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PUBLIC PROCUREMENT SYSTEM IN POLAND

PUBLIC PROCUREMENT SYSTEM IN POLAND. June 2006 Małgorzata Bonikowska, PhD. Table of contents. Public Procurement Office Public Procurement Law - Basics Public Procurement Law - Amendment 2006 Public Procurement Law Amendment - Change Effects. PUBLIC PROCUREMENT OFFICE.

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PUBLIC PROCUREMENT SYSTEM IN POLAND

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  1. PUBLIC PROCUREMENT SYSTEMIN POLAND June 2006 Małgorzata Bonikowska, PhD.

  2. Table of contents • Public Procurement Office • Public Procurement Law - Basics • Public Procurement Law - Amendment 2006 • Public Procurement Law Amendment - Change Effects

  3. PUBLIC PROCUREMENT OFFICE

  4. History • The Polish Public Procurement Office was created on 1st January 1995. • Following the adoption of the first Act on Public Procurement.

  5. Structure • Secretariat of the President • Legal Department • Control Department • Training and Publications Department • International Cooperation, Studies and Analyses Department • Bureau of Appeals • Organisational and Financial Bureau

  6. Key Duties • To publish the Official Public Procurement Bulletin • To prepare drafts of legislative acts in the field of public procurement • To issue administrative decisions in response to request for the application of a procedure other than open tendering or restricted tendering • To arrange appeal proceedings under the Public Procurement Law • To check the regularity of conducted procedures • To prepare training programs, organise and inspire training events in the field of public procurement.

  7. Principles • Equal treatment of economic operators. • Open and fair competition. • Openness and transparency of procedures. • Obligation to draw up documents in writing. • Primacy of open and restricted tendering procedures.

  8. PUBLICPROCUREMENT LAWBASICS

  9. History • First law: Act for Public Procurement: • approved on 10 June 1995 • amended several times to make the procurement process more transparent and to adjust itself to EU requirements • Public Procurement Law (PPL) - in accordance with the EU directives: • approved on 29 January 2004 • last Amendment (in accordance with the modifications of the EU directives) approved on 7 April 2006, published on 10 May, entered into force on 25 May 2006.

  10. EU Basis • Directive 2004/18/WE of the European Parliament and Council (31.03 2004) for coordination of public procurements procedures for services, supplies and works („classic directive”) • Directive2004/17/WE of the European Parliament and Council (31.03 2004) for coordination of public procurement procedures in sectors: energy, transport, post services and water treatment („sectorial directive”) • Regulation1874/2004/WE of the European Commission (28.10. 2004) changing Directives 2004/17/WE and 2004/18/WE changing value limits and their application. • Directive 2005/51/WE of the European Commission (7.09.2005) changing the annex XX to the Directive 2004/17/WE and annex VIII to the Directive 2004/18/WE. • Regulation 2083/2005/WE of the European Commission (19.12.2005) changing directives 2004/17/WE i 2004/18/WE as for value limits and their application. • Regulation 2195/2002 of the European Parliament and Council (5.11.2002) on Common Procurement Vocabulary (CPV).

  11. PPL applies to: • the public finance sector units within the meaning of provisions on public finances; • state organisational units not having legal personality • legal persons established for the specific purpose of meeting needs in the general interest, not having industrial or commercial character, if the entities mentionned above: • finance them in more than 50%, • have more than half of shares or stocks, or • supervise their managerial board, or • have the right to appoint more than half of the members of their supervisory or managerial board; • Other entities, if the contract awarded by them is financed with the participation of funds, the allocation of which is dependant on the use of the contract award procedure provided for in the PPL, • entities, who have been granted the works concession by the entities mentionned above, insofar as they award contracts for the purpose of the execution of that concession.

  12. PPL does not apply to: (1) 1. Contracts awardedpursuant to: • the procedure of an international organisation or international financial institution, if the contract is to be financed with the participation of funds, the allocation of which is dependant on the PPL, • agreements concluded between the government of the Republic of Poland and governments of member states of the North Atlantic Treaty Organisation (NATO) concerning the stationing of troops, if these agreements provide for contract award procedures other than those provided for in the PPL, • an international agreement, concluded by Poland, concerning the implementation or execution of a project by the parties to that agreement, if that agreement provides for contract award procedures other than those provided for in the PPL; 2. Certains contracts of the National Bank of Poland

  13. PPL does not apply to: (2) 3. Contracts where the object of the contract includes: a) arbitration or conciliation services, b)services of the National Bank of Poland, e)research and development services other than services for its use in the conduct of its own affairs and wholly remunerated by the awarding entity and where the benefits accrue exclusively to the awarding entity, f)armaments within the meaning of the Act of 29 November 2000 on external trade in goods, technologies and services of strategic significance for state security and for keeping international peace and security and amending certain other acts g)purchase of rights to transmission of programmes by radio or television broadcasters, h) purchase of broadcasting time, i) purchase of ownership or other rights to real properties, j)financial services related to the issue, trade or transfer of securities;

