A Guide To Public Procurement in CEE

Love me tender
A guide to Public Procurement in CEE

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A guide to Public Procurement in CEE | 2011
Allen & Overy LLP 2011
Contents
Introduction 04 Public Procurement in CEE Potential for Growth? 06 Public Procurement Legislation in Central Europe More European or More Central? 08 Submitting a Bid What is Happening Behind Closed Doors Veni, Vidi but not Vici Conclusion 26 36 40 52
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Part 1
Introduction
A Guide to Public Procurement in CEE is not exactly a title that will have people dancing in the streets. Nonetheless, scratch the surface and you will find a topic which touches the hearts of many businesses in a way which is not immediately apparent.
Every business has a product or service to sell, and it is at the heart of any successful business that you will find the key elements that make it so: the ability to offer a superior product in terms of quality, efficiency, design, innovation and reliability; and the ability to provide that product either more cheaply than ones competitors, or at a price which is amply justified by its superior features. Small wonder then, that any business which truly believes in either the quality or the value for money (or both) of its products gets upset when told that, in a fair fight, a competitors product delivered the same capability at a cheaper price or delivered superior capability which justified its higher price. And then it begins was the fight really fair, was there a level playing field, if there had been, shouldn't we have won, was price the only criterion (and if not why not, and if so why so), did money change hands or was information leaked about our price, were we disqualified on a technicality, should the competition have been disqualified for being non-compliant, why didnt we win? In short, I want another go, and this time I want to win. So, in spite of the rather dry nature of public procurement, in the end nothing gets a businessperson hotter under the collar than the perception that a tender was run badly, or worse unfairly, or worst of all, illegally.
nothing gets a businessperson hotter under the collar than the perception that a tender was run badly
When the dust settles, and the general feeling of being hard done by fades, a bidder may realise that, had it prepared itself better, it could have significantly improved its chances of a successful bid, or radically reduced the chances of its disqualification. With a better understanding of the culture and overall framework of tender procedures in CEE, it could have organised itself much more quickly on the legal and administrative side, lessened its chances of being tripped up on a technicality, and got on with the business of doing what it does best concentrating on presenting its product in the most favourable light possible, and demonstrating its inherent value for money. Of course, in some circumstances, that is exactly what it had already done, and it lost in circumstances that justify a second look: a review, an appeal, a chance to ask why and in some cases, an opportunity to have another go in a reconvened tender (or, most gratifying of all, disqualification of a competitor and the wrenching back of first place to the challenger). There is a disappointing side to the topic of public procurement as well. In some of the countries in CEE, many business people talk openly about the worsening of corruption and the lack of transparency in tender processes, be these tender rules that have been framed to favour a particular bidder, tenders published in places where outsiders could not possibly have been expected to have been able to view the tender notice, or simply where demands for bribes have been made. It is worth spending some time thinking practically about what steps can be taken to reduce this worrying trend. EU membership by itself does not seem to have been enough to reverse this blight, and only the latest wave of EU entrants have been placed under slightly tighter supervision on the use of EU funds. If the panacea of EU entry has failed to live up to expectations on the reduction of corruption, what other measures could succeed? There is some feedback that e-tenders/electronic auctions have the capacity to significantly increase transparency on tenders, and the authors of this publication encourage
public authorities to press on with the implementation of these systems. Another suggestion made in an earlier version of this publication included the pre-vetting of tender rules and this suggestion seems to have been taken on board, for example in Hungary. Also, the idea of the list of pre-qualified entities also removes much of the uncertainty of being disqualified on a rather irrelevant technicality, used for example in Slovakia. As a result of the economic crisis, deeply felt at the time of this publication, the pressures to deliver value for money and the pressures to win new business are stronger than ever. It is therefore doubly important not to throw away a chance of new business through carelessness. Further, for governments facing increasingly stretched public finances, there is pressure to procure better value for money services, and to ensure that public money is being spent wisely. With pressure on government budgets, governments must also look for ways to proceed with public works not only using public money, but private money too. These public private partnership finance (PPP) projects are extremely useful, but again care must be taken to understand how public procurement law still impacts on these projects. Whilst nominally the public regulations apply to PPP, the more specific issues that arise when addressing PPP mean that PPP could not be addressed fully in this publication. However, many observations in this brochure will also apply to PPP. This is particularly true for cases where both public procurement and PPP are regulated under the same law. This is the case for instance in Slovak procurement law although this dual regulation has often been criticised. On the other hand, in the Czech Republic and Poland PPP is regulated by a separate act, but in both cases the act still contains many references to public procurement law. The objective of this publication is to provide a brief overview of some of the main issues that we have identified in the public procurement rules in CEE whilst advising our clients in tender processes, as well as providing some practical tips that may help in the bidding process either to avoid disqualification, seek a review, or simply bid in the future on a more informed basis.
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Part 2
Public Procurement in CEE Potential for Growth?
The open market offers more opportunities
Public procurement legislation has recently undergone substantial changes in the CEE region. This is primarily as a result of the harmonisation process which aims to transpose the European public procurement directives into national legal frameworks. The idea behind harmonisation is to achieve a set of public procurement rules that share the same principles and modes of operation throughout Europe. From the bidders point of view, harmonisation should bring the advantage of being able to bid in different countries under comparable terms and conditions, leading to a more advanced state of preparedness, greater efficiency, and savings on bidding costs. As for contracting authorities,
the legislation aims to ensure that a transparent and uniform set of rules governing the process of procurement of goods, works and services is adopted, leading to more transparency, fewer challenges and failed bids, and more successfully concluded tenders. As a result of the legislative changes, public procurement is an increasingly attractive area. For example, even in a comparatively small country such as Slovakia, in 2010 the contracting authorities awarded contracts in the total value of approx. EUR 3 billion and contracting entities spent a further EUR 1,7 billion through tenders conducted under public procurement rules.
VALUE OF CONTRACTS AWARDED THROUGH THE PUBLIC PROCUREMENT PROCESS IN INDIVIDUAL CEE COUNTRIES IN 20101
41.8 bn 4.9 bn 11.8 bn 6 bn

Poland Slovakia Czech Republic Hungary
TOTAL
64.5 bn
(Excluding Romania not available)
Public procurement is mainly used in two areas, the first in relation to public sector entities seeking to procure goods or services, and the second in relation to sectors of the economy. With regard to the first area, the provision of goods, services, buildings and works for the state and municipalities can be done only through the public procurement process. In the second area, public procurement will also apply to certain specific sectors such as network industries and transport. The process of public procurement is crucial for the construction market, in particular the construction and
modernisation of roads. It is also prevalent in environment protection schemes, for example water management projects including sewage systems. In addition, public procurement has a significant impact on other sectors of the economy in which the state is an active player, for example the provision of public services in the health, energy and defence sectors. Despite the growing importance of public procurement in the CEE economy, and despite the legal changes that have taken place, it cannot be said that public procurement is fully harmonised.
Naturally, national differences still exist. Before entering a market with the intention to bid on a public procurement tender, it is advisable to be acquainted with how the bidding process operates specifically in that market, what the biggest challenges are likely to be, and what problems a bidder may face or should be aware of. Proper knowledge of the public procurement rules in advance may save considerable time, costs and unpleasant surprises it may even save a bidder from rejection from a tender altogether.
except for Czech Republic where the value is from 2008
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Part 3
Public Procurement Legislation in Central Europe More European or More Central?
(A few words about the rules for participating in a tender)
3.1 Implementation of European public procurement rules in CEE legislation
Over the last decade, on their journey of accession to the EU and beyond, CEE countries have had to align their respective national public procurement legislation (the National PP Laws) with EU legislation. The results of this process are two-fold. On the one hand, the National PP Laws are a step towards adopting the principles which are embedded in EU legislation: they have transposed a new definition of the contracting authority, provided new financial limits for above-threshold and below-threshold public contracts (having reference to the thresholds specified in Article 7 of Directive 2004/18 and Article 16 of Directive 2004/17), introduced processes for challenging decisions and remedies (in line with Directives 89/665 and 92/13), notifications in tenders and administration as well as providing numerous new concepts that did not exist under previous legislation. On the other hand, many practical issues (in particular those that directly affect bidders) remain unchanged or in certain respects have become even more burdensome.
In awarding public contracts, national contracting authorities must adhere to national procedures, which must follow the rules and principles set forth in Directive 2004/18 (also known as the Public Sector Directive), which applies to contracts awarded by the public sector, i.e. state authorities (central, regional or local) and certain entities financed or controlled by the State (referred to as bodies governed by public law), as well as Directive 2004/17 (also known as the Utilities Directive) which deals with contracts awarded by entities operating in the water, energy, transport and postal service sectors (even if these entities are privately owned, but operate on the basis of special or exclusive rights granted by a Member State). These directives introduce the use of open, restricted and negotiated procedures and competitive dialogue into the public procurement process, which are further specified in national public procurement legislation. The main features and scope of application of the respective procedures in CEE are briefly summarised in the table at the end of this publication.
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3.2 National problems remain Lack of flexibility of legal, financial and technical standing requirements of non-CEE bidders Slovakia
The Slovak Public Procurement Act sets out general requirements which must be complied with by the bidder in order for it to participate in a tender. These requirements concern the legal and financial status of the bidder as well as its technical capabilities. The problems encountered under the Slovak tender requirements result from the lack of flexibility with regard to bidders from outside Slovakia, and from a failure to consider more generic drafting in favour of basing the legislation on purely national concepts. This is because the Slovak Public Procurement Act still requires documents to be recognised under Slovak legislation, which can in practice be very difficult to achieve for bidders from outside Slovakia, even in an equivalent form. A good example of this inflexibility is the requirement to provide a document which proves that the bidder is subject to no bankruptcy or liquidation proceedings and that a petition for bankruptcy has not been dismissed due to lack of assets. The document satisfying this requirement is, in Slovakia, issued by the courts. However, in our experience, a similar document is not issued in many other jurisdictions because the courts in other jurisdictions do not keep records of bankruptcy proceedings. Furthermore, obtaining a document stating that there are no litigation proceedings is very impractical as litigation may be commenced in a number of courts in different parts of the relevant country, or indeed, in many different jurisdictions. In general, a document that is not issued in the country of the registered office of the bidder may be substituted by an affidavit, but only if a sufficiently equivalent document is not issued in that particular country. Without going into too much theoretical detail on what is considered sufficiently equivalent, the two examples above demonstrate that satisfying the tender criteria may cost the bidder considerable time and effort, trying to establish how it can formally satisfy the requirements without any guarantee that the documents which are eventually produced will be satisfactory, or even give the contracting authority the desired comfort that the document was intended to provide. With regard to financial standing, tender rules often stipulated that a set of accounts of the bidder should be provided. As a result of the unclear nature of this requirement, bidders often found themselves contemplating whether or not they needed to prepare a full translation of their annual reports. Fortunately, frequent clarification requests made to the contracting authority usually revealed that only financial statements of the bidder needed to be provided. Of course, where a bidding vehicle is only a special purpose vehicle set up for the bid, in practice, the bidder would have to assume that it should submit the consolidated financial statements of the group, which again in practice may be onerous if the tender is time constrained (as it usually is). One of the ways that financial standing can be proven under the current wording of the Slovak Public Procurement Act is by submitting the turnover figures solely for activities which are relevant to the public procurement in question. Although this is a welcome attempt to clarify the problem described above, again a lack of certainty still leaves the requirement open to interpretation and could result in a bidder wasting valuable time trying to establish what it should supply to satisfy this requirement. Furthermore, it may be very difficult to calculate the revenue from such activities and to separate those revenues from the revenues derived from other business activities.
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a failure to consider more generic drafting in favour of basing the legislation on purely national concepts
The list of technical requirements can be specified by the contracting authority according to the specific needs of the tender. Usually, a list of successfully completed contracts which have a similar subject matter to that of the tender will be required, with such list being confirmed by the contracting authority or a client of the bidder. However, clients in the private sector receiving goods or services which are similar to or the same as those being offered under the tender may understandably be reluctant to provide references or divulge confidential information, particularly in the more sensitive areas of procurement. Additionally, the Public Procurement Act requires that the references must concern the goods supplied or works/ services performed in the last three years. It is not clear, though, whether the three-year period is to be calculated from the day of the announcing the tender, or the date of submitting the bids, or some other date. In general, ambiguities such as those described above can be resolved by requesting clarification from the contracting authority. The problem is that even if the bidder asks its questions swiftly after the contract notice is issued, the contracting authority may wait with its answers until six days before the deadline for submitting the bids (as it often does). This may not leave sufficient room for the bidders to obtain the required documents if the explanation given by the contracting authority shows that some additional unexpected documents are required.
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Poland
In Poland, the EC directives regarding public procurement have already been fully implemented and there is no longer any discrepancy between Polish and European procurement law. Polish Public Procurement Law means the Public Procurement Law dated 29 January 2004, as amended (consolidated text, J. L. 2010, No. 113, item 759) (PPPL) has been amended to implement EC directives and incorporate related amendments intended to improve public procurement procedures, and in order to reflect the challenges connected with the current economic situation. Thanks to the implementation of EC Directives and the amendments incorporated into the PPPL, Polish public procurement law is quite friendly towards non-Polish bidders. If some documents required in the tender procedure are not issued in the bidders country of residence, foreign bidders are entitled to submit equivalent documents relating to the bid, provided these are issued by proper public or private bodies in the bidders country. These documents must be issued no earlier than six months prior to the deadline for filing a request to participate in a bid, and no earlier than three months prior to the deadline for filing an offer. As with other CEE countries, ensuring equivalence may be problematic due to the differences in national legal systems, and in the event of any uncertainty it is very important to contact the contracting authority in advance and ask it to clarify what is required in order to adequately satisfy the formalities. In addition, under Polish law there is a very important general rule stating that if the bidder's country does not issue a certain type of document at all, it is sufficient for the bidder to make a declaration instead (in confirmation of the information otherwise required to be proved by the relevant document(s)) provided this is authorised by a notary or made in a court or other administrative unit in the bidder's country of residence. This rule plays a very important role in practice, as its application resolves many problems regarding documentation which occur in other CEE countries. The Public Procurement Act also contains very tight deadlines for issuing a request for clarification of the tender rules or documents being filed during the tender procedure. If the bidder wants to obtain clarification from the contracting authority, it must submit the request by the end of the day on which the mid-point of the term for issuing the tender offer falls, i.e. halfway towards the deadline. For equal to- or above-threshold orders, however, the wording of the Public Procurement Act is ambiguous. It is not clear how to establish the term for seeking clarification, as under the Act the deadline starts running from the submission by the contracting authority of the contract notice for official publication. In practice the contract notice is published only approximately five days after its submission. Further, the unofficial publication of the material conditions of the contract prior to the official publication of the contract notice in the official EU journals is prohibited (for example on the contracting
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authoritys website or in the contracting authoritys seat). The relevant deadline therefore only runs for about five days, leaving the bidders with very little chance to get acquainted with the tender rules. This is not in accordance with the goal of the Public Procurement Act and puts the bidders in a difficult position. On the other hand, while the material conditions of the contract can be published only after the official publication of the contract notice (in practice after the abovementioned five days from the submission for publication), the contract notice itself can be unofficially presented by the contracting authority on the contracting authority's website or in the contracting authoritys seat before publishing the material conditions of the contract. The contract notice involves most (although not all) of the information regarding the bid. This unofficial publication of a contract notice may take place several days earlier than the official publication of the material conditions of the contract. The result is that in practice this puts domestic bidders in a more favourable position as they normally have access to the contracting authoritys website (which is usually in the Polish language) or they can easily visit the contracting authoritys premises. Foreign bidders are in a worse position as they usually derive their knowledge about a tender only from official publications. Hence, domestic bidders have several more days to prepare themselves for the bid, which can be crucial in procedures where time is of the essence.
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Hungary
The Hungarian Public Procurement Act has been drafted to ease the burden on foreign bidders, and help them to provide the necessary documentation to fulfil the bidding criteria by allowing them to provide documents usually issued for the same purpose in their home country. In many cases, an affidavit or a declaration under oath is required or, if these are not recognised under local law, a certificate issued by the competent court, authority or professional association will suffice, or even a declaration notarised by a public notary. Certain certificates issued in the jurisdiction of the bidder by the relevant authority, such as a certificate of incorporation of the bidder or a certificate issued by the tax authority that the bidder has paid all taxes due, must be accepted by the contracting authority. Similarly, a bid may not be refused on the grounds that the proposal does not meet the technical description and standards set out in the tender, provided the bidder can prove that the proposal is equally fit for purpose. However, care must be taken to ensure the equivalence of documents obtained abroad and the documents required under the Hungarian Public Procurement Act, as a failure to comply with the correct criteria can still lead to the disqualification of the bidder. In order to reduce this risk, it is advisable to make a reference in the certificate or notarised declaration to the relevant section of the Hungarian Public Procurement Act, indicating that the document has been issued for the purposes of complying with the relevant section of the act and the ways in which it achieves compliance. As with other CEE countries, ensuring equivalence may be problematic due to the differences in national legal systems. Local lawyers may be able to advise on what may be accepted by the contracting authority, and as elsewhere one should contact the contracting authority in advance and ask it to clarify what is required in order to adequately satisfy the formalities. As an example, on one occasion, a foreign investment bank was unable to provide some bank account information which was requested by the contracting authority to certify its financial good standing, due to internal policies of the bank and applicable law. Nevertheless, on this particular occasion, the contracting authority was persuaded to accept an alternative means of certification. The arguments presented to the contracting authority were based on the general principle that bidders must be treated on equal terms regardless of their nationality, and that this principle must override such technicalities. Therefore, if a bidder is simply not able to comply with a formal requirement because it would lead to an infringement of its domestic laws or regulations, an alternative form of satisfaction must be accepted and the requirement for equivalence in such cases must be approached with a degree of flexibility.
equivalence in these cases must be approached with a degree of flexibility

