New PPL: Is everything in line with EU law?
The explanatory memorandum for the draft of the new Public Procurement Law indicates the need to increase the transparency and coherence of national regulations, recognising that the EU’s procurement directives have already been implemented in the Polish legal system. However, the effect of the “small amendment” of 2016 has been unsatisfactory from the very beginning. Hence, the draft contains a number of new solutions justified by the need to reflect the regulations of the procurement directives in the Polish act.
Shortlisting of contractors finally in accordance with EU law
The issue of relying on the potential of a third party for the purpose of assessing a contractor’s ability to execute the contract at the stage of the selection criteria has been questionable on the Polish public procurement market for several years now. And not only on the part of the participants in the procurement, as the Parliament itself cannot decide how to understand the provisions of the Classic Directive (2014/24/EU) in this matter.
In particular, the most recent amendment to the Public Procurement Law, in 2016, offered a chance to improve the Polish act, but revealed a lack of understanding of the institution of combining potentials introduced at the EU level. During the legislative work on that amendment, the right of contractors to use the potential of a third party also for the purpose of meeting the selection criteria in Art. 22a(1) PPL was initially confirmed, after which this possibility was removed from the draft. However, Art. 25a(3) PPL, indicating which documents of entities on whose resources the contractor relies should be submitted during the proceedings, was inconsistently left intact. The scope of reference to these resources was defined as “fulfilment of the conditions for participation in the procedure or fulfilment of the selection criteria.” This solution was in force until December 2016.
However, the idea of introducing into the Polish act permission to rely on the potential of a third party for the needs of the shortlist was criticised in the public discussion. It was accused of broadening, beyond the provisions of the directive, the purpose for which a contractor would be able to rely on the resources of another entity during the proceedings.
In the current draft of the new Public Procurement Law, Art. 132 (also 133 and others) repeats the rule that the contractor may rely on technical or professional abilities, or the financial or economic situation of entities providing access to resources, not only to confirm that the conditions for participation in the procedure are met, but also for the selection criteria. Will this provision survive this time?
In one sentence only, the drafters explain the introduction of Art. 132, saying that it makes the regulation more understandable in this respect. At the concept stage of the new Public Procurement Law, this was justified by the wording of the European Single Procurement Document, which provides for the possibility of fulfilling the selection criteria with the use of available potential.
However, it may turn out that the justification limited to a reference to the ESPD regulation will again be reconciled with the literal interpretation of the Classic Directive, which is established in Poland, that fulfilment of the selection criteria must be demonstrated solely on the basis of the contractor’s own abilities.
But according to the Court of Justice of the European Union, the contractor’s right to rely on the potential of a third party to demonstrate the ability to perform the contract cannot be limited solely to the qualification stage, but should also cover the selection stage (Apelski, C-324/14). Since the aim of the regulation on the use of the potential of a third party is to open up public procurement to the widest possible competition, the right to rely on the potential of other entities is vested in each contractor and cannot be interpreted as existing only in exceptional cases. In addition, it was decided that an entity following this route could not be treated less favourably in its bid than a contractor not using external resources.
Therefore, we should assess positively the proponents’ final willingness to implement these principles in the Public Procurement Law, even though the phenomenon of overregulation in the area of public procurement is itself negative. However, it is necessary to take into account the long practice of applying restrictions unjustified under European law on access to contracts by bidders relying on the potential of third parties and inconsistent modelling of regulations in this respect under the amendment of 22 June 2016. Thus, introduction of a regulation clarifying that the possibility of relying on third-party potential for selection criteria is allowed under the new Public Procurement Law is justified and ultimately removes the incompatibility of Polish law with EU law.
The rules for using the potential of a third party at the stage of contract performance, i.e. making available potential in terms of education, professional qualifications or experience, and joint and several liability for not making resources available in terms of financial or economic situation, will remain unchanged, i.e. as currently regulated in Art. 22a PPL.
Referring outside resources to the date of submission of the application or bid only: Is inclusion of the Esaprojekt ruling in the new act needed?
Art. 137 of the proposed new Public Procurement Law provides that it is not permissible for a contractor, who alone demonstrates compliance with a condition at the stage of submission of bids or requests to participate in the procedure, to invoke the potential of a third party in this respect at a later stage.
This regulation complements the temporary provision of Art. 22a(6) PPL. The principle expressed in it is clear, especially as it was confirmed by the CJEU in Esaprojekt (C-387/14). However, the idea of introducing the Esaprojekt ruling (as discussed in the concept for the act) into the new Public Procurement Law is incomprehensible.
The ruling in Esaprojekt is an additional contribution to the interpretation of public procurement law to the extent that it is regulated in particular in Art. 63 of Directive 2014/24/EU, but not only. Under other provisions, it is possible to join the procedure only up to the date specified by the contracting authority, and late applications or bids will be deemed to be inconsistent with the terms of reference (cf. Art. 56(1) of Directive 2014/24/EU). In the Polish act, the impossibility of joining the procedure after the deadline results directly from Art. 50 and 84 (return of the application or bid), as well as Art. 163 and 257 of the draft new act (rejection of the application or bid).
Therefore, any attempt to include a new entity in the procedure or to change the contractor’s identity after the deadline for submitting an application or bid must be considered contrary to the principle of equal treatment, as in the case of such entities the deadline would effectively be extended.
It is a mistake to introduce the position of the CJEU into the national legal order on one chosen ruling. To be consistent, the Polish drafters would have to translate all the CJEU rulings into provisions of national law. Such an expectation is obviously unrealistic, but the practice of selective incorporation of certain rulings into the act may create a risk that as long as the holdings from the CJEU are not enshrined in the national legal order with a proper regulation, the European acquis will not be applied in Polish public procurement law.
