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PUBLIC PROCUREMENT IN ROMANIA

January 15 2013

VASS Lawyers a fost invitata de prestigioasa publicatie International Comparative Legal Guide sa redacteze si sa publice in volumul “Public Procurement 2013 – A practical cross-border insight into public procurement” capitolul despre sistemul achizitiilor publice din Romania. Prezentarea sistemului achizitiilor publice din Romania a fost redactata in luna octombrie 2012, luand in considerarea legislatiei in vigoare la acea data.

Materialul poate fi accesat si pe site-ul publicatiei International Comparative Legal Guide, la adresa http://www.iclg.co.uk/practice-areas/public-procurement/public-procurement-2013/romania.

1          RELEVANT LEGISLATION

 

1.1       WHAT IS THE RELEVANT LEGISLATION AND IN OUTLINE WHAT DOES EACH PIECE OF LEGISLATION COVER?

 

Being one of the European Union member states, Romania has a varied legislation on public procurement, especially due to the transposition obligation of the European directives. All the regulatory acts are in accordance with the Treaty on European Union, with the Treaty on the Functioning of the European Union, as well as with the directives on public procurement.

 

Therefore, at present, in Romania, the most important legal act regarding public procurement procedures is the Government Emergency Ordinance no. 34/2006 on the awarding of public procurement contracts, works concession contracts and services concession contracts, with subsequent amendments ( „GEO no. 34/2006).

 

This ordinance represents the general legal framework for the public procurement field as it provides the principle rules required for organizing and carrying out these types of procedures. Nonetheless, the public procurement legislation („PPL”) also includes other relevant regulatory acts, as well as secondary legislation, which contain special provisions, as following:

  • Government Decision no. 925/2006 for approving the application Norms of GEO no. 34/2006;
  • Government Decision no. 71/2007 for approving the application Norms of the provisions referring to the awarding of the public works concession contracts and of services concession contracts, as provided in GEO no. 34/2006;
  • Government Emergency Ordinance no. 30/2006 regarding the verification of the procedural aspects concerning the awarding of public procurement contracts, of public works concession contracts and public services concession contracts, with subsequent amendments;
  • Government Decision no. 942/2006 for approving the application Norms of GEO 30/2006;
  • Government Emergency Ordinance no. 114/2011 regarding the awarding of certain public procurement contracts in the defence and security fields;
  • Government Decision no. 1037/2011 for approving the Regulation on organisation and functioning of the National Council for Solving Complaints ( „Council” or „NCSC”);
  • Law no. 178/2010 regarding the public-private partnership;
  • Government Decision no. 1239/2010 for approving the application Norms of Law no. 178/2010, as well as for the approval of measures regarding the reorganization of the Central Unit for the Coordination of Public-Private Partnership within the Ministry of Public Finance;
  • Government Decision no. 525/2007 for the organization and functioning of the National Authority for Regulating and Monitoring of Public Procurement („NARMPP”).

These pieces of legislation are also completed and supplemented by a tertiary legislation, namely several orders adopted by NARMPP in relation to the interpretation and application of certain legal provisions of GEO no. 34/2006.

 

1.2       ARE THERE OTHER AREAS OF NATIONAL LAW, SUCH AS GOVERNMENT TRANSPARENCY RULES, THAT ARE RELEVANT TO PUBLIC PROCUREMENT?

 

Both contracting authorities and tenderers are bound also by specific normative acts such as competition law, Law no. 161/2003 on measures to ensure transparency in the exercise of public dignities, public functions and business environment, the prevention and punishment of corruption.

 

At the same time, the tender books are subject to specific legal provisions relevant for the scope of the contract (e.g. constructions legislation, utilities legislation, energy legislation etc.)

 

Last but not least, a significant number of procedures are carried out by economic operators who have accessed European funds, the specific legislation in this field becoming, thus, applicable.

 

1.3       HOW DOES THE REGIME RELATE TO SUPRA-NATIONAL REGIMES INCLUDING THE GPA, EU RULES AND OTHER INTERNATIONAL AGREEMENTS?

 

When adhering to the E.U., one of the fundamental obligations undertaken by Romania was to put its entire PPL in accordance with all European regulatory acts.

 

Therefore, the main European directives, such as Directive 2009/81/EC, Directive 2004/18/EC, Directive 2004/17/ECor Council Directive 89/665/EEC, were transposed in the Romanian legal system, becoming thus the very basis of the PPL.

 

Commission regulations, such as Commission Regulation (EU) no. 1251/2011 of 30 November 2011 amending Directives 2004/17/EC, 2004/18/EC and 2009/81/EC of the European Parliament and of the Council in respect of their application thresholds for the procedures for the awards of contract, are directly applicable.

 

In 2007, when adhering to the EU, Romania became also part of the GPA being, thus bound by this agreement.

 

1.4       WHAT ARE THE BASIC UNDERLYING PRINCIPLES OF THE REGIME (E.G. VALUE FOR MONEY, EQUAL TREATMENT, TRANSPARENCY) AND ARE THESE PRINCIPLES RELEVANT TO THE INTERPRETATION OF THE LEGISLATION?

 

GEO no. 34/2006 provides the fundamental principles of the public procurement procedures, namely: non-discrimination, equal treatment, transparency, mutual recognition, proportionality, efficient use of public funds and accountability.

