New Amendments to the Public Procurement Legislation

by Adina Chilim-Dumitriu, Partner, NNDKP

The legislative package on public procurement adopted in May 2016 was further amended by Emergency Government Ordinance no. 45/2018 for modification and completion of certain enactments with impact on public procurement field (“EGO 45/2018”), which was published in the Official Journal of Romania no. 459 dated June 4th, 2018 and entered into force at the moment of the publication thereof.

Some of the reasons for adopting such piece of legislation are presented in the preamble of EGO 45/2018 and consist in: (i) improvement and increasing of the flexibility of the public procurement system; (ii) improvement of the absorption of European Union funds which is a priority public interest,; (iii) the risk that the allocated funds could be reduced and the development of national economy could be affected.

We present below the most important changes in the public procurement field, namely relevant amendments to Law no. 98/2016 on public procurement, Law no. 99/2016 on sectoral procurement and Law no. 101/2016 on remedies and means of appeal in the award of public procurement contracts, utilities contracts and concession contracts and on the organization and operation of the National Council for Solving Complaints.

AMENDMENTS TO LAW NO. 98/2016 AND LAW NO. 99/2016.

• The amounts of the thresholds (estimated contract value, excluding VAT) for organizing public procurement procedures / publishing contract notice are modified, as follows:

a. RON 24,977,096 for works contracts/framework agreements (both under Law no. 98/2016 and Law no. 99/2016);

b. RON 648,288 lei for supply of products and services contracts/frameworks agreements (under Law no. 98/2016) and RON 1,994,386 (under Law no. 99/2016);

c. RON 994,942 for supply of products and services contracts/frameworks agreements awarded by the county councils, the local councils, the General Council of Bucharest, as well as by the public institutions under their control (which does not have a correspondent under Law no. 99/2016);

d. RON 3,376,500 for social services and other specific services contracts/framework agreement (under Law no. 98/2016) and RON 4,502,000 (under Law no. 99/2016).

Contracting authorities / entities shall be entitled to directly procure products or services where the estimated value (excluding VAT) is less than RON 135,060, and, respectively, works contracts, if the estimated value (excluding VAT) is lower than RON 450,200.

Note: The European Commission has increased the thresholds applying to award procedures under the EU Procurement Directives commencing on or after January 1st, 2018 and such provisions entered into force at that date, with direct application under the Romanian legislation.

• Centralized purchasing units

Establishment of centralized purchasing units may be now realized by means of decision of local deliberative authorities (in addition to Government decision).

• Confidentiality aspects

Bids and participation requests are confidential until the publication of the award report.

• Modifications regarding the negotiation without prior publication procedure (Law no. 98/2016)

In cases when immediate intervention is needed, the contracting authority is entitled to make the acquisition in parallel with the application of the negotiation without prior publication of a contract notice.

• Possibility to further establish the conditions and methods for application of the simplified procedure – by means of the methodological norms

• Amendments regarding the qualification and selection criteria and the award criteria

The amount of unpaid taxes and contributions – as maximum accepted amount which does not trigger the sanction of exclusion from the procedure – was increased to RON 10,000 owed to the consolidated general budget.

The lower price award criteria can no longer be used by contracting authorities/contracting entities for awarding of contracts having an estimated value higher than the thresholds mentioned above.

• Repealing of the provisions regarding sending of intermediary evaluation reports (corresponding to each stage of the evaluation process)

• Detailing of the right / modality to access the procurement file 

• Clarifications regarding the circumstances when modification of a public procurement contract/ sectoral contract is permitted (without a new procedure) and circumstances of application thereof

AMENDMENTS TO THE REMEDIES LAW NO. 101/2016

• Repealing of the requirement of sending first a prior notification to the contracting authority, prior to being able to submit the claim to CNSC / court

The person considering itself harmed by an act of the contracting authority/entity will directly file a challenge (in Romanian, “contestație”) with the National Council for Solving Complaints (“CNSC”) or with the courts of law.