  14. PPL does not apply to: (3) 4) employment contracts; 5) contracts which are declared state secret according to the provisions on protection of confidential information or when the basic interests of the State’s security so requires. 6) contracts for services rendered to another awarding entity, referred to in Article 3 paragraph 1 items 1 and 2, who by means of an act or administrative decision has been vested with the exclusive right to render those services; 7) allocation of subsidies from public funds, if these subsidies are allocated pursuant to acts; 8) contracts and contests where their value does not exceed the equivalent in PLN of 6.000 EUR. 10) Certain contracts in the telecommunication sector 11) services, supplies and works purchased from the Central Contracting Unit or from the contractors selected by this unit.

  15. Procedures The primary procedures for awarding public contracts: 1 - Open (unlimited) tendering 2 - Restricted tendering Other procedures, under the circumstancesdescribed inthe PPL: 3 - Negotiated procedure with publication procedure 4 - Competitive Dialog procedure (NEW!) 5 - Negotiated procedure without publication procedure 6 - Single-source procedure 7 - Request-for-quotations procedure 8 - Electronic contest (ex-auction) procedure

  16. Specific provisions • Framework contracts (Art.99-101) • Dynamic system of awarding (Art. 102-109) NEW! • Fully electronic awarding procedure, draft offers signed by „save electronic signatures”, simplified contract notices • Design Contest (Art.110-127) • a public promise, in which by means of a public notice the awarding entity promises a prize for the execution and transfer of rights to the design selected by the jury, • in particular in the fields of spatial planning, town planning, architecture and civil engineering and data processing. • Works concessions (Art.128-131) • Sectorial contracts (Art.132-138)

  17. Sectorial contracts - activities • exploring, prospecting for or extracting gas, oil and its natural derivatives, brown coal, hard coal and other solid fuels; • the management of airports, maritime or inland ports and their provision to air, sea and inland carriers; • the creation of fixed networks intended to provide public services connected with the production, transport or distribution of electricity, gas or heat or supply of electricity, gas or heat to such networks or management of such networks; • the creation of fixed networks intended to provide public services connected with the production or distribution of drinking water or supply of drinking water to such networks or management of such networks (included sewage systems) • the operation of networks providing public services in the field of transport by railway, tramway, trolley bus, cable or automatic systems; • the operation of networks providing public services in the field of transport by bus; • the provision of post services (included addresses databases management)

  18. Contract award procedure • Polish language • Tender committee (Art.19-21) • min. 3 people • Nominated by the Head of the Awarding Entity • Obligatory over 60.000 EUR. • Documents requested to economic operators (Art. 25-26) • Reasons for exclusion (Art.24) • Written communication, by fax or e-mail, confirmation may be requested. • Vadium: • Only in open tender: 0,5%-3% of the total value of the contract • May be requested in negotiation without publication (Art.64) • Deadlines (minimum: 7 days)

  19. Specification (Art. 29-31) • The object of the contract should be described: • in an unequivocal and exhaustive manner • by means of sufficiently precise and comprehensive wording, • taking into consideration all requirements and circumstances which could influence the preparation of a tender. • The awarding entity shall describe the object of contract: • using technical and qualitative characteristics, • observing Polish Standards • transposing European harmonised standards, • The Awarding Entity is allowed to skip the above if is able to describe contract by functional requests (NEW!) • CPV is applicable.

  20. Specification (2) • The object of the contract shall not be described: • in a manner which could restrict fair competition! • by reference to trade marks, patents or origin unless this is justified by the nature of the object of the contractor where the awarding authority cannot otherwise describe the object of the contract with sufficient precision, • provided that the references are accompanied by the words "or equivalent" or other words of similar meaning. • Clarifications on written request of economic operators: • 6 days and more before the deadline • 4 days and more before the deadline IN CASE of negotiations with publication and restricted tender.

  21. Law enforcement measures • Protest to the Awarding Entity (Art. 180-183) • Must be sent in 7 days - for award procedures announced in PPO bulletin • Must be sent in 14 days - for award procedures announced in the EU Official Journal • Appeal to the PPO President (Art. 184-193) • Must be sent in 5 days since the deadline for protest examination • copy to the Awarding Entity (which informs other tenders in 2 days) • Arbitrators have up to 15 days since the registration of appeal in the PPO. • Complain to Court (Art. 194-198) • Must be sent in 7 days after the sentence of Arbitrators. • The Court has up to 1 month since the registration of the complain.