Completion of documents and statements: single request principle abolished?
The concept for the new Public Procurement Law indicated that the new act would clearly define the principle of one-time submission of additional documents (p. 38 of the concept). However, there is no provision in the draft introducing such a regulation. In particular, it is not included in Art. 142 regulating the issues of summons and supplementation.
This omission appears correct, as the single request principle is not justified by Directive 2014/24/EU or the CJEU rulings.
Art. 56(3) of Directive 2014/24/EU simply allows the possibility for a contractor to submit, add, clarify or complete the relevant information or documentation.
There is no provision that a request to the contractor can only be made once in this respect. On the contrary, in this respect, the European law is guided by the general principles of public procurement and sets limits on supplementation of bids (or applications) not in relation to the number of requests or supplements, but in relation to their substantive content.
Such a limit is the moment when the information provided in additional documents or explanations would lead to a change in the bid (Slovensko, C-599/10) or affect the contractor’s identity, tantamount to submission of a new bid (Esaprojekt, C-387/14) or leading to a significant change in the bid (Arschus, C-131/16). The CJEU also allows the submission of information and documents which were not submitted at all with the bid or application, provided that they existed objectively at the date of the bid or application (Manova, C-336/12).
In Polish national law, the single request rule has never been enshrined in the act, and its use was based on interpretation of the law in rulings, which in any event were not uniform, as some rulings indicated that there is only an obligation stemming from the Public Procurement Law requiring at least one request (Case SO IV Ca 223/08), but the act “does not give any indication as to whether a request should be single or multiple” (cases KIO/UZP 827/08 and SO XII Ga 391/08).
In the course of the current legislative work, the intentional abandonment of automatically applying the principle of a single request for supplementary documents or explanations to all factual situations is correct, as it leaves the possibility for contracting authorities to act in accordance with rules developed by the CJEU for supplementing applications or bids. It also fully respects the principle of equal treatment, which incorporates two commands, namely that comparable situations cannot be treated differently and that different situations cannot be treated equally.
The proposed Art. 142(2) introduces the rule that the obligation to request supplementary documents or explanations does not apply if the submitted documents indicate that the application or bid must be rejected. This provision seems to repeat the rule currently enshrined at the end of Art. 142(1). The premise of both regulations is the same: when the documents provided indicate the necessity to reject the application or bid, either because of late submission or because the content proves that the contractor does not meet the conditions for participation in the procedure. Therefore, Art. 142(2) seems redundant.
The new act also introduces a regulation that the winning contractor does not have to repeat statements already made at the stage of the ESPD (Art. 141). In such a case, the contracting authority is only obliged to call for confirmation of the validity of the information contained in the ESPD.
Finally, it is worth noting Art. 142(3) of the proposed new act. It provides that the supplementation of documents and statements at the request of the contracting authority may not serve to confirm that the selection criteria are met. The justification of the draft is silent on this topic and the regulation itself is incomprehensible. It seems to provide a ban on the contracting authority determining the scope of the request for supplementation. However, verification of documents is intended to assess the contractor’s ability to perform the contract, and the selection criteria are one of the elements of that verification, which is often based on the conditions for participation in the procedure. The Classic Directive does not provide any basis for differentiation in this respect. We can expect that the draft will be fine-tuned in this respect.
Significant change in the content of technical specifications: it is not possible to increase the competitiveness of the proceedings
The seemingly inconspicuous Art. 153(2) of the proposed new act may lead to blocking the possibility to question the content of technical specifications on the grounds that they contain conditions restricting competition. In an open bid procedure, this provision prohibits the introduction of changes to the content of the technical specifications affecting the circle of contractors interested in award of the contract. This prohibition refers to situations specified in Art. 153(1), i.e. justified cases and in the period before the deadline for submission of bids.
The explanatory memorandum to the draft explains that this regulation is necessary to reflect recital 81 of Directive 2014/24/EU. Indeed, the preamble to the Classic Directive explains that an amendment of procedural documents cannot be such that, as a result of its introduction, other entities may be admitted to the procedure or would be interested in participating in it. However, in this respect, it refers to a situation where pre-selection of bidders took place. Such a situation will therefore concern two-stage procedures, where a possible change of technical specifications would occur after the qualification of contractors.
On the other hand, the general possibility of introducing substantial changes to technical specifications results from Art. 47(3)(b) of Directive 2014/24/EU and is linked to the obligation to extend the deadline for submitting bids accordingly.
Therefore, a change in the content of technical specifications resulting in e.g. expansion of the circle of potential contractors (i.e. lowering of requirements) should be allowed before the deadline for submission of bids in an open procedure, provided that the contracting authority extends the deadline for submission of bids accordingly, which in this case would most likely mean setting a new minimum period. In this sense, the key principles of public procurement remain in place; in particular, each contractor has an equal chance to prepare a bid, guaranteed by a minimum period for submission of a bid. Similarly in the case of a change resulting in reducing the circle of contractors, i.e. raising the requirements (subject to a change in the deadline for submission of bids necessary to revise the bid): Art. 153(2) does not allow this either.
Therefore, Art. 153(2) of the proposed new act requires further refining. Otherwise, it may unjustifiably limit contractors’ efforts to increase the competitiveness of procurement by aiming to lower the requirements in the technical specifications and, at the same time, will not comply with the relevant provisions of the Classic Directive.
Mirella Lechna, attorney-at-law, Infrastructure, Public Procurement & PPP practice, Wardyński & Partners