The contracting authority may take the remedy measures it considers necessary in 3 days as of the receipt of the challenge. These measures must be communicated to the challenger, to the others economic operators involved in the procedure as well as to CNSC in one working day as of the date they were taken.

• Introducing a bond for the challenge before CNSC / court

A bond of 2% of the estimated/established value of the contract must be paid – under the sanction of the claim being rejected -, such bond being capped at:

• RON 35,000 (approx. EUR 7,600) / RON 88,000 (approx. EUR 19,000) for procedures having an estimated/established value below the thresholds provided by Laws no. 98/2016 and no. 99/2016, as subsequently amended;

• RON 220,000 (approx. EUR 48,000) / RON 880,000 (approx. EUR 190,000) for procedures having an estimated/established value over the thresholds provided by Laws no. 98/2016 and no. 99/2016, as subsequently amended.

For award procedures concerning framework contracts, the abovementioned values will be calculated based on the estimated value of the biggest subsequent contract.

• Amendments regarding the confidential nature of the challenge

The contracting authority has the obligation to publish the challenge in SEAP, excluding, however, the information which the economic operator deemed confidential, classified or protected by an intellectual property right.

• The solutions that can be rendered by CNSC/ courts of law

When obliging the contracting authority to issue an act/adopt certain necessary measures, CNSC/court will have to clearly and precisely indicate the actions that have to be taken by the contracting authority.

Furthermore, CNSC/the court will be able to decide the award of the contract to a specific economic operator, when such operator was designated by the contracting authority or its quality of a winning bidder results from the information comprised in the file of the respective challenge.

Also, in cases where reevaluation was ordered by CNSC/the court, the latter will have to clearly and precisely indicate:

• the limits of the reevaluation,

• the identity of the bids subject to reevaluation,

• the stages of the award procedures subject to the reevaluation,

• concrete measures to be adopted by the contracting authority within the reevaluation.

• Amendments of the procedure for solving challenges before the CNSC

Certain deadlines within the CNSC procedure for solving challenges have been reduced, in order to ensure a faster process (for instance, the contracting authority has to respond to CNSC’s requests and to submit documents in 3 days as of the receipt of the request, instead of 5).

Also, the term for solving the challenge has been reduced to 15 days (instead of 20 working days) as of the receipt of the public/utilities procurement file, respectively in 5 days (instead of 10 working days) in case of an exception that prevent the analysis over the merits of the case.

• Amendments of the procedure for solving challenges before the courts of law

The statement of defense has to be submitted by the defendant and communicated to the claimant in 5 working days as of the communication of the challenge by the court of law.

The claimant is obliged to submit a response in 3 working days as of such communication by the defendant.

Under the sanction of being rejected as belated, the challenge must be sent to the court of law and the contracting authority, within the deadline provided by the law.

Amendments regarding relevant deadlines in respect of the submission of a claim against CNSC decision

Deadline for submitting:

• claim against the CNSC decision – 10 working days as of the communication to the parties and, respectively, as of the date of acknowledgement for other affected persons;

• statement of defense – 5 days as of the receipt of the claim from the competent court (not from the claiming party).

The provisions regarding the bail for the request to suspend the award procedure/ the performance of the contract have been repealed.

• Claims for damages within the award procedure and the performance, annulment, termination of procurement contracts

The new deadline for submitting a claim is of:

• 1 year as of the accrual of the right, for claims regarding damages caused within the award procedure;

• 3 years as of the accrual of the right for claims regarding the performance, annulment, nullity and termination of contracts,

unless special laws provide other statute of limitation deadlines in connection to the breaches of legal/contractual obligations.

Stamp duty for such claims – calculated based on the estimated value of the contract, no longer capped:

• up to RON 100,000,000 (approx. EUR 21,750,000) – 2%

• over RON 100,000,000 (approx. EUR 21,750,000) – 1%.