Last updated: 30 December 2021
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- Teodora KOLETSIS
Ms. KOLETSIS, we know that you are Partner lawyer at Gruia Dufaut Law Firm and that you coordinate the advisory and litigation department specialised in public procurement, and in this capacity, we would like you to give our readers your perspective on the development of public procurement and the main challenges faced by the actors of this specific field?
Teodora KOLETSIS : Despite the Covid-19 pandemic putting pressure on companies in different ways and at different levels, public procurement didn’t lack certain effervescence. The number of cases entrusted by our clients to GRUIA DUFAUT law firm has been on the rise this last year, but we are still waiting for improvement in the handling of the process by the public authorities.
Public procurement shows to what extent a State is rightfully governed, as it regulates how the public money is spent by granting free access to economic operators to this process.
The national public procurement system has been subject to an ongoing process of legislative change, which results in frequent legislation change and constantly changing the rules of the game while playing it, and this entails a certain level of legal uncertainty.
But legal uncertainty is not really the worst part of it, what is even worse is a persistent, obvious incapacity of the contracting authorities to carry out effective and fully transparent awarding procedures. Legal provisions are still very often violated, contracts specifications are very often tailored to suit a little bit too perfectly certain bidders entailing challenging, resuming or annulment of public procurement calls, so that many major investments remain a Fata Morgana.
Although the awarding documents are thoroughly checked by the authority, such checks are usually limited to the information in the data sheet without considering the contractual clauses, which are often discriminatory or contain subjective technical specifications. All these shortcomings determine many serious companies to recede from submitting an offer, qualifying the attempt to participate in tenders a waste of time and money.
Finally, the lack of transparency in public procurement on the contracting authorities’ side remains a real issue for Romania. This was in fact mentioned also in the report of the European commission from 2020 on the rule of law.
There is so much room for improvement in public procurement, on both the contracting authorities and on the economic operators’ side if the authorities had published and debated not only the annual public procurement plan but also the specifications for major planned procurement, in order to receive valuable feedback or to encourage competition for the best solutions.
At the same time, stage successes do exist. We are glad that GRUIA DUFAUT team managed to convince the NCSC to judge the award documents “in fairness”, in order to allow as many operators as possible to take part in the proceedings, in full compliance with the principle of equal treatment. These solutions are, of course, determined, on the one hand, by the need to align with European rules, and, on the other hand, by the need to adjust to the economic realities of the country and to clarify the legal provisions and the award documents.
What have been the trends in the procurement sector since the beginning of the pandemic until now and which has been the most predominant type of task your clients entrusted you during this period?
Teodora KOLETSIS : As business lawyers, we advise almost exclusively domestic and foreign private companies, providing counsel and legal assistance, both in the bidding phase and the award procedure, and in the execution of the public procurement contract or litigation.
The missions entrusted follow the general trend in the field, so depending on the nature of the procurement procedure used for the works or the provision of services, the most numerous were the open tenders.
On the other hand, as in previous years, we mostly advised on litigious aspects of public procurement procedures, whether we are talking about appeals to the NCSC, or actions before the courts.
Which has been, in your opinion, the challenge in public procurement procedures from a legal perspective lately?
Teodora KOLETSIS : Well, we surely don’t lack challenges, but I would like to highlight a real issue that our clients are facing, which is proving similar experience gained through several subsequent contracts actually executed under a framework agreement.
In fact, contracting authorities, at their discretion and according to their specific needs (staff shortage for reception of services, budgetary constraints, etc.) use to fragment a framework agreement into many subsequent contracts.
Excessive fragmentation of the value of the framework agreement results in an impossibility to prove, in other procedures, the existence of similar experience of the operator from a limited number of contracts, for example 3-5 contracts. For example, there are cases where an operator has executed 15 subsequent contracts simultaneously within about 10 days. The contracting authorities continue to use in the data sheet the requirement to prove similar experience from a limited number of contracts executed in the past with a limited value of "x" lei. Thus, the operator, although having actual similar experience in the same kind of products / services / works, cannot bring this experience as evidence in the new procedure, for the sole reason of excessive fragmentation of the framework agreement in too many subsequent contracts. The best solution to correct this flaw in practice is to formulate the requirement in the data sheet in the sense that “the bidder must demonstrate that during the last 3 years it has performed (completed) services and / or works / supplied similar products cumulatively amounting to at least ... "x" lei ".
Do you think that public procurement shall resume the same dynamics as before the outbreak of the COVID-19 pandemic?
