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Structure and Functions of a Structure and Functions of a Central Public Procurement Central Public Procurement

Institution – the Public Institution – the Public Procurement CouncilProcurement Council,, Hungary Hungary

Gabriella Fribiczer, PPCGabriella Fribiczer, PPC

Regional Conference on “Public Procurement Reform in West Balkan” Pristina, 16-17 September 2008

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OVERVIEWOVERVIEW

I. STRUCTURE OF PPCI. STRUCTURE OF PPCII. LEGAL BASISII. LEGAL BASISIII. FUNCTIONS OF PPCIII. FUNCTIONS OF PPCIV. REVIEW PROCEDURESIV. REVIEW PROCEDURES

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I. I. INSTITUTIONAL SET-UPINSTITUTIONAL SET-UP

STRUCTURE OF PPCSTRUCTURE OF PPC

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PUBLIC PROCUREMENT PUBLIC PROCUREMENT COUNCIL (PPC) I.COUNCIL (PPC) I.

PPPPCC was established in 1995 (at the same was established in 1995 (at the same time time that that the the first PP first PP Act came into force) Act came into force)

aim: enforcing the objectives of the PP Actaim: enforcing the objectives of the PP Act centralized, autonomous bodycentralized, autonomous body subordinated only to subordinated only to the the ParliamenParliamentt must report to the Parliament every yearmust report to the Parliament every year central budgetary organcentral budgetary organ the Council convenes 7 to 8 times every the Council convenes 7 to 8 times every

yearyear

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PUBLIC PROCUREMENT PUBLIC PROCUREMENT COUNCIL (PPC) II.COUNCIL (PPC) II.

the PPthe PPCC is constituted of 19 members: is constituted of 19 members: - President- President - 6 members responsible for the enforcement of the - 6 members responsible for the enforcement of the

basic principles and public interestbasic principles and public interest - 6 members representing the general interest of the - 6 members representing the general interest of the

contracting entitiescontracting entities - 6 members representing the general interest of the - 6 members representing the general interest of the

tendererstenderers PPC members are not employed fullPPC members are not employed full--time (except the time (except the

President)President) the mandate of the PPthe mandate of the PPCC members is for not less than members is for not less than

a two year terma two year term

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PUBLIC PUBLIC PROCUREMENT PROCUREMENT

COUNCIL (PPC) III.COUNCIL (PPC) III.TThe President of the PPhe President of the PPCC is elected with a two-thirds quorum for a is elected with a two-thirds quorum for a

five year term of service by the members of five year term of service by the members of the Council (may be re-elected once) the Council (may be re-elected once)

employed full-timeemployed full-time independentindependent civil servantcivil servant entitled to salary and other benefits as due entitled to salary and other benefits as due

to senior state secretariesto senior state secretaries

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STRUCTURE OF PPCSTRUCTURE OF PPCSECRETARIATSECRETARIAT

standing structure of PPC, led by standing structure of PPC, led by the Secretary Generalthe Secretary General

in charge of coordinating the in charge of coordinating the activity of the Council, preparing activity of the Council, preparing and implementing the CPP’s and implementing the CPP’s decisions;decisions;

employing civil servantsemploying civil servants

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STRUCTURE OF PPCSTRUCTURE OF PPCUNITS OF THE UNITS OF THE SECRETARIATSECRETARIAT

Legal Unit:Legal Unit:• giving legal advice (help-desk)giving legal advice (help-desk)• preparing draft recommendations, briefingspreparing draft recommendations, briefings• administering the list of conciliatorsadministering the list of conciliators

Unit of International Relations and Training:Unit of International Relations and Training:• international representationinternational representation (ACPC, PPN, EU Lab, etc.)(ACPC, PPN, EU Lab, etc.)• coordination and control of pp trainingcoordination and control of pp training

Editorial Board: Editorial Board: • publishing and transmitting pp noticespublishing and transmitting pp notices

Economic Analysis Group:Economic Analysis Group:• management and analysis of statisticsmanagement and analysis of statistics