 

The relevance of these principles resides in their creating the general legal framework for the awarding of public procurement contracts. Moreover, according to the legislation, any situation for which there is no express regulation shall be interpreted through these principles.

 

1.5       ARE THERE SPECIAL RULES IN RELATION TO DEFENCE PROCUREMENT OR ANY OTHER AREA?

 

Romanian legislation comprises a special normative act on defence procurement. Thus, Government Emergency Ordinance no. 114/2011 on the awarding of public procurement contracts in defence and security fields („GEO no. 114/2011”) applies to the award of public procurement contracts which refer to the supply of military products and/or of sensitive products, to works, products and services directly related to the products aforementioned, and, last but not least, to works and services for specifically military purposes or sensitive works and services.

 

GEO no. 34/2006 creates the general legal framework in the public procurement field and it applies only if there are no other special provisions. Consequently, GEO no. 114/2011 shall apply with priority.

 

For the construction field also, two normative acts were adopted – Order no. 1033/2011 and Order no. 1034/2011 of the Ministry of Transport and Infrastructure – which establish the applicability of the special rules of the International Federation of Consulting Engineers („FIDIC”), regarding the contractual conditions for works contracts.

 

2          APPLICATION OF THE LAW TO ENTITIES AND CONTRACTS

 

2.1       WHICH PUBLIC ENTITIES ARE COVERED BY THE LAW (AS PURCHASERS)?

 

The public entities acting as purchasers that are covered by GEO no. 34/2006 are as follows:

i.     any central, regional or local state body – public authority or institution;

ii.    any entity, other than the ones mentioned above, having legal personality, which was founded in order to satisfy general needs which are not commercial or industrial, and which complies with at least one of the following situations: is mostly financed by a contracting authority as defined under letter i or by other public body; is subordinated or controlled by a contracting authority as defined under letter i. or by other public body; the majority of its board of directors or the members of its management or supervisory bodies are nominated by one of the entities mentioned under letter i. or by other public body;

iii. any association composed of one or several contracting authorities as defined under letters i, ii, iv, v;

iv.    any public enterprise which develops one or several activities in the utilities sectors (water, energy, transportation and postal services), when it awards public procurement contracts or it concludes framework agreements for carrying out such activities;

v.    any other entity, other than those provided under paragraphs i – v, conducting one or several activities in the utilities sectors, based on a special or exclusive right, granted by a competent authority, when it awards public procurement contracts or concludes framework agreements in order to perform those activities.

 

2.2       WHICH PRIVATE ENTITIES ARE COVERED BY THE LAW (AS PURCHASERS)?

 

The provisions of GEO no. 34/2006 apply to private entities as purchasers only in the following two situations:

  • the award of a services contract by a legal entity which is not a contracting authority, if the two following conditions are met cumulatively: the contract is directly financed, more than 50%, by a contracting authority and the estimated value of the contract is equal to or above the equivalent in lei of 200.000 euro;
  • the award of a works contract by a legal entity which is not a contracting authority, when that contract is directly financed, more than 50%, by a contracting authority and the estimated value of the contract is equal or above the equivalent in lei of 5.000.000 euro.

However, a private entity can also fall under the category mentioned at point 2.1 letter 5.

 

2.3       WHICH TYPES OF CONTRACTS ARE COVERED?

 

The national PPL provides for three main types of contracts: public procurement contracts for services, supply of goods and works, services concession contracts and public works concession contracts.

 

2.4       ARE THERE FINANCIAL THRESHOLDS FOR DETERMINING INDIVIDUAL CONTRACT COVERAGE?

 

The Romanian legislation provides several financial thresholds for determining individual contract coverage. As a consequence, contracting authorities must publish a contract notice/award notice in the OJEU in the following cases:

  • if the contracting authority is one of those provided under i, ii or iii of question 2.1. above, and the estimated value of the supply or services contract is equal or above the equivalent in lei of 130.000 euro;
  • if the contracting authority is one of those provided under iv and v of question 2.1. mentioned above, and the estimated value of the supply or services contract is equal or above the equivalent in lei of 400.000 euro;
  • if the estimated value of the works contract is equal or above the equivalent in lei of 5.000.000 euro.

Moreover, when a contracting authority awards a public procurement contract for services included in Appendix no. 2B (i.e. hotel and restaurant services, transport services, legal services etc.), then the obligation to comply with the provisions of GEO no. 34/2006 applies only for contracts whose value is equal or in excess than the values mentioned above.

 

2.5       ARE THERE AGGREGATION AND/OR ANTI-AVOIDANCE RULES?

 

According to the provisions of GEO no. 34/2006, the contracting authority does not have the right to subdivide the public procurement contract in several separate contracts of lower value, nor to use calculation methods leading to a sub-evaluation of the estimated contract value, for the purpose of avoiding the application of those legal provisions which stipulate obligations for the contracting authority dependent upon certain thresholds.

 

The rules on the estimation of the contract value follow the same reasoning and impose for each type of contract the adding up of all amounts payable for the performance of the respective contract, without VAT, taking into consideration any form of options and any possible supplements or increases of the contract’s value. The same applies for services, supplies or works contract awarded by lots, the estimated value of the contract resulting from the adding up of the value of all lots.

 

2.6       ARE THERE SPECIAL RULES FOR CONCESSION CONTRACTS AND, IF SO, HOW ARE SUCH CONTRACTS DEFINED?

 

The Romanian PPL provides, indeed, special rules with regard to concession contracts. Thus, these contracts are regulated under a specific chapter in GEO no. 34/2006 and the applicable rules are detailed by a separate Government Decision.

