Presentation by Gheorghe Cazan for public procurement workshop in Moldova on 9 June 2014

1. © OECD
AjointinitiativeoftheOECDandtheEuropeanUnion,
principallyfinancedbytheEU
Public Procurement Review System
in EU Member States
– Practical Examples –
Chisinau, 9 June, 2014
Leogrand Hotel

2. Bodies responsible for
review (EU)
• To ensure an efficient functioning of the remedies system,
review bodies must meet few essential conditions:
- to be independent of the contracting authorities and
tenderers, so as to ensure that they adopt correct decisions
- to work on the basis of certain procedures which enable a
rapid resolution of disputes

3. Bodies responsible for
review (EU)
- to be conferred with powers for:
 imposing interim measures with the aim of correcting the
infringement or preventing further damage, including measures to
suspend or to ensure the suspension of the tender procedure or the
implementation of any decision taken by procuring organization;
 set aside or ensure the setting aside of decisions taken unlawfully,
including the removal of discriminatory technical, economic or
financial specifications in the tender notice or in tender
documentation;
 award damages to persons harmed by an infringement.

4. Legal Basis (EU)
• EU Member States are basically free to choose the organisation
and procedures for their national review system;
• pre-contractual and post-contractual remedies;
• equivalence and effectiveness of national remedies;
• there is a great variety of review mechanisms among EU Member
States and Candidates (e.g. ordinary, special or administrative
courts, automatic suspension of award procedures, interim
measures,…).

5. Institutional set-up in EU
member states
Ordinary Courts
• Belgium, France, Ireland, Lithuania, Netherlands, Portugal,
Sweden, United Kingdom
Specialised Review Body
• Austria, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia,
Finland, Germany, Hungary, Luxembourg, Poland, Romania,
Slovenia, Croatia
as well as:
• Balkan countries (Albania, FYROM etc.), Ukraine

6. First-Instance Review before and after the
Conclusion of the Contract
Specialised
Review Body
Civil or Ordinary
Court
Administrative
Court
Prior to
conclusion
of the contract
Austria, Bulgaria, Cyprus,
Czech Republic, Denmark,
Estonia, Finland, Germany,
Hungary, Latvia, Malta,
Poland, Romania, Slovakia,
Slovenia
Belgium (utility), Denmark,
France (private utility), Ireland,
Lithuania, Luxembourg (utility),
Netherlands, United Kingdom
Belgium (public), Estonia,
France (public), Luxembourg
(public), Portugal, Sweden
After conclusion
of
the contract
(damages)
Denmark Belgium (utility), Cyprus,
Czech Republic, Denmark,
Estonia, Finland, France
(private utility), Germany,
Hungary, Ireland, Latvia,
Lithuania, Luxembourg (utility),
Malta, Netherlands, Poland,
Slovakia, Slovenia,
Sweden, United Kingdom
Belgium (public), France
(public), Luxembourg (public),
Portugal, Romania

7. First-Instance Review before and after the
Conclusion of the Contract
Instance Specialised
Review Body
Civil or Ordinary
Court
Administrative
Court
1st instance Austria, Bulgaria, Cyprus, Czech
Republic, Denmark, Estonia,
Finland, Germany, Hungary,
Latvia, Malta, Poland, Romania,
Slovakia, Slovenia
Denmark, France (private
utility), Ireland, Lithuania,
Luxembourg (utility),
Netherlands, United Kingdom
Belgium, Estonia,
France (public),
Luxembourg (public),
Sweden
2nd instance Cyprus, Denmark, France
(private utility), Germany,
Hungary, Ireland, Lithuania,
Luxembourg (utility),
Netherlands, Poland, Romania,
Slovakia, United Kingdom
Austria, Bulgaria, Czech Republic,
Estonia, Finland,
France (public), Latvia,
Luxembourg (public), Portugal,
Sweden
3rd instance Estonia, France (private
utility), Hungary, Lithuania,
Netherlands, Slovakia, United
Kingdom
Latvia, Portugal, Sweden

8. POLAND

9. Current - administrative set up
Main Players
Public Procurement Office – President of PPO
• Centralgovernment body competent for matters concerning
public contracts, defined by PPL
• PPO – office supporting activities of President of PPO
• A separate body within public administration created 1995
• Staff of PPO: 135 working in 7 org units + internal auditor
l

10. National Appeals Chamber
 NAC established in November 2007 replacing panels of arbiters
who were responsible for review of appeals on the basis of
previously legal provisions
 The bodies of National Appeals Chamber are:
 Chairman
 Vice-chairman and
 General Assembly composed of all members NAC
Composition: 38 members

11. Current review system
Two-instance review procedure:
1st – appeal to the National Appeals Chamber (NAC),
special review body only for public procurement
and then
2nd – complaint to the relevant common (regional)
court

12. Review system (1994-2007)
3 stage review process with list of arbiters
I Protests
- supplier filed a protest directly to the contracting authority
II Appeals
- supplier filed an appeal to the Chairman of PPO, appeals were
examined by panels of arbiters selected from list of arbiters -
arbiters appointed ad hoc for specific case
III Complaints
- Suppliers filed a complaint to the regional court (competent for
the place of residence of the contracting authority)

13. Review system (2007-2010)
3 stage process with NAC
I Protests
- Supplier filed a protest directly to the contracting authority
II Appeals
- Supplier could file an appeal to the Chairman of PPO, appeals were
examined by National Appeal Chamber
III Complaints
- suppliers/contracting authority could file a complaint against NAC’s
ruling to the regional court (competent for the place of residence of
the contracting authority)

