Changes in the regulation of public procurement in the Czech Republic anticipated in 2015 and 2016 (October 2014)

A new law on public procurement is expected to enter into force in early 2016 in order to transpose the new EU directives on public procurement (adopted in April 2014). Even before that, partial changes will be introduced with effect as of 1 January 2015 by an amendment to the currently effective Act on Public Procurement prepared by the Ministry of Regional Development. The amendment has been approved by the Government, Parliament approval is pending.

Amendment to the current law

The draft amendment implements several changes brought by new EU public procurement rules and addresses certain inefficiencies of the current framework identified by public purchasers. Its main objective is to simplify procurement rules for both public purchasers and tenderers by introducing the following changes:

  • More flexibility for purchases of additional services: Under the currently effective regulation, the requirements for assessing the necessity (and thus the legality) of purchases of additional services after contract signature are rather strict and public purchasers often fail to comply with them. The amendment introduces a criterion of ‘due care’ for an assessment of whether or not the purchase is necessary, with the aim to bring a greater level of flexibility to the process of purchasing additional services. By way of an example, if a need for additional purchases arises as a result of errors in the project documentation that could not have been identified by a procurer who had acted with due care, such additional purchases will not require a new procurement procedure.
  • Supplier´s quality as a new evaluation criterion: A possibility to evaluate tenders with regards to the quality of the supplier´s team will be introduced. Specifically, public purchasers will be allowed to take into account ‘organization, qualification and experience of individuals involved in the tender’, if the quality of the team has significant impact on the provision of the services (e.g. in case of consulting services).
  • Award of the contract to a sole bidder: The amendment will remove the (recently introduced) obligation to cancel the public procurement if only one bid is left for evaluation. While intended to prevent machinations and corrupt practices, the obligation has been widely criticized for causing unnecessary complications for a number of public purchasers,
    prolonging procurement processes and yet failing to fulfil the intended purpose.
  • Supervision of the Office for the Protection of Competition (“UOHS”): The amendment is also likely to affect provisions on the regulator´s supervision. It is expected to speed up decisionmaking procedures and limit possibilities of misusing the right to complain against the public purchaser´s actions. By way of an example, if a tenderer submits a complaint to UOHS but withdraws the complaint prior to issuance of the final decision, the tendered will forfeit 20% of the mandatory deposit paid at the submission.

Impact of the new EU public procurement rules in 2016

The new EU regulatory framework for public procurement must be implemented by 18 April 2016. Although no proposal for a Czech implementing law has yet been submitted, it is already clear that the transposition will significantly affect the national tendering rules. The changes introduced by the EU directives aim to increase transparency and effectiveness of the proceedings, support SMEs as well as facilitate fulfilment of other goals such as environmental or cultural development, and include the following:

  • Compliance with qualification criteria: The evaluation of bids should occur prior to verifying compliance with qualification criteria. In order to speed up tender processes, a newly introduced unified document (“European Single Procurement Document”) should serve as a verification of the bidder´s compliance with qualification criteria.
  • Innovation partnership: For technically and financially demanding projects, the public purchasers will have the opportunity to conclude agreements with the bidders in order to develop an optimal solution jointly in a partnership.
  • Support of SMEs: Instead of entering into a single contract with a large undertaking, public purchasers will be encouraged, wherever possible, to split the intended purchase into several smaller purchases. A decision not to split the purchase will have to be justified.
  • Support of environmental and social goals: Procurers will be entitled to require fulfilment of certain environmental standards (e.g. fair trade labelling), base their selection on the lifecycle costs and environmental impact (e.g. CO2 footprint), or reserve certain tenders for sheltered workshops or other enterprises engaging disadvantaged persons.
  • Facilitation of e-procurement and functioning of the internal market: As of October 2018, electronic submissions for participation in tenders will become mandatory. The information system E-Certis will facilitate cross-border tender participation and communication.