Act No. 40/2015 Coll., which amends Act No. 137/2006, on public procurement (hereinafter “PPA”) came into effect on 6 March 2015.

Among the main changes brought by the amendment is a repeal of the obligation to cancel a tender if only one bid is received or one bid remains, and the ability to continue the award procedure in this case. Further, evaluation criteria have been extended to include an assessment of the organisation, qualifications and experience of persons involved in the performance of the public contract. The amendment also introduces a number of minor changes, which will be detailed below.

1.      Tenders with only one bidder

Hitherto, the provisions of Section 71 and 84 of the PPA imposed an obligation on the contracting authority to cancel a tender if only one bid was received, or if only one bid remained after eliminating all other candidates. The amendment repeals this problematic provision without replacement, and therefore allows contracting authorities to continue the award procedure with only one candidate.

The paradox is that the current regulation had the ambition of increasing the competitiveness of bids and providing an incentive for contracting authorities to relax conditions for award procedures to open them up to a greater number of candidates; however, the situation led to the conclusion of cartel agreements for the sole purpose of ensuring the plurality of bids, or the creation of fictive second bids, just so the award procedure was not cancelled.

This amendment is therefore beneficial for both contracting authorities and economic operators, as, in practice, bids are often submitted by only one candidate in award procedures, especially in areas with limited competition, and such procedures then have to be cancelled and re-announced, which is time-consuming and administratively and financially demanding for both the contracting authority and the economic operator.

2.      Evaluation criteria

The evaluation criteria set out in Section 78 (4) have been newly extended to include the organisation, qualifications and experience of persons involved in the performance of the public contract, if these have a significant impact on its performance. According to the explanatory memorandum, this change is primarily aimed at contracts for so-called intellectual services and specialised artisans, which is understood to mean consultants, architects, project designers, restorers, etc. In terms of contracts for construction work, this criterion would only be applied, according to the explanatory memorandum, if combined with the above intellectual services.

It is tempting to define this new criterion as a subjective criterion, i.e. with no precise specification of required qualifications or experience. However, such a definition would place great demands on justification of the public contract by the contracting authority, especially in relation to the principle of equal treatment and non-discrimination. It will therefore be preferable to define it as an objective criterion, with a precise numerical expression of required experience, for example, in years of experience in the field, or the level of qualifications on a point scale.

The question of “significant impact on the performance of the public contract” is also at issue, i.e. how to define this and justify the use of this evaluation criterion, so the award procedure cannot be contested before the Office for the Protection of Competition (hereinafter “OPC”) on the grounds of its use.

The disadvantage of using this criterion is that it can also increase the contracting authority’s administrative burden, both in terms of the preparation of tender documentation and in the award procedure itself, where a greater number of requests for additional information or objections from candidates can be expected.

Despite this, however, the use of this evaluation criterion can be beneficial for the contracting authority, as the quality of provided services generally depends on the qualifications and experience of the people providing these services. An increase in the quality of services provided under such contracts can be expected, as candidates will be motivated to include their most experienced and qualified employees in the realisation team.

3.      Other changes

The amendment also affects conditions for the award of contracts in negotiated procedures without publication in the case of contracts for additional construction work (i.e. extra work). Hitherto, the law permitted the award of such work, if so required by objectively unforeseen circumstances. Therefore, if there was a need to award additional work due to, for example, an error in project documentation prepared by the authorised architect, the contracting authority could not award this additional work in a negotiated procedure without publication, as this error could have been objectively identified.

The amendment moderates this overly strict requirement and allows additional work to be awarded in cases where the need arises due to circumstances that could not have been foreseen by the contracting authority acting with due care. In the above example, therefore, it would be possible to award additional work, as the use of an authorised architect can undoubtedly be described as due care.

The amendment also increases the maximum amount of additional work that can be awarded from the original 20% of the price of the original contract to 30%. Contracting authorities thus have greater scope for awarding additional work.

Finally, the amendment also has a major impact on reviews of the contracting authority’s actions before the OPC, with a large number of changes in these proceedings. At random, these include, for example, the obligation to concurrently submit written evidence in electronic form with the motion to initiate proceedings, the ability to only submit motions by data message or in electronic form with a certified digital signature, and the inability to amend or supplement the motion following its submission in any way, as the Office will disregard any such changes.

4.      Conclusion

The amendment of the Public Procurement Act can be judged as beneficial for both the contracting authority and economic operators, with its main effect being to reduce the contracting authority’s administrative burden and eliminate the problematic situation in case of the submission of a bid by a single candidate.

The extension of evaluation criteria to include the organisation, qualifications and experience of employees is also beneficial, as the main criterion to date was the bid price, which did not always reflect the quality of the whole contract and realisation team. However, at the same time, the use of this criterion increases the contracting authority’s burden, as it places greater demands on justification of the public contract and will probably lead to an increase in the number of requests for additional information and objections from candidates. From a long-term perspective, however, its use should motivate candidates to put together the best qualified realisation team and lead to an improvement in the quality of contracts in general.

For more information, please contact our office’s partner, Mgr. Jiří Kučera, e-mail: jkucera@kuceralegal.cz ; tel.: +420604242241.