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Czech Republic
Under the Czech Public Procurement Act, the situation is very similar to Slovakia vis--vis non Czech bidders. With certain exceptions, consideration is given to the legal regulations in the country of the bidders incorporation. In other words, when assessing the documents which are required by the Czech Public Procurement Act, the foreign bidder may provide the equivalent documents that are available in the bidders country. However, unfortunately and all too often, it is difficult to assess whether or not foreign documents evidencing certain facts required by the Czech Public Procurement Act will be satisfactory. It is obviously possible to raise this as an additional question to the contracting authority and thus try to establish whether a particular document will be considered as a suitable equivalent, but, from our experience, the contracting authority tends not to comment on the interpretation of applicable law and such additional questions will likely remain unanswered. For example, in a tender relating to the introduction of e-tolls in the Czech Republic one of the bid requirements was that the bidders team had to include a person authorised as a construction engineer (in Czech: autorizovan inenr pro pozemn stavby). It was likely that some bidders would not have a suitable person authorised under Czech law, and in that case, it would be necessary to establish what would be the equivalent requirement in the bidders country of incorporation. Whilst this appears to be a simple question at first sight, in fact it is a very difficult question to answer when the applicable foreign countrys legislation is completely different from Czech legislation (as it often is). The contracting authority may to a certain extent request an explanation of, or supplements to, any documents which are to be submitted, but it is not obliged to do so. The contracting authority is, however, required to disqualify a bidder that has not complied with the tender rules. Obviously, as in the other CEE countries, there is constant tension between a contracting authoritys desire to be transparent, but also to be flexible to a practical extent. A contracting authority may wish to use its discretion to disregard insignificant technical errors, but this can be a challenge when set against a backdrop of legislation which obliges it to disqualify non-compliant bids. No public official will want to be the person who exercises discretion if it could later be argued that the letter of the law obliged them to disqualify the bid. An amendment has recently been made to the Czech Public Procurement Act which came into effect in January 2010 and implements further EC principles, especially in relation to the review of the public procurement process. In particular, this amendment provides that any bidders who submit information or a document that is misleading may have to pay an administrative fine of up to CZK 10 million and will be prohibited from participating in the public procurement process for a period of three years. The practical implications of this alteration remain to be seen but it could prove to be draconian. From a foreign bidders perspective, a brief mention should also be made of the specific rules that apply to the defence sector. The effect of the Czech Act on Foreign Trade with Military Material is that where public contracts for military materials are concerned, only a company with its registered seat in the Czech Republic could be eligible for the contract. In practice, however, foreign companies usually establish a Czech subsidiary to circumvent this provision. In the famous Czech Pandur case, for example, a public contract on the supply of armoured carriers was concluded between the Czech Ministry of Defence and the Czech company Defendia CZ, s.r.o., which is in fact indirectly owned by Austrian companies General Dynamics European Land Systems GmbH and Steyr-Daimler-Puch Spezialfahrzeug GmbH.
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Romania
Romanian public procurement law is reasonably flexible vis--vis non-Romanian bidders, who are permitted to provide equivalent documents when participating in public procurement procedures. Romanian contracting authorities must consider equivalent documents from other jurisdictions which prove the status of the bidders. Nevertheless, it is always a good idea to check with the contracting authority in advance if possible whether the documents to be provided are sufficient. If there is uncertainty with respect to the status of the bidders, the Romanian contracting authorities have the right to request information directly from the authorities that originally issued the documents submitted by the bidders. If these documents are not usually issued in the bidders country, the Romanian contracting authority must accept a declaration on oath (affidavit) instead. If a country has no provision for declarations to be given on oath then a declaration (declaratie autentica in Romanian) made by the respective bidder before a public notary, competent judicial or administrative authority or a competent professional or trade body must be accepted.
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As a result, in practice, the application

of these legislative improvements is (currently) very limited
Introduction of new concepts without considering their practical implications

