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Importance of the independent

review system and key benefits

- EU legislation and

international good practice -

Zoran Blažević, Croatia

Chisinau, Moldova, 9 June 2014

Content

Procurement review and remedies system

Principles

First steps PRB – Procurement Review

Body

Recommendations

2

3

Creating an adequate „Procurement

Environment”

Law

Clearly drafted

Principle-based

Reliable framework

Remedies

Accessible

Effectiveness

Cost

Institutions

Review body

Oversight body

Central purchasing

agency

Key questions

Procurement system

Training

Procurement personnel

Public Procurement Environment

Public procurement market

• PRIVATE ENTITIES

– Survival in business? YES

– Where happening? MARKET

• PUBLIC ENTITIES

– Do they have to buy? YES

– Where? MARKET

ROLE OF PRB?

• Public procurement market in Republic of Croatia in 2012.: 33.250.330.011,00 HRK. In BDP 11.9%.

• Value of appeal cases in front of PRB in 2012.: 11.555.556.000,00 HRK.

4

What are the rights of the parties in

the remedies procedure

• A dissatisfied party may appeal to the PRB’s and

to seek protection of rights before the PRB’s

against:

- Decisions

- Acts

- Omission

5

The most common complaint alleges

• Description of procurement – technical

specification.

• Conditions and evidence of suitability.

• Selection criteria.

• The central institutes of public procurement

conditio sine qua non.

6

Why is the independence the key

issue?

• Dispute between contracting authorities and

representatives of private sector.

• To whom the unsatisfied party may appeal?

• Executive government vs private sector…

• How to create trust from the side of private

sector and avoid distrust.

• Court system or independent review bodies.

7

To whom appeal can

be submitted?

• To the Courts ?

• To the independent procurement review bodies

(PRBs)?

Directive 89/665

What if PRB is not part of judicial government

Decisions of the PRB-s in the process of control of the public procurement, have to be in writing, with an clear explanation of reasons for such decision-making.

For all participants in the review proceedings, after the decisions of PRBs, judicial review in the last instance have to be secured.

PRB has to be independent and the members of PRB will be elected on mandate.

PRB procedure is inter partes and decision of such body have to be legally binding.

Members of the PRB shall be appointed under the same conditions as the representatives of the judiciary.

President of PRB must meet the same legal and professional qualifications as members of the judiciary.

REPUBLIC OF CROATIA

PRB IN PUBLIC PROCUREMENT SYSTEM

CROATIAN PARLIAMENT

GOVERMENT OF THE REPUBLIC OF CROATIA

VICE – PRESIDENT OF GOVERMENT AND MINISTER of the MINISTRY OF ECONOMY, LABOUR AND

ENTREPRENEURSHIP

- Negotiator for Chapter 5 -th - Public Procurement

MINISTRY OF ECONOMY, LABOUR AND

ENTREPRENEURSHIP Directorate for the PP System

REPORT

STATE COMMISSION

FOR THE SUPERVISION OF PP PROCEDURES

PARTICIPANTS IN

THE PUBLIC PROCUREMENT/

APPEALS

MINISTRY OF FINANCE

AGENCY FOR THE PPP

COORDINATING BODY for the IMPLEMENTATION of PP SYSTEM

INFORMAL OPERATIONAL

WORKING GROUP

Remedies available to economic

operators

• Pre-trial complaints before the contracting authority (if

available under national law);

• Interim measures against procurement decisions,

including the award decision;

• Set aside of unlawful procurement decisions, award

decision and

• Annulment of concluded contract.

• Compensation of economic operators for all harm

suffered as a result of a breach of procurement law -

damages

Benefits of independent review

bodies

• Stimulation of competition on the market,

• Promotion of government of public finance,

• Decreased possibility for corruption,

• Minimizing of administrative duties,

• More participants on the side of private sector,

• Lower prices at the public procurements,

• Stimulation of excellence,

• Creation of case database

• etc.

Review procedure

- best practice model-

• Standstill period

• Suspension effect of the appeal

• Review of public procurement award procedure should be a two-stage procedure:

1st stage: procedure before the contracting entity

2nd stage: procedure before the Court or the PRB

• Legal protection against the PRB’s decision

2nd stage – procedure in front of PRB or the

Court:

Proceedings before the PRB or the Court should only be

initiated:

• after an unsuccessful 1st stage review before the

contracting entity.

• when the aggrieved party does not consent (partially or

entirely) to the decision of the contracting authority on the

demands from the appeal.

• if it does not decide in due specific time (for example 10

days).

The PRB should decide within the limits of the

review appeal (and with or with out ex offo legality

test of the procurement procedure).

In case of violation of the basic principles of public

procurement the PRB should be competent to

examine all evidence considered relevant for the

clarification of the subject matter of the claim and

those necessary for adoption of a legally correct

decision.

Competence of the PRB

Before bringing the final decision, the PRB should:

• ask for additional explanations from the contracting

entity or the claimant of the review claim.

• review other documents and the actual situation of

both parties.

• collect other information necessary for making a

decision.

• ask public and private law persons for personal and

other data which are required for making a decision.

Competence of the PRB

PRB should decide on the appeal authoritatively.

There are three types of main decisions it can adopt:

• appeal can be dismissed as unlawful or late or..

• appeal can be rejected as ungrounded.

• appeal can be accepted and the decision or the

• procedure in question partially or entirely invalidated.

Competence of the PRB

Major risks in development of PRB-s

Independent PRB

Lack of experience in

public procurement

Lack of financial independence

Lack of transparency in the

process of selection of the

members of PRB

Influence of the political

structure

Increased administration in the procedure

And possible delays in procurement procedure

Answers to the risks…

Education of the private and public sector about legal protection in public procurement

PRB – main questions?

- Independents of PRB

- Sufficient budget

- Case law

PRB - Visibility

Transparent functioning

Web – page

Awareness raising material

Manuals for all stake holders

PRB - Independents

• Relationship toward the government

• Relationship toward the representatives of private sector

• Relationship toward the contracting authorities

Instead of conclusion

• Transparent and efficient review system is precondition

for development of public procurement system.

• To accomplish best value for the public money case law

in remedies procedure is necessary.

• Private sector is second party in the public procurement

contract with equal rights as public side.

• Role of the Courts is to ensure protection of the legal

rights of all parties in the public procurement system.

Judicial control over the PRB’s case law.

20

Time for….

Questions and comments ???

Thank you for your attention !

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