 

The services concession contracts is defined as the contract similar to the public services contract, except for the fact that the consideration for the provision of services by the contractor consists either solely in the right to exploit the services or in this right together with the payment of an amount previously established.

 

The public works concession contract is defined as the contract similar to the public works contract, except for the fact that the consideration for the works to be carried out by the contractor consists either solely in the right to exploit the works or in this right together with the payment of an amount previously established.

 

Although governed by specific rules, the concession contracts and public procurement contracts are regulated by several common provisions including but not limited to: the fundamental principles, the estimation rules, the settlement of claims filed during procedures, the publishing of a contract notice in the Electronic System of Public Procurement („ESPP”) and, as appropriate, in the Official Journal of the EU („OJEU”), and, optional, in the Romanian Official Gazette, and the awarding procedures (except for the request for tenders).

 

3          AWARD PROCEDURES

 

3.1       WHAT TYPES OF AWARD PROCEDURES ARE AVAILABLE?  PLEASE SPECIFY THE MAIN STAGES OF EACH PROCEDURE AND WHETHER THERE IS A FREE CHOICE AMONGST THEM.

 

In terms of the Romanian PPL, the award procedure consists of the steps to be taken by the contracting authority and by tenderers, in order to reach a common ground and conclude the public procurement contract.

 

GEO no. 34/2006 provides for the following award procedures:

  • open procedure, meaning the procedure within which any interested economic operator has the right to submit a tender; this procedure is carried out in one stage;
  • restricted procedure, within which any economic operator is entitled to submit an application, but only selected candidates will be allowed to submit a tender; this procedure is carried out in two stages: selection of applicants stage and evaluation of tenders stage;
  • competitive dialogue, within which any economic operator is entitled to submit an application, the contracting authority conducting a dialogue with the admitted candidates in order to identify one or more solutions capable of meeting its requirements; once a solution is identified, the selected candidates will prepare the final tender on the basis of that solution; this procedure is carried out in three stages: the preselection of applicants stage; the dialogue stages and the evaluation of final tenders stage;
  • negotiated procedure meaning the procedure within which the contracting authority carries consultations with the selected candidates and negotiates the contract terms, including the price, with one or several tenderers; the negotiated procedure can be carried out with or without prior publication of a contract notice; the negotiated procedure with prior publication of a contract notice is carried out in two stages: preselection of applicants stage and the negotiation stage;
  • request for tenders, namely the simplified procedure whereby the contracting authority requests tenders from several economic operators; this procedure is carried out in one stage;
  • the design contest, namely  a special procedure through which the contracting authority acquires, mainly in the fields of city and country planning, architecture or data processing a plan or a project by selecting it through a jury, based on competitive criteria, with or without awards.

As a general rule, contracting authorities shall apply the open or restricted procedure. Only in the specific circumstances, expressly provided by the legislation, the contracting authorities may award the public contracts by means of other award procedures.

 

Contracting authorities may also purchase directly goods, services or works, only when the estimated value of the purchase does not exceed 15.000 euro for every products, services or works purchase.

 

In addition to the above mentioned, GEO no. 34/2006 provides for three special procedures for the awarding of a public contract:

  • the framework agreement – the written agreement between one or more contracting authorities and one or more economic operators,  the purpose of which is to establish the essential elements/terms governing the public contracts to be awarded during a given period, in particular with regard to price and, where appropriate, to quantities;
  • the dynamic purchasing system – the contracting authority has the right to use a dynamic purchasing system only through the ESPP and only for the purchase of everyday consumer products, whose general features available on the market meet the needs of the contracting authority;
  • the electronic auction.

3.2       WHAT ARE THE MINIMUM TIMESCALES?

 

Romanian PPL provides several timescales for different steps within a procedure depending on the specific procedure a contracting authority applies.

 

Thus, the law provides for certain minimum timescales between the publishing of the contract notice in the ESPP/OJEU and the date for submission of tenders/applications/projects:

  • for open procedure – 52 days or 20 days, depending on the estimated value of the contract;
  • for restricted procedure – 37 days or 10 days, depending on the estimated value of the contract;
  • for competitive dialogue – 37 days or 20 days;
  • negotiated procedure with prior publication of a contract notice – 37 days or 10 days, depending on the estimated value of the contract;
  • request for tenders – 10 days;
  • design contest – 52 days.

Other timescales regard the publishing of the award notice within 48 days from the award of the public procurement contract or the establishment of the winning tender within 20 days from the date of the tenders opening.

 

3.3       WHAT ARE THE RULES ON EXCLUDING/SHORT-LISTING TENDERERS?

 

According to GEO no. 34/2006, contracting authorities have the right to apply qualification and selection criteria with regard to: the personal situation of the candidate/tenderer; the capacity to exercise its professional activity; the economic and financial situation; the technical and/or professional capacity; the quality standards; the environmental standards.

 

Contracting authorities may establish minimum levels for the above-mentioned criteria and request supporting documents. Those tenders not fulfilling the qualification criteria shall be rejected as unacceptable.

 

Moreover, contracting authorities are obliged to exclude from the procedure any tenderer/candidate who has been subject of a conviction by final judgment of which the contracting authority is aware, for participation in a criminal organization, corruption, fraud and/or money laundering.

