The Public Procurement Act, a new agenda for completing the public procurement process in Denmark

Transcription

1 The Public Procurement Act, a new agenda for completing the public procurement process in Denmark DELACOUR s mini guide on the Danish public procurement act for contracting entities

2 Page 2 Do you have a grip of the public procurement act? The Danish public procurement act sets a new agenda for completing the procurement process in Denmark. From 1 January 2016 and onwards, contracting entities one should therefore consider the consequences of the act on the completion of the public procurement process. SIGNIFICANT CHANGES The public procurement act comprises a total of 199 sections and is a Danish legislative implementation of the 94 Articles of Directive 2014/24/EU of 26 February 2014 on public procurement. In other words, it is a matter of a comprehensive body of rules, which it will take some time and effort to get used to, both on the part of public authorities and enterprises. The public procurement act introduces a number of changes in the area of public procurement and, in some respects, creates a flexibility which greatly influences the planning and completion of public procurement going forward. The purpose of this mini guide is to give an overview of the most significant changes, which merit the special attention of contracting entities when the new act is implemented in their organization. The public procurement act generates the need for a legal overhaul of the precedents, procedures and processes of contracting entities. DELACOUR would be pleased to assist contracting entities in handling this task, in order for future public procurement processes to also be completed without contracting entities finding themselves in resource-intensive conflicts. Our experts in public procurement law are ready to assist you with carrying out a legal overhaul, which will always be customized to fit the wishes and requirements of the respective contracting entity. A public procurement legal overhaul may comprise one or more of the following: Reviewing purchasing policies Reviewing procurement process plans Reviewing precedents Reviewing standard contracts Reviewing standard terms and conditions Reviewing standard tender terms and conditions Reviewing processes Reviewing internal guidelines SELECTION OF TENDERERS The selection of tenderers basically takes place according to the principles applied hitherto. A distinction is made between voluntary and mandatory exclusion criteria, just like a distinction is drawn between selection criteria, which relate to economic/ financial capabilities and technical/professional capabilities. However, the public procurement act implements a number of changes. For example, provisions have been included, which relate to the documentation of reliability, according to which an applicant or a tenderer has the option of documenting its reliability, albeit that it is comprised by one or more exclusion criteria (self-cleaning). ESPD (European Single Procurement Document) By Regulation (EU) 2016/7 of 5 January 2016 it has, as of 1 January 2016, become mandatory to use a new single European standard document (ESPD European Single Procurement Document). It is a type of self-declaration, which provides preliminary evidence of a applicant or tenderer fulfilling the criteria in terms of exclusion, suitability and selection. The introduction of the ESPD makes demands on both contracting entities and tenderers in terms of completing the form. For instance, in the event that the document has not been correctly completed, doubts may arise as to whether the tender is conditional. As the document has not been entirely finalised from an EU point of view, the Danish Competition and Consumer Authority has prepared preliminary edition with accompanying guidance.

