The next series in our Tuesday Mornings for Construction series will cover a recently popular topic concerning the amended Public Procurement Law. With the New Year, after a relatively long vacatio legis , the provisions of the Act of September 11, 2019, the Public Procurement Law, entered into force.
As a preliminary remark, it should be noted that the amendment was primarily necessitated by the need to improve the transparency and efficiency of the public procurement system, to balance the positions of parties to public procurement contracts, and to support the development of small and medium-sized enterprises and innovative, modern projects and services. As the drafters pointed out, after 15 years of increasing stagnation in public procurement, it became necessary to adapt them to current economic realities. These outdated regulations discouraged many entities from applying for public procurement contracts, as evidenced by the decreasing number of bids submitted in these procedures year after year.
The scale and nature of the changes to the Public Procurement Law are revolutionary. The number of provisions has changed – the amendment contains over 600 articles, compared to three times fewer in the previous law. The structure of the act itself has also changed, in order to achieve maximum transparency. Due to this revolution, the legislature decided to significantly extend the waiting period for the regulations adopted in 2019 to come into force. This was dictated by the need to ensure that all parties and participants in the public procurement market can prepare for operating under the new rules.
In today's article, we highlight a significant change in public procurement. The amendment has modified one of the most crucial definitions – the definition of a contractor, including construction works. Previously, a contractor was exclusively a natural person, legal entity, or organizational unit without legal personality that applied for a public contract, submitted a bid, or concluded a public procurement agreement.
It has now been extended to the European model – i.e. Directive 2014/24/EU – to include a natural person, a legal person or an organizational unit without legal personality who " offers the execution of construction works or a construction work, the supply of products or the provision of services on the market ." Therefore, from January 1, 2021, a contractor will be "a natural person, a legal person or an organizational unit without legal personality who offers the execution of construction works or a construction work, the supply of products or the provision of services on the market, or is applying for a contract, has submitted a tender or has concluded a public procurement contract."
This definition has expanded the scope of entities eligible for legal remedies, including those entitled to file appeals with the National Appeals Chamber. According to the justification for the draft amendment, a contractor will now include, for example, a participant in preliminary market consultations, an entrepreneur not invited to negotiate a public procurement procedure without publication or a single-source procurement, or a former participant in a public procurement procedure questioning the admissibility of amendments to a public procurement contract concluded with another contractor. The definition of contractor is therefore broad. However, it is important to remember that this scope will narrow as the public procurement process progresses. Initially, contractors will include all entities that submitted offers or applications to participate in the procedure. However, at the final stage, upon execution of a given contract, only the entity that has concluded the contract with the contracting authority and will be implementing it will remain a contractor.
We cordially invite you to continue following our series – next week you will be able to learn more about another change introduced by the amendment – the balancing of the parties' positions in public procurement.
This alert is for informational purposes only and does not constitute legal advice.
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