  22. PUBLIC PROCUREMENT LAWAMENDMENT7 APRIL 2006

  23. Direct reasons for changes • Modifications of the EU directives: • they entered into power on 30 April 2004 • they had to be implemented until 31 January 2006. • Low and slow absorption of the to EU funds in Poland. • Misunderstood role of the PPO President’s by Awarding Entities • Development of ICT, which allows to use more innovative ways of contract awarding

  24. Social consultations The draft of the Amendment was consulted with: • Polish Confederation of Employers (PKP) • National Economic Chamber (KIG) • Polish Confederation of Private Employers Lewiatan” (PKPP) • Institute for Public Affairs (ISP) • Foundation for SMEs • Business Center Club. It was also consulted with Council for Public Procurement.

  25. Additional PM regulations • 603 - on rules of appeals • 604 - on values of contract to be noticed in EU Official Journal • 605 - on the documents requested from the economic operators • 606 - on the protocol from the awarding contract procedure • 607 - on arbitrators remuneration • 608 - on payments for appeals • 609 - on the templates of contract notices to be sent to PPO • 610 - on Euro rate to the Polish Złoty

  26. Main Changes • INCREASE IN VALUE LIMITS • NO PROCEDURE UNDER 60.000 EUR • SIMPLIFIED PROCEDURES OVER 60.000 EUR UP TO THE EU LIMITS • FULL RESPONSIBILITY OF THE AWARDING ENTITY • MORE LIMITED USE OF PPL BY PRIVATE ENTITIES • MISTAKES IN FORMALITIES NO MORE OBSTACLE FOR A GOOD OFFER LONGER CONTRACTS DEADLINES (OVER 4 YEARS) • ELMINATION OF OBSERVERS • REFORM OF THE LAW ENFORCEMENT MEASURES SYSTEM • LESS TECHNICAL SPECIFICATIONS , NO SPECIFICATION IN SINGLE-SOURCE PROCEDURE • NEW PROCEDURES: COMPETITIVE DIALOG AND ELECTRONIC CONTEST • NEW SPECIFIC PROVISION : DYNAMIC SYSTEM OF AWARDING • FRAMEWORK CONTRACTS OPEN FOR ALL • SPECIFIC WAY : ELECTRONIC AUCTION • CENTRAL CONTRACTING UNIT

  27. Value Limits • under 6.000 EUR - PPL does not apply • only Public Finances Law) • Internal rules of Awarding Entity • 6.000-60.000 EUR - no specified procedure • Minimum of formalities, decisions of Head of Awarding Entity • Tender committee optional • No contract notice in the PPO bulletin – but on the special PPO portal • short deadlines (but still minimum: 7 days) • No right for protest nor appeal • Over 60.000 EUR – simplified procedure • over value limits mentioned in EU directives (next slide): • additional obligations as for contract notices in contracts • Restricted procedure: • 10.000.000 EUR and more (was 5.000.000) for services and supplies • 20.000.000 EUR and more (was 10.000.000) for works.

  28. EU value limits(repeated in Polish Regulation 604) 1. Public finances sector: • 137.000 EUR and more - for services and supplies • 5.278.000 EUR and more - for works 2. Other Awarding Entities: • 211.000 EUR and more - for services and supplies • 5.278.000 EUR and more - for works 3. For design contests, if the total value is: • 137.000 EUR and more - for public sector • 211.000 EUR and more - for other Awarding Entities • 422.000 EUR and more - for sectorial contracts

  29. Contract notices - place • 6.000-60.000 EUR (Art.4a/1) • on the website of the Awarding Entity • in its headquarters in a visible place • On the PPO special website www.portal.uzp.gov.pl (so called „under limit notices”) • Over 60.000 EUR • In PPO bulletin, accessible also via the PPO website • In cases described in the Regulation 604 (Art.11/8 PPL) • in the EU Official Journal • in case of works over 20.000.000 EUR and services and supplies over 10.000.000 EUR • in a national newspaper

  30. „Underlimit” notices • Only in electronic version • The Awarding Entity must log on the portal • In the contract notice : • Awarding Entity data (address etc.), contract description, awarding procedure, evaluation criteria, deadlines, place for delivering offers • In the award notice: • number of the contract notice, address, contract description, justification for selecting the winner(s), its (their) data (address etc)

  31. Awarding Entity responsibility • No need of approval of the PPO President as for: • Implementing procedures other than open and restricted tender • Signing contracts for a longer period that 3 years • Cancellation of request for guarantee for the right implementation of the contract • Approval for signing contract before the final sentence resulting from protests. • It will make the procedures quicker even by 3 months • The PPO President has to be informed (instead of approving) about the award procedure within3 days since it started.

  32. PP Office Checking (Art.161-171) • The PPO President may check the award procedure before it ends (Art.167) • Control ex-ante is done always for: • Works if 20.000.000 EUR or more • Services and supplies if 10.000.000 EUR or more • Ex-ante control stops the contract award procedure • Control ex-post may be done up to 4 years ater the award procedure is over.