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STRUCTURE OF PPCSTRUCTURE OF PPCARBITRATION BOARDARBITRATION BOARD

operates alongside the operates alongside the PPCPPC set up also in 1995set up also in 1995 first instance public procurement first instance public procurement

review bodyreview body independent, administrativeindependent, administrative permanent „quasi-judicial” bodypermanent „quasi-judicial” body ””tribunal” entitled to make a tribunal” entitled to make a

reference to the ECJ (request for reference to the ECJ (request for preliminary ruling)preliminary ruling)

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STRUCTURE OF PPCSTRUCTURE OF PPCARBITRATION BOARDARBITRATION BOARD

efficient operation of the Board is provided efficient operation of the Board is provided from the budget of the PPfrom the budget of the PPCC

the Board consists of public procurement the Board consists of public procurement commissionerscommissioners

the chairperson and the vice-chairperson of the chairperson and the vice-chairperson of the Board are elected from the public the Board are elected from the public procurement commissioners by the two-procurement commissioners by the two-thirds of the members of the Council in thirds of the members of the Council in attendance, for a five-year termattendance, for a five-year term (possibility (possibility of re-election is not restricted)of re-election is not restricted)

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PUBLIC PUBLIC PROCUREMENT PROCUREMENT

COMMISSIONERS I.COMMISSIONERS I. number of commissioners (staff of number of commissioners (staff of

the Board) is determined by the PPCthe Board) is determined by the PPC commissioners are appointed and commissioners are appointed and

recalled by the PPrecalled by the PPCC they are they are full-time civil full-time civil servantsservants strict rules on strict rules on conflict of interestesconflict of interestes

related to the contracting entities related to the contracting entities and the tenderersand the tenderers

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JUDICIAL REVIEWJUDICIAL REVIEW

Municipal CourtMunicipal Court

Municipal Court of AppealsMunicipal Court of Appeals

Ordinary Civil Ordinary Civil Courts Courts (ineffectiveness + damages) – (ineffectiveness + damages) – will change in the future („one will change in the future („one court for all” concept)court for all” concept)

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EU II. II.

LEGAL LEGAL BACKGROUNDBACKGROUND

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PP PP LEGISLATIONLEGISLATION

the former PP Act : Act XL of the former PP Act : Act XL of 19951995

present PP Act: Act CXXIX of present PP Act: Act CXXIX of 2003 -2003 -

entered into force on 1st of May entered into force on 1st of May 2004 as a general rule;2004 as a general rule;

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PP PP LEGISLATIONLEGISLATION

implementation of Directives implementation of Directives 2004/17 and 2004/18: 15th 2004/17 and 2004/18: 15th January, 2006January, 2006

implementation of Directive implementation of Directive 2007/66: planned from 1st of 2007/66: planned from 1st of January 2009 and partially from January 2009 and partially from 1st of June, 2001st of June, 20099

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THE PP ACT IN THE PP ACT IN FORCEFORCE

all the essential rules on award all the essential rules on award procedures and on review procedures, procedures and on review procedures, as well as on the operation of the PPC as well as on the operation of the PPC can be found in this one Actcan be found in this one Act

however: certain topics (e.g. however: certain topics (e.g. centralised procurements, order of centralised procurements, order of publication, tender notices) are publication, tender notices) are regulated in secondary legislation regulated in secondary legislation (governmental and ministerial decrees) (governmental and ministerial decrees)

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III.III.FUNCTIONS OF PPCFUNCTIONS OF PPC

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FUNCTIONS OF FUNCTIONS OF PPCPPC

preparing recommendations clarifying preparing recommendations clarifying recurring problems in applying pp lawrecurring problems in applying pp law

briefings on practical issues are briefings on practical issues are issued by the Presidentissued by the President

help-desk: giving oral and written help-desk: giving oral and written opinions to contracting opinions to contracting entities andentities and tendererstenderers

non of these are legally bindingnon of these are legally binding briefings and recommendations are briefings and recommendations are

published in the PP Bulletinpublished in the PP Bulletin

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FUNCTIONS OF FUNCTIONS OF PPCPPC

initiating the modification of initiating the modification of PP legislation, involved in the PP legislation, involved in the consultation processconsultation process

maintaining international maintaining international relationsrelations

maintaining records maintaining records (database) on public (database) on public procurementprocurement

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FUNCTIONS OF PPC - FUNCTIONS OF PPC - TRAININGTRAINING

Training activities: first: Training activities: first: participation in training and participation in training and ‘further training’ of contracting ‘further training’ of contracting entities and tenderers, later entities and tenderers, later (from 2004): coordination and (from 2004): coordination and supervision of training activities supervision of training activities in the field of pubin the field of publlic ic procurementprocurement..

