Legislation which governs public procurement

The Directives clarify that the power to exclude bidders can apply throughout the procurement process not only during the pre-qualification stage and may also extend to sub-contractors and consortia members. The Directives specify that contracting authorities may take into account, as part of the MEAT criteria, the characteristics of the production process of the works, goods or services to be purchased, such as working conditions and staff health protection. The Directives expressly allow contracting authorities to take into account the organisation, qualification and experience of staff assigned to performing the contract as an award criterion, recognising that this may affect the quality of the contract performance.

As regards the assessment of the best price-quality ratio, the Directives provide that any qualitative, environmental or social criteria must be linked to the subject matter of the contract, which controls the ability of contracting authorities to take account of wider social, political and environmental considerations.

The Directives include express provisions regulating the circumstances in which contracts may be modified during their term without triggering an obligation to carry out a new tender procedure — an issue that has given rise to much debate and litigation.

More helpfully, the Directives provide that contract modifications will not be considered to be substantial where they have been provided for in the procurement documents in clear, precise and unequivocal review clauses or options. Such clauses or options must state the scope and nature of possible modifications, as well as the conditions under which they may be exercised, and may not alter the overall nature of the contract.

The Directives also allow modifications in circumstances in which, despite reasonably diligent preparation of the initial award by the contracting authority, the modifications are required as a result of unforeseen circumstances. In such cases, a new procurement procedure will not be required so long as the modification s do not alter the overall nature of the contract. In addition, the Directives clarify that a new award procedure will not be required in the event that additional works, services or supplies are necessary, and where a change of contractor cannot be made for technical or economic reasons and would cause significant inconvenience or duplication of costs.

It is also helpful that the Directives expressly provide that a successful tenderer may undergo structural changes during the performance of the contract, such as internal reorganisations, mergers and acquisitions or insolvency, without giving rise to a requirement to conduct a new award process. A complaint to the Commission is the cheapest and most straightforward option.

However, it will usually be slow; therefore, in many cases, it may not be very effective. There is always a risk that the Commission will not consider that the case is worthy of investigation at the EU level the Commission will not and cannot pursue all complaints. Moreover, there is no effective mechanism for injunctive relief interim measures at the EU level are very difficult to obtain. There is no fixed timescale for the procedure, and generally the process will be slow and certainly outside the control of the complainant, who will have limited visibility over the conduct and progress of the case.

If successful, a complaint may ultimately lead to the Commission taking action before the CJEU under Article against a Member State for infringement of the relevant directive see the description of the procedure above at section 5, paragraph 3.

In its judgment under Article proceedings, the CJEU cannot order a Member State to act or to refrain from acting in a particular way. The CJEU held that Germany was under an obligation to remedy the infringement in question by taking all appropriate measures, which might include the rescission of a contract which had already been concluded, irrespective of whether German national law provided for this possibility. This remedy is available on limited grounds after a contract has been entered into in breach of the applicable directive.

Alternative penalties contract shortening, fines, or both are also available instead of ineffectiveness, in situations where ineffectiveness is inappropriate. A likely outcome of any challenge is for the court to declare that a public contract has to be re-tendered to the market as a whole — particularly in cases where a public contract is amended in a way which is materially different in character from the original contract.

Material changes and changes in scope can result in a procurement being qualified as a new procurement requiring a new tender process. In Wall [see Endnote 16], the CJEU held that the replacement of a specified sub-contractor may require a new award procedure to restore transparency. The CJEU affirmed that an essential change had taken place requiring a new award procedure to ensure compliance with the principle of transparency.

Under the Directives, the award of service concessions was excluded from the public procurement regime, and the award of works concessions was subject only to a narrow set of specific rules.

The choice of the most appropriate procedure for the award of concessions is left to contracting entities, subject to basic procedural guarantees, including:.

The rules specify that the main feature of a concession — the right to exploit the works or services — always implies the transfer to the concessionaire of an economic risk involving the possibility that it will not recoup all the investments made and the costs incurred in operating the works or services covered by the award. However, this does not exclude the award of concessions in sectors such as those with regulated tariffs, to the extent that an operating risk, however limited, can still be transferred to the concessionaire.

Broadly, the provisions are intended to stop Member States from unfairly supporting their own companies to the detriment of competing companies from other Member States. In the context of public procurement, aid can arise where the terms of a contract for works, services or supplies are not aligned with normal market-based commercial terms as to price or other matters, or where the contract does not reflect a genuine need. The advantage must come directly or indirectly from the resources of the State, and the measure providing for this must be imputable to the State.