Public procurement legislation in CEE has introduced numerous new concepts. Whilst the inclusion of these concepts may be beneficial, their effectiveness in practice remains doubtful.
Slovakia
The Slovak Public Procurement Act introduced a number of concepts, some of which are legal, whilst others are more technical in nature. They include the concept of having a framework agreement, allowing bidders and the contracting authority to communicate with one another via electronic means, and the introduction of a dynamic procurement system and electronic auctions. The framework agreement is a new type of agreement that should regulate the rights and obligations of one or more contracting authorities on the one hand and one or more bidders on the other hand. The framework agreement should endure for a period of up to four years maximum (not including procurements in the field of defence) and should set out the basic terms and conditions for the supply of goods, services or construction. The framework agreement resembles a contract on future agreement (which is a contract that is recognised under Slovak commercial law and allows the parties to agree on the basic terms of their future contractual relations). The framework agreement is, however, a new sui generis contract and the required content is not specified in great detail (only examples of the type of content for the framework are available, such as the price and the anticipated quantity of supply). It is, therefore, difficult to know to what extent a framework contract should regulate the rights and obligations between the contracting authority and the bidders, and to what extent (if at all) terms and conditions should be left to future individual contracts. Additionally, it needs to be clarified which of the two contracts takes precedence. Some argue that as future individual contracts can only derive from the framework agreement they should not prevail over the framework agreement. Others argue
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that as the individual contracts specify in greater detail the basic terms set out in the framework agreement then these should prevail. These latter individuals also argue that, in any event, the parties always have the freedom to agree as they see fit in subsequent specific contracts. However the latter view needs to be treated with caution in the context of procurement in the event that a subsequent individual contract changes the terms on which the bidder initially won the bid, for obvious reasons. The Slovak Public Procurement Act also introduced some technical improvements such as electronic communications, electronic auctions and a dynamic procurement system. These should increase the efficiency of the public procurement process and accelerate communication between bidders and the contracting authority. Starting 1 January 2012, the contracting authorities must organise all tenders for the supply of products (except tenders run through the negotiate procedure without publication method) using electronic auctions. E-auction should also be used in procurement of services or construction works, if it is possible to accurately determine the technical specifications, as well as in awarding contracts under a dynamic purchasing system and when reopening competition between all parties to a framework agreement. This is an example of rapid evolution, since in 2008-9 the volume of tenders organised as electronic auctions was less than 1%, while in 3Q 2011 this number increased to 25%. The studies of Transparency International Slovakia show that e-auctions bring savings and increase transparency.2 It remains to be seen whether contracting authorities are prepared for such a change and also whether e-auctions are ideal for each type of contract.
Source: http://www.transparency.sk/vyskum-tis-e-aukcie-na-slovensku-setria-peniaze/ (in Slovak only)
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Poland
Concepts introduced in Poland, such as the framework agreement and electronic auctions, are in general identical to those in Slovakia. In 2006 a new procedure of competitive dialogue was introduced to the PPPL which is specifically designed for PPP projects. Although this should be considered positive, there are legal concerns regarding the appropriateness of the method of implementing this procedure into Polish law which may have a negative impact on PPP tendering procedures. Firstly, Polish law sets stricter rules than European law in terms of the obligatory number of participants that the contracting authority is obliged to invite to the dialogue phase. Under the PPPL, if the value of the contract is equal to or above-threshold, the contracting authority needs to invite at least five participants to the dialogue, whereas the European requirement is at least three. This solution may lead to greater costs for the contracting authority. On the other hand, for the bidders the cost to prepare a final bid in a PPP project is also considerable. In this respect the method of implementing competitive dialogue in Poland significantly reduces the chance for each bidder to be awarded the contract in comparison to if there were only three bidders. Consequently, this may deter enterprises from taking part in the procurement process. Secondly, doubts remain whether under Polish law a contracting authority is legally allowed to conduct a competitive dialogue in stages. Under EU law one of the key features of the competitive dialogue procedure is that the contracting authority can develop a competitive dialogue process that meets its individual requirements. For example, a contracting authority may wish to divide the dialogue phase into two or more stages, reducing the number of solutions and bidders involved at each stage on the basis of the award criteria specified in the contract notice or a descriptive document. Polish regulations are silent in this respect and therefore the contracting authorities may refrain from structuring the dialogue phase in stages to the detriment of the effectiveness of the tendering procedure.
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Czech Republic
Concepts introduced in the Czech Republic such as the framework agreement and electronic auctions are in general identical to those introduced in Slovakia. The Czech Public Procurement Act in particular should have made it possible to use electronic communication devices widely. However, due to certain deficiencies in the legislation, this is not always the case in practice even though some major improvements in this respect can be observed. For example, further amending legislation introduced has resulted in the requirement that some communication between the bidder and the contracting authority during the period after the submission of the bid must be made through electronic data boxes (provided that the bidder has one). On the other hand, the submission of the bid itself is not allowed to be made via electronic data box, so the extent to which technical improvements have been implemented remains inconsistent.
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Hungary
The common concepts of abnormally low price or impossible undertaking have been adopted by the Hungarian Public Procurement Act, but their practical meaning is difficult to discern. If these concepts are established, they may lead to the disqualification of bidders. The same applies to the requirement of extreme urgency in the case of setting aside the publication of a tender notice. The problem with these concepts under Hungarian law is that the Public Procurement Arbitration Committee (which acts as the supervisory authority for public procurement proceedings) adopts a case-by-case approach. While the purpose of this approach is to ensure that all the relevant circumstances of each individual case are considered, the drawback is that it is very difficult to predict the outcome of an individual case. We note nevertheless that as of September 2010 a threshold has been applied when determining abnormally low price. Under the new rule, if the price of a bid is at least 15% lower than (i) the average price of all other bids, (ii) the average price of all bids without considering the highest and the lowest bid if more than three bids, and (iii) the estimated benchmark price if there is one bid, then the price indicated in the bid shall be deemed as abnormally low. The Hungarian Public Procurement Act has also introduced some technical improvements such as electronic procedures, electronic auctions and a dynamic procurement system. As a general rule, actions taken under the procurement procedure may be performed using electronic means (subject to certain conditions contained in separate legislation). Notices must also be sent electronically via the Public Procurement Advisory Committee (the Advisory Committee) to the Office for the Official Publications of the European Communities. The Hungarian Public Procurement Act also recognises the concept of a framework agreement. As in Slovakia, a framework agreement is made between one or more contracting authorities and one or more (if more than one, then at least three) bidders and sets out the key terms and conditions (especially the prices and the quantity) of the contracts to be awarded during a given period. A framework agreement may endure for a maximum period of four years. The terms of the contracts concluded under the framework agreement may not exceed the terms of the framework agreement.
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Romania
New concepts introduced in Romania are in general identical to those introduced in Slovakia, Hungary and the Czech Republic, including the concepts of a framework agreement, dynamic procurement system and an electronic auction. Romanian public procurement law provides that the framework agreement may endure for a maximum period of four years, and longer periods may be established only in exceptional cases. Romanian public procurement law does not provide any detailed description about what form a framework agreement should take, although it does set out certain mandatory provisions that must be included. Unless the subject matter of the framework agreement is such that there is a limited number of eligible bidders capable of entering into it, the contracting authority should address the tender to at least three bidders. In 2008 the Romanian government passed a decision requiring Romanian contracting authorities to use electronic systems for at least 20% of the total value of tenders carried out by them. This decision failed to specify any sanctions for non-compliance and was therefore largely ineffective. However, in 2009 a further decision established that fines for non-compliance would be incurred and we have seen a corresponding rise in the number of procurements conducted by electronic means. By November 2009 this number increased to 13%. In 2010 the Romanian government passed another decision requiring Romanian contracting authorities to use electronic means for at least 40% of the total value of tenders carried out by them.
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Formalistic approach
Formal requirements, in particular with respect to a bid submission, are often extremely detailed in CEE countries. It should be noted that this can be misused to facilitate the disqualification of unwanted bidders, since it is more or less always questionable whether all formal requirements have been precisely met by each bidder. Therefore, instead of the legal framework providing a more transparent process, the lack of clarity (or incorrect over-specification) of tender requirements can lead to the opposite effect a contracting authority disqualifying bidders for minor administrative or technical failures to comply with the bidding process. This may not always arise as a result of an improper abuse by a contracting authority of the formalistic requirements to engineer a pre-desired result (as is inevitably feared by losing bidders), but is just as likely to arise because the contracting authority fears that to ignore formal non-compliance by a bidder would lead to charges that the bidder in question had been favoured. Contracting authorities may therefore find themselves trapped between the Scylla of feeling obliged to disqualify formally non-compliant bids on a technicality, and the Charybdis of appearing to engineer a win for a particular bidder by disqualifying the other bidders on minor grounds. Any system of public procurement rules which can be developed to resolve this quandary will, therefore, be most welcome to both bidders and contracting authorities. While it is true that the contracting authority may request the bidders to explain their offers, which may include a request to correct minor formal errors or supply missing documents, it is not clear when a contracting authority is supposed to use this right and which errors may be remedied in this way. It would be useful to introduce a mandatory short cure period for minor non-compliance, but inevitably there will be difficulties in defining what are minor or technical breaches only, as well as objections from compliant bidders that they see no reason why a non-compliant bid should be given a second chance when their own bid has been compliant. By way of example, in the Czech Republic and the Slovak Republic, bids are, in most cases, to be delivered in a closed envelope and bound in a specific way. The tender rules often used to include extremely detailed requirements on how to bind the bid documents together, such as which laces are to be used, where and how to stamp/execute the bound documents and the type of envelope to use, etc and even minor non-compliance resulted in a bidder being excluded from the tender process without the content of its bid even being considered. Although the situation improved recently and exclusion of bidders for purely formal deficiencies is much less frequent, a very careful, even pedantic approach to preparation of the bid, including compliance with the formal requirements set out in the tender documents, is still strongly recommended.
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The Hungarian Public Procurement Act specifically describes the formalities a bid must comply with, although the contracting authority may now set less strict requirements in a tender and certain formal imperfections may be also cured under specific circumstances. As of 1 April 2009 the contracting authorities must allow bidders to file certain additional documents. This right is extended to all bidders in a tender in accordance with the basic principle of non-discrimination. Please note that the right only relates to certain documents, including certificates relating to the disqualification rules and formal compliance. It is not extended to documents which form part of the technical description of the bid or the basis of its evaluation. In Poland, restrictive rules concerning formal tender requirements have been loosened recently. In effect, during the process of evaluating offers the contracting authority may require that bidders explain their offer. Furthermore, in the bidders offer the contracting authority may correct: (i) obvious misprints; (ii) obvious computational errors; or (iii) other errors which result in inconsistencies with the tender terms and conditions, but which do not cause essential modifications to the bid. By making such amendments, the contracting authority cannot reject a bidders offer due to such minor inconsistencies, unless it does not match the essential terms of the contract.
In Romania there are also restrictive rules concerning formal tender requirements such as those related to the ink to be used for printing or writing the bids, the signing and stamping of the documents, or to the submission of bids. Romanian contracting authorities do not have the discretion to waive breaches of these rules. Usually the tender rules prepared by the contracting authorities contain detailed formal requirements concerning the form and submission of the tenders. It is also recommended that the bid is presented together with a cover letter in a specific form.
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Complexity of applicable regulations

Hungarian law is particularly difficult in the area of public procurement since, in addition to the main legislative source (the Hungarian Public Procurement Act), there are a number of other regulations containing special rules which apply to certain types of public procurement procedure. For example, special rules apply to the procurement of pharmaceutical products, procedures involving state or professional secrets, and the procurement of products for military, or police-related purposes. Furthermore, special rules apply to certain aspects of public works contracts and electronic procurement. These rules are issued in the form of government decrees and they must be taken into account when a foreign bidder submits a bid in Hungary. As of 1 January 2012, a new law on public procurement will enter into effect (the New Law). While the New Law will contain the same basic principles and procedures, the aim was to ease procedural burden, improve transparency and strengthen the competitiveness of small and medium businesses. In Romania there are also special rules governing certain types of public procurement procedures, such as the award of media advertising contracts. In addition, certain categories of contracts, such as those included in the category of state secrets according to the legislation on classified information protection, or contracts which, if performed, must be accompanied by special security measures for protecting essential national interests, are not carried out under the normal public procurement procedures covered by the general law, but are instead subject to special proceedings under special laws.
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Contracting authorities may find themselves trapped between the Scylla of feeling obliged to disqualify formally non-compliant bids and the Charybdis of appearing to engineer a win
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Part 4
Submitting a Bid
(Plus some useful hints on how to avoid being disqualified)
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4.1 Managing time and roles in preparing a bid

Preparation of a bid up to the point of its submission is a lengthy and complex process and therefore it requires good planning and management. Apart from substantive matters, attention must be paid to the formal aspects of the bid.
Knowing the tender rules

Although this may sound like an obvious first step, perhaps the most important task is to get acquainted with the tender rules. Usually the tender rules are large documents containing large amounts of information and many requirements that must be carefully considered. It is often the case that the tender rules are not well organised. One subject may be discussed under several different headings or information provided or requested may be contradictory. Therefore attentive reading of the tender rules is essential. Having a good knowledge of the tender rules enables a bidder to manage timing and to allocate responsibilities accordingly. This will enable the bidder to ask for information in respect of any rules and requirements which may need further clarification. It also minimises the risk of not fulfilling the formal and substantive criteria and of missing deadlines. Tip: It is recommended that the tender rules are discussed between the members of the bidding team and legal counsel. The bidding entity may be more aware of the technical implications of the tender rules than legal counsel are, whereas legal counsel may provide guidance on and focus the bidders attention towards any legal or practical issues. Joint examination of the tender rules by all members of the team should enable the team to get acquainted with the requirements and highlight potential legal or technical risks which may require further attention. It can also help to identify the equivalent documentation in the home country of the bidder, where only local specifications are stated in the tender rules. It is, in addition, important to continuously monitor and evaluate the requirements throughout the tender process. Whilst careful and critical evaluation of the tender rules at an early stage is essential, it is useful to review the rules regularly to ensure that they continue to be applied practically in the light of subsequent knowledge and practice acquired during the process of putting together the bid.
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Identification of the bidder

Some of the key elements of the tender rules are the requirements in relation to the bidding entity. The tender rules may directly or indirectly contain requirements that not all bidders may be able to satisfy. They contain legal, financial and technical requirements and may directly require that the bidder has a certain licence or satisfies specific turnover criteria. The tender rules may also set out further indirect criteria, for example, by referring to a law that contains other requirements such as obliging the bidder to have a registered office in the country of the contracting authority. The contracting authority may also require the bidder to establish a business association (a special purpose vehicle), if it is reasonable to do so, for the purpose of performing the contract. Tip: The bidder should ensure that it is itself qualified to submit a bid. If it is not, it will be necessary to immediately start seeking alternative solutions, such as using a subcontractors credentials, entering into a consortium or bidding through another entity.
Checklist of tasks & responsibility