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FUNCTIONS OF PPC - FUNCTIONS OF PPC - TRAININGTRAINING

from 1997: training of trainers programme from 1997: training of trainers programme with the support of World Bankwith the support of World Bank

training institutions were selected training institutions were selected (University of Economy), manual was (University of Economy), manual was elaborated and publishedelaborated and published

20 trainers were trained 20 trainers were trained trainers participated several trainings in trainers participated several trainings in

the organisation of the PPC (mainly local the organisation of the PPC (mainly local government officers at county seats)government officers at county seats)

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FUNCTIONS OF PPC - FUNCTIONS OF PPC - TRAININGTRAINING

later on (from 2000-2003): 2-3 day-long later on (from 2000-2003): 2-3 day-long workshops – target group: local government workshops – target group: local government officials who had already acquired officials who had already acquired competences in public procurement; aim: competences in public procurement; aim: providing more extensive knowledgeproviding more extensive knowledge

in 2002-2003: in cooperation with Budapest in 2002-2003: in cooperation with Budapest Business School (an institution for higher Business School (an institution for higher education): 72 hour training course focusing education): 72 hour training course focusing on public procurement (also case-studies)+ on public procurement (also case-studies)+ legal and financiallegal and financial knowledgeknowledge

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FUNCTIONS OF PPC - FUNCTIONS OF PPC - TRAININGTRAINING

since 2004: max. 500 (220) hour long PP since 2004: max. 500 (220) hour long PP training is organized by different training is organized by different organizations/ accredited, state-organizations/ accredited, state-approved training, certification in the approved training, certification in the end (requested more and more often by end (requested more and more often by contracting entities when hiring pp contracting entities when hiring pp people)people)

members and staff of the PPC is present members and staff of the PPC is present during the exams monitoring the quality during the exams monitoring the quality of trainingof training

supervision through setting out supervision through setting out professional and examination criteriaprofessional and examination criteria

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FUNCTIONS OF PPC - FUNCTIONS OF PPC - TRAININGTRAINING

in the framework of coordination and in the framework of coordination and supervision of PP training: PPC publishes supervision of PP training: PPC publishes information related to pp training activities information related to pp training activities (information on workshops, trainings (information on workshops, trainings together with their duration, trainers together with their duration, trainers involved), as well as information about the involved), as well as information about the results of the exams results of the exams

PPC contacts any training organisation if PPC contacts any training organisation if detects any problems concerning the quality detects any problems concerning the quality of the training of the training

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FUNCTIONS OF PPC - FUNCTIONS OF PPC - TRAININGTRAINING

training of civil servants by the Hungarian Public training of civil servants by the Hungarian Public Administration Office – Administration Office – PPC PPC participated in the participated in the elaboration of the training materials and in the elaboration of the training materials and in the selection of trainersselection of trainers

several universities offer public procurement several universities offer public procurement courses (part of the training, e.g. Faculty of Law) courses (part of the training, e.g. Faculty of Law) or special courses – PPC participates in the or special courses – PPC participates in the elaboration of the programmes and training elaboration of the programmes and training materialsmaterials

members and staff of PPC participating at pp members and staff of PPC participating at pp events (workshops, trainings) aevents (workshops, trainings) as s a a speaker/speaker/trainer when requestedtrainer when requested

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EU

FUNCTIONS OF PPCFUNCTIONS OF PPC

administering listadministering lists:s:• contracting entitiescontracting entities• approved contractorsapproved contractors• Official Public Procurement Official Public Procurement

ConsultantsConsultants publishing the Official Journal of publishing the Official Journal of

the PPC: the Public Procurement the PPC: the Public Procurement BulletinBulletin

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MONITORING ACTIVITY MONITORING ACTIVITY President/Members of PPCPresident/Members of PPC

ex officio proceedings ex officio proceedings initiated by the President or initiated by the President or the Members of PPCthe Members of PPC

possibility for the President to possibility for the President to require information from any require information from any contracting entitiescontracting entities

