Public tendering and legal aspects of project business in Romania
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1 Public tendering and legal aspects of project business in Romania Ligia Cecilia Popescu/Fabiola Meister Wolf Theiss Bucharest, Romania April 9, 2013
2 Public Procurement plays key role in new Government s objectives to improve business environment in Romania!
3 TOPICS 1. Relevant Legislation - Government Emergency Ordinance no. 34/2006 (GEO 34/2006) 2. Rules for the implementation of GEO 34/ Underlying principles according to GEO 34/ Art 8 GEO 34/2006 contracting authorities 5. Government Emergency Ordinance 77/2012 significant changes in line with European legislation 6. Remedies and Enforcement
4 RELEVANT LEGISLATION AND IMPLICATIONS OF BEING A EU MEMBER STATE The most important legal act regarding public procurement procedures is Government Emergency Ordinance no. 34/2006 on the awarding of public procurement contracts, works concession contracts and services concession contracts, with subsequent amendments it represents the general legal framework for public procurement in Romania, as amended. As a EU member state, Romania has a varied legislation on public procurement, especially due to the transposition obligation of the European directives. All the regulatory acts are in accordance with the Treaty on European Union, with the Treaty on the Functioning of the European Union, as well as with the directives on public procurement.
5 RULES FOR THE IMPLEMENTATION OF GEO 34/2006 Government Decision no. 925/2006 on the approval of the rules for the implementation of the provisions regarding the award of public procurement contracts, public works concession contracts and services concession contracts
6 UNDERLYING PRINCIPLES ACCORDING TO GEO 34/2006 GEO 34/2006 provides for the fundamental principles of the public procurement procedures: The principle of nondiscrimination and equal treatment means ensuring the necessary conditions for effective competition, by establishing and applying, throughout the award procedure, identical rules, requirements and criteria for all economic operators, so that any of them may participate in the award procedure and can enjoy equal opportunities to become contracting parties.
7 UNDERLYING PRINCIPLES ACCORDING TO GEO 34/2006 The principle of mutual recognition means accepting goods, services and works which are legally offered on the European Union market, diplomas, certificates and other documents issued by competent authorities of other states, as well as technical specifications, which are equivalent to those required at national level. The principle of transparency means making public all information regarding the application of the award procedure especially in regards to the opportunity to participate in the procurement process, the elements of the tender documentation, as well as the result of the procedure.
8 UNDERLYING PRINCIPLES ACCORDING TO GEO 34/2006 The principle of proportionality means ensuring the correlation between the customer's needs, the object of the contract and the requirements requested to be fulfilled. The principle of the efficient use of the public funds means applying the procedures for the award of contracts by way of competition and using criteria that reflect the offers' economic advantages in order to obtain the best value for money.
9 UNDERLYING PRINCIPLES ACCORDING TO GEO 34/2006 The relevance of these principles resides in their creating the general legal framework for the awarding of public procurement contracts. Moreover, according to the legislation, any situation for which there is no express regulation shall be interpreted through these principles.
10 ART 8 GEO 34/2006 CONTRACTING AUTHORITIES Contracting authorities may be: a) any governmental agency public authority or public institution - operating at central, regional or local level; b) any body other than those stipulated under letter a), having legal personality, which has been established for the specific purpose of meeting needs in the general interest, lacking the industrial or commercial character and which fulfills at least one of the following conditions:
11 ART 8 GEO 34/2006 CONTRACTING AUTHORITIES it is financed for the most part by a contracting authority as defined under letter a) or by other body governed by public law; subordinated or subject to supervision by a contracting authority or by other body governed by public law; entities where more than a half of the members of the board of directors/supervisory body are appointed by a contracting authority or by other body governed by public law.
12 ART 8 GEO 34/2006 CONTRACTING AUTHORITIES c) any association including one or more of the contracting authorities; d) any public undertaking that carries out one or more of the following activities: water, energy, transport and postal services; e) any legal entity, other than those indicated under letters a) - d), which carries out one or more of the following activities: water, energy, transport and postal services, based on a special or exclusive right.
13 ART 8 GEO 34/2006 CONTRACTING AUTHORITIES Legal entities that are not deemed to be contracting authorities now have an obligation to comply with public procurement laws if cumulatively they award services or works contracts that are financed 50% or more by a contracting authority and are worth at least EUR 5,000,000 (for a service contract) or at least EUR 200,000 (for works contracts)
14 GOVERNMENT EMERGENCY ORDINANCE 77/2012 SIGNIFICANT CHANGES 1. Public Procurement Contract an administrative contract; 2. New thresholds for the awards of contracts; 3. Publicity rules; 4. Awarding procedures; 5. Notification of direct acquisition over EUR 5,000; 6. Joint offers; 7. Selection Criteria; 8. Rules for Avoiding Conflict of Interest; 9. Remedies and Enforcement.
15 PUBLIC PROCUREMENT CONTRACT - AN ADMINISTRATIVE CONTRACT GEO no. 77 re-classified the public procurement contract as an administrative contract (as opposed to a commercial contract).this means that the administrative courts will have the competence to handle complaints against already-concluded public procurement contracts.
16 NEW THRESHOLDS FOR THE AWARDS OF CONTRACTS GEO 77/2012 has fully implemented the Commission Regulation (EU) No 1251/2011 of 30 November 2011 amending Directives 2004/17/EC, 2004/18/EC and 2009/81/EC of the European Parliament and of the Council in respect of their application thresholds for the procedures for the awards of contract.
