A change in subcontractors announced during a public tender

The contracting authority may require the contractor to identify its subcontractors in its offer. Then if the contractor wants to release the subcontractor or use a different subcontractor, it must assure that the conditions for participating in the proceeding are still met to an equal degree.

Under Art. 36b(2) of Poland’s Public Procurement Law, a contractor who relies on the resources of another entity to demonstrate fulfilment of the conditions for participation in the procurement procedure may give up the use of that entity as a subcontractor only if it assures that the new subcontractor or the general contractor by itself meets the same conditions to no less a degree than was required during the procedure for award of the contract.

The rule is that a contractor which does not independently meet the conditions for participation in a procurement procedure may rely on the knowledge, experience, technical potential, personnel capable of performing the contract, or financial abilities of other entities regardless of the legal nature of their relations (Public Procurement Law Art. 26(2b)). A contractor which does not itself have all these necessary resources may participate in a tender on the assumption that it will use a subcontractor which has the missing potential, such as the knowledge and experience required by the contracting authority.

Under the regulations in force since 24 December 2013, the contracting authority may specify in the terms of reference for the procurement that a contractor must provide the names of the entities lending it their resources. Use of third parties to fulfil the conditions for participation in the procedure should be done on the assumption that the contractor will actually use the potential indicated in the offer at the stage of contract performance. It would be erroneous to assume that the potential indicated in the offer will not actually be used during contract performance. While reliance on the potential of another operator does not necessarily mean that it will be hired as a subcontractor, in some situations subcontracting is the only feasible form for providing the resources needed to perform a public contract.

As a rule, a subcontractor identified in an offer may be replaced by another subcontractor even after the contract is awarded. But if the replaced subcontractor’s attributes were such that they enabled the general contractor’s offer to be selected (as an offer that met the conditions for participation in the procedure), then it should be assured that if the new subcontractor had been identified in the offer instead of the original subcontractor, the general contractor would also have met the conditions for participation in the procedure.

The new subcontractor need not have exactly the same qualifications as the original subcontractor. More specifically, if the replaced subcontractor met the specified criteria to a degree higher than required, it is sufficient that the new subcontractor meet the criteria at the minimum level. This is because the potential of a third party may be used only to meet the minimal criteria for participation in the procedure. Such borrowed capacity may not be used by the contractor to obtain a higher position in the ranking of offers, because contractors may be awarded additional points only for their own capacity.

With respect to the time as of which the new subcontractor must meet the criteria of the replaced subcontractor, it is sufficient if this is the case on the date when the change in subcontractors occurs. The current regulations do not support a requirement that the new capacity offered to the contractor by the new subcontractor had to be available to the new subcontractor at the time the contractor filed its offer. Art. 36b(2) refers not only to the possibility of replacing a subcontractor with another subcontractor, but also to the possibility of the general contractor releasing the subcontractor and performing by itself the portion of the contract originally assigned to the subcontractor. This provision indicates that the contractor may take on independent performance of the portion of the contract which was to be performed by the subcontractor lending it its potential, if the contractor is now in a position on its own to meet the conditions for participation in the procedure specified in the terms of reference (previously met by relying on the subcontractor). Because reliance on resources of a subcontractor at the stage of the offer is always tied to the contractor’s inability to meet the conditions for participating in the procedure on its own, it follows that the contractor could gain the ability to meet the conditions on its own only subsequently, after the date for submission of offers.

Consequently, as the contractor may release a subcontractor because the contractor itself obtained the relevant attributes (knowledge, experience, and technical, human or financial resources) some time after submission of the successful offer, so also may a subcontractor be replaced by another subcontractor which at the time of consideration of the general contractor’s offer would not have assured the general contractor’s compliance with the conditions for participation, but at the time it becomes a subcontractor does have the capacity required by the contracting authority.

Anna Prigan, Infrastructure & Transport and Public Procurement & Public-Private Partnership practices, Wardyński & Partners