The bid usually consists of a general part which relates to documents concerning the legal, financial and technical standing of the bidder, and a specific part which includes the proposal for the delivery of goods or the provision of services that form the subject matter of the tender. The documents must satisfy certain content requirements as well as requirements in relation to form. It is therefore necessary to clearly assign the tasks and responsibilities to ensure that the documents contain what is required.
Get acquainted with the tender rules

The team should clearly allocate responsibility to its members for each task to be satisfied in order to obtain the required documentation. Sometimes obtaining documentation is purely a matter for legal counsel. This will be the case when a document needs to be drafted by legal counsel and then simply signed by a representative of the bidder, or if the document is issued by another body and its content needs to be reviewed or discussed with legal counsel. The technical team may, on the other hand, be more heavily involved in obtaining references from business partners and technical certificates, etc. The in-house legal counsels of the bidder are important as they will have a deep understanding of the business of the bidder, and the way in which the bidder customarily conducts itself during tenders. They may have to monitor or implement internal guidelines as to the form and content of documents, the level of
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It is crucial to allow sufficient time for the preparation of the bid
acceptable risk, the appropriate level of decision-making (for example, they will decide when a decision requires approval at a more senior level or requires approval from the board), ensure formal compliance with internal guidelines when giving undertakings, representations, affidavits, bid bonds and internal compliance generally. Last but not least, the in-house legal counsel may have to co-ordinate the execution of the relevant documents on behalf of the bidder and ensure that signatories will be available when needed. Timing is also crucial and obtaining certain documents may be a time-consuming process. Formal requirements will also place an extra burden on the bidder, for instance documents may require notarisation or an apostille, or may need to be translated and certified. Final compilation of the bid also needs time as bidders understandably wish to present the bid in an attractive format, and the physical process of binding and sealing the bid tends to take more time than expected. Tip: The preparation of a bid is a process involving a large team of people, including not only a technical and legal team but also third parties such as state bodies and business partners of the bidder, etc. In addition to obtaining the required documents, which takes a considerable amount of time, documents will also need to be translated, verified by a notary and may have to satisfy further requirements. It is therefore recommended that the timetable for submitting a bid is prepared some time in advance and, to the extent possible, followed scrupulously.
Additionally, consideration should be given to the practical execution of the bid itself, such as: where will the bid be compiled; who will be signing it; how will last minute changes to the bid documents be implemented (and will there be a person on standby authorised under a power of attorney to sign changes); who will actually deliver the bid (and is legal counsel actually going to be accepted as the deliverer of the bid or does an authorised representative of the bidder have to physically deliver the package); is there enough time for printing, binding and delivery of the bid; has the delivery address and the time for delivery (even the traffic situation) been double checked, etc. Consideration should also be given to administrative matters such as: are the envelopes and boxes big enough to contain the bid; are the boxes properly labelled; are the relevant parts of the bid in the proper envelopes if they are required to be separated, etc. Responsibility for all these elements should be clearly allocated. It is crucial to allow sufficient time for the preparation of the bid. The drafting of the declarations and the procurement of the necessary certificates is a timeconsuming process. Care must be taken to draft the necessary powers of attorney granted by foreign bidders to the person representing them. It should be considered in advance whether someone representing a foreign bidder will need to be present in person to sign the necessary declarations before a local notary.
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4.2 Translations
A question often arises as to whether a bid must be submitted in two languages, i.e. the language of the home jurisdiction of the bidder, as well as the local language. For foreign bidders, good corporate governance would dictate that the bid must be available in the native language of the directors/decision makers of the bidder so that they can understand what they are submitting. However, where there are time limitations, and, for example, only the local language version has been properly formatted and finally checked, it seems perfectly acceptable to submit the bid in the local language only, with no official translation, unless the tender rules stipulate otherwise. Unofficial translations can be made available internally so that the bidders directors can sign off on the submitted bid, but this unofficial version would not have to be submitted, as long as the local language version is properly submitted (again, unless the tender rules say otherwise). In Slovakia, bids must be submitted in the official language, i.e. Slovak. However, this means that for foreign bidders all corporate, economic and technical standing documentation will always be in its original language as well as in Slovak. The other part of the bid, i.e. the contract element, must be in Slovak but it is not necessary to submit it in the original language as well. In general, the same is true in Poland. Under the PPPL all the proceedings are to be held in Polish. However, it is left to the discretion of the contracting authority whether or not to allow certain documents to be submitted in one of the languages of international trade or in the language of the country in which the order will be granted. If there is no such decision, all the documents must be submitted in both the original bidders language and in a translation which is certified by the bidder.
In Hungary, the language(s) of the public procurement procedure may be chosen by the contracting authority, but foreign bidders can expect that the language for the procedure will be Hungarian. Even if the contracting authority has chosen an alternative language, the tender notice and the documentation must also be made available in Hungarian and the bidders must always be given the option to prepare their bids in Hungarian. If there is a discrepancy between the Hungarian and foreign language versions of a document, the Hungarian version will prevail. These rules evidently favour national bidders. In Romania, the language of the public procurement procedure is left to the sole discretion of the contracting authority, and must be specified in the contract notice. Unsurprisingly, foreign bidders should expect that the language selected by the contracting authority will be Romanian. In addition to the logistical requirement of translating bid documents, some documents need to be translated officially, i.e. translated by an authorised translator, or also presented in the original language and accompanied by a translation, depending on the requirements specified in the tender documentation. The Slovak Public Procurement Act does not specify whether a certified translation of the bid documents is required. In our experience, however, contracting authorities generally apply a more formalistic interpretation of the law and therefore we would suggest using a certified translator to minimise the risk of being disqualified. Sometimes documents in Czech are permitted in Slovak tenders. In Hungary translation requests may be submitted to the National Translating and Translation Certifying
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Office (in Hungarian: Orszgos Fordt s Fordtshitelest Iroda) if the bidder wants to ensure that it submits a certified translation. In the Czech Republic the language of the bid will be determined by the tender rules published by the contracting authority. However, in practice it would be fairly exceptional for languages other than Czech (and Slovak) to be permitted. If the bid has to be filed in Czech (which means that the whole communication during the tender process will be carried out in Czech, including additional questions and answers to those questions), any documents in a foreign language must be translated into Czech by a certified Czech translator. As the number of documents that need to be translated will be considerable, and their content will often be very technical and complex (and therefore require more time to translate), obtaining translations can take a substantial amount of time. In some countries, there are a limited number of translators qualified in certain languages, such as Dutch. It may well be the case that, although the tender rules require a translation, the whole document in question will not need to be translated and instead an extract containing the relevant information will be sufficient. This is usually the case with financial standing requirements and with documents such as financial statements, where the contracting authority has confirmed that only certain data from the financial statements needs to be translated.
Tip: It is recommended that once the final form of the bid documentations wording is approved, the documents are sent immediately for translation. In the event of any doubt, it is suggested that the bidder clarifies the language requirements with the contracting authority. Allow an hour per page for translation and be aware that if you submit a last minute four-page document to be translated one hour before the bid delivery deadline, you may not make it in time. Also, while in urgent cases the official translation may be produced within a very short period, the price paid for these urgent translations is likely to be very high. Bidders may also find that obtaining a fee quote from the translator may be difficult because the translator will require details of the document to be translated which may not always be possible to provide, simply because when the quote is requested, the local lawyer has not yet seen the document. It is therefore advisable to request details (especially the length or likely length) of the document from the members of the team in order to be able to obtain a reasonable estimation of translation costs. Finally, when preparing drafts of documents, send electronic scans of originals well in advance to the translator as this takes less time than sending copies by post. When doing this, take care to ensure that the final translations correspond to the final version and not the older drafts.
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4.3 Communicate with the contracting authority to clarify the tender rules
Bidders should consider using opportunities to communicate with the contracting authority, but must be careful not to disclose their identity. Bidders have the right to request clarification from the contracting authority of the tender rules or any other related documents and the contracting authority is under a statutory obligation to notify all bidders (not only the bidder who submitted the question) of any clarification it provides. Moreover, in some countries, for example in Poland, the contracting authority may also convene a bidders meeting in order to clarify any doubts and uncertainty arising from the tender rules and documents. The clarification of tender rules gives the bidder the opportunity to confirm or clarify requirements under the tender rules so that they can successfully satisfy the requirement in question. Be aware that attention should be paid to the wording of each question as the answers are disclosed to the other bidders and unless the question is carefully drafted, it may give other bidders information that a bidder may not wish to disclose (including enabling the other bidders to deduce the identity of the bidder asking the question).
Tip: In addition to the suggestions above, a general recommendation is to phrase each question clearly to avoid any ambiguous interpretation of the question by the contracting authority. Use closed rather than open questions to ensure that the response you receive addresses your question rather than straying into general territory and not answering the question directly. Divide questions up clearly and do not try to ask several questions at once within a single question as this will make it more difficult for the contracting authority to answer each question specifically. The ability to submit questions is usually subject to tight deadlines so care must be taken to submit them in time. For example, in Hungary additional information may be requested no later than ten calendar days prior to the deadline for submitting the bids and the additional information must be provided no later than six calendar days prior to the deadline. The procurer may extend this deadline if it is not able to give additional information in time. Please note that sometimes the number of questions which may be filed is limited.
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4.4 Be very attentive not only to the substantive but also the formal requirements
