More appeals and greater judicial oversight over decisions by contracting authorities
The amendment of the Public Procurement Law which entered into force on 28 July 2016 opens up broader possibilities for protecting the interests of contractors in appellate proceedings before the National Appeal Chamber (KIO).
The amendment generally did not introduce many changes to the existing regulations. But apparently modest changes should improve the use of appellate measures available to contractors. This effect should be achieved primarily by a change in the list of grounds for appeal, the revised method for filing appeals electronically, and a new method for calculating the deadline for filing appeals.
The amendment also introduces other changes affecting legal protections for contractors, such as a revised scope of KIO review in aspects upheld by the contracting authority, but here we address only the changes affecting actions by the appellant contractor.
New grounds for appeal
The new regulations introducing additional grounds for challenging decisions by contracting authorities apply to contractors who are participating or plan to participate in procedures for award of public contracts in Poland valued below the EU thresholds. (Under the Council of Ministers’ regulation of 28 December 2015, the threshold requiring announcement of tenders in the EU Official Journal is generally EUR 135,000 for supplies and services and EUR 5,225,000 for construction works.) Despite this limitation, the change is significant, as the great majority of tenders in Poland fall within this category.
From 28 July 2016, contractors interested in procedures below the EU thresholds can also exercise the right to challenge decisions by the contracting authority involving the description of the subject of the procurement. The law now precisely distinguishes between the possibilities of an appeal connected with the specification of conditions for participating in the procedure and an appeal connected with specification of the subject of the procurement.
Prior law referred to “the description of the method of performing the evaluation of fulfilment of the conditions for participation in the procedure,” raising doubts among contractors who tried to rely on this provision to seek review of the description of the subject of the procurement. This provision was the subject of numerous rulings by the National Appeal Chamber, which held that it did not cover the description of the subject of the procurement but only the description of the conditions for participation in the procedure (rulings of 12 February 2015, KIO 172/15, and 19 June 2008, KIO/KU 2/08). Other measures provided for in the Public Procurement Law—such as the right to request clarification of the terms of reference or the right to notify the contracting authority of the unlawfulness of its decision—were not always sufficient, and it remained within the discretion of the contracting authority whether to make a relevant change to the description of the subject of the procurement.
In practice this made it impossible to challenge or effectively amend an erroneous description of the subject of the procurement. This often forced contractors to drop out of the proceedings, as uncertainty surrounding the subject of the contract could not be regarded as a normal contractual risk that bidders should assume.
Moreover, the new regulations permit bidders to challenge the decision by the contracting authority on selection of the most advantageous tender. This change will have a major impact on the legal situation of a bidder whose tender was not excluded but was also not selected, when it turns out that the contracting authority did not select the winning tender in compliance with the regulations.
Prior law did not permit any influence over the decision of the contracting authority if it improperly applied a criterion for evaluation of tenders, or failed to exclude a tender that did not meet the conditions for participation in the procedure. The practice for procurements above the EU thresholds shows that such instances are far from rare.
Thanks to these changes, procurements below the EU thresholds will be subject to more extensive judicial review, which in turn should ensure the proper award of contracts in compliance with principles of transparency, fair competition, and equal treatment of contractors. Moreover, the ability to challenge the selection of the winning tender should encourage contractors to prepare their tenders more carefully and encourage contracting authorities to evaluate them more carefully, regardless of the size of the contract.
For contractors, this is undoubtedly a positive and desired change. But contracting authorities will have to deal with prolonged tender proceedings and the need to conduct all actions with care, while the National Appeal Chamber will have to consider more appeals, regardless of their merits. Public institutions have time to plan and organise their work in this respect, as the new regulations do not apply to procedures already commenced. Only contractors who take part in procedures announced after entry into force of the amendment will be able to take advantage of the expanded appeal rights.
Realistic ability to file appeals electronically
As part of the change in the review provisions, the possibility has been introduced to use an electronic signature not only verified by a qualified certificate, but also verified by an equivalent means, such as a “trusted profile” under Poland’s e-PUAP system. (We discussed the need for this change in the article “Public tenders: How to calculate the period for filing an appeal?”) Because qualified secure signatures were not commonly used among potential contractors (both companies and individuals), the right to file an appeal electronically existed only on paper.
Obtaining a trusted profile on the e-PUAP system is free of charge and much easier than obtaining a qualified electronic signature, so this change will undoubtedly make it common to file appeals electronically. This should significantly expedite preparation and filing of an appeal, because the contractor will not have to factor in the time required for physical filing of the appeal (a major consideration particularly for contractors not from Warsaw) and will not be limited by the KIO working hours.
Deadlines for filing appeals
The amendment does not change the length of the appeal periods, but includes a provision specifying the manner of calculating periods under the Public Procurement Law. Under the new provision, if the end of a period to perform an action falls on a Saturday or a statutory non-working day, the deadline will be the next day following the non-working day or days. This means that if the period for filing an appeal falls on a Saturday, the deadline will be the following Monday.
The rules stated in the amended provisions reiterate those set forth in Regulation (EEC, Euratom) No 1182/71 of the Council of 3 June 1971 determining the rules applicable to periods, dates and time limits. This regulation applies directly in the Polish legal system, but nonetheless there was uncertainty how to apply the provisions of the Polish Civil Code when calculating time limits. Saturdays are not treated as a statutory non-working day, and thus in the absence of a secure signature appeals had to be filed on the Friday, during the office’s working hours (rulings of 18 March 2014, KIO 451/14, and 13 June 2012, KIO 1045/12).
The amendment eliminates any doubts surrounding calculation of the period for filing an appeal, to the contractor’s advantage and in line with Regulation 1182/71.
The changes in this respect will directly affect contractors and promote competition in public procurement. Expansion of the ability to challenge decisions by contracting authorities, both with respect to the subject of the decision and the time limit for taking such actions by contractors, will encourage careful compliance with the Public Procurement Law by contracting authorities, regardless of the scale of the procurement.
Serom Kim, Infrastructure, Transport, Public Procurement & Public-Private Partnership practices, Wardyński & Partners
