European Union, especially now after Brexit, has to answer more and more questions about its near future and one of the painful issue raised is the one regarding the contribution to the European budget and how are these money spend for developing solutions to get us out from the crisis we entered in 2009. The national actors started questioning the standardization of the public procurement at European level, some of them considering that he new Directives issued in 2014 may block the process of restarting the European economy. On the other hand others welcomed the new lines presented by the European acts considering some of the provisions may lead to more transparency and competition which will result in better public investments. Which of the two opinions are right only the near future will tell us. We can only analyze the last months and realize that the majority of Member States, but especially east-European countries have real problems in applying the implemented Directives and some still didn’t come with any national legislation.
Among of the first seven member states transposing the Directives was Romania, who, even under the pressure of some political changes, succeeded to respect the term and adopted four national normative acts, after they were under the fire of a public debate for more than a year. These normative acts are: Law regarding the public procurement, Law regarding the sectorial public procurement, Law regarding the works and service concessions, Law regarding corrective mechanisms and contestation procedure in public procurement, that entered into force on 26 may 2016.
The new legislative package brings significant substantive and procedural changes to a complex and painful procurement process in Romania. All this in the context of entering the second period of accession of structural funds after some years in which the statistics show a weak allocation for the main programmes, especially big infrastructure and environment, from where the construction industry is expecting the main income.
Romanian Society of Construction Law tries to sustain and guide the process of implementation of the European Directives by working with all national and European institutions on the interpretation of the new rules by offering analyses and advices to all actors involved in the process of public procurement of works, products or services from the construction sector.
We consider that, maybe one of the most important change brought by the EU rules is the principle “value for the money” defined as “the best mix of quality and effectiveness for the least outlay over the period of use of the goods or services bought”, provision transposed by the Romanian Government under the pressure of the negative effects of the old provisions which stated the “lower price” or the “most economically advantageous offer” as the awarding criteria raised various interpretations and blocked numerous procurement procedures. So, the new legislation indicates the contract will take into account the criteria which is based either on the final cost of the entire life of project or on „best value for money”, including quality aspects, environmental and/or social, but we have to say that after an analysis of the last months, the public authorities are still under the governance of the lowest price and the fear of future sanctions makes them depart from Directives ‘goals. We are just hopping the near future jurisprudence and doctrine to lead to a change of culture of both the contracting authorities and controlling institutions and the Romanian Society of Construction Law is sustaining a long term analysis of the project with the purpose of seeing the real final costs.
Another important change brought by the new pieces of legislation regards the thresholds to be observed in public procurement procedures. Thus, the law will apply for public procurement contracts / framework agreements whose value, excluding VAT, is equal to or greater than: aprox. 5 million euro for public contracts/framework agreements for works and 130.000 euro for public contracts/framework agreements for products and services. The contracting authority has the right to directly purchase products or services where the estimated value of the acquisition, net of VAT, is less than 30.000 euro or works, where the estimated value of the acquisition, net of VAT, is less than 100.000 euro.
To avoid delay in the procurement procedures and bail was introduced. Thus, request suspension of the award procedure or performance of the contract can be made only in justified cases and by avoiding an imminent damage, but conditioned by the issue of a warranty which value will be calculated based on the estimated value of public procurement contract. The court may suspend the awarding procedures if the plaintiff secures the payment of a bail in amount of 2% of the contract value. The consortium members may now individually submit challenges to the National Council for Solving Complaints, an independent body with administrative-judicial activity seated in Bucharest, designed to resolve public procurement disputes. The plaintiff must deposit a guarantee of 1% of the value of the contract.
The new legislation provides two new awarding procedures: the innovation partnership, which is used for innovative solutions and the simplified procedure, used for the contracts with a reduced value. The national institution which supervises the entire public procurement process had to intervene in the period following the implementation of the new legislative package to sanction public authorities for mistaking the new simplified procedure with the direct purchase of products and services described above and it can be noticed that the number of the tenders’ voidance is declining so we may conclude that the new procedure offered to us by the Directives starts to be understood.
An awaited legislative instrument was the amending of the contract, which under the old light of the law was very difficult and questionable, but the new provisions indicate clearly that the contract can be amended during the course of its execution without a new awarding procedure. The amendments can refer to the value of the agreement or other aspects, including the change of the contractor. Thus, the change of the contractor can be made if this option was provided in the agreement or upon early termination of the agreement the existing contractor has assigned its contracts with sub-contractors to the awarding authority. Also, the new provisions regulate that if the concession agreement provides for the option of the investors to assign the agreement to a new operator, such new operator will have to fulfill the qualification and selection criteria provided by the awarding documentation.
The above mention, next to the text by which permits the contracting authority to perform direct payments to subcontractors we consider will offer the investors a great chance to save the projects, our last years’ experience being of many important public projects blocked and under litigation or arbitration mainly to the impossibility of the contracting parties to continue the execution of the works with some of the important and capable subcontractors after the main contractors entered insolvency.
This article intended to offer an immediate perspective of how one of Member States mostly affected by the new public procurement European legislation is dealing with the new principles of projecting and spending public European/national budgets. The Romanian Society of Construction Law will continue to offer assistance to all actors involved in the public procurement with the goal to create a better construction legal environment. Among RSCL`s objectives we can name supporting arbitration in constructions field, consultancy with people interested in construction law and related areas, editing specialized periodical publications, organizing preparation courses, seminars, conferences and public debates, initiating, promoting and developing any actions that support the above mentioned field, developing own programs and in partnership with public authorities from Romania and abroad.