Bidders should pay attention to formal requirements such as the format of the documents submitted and the structure of the bid, etc. Not only the substance but also the form of the bid is regulated by law and the tender rules, and therefore it is of crucial importance to get the formal requirements right. The first set of formal requirements primarily concerns the documents that form part of the bid, such as who will issue and sign the document, whether the document needs to be an original or a copy, whether the signature is to be verified by a notary and whether the document is to be accompanied by a certified translation, etc. Once the documents have been prepared, the second set of formal requirements usually addresses the form in which the bid itself should be organised, such as whether it should it be presented in binders, whether it should be submitted with a cover letter and whether it needs to be made available electronically as well as in hard copy, etc.
The bid is usually submitted in a sealed envelope containing the required information. The question as to whether a power of attorney is required for the submission of the bid documents should also be addressed. The formal requirements may, of course, also arise further along in the bid process, for instance in relation to the submission of requests for clarification of the tender rules, the opening of envelopes containing the bids and the submission of additional explanations of the bids, etc. Tip: As the formal requirements are equally as important as the substantive ones, it is strongly recommended that due attention is paid to these requirements so that the risk of disqualification for non-compliance is minimised.
phrase each question clearly use closed rather than open questions divide questions up clearly
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4.5 Checklist for a successful bid
(a) Ensure that the entire team familiarises itself with the tender rules. (b) Have a team meeting and draft a bid timetable, highlight time-consuming requirements and areas for clarification, and delegate responsibility for each task to an appropriate team member. (c) Commence, as soon as practicable, any necessary clarification procedures. (d) Identify (or establish, if necessary) the appropriate bidding vehicle. (e) Ensure that the logistics of the bid submission are arranged well in advance. This should include: (i) Liaising with appropriate translators, and forewarning them of the timing and length of impending translations; (ii) Liaising with and forewarning appropriate public notaries; (iii) Contacting courier services to establish how long it will take to transport the final bid documents; (iv) Ordering the appropriate stationery such as laces, labels, boxes, bindings, etc and discussing printing and binding times with printers (if appropriate); and (v) Establishing the anticipated location and availability of key personnel (i.e. directors/ signatories) at the time of the bid submission, and if necessary obtain authorisations and powers of attorney if others are to act on their behalf.
(f ) Continually monitor the progress of the bid in light of the timetable and deadlines. Conduct regular all-party conference calls to discuss new issues, the progress of the document collation, and any communications with the contracting authority. (g) Observe and record the progress of the bid and the actions of the parties involved in it, to ensure a well-prepared appeal, should one become necessary. (h) Check regularly that all substantive and formal requirements of the bid will be satisfied. Do not panic if things go wrong (always have a plan B), and, where possible, try to be flexible and creative.
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Dont panic if things go wrong
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Part 5
What is Happening Behind Closed Doors
(Evaluation of bids)
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5.1 Independent expert evaluation
Under the different CEE legislation, the evaluation process is part of the tender process in which the bidder is generally not an active participant. The evaluation process is not public (except for the envelope-opening session in which the bidders representatives are allowed to participate). The bids are evaluated by an evaluation committee on the basis of criteria specified by law or in the tender rules. Once the evaluation process has been finalised, the evaluation committee will distribute the results of the tender. In Slovakia, the evaluation committee must comprise at least three experts. It will examine whether the bids are in compliance with the tender notice, the tender rules and the Slovak Public Procurement Act. The bidder may be required to clarify its bid if requested to do so by the evaluation committee. The clarification request will usually concern parts of the bid which are unclear, or which appear to be inconsistent. The evaluation committee must also request clarification of the price if it appears to be abnormally low and the bidder must prepare the clarification within the time period specified in the tender rules or in the request for clarification. The clarification is not a means by which the submitted bid can be amended, and serves only to explain existing elements of the bid which are unclear. Any attempt to make the bid more advantageous should be rejected by the evaluation committee. The award criteria may be either the lowest price or most economically advantageous tender, the former being used much more frequently than the latter. This is perhaps a result of the higher transparency of awarding on the basis of lowest price, or also because the use of the most economically advantageous tender criterion requires more effort and expertise on the part of the contracting authority. Such an approach is in our view rather unfortunate as especially in case of more complex contracts, the lowest price often fails to bring the best value for money for the contracting authority. Better education of the contracting
authorities as well as guidance from the Public Procurement Office on how to use the most economically advantageous tender criterion to evaluate the bids could help to make its use more wide-spread. In Poland, an evaluation committee must be appointed if the contract is equal to or above the limit for an abovethreshold order, having reference to the thresholds specified in Article 7 of Directive 2004/18 and Article 16 of Directive 2004/17. Otherwise the appointment of an evaluation committee is left to the sole discretion of the contracting authority. The evaluation committee must comprise at least three members. In some cases, when special knowledge is required, the committee may appoint an external expert. The committee examines whether the bids are in compliance with the tender notice, the contracting authoritys requirements and applicable law. In addition, the committee prepares and conducts the tender, and undertakes all actions relating to communicating with the bidders and clarification procedures etc. Once the tender is concluded, the evaluation committee must issue a tender protocol, which sets out its decision and the considerations that were taken into account, similar in many respects to minutes from a shareholders meeting. The evaluation criteria will be either the lowest price or the most economically advantageous bid. The final decision regarding the award of a contract is left to the contracting authority. The evaluation committee plays an advisory role only. In the Czech Republic, for most award procedures the contracting authority must establish an expert committee in which at least one third of its members are competent professionals in relation to the subject of the tender. The expert committee evaluates the bids to assess if they comply with the law and whether they meet the requirements of the contracting authority.
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Generally speaking, the criteria used to evaluate the bids will be either the most economically advantageous tender or the lowest price. The committee will rank the bids in order of preference and prepare a Bid Evaluation Report which is available to the bidders on request up until the point at which the contract is entered into. In Hungary, as in Slovakia, the contracting authority in certain cases must establish an evaluation committee consisting of at least three experts. The committee will prepare a written opinion and make a recommendation, on behalf of the contracting authority, for the person or the body making the final decision in relation to the public procurement procedure. The contracting authority may decide to award the contract to the bidder offering either the lowest price or the most economically advantageous bid. If the contracting authority chooses the latter option, it must determine the evaluation factors on which to assess the tender. Each evaluation factor must have a multiplier relating to the relative importance of the category together with a minimum and maximum amount of points which each category may be awarded. The contracting authority has freedom in terms of the way in which the factors and the multipliers are determined. However, this freedom is subject to certain restrictions, for example all factors must be related to the subject matter of the contract and the evaluation system must not lead to the double counting of the same criteria. The contracting authority must give each bidder the opportunity to submit subsequent documents or certificates under the same terms and conditions. Subsequent disclosure may relate to any certificates in connection with disqualification rules, qualification requirements and documents prescribed in the tender notice, in addition to disclosure required to remedy any formal discrepancy.
Those parts of the bid not affected by subsequent disclosure must remain unaltered. The bidder may also be asked to clarify unclear statements contained in declarations or certificates which relate to disqualification rules, qualification requirements or documents prescribed in the tender notice. Such clarification must not result in the bid being amended. The bidder may also be requested to clarify whether the price appears to be abnormally low or high, or whether an element of the bid may be impossible. The contracting authority must reject the bid if it finds the explanation given by the bidder unacceptable or economically unfeasible and each bidder must be simultaneously informed of requests made for subsequent disclosure or clarification by the contracting authority. The tender shall be declared unsuccessful if (i) no bid is submitted, (ii) all bids submitted are invalid, (iii) the bidder became unable to perform or (iv) one of the bidders corrupted the procurement procedure. In Romania, it is the contracting authoritys responsibility to establish an evaluation committee which will award the contract. The evaluation committee will examine whether the bids comply with the requirements set out in the tender rules. The contracting authority may propose that some internal and/or external experts are appointed as members of the evaluation committee. Again, the award criteria can be either the lowest price or the most economically advantageous bid. If the price offered seems to be unjustifiably low, the evaluation committee must request additional details and explanations from the relevant bidder before rejecting its bid. Once the evaluation process is completed, the evaluation committee must prepare the Bids Evaluation Report (Raportul Procedurii de Atribuire in Romanian).
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5.2 Problems with challenging the evaluation process
Relevant legislation may set out rules for the appointment of evaluation committee members, the procedure to be followed when submitting requests for clarification of bids, as well as the fact that the evaluation process is not public. Apart from these rules, the actual evaluation of the bids is left to the evaluation committee members. In practice, the lack of legal rules governing how the evaluation process should be performed has proven problematic for bidders who want to challenge the results of the tender. For example, a bidder may wish to challenge the result of a tender on the basis that it has doubts about the adequate examination of its bid by the evaluation committee. Such doubts may arise, for example, if numerous bids are submitted to the contracting authority, the subject matter of the tender relates to a complex system or the
preparation of the bids requires several months of work, and yet the evaluation committee arrives at a decision within a very short period of time. The rapid delivery of results may raise doubts that the evaluation committee has had sufficient time even to read all of the bids. Although this may be raised as one of the grounds to challenge the results, it may be surprising to learn that this objection does not necessarily have the benefit of being based on any concrete provision of law. The evaluation rules may, however, also stem from the tender rules. It is therefore necessary to observe the evaluation process in light of the tender requirements and to consider basing any challenge to the tender results on these requirements.
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Part 6
Veni, Vidi but not Vici
(How to challenge the bid results)
Despite putting a large amount of time and effort into the preparation of the bid, ultimately tender results depend on the evaluation by the contracting authority, and so a bidder may find that events do not play out as anticipated (i.e. it does not win). Bidders as well as contracting authorities can make mistakes, and there are plenty of opportunities to make them.
a bidder may find that events do not play out as anticipated

