Changes to public procurement
The Government Legislation Centre published a bill amending certain acts to improve the legal and institutional environment for entrepreneurs, which is currently subject to social consultations. The regulations also provide for changes to the Public Procurement Law.
What is the government’s proposal?
According to Art. 42 of the bill, the provisions of the Public Procurement Law are to incorporate the following solutions:
(1) loans incurred by local government units will also fall within the scope of the Public Procurement Law, with the exclusion of loans granted up to the limits established in budgets by special-purpose state funds and state and local government legal persons classified as the public finance sector,
(2) the optional reasons for exclusion of a contractor are to be changed in respect of contractors subject to bankruptcy and restructuring proceedings,
(3) a new delegation is made to establish new forms of notices to be published in TED in compliance with the EU requirements,
(4) the rules for filing a complaint with the public procurement tribunal through postal operators will change
The changes are briefly described below.
- A loan for local government units treated on a par with bank loans (changed Article 11(1)(8), sec. 8a added to the PPL)
Currently, pursuant to Art. 11 (1)(8) of the PPL, the PPL applies to loans extended by banks to local government units within the limits of financial liabilities established in the budget law, but it does not apply to loans incurred by local government units, also those incurred from lending institutions. The authors of the bill are of the opinion that such a distinction is not justified, either by the EU regulations or by the Polish law. Sec. 8a is planned to be added to Art. 11(1) of the PPL, which excludes the applicability of the PPL to loans incurred by local government units within the limits established in the budget law, special-purpose state funds and state and local government legal entities falling within the public finance sector,
- Change of the optional reasons for exclusion
Article 109(1)(4) of the PPL in its current wording offers the possibility for contracting entities to apply an optional reason for exclusion of a contractor, which leads to limitation of access to public procurement for those contractors who are subject to bankruptcy or restructuring proceedings. However, initiation or conduct of such proceedings will not always lead to definite closure of the entity’s business. However, currently this provision does not offer the possibility to limit its applicability to those entities only whose capacity to perform a contract is poor due to their financial situation (entities under liquidation or bankruptcy), and it also applies to those entities with respect to which restructuring was completed, who entered into a composition with creditors and who do not intend to wind up.
For this reason, the contracting entity had to:
– either waive this requirement hoping that no tender will be submitted by a bankrupt entity (due to its optional nature),
– or apply the requirement, barring tenders from contractors whose financial situation, despite initiation of the relevant insolvency procedures, does not prevent them from due performance of the contract.
To satisfy the expectations of contracting parties and contractors, the bill divides the optional requirement into two parts by modification of the current wording of Art. 109(1)(4) and adding an additional requirement in 4a. Accordingly:
- the planned sec. 4 provides that the optional exclusion will apply to contractors who are subject to liquidation or bankruptcy, except for contractors:
– who, after declaration of bankruptcy, entered into a court-approved composition, if the composition does not provide for satisfaction of creditors by liquidation of the bankrupt’s assets, unless the court ordered liquidation of the assets in pursuance of Article 366(1) of the Bankruptcy Law of 28 February 2003 (Journal of Laws of 2022 Item 1520, as amended), or
– whose assets are managed by a liquidator or court, or
– who entered into a court-approved composition under restructuring proceedings, which provides for satisfaction of creditors by liquidation of their assets, or with respect to whom the court ordered liquidation of assets in pursuance of Article 332(1) of the Restructuring Law of 15 May 2015 (Journal of Laws of 2022 Item 2309), or
– whose business activity is suspended or who are in similar circumstances as a result of a similar procedure provided for in the regulations applicable in the place of initiation of this procedure.
- according to the planned sec. 4a, the optional exclusion will apply to a contractor:
– who entered into a court-approved composition under restructuring proceedings, other than a composition which provides for satisfaction of creditors by liquidation of the contractor’s assets, or
– who, after declaration of bankruptcy, entered into a court-approved composition, if the composition does not provide for satisfaction of creditors by liquidation of the bankrupt’s assets, or
– who is in a similar situation as a result of a similar procedure provided for in the regulations applicable in the place of initiation of this procedure.
With the separate regulations for the proposed reasons for exclusion, contracting entities can take decisions to apply them more effectively, taking into account the possibility of continued operations by contractors applying for a public contract.
The explanatory memorandum also refers to COVID-19 and the effects thereof on meeting commitments, especially by SME – the near future may see an increased number of entrepreneurs who, for various reasons, will be forced to enter into a composition with their creditors. In this case, the financial condition of the contractor does not need to raise any serious concerns of the contracting entity, as in case of contractors with respect to whom liquidation proceedings were initiated or bankruptcy was declared.
- New notice forms published in the Official Journal of the EU.
By the force of the Commission Implementing Regulation (EU) 2019/1780, transitional provisions, starting from 25 October 2023 the new standard notice forms will have to be used in the Official Journal of the EU (Tenders Electronic Daily – TED). The EU law provides for selection of additional mandatory fields for contractors by national authorities that establish template forms. For this reason, the reference under Art. 87(1) of the PPL was updated. Currently this provision does not refer to new versions of the regulations, and therefore it is necessary to introduce a delegation for the minister in charge of economy to issue a regulation on adaptation of the optional fields in e-forms to comply with Regulation 2019/1780.
- Not only the Polish Post (Poczta Polska) will be used to lodge a complaint to the public procurement office.
A change is also planned to Art. 580(2) sentence two of the PPL. It provides that a complaint lodged at a post office of a postal operator within the meaning of the Postal Law of 23 November 2012 (…) is equivalent to its filing. However, in the light of the judgment of the European Court of Justice (fourth chamber) of 27 March 2019 in case C-545/17 Mariusz Pawlak vs Prezes Kasy Rolniczego Ubezpieczenia Społecznego (Chairman of the Agricultural Social Insurance Fund, Poland) in which the Court held that provisions which restrict the right to post a procedural document only at post offices of the sole operator designated by the law, i.e. the provisions of Art. 165 § 2 of the Civil Procedure Code (KPC), are precluded by the EU law. For this reason, the amendment also applies to the rule for lodging a compliant with the public procurement law. Accordingly, a complaint will be considered lodged if it is posted not only at a post office of the postal operator within the meaning of the Postal Law, but also at an office of an operator that provides delivery services throughout the European Union.
The proposed changes are positive, in particular as regards the possibility offered to contracting entities to choose their approach to contractors whose economic situation has deteriorated. This flexibility, reflected in more favourable approach to contractors who are subject to restructuring, and exclusion of those contractors only who are bankrupt, will duly safeguard the interest of contracting entities while also improving the economic situation of restructured entities.
We will track the development of the proposed amendment.
KONTAKT
E: tomasz.srokosz@pl.Andersen.com
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