17 NEW THRESHOLDS FOR THE AWARDS OF CONTRACTS Participation Notice shall be published in the EU Official Journal in case the value of the contract exceeds the Lei equivalent of: i. EUR 130,000 for supply or services contracts granted by authorities and public institutions; ii. EUR 400,000 for supply or services contracts granted by public companies or other entities performing relevant activities in one of the sectors of public utility water, energy, transports and postal services; iii. EUR 5,000,000 for contracts for works, and concession of public contracts.
18 PUBLICITY RULES The contracting authority must publish a Participation Notice in the SEAP in the following cases: i. procedures of Open, or Limited Public Tender, Competitive Dialogue, or Negotiation with the prior publication of a Participation Notice are launched in order to conclude a public procurement contract, or framework agreement; or ii. an electronic purchasing system is initiated, which means that the public procurement procedure is carried out electronically on the Electronic System of Public Procurement ("SEAP") and all the users registered with SEAP participate to such procedure; or iii. a Tender for a Solution Project is organized.
19 AWARDING PROCEDURES The contracting authorities have an obligation to specify in the participation notice and within the tender documentation the awarding criteria and procedure. These may be: i. Open Public Tender takes place in a single stage and any interested provider can submit a tender; ii. Limited Public Tender consists of two stages, and only the bidders selected by the contracting authority at the first stage will be invited to submit bids in the second stage; iii. Competitive Dialogue any interested provider can submit a bid; the contracting authority may perform the dialogue only with the accepted candidates and only the candidates selected by the contracting authority from the accepted candidates are invited to make the final offer;
20 AWARDING PROCEDURES iv. Negotiation the contracting authority discusses and negotiates the contractual clauses, including the price, with the candidates selected from suppliers, contractors and providers; the negotiation may be with or without the publication of a participation notice; v. Offer Request a simplified procedure according to which the contracting authority requests offers from several suppliers, contractors and providers; vi. Tender for a Solution Project allows the contracting authority to obtain a plan or a project which was selected by a jury on a competitive basis, especially in the territorial planning, urban, and zoning sectors.
21 AWARDING PROCEDURES As a general rule, contracting authorities shall apply the open or restricted procedure. Only in the specific circumstances, expressly provided by the legislation, the contracting authorities may award the public contracts by means of other award procedures.
22 NOTIFICATION OF DIRECT ACQUISITION OVER EUR 5000 According to the provisions of GEO 34, the contracting authority may procure products, services, or works without a tender, if the value of the acquisition does not exceed the Lei equivalent of EUR 15,000 for each acquisition. Any direct acquisition over EUR 5,000 (without VAT) is required however to be recorded in the SEAP.
23 JOINT OFFERS Art 44. of GEO 34/2006 allows economic operators to associate for the purpose of submitting a joint offer, without having the obligation to officially register their association. The contracting authority is entitled to request that the association/joint venture is formally registered only in case the joint offer is declared as winner, and only if such measure represents a condition necessary for the appropriate performance of the contract. Without any derogation from its liability with regard to the manner of performance of the future public procurement contract, the bidder may include in the technical proposal the possibility to subcontract part of the works or services covered by the tendered contract.
24 SELECTION CRITERIA The contracting authority is entitled to apply qualification and selection criteria only with regard to: i. status of the candidate; ii. capacity to carry out its business activity; iii. economic and financial status; iv. technical and/or professional capacity; v. quality assurance standards; vi. standards regarding the environment protection, in certain cases mentioned by GEO no. 34.
25 SELECTION CRITERIA All amendments to the selection and evaluation criteria are to be published in an erratum and the period during which participants may submit their offers should be extended accordingly. It is unlawful to amend any information from the invitation to participate or the announcement by giving clarifications without the issuance of an erratum. This may lead to the award process being annulled.
26 RULES FOR AVOIDING CONFLICT OF INTEREST It is expressly stated that the contracting authority discloses in the tender documentation the persons with decision-making powers who are deemed to be managers of the contracting authority, members of the boards of the authority who are involved in the public procurement process as well as any other person within the authority who has power to influence the content or the public procurement process.
27 REMEDIES AND ENFORCEMENT Any bidder, whose rights or interests were infringed by an action of a contracting authority, is entitled to challenge the respective action by filing a complaint with the CNSC. CNSC is a special body created to review and take decisions with regard to any challenge brought against any deed issued with regard to an award procedure. According to the GEO no. 77, the Decisions of CNSC must be published in SEAP and on the website of CNSC. The decisions of CNSC may be challenged before the Administrative Litigation Section of the Court of Appeals competent in the jurisdiction where the contracting authority is located. The court decision is final and irrevocable.
28 REMEDIES AND ENFORCEMENT In case that CNSC dismisses the complaint as unfounded, the contracting authority shall retain a percentage of the participation bond calculated function of the estimated value of the tendered contract. The claims for damages caused during the awarding procedure may be filed only with the administrative contentious sections of the tribunal from the jurisdiction in which the contracting authority has its registered office, according to the rules provided by GEO 34/2006, or by filing a separate legal action, according to the civil procedure.
29 CONCLUSIONS New Government prioritizes public procurement as efficient means to boost business environment. Good allocation of funds to highways, national road and rural infrastructure, energy projects. The public procurement legislation in Romania has rigorously transposed EU legislation. Public contracts have always lured private companies - the opportunities and the benefits are significant now in light of a cohesive legislative regime.
30 THANK YOU FOR YOUR ATTENTION! Ligia Cecilia Popescu Wolf Theiss Bucharest, Romania Tel : F ligia.popescu@wolftheiss.com Fabiola Meister Wolf Theiss Bucharest, Romania Tel : F fabiola.meister@wolftheiss.com
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