 

Also, Romanian legislation provides for the obligation of contracting authorities to reject tenders as unacceptable for the following reasons:

  • the tender was submitted after the deadline for submission or at another address than the one stipulated in the contract notice;
  • the tender is not accompanied by  the participation guarantee as it was requested in the tender documentation;
  • the tender submitted is a variant, that cannot be taken into consideration because: the possibility to submit variants is not stipulated explicitly in  the contract notice, or the  variant does not meet the minimum requirements stipulated in the technical specifications;
  • the tender does not respect the mandatory regulation regarding specific employment protection and working conditions;
  • the price exceeds the estimated value established in the contract notice and there are no available supplementary funds or the price exceeds with more than 10% the estimated value of the contract or the conclusion of the contract for that price would lead to the eluding of those legal provisions establishing obligations of the contracting authority in relation to certain thresholds;
  • the tender has an abnormally low price as compared with what has to be supplied, executed or provided.

A tender shall be rejected as non-conformant if:

  • it does not meet the requirements of the technical specifications;
  • it contains proposals referring to contract clauses that are obviously disadvantageous for the contracting authority;
  • it contains prices as part of the financial proposal that are not a result of free competition and that cannot be justified;
  • in a public procurement procedure in which the contract is awarded on lots, the tender is submitted without the distinction on the tendered lots, thus making impossible to apply the award criteria for every lot.

Within restricted procedures, negotiated procedures with prior publication of a contract notice and competitive dialogue, the contracting authority shall select/preselect the applicants in accordance with the criteria and rules mentioned in the contract notice. Contracting authorities also have the obligation to mention in the contract notice the minimum and maximum number of candidates that it intends to select.

 

3.4       WHAT ARE THE RULES ON EVALUATION OF TENDERS?

 

According to the PPL, when awarding a public procurement contract, the contracting authority has the obligation to appoint the persons in charge with the evaluation of the tenders, who will be forming an evaluation committee. This committee must include specialists in the field of the object of the contract that will be awarded and they must be members of the public procurement department within the contracting authority. Also, in order to support the evaluation activities, the contracting authority can also appoint co-opted external experts.

 

During the awarding process, the members of the evaluation committee and the co-opted experts must follow certain rules. Thus, they have a confidentiality obligation regarding the contents of the tenders and any other information submitted by the tenderers, whose disclosure might prejudice their intellectual property or commercial know-how’s or/and secrets and an obligation to not be in a situation of conflict of interest. In order to ensure the compliance of these rules, before undertaking their responsibilities, both the evaluation committee and the co-opted experts must sign a statement on own responsibility, stipulating that they will respect the confidentiality obligation and that they are not in a situation of conflict of interest.

 

Withal, the evaluation commission will establish which are the clarifications and additions, whether formal or confirmatory, necessary for the evaluation of every tender and the period of time granted for the transmission of the clarifications. If the tenderer does not transmit the required clarifications/answers within the period of time established by the evaluation commission or in case the explanations submitted by the tenderer are not conclusive, the tender shall be considered irregular.

 

Equally important, the evaluation committee has the right to correct the arithmetic errors and the formal flaws only with the tenderer’s approval. When the tenderer does not accept the correction of these errors/flaws, the tender will be considered irregular. The evaluation committee has the obligation to reject the unacceptable tenders and the irregular tenders.

 

Within 20 days as of the date of the opening of tenders, the evaluation committee has the obligation to establish the successful tender. This deadline may be extended only once, in duly justified cases.

 

After the evaluation of tenders is completed, the evaluation committee shall elaborate the report on the awarding procedure, which shall be signed by all the members of the evaluation committee, including its president. The report of the awarding procedure shall be forwarded to the head of the contracting authority for approval and based on this report, communication of the results of the procedure will be drawn.

 

3.5       WHAT ARE THE RULES ON AWARDING THE CONTRACT?

 

The contracting authorities have the obligation to specify within the participation notice and within the tender documentation the awarding criteria, which, once established, cannot be changed throughout the entire duration of the awarding procedure.

 

The criteria for awarding the public contract can be: (i) either the most economically advantageous tender; (ii) either, exclusively, the lowest price.

 

If the awarding of the public contract is realized through competitive dialogue, the award criteria can only be the most advantageous economically tender.

 

The application of the “most economically advantageous” criterion has to comply with strict rules, such as: (i) the contracting authority has the obligation to state, clearly and detailed, in the invitation/participation notice, as well as in the tender documentation, the tender evaluation factors with their relative weights or, under certain conditions, the decreasing order of importance of the evaluation factors; (ii) the successful tender will be the tender that meets the highest score resulting from the application of the system of evaluation factors; (iii) tender evaluation factors may be, together with the price: quality, technical or functional characteristics, environmental characteristics, running costs, cost/effectiveness rapport, after-sale services and technical assistance, delivery or performance term, other elements considered significant for the evaluation of the tenders; (iv) the qualification criteria cannot be used as evaluation factors; (v) the tender documentation shall specify calculation algorithm or methodology of scoring concrete benefits that will result from the technical and financial proposals submitted by the tenderers.

 

When “the lowest price” criterion is applied, the wining tender will be the admissible tender with the lowest price.

 

3.6       WHAT ARE THE RULES ON DEBRIEFING UNSUCCESSFUL BIDDERS?

 

The contracting authorities have the obligation to inform all economic operators involved in the awarding procedure on the decisions regarding the result of the selection or the outcome of the award procedure in writing, not later than 3 working days as of their issuance.