14. Submission of appeal
Appeal should be lodged with the President of the National Appeal
Chamber in writing or by electronic means with a secure electronic
signature verifiable using a valid qualified certificate
The conclusion of a contract does not restrict the possibility of
lodging the appeal

15. Standstill period
• contracting authority/entity may not conclude a contract until
NAC adopts judgment or decision which ends the procedure
• a motion to NAC in order to revoke the above
• accepted only where non-conclusion of a contract might cause a
negative effects for public interest exceeding the benefits related
to the necessity of protecting of all interests

16. Rulings of NAC
• Rejection of appeal – formal reasons other than lack of
entry fee
• Dismissal – appeal ungrounded
• Admission – appeal justified

17. Rulings by NAC (2): admission of
appeal
• order to correct action in breach of law
• declare the contract ineffective; or
• declare the contract ineffective with regard to the unfulfilled
obligations and impose a financial penalty instead; or
• impose a financial penalty or rule the shortening of the duration
of contract if important public interest requires the contract be
maintained
• make a statement on the violation occurred

18. Ineffectiveness of contracts
A procurement contract shall be null and void if the awarding entity:
1. used the negotiated procedure without publication or single-
source procurement in breach of provisions of the Act;
2. failed to publish the contract notice in the Public Procurement
Bulletin or submit it for publication to the Publications Office of
the European Union;
3. conclude the contract in breach of provisions the relevant
provisions on standstill / suspension period, if this prevented NAC
from examining the appeal before the conclusion of a contract;

19. Ineffectiveness of contracts (2)
A procurement contract shall be null and void if the awarding
entity:
[…]
4. prevented the economic operators from submitting (indicative)
tenders in a contract award procedure conducted under a
dynamic purchasing system;
5. awarded a contract under framework agreement prior to the
expiry of the relevant time-limits;
6. used the request-for-quotations in the breach of provisions of
the PPL

20. Complaint
• may be submitted by both the contracting authority/entity
concerned and the economic operator + by the President of PPO
• within 7 days (21 days for the PPO President)
• to regional court relevant for the seat of the contracting
authority/entity - via PPO Pres.
• ruling given immediately but not later than within one month

21. Review procedures – evolution of
thresholds
< 20,000 € no review procedures (1994)
< 30,000 € no review procedures (1997)
< 6,000 € no review procedures (2004)
< 60,000 € only protests (2006)
< 137,000 € (5,278,000 € for works) only protests (2007-2008)
2008 – 2014 no legal protection below 14,000 € (PPL not applicable),
limited below EU thresholds, full coverage above EU thresholds

22. Entry fee – current amounts
Supplies and services < EU thresholds cca 1800 euros
Supplies and services > EU thresholds cca. 3800 euros
Works < EU thresholds – 2500 euros
Works > EU thresholds – 5000 euros

23. AUSTRIA

24. System of Settling PP Disputes in
Austria
Procurement procedure
PPO: pre contr.,
interim
measure
PPO: post
contractual
Courts: action
for damages
Highest
Administrative
Court
Constitutional
Court
Supreme Court
EU: Court of Justice
after the award of contract

25. PP Review Institutions in Austria
• Federal Public Procurement Review Authority – PPO
(specialised administrative court)
• 9 Laender Procurement Review Authorities (UVS, VKS) in each
of the Austrian provinces for the legal control of provincial and
municipal public procurement award procedures (general and
specialised administrative courts)

26. PPO
 new organisation since Sept. 2002
(former PPO was part of the Ministry of Economic Affairs; now an
independent administrative court specialised for pp control only)
 14 senates, each senate consists of one chairperson (lawyer) and
two associated judges (procurement practitioners, lawyers,
economists, engineers)
 all members
• independent like judges
• chairpersons: first appointment for a period of five years; then
unlimited and independent
• other members: appointed for 5 years, possibility for
reappointment

27. PPO – Internal Procedures
• distribution of cases according to a pre-determined rotation
principle, regulated in an internal rulebook (fair, transparent,
previsible);
• publication of cases to be handled, composition of senates and
dates of oral hearings are published on the PPO board
(electronic);
• Oral hearings – standard procedure
• Legal deadline of 6 weeks (usually respected)
• Publication of all pp decisions on the webpage in an anonymised
form (www.ris.gv.at; publication of PPO decisions only:
www.bva.gv.at)

28. Fees - Austria
Regulation on Lump-Sum Fees: Legal Gazette II 72/2010
Directaward EUR 208,--
DirectawardaboveEUthresholds EUR 623,--
DirectawardbelowEUthresholds EUR 311,--
NegotiatedprocedurewithoutpriorpublicationbelowEUthresholds
workscontracts EUR 415,--
supplyandservicecontracts EUR 311,--
intellectualservicecontracts EUR 363,--
RestrictedprocedurewithoutpriorpublicationbelowEU thresholds
workscontracts EUR 2.594,--
supplyandservicecontracts EUR 830,--
Otherproceduresabove EUthresholds
workscontracts EUR 5.188,--
supplyandservicecontracts EUR 1.660,--

29. HUNGARY

30. Dual System of Public Procurement
Review
Two separate paths of review:
1. a specialized review body (first instance)
 appeal against its decision to administrative court (second
instance)
 remedies other than damages
2. civil courts
 damages
 render the contract ineffective in a given case
30

31. Prior Complaint to the Contracting
Authority
• possibility to complain directly to the contracting authority as
well: preliminary dispute settlement
• optional - not a precondition for judicial review