a joint initiative of the oecd and the european

8/14/2019 A Joint Initiative of the OECD and the European

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Trends and Features in theTrends and Features in the

Review and Remedies SystemReview and Remedies Systemin Germanyin Germany

International Conference in Dubrovnik

24th 25th May 2007

Public Procurement Review and Remedies

Systems

Dr. Gabriele Herlemann


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Special features of the German

Special features of the German

Public Procurement LawPublic Procurement Lawq Regulated under various different laws

q Cascade: regulated in a variety of

different sources of law (historic reasons)q In the beginnings: public procurement =

part of budget law only

q

no redress in law for the tendererstowards the state (contracting authorities)


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Economic importance ofEconomic im

portance of

public contracts

public contracts

q Opening-up of public procurement to

community competition: Common

market for public procurementq Primary law not sufficient

Secondary law (=EU Directives) was

issued


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General character of EECGeneral character of EEC

secondary lawsecondar

y law

q Provides only a framework for the

national laws of the member states

q Member states have to decide how toadapt their national laws to the Directives

q Member states must work within the

framework

q pp-law varies across EU-member

states


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Adaptation of German Law toAda

ptation of German Law to

Directive 89/665/EEC of 21Directive 89/665/EEC of 21

December 1989December 1989

q Directive 89/665/EEC = basis for thereview and remedies system

q Integration of review system into Germanantitrust law

q Reflections of the German legislator:having both to do with competition

q However: Antitrust law and pp-law do nothang together no necessity


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Directives new aspects forDirectives new

aspects for

German lawGerman law

q Redress in law, rights for tenderers

towards the state regarding pp-law

q Introduction of thresholds: Directive is onlyrelevant for public contracts above a

certain value

q Introduction of a new definition of public

contractor: also subjects to private law

can under certain circumstances be

defined as public contractors


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Division of German reviewDivision of German review

system into two partssystem into two parts

Below thresholds:

EEC Directives do notregulate pp below

thresholds: German systemadapts this division

absence of effectiveremedies

German Constitutional

Court: division goesconform with Germanconstitution

Above thresholds:

Effective remedies in a sense

of primary legal protection,

which means: the tendererschance to get the contract still

exists, not only recovery of

damages at civil courts.


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ancedbytheEU. In the following: focus onIn the following: focus on

tendering procedurestendering procedures

above thresholds.above thresholds.


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Institutions in chargeInstitutions in charge

q 1st instance:Public Procurement Tribunals. Legalstatus: part of the administration.Attention: Directive demands courts,but: not necessarily in a constitutionalsense.

q 2nd instance:Higher Regional Courts (pp chambers).

q 3rd instance? No (but see below).


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Germany as a Federal State Germany as a Federal State

consequences for the institutions in charge:consequences for the institutions in charge:q 1st instance:

Federal Public Procurement Tribunals

(3 special divisions of the Federal Cartel Office), if

the contracting authority is federal;

State PPTs, if the contracting authority is a stateauthority.

q 2nd instance:

Higher Regional Court for the region of the 1st instance

that has issued the decision.

q

Federal Supreme Court (= High Court of Justice):Competent only if one Higher Regional Court intends to

release a decision which differs from another Higher

Regional Courts decision in an identical case. Rarely

the case diversified jurisdiction.


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Composition of PPTs inComposition of PPTs in

1st instance:1st instance:

q Chairperson (=civil servant)

q Two associate members, of whom oneserves in a honorary capacity (= a layman).Intention: honorary associate should havepractical experience.

q Judicial in character: PPT exercise theirfunctions independently and on their ownresponsibility.


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The two major requirements forThe two major requirements for

applications at the PPT in German law:applications at the PPT in German law:

q Interest in obtaining a particular public

contract, risk of being harmed by an

alleged infringement

q Previous notification to the public

contracting authority of the allegedinfringement


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Basis for these requirements forBasis for these requirements for

applications:applications:

Article 1 Section 3 of theReview and Remedies

Directive


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Review procedures are onlyReview procedures are only

available for:available for:

q Persons having an interest in obtaining a

particular public contract and

q Who risk being harmed by an alleged

infringement

Review procedure is not successful in any

case of an infringement, but only if theinfringement causes a damage to the

person seeking the review


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Jurisdiction of GermanysJurisdiction of Germanys

Federal Court of Justice:Federal Court of Justice:

Tenderer must be excluded fromparticipation in a public contract if:

a reference for the proof of his

economic, financial standing/histechnical or professional ability(=criteria for qualitative selection),which has been required by the publiccontractor, does not accompany theoffer

The offer is not complete, if forexample a price for one position is

missing


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Important: The legalImportant: The legal

consequence does not dependconsequence does not depend

on how significant the missingon how significant the missingreference/declaration is!reference/declaration is!


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Strict legal consequence for theStrict legal consequence for the

tenderer concerned:tenderer concerned:

Substantive law: tenderer is not

allowed to compete for this specific

public contract for formal reasons Application at the PPT is inadmissible

as a tenderer who is not allowed to

compete cant be harmed by an

infringement (no chance to get the

award)


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Consequence of the formalisticConsequence of the formalistic

approach:approach:

Advantage:

Transparency, as

strict consequencedoes not depend on

significance

no litigation about:

which missing

reference etc. is

significant and

justifies the exclusion

of the tenderer?

Economic

disadvantage:

often the formallymost correct offer

is being selected

for the award, not

the economically

advantageous offer


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NecessaryNecessary previousprevious actions ofactions of

the applicant:the applicant:

q Applicant has to notify the contractingauthority previously of the alleged infringementand of his intention to seek review: without

undue delay after becoming aware of theviolation of provisions

q If not: the application at the pp tribunal isinadmissable

q Previous payment of minimum fee =2.500.- Euros(only Federal Public Procurement Tribunal)


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Tribunal procedure 1st instanceTribunal procedure 1st instance

q Initiation of review proceedings only uponapplication, not ex officio

q Accelerated proceedings maximum 5 weeks

q Person who is supposed to get the awardaccording to the public authority: = competitor ofthe person seeking review he has to be invited

to take part in the review procedure and can playan acitve role; has the same rights as theapplicant.


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qParties may inspect the files.Exception: competitors business-

secrets

qLawyernot necessary in the 1st

instance

qDecision on the basis of a

Hearing

qInvestigation principle


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Most important effect of theMost important effect of the

review procedure:review procedure:

q Automatic suspension of the contract to

which the procedure relates

contractingauthority is not allowed to make the award

prior to the decision and before the expiry

of the period for a complaint

q Otherwise: invalidity of the contractq effective, primary legal protection


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Contracting authoritys weaponContracting authoritys weapon

against automatic suspension:against automatic suspension:

Application to the PPT PPT may allowthe contracting entity to award the contractif, taking into account all interests whichmay be impaired as well as the interests ofthe general public in the quick conclusionof the award procedure the negativeconsequences of delaying the award until

the end of the review outweigh theadvantages involved.


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2nd2ndinstanceinstance

q Time for appeal: 2 weeks. Lawyer necessary.q No limited period for the Higher Regional Courts

decision

q Automatic suspension effect: only for 2 weeks,afterwards: applicant has to apply for theextension of the suspension effect. Depends onthe prospects of success. If the Court doesntextend the suspension: public authority is allowedto make the award immediately, applicant canonly claim damages.

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