 

The communication through which the above information is transmitted shall be sent by mail, fax or electronic means.

 

By this communication, the contracting authorities have to inform the unsuccessful bidders of the deadline for filing appeals, as well as of the reasons behind the decision, as follows: (i) to each candidate rejected, the reasons which led to the decision; (ii) for each tender rejected, the reasons based on which the tender was considered unacceptable and/or non-conformant; (iii) to any admissible tenderer that was not declared successful, the characteristics and relative advantages of the winning tender(s) in relation to its tender, as well as the name of the successful tenderer.

 

The contracting authority is entitled not to disclose the above information if the disclosure would lead to failure in application of a legal provision, would impede the application of a legal provision, would be contrary to public interest, would prejudice the legitimate commercial interests of the economic operators or might prejudice fair competition.

 

3.7       WHAT METHODS ARE AVAILABLE FOR JOINT PROCUREMENTS?

 

According to GEO no. 34/2006, any association formed by one or more contracting authorities can also be a contracting authority.

 

Moreover, even though the government has the right to approve by decision the implementation of a national centralized system for specialized procurement of certain products, services or works from one or more centralized procurement units, such a system has not yet been implemented.

 

NARMPP’ attempts to establish a centralized procurement unit which could acquire in its own name products and/or services destined to one/more contracting authorities or could award public contracts in the name and on behalf of other contracting authorities, have also failed.

 

3.8       WHAT ARE THE RULES ON ALTERNATIVE BIDS?

 

The contracting authorities have the right to allow the tenderers to submit alternative tenders only if the award criterion is “the most economically advantageous tender”. In such a case, the contract notice must state explicitly whether it is allowed to submit alternative tenders or if this possibility is prohibited.

 

When alternative tenders are allowed, the technical specifications have to specify the minimum requirements that the tenders must comply with. The alternative tenders that do not meet these minimum requirements shall not be taken into consideration.

 

4          EXCLUSIONS AND EXEMPTIONS (INCLUDING IN-HOUSE ARRANGEMENTS)

 

4.1       WHAT ARE THE PRINCIPAL EXCLUSIONS/EXEMPTIONS AND WHO DETERMINES THEIR APPLICATION?

 

According to G.E.O no. 34/2006, certain public contracts are excluded de jure from the scope of the ordinance.  Exempli gratia, the PPL shall not apply for the following public procurement contracts:

  • contracts having as object the performance of services included in the annex no. 2B to GEO no. 34/2006 and with an estimated value below the thresholds for publication of award notices in OJEU;
  • contracts included in the category of state secret information, as well as contracts requiring the imposing of special security measures in order to protect national interests;
  • contracts awarded by structures of the contracting authorities operating on other states’ territory when the estimated value of the contract is lower than the thresholds provided for publication of contract notices in OJEU;
  • contracts having as object the purchase or lease, by any financial means, of lands, existing buildings, other real estates or rights over such real estates;
  • contracts referring to the purchase, development, production or co-production of programs destined to broadcasting, by radio-broadcasting or television institutions;
  • contracts referring to the performance of services of arbitration and conciliation;
  • contracts referring to the performance of financial services related to the issuance, purchase, sale or transfer of equity or other financial instruments, especially operations of the contracting authority performed for the purpose of attracting financial and/or capital resources, as well as the performance of services specific to a central bank by the National Bank of Romania;
  • contracts referring to the employment of work force, respectively the conclusion of labour contracts;
  • contracts referring to the performance of services of research-development entirely paid by the contracting authority and the results of which are not destined, exclusively, to the contracting authority for its own benefit;
  • contracts awarded as a consequence of: (i) an international agreement concluded in compliance with the provisions of the EU Treaty with one or more states which are not members of the EU and which has as object the supply of products, performance of services, or performance of works destined to the implementing or exploiting of a project in common with the signatory states, and only if by the respective agreement a specific procedure for the awarding of the respective contract was mentioned; (ii) an international agreement regarding the stationing of troupes and only if by the respective agreement a specific procedure for the awarding of the respective contract was mentioned; (iii) the application of a procedure specific to certain international bodies and institutions; (iv) the application of a specific procedure provided by the European community law, under the context of the programs and projects of territorial cooperation;
  • the services contracts of research and release of archaeological  loads for the archaeological patrimony and archaeological sites.

4.2       HOW DOES THE LAW APPLY TO “IN-HOUSE” ARRANGEMENTS, INCLUDING CONTRACTS AWARDED WITHIN A SINGLE ENTITY, WITHIN GROUPS AND BETWEEN PUBLIC BODIES?

 

A public-public partnership, representing a joint implementation of a project by two or more national and/or international public entities, is subject to the rules provided by the PPL.

 

However, GEO no. 34/2006 does not apply to services contracts awarded to another contracting authority or to an association of contracting authorities, if they benefit of an exclusive right for the performance of the respective services, according to the law or other normative acts, insofar such legal provisions are compatible with the EU Treaty.

 

Specific rules in this regard are provided by the PPL in the field of utilities contracts. Thus, GEO no. 34/2006 does not apply for the awarding of public utilities contracts (i) by a contracting authority to one of its affiliated companies; (ii) by a combination of several contracting authorities, formed solely to carry out a relevant activity, to a company affiliated with one of the contracting authorities concerned; (iii) by a combination of several contracting authorities, formed solely to carry out a relevant activity, to one of the respective contracting authority; (iv) by a contracting authority to an association of contracting authorities of which itself is part and was formed solely to carry out a relevant activity.