In cases where a bidder may have a genuine complaint, the law does allow for certain complaints to be made against the decision given in respect of a tender. Below is a brief summary of remedies available to the bidder. We have also included aspects that should be borne in mind when making a complaint. A general comment relevant in all CEE countries is that the deadlines for submission of all complaints are quite tight. The situation has been improved somewhat by the implementation of the Remedies Directives (Directives 89/665 and 92/13), which provides for a 10 day standstill period after selection of the successful bidder, during which the contracting authority may not proceed to conclude the contract with that bidder, in order to allow for the possibility of challenges to the decision. Even so, however, the timeframe during which complaints must be submitted by unsuccessful bidders varies between member states, and may be as little as five days in some cases (e.g. in Poland for certain types of bids), despite the fact that the standstill period lasts for 10 days. This is a very short timeframe within which to collect all the necessary information and documentation and to construct an argument for the sought after remedy. The reaction of the bidder must therefore be very prompt. Without being unduly pessimistic about the tender results during the bidding process, it is helpful for a bidder to continue to be very attentive to the actions of the contracting authority and to observe any potential noncompliance of the contracting authority with respect to the law and the tender rules, as it may be more difficult to examine retrospectively whether there was any aspect of the contracting authoritys conduct that could form the basis of an appeal. It is also essential, especially in cases where the bidder is a multinational company, to ensure that the originals of the relevant authorisations are delivered to the bidders lawyers in due time. It may be that the appropriate power of attorney is not delivered on time owing to a directors travels, meetings and more important duties, etc, and the remedy is rejected by the contracting authority on the grounds of the formal defect, namely the power to represent the bidder in the remedy proceedings being questioned.
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In any event, flexibility and rapid responses are necessary
Part 2
6.1 Slovakia
Appeal to the contracting authority (request for remedy) The first step when challenging the tender result is to turn to the contracting authority itself. Within ten days of the result being delivered, the unsuccessful bidder must file a request for a remedy to the contracting authority if it wishes to make a complaint. The contracting authority then has seven days to decide whether or not it will allow the claim of the bidder. In our experience, contracting authorities are generally not willing to allow the bidder's claim, and so the usefulness of this remedy appears questionable. However, making this request for a remedy is a prerequisite to the other available remedies. Second instance appeal to the Public Procurement Office (objection) If the contracting authority rejects the request for a remedy or if it does not decide whether to confirm or deny the claim in time, the bidder has a right to object by making a second instance appeal to the Public Procurement Office. On the basis of an objection the Public Procurement Office may, for example, order a re-evaluation of the bids or, depending on the materiality of the alleged breach by the contracting authority, even cancel the tender. The objection has a suspensory effect, which means that until the Public Procurement Office comes to a decision, the contracting authority may not award the contract.
In order to decrease the workload of the Public Procurement Office and to ensure that a decision to object is not made too lightly, the Slovak Public Procurement Act stipulates the obligation to pay a deposit before an objection against a decision of the contracting authority is filed. Depending on the nature of the objection, the amount of the deposit is either a fixed sum (EUR 600 to 7,500) or a percentage of the bid price subject to a cap of EUR 600,000. The deposit must be credited to the account of the Public Procurement Office by (at the latest) the last day of the period for submitting the objection. If the bidder is successful (or in certain cases when the proceedings are stopped), the Public Procurement Office will return the deposit. If the bidder is unsuccessful, the bidder will forfeit the deposit. Observe and collect all information As already mentioned, due to the restricted access to information during the course and evaluation of the tender, it is sometimes complicated for a bidder to acquire evidence to support its appeal. In our experience, the Public Procurement Office performs its own investigations and reaches a decision based on its own findings. However, it still requires a bidder to submit evidence and arguments to justify its objections and may reject an objection due to lack of evidence. Therefore, every single observation matters and may help to obtain a successful result for the bidder.
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Be prepared for all alternatives Even though the contracting authority should reach a decision within a week of the delivery of the complaint and request for a remedy, it may be that its decision will not be delivered to the bidder until after the deadline for submitting an objection, or will not be delivered at all. Even if delivered late, the bidder will probably wish to respond to the arguments of the contracting authority in the bidders objection. It is therefore advisable to be prepared for all possible outcomes. This could include preparing draft objections on the basis of the anticipated arguments of the contracting authority in case the contracting authoritys decision is delivered to the bidder late and the bidder has little time to prepare a response, or by preparing another draft objection in the event that the decision of the contracting authority is not delivered to the bidder at all. Additionally, it is sensible to ensure that someone is authorised to sign the objection on the bidders behalf at the required moment (by virtue of a power of attorney or a statutory authority). In any event, flexibility and rapid responses are necessary.
Be ready to attend an oral hearing The Public Procurement Office may order an oral hearing to be attended by the contracting authority and the concerned bidder. In the event that the disputed public procurement concerns an above-threshold contract, the Public Procurement Office is obliged to order an oral hearing. There are no prescribed procedural rules and even though the Public Procurement Office will follow a standard agenda (introduction by the Public Procurement Office, followed by the bidder giving a presentation and then the contracting authority giving a presentation, and concluding with final questions being posed to the bidder and the contracting authority by the Public Procurement Office), the proceedings differ significantly from regulated court proceedings and are much less formal. This informality (and also the fact that the Public Procurement Office can oblige the bidder to be present in person) will sometimes lead to the Public Procurement Office asking questions which reach beyond the scope of the objection. Therefore, the bidder should be prepared to answer questions concerning the bid more generally.
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Be aware that it may take time for the Public Procurement Office to make a decision The Public Procurement Office will need co-operation from the contracting authority to start its review (the contracting authority has to deliver all documents connected with the tender to the Public Procurement Office). In the event that the contracting authority is uncooperative, proceedings of the Public Procurement Office may be delayed. The 30 day (or 14 day in some cases) statutory period of time for the decision of the Public Procurement Office can be extended if the Public Procurement Office decides to ask for an experts view on the issues. Review by a court The decision of the Public Procurement Office is final and cannot be challenged as such. However, if the bidder believes that the Public Procurement Office did not follow the law when reaching a decision, or if the decision is contrary to law, it can file a petition to the relevant court within ten days of the Public Procurement Office delivering its decision. Please note that the court will only review the decision if errors were made in the decisionmaking process which, had they not been made, would have resulted in a different outcome. The petition will not have a suspensory effect and the contracting authority may start negotiations with the winner of the tender. However, the court may decide to suspend the effects of the decision if continuing to act will cause serious damage. Unfortunately, Slovak courts are very slow in making decisions and such proceedings can take several years.
Challenge to the validity of the contract The contract between the contracting authority and the winning bidder may be challenged even after it is entered into by the Public Procurement Office, by the public prosecutor, or, in certain cases, even by the unsuccessful bidders or potential bidders. The Public Procurement Office or the public prosecutor (in Slovak prokurtor) may challenge the validity of a contract in court if the contract was awarded in breach of the Public Procurement Act. This right lapses after one year following the conclusion of the contract. However, this remedy is used very rarely in practice. The bidders or potential bidders who have been affected by the conduct of the contracting authority may also challenge the validity of a contract if no public procurement was conducted even though it was mandatory under the Public Procurement Act, or if the standstill period was not observed and thus the bidders or potential bidders were deprived of their right to remedies or of the opportunity to be awarded a contract. This right generally lapses after six months following the conclusion of the contract in question. This remedy is relatively new (introduced in 2010) and its practical impact remains to be seen.
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6.2 Czech Republic
Appeal against the contracting authority Bidders may file an objection with the contracting authority in respect of any action taken by the contracting authority which is in breach of the law, provided that the objection is filed within 15 days of the bidder learning of the breach and, in any event, before the contract is entered into with the selected bidder. A bidder may also file an objection if the contracting authority voluntarily announces its intention to enter into the contract with another bidder provided the objection is filed within 15 days of the announcement being made. The contracting authority may not conclude the contract with the selected bidder or cancel the tender until all filed objections mentioned above have been decided on. Objections must be dealt with within ten days of being filed. The contracting authority is obliged to notify all bidders of the objections filed and its subsequent decision. As a result of a recent amendment to the law, bidders may now also file an objection if they believe that the tender rules are unlawful provided they do so within five days of the deadline for submitting a bid passing. In the event that the contracting authority rejects the objections, it may not enter into the contract with the selected bidder for a period of ten days, during which time a bidder wanting to challenge the results is entitled to file a submission for review by the Antitrust Office. If such a submission is filed by the bidder, the contracting authority may not enter into the contract for a period of 40 days from the date on which the bidder delivered its objection. Alternatively, after the contract has been concluded the unsuccessful bidder may claim that the contract is ineffective. If the Antitrust Office finds that the contract was unlawfully executed, it may impose a ban on the performance of the contract. This claim must be brought after 30 days following the announcement that the contract
has been executed, but no later than six months from the day that the contract was actually entered into. Please note, however, that the Antitrust Office will not impose a ban on performance in cases where it is in the overriding public interest that the contract be performed, even if the contract was unlawfully executed. Review by the Antitrust Office A submission for review by the Antitrust Office can be made only after the relevant bidder has unsuccessfully filed objections with the contracting authority. Similarly, as with the objections referred to above, it is essential not to miss the tight deadline. The submission is subject to a deposit varying between CZK 50,000 and 2 million (approximately EUR 2,000 to 70,000). The deposit will be returned to the bidder if the Antitrust Office approves the submission. The Antitrust Office has the power to issue a preliminary injunction under which it either prohibits the relevant agreement from being entered into, freezes the tender or imposes a ban on performance of the contract (as described above) provided that the agreement has already been entered into. The decision of the Antitrust Office can be appealed and, if so, will be heard by the chairman of the Antitrust Office. Appeal to the court The decision of the Antitrust Office can be challenged in court. However, a challenge is generally only possible if the original decision of the Antitrust Office has been appealed against, and the appeal rejected. The action must be submitted to the court within two months of the day of the Antitrust Office delivering its decision. The court is entitled to require third parties to provide it with any documents and other materials necessary as evidence for the proceedings. The court is authorised to annul the decision and return the matter to the Antitrust Office, which is then obliged to follow the legal ruling of the court, i.e. in its new decision it cannot deviate from the ruling delivered by the court.
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6.3 Hungary
Preliminary dispute resolution From 1 January 2010 bidders may challenge the written report (i.e. the result of the public procurement procedure) of the contracting authority Procedure by submitting a request for preliminary dispute resolution. The bidder must submit such challenge within three business days of the Award Procedure. The disputed parts of the written report, the bidders suggestions, any other comments and the data, facts and references to the documents supporting the claim must also be included in the request. The contracting authority has three business days to inform the bidder of its point of view on the request and to send its reply to the bidder. If a request for a preliminary dispute resolution has been submitted, the contracting authority cannot enter into the contract from the date that the request was submitted and for ten calendar days after the contracting authority issues its response (this period is known as the contracting moratorium). However, please note that bidders cannot submit any request for preliminary dispute resolution in relation to a written report which has already been amended. Appeal submitted to the Public Procurement Arbitration Committee Bidders and other interested parties may submit an appeal to the Public Procurement Arbitration Committee (the Arbitration Committee) to challenge the award. The appeal must be submitted to the Arbitration Committee within ten calendar days of the date when the award was made known (or 15 calendar days in the case of simplified national threshold procedures), or, in the case of supplies purchased without public procurement, the date when the contract was concluded (and if such a date cannot be determined, the date that the contract was commenced by either party). In the latter case, an appeal may be submitted
within one year if a bidder becomes aware of a breach of law after the original deadline. The appealing bidder must also enclose the contracting authoritys response to the request for preliminary dispute resolution. The Arbitration Committee must make a decision within 15 days of the commencement of proceedings, unless it chooses to hold hearings, in which case it has 30 days to reach a decision. However, if the appeal relates to the unlawful amendment or fulfilment of a contract, the Arbitration Committee has 60 days to make a decision. If a procedure has been initiated, the contracting moratorium also applies until the decision is adopted (unless the Arbitration Committee otherwise permits the conclusion of the contract). A contract governed by the Hungarian Public Procurement Act is null and void if it has been entered into without going through a public procurement procedure or is in breach of the provisions relating to the contracting moratorium. In such case, the Arbitration Committee must initiate court proceedings to seek a declaration of invalidity in relation to the contract and the enforcement of the consequences arising from the invalidity. The Arbitration Committee may impose a variety of sanctions, depending on the seriousness of the contracting authoritys breach. Sanctions include prescribing certain preconditions to be fulfilled by the contracting authority when awarding the contract, annulling a decision (provided that the contract has not yet been concluded), imposing a fine and prohibiting the bidder to participate in public procurements for a period of between six months and three years. The Arbitration Committee may also impose interim measures if it considers that it is probable that the public procurement rules will be breached by suspending the public procurement procedure.
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Review by the court The decision of the Arbitration Committee is final and no appeals may be made against it. However, review proceedings may be initiated before the court by those adversely affected by the decision. The request may only be filed with the Arbitration Committee by electronic means (except for those requests relating to the simplified national threshold procedures) within 15 days of the date that the Arbitration Committee delivers its decision. The Arbitration Committee will forward the request along with the other related documents to the court. The court has the power to alter the decision and can impose the same sanctions as the Arbitration Committee. A judgment of the court of first instance may be challenged by an appeal submitted to the court of second instance.
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6.4 Poland
New concepts of challenging the bid introduced as a result of the amendments to the Public Procurement Act have made the process of challenging a bid very formal and rather complicated. These changes were intended to speed up the process of granting contracts, but they may also make the procedure less transparent. The most significant barrier under the PPPL is the requirement for a very high court fee which is payable in order to file a complaint to the appropriate court. The bidder is obliged to pay 5% of the total value of the contract (but no more than PLN 5 million for example, if the value of the contract is PLN 10 million, the court fee would be PLN 500,000). This means that in practice many bidders will not be able to file a complaint because of their financial circumstances and the prohibitive nature of the fees. Consequently, although the formal procedure entitles the bidder first to appeal the contracting authoritys decision to the National Appeals Chamber and second to file a complaint to the court, the financial barriers make the usefulness of this procedure very limited. In practical terms, therefore, the challenge process is restricted to a one-step procedure. This strengthens the position of the contracting authorities. Under the PPPL, only specified entities are entitled to exercise the right to challenge the results of the bid. These are: (i) bidders; (ii) contest participants; (iii) other entities (provided they have or had an interest in securing the bid, or have suffered or may suffer damage as a result of the contracting authoritys actions not being in compliance with the provisions of the PPPL); and (iv) organisations listed by the President of the Public Procurement Office.