  33. Contracts deadlines • Possibility to sign contracts for 4 years and more (art. 142 ust. 2) • But only in certain circumstances such as financial reasons: • financial situation of the Awarding Entity • dates of payments

  34. Formalities • The Awarding Entity will have the obligation to ask the tenderes for all the necessary explanations or presenting missing documents in order to let them take part in the awarding procedure. • This change is going tostop Awarding Entities from eliminating good offers because of the formal mistakes and help the best offers to win.

  35. Less private sector under PP Law • subjects which are not in the public financial sector (companies, NGOs etc.) and make awarding procedures for purchases financed over 50% from the public sources do not need to follow the law. • They will need to apply the law if (jointly): • The contract is over the value limits in the EU directives • The contracts are for works, roads or water management infrastructure, public buildings or services connected with such works.

  36. Observers • The Observer function is eliminated. • It was not foreseen in the EU directives. • It resulted to be useless in practice. • It applied to the awarding procedures checked by ex-ante control anyway (so it was a double checking…).

  37. Protests and appeals • On-going information by the Awarding Entity to contractors: • It will make the list of protests shorter • Concentration of protests and appeals to the same awarding procedure: • by the Awarding Entity • by the Arbitrators Panel • Limited time for protests on the same issue by different contractors

  38. Arbitrators sentences • Arbitrators have to examine appeals against dismissal or rejection of protests lodged in contract award procedures quicker. • In 15 days from the registration of the appeal in PPO (before: in 15 days since the Arbitrators Panel’s lodging) • This change makes the real time of protest-appeal procedure going from 3 months down to 1 month.

  39. Security(Art.147) • The awarding entity may request the economic operator to provide security on due performance of the contract, • It is obligatory in case of contracts for: • Works over 20.000.000 EUR. • Services and supplies over 10.000.000 EUR (except for contracts for credits and loans) • may be avoided if the security request will cause: • elimination of all offers • increase of prices

  40. Central ContractingUnit(Art. 15a) • Institution introduced in the EU directives • It will be responsible for centralized awarding conract procedures for the public administration (central and local) • Neither the structure of the Unit nor its place in the public administration structure is not decided yet. • Probably it will be a part of the Prime Minister Chancellery.

  41. Single-Source Procurement • There is NO need to prepare a detailed Specification under this procedure. • However, it is obvious that economic operators have to receive basic information on the subject of the award, conditions of participation in the procedure and all other information „necessary to do the awarding procedure”.

  42. Competitive Dialog Procedure • It did not exist in the previous PP Law. • It starts after the contract notices has been published. • The awarding entity dialogs with selected contractors and invites them to present offers. • This procedure can be used ONLY under two conditions (both are requested): • Price is not the only criterium for selection o the best offer • It is not possible to go for open or restricted tender because one can’t describe the request in a proper way or decide objectively about the financial for legal circumstances for doing the contract.

  43. Electronicauction (Art. 91a-c) • Is applicable only in the following procedures: • open tender, • restricted tender • negotiations with publication • Must be foreseen in the Specification • It applicable if there are 3 or more valid offers • It uses the same criteria as written in the Specification • It goes in one step. • Tenders have to use „save electronic signature”

  44. Framework Contracts(Art. 99-101) • It is open for all sectors! • Procedures applicable to sign framework contracts: • Open tender • Restricted tender • Negotiations with publications • Number of contractors: • Usually 3 and more economic operators • If technical or administrative reasons, it is allowed to sign it with only one economic operator • Procedures applicable withinframework contracts: • Single-source procedure – if 1 contractor • Negotiations without publications – if more contractors • contractors don’t need to present again any documents.

  45. PUBLIC PROCUREMENT LAWAMENDMENT EFECTS OF CHANGES

  46. Main Goals • Quicker, easier and more effective implementation of the public projects, especially co-financed by the structural funds: • Only 51% of the total allocation contracted… • Only 4,4% of the total allocation transferred… • Main reason: extremely long procurement procedures, especially in infrastructure sector… • Elimination of extra barriers not resulted directly from the EU directives such as: • lower value limits, • Obligatory request for approval to the PPO President • Full responsibility of Awarding Entities • in case of contradiction, the responsibility is not given any more to the PPO President

  47. Main Problems • More responsibility to the public administration means more fear of the civil servants… • details for procedures under 60.000 EUR still seem unclear (lack of the Regulation)… • Difficulty for the projects already started and financed - to be continued on the basis of the same technology… • PPPO portal does not fully work yet…

  48. THANK YOU… Dr Małgorzata Bonikowska boss@grupaboss.pl office: Tel.(+48 22) 499 59 30 Fax (+48 22) 499 59 31 Assistant: (+48) 500 120 447 Str. Sęczkowa 68d/1 03-994 Warsaw, Poland

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