 

5          REMEDIES AND ENFORCEMENT

 

5.1       DOES THE LEGISLATION PROVIDE FOR REMEDIES/ENFORCEMENT MEASURES AND IF SO WHAT IS THE GENERAL OUTLINE OF THIS?

 

The PPL guarantees two means of appeal against the acts/decisions of contracting authorities during the awarding procedure: challenge (in Romanian ‘contestatie’) and complaint (in Romanian ‘plangere’).

 

Challenges can be submitted to the National Council for Solving Challenges (NCSC), an independent organism with administrative and judicial activity, within 10 days/5 days as of the date when the act/decision was communicated. The challenge does not suspend de jure the awarding procedure (except the conclusion of the public procurement contract), but NCSC may decide the suspension of the procedure if certain conditions are met. The procedure in front of NCSC is mainly written, but oral hearings can be held when the panel considers necessary. The panel is formed by three members, within which at least the chairman has a legal background. When challenges are rejected as ungrounded, the contracting authority will retain a part of the participation guarantee submitted together with the tender.

 

The decisions of NCSC can be further appealed with a complaint/recourse at the court of appeal where the public authority is headquartered, within 10 days as of the date when the NCSC decision was communicated. The challenge does not suspend the execution of NCSC’s decision. Thus, the contract concluded in breach of the Council’s decision is null and void, but the public procurement contract can be concluded if the decision of NCSC is in favor of the contracting authority. However, in duly justified cases the performance of the contract can be suspended by the court. The challenge shall be solved by a panel formed of three judges, in an urgent manner, within maximum two hearings. The decision of the court of appeal is final and irrevocable.

 

Challenges regarding compensations for reparation of damages caused during the awarding procedure can be submitted by separate action with the tribunal in the jurisdiction of which the contracting authority is headquartered. Any interested person may request damages, compensations or indemnification of any type, grounding its claims on the breach by the contracting authority of the legal provisions, under the following conditions:

(i) if the damages are caused by an act of the contracting authority, only after the act was annulled or remedies were adopted;

(ii) if damages representing the costs for preparing the tender or participating in the procedure are requested, than it must be proved that the chance to win the contract was real and it was lost due to an infringement of the PPL.

 

5.2       CAN REMEDIES/ENFORCEMENT BE SOUGHT IN OTHER TYPES OF PROCEEDINGS OR APPLICATIONS OUTSIDE THE LEGISLATION?

 

Other than the remedies within the applicable European and national PPL there are in principle no other types of proceedings or applications outside the G.E.O no 34/2006 providing remedies/ enforcement possibilities with regard to public procurement procedures.

 

5.3       BEFORE WHICH BODY OR BODIES CAN REMEDIES/ENFORCEMENT BE SOUGHT?

 

Besides the bodies mentioned in section 5.1 above, the National Authority for Regulating and Monitoring of Public Procurement (NARMPP) has a supervising activity in the public procurement field. Thus, it ascertains the contraventions and it enforces these sanctions provided by GEO no. 34/2006. The sanctions consist in fines applied to contracting authorities that range from RON 20,000 to RON 100,000, depending on the offence. These amounts entirely become income to the state budget.

 

Not only that NARMPP can initiate the ex post control ex officio, but any person has the right to notify the authority with regard to the infringement of the PPL.

 

5.4  WHAT ARE THE LIMITATION PERIODS FOR APPLYING FOR REMEDIES/ENFORCEMENT?

 

The challenges can be submitted with NCSC within 10 days, respectively 5 days from the day following the acknowledgment of an act of the contracting authority deemed illegal, if the estimated value of the contract to be awarded is equal to or higher, respectively lower, than the thresholds provided for publication of a contract notice in OJEU. If the challenge concerns the tender documentation published in the ESPP, the date of acknowledgement is the date of publication of tender documentation.

 

The appeals against the NCSC decisions have to be submitted with the competent court of appeal within 10 days as of the communication date of the decision.

 

Challenges regarding compensations for reparation of damages caused during the awarding procedure can be submitted within the general prescription period of 3 years.

 

The application of sanctions by NARMPP is prescribed within 36 months from the date of the offence.

 

5.5       WHAT REMEDIES ARE AVAILABLE AFTER CONTRACT SIGNATURE?

 

The challenges concerning the execution, the nullity, cancellation, resolution, termination or unilateral termination of public contracts are settled in the first instance by the tribunal in the jurisdiction of which the contracting authority is headquartered.

 

The PPL provides for the absolute or relative nullity of the public procurement contracts when: (i) the contracts covered by the PPL are concluded before the waiting periods of 11 or 6 days (depending on the estimated value of the contract) as of the date of transmission of the communication on the outcome of the procedure; (ii) the contracts concluded before receiving the decision of NCSC, when a challenge has been filed against the awarding procedure; (iii) the contracts concluded in breach of the NCSC decisions; (iv) the contractor employs in order to fulfil the public contract, natural or legal persons who were involved in the process of verification/evaluation of applications/tenders submitted, within a period of at least 12 months from the conclusion of the contract.

