contracting authority. It should be assumed that the contracting authority has the greatest interest in assuring that it obtains work of the appropriate quality in exchange for award of the contract.
If the contracting authority learns in this way of irregularities in the performance of a contract, it can pursue the available remedies. If the contracting authority does not take action, the authorities exercising supervision over the contracting authority may be notified accordingly if the contracting authority is spending public funds needlessly, extravagantly or inefficiently.
And if it turns out that the contractor is operating inefficiently because the contract permits it to do so, perhaps the contracting authority will heed the voice of the public the next time it draws up the tender documentation for a similar procurement in the future.
Anna Prigan, Infrastructure & Transport Practice and Public Procurement & Public-Private Partnership Practice, Wardyński & Partners
