Changes in public procurement law – Package 3.0 are to introduce further tools for the ordering parties and contractors

The Anti-Crisis Package solutions in force allow the modification of the manner of performance of a public procurement contract, in particular by temporarily suspending performance, changing the scope of the parties’ services or changing the date of performance. This is a special arrangement, primarily in light of Article 144 of the Public Procurement Law. Pursuant to Article 15r, the Ordering Party shall decide on the amendment of the contract after consultation with the contractor. Currently, the package of amendments prepared by the Government provides for more far-reaching measures which are to facilitate smoother implementation of public procurement. This is important news, especially for industries where the turnover of entrepreneurs has decreased as a result of the outbreak of COVID-19.

The current regulations of the Anti-Crisis Package indicate that it is possible to change the content of a contract entered into under the public procurement law regime provided that two conditions are met:

1. the occurrence of circumstances related to the outbreak of COVID-19, and
2. the impact (actual or potential) of these circumstances on the proper performance of the contract.

Article 15r regulates the procedure to be followed in order to effectively change the provisions of the contract; however, it is worth stressing that the initiative to implement the changes actually lies with the ordering party.

The second “package” solution interferes much more with the practice of trading as the activities of the National Appeals Chamber were suspended, including the examination of appeals lodged, which led to the stalling of many public procurement procedures.

The regulations are supplemented by provisions abolishing the liability of managers for failure to collect receivables arising in connection with non-performance or improper performance of a contract entered into under the public procurement law regime. These provisions cover liability on criminal and civil grounds and public finance discipline.

Resumption of the work of the National Appeals Chamber – novelties in the procedure 

The National Appeals Chamber is to resume its activity under the provisions of the public procurement law, but with some significant modifications, provided for in Articles 14i – 14o of the Act referred to as Package 3.0. First of all, the changes will apply not only during the state of an epidemic or epidemic threat, but also 15 days after the end of the last of the existing states.

Appeals will be heard in closed sessions, without the participation of the parties and participants, based on the evidence gathered. The contractor who reports accession to the appeal procedure should submit a position in the case (in writing or electronically) to the Chamber and the parties and support it with evidence. Failure to present a position does not stop the examination of the case, and failure to fulfil formal obligations related to proving the delivery of a position to the other participants will constitute grounds for declaring the accession to the proceedings ineffective.

The key to the procedure conducted in a new manner is the collection of evidence by the National Appeals Chamber. The parties may present evidence only at the stage of lodging an appeal, responding to an appeal and joining the proceedings – this is therefore a significant change with respect to Article 190 of the public procurement law, according to which the parties may present evidence until the hearing is closed.

Judgement is to be given on the basis of the facts established in the course of the proceedings, based on evidence and documents submitted by the parties. The announcement of the judgement will be published on the website of the Chamber, on the date of the judgement. Taking into account the character of the procedure, a solution is proposed that the appellant will be able to withdraw the appeal until the judgement is pronounced and not, as is currently the case, until the hearing is closed.

The Package 3.0 assumes the exclusion of part of the public procurement law provisions – Articles 185(4), 186(1), (5) and (6), 187(8), 189(3) to (8), 190(1) and (3), 191(1) to (3), 196(1), (2) and (5).

New measures governing the contractor’s relationship with the contracting party

Current restrictions, including above all the ban on business operation issued to some entrepreneurs, affect the financial liquidity of companies, including those applying for or performing public procurement contracts. The proposed solutions of the Package 3.0 are intended to protect contractors from the consequences of non-performance or improper performance of contracts, as well as to facilitate the process of applying for a public procurement contract.

After the aforementioned Article 15r, Article 15r¹ is to be added, introducing, for the duration of the state of epidemic or epidemic threat, as well as for 90 days following the termination of the last of the above states, a prohibition for the ordering parties to deduct from the contractor’s remuneration amounts due to contractual penalties for non-performance or improper performance of the contract, as well as a prohibition to seek satisfaction from the performance guarantee. Importantly, this prohibition covers only those events which occurred during the state of an epidemic or epidemic threat and which give rise to contractual penalties or the use of security by the ordering party. For the period indicated at the beginning of this paragraph, the limitation periods for claims “covered” by the prohibition stop running and those that run are suspended.

The second important solution to be implemented by the Anti-Crisis Package 3.0 is to change the rules for lodging a tender security deposit in public procurement procedures. The existing obligation to demand a security deposit for an order with a value exceeding the so-called EU thresholds is to be changed into the right of the ordering party to demand such a deposit. The draft Package 3.0 assumes exclusion of the application of Article 45(1) of the public procurement law.

Thirdly, if the public procurement contract is to last more than 12 months, the remuneration shall be paid in parts – according to the progress of performance or in the form of advances on performance. The terms of payment are to be specified in the contract, with the last tranche of remuneration paid on the basis of the modified rules not being higher than 50% of the total remuneration, and the advance payment not being lower than 5% of that remuneration.

Fourthly, the security requested by the contracting authority shall not exceed the equivalent of 5% of the total price quoted in the tender or the maximum nominal value of the contractor’s obligation. In special cases, if justified by the subject matter of the contract or the level of risk related to the performance of the contract, this security may be increased to the equivalent of 10%. However, the contracting authority should include a description of such a factor in the Terms of Reference. It will also be possible to release part of the security by the ordering party, in the case of execution of part of the subject matter of the contract – such a solution should also be provided for in the Terms of Reference.

Adam Madejski, attorney-at-law