 

After the conclusion of the contract any person that considers his own rights/legitimate interest damaged may submit a request for cancellation of the contract before the competent court under common law. The court declares the contract null and void if one of the hypotheses described under G.E.O no. 34/2006 occur, such as: (i) the contracting authority awarded the contract without complying with the obligations relating to the publication of a contract notice/ participation invitation as provided by the emergency ordinance; (ii) the provisions regarding the awarding procedure were violated, if this violation deprived the interested economic operator of the opportunity to submit an appeal before the conclusion of the contract, if such a breach is combined with the violation of other legal provisions in public procurement filed, if the latter violation affected the chances of the interested economic operator to obtain the contract.

 

However, if the court believes that, in the above mentioned situations, imperative reasons of general interest require the maintenance of the effects of the contract, it shall order, instead, alternative sanctions, as follows: (i) limitation of the effects of the contract, by reducing its execution period; and/or (ii) the application of a fine to the contracting authority of 2% – 15% of the value of the contract.

 

To the extent that an economic operator did not file an appeal in this regard, the NARMPP has the right to request the Bucharest Court of Appeal, within the general prescription term of 3 years, the ascertainment of the absolute nullity of the contracts for the reasons mentioned above, as well as other reasons, such as: (i) the contract was concluded without observing the minimum requirements of the technical specifications or, although observed, the contract was concluded in less favourable conditions than the ones set out in the technical and/or financial proposal/s of the winning tender; (ii) the contract was signed in violation of certain provisions regarding conflict of interests; (iii) failure to comply with/ modification of the qualification and selection criteria and / or of the evaluation factors provided in the call for tenders / contract notice; (iv) an amendment of the contract that has resulted in lowering the benefits and, if the case, the criteria that led to the declaration as successful of the tender. The decision of the Bucharest Court of Appeal may be appealed within 15 days since the date of the communication, before the High Court of Cassation and Justice.

 

5.6       WHAT IS THE LIKELY TIMESCALE IF AN APPLICATION FOR REMEDIES/ENFORCEMENT IS MADE?

 

According to GEO no. 34/2006, the NCSC has the obligation to solve the challenge in no more than 20 days from the receipt of the public procurement documentation from the contracting authority or within 10 days in case of an exception occurs, which prevents an analysis of the substance of the challenge. However, in duly justified reasons, the original term can be extended only once by 10 additional days. In general, the challenges are solved within 3 to 6 weeks as of the date the complaint is filed, depending on its complexity.

 

Regarding the complaints filed against the NCSC decisions with the competent courts of appeal, they are solved within an average timescale of 1-2 months.

 

5.7       IS THERE A CULTURE OF ENFORCEMENT EITHER BY PUBLIC OR PRIVATE BODIES?

 

Between 2006 and 2010, the number of challenges filed with NCSC has increased significantly, year after year, so that 7867 complaints were filed in 2010. However, in 2011, the number of complaints decreased by approximately 20%, to 6293, especially due to the legislative change regarding the retention of a part of the participation guarantee when the challenge is rejected by NCSC. Approximately 33% of the challenges filed with NCSC in 2011 were solved in favor of the economic operators.

 

As regards the enforcement of the NCSC decisions, mention should be made that the decision through which the council cancels entirely or partially the appealed act is mandatory for the contracting authority. Failure to comply with the council’s decision within the time limit established by NCSC leads to the following sactions: (i) the manager of the unit which has not made all necessary arrangements for carrying out the Council’s decision or the liable person might pay a fine for each day of delay, consisting in 20% of the monthly minimum economy wage, at the request of the interested party; (ii) the responsible legal or natural persons might pay a fine between RON 40,000 and RON 80,000, imposed by NARMPP.

5.8       WHAT ARE THE LEADING EXAMPLES OF CASES IN WHICH REMEDIES/ENFORCEMENT MEASURES HAVE BEEN OBTAINED?

 

One of the leading examples of cases in which remedies/enforcement measures have been obtained is the success obtained afore the NCSC and the Bucharest Court of Appeal for the construction company Mochlos S.A. VASS Lawyers thus obtained for its client the cancellation of successive decisions to exclude the tenderer from a procedure for awarding an infrastructure works contract of national interest, with an estimated value of over 140 million RON. The works contract was concluded in August 2012.

 

5.9       WHAT MITIGATION MEASURES, IF ANY, ARE AVAILABLE TO CONTRACTING AUTHORITIES?

 

Before addressing the NCSC, an injured person may notify the contracting authority regarding the alleged infringement of the PPL and its intention to notify the NCSC. The notification does not suspendde jure the awarding procedure. After receiving such a notification, the contracting authority may take any action that it considers necessary in order to remedy the alleged infringement, such as the suspension of the awarding procedure or the revocation of a document issued in that proceeding.

 

Furthermore, after receiving a complaint, the contracting authority has the right to take mitigation measures, following that complaint. Any such measure must be communicated to the complainant, to the other economic operators involved in the awarding procedure and to the Council, no later than one business day from the date when the measure was adopted.

 

6          CHANGES DURING A PROCEDURE AND AFTER A PROCEDURE

 

6.1       DOES THE LEGISLATION GOVERN CHANGES TO CONTRACT SPECIFICATIONS, CHANGES TO THE TIMETABLE, CHANGES TO CONTRACT CONDITIONS (INCLUDING EXTENSIONS) PRE-CONTRACT SIGNATURE?  IF NOT, WHAT ARE THE UNDERLYING PRINCIPLES GOVERNING THESE ISSUES?