If it did, aid is not involved. If it did not, aid is involved — the aid being the difference between the actual value of the contract and the value of a contract that a market purchaser would have entered into with the difference being repayable. If the purchaser has run an open, transparent and non-discriminatory procurement procedure for example, one in accordance with the public procurement rules and the contract price is established through that procedure, then there is generally accepted to be a presumption that State aid is not involved.

If the purchaser has properly used the open procedure, the contract should be at market value and not involve aid. The position is less clear for cases in which the restricted, negotiated or competitive dialogue procedures are used.

German public procurement law is significantly influenced by European law and has recently been amended by numerous new legal stipulations. Thus it was on 24 April that extensive modifications of section 97 and the following sections of the German Act against Restraints in Competition were enacted which govern legal protection when it comes to public procurement procedures.

This is so for the reason that the German legislation provides that a differentiation must be made between different types of contract awards. This gives rise to the following structure:. In some respects it is also mandatory to comply with contract-awarding regulations and requirements when it comes to the award of civil engineering measures, and in connection with the building and erection of hospitals, sports, recreational or leasure-time facilities, and school, university or administrative buildings.

Public contracts that are covered by the European directives are valued at around EUR billion, making it a key driver of the EU economy. Concessions are defined as contracts for pecuniary interest by means of which one or more contracting authorities or contracting entities entrusts the execution of works, or the provision and the management of services, to one or more economic operators.

The consideration for the works or services consists in the right to exploit the works or services or that right together with payment. The right to exploit the works or services implies the transfer to the concessionaire of an operating risk of economic nature involving in particular, the possibility that the concessionaire will not recoup the investments made.

Therefore this would cover a broad range of PPPs. Earlier documents, which are still relevant until these directives come into force in include:. OECD procurement page , with links to national procurement authorities in European countries. Government procurement page developed by the WTO. Parties may seek de novo review in the Court of Federal Claims of agency procurement decisions following the disposition of a timely GAO protest. The GAO, the Court of Federal Claims, and procuring agencies have wide latitude in structuring remedies in response to protests of awarded contracts.

For instance, if the GAO determines that an award did not comply with applicable statutes or regulations or solicitation terms, it may recommend that the procuring agency terminate the contract, re-compete the contract, amend the solicitation, or award the contract to the protester.

The GAO is required by statute to decide all protests within days of filing. Protest actions at the Court of Federal Claims are not subject to any statutory or regulatory timetable and usually take many months to resolve. The GAO resolves hundreds of protests each year by written decision. Thus, it is difficult to identify current leading examples of GAO bid protest decisions; nevertheless, GAO decisions have precedential value and are often relied on in resolving future bid protests. A discussion of the most common reasons for the GAO sustaining a protest may be found at 5.

Procuring agencies are authorised to take voluntary corrective action in response to a protest to address issues identified in the protest. The nature, scope, and timing of any voluntary corrective action are within the broad discretion of the procuring agency. If not, what are the underlying principles governing these issues? Procuring agencies may change their requirements or the terms and conditions of the procurement prior to award, either before or after receipt of proposals.

In negotiated procurements, agencies must amend the solicitation to make such changes. Regardless of the type of procurement, however, procuring agencies must provide tenderers with fair notice of their requirements and the criteria that will be used to evaluate tenders. Pre-award changes to the bidding entity i. Numax Elecs. See Baker Support Servs. Where changes may affect the resources available for contract performance, tenderers should disclose that information to the agency before contract award.

In negotiated procurements, exchanges with offerors and the submission of revised proposals are governed by FAR Because agencies may not favour one tenderer over another see FAR Post-contract changes are governed by FAR Part 43 and are made via contract modifications.

Depending on the type of change, the modification may be made unilaterally by the contracting officer or may be negotiated by the parties. Disputes concerning contract changes after award are primarily governed by the Contract Disputes Act of , which provides both an administrative and a judicial process for the resolution of all claims by both contractor and government relating to an existing contract.

See also FAR Subpart Most contract administration disputes are settled at the procuring agency level by negotiating a request for equitable adjustment of the contract price and schedule. However, if a dispute is not settled informally at the agency level, the contractor may file an action at the Court of Federal Claims or at a board of contract appeals.

The Assignment of Contracts Act, 41 U. See Tuftco Corp. Formal consent for a transfer of a contract is obtained through the novation process, which is governed by FAR Subpart Agencies may not award a contract with the intent to transfer the contract to another entity.

FAR Subpart 7.