The reasons for challenging a tender vary on a case-by-case basis. However, the main reason is the infringement of fair competition and equal treatment rules by the contracting authority and usually results from either the improper or imprecise description of the subject of the contract or from the stipulation of an inappropriate set of conditions for participation in the tender. Other reasons usually include mistakes made by the contracting authority at the tender evaluation stage, such as the unjustified rejection of a bid or the exclusion of a bidder, or an unjustified annulment of the tender. Appeal to the National Appeal Chamber Appealing against the contracting authoritys decision to the National Appeal Chamber is the first step in challenging the bid. The PPPL specifies the circumstances in which an appeal may be made. It specifies that an entity can only appeal if the contracting authoritys action or omission is in breach of the PPPL. Additionally, if the relevant order is a below-threshold order, having reference to the thresholds specified in Article 7 of Directive 2004/18 and Article 16 of Directive 2004/17, the entitled entity may appeal against: (i) the contracting authoritys choice of a negotiated procedure, free order procedure or price query procedure; (ii) the contracting authoritys summary of whether the conditions for taking part in the bid were fulfilled; (iii) the bidders exclusion from the bid; and (iv) the rejection of the bidders offer. The appeal must specify the contracting authoritys unlawful act or omission and set out the bidders claim and the factual and legal background for justifying the appeal. The appeal must also be registered with the President of
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the National Appeals Chamber in hard copy or electronic form and the bidder must send a copy of the appeal to the contracting authority. In addition to the right of appeal, the bidder or contest participant is entitled to inform the contracting authority about its illegal act or omission. If this is acknowledged, the contracting authority will remedy its mistake and there will be no need for a formal appeal. In reality it is very rare for a contracting authority to settle a complaint in line with a bidders demand. Nonetheless, it is worth trying, as in some cases the contracting authority has been known to accept a bidder's complaint without objection. Deadlines for submitting the appeal vary and depend on the grounds for appeal and whether the relevant order is a below-threshold order or above-threshold order. Pursuant to the general rule, if the contracting authority communicates with bidders in writing, the appeal must be lodged within 15 days (if the value of the contract is equal to or above the threshold) or 10 days (if the value of the contract is below the threshold). If the contracting authority communicates with bidders by fax or email, the appeal must be lodged within 10 days (if the value of the contract is equal to or above the threshold) or five days (if the value of the contract is below the threshold). In the context of deadlines for submitting an appeal, bidders need to take into account two specific issues. Firstly, it should be specifically noted that the deadline starts at the moment the information is dispatched and not its delivery to a bidder. This is especially important in the case of a written communication where the term to submit an appeal starts from the date of dispatching the information by the contracting authority to the bidders
and not the delivery of the letter. This solution is different from a general civil or administrative procedure where the moment of delivery of information to the addressee is binding. Secondly, it is important to note that the deadline for submitting an appeal will be met only if the appeal is delivered to the National Appeals Chamber before the deadline. Contrary to a general rule under Polish law, with this type of appeal the date of sending is not relevant; only the date of its delivery is binding. Therefore, it may be the case that due to a delay in delivery, an appeal will not be submitted on time and will subsequently be rejected. If the appeal relates to the content of the contract notice and/or in some circumstances (i.e. if the relevant procedure is an open procedure) also to the contract documentation, the appeal must be lodged within: 10 days of the contract notice being published in the EU Official Journal or the publication of the contract documentation on the contracting authoritys website (if the value of the contract is equal to or above-the threshold); five days of the contract notice being published in the Public Information Bulletin (Biuletyn Zamwie Publicznych) or the publication of the contract documentation on the contracting authoritys website (if the value of the contract is below the threshold). Appeals against the contracting authoritys acts or omissions other than those specified above must be submitted within 10 days of the date that the bidder or relevant entity becomes aware of, or should have become aware of, the grounds of appeal if the value of the contract is equal to or above the threshold order, or five days if the value of the contract is a below-threshold order.
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The PPPL also specifies that other deadlines for appealing the results of a bid may apply, depending on the specific grounds of the appeal. These deadlines range from between 15 days and six months. In principle, the contracting authority cannot conclude the public contract in question until the appeal is settled or the judgment of the National Appeal Chamber is given. However, in some circumstances, as an exception, the bidder may submit a motion to the National Appeals Chamber for it to grant the procurement before the appeal proceedings are finalised. The National Appeals Chamber is entitled to accept the motion if to do so is in the overriding public interest. The contracting authority may respond to the appeal. If it acknowledges the appeal, the National Appeals Chamber is entitled to discontinue the proceedings. In such cases the contracting authority will take specific action to remedy the damage, for example by retaking certain decisions and undoing previous actions. If the contracting authority fails to respond to the appeal, or defends its actions, the National Appeals Chamber will examine the appeal in a hearing within 15 days of the appeal being filed with the President of the National Appeals Chamber. If the National Appeals Chamber accepts the appeal and the contract is not yet granted it may: (i) order the contracting authority to take a particular action; (ii) order the contracting authority to re-take the action that was the subject of the appeal; or (iii) annul the contracting authoritys action. If the contract has already been granted and there are obstacles to it being annulled, the National Appeals Chamber is entitled to: (i) annul the contract (if possible); (ii) partially annul the contract and
impose a financial penalty; or (iii) impose a financial penalty and shorten the period of the contracts validity if upholding the contract is in the public interest. In addition, if the contract has already been granted, the National Appeals Chamber is entitled to certify that the contract violates the provisions of the PPPL. The verdict of the National Appeals Chamber must comprise legal and factual reasoning and will have the effect of a court judgment. It is important to note that the National Appeals Chamber is not entitled to give an order which goes beyond the scope of the bidder's original claim. Complaint to the Court If the verdict of the National Appeals Chamber is unfavourable, the bidder can appeal the decision, through the President of the National Appeals Chamber, to the competent district court within seven days of the decision being delivered to the bidder or other entitled entity. The President of the National Appeals Chamber must transfer the complaint and all associated files to the court within seven days from the date of submitting the appeal. Apart from the bidder, the President of the Public Procurement Office is also entitled to bring an action before the court within 21 days of the verdict of the National Appeals Chamber being given. Judgment must be delivered by the court within one month of the initiation of these proceedings. The court may either reject the complaint (if it is groundless), or accept it and amend the judgement of the National Appeals Chamber. The judgment of the court is final and cannot be appealed unless a complaint is brought before the court by the President of the Public Procurement Office.
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6.5 Romania
If the bidder believes that a contracting authority has infringed the public procurement rules, it may have recourse to two different settlement bodies, depending on the moment when the dispute arose and the object of the dispute. Disputes which have as their sole object a request for damages or disputes which arise during the awarding procedure or after the execution of the contract may only be settled by a court. Any disputes arising during the public procurement process up to the point by which the contract has been executed are solved by the National Council for Resolving Complaints (the Council). Complaint to the contracting authority In 2010 the Romanian Public Procurement Law was changed in respect of the complaints procedure, the settlement of disputes and remedy measures relating to breaches of public procurement provisions related to the award procedure. Prior to filing a claim with the Council, the bidder may notify the contracting authority of the alleged breach of the procurement provisions and its intention to address the Council. This notification will not automatically result in the suspension of the procurement procedure. However, the contracting authority may take any remedial measures that it considers necessary to rectify the alleged breach, including suspending the procurement procedure and repealing the act which caused harm to the bidder. These remedial measures must be communicated to all bidders within one business day of implementing the remedial action. Notwithstanding the above, the bidder is free to file a complaint with the Council without first notifying the contracting authority, but always sending a copy of the complaint to the contracting authority. In cases where it has already notified the contracting authority of its complaint, the bidder has no obligation to wait for the contracting authority to communicate its proposed remedies prior to proceeding with its claim to the Council. However, notification to and negotiation with the contracting authority can benefit both parties in enabling them to achieve a swifter and less costly resolution of the dispute. If the remedial measures communicated by the contracting authority are satisfactory to the bidder, it must renounce its right to bring a claim (or to continue with an existing claim, as applicable) before the Council in respect of the breach in question, and must notify the contracting authority that it has done so. Appeal to the court Only the courts can settle disputes arising after the date of the execution of the contract. Also, damages may only be granted by the court, and the disputes related to the rights and obligations contracted within the awarding procedure will be solved with emergency and priority according to the Romanian Civil Procedure Code. The claims for damages related to the awarding procedure may be requested only in a separate action. The bidder shall prove the breach of the public procurement provisions and that he had a real chance to be awarded with the contract, but it was compromised as a result of such breach. In justified cases and in order to prevent an imminent loss, the court may decide, upon the request of the interested party, to suspend the contracts performance. The court may decide to annul the contract if: (i) the contracting authority awarded the contract without observing the publicity requirements; or (ii) the contracting authority breached the rules regarding the execution of the contract and this prevented the bidder from contesting the award prior to the execution of the contract; if such breach is combined with the breach of other provisions, such other breaches should have affected the bidders chance to obtain the contract; or (iii) the provisions for the award of the framework agreement and the dynamic purchasing provisions are breached. In exceptional cases, the court may decide on some alternative sanctions, such as: (i) the limitation of the contracts effects by reducing the term of its performance; and/or (ii) applying a fine to the contracting authority of between 2% and 15% of the value of the contract, the amount of which is determined based on a specific rule provided by the law.
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The claims for annulment of the contract as per above can be submitted: (i) not later than 30 days from the date when the awarding notice was published, provided all the required legal provisions have been observed; or from the date when the bidder and the interested participants have been informed about the execution of the contract, provided that all the legal provisions have been observed in this respect; or (ii) not later than 60 days from the date of the contracts execution, if the legal conditions mentioned above have not been observed. The claims introduced after the dates mentioned above will be settled subject to the courts discretion in deciding on the annulment of the contract or application of the alternative sanctions presented above. The courts decision may be challenged by appealing to the Court of Appeal within five days from the communication date. Review by the National Council for Resolving Complaints During any phase of the public procurement procedure the bidder may file a complaint with the Council against any act of the contracting authority made during the procurement procedure. The complaint must be submitted to the Council (and to the contracting authority, regardless of the prior notification as mentioned under paragraph (i) above) within five or ten days, depending on the estimated value of the contract (there are certain thresholds imposed by law) commencing from the day after the bidder learned about the contracting authoritys act which in its view infringes the public procurement rules. In addition, the complaint must be submitted within the stipulated time-frame for the submission of the tender. It is essential not to miss these deadlines. The contracting authority must send its response
to the complaint to the Council and to the bidder together with any relevant documents and a copy of the public procurement folder, or may take remedial action. If the remedial action proposed by the contracting authority is satisfactory to the bidder, it must notify the Council and the contracting authority that it is withdrawing its complaint, in which case the contracting authority is not required to make a formal response to the complaint. Notwithstanding the above, the Council may issue its decision on a complaint brought by a bidder even if the contracting authority fails to deliver its response or implement a remedy. Once the complaint has been submitted to the Council, and provided that it has not been withdrawn, the public procurement procedure may be suspended by the Council until the dispute is settled by the Council. Any contracts concluded during the suspension period or, in any case, before the notification of the Councils decision within the legal term, will be null and void. The Council must issue a decision within 20 days of receiving the public procurement file from the contracting authority or in 10 days in certain exceptional cases. This term may be extended by ten days in specific cases. If the contracting authority fails to provide the Council with a copy of the procurement folder, a fine of RON 10,000 will be payable by the contracting authority and the period of time within which the Council must issue a decision will start from the last day that the contracting authority should have sent the folder to the Council. Depending on the decision issued by the Council, the public procurement procedure will re-commence or be cancelled. The Councils decision can be challenged by an appeal submitted to the court within ten days of the date that the Council communicates its decision to the bidder. The court can suspend performance of the contract in case of well-justified reasons and to prevent imminent damage.
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Part 7
Conclusion
This publication has attempted to describe in reasonable detail the framework of public procurement in CEE, identifying suggestions for improving efficiency in submitting bids and encouraging a better understanding of how the process works and what to do if something seems to have gone wrong.
It is not our intention to encourage a culture of endless appeals. Nor is it our intention to create a culture of fear, with bidders being paralysed with anxiety over the kind of envelope to put their bid in and contracting authorities being frightened of taking a wrong step for fear of triggering an appeal or the cancellation of the tender (and having to do it all over again). In identifying and describing these issues, it has become clear to us that, in general, there is too much tension between the desire to ensure full transparency and the desire to have a flexible and sensible process. Essentially, the way in which legislators have sought to achieve transparency is by attempting to micromanage the process by imposing detailed requirements, and the way in which contracting authorities have sought to evade any potential criticism of being non-transparent is by rigidly adhering to these detailed and complex rules which sometimes are almost impossible in practice for bidders to comply with.
The end result is not transparency but increased bureaucracy, costs, inefficiencies and needless confusion about whether a bid is eligible, long before getting on to the more important business of determining which bidder will provide the best package of products or services for the job in order to serve the public interest most effectively. Further, the focus on rigid formalities has in some cases given rise to the phenomenon (as observed above) that contracting authorities may be tempted to pick and choose between bidders, using the spurious excuse that certain bidders are disqualified for being noncompliant on small technicalities. With a view to avoiding this temptation from becoming too powerful, and with a view to ensuring that the overall aim of procurement in the public interest is fulfilled (namely to ensure that the procured goods or services are provided by the best-qualified persons at the best value for money within the shortest time frame), the authors of this publication recommend that the legislators in CEE continue to re-examine the relevant laws to ensure that:
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there is too much tension between the desire to ensure full transparency and the desire to have a flexible and sensible process
(a) more attention is paid to the mutual recognition of requirements imposed on foreign bidders, and that laws and tender rules are drafted clearly and more flexibly so as to enable international bidders to easily identify the equivalent documentation or other requirements in their respective jurisdictions. (b) more effort is expended in understanding the business norms employed across a wider cross-section of jurisdictions, with the same aim as in paragraph (a) above, namely to ensure that requirements are realistically achievable in other jurisdictions. (c) countries consider implementing a system whereby an independent body (possibly even the body to whom appeals are made, such as the Public Procurement Office) reviews tender rules before they are issued to ensure that they are clear and compliant with all
applicable laws. This would reduce the scope for appeals simply on the basis that the tender rules were unclear or non-compliant with legislation. For example, in Hungary the Advisory Committee reviews the notices provided by the contracting authority (before they are forwarded or issued) to ensure compliance with applicable law. (d) countries consider a pre-review system, allowing for rulings that a bidder or document is sufficient/ compliant in advance of a bid submission. This could form part of the clarification procedure. (e) independent observers observe the opening and assessment of bids. In Hungary, other than for the simplified national threshold procedures, it is compulsory to involve an official public procurement consultant in the procedure as an independent observer.
We hope that you have found this publication informative and useful, and wish you the best of luck with your future bids.
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Public procurement procedures

