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Implementation of the Public Procurement Directive in CEE

Contract Award Criteria

February 2, 2016, Source : C / M / S / Law Now, http://www.cms-lawnow.com/


Bulgaria 
Directive 2014/24/EU (the “Directive”) introduced a new contract award criteria for public procurements – contracting authorities are now obliged to choose the “most economically advantageous tender” (the “MEAT”). The Directive establishes that MEATs shall be identified on the basis of the price, cost or best price-quality ratio. It also seeks to reduce the use of price as the only criterion and urges the consideration of qualitative factors. Regarding the cost criterion, the Directive encourages the use of the “lifecycle costing method” which includes the main cost elements throughout the life of the procurement (e.g. costs of acquisition, use, maintenance, end life costs). In respect to the best price-quality ratio, the Directive suggests consideration of qualitative, social and environmental factors. The Directive also prescribes that the contract award criteria must always be linked to the subject matter of the procurement.
Please find below the implementation status of the MEAT provision of the Directive in the following CEE countries:

  • Bulgaria has fully implemented the Directive and allows the following award criteria: lowest price; costs, including consideration of the cost effectiveness and life-cycle costs of a project; and best price-quality ratio, which might consider the price, costs, quality and environmental and social factors of the contract. Contracting authorities may choose any of these award criteria in their tendering, however, award criteria shall not be the selection criteria as well.
  • Czech Republic
    The Czech Republic has adopted the Directive. Consequently, the sole award criterion is MEAT, with emphasis on the best price-quality ratio including lifecycle cost-quality ratio. Although best price-quality ratio and lifecycle cost-quality ratio are preferred, contracting authorities are still allowed to award contracts based on the lowest price or lowest lifecycle cost (with some exemptions e.g. design work).
  • Hungary
    Hungary has adopted the Directive. The law urges qualitative procurement, requires the use of best price-quality ratio or the life-cycle costing method and prescribes that the price only criterion should be rarely used. However, in practice, award decisions of contracting authorities are still often determined by price.
  • Poland
    Poland has fully implemented the Directive. Contracting authorities are encouraged to apply the life-cycle costing method but there is still not enough established practice regarding this new criterion. Although the law severely limits the use of price as the sole criterion, many tenders are still awarded with consideration of price alone. However, the situation has been improving and statistics show that more and more contracting authorities apply additional criteria.
  • Romania
    Romania has implemented the Directive and encourages a qualitative approach to evaluating bids. Nonetheless, contracting authorities are free to apply the lowest price, lowest cost, best price-quality ratio and best cost-quality ratio criteria for awarding contracts. Factors for determining the best price/cost-quality ratio include qualitative, environmental and social factors, including combatting unemployment. In practice, however, contracting authorities often use the lowest price criterion.
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