3 DELACOUR 2016 Public procurement law DIALOGUE WITH THE TENDERERS The public procurement act supports carrying out a preliminary dialogue with the market. The option of undertaking such market assessments is not a new thing. Therefore, the new provisions primarily mean that the actors in the public procurement market are made aware that the option of a dialogue exists. However, contracting entities ought to be particularly aware of the fact that the public procurement act confers a duty on the contracting entity to exclude an applicant or tenderer which has participated in an early dialogue with the contracting entity and thereby achieved an unavoidable competitive edge. FLEXIBLE PUBLIC PROCUREMENT PROCEDURES The public procurement act extends the options to make use of tender processes like pre-tender negotiations and competitive dialogue. For example, it will be possible to make use of these types of tender processes if the requirements of the contracting entity cannot be met without already existing solutions being modified. This could be the case within the IT business. The public procurement act contains a number of provisions, which provide a framework for these types of tender processes, eg in relation to the fixing of deadlines, the number of participants in negotiations, transparency of the negotiation process, etc. However, it falls to the contracting entity to complete this framework and consider the practical aspects of planning actual negotiations. Complaints tribunals practice has shown that firm action will be taken against contracting entities, which do not comply with the rules on the execution of pre-tender negotiations. For this reason, careful thought must be given to both the formal provisions and the practical execution before this type of tender is attempted. INNOVATION PARTNERSHIPS Innovation partnerships is a new type of tender, which has been introduced with a view to supporting the spreading of innova Page 3 tive solutions in the public sector domain, eg in the healthcare sector. Previously, such public-private collaborations were divided into a design and development process and a subsequent procurement process. With the introduction of this new type of tender the option is created to gather the development of the innovative solution and the subsequent procurement of the solution into one process. Innovation partnerships are composed of three stages or phases. First, the procurement process, which is based on a negotiation process with selected tenderers, is completed. Then, one or more partnership contracts on a design and development process are entered into. Finally, a contract may be entered into on the procurement of the product which has been developed. Employing this type of procurement process means that the contracting entity must consider a significant number of factors, including whether the requirements of the contracting entity are suited to forming the basis of a innovative process, the consequences of the design and development process in terms of time and resources, who acquires the rights to the product, whether the participants are to be remunerated, etc. FRAMEWORK AGREEMENTS The public procurement act specifies a number of factors, which have previously given cause for doubts, eg in connection with the opportunity to enter into contracts under the framework agreements, the options of entering into contracts directly, and mini-tenders of contracts. ENTERING INTO CONTRACTS In any event, the allocation criteria will, in future, be the most advantageous tender from a financial perspective. Thus, the previous distinction between the most advantageous tender from a financial perspective and the lowest cost is discarded. The public procurement act generates the need for a legal overhaul of the precedents, procedures and processes of contracting entities.

4 Page 4 Pursuant to the public procurement act, the most advantageous tender from a financial perspective may be identified on the basis of one of the following criteria: 1. Price 2. Costs, or 3. The most advantageous relationship between price and quality The contracting entity must be aware that, pursuant to the provisions of the Danish Act on Tender Procedures, a distinction will continue to exist between the most advantageous relationship between price and quality in procurement processes for construction and civil engineering works. REVERSAL OF DECISIONS TO ALLOCATE The public procurement act provides contracting entities with the option of reversing a decision on allocation in the event that an error was made in the original evaluation of tenders. This provision on the option to reverse a decision does not implement a provision from Directive 2014/24/EU of 26 February 2014 on public procurement and it is, thus, a matter of a purely Danish national provision which, however, is based on European Court of Justice practice. Reversing the decision on an allocation will typically cause unrest among the tenderers, if they have already been informed of the initial result of the procurement process. A contracting entity ought therefore to carefully consider incorporating a standard paragraph in the procurement documentation, which allows for the reversal of an allocation. DEADLINES Basically, the contracting authority must fix the deadline based on what is appropriate in relation to the specific procurement process. However, the public procurement act contains provision for minimum timeframes. These deadlines are shorter than the previous ones and, therefore, create a new framework for planning and completing the procurement process. SMALL AND MEDIUM-SIZED ENTERPRISES The public procurement act provides that a contracting entity shall provide justification in the event that the contract is not split into lots. Such justification, which must appear from the procurement documentation, may eg be the regard for the possibility of achieving economies of scale or creating the competition required with respect to the contract put up for tender. The public procurement act moreover provides for capping the requirements made on the turnover of candidate companies. Thus, the contracting entity must not require that the minimum turnover of an applicant or tenderer is in excess of twice the value of the contract put up for tender. Presumably, the public procurement act will not cause noticeable practical changes in relation to the participation in tender processes of small and medium-sized enterprises. In the event that a contracting entity wishes to encourage small and medium-sized enterprises participation in the procurement process, the contracting entity must first and foremost be aware of the minimum requirements laid down for participating in the procurement process, and maybe provide guidance to these enterprises on the possibility of putting in bids in collaboration with other enterprises, eg by establishing a joint venture. This may be relevant eg in relation to establishing innovation partnerships with a view to developing innovative solutions for public authorities. LABELLING The public procurement act s provisions on labelling provides the contracting entity with the option of setting out specific requirements to labelling, which certify environmental, social or other qualities. However, the contracting entity will be obliged to accept all labels, which fulfil similar label requirements. TECHINICAL SPECIFICATIONS Overall, the rather complicated provisions with respect to technical specifications remain unchanged. Notwithstanding the above, the public procurement act introduces a certain flexibility in that it introduces the option of pre-tender negotiations in certain circumstances, in the event that the contracting entity cannot adequately determine the technical specifications. THE LIGHT-REGIME With the provisions for a light-regime, the public procurement act introduces the option for contracting entities to complete a simplified procurement process in the allocation of contracts for certain social, health-related and educational services. This procurement process is almost identical to the provisions relating to advertising contained in Paragraph II of the Danish Act on Tender Procedures, which have been repealed by the public procurement act. PROCUREMENT OF LESS THAN THE THRESHOLD VALUE The provisions on advertising contained in the Danish Act on Tender Procedures have been repealed, however the Act s provisions on construction and civil engineering works still apply to national procurement processes of less than the threshold value. When procuring goods or services of less than the threshold value the public procurement act requires that an assessment is carried out as to whether the contract has a clear cross-border interest. If the contract is deemed to have a clear cross-border interest, it must be advertised. If it is assessed that this is not the case, the contracting entity may choose to ensure that the procurement is taking place under market-related conditions. The contracting entity ought to ensure that the assessment is documented, eg by producing a brief memorandum to this effect. The new 2016/2017 threshold values may be found at the home page of the Danish Competition and Consumer Authority SUSTAINABLE PROCUREMENT AND LIFE-CYCLE COSTS The public procurement act specifies that the contracting entity has the right to promote environmental considerations and social conditions. Eg the contracting entity may choose to exclude tenderers which do not live up to their obligations pursuant to employment law. The public procurement act offers the option of allocating a contract on the basis of an assessment of life-cycle costs. Eg