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CONTROL OF NOTICESCONTROL OF NOTICES notices related to public notices related to public

procurement has to be published procurement has to be published through the PPCthrough the PPC

before notices are forwarded or before notices are forwarded or published, the Editorial Board published, the Editorial Board revises all of them both revises all of them both regarding their form and content regarding their form and content

strict time limits apply for this strict time limits apply for this control activitycontrol activity

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CONTROL OF NOTICESCONTROL OF NOTICES if the notice breaches PP law, it is if the notice breaches PP law, it is

sent back for reconsiderationsent back for reconsideration notices sent back to the Editorial notices sent back to the Editorial

BoaBoarrd with the same content are d with the same content are forwarded or published, but the forwarded or published, but the PPC is also informedPPC is also informed

members of the PPC are entitled to members of the PPC are entitled to initiate ex officio proceeding of the initiate ex officio proceeding of the Arbitration BoardArbitration Board

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CONTROL OF AMENDMENT/ CONTROL OF AMENDMENT/ PERFORMANCE OF CONTRACTSPERFORMANCE OF CONTRACTS

contracting authorities shall contracting authorities shall publish a notice in the PP publish a notice in the PP Bulletin regarding the Bulletin regarding the amendment and the execution amendment and the execution (completion) of the contract(completion) of the contract

two model notices:two model notices:• one for modificationone for modification• one for executionone for execution

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CONTROL OF AMENDMENT/ CONTROL OF AMENDMENT/ PERFORMANCE OF CONTRACTSPERFORMANCE OF CONTRACTS

PP Act sets out strict conditions for PP Act sets out strict conditions for amending the contractamending the contract -> ‘ -> ‘events not events not foreseeableforeseeable’’

tthe Arbitration Board he Arbitration Board has the has the right to right to settle legal disputes regarding the settle legal disputes regarding the amendmentamendment/ / performance of the performance of the contract concluded in a public contract concluded in a public procurement procedureprocurement procedure

aany interested party may initiate the ny interested party may initiate the procedure of the Arbitration Board procedure of the Arbitration Board based upon the information publishedbased upon the information published

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CONTROL OF AMENDMENT/ CONTROL OF AMENDMENT/ PERFORMANCE OF CONTRACTSPERFORMANCE OF CONTRACTS

in addition, should emerge the in addition, should emerge the suspicion of a violation of law, the suspicion of a violation of law, the PPC shall forward the notice to PPC shall forward the notice to bodies generally controlling ppbodies generally controlling pp

these these controlling bodiescontrolling bodies (e.g. State (e.g. State Audit Office, Government Control Audit Office, Government Control Office) may initiate the ex officio Office) may initiate the ex officio proceeding of the Arbitration proceeding of the Arbitration Board within one year of the Board within one year of the infringementinfringement

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CONTROL OF NEGOTIATED CONTROL OF NEGOTIATED PROCEDURES WITHOUT PRIOR PROCEDURES WITHOUT PRIOR

PUBLICATION OF A NOTICEPUBLICATION OF A NOTICE PP Act obliges CAs to send the PP Act obliges CAs to send the

contract notice, along with the contract notice, along with the information and documents justifying information and documents justifying the application of this procedure to the application of this procedure to the Chairman of the PP Arbitration the Chairman of the PP Arbitration Board Board

if the Chairman finds that the if the Chairman finds that the application of this procedure was application of this procedure was unfounded, he/she initiates the ex unfounded, he/she initiates the ex officio review procedure of the officio review procedure of the Arbitration BoardArbitration Board

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CONTROL OF NEGOTIATED CONTROL OF NEGOTIATED PROCEDURES WITHOUT PRIOR PROCEDURES WITHOUT PRIOR

PUBLICATION OF A NOTICEPUBLICATION OF A NOTICE the Chairman has 15 days to take this the Chairman has 15 days to take this

decisiondecision if the panel of the Commissioners finds if the panel of the Commissioners finds

that the application was unlawful, it that the application was unlawful, it sets aside of the decision of the CA sets aside of the decision of the CA concerning the choice of procedure concerning the choice of procedure (except the contract has already been (except the contract has already been concluded)concluded)

in the latter case the Board imposes a in the latter case the Board imposes a fine (up to the 30 % of the value of the fine (up to the 30 % of the value of the contract)contract)