PROCEDURE
Open procedure
MAIN FEATURES
Number of bidders is not limited. Available in Slovakia, Czech Republic, Hungary, Poland and Romania
SCOPE OF APPLICATION
Slovakia, Czech Republic and Romania: all sectors, including network industries Poland: all types of public contracts regardless of the contract value Hungary: in national threshold procedures service concessions are only applicable for the general simplified procedure. In the water, energy, transport and postal industries this is only used for the procurement of goods, works investment and the procurement of services
TIMING
The period for submitting a bid varies from at least seven to at least 52 days
Restricted procedure
Slovakia, Czech Republic, Poland and Romania: the number of bidders invited to submit a bid may be limited by the contracting authority. In Poland and Slovakia, however, this number cannot be fewer than five (10 in the case of Slovakia) or more than 20 Hungary and Romania: the number of bidders invited cannot be fewer than five
Slovakia, Czech Republic and Romania: all sectors, including network industries Poland: all types of public contracts regardless of the value of the contract Hungary: all sectors however, in the water, energy, transport and postal industries, only used for the procurement of goods, works investment and the procurement of services
The period for filing a request to participate varies from at least seven to at least 37 days The period for submitting a bid varies from at least seven to at least 40 days
Negotiated procedure with prior publication of a contract notice
Slovakia, Czech Republic, Hungary, Poland and Romania: T he contracting entity consults the bidders of its choice; Negotiation of the terms of the contract with one or more of the candidates (at least three candidates in Slovakia, Hungary, Czech Republic and Romania)
Slovakia, Hungary, Poland and Romania: no bids, suitable bids or applications have been submitted in previous tenders , but this no longer applies in Romania; or tenders where, due to the nature of works, services, supplies or related risks, it is not possible to calculate the value of the tender in advance; or contracts performed solely for the purpose of research; or the nature of the services, including financial services, does not permit a clear definition of the subject matter of the tender Czech Republic: as above. This procedure may be used without the conditions mentioned above by contracting entities in network industries, and by public contracting authorities in relation to a limited number of services Poland: in addition to the above, the contracting authority may choose this procedure when the order is a below threshold order Hungary: in the water, energy, transport and postal industries this is only used for the procurement of goods, works investment and the procurement of services
The period for submitting a request to participate varies from at least ten to at least 37 days The period for submitting a bid varies from at least seven to at least 24 days. In the Czech Republic it may be specified by the public contracting authority. In network industries it is agreed with all bidders In Hungary: The period for participating varies from at least ten to at least 30 days; The period for submitting a bid is specified by the contracting authority (except for special procedures where the period varies from at least ten to at least 24 days)
IMPORTANT: Please note that the information contained in this table was simplified in order to enable the comparison of the public procurement procedures in various jurisdictions. It does not provide a precise description of the public procurement procedures in each jurisdiction and it does not constitute legal advice.
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PROCEDURE
Negotiated procedure without publication of a contract notice
MAIN FEATURES
Slovakia, Czech Republic, Poland and Romania: the selection process takes the form of negotiations Hungary and Poland: the contracting authority consults with bidders of its choice (provided there are at least three bidders in Hungary, or at least two bidders in Poland (only two bidders required, if the number of specialist bidders being able to perform the contract is limited))
Slovakia, Czech Republic and Romania: no bids, suitable bids or applications have been submitted in previous tenders (this also applies in Hungary and Poland); or the goods, works and services may only be provided by a particular economic operator (this also applies in Hungary and Poland); or reasons of extreme urgency (this also applies in Hungary); or contracts performed solely for the purpose of research (this also applies in Poland); or the subject of the tender is supplies that are quoted on a commodity market; or the purchase of supplies on advantageous terms, i.e. from a liquidator; or other cases specified by law (applies also in Poland, e.g. a contest was held and, as a result, at least two bidders were invited to take part in the negotiation procedure) In Hungary there are further cases in relation to additional and ancillary services (only in the case of procurement of works investment, services and goods). A similar rule applies in the Czech Republic
TIMING
Slovakia, Czech Republic, Hungary, Poland and Romania: the bidders are invited to negotiate and no time limits are stipulated by law
Competitive dialogue
Slovakia, Czech Republic, Hungary, Poland and Romania: The contracting authority may limit the number of candidates, but there must be a minimum of three, except in Poland where there must be, if the order is equal to or above the threshold order, at least five
Slovakia, Czech Republic, Hungary and Romania: particularly complex contracts Romania: in addition to the above, there is a condition that the contract can not be awarded through an open or restricted procedure Poland: particularly complex contracts and contracts where price was not the only criterion Hungary: this procedure cannot apply to water, energy, transport or postal industries Czech Republic: may only be used by public contracting authorities
Slovakia: The period for a request to participate is at least 30 days Czech Republic: the period for a request to participate is at least 37 days and in the Czech Republic, at least 15 days in below-threshold tenders the period for submitting a bid in Slovakia and the Czech Republic is specified by the contracting authority. In Poland, it is ten days Hungary: the period for a request to participate is at least 30 days and this cannot be shortened. The period for submitting a bid is specified by the contracting authority Poland: the period for a request to participate is at least seven days and at least 37 days in equal to or above-threshold orders the period for submitting a bid is at least ten days Romania: a request to participate can not be made until a minimum of 37 days have elapsed, however this term may be reduced by seven days if the request is sent electronically
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PROCEDURE
Simplified below-threshold procedure (applicable in the Czech Republic and Romania only) In Hungary the simplified national threshold procedures apply
MAIN FEATURES
Czech Republic: the public contracting authority sends the written call for competition to at least five candidates Hungary: either an open procedure, a negotiated procedure with prior publication of a notice or a negotiated procedure without prior publication of a notice Romania: the contracting authority is free to decide the number of candidates to be invited, but for the procedure to be valid, the contracting authority must receive at least two proper tenders otherwise the procedure must be cancelled
Applies only to below-threshold tenders. Czech Republic: may only be used by public contracting authorities Hungary: the general simplified procedure applies for the procurement of goods, works investment, works concessions, procurement of services and service concessions. The special simplified procedure applies for the procurement of goods, works investment and the procurement of services Romania: procurement of goods, works and services
TIMING
Czech Republic: the period for submission of a bid is at least 15 days, or at least seven days, depending on the circumstances Hungary: for the general simplified procedure the period for submitting a bid is at least 20 calendar days. For the special simplified procedure, the period for submitting a bid is specified by the contracting authority and cannot be shortened Romania: the period for submission of a bid is at least ten days, but it may be shortened under certain circumstances No time limits stipulated by law
Free order (applicable in Poland only)
The contracting authority awards a public contract after negotiating with only one bidder
supplies, services or works may be provided by only one bidder; exceptional cases of urgency which were not caused by the contracting authority; no bids, suitable bids or applications have been submitted in previous tenders; it is possible to award a supply contract on particularly advantageous terms, e.g. in connection with a winding-up procedure; the subject of the tender is supplies which are quoted on a commodity market; other cases stipulated by law
Price query (applicable in Poland only)
The contracting authority asks at least five selected candidates for the price and then invites them to submit a bid
The contracting authority may award a contract under the price query procedure if the objects of the contract are generally available, the supplies or services are of a fixed quality, and the contract value is below-threshold The design contest is a special procedure that enables the contracting authority to acquire, mainly in the fields of town and country planning, architecture and engineering or data processing, a plan or design selected by a jury based on a competition with or without the award of prizes. The design contest may constitute a phase of the negotiated procedure without publication of a contract notice in this case, the winner(s) of the design contests is/are invited to negotiations within the procedure mentioned above In Hungary, design contests are conducted in an open or a restricted procedure
No time limits stipulated by law
Design contest (applicable in Slovakia, Romania and Hungary)
The contracting authority may proceed to a preliminary selection of the candidates based on clear, objective and non-discriminatory criteria in order to ensure genuine competition
In Romania designs and plans must not be submitted until at least 52 days have elapsed since the date that the contest notice was sent. In Slovakia the period for submission is determined by the contracting authority In Hungary, the period for submitting a bid is at least 60 calendar days generally, but a shorter term may apply to some special projects
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PROCEDURE
Electronic auction (applicable in Poland and Slovakia)
MAIN FEATURES
In Poland the procedure is designed only for below-threshold orders The number of bidders is not limited
In Poland the procedure is conducted via the contracting authoritys internet website, in real time. Bidders issue their offers (by completing an electronic application form on the contracting authoritys website) which then automatically ranks the offers in accordance with the most advantageous bid (based only on the price) Under the procedure bidders are entitled to issue more than one bid. The bid stops being binding on the bidder once a more advantageous bid is issued The procedure is open and may consist of more than one stage
TIMING
In Poland the period for making a request to participate in the procedure is at least seven days after the date of the contracting authoritys announcement The period for opening the auction is at least five days after the date of issuing invitations to the bidders
In Slovakia and Hungary an electronic auction is not a separate procedure, but a part of another procedure. An electronic auction may follow the initial evaluation of bids and helps the contracting authority to make the final decision on the winning bid The number of bidders is not limited
In Slovakia an electronic auction is a repeated process (done electronically) that bidders use to submit new (lower) prices or new values to their offer The advantage for the bidders is that they can improve their offer, given that at any moment of the electronic auction each bidder can establish its relative position to other bidders (without knowing their identity) The advantage for the contracting authority is that the ranking of the offers is done automatically by electronic means An electronic auction can be used in the open procedure, restricted procedure and negotiated procedure with prior publication of a contract notice; it cannot be used for services, the parameters and values of which cannot be quantified in amounts or as a percentage. In Slovakia, the use of electronic auctions is mandatory since 1 January 2012 for all contracts for the supply of products. E-auction should also be used in procurement of services or construction works, if it is possible to accurately determine the technical specifications, as well as in awarding contracts under a dynamic purchasing system and when reopening competition between all parties to a framework agreement In Hungary, the contracting authority may initiate the use of the electronic auction only in the open procedure, the negotiated procedure and the framework agreement procedure if the contracting authority previously indicated this possibility in the notice published
In Slovakia the period for opening an auction is at least two business days after the date of issuing invitations to the bidders
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Key contacts
Hugh Owen
Partner Slovakia Tel +421 2 5920 2414
hugh.owen@allenovery.com
Jan Myka
Partner Czech Republic Tel +420 222 107 151
jan.myska@allenovery.com
Zoltn Lengyel
Partner Hungary Tel +36 1 429 6033
zoltan.lengyel@allenovery.com
Tomasz Kawczyski
Partner Poland Tel +48 22 820 6137
tomasz.kawczynski@allenovery.com
Victor Pdurari
Partner Romania Tel +40 31 405 7783
victor.padurari@rtprallenovery.com
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FOR MORE INFORMATION, PLEASE CONTACT:
BRATISLAVA
BUDAPEST
BUCHAREST
Allen & Overy Bratislava, s.r.o. Eurovea Central 1 Pribinova 4 811 09 Bratislava Slovakia Tel: +421 2 5920 2400 Fax: +421 2 5920 2424
Morley Allen & Overy Iroda Madch Trade Center Madch Imre t 13-14 H-1075 Budapest Hungary Tel: +36 1 483 2200 Fax: +36 1 268 1515
Radu Trcil Pdurari Retevoescu SCA in association with Allen & Overy LLP 60 Dacia Boulevard 020061 Bucharest 2 Romania Tel: +40 31 405 7777 Fax: +40 31 405 7778
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Allen & Overy (Czech Republic) LLP, organizan sloka V Celnici 4 110 00 Prague 1 Czech Republic Tel: +420 222 107 111 Fax: +420 222 107 107
Allen & Overy, A. Pdzich sp. k. Rondo ONZ 1 00-124 Warsaw Poland Tel: +48 22 820 6100 Fax: +48 22 820 6199
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Allen & Overy is an international legal practice with approximately 4,750 staff, including some 480 partners, working in 39 ofces worldwide. Allen & Overy LLP or an afliated undertaking has an ofce in each of: Abu Dhabi Amsterdam Antwerp Athens (representative ofce) Bangkok Beijing Belfast Bratislava Brussels Bucharest (associated ofce) Budapest Casablanca Doha Dubai Dsseldorf Frankfurt Hamburg Hong Kong Jakarta (associated ofce) London Luxembourg Madrid Mannheim Milan Moscow Munich New York Paris Perth Prague Riyadh (associated ofce) Rome So Paulo Shanghai Singapore Sydney Tokyo Warsaw Washington, D.C.
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A Guide To Public Procurement in CEE

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41.8 bn 4.9 bn 11.8 bn 6 bn

except for Czech Republic where the value is from 2008

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3.1 Implementation of European public procurement rules in CEE legislation

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equivalence in these cases must be approached with a degree of flexibility

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As a result, in practice, the application

Introduction of new concepts without considering their practical implications

Source: http://www.transparency.sk/vyskum-tis-e-aukcie-na-slovensku-setria-peniaze/ (in Slovak only)

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Complexity of applicable regulations

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4.1 Managing time and roles in preparing a bid

Knowing the tender rules

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Identification of the bidder

Checklist of tasks & responsibility

Get acquainted with the tender rules

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It is crucial to allow sufficient time for the preparation of the bid

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4.5 Checklist for a successful bid

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Dont panic if things go wrong

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5.1 Independent expert evaluation

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5.2 Problems with challenging the evaluation process

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a bidder may find that events do not play out as anticipated

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In any event, flexibility and rapid responses are necessary

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