 

The PPL provides for certain rules regarding changes of the tender documentation during the award procedure, such as: (i) the award criterion and the evaluation factors mentioned in the contract notice and in the tender documentation cannot be changed during the procedure; (ii) no modification and / or addition to the qualification and selection criteria specified in the contract notice and in the tender documentation can be operated, except for changes ordered by decision of NCSC; (iii) when the extension of the deadline for submitting the tenders becomes necessary, an errata to the contract notice has to be published at least 3 days before the initially announced deadline; (iv) if the  tender  documentation is published in the ESPP, the contracting authority must publish any modifications brought to it by creating a new electronic file with direct and unrestricted access, similar to the initial file; (v) the tenderers may submit, within the tenders, proposals to amend the contract clauses from the tender documentation, but if the proposals are obviously disadvantageous to the contracting authority and the tenderer does not give up on these amendments, even though asked to, the tenders will be considered non-conformant.

 

Certainly, the contracting authorities may amend the tender documentation, within the limits imposed by PPL, exclusively before the tenders submission deadline.

 

6.2       TO WHAT EXTENT ARE CHANGES PERMITTED POST-CONTRACT SIGNATURE?

 

Post-contract signature, changes to a public procurement contract are permitted, to the extent that they do not represent a substantial change of the contract, in accordance with the ECJ case law. If a contract is amended by lowering the benefits and, if the case, the criteria that led to the declaration as successful of the tender, NARMPP may ask in court the annulment of the contract.

 

Even though the PPL does not expressly regulate the changes of the public procurement contract, specific provisions are relevant for the performance of the public procurement contract.

 

Thus, according to the provisions of G.E.O no. 34/2006, in a public procurement contract only the assignment of receivables arising from that contract is allowed, obligations remaining in charge of the contracting parties as stipulated and initially assumed.

 

Moreover, the replacement of the subcontractors nominated in the tender during the execution of the contract, can be made provided that two cumulative conditions are met: (i) the contracting authority expresses its agreement in this regard and (ii) the replacement of these shall not lead to the modification of the initial technical or financial proposals.

 

Detailed rules are also specified for the adjustment of the contract price. The PPL expressly regulates the situations in which the price can be adjusted when this possibility was mentioned within the tender documentation, as well as in the contract. There are also two exceptional cases in which the price can be adjusted even if no such mention was made in the documentation (e.g. unforeseeable circumstances independent of the will of the parties).

 

The legal provisions regarding the negotiated procedure without prior publication of a contract notice are also relevant for contract amendments. In this regard, the GEO no. 34/2006 provides strict conditions that have to be met cumulatively for the purchase of works and services that are not included in the initial contract in the following situations: (i) when, due to unforeseen circumstances, they have become necessary for the  fulfilment of the contract in question; (ii) when such option was mentioned in the contract notice.

 

Last, but not least, it is important to underline that any modification of the public procurement contract shall not lead to the infringement of the public procurement principles of transparency, non-discrimination and equal treatment.

 

7          PRIVATISATIONS AND PPPS

 

7.1       ARE THERE SPECIAL RULES IN RELATION TO PRIVATISATIONS AND WHAT ARE THE PRINCIPAL ISSUES THAT ARISE IN RELATION TO THEM?

 

The privatisations do not fall under the scope of the public procurement legal provisions.

 

7.2       ARE THERE SPECIAL RULES IN RELATION TO PPPS AND WHAT ARE THE PRINCIPAL ISSUES THAT ARISE IN RELATION TO THEM?

 

Law no. 178/2010 is the legislative act establishing public-private partnership in Romania and it has resulted from an increasingly intense need of such a contractual formula for institutional PPPs.

 

PPP arrangements are aimed at designing, financing, construction, rehabilitation, modernization, operation, maintenance, development and transfer of a public good or service, as applicable. The implementing rules of Law no. 178/2010 define public-private partnership as “an economic mechanism of association of two partners, the public authority and the private investor in order to realize, through public-private partnership project, a public good or a public service”.

 

At present, the most serious problem consists in the lack of an interface within the ESPP for publishing selection notices, making the PPP arrangements impossible to initiate. Thus, even though Romania has an IPPP legislation in force since 2010, no important projects were yet initiated under this legislation.

 

8          THE FUTURE

 

8.1       ARE THERE ANY PROPOSALS TO CHANGE THE LAW AND IF SO WHAT IS THE TIMESCALE FOR THESE AND WHAT IS THEIR LIKELY IMPACT?

 

In 2012, NARMPP established the National Consultative Committee for Public Procurement, within which measures for improvement of the PPL have been debated.  Thus, in October 2012, NARMPP submitted with the Romanian Government a concrete proposal for a government emergency ordinance that will significantly amend the GEO no. 34/2006. Furthermore, upon amending GEO no. 34/2006, the Government Decision no. 925/2006 for approving the application norms of GEO no. 34/2006 will most probably also be modified.

 

On the long term, the president of NARMPP also announced in June 2012 that the institution envisages a codification of the PPL, thus bringing all pieces of relevant legislation within one Public Procurement Code. However, given the new European reform proposals on public procurement, such a codification of the public procurement rules will be initiated only upon the adoption of the new directives.

 

 

Publicat de International Comparative Legal Guide in volumul “Public Procurement 2013 – A practical cross-border insight into public procurement”.
Autori: echipa VASS Lawyers, octombrie 2012.

 

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