Teodora KOLETSIS : We expect to see volumes mounting in public procurement, if for no other reason at least because Romania is granted about 30 billion euros funding for the next five years for projects under PNRR. And, of course, let’s not forget local resources and European development funds.
But despite the raise in volume of public procurement being predictable, how long it is going to take to see improvement of the legislative framework remains unclear. One area that needs urgent improvement is the simplification of legislation. There are many companies that have publicly complained that for similar tenders, in Romania the tenders’ documents count 1,000 pages, while abroad no more than 150 pages. In fact, even the authorities admit that public procurement proceedings need to become smoother and that a means to this end would be going digital and interconnecting the databases of several operators in Romania in order to cut on the number of documents submitted in tenders and to speed up the checking process. But words are useless unless put into practice...
Public procurement legislation has undergone significant changes during the past year. Which have been the most important legislative changes in the field of public procurement?
Teodora KOLETSIS : I would not speak of what happened in 2020 without first mentioning GD no. 119/2019 regulating, among other, the organization of centralized procurement procedures, which although enacted since 2018, has been unenforceable before because the GEO no. 46/2018 lacked Application Norms. The GEO no. 25 of 31 March 2021 redefined, in accordance with the relevant European guidelines (art. 25 of Directive 2014/24 / EU), the general rules regarding the participation of economic operators from third countries in the award procedures in Romania.
Reconsidering the definition of "economic operator" entitled to participate in award procedures, the law bans the participation of economic operators from some third countries, such as China, which, according to the legislator, provide low guarantees of compliance with certain requirements, such as quality standards, environment and sustainable development, requirements related to working conditions and social protection, competition policies.
This measure, inspired by Brussels (see also European Commission Communication No C (2019) 5494 of 24.07.2019 on guidelines for the participation of third country tenderers and goods in the EU public procurement market) was enacted in the context of several proceedings having been started and expected to be launched in key areas in Romania, within some major investment projects financed by structural and investment funds. The same ordinance also came with several changes intended to reduce bureaucracy a bit and shorten several time frames that unnecessarily lengthened the tender procedure.
Among these changes, I would mention the measure to eliminate the obligation for the winning economic operators to produce tax certificates for all working points (and in practice an operator can have hundreds of such working points).
Personally, I am glad that the legislator retained the arguments that I personally argued in favour of before ANAP, within a project supported by members of the French Chamber of Commerce and Industry in Romania (CCIFER) aimed at eliminating this provision, which significantly hampered the procurement procedure.
Thus, based on the proposal made by us, ANAP understood to involve in amending the law, in the sense that economic operators participating in award procedures are bound to produce a tax certificate only for the headquarters, while for the secondary offices or working points a sworn statement on compliance with tax obligations, namely payment of taxes, duties and contributions due to the consolidated general budget, is sufficient.
The normative act of August 2021 also comes with other measures that I consider beneficial and which aim to less time consuming award procedures and evaluation of tenders processes. Thus, the previous 80-day timeframe for drawing up the procedure report / interim report was replaced by different, shorter timeframes, tailored to suit different types of procedures.
Also, the deadline for submitting documents in the case of simplified procedures was set at 5 days, not open to extension, as it was almost systematically the case before, and the deadline for publishing the decision to cancel the procedure for awarding the contract / framework agreement was also shortened from three days to one day.
There are also new deadlines when it comes to resolving disputes meant to expedite this procedure. Thus, the contracting authority has 10 working days (the previous 20-working day time frame is reduced by half) to annul an act / issue a deed / adopt the necessary measures to restore lawfulness further to a decision issued by NCSC / the court.
At the same time, the contracting authority is now obliged to conclude the public procurement contract / framework agreement with the winning bidder following a NCSC decision to maintain the outcome of the award procedure, even if this decision was challenged and the no final decision is rendered in the file.
Finally, the same ordinance also amended the amount of the deposit to be lodged by the economic operator and which is now determined in accordance with the stage of the procedure in which the dispute occurs, i.e. 2% of the estimated value of the contract, if it is equal to or greater than the thresholds requiring publicity of the notice in the OJEU, but not more than 220,000 lei, if the challenge was filed before the opening of tenders, or 2% of the estimated value of the contract, if it equals or is greater than the value thresholds required for publicity of the notice in the OJEU, but not more than 2 million lei, if the challenge was filed after the opening of tenders.
So here are some changes that will have a short-term impact and could improve the award process. The condition is, however, that the law be fair and uniformly applied. The process of legislative changes in this area remains open, unblocking projects and conducting transparent public procurement procedures without restricting competition being at stake.
Interview for Public Procurement Magazine, published in No 163/December 2021 .