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A guidance for public procurement procedures in Germany in times of COVID-19

April 7th, 2020, Source> CMS Law-Now, Authors: Dr. Jakob Steiff LL.M. (Edinburgh), Dr. Tobias Sdunzig

In the course of the current pandemic various measures have been adopted in Germany both on federal and state level to enable public purchasers to procure services to help contain the pandemic and facilitate the public administration’s ability to respond quickly.

1. Ongoing procurement procedures are not automatically suspended

The German parliament has not passed any law or issued any decree suspending deadlines within public procurement procedures. Thus, deadlines such as the deadline for submitting offers, continue to apply. There is also no reliable information on whether contracting authorities have generally suspended deadlines on their own initiative. However, if a contracting authority has not prolonged a deadline, bidders can request an extension. It is conceivable and also permissible that contracting authorities may extend deadlines in response to the current situation, especially if bidders cannot collect all necessary documents because of external reasons or restrictions imposed by law.

2. Extended use of simplified procurement procedures (direct award or negotiated procedure without notification) is allowed

The Federal Ministry of Economics and Energy (BMWi) issued the decree “on the application of public procurement law in connection with the procurement of services to contain the spread of the SARS-CoV-2″ on March 19, 2020, which came into force with immediate effect. The decree contains various clarifications and recommendations for action with regard to urgent procurement. It serves as an interpretation guideline for contracting authorities as to whether certain simplified procedures and accelerations regulated under the Public Procurement Ordinance (VgV) are available due to the current pandemic. The same applies to contracts awarded in the construction sector. At least for now, Germany is not planning any legislative changes to the relevant legal framework for the award of services, supplies and construction work above the EU-thresholds.

With regard to simplified procurement procedures, the BMWi has clarified that in the current situation of the spreading, the negotiated procedure without a call for competition can be used to procure services quickly and efficiently. Normally before such a procedure may be used, amongst other things, there has to be an unforeseen event and extremely urgent and compelling reasons for its use. These are now to be treated as fulfilled for the purchase of services intended to contain and deal with the corona pandemic in the short term or to maintain and ensure the operation of the public administration.

The emergency procedure may be used, amongst others, for the following:

  • remedies and aids such as disinfectants, disposable gloves, masks, protective gowns, dressing materials, swabs, abdominal cloths,
  • medical equipment such as ventilators,
  • services necessary during the crisis (such as mobile IT equipment, e.g. for setting up home office workstations, video conferencing technology and IT line capacities).

Contracting authorities are recommended not to overstretch the scope of the decree and to properly document both the fulfillment of the high requirements for and the process of the simplified procurement procedure used.

For contracts below the EU-thresholds for supplies and services (currently EUR 214,000), the BMWi recommends in its decree the possibility of awarding contracts in negotiation procedures without a call for competition pursuant to the Sub-Threshold Award Regulation (UVgO). Furthermore, several federal states have issued additional legislative acts for sub-threshold awards, which greatly facilitate the application of simplified and accelerated procedures for services to contain the pandemic. For this purpose, the respective public procurement laws of the federal states for supplies and services below the EU-thresholds were partly amended – for a limited period – (e.g. in Hamburg, Bavaria, Rhineland-Palatinate, Lower Saxony) or even suspended (North Rhine-Westphalia). Thus, for example, the value limits for simplified procurement procedures have been changed by the federal states for the procurement of goods and services required due to the Corona crisis, as follows:

  • Hamburg: value limit for negotiated contracts under the UVgO raised to the EU-threshold for supplies and services (currently EUR 214,000) (limited until 31.12.2020);
  • Bavaria: value limit for direct awards under the UVgO raised to EUR 25,000, for negotiated contracts with or without a call for competition or for limited tendering without a call for competition raised to the EU-threshold for supplies and services (currently EUR 214,000) (limited until 30.06.2020);
  • Rhineland-Palatinate: direct awards up to the EU-threshold for supplies and services (currently EUR 214,000) are possible without any further restrictions; the guidelines of efficiency and economy remain to be observed (limited until 30.06.2020);
  • Lower Saxony: value limit for direct awards raised to EUR 20,000 (limited until 31.05.2020);
  • North Rhine-Westphalia: application of UVgO suspended until 30.06.2020; the guidelines of efficiency and economy remain to be observed.

3. Taking special measures and extending the use of electronic means during a procurement procedure

If a contracting authority has admissibly chosen a negotiated procedure without a call for competition for the procurement of goods and services required due to the Corona crisis the BMWi clarifies in its decree that the authority may be entitled to shorten the minimum deadlines for submitting an offer – depending on the individual case – even up to 0 days (ad hoc procurements). The same applies to respective contracts below the EU-thresholds. On the other hand, it is also conceivable and permissible that contracting authorities may extend deadlines in response to the current situation, e.g. the extension of deadlines for submitting an offer in order to allow bidders more time to submit the tender documents or the extension or postponement of performance deadlines.

In addition, the BMWi suggests that contracting authorities may admissibly invite only one undertaking to submit a tender within the negotiated procedure without a call for competition, e.g. if only one undertaking will be able to fulfill the contract under the technical and time constraints imposed by imperative urgency.

It is conceivable that physical negotiations or presentations within a negotiated procedure – whether or not it is forthcoming or ongoing – could be replaced by using electronic means (digital/video conferences), provided that the principles of equal treatment, non-discrimination and transparency are applied. Thus, it is essential that the same conditions apply to all bidders.

4. No automatic suspension of certain deadlines for remedies

The current deadlines for remedies in public procurement procedures set out by German law continue to apply. Accordingly, a bidder must file a complaint against the tender documents and the award decision to the contracting authority within 10 days after the reason for the complaint has become known. An application for review (Nachprüfungsantrag) must be filed before the public procurement tribunals within 15 days after dismissal of the relevant complaint by the contracting authority.

5. Modifications of existing contracts in the context of COVID-19

The BMWi points out in its decree that under Section 132 (2) of the Act against Restraints of Competition (GWB) it is possible to extend existing contracts with the agreement of the contracting parties and to increase their value without conducting a new award procedure. In order to cope with short-term procurement needs, an amendment, extension and/or expansion of the contract pursuant to Section 132 (2) sentence 1 no. 3 GWB could be considered.

The BMWi clarifies that the legal precondition of an unforeseeable event for the contracting authority is satisfied in respect the current COVID-19 pandemic. The further requirement that there is no change in the overall nature of the contract would be fulfilled in cases in which only the delivery quantities of the agreed service are increased or an existing delivery contract for certain medical aids is supplemented by further objects which have the same or a similar purpose. The extension limit of an existing contract permitted under Section 132 (2) sentence 1 no. 3 GWB is reached if the value of the original contract is increased by more than 50 % of the value of the original contract. If the abovementioned requirements are fulfilled, a contractual extension is lawful.

 

 

 

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