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EU

STATISTICAL STATISTICAL OBLIGATIONSOBLIGATIONS

PPC is obliged to report to the PPC is obliged to report to the Parliament and fulfill statistical Parliament and fulfill statistical obligations towards the EUobligations towards the EU

sources:sources:• Centralized publication -Centralized publication -

>>contract award noticescontract award notices• PP Act obliges CPP Act obliges CEEs to prepare s to prepare

an an annual statistical summaryannual statistical summary, , in a prescribed format, about in a prescribed format, about their annual pps. This summary their annual pps. This summary shall be communicated to the shall be communicated to the Council not later than May 31st Council not later than May 31st following the year in question.following the year in question.

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EU

SOME STATISTICS SOME STATISTICS FOR 2008FOR 2008

the overall value of public the overall value of public procurement: 1521,3 billion HUF procurement: 1521,3 billion HUF above the national thresholds (no above the national thresholds (no information about low-value information about low-value procurements yet)procurements yet)

4957 procedures above the 4957 procedures above the thresholdsthresholds

11 bids submitted as an average11 bids submitted as an average 6% (value) won by foreign tenderers6% (value) won by foreign tenderers

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EU

IV. REVIEW IV. REVIEW PROCEDURESPROCEDURES

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EU

PROCEDURE OF THE PROCEDURE OF THE ARBITRATION BOARDARBITRATION BOARD

May be initiatedMay be initiated upon application orupon application or ex officio (two types)ex officio (two types)

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EU

EX OFFICIO EX OFFICIO PROCEDURESPROCEDURES

Ex officio procedures may be initiated by Ex officio procedures may be initiated by organisations defined in the PPA:organisations defined in the PPA:

MMemberemberss or the or the PPresident of the President of the PPCPC the State Audit Officethe State Audit Office the Government Control Officethe Government Control Office the Public Administration Office of the county or Budapestthe Public Administration Office of the county or Budapest the Hungarian State Treasury (in respect of the use of tied the Hungarian State Treasury (in respect of the use of tied

subsidy or addressed subsidy granted to local subsidy or addressed subsidy granted to local governments)governments)

the parliamentary commissionerthe parliamentary commissionerss the entity providing subsidy for public procurements;the entity providing subsidy for public procurements; the entity authorized to conduct public procurement the entity authorized to conduct public procurement

procedures in the scope of centralised public procurementprocedures in the scope of centralised public procurement

© OECD

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DECISIONS OF THE DECISIONS OF THE ARBITRATION BOARD IN ARBITRATION BOARD IN

20072007

rejection (appeal unfounded):rejection (appeal unfounded): 318 318 the case was terminated: the case was terminated: 114848 appeal founded: appeal founded: 227227 pending proceedings: pending proceedings: 58 58

© OECD

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NUMBER OF REVIEW NUMBER OF REVIEW PROCEDURES IN 2007PROCEDURES IN 2007

number of review number of review procedures: procedures: 751 (decrease: in 751 (decrease: in 2005: 1091, 2006: 858)2005: 1091, 2006: 858)

aamong these: upon the mong these: upon the initiative of the Chairinitiative of the Chairperson person oof the Arbitration Board: f the Arbitration Board: 109109

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PUBLICATION OF THE PUBLICATION OF THE DECISIONS AND THE DECISIONS AND THE

RULINGSRULINGS bboth the decisions of the Arbitration oth the decisions of the Arbitration

Board and the rulings of the courts Board and the rulings of the courts shall be published in the Public shall be published in the Public Procurement BulletinProcurement Bulletin ( (official organ official organ of thof the PPC)e PPC)

aas the Bulletin is published on the s the Bulletin is published on the Internet as well, the decisions and Internet as well, the decisions and the rulings are also available there, the rulings are also available there, free-of-chargefree-of-charge

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THANK YOU FOR YOUR THANK YOU FOR YOUR ATTENTIONATTENTION

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