5 Page 5 the environmental costs and consequences of manufacturing a certain product may be taken into consideration. ACCESS TO PROCUREMENT DOCUMENTATION The introduction of the public procurement act means that the contracting entity is obliged to provide free, direct and fully electronic access to the procurement documentation from the date of the publication of the procurement process in the Official Journal of the European Union. Thus, contracting entities are no longer permitted to continue work on the procurement documentation after the notification of the procurement process has been dispatched. This may eg give cause to considerations in relation to the contracting entity s contracts with external advisors who assist the contracting entity in the production of the procurement documentation or the completion of the procurement process. PUBLICATION OF THE EVALUATION METHOD The public procurement act confers a duty on the contracting entity to describe the evaluation method and the criteria applied in the evaluation process. The contracting entity s option to make any necessary adjustment to the evaluation method after bids have been received has therefore been significantly limited. Contracting entities ought to pay particular attention to this duty in order to avoid the procurement process being disallowed. CHANGES RELATING TO TENDERERS AND CONTRACTING ENTITIES Changes relating to tenderers or contracting entities have long been a bone of contention amongst the actors on the procurement market. The public procurement act introduces a number of provisions which specify the circumstances in which such changes may be made. However, the provisions continue to entail a requirement for a specific individual assessment on a case-by-case basis. CHANGES TO CONTRACTS To date, the provisions relating to public procurement have been limited to the governing of the procurement process from the planning stage to the stage of entering into a contract. The public procurement act introduces provisions for when a contract may be changed without this conferring a duty on the contracting entity to start a new procurement process. Amongst others, the provisions give rise to contemplating the inclusion of contract clauses, which may effectively retain the right to make changes to the contract during the contract period without the need to complete a new procurement process. CANCELLATION OF CONTRACTS The public procurement act introduces the duty on the contracting entity to cancel a contract in the event that a final decision or judgment finds that the contracting entity s allocation of the contract was made illegally. The background for the introduction of this duty is that the cancellation of an illegal allocation does not mean the contract is cancelled, as it is solely the basis for allocation of the contract that is cancelled. The provision gives rise to deliberations on how this duty should be dealt with in the contract with the winning tenderer to avoid the risk of liability for compensation. Speak to DELACOUR, if you have questions on public procurement law, or read more at en.delacour.dk Rune Hamborg Attorney-at-law, Partner rha@delacour.dk D M Jesper Petersen Bach Attorney-at-law, Associate Partner jba@delacour.dk D M Emil Sepstrup Reventlow Attorney-at-law esj@delacour.dk D M Jacob Hellsten Vedel Attorney-at-law jhv@delacour.dk D M Jeanette Torp Junior Attorney jto@delacour.dk D M Langebrogade 4 DK-1411 Copenhagen K Åboulevarden 13 DK-8000 Aarhus C