The beginning of 2021 marked the long-announced entry into force of the amended Public Procurement Law. What new obligations and rights did this bring for contracting authorities and contractors?
A new category of procurement
One of the most significant changes was the definition of a new type of procurement. From 2021, procurements with a value of at least PLN 50,000 and no more than PLN 130,000 became so-called low-value procurements. The value does not include value added tax (VAT) and applies only to one-off purchases.
Introducing this long-awaited definition significantly simplified the existing procedures and, as a result, streamlined the procurement process.
A new list of prohibited contract clauses
A significant and particularly beneficial change for contractors was the express definition of prohibited contract terms. Under the new rules, a contract may not provide for:
- The contractor’s liability for delay where that liability is not justified by the circumstances or the scope of the procurement.
- Contractual penalties for contractor conduct that is in no way connected with the subject matter or performance of the contract.
- The contractor’s liability for circumstances for which the contracting authority is solely responsible.
- The contracting authority’s right to reduce the scope of the procurement without specifying a minimum value or quantity of the parties’ performance.
- If a contract contains any of the above clauses, an appeal may be brought before the National Chamber of Commerce.
Efficiency as a new procurement principle
The new law also introduced principles intended to make procurement proceedings more efficient.
One is the efficiency principle, under which an award should provide the best quality and achieve the best results, including, where possible, social, environmental, and economic outcomes.
The new rule encourages a broader interpretation of the purpose of the procedure and evaluation of submitted bids. The intention is to select the best bids, not merely the cheapest.
Procurement specifications, not only essential terms
The latest amendment emphasizes the importance of procurement documents and all their components. It clarifies the terminology by replacing the previously used phrase with “specification of procurement conditions.” Although the change may not stand out at first glance, its aim is to bring all procedural requirements for participation and conduct of the proceedings together in one document. In theory, this should make the process easier to follow and clearer.
Electronic qualified signatures
The new Public Procurement Law also reflects the widespread use of new technologies. It makes electronic form mandatory for procurement or tender proceedings whose value is equal to or above the relevant EU thresholds.
Applications to participate, contractors’ statements that they are not subject to exclusion, and statements that they meet the participation requirements or selection criteria must also be submitted exclusively in electronic form.
Electronic form is also essential for these statements in procurement or tender proceedings whose value is below the EU thresholds under discussion.
Changes to the permitted forms of bid security
Previously, bid security could be provided, for example, as a bank guarantee or a guarantee from a cooperative savings and credit union. When the amended Public Procurement Law entered into force, those forms of this type of “security deposit” ceased to be accepted.
The new rules list only the following permitted forms of bid security:
- Cash;
- Bank guarantees;
- Insurance guarantees;
- Guarantees issued by entities referred to in Article 6b(5)(2) of the Act establishing the Polish Agency for Enterprise Development (the so-called “guarantee fund”).
A new requirement: analysis of needs and requirements
To improve the efficiency of the public procurement system, public contracting authorities are now required to prepare an analysis of needs and requirements before starting procurement proceedings.
The analysis is intended to rely primarily on examining market capacity and all available options for carrying out the project. This preparation requirement applies directly to classic procurement with a value equal to or above the EU thresholds. The law allows the analysis to be omitted in some cases, including certain negotiated procedures or a negotiated procedure without prior publication.
Modernization plans and reality
The changes were intended to respond to businesses’ long-standing expectations of more efficient and transparent public procurement proceedings. However, voices have increasingly questioned whether the state was ready for the announced changes. The results of putting the planned reforms into practice would become clear over time.
In addition to the changes listed in this article, the law introduced many other, smaller but still important changes. If you have questions, contact our law firm.
