trends and features in the review and remedies system in germany
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Trends and Features in the Review and Remedies System in Germany. International Conference in Dubrovnik 24th – 25th May 2007 „Public Procurement Review and Remedies Systems“ Dr. Gabriele Herlemann. Special features of the German Public Procurement Law. - PowerPoint PPT PresentationTRANSCRIPT
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Trends and Features in the Trends and Features in the Review and Remedies System Review and Remedies System
in 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 Law
Regulated under various different laws „Cascade“: regulated in a variety of
different sources of law (historic reasons) In the beginnings: public procurement =
part of budget law only no redress in law for the tenderers
towards the state (contracting authorities)
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Economic importance of Economic importance of public contractspublic contracts
Opening-up of public procurement to community competition: Common market for public procurement
Primary law not sufficient
Secondary law (=EU Directives) was issued
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General character of EEC General character of EEC secondary lawsecondary law
Provides only a framework for the national laws of the member states
Member states have to decide how to adapt their national laws to the Directives
Member states must work within the framework
pp-law varies across EU-member states
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Adaptation of German Law to Adaptation of German Law to Directive 89/665/EEC of 21 Directive 89/665/EEC of 21
December 1989December 1989
Directive 89/665/EEC = basis for the review and remedies system
Integration of review system into German antitrust law
Reflections of the German legislator: having both to do with competition
However: Antitrust law and pp-law do not hang together no necessity
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Directive´s new aspects for Directive´s new aspects for German lawGerman law
Redress in law, rights for tenderers towards the state regarding pp-law
Introduction of thresholds: Directive is only relevant for public contracts above a certain value
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 review Division of German review system into two partssystem into two parts
Below thresholds:EEC Directives do not regulate pp below thresholds: German system adapts this division
absence of effective remedies
• German Constitutional Court: division goes conform with German constitution
Above thresholds:
Effective remedies in a sense of „primary“ legal protection, which means: the tenderer´s chance to get the contract still exists, not only recovery of damages at civil courts.
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U. In the following: focus on In the following: focus on
tendering procedures tendering procedures above thresholds.above thresholds.
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Institutions in chargeInstitutions in charge
1st instance: Public Procurement Tribunals. Legal status: part of the administration. Attention: Directive demands „courts“, but: not necessarily in a constitutional sense.
2nd instance:Higher Regional Courts (pp chambers).
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: 1st instance:
• Federal Public Procurement „Tribunals“ (3 special divisions of the Federal Cartel Office), if the contracting authority is federal;
• State PPT´s, if the contracting authority is a state authority.
2nd instance: Higher Regional Court for the region of the 1st instance that has issued the decision.
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 Court´s decision in an identical case. Rarely the case diversified jurisdiction.
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Composition of PPTs in Composition of PPTs in 1st instance:1st instance:
Chairperson (=civil servant) Two associate members, of whom one
serves in a honorary capacity (= a layman). Intention: honorary associate should have practical experience.
Judicial in character: PPT exercise their functions independently and on their own responsibility.
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The two major requirements for The two major requirements for applications at the PPT in German law:applications at the PPT in German law:
Interest in obtaining a particular public contract, risk of being harmed by an alleged infringement
Previous notification to the public contracting authority of the alleged infringement
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Basis for these requirements for Basis for these requirements for applications:applications:
Article 1 Section 3 of the Review and Remedies
Directive
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Review procedures are only Review procedures are only available for:available for:
Persons having an interest in obtaining a particular public contract and
Who risk being harmed by an alleged infringement
Review procedure is not successful in any case of an infringement, but only if the infringement causes a damage to the person seeking the review
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Jurisdiction of Germany´s Jurisdiction of Germany´s Federal Court of Justice:Federal Court of Justice:
Tenderer must be excluded from participation in a public contract if:• a reference for the proof of his
economic, financial standing/his technical or professional ability (=criteria for qualitative selection), which has been required by the public contractor, does not accompany the offer
• The offer is not complete, if for example a price for one position is missing
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Important: The legal Important: The legal consequence does not depend consequence does not depend on how significant the missing on how significant the missing
reference/declaration is!reference/declaration is!
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Strict legal consequence for the Strict 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 can´t be harmed by an infringement (no chance to get the award)
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Consequence of the formalistic Consequence of the formalistic
approach:approach:
Advantage:
Transparency, as strict consequence does not depend on significance
no litigation about: which missing reference etc. is significant and justifies the exclusion of the tenderer?
Economic disadvantage:
often the formally most correct offer is being selected for the award, not the economically advantageous offer
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Necessary Necessary previousprevious actions of actions of the applicant:the applicant:
Applicant has to notify the contracting authority previously of the alleged infringement and of his intention to seek review: „without undue delay after becoming aware“ of the violation of provisions
If not: the application at the pp tribunal is inadmissable
Previous payment of minimum fee =2.500.- Euros (only Federal Public Procurement Tribunal)
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Tribunal procedure 1st instanceTribunal procedure 1st instance
Initiation of review proceedings only upon application, not ex officio
Accelerated proceedings maximum 5 weeks
Person who is supposed to get the award according to the public authority: = competitor of the person seeking review he has to be invited to take part in the review procedure and can play an acitve role; has the same rights as the applicant.
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Parties may inspect the files. Exception: competitor´s
business- secrets
Lawyer not necessary in the 1st instance
Decision on the basis of a Hearing
Investigation principle
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Most important effect of the Most important effect of the review procedure:review procedure:
Automatic suspension of the contract to which the procedure relates contracting authority is not allowed to make the award prior to the decision and before the expiry of the period for a complaint
Otherwise: invalidity of the contract effective, „primary“ legal protection
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Contracting authority´s „weapon“ Contracting authority´s „weapon“ against automatic suspension: against automatic suspension:
Application to the PPT PPT may allow the contracting entity to award the contract if, taking into account all interests which may be impaired as well as the interests of the general public in the quick conclusion of the award procedure the negative consequences of delaying the award until the end of the review outweigh the advantages involved.
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2nd2nd instanceinstance
Time for appeal: 2 weeks. Lawyer necessary. No limited period for the Higher Regional Court´s
decision Automatic suspension effect: only for 2 weeks,
afterwards: applicant has to apply for the extension of the suspension effect. Depends on the prospects of success. If the Court doesn´t extend the suspension: public authority is allowed to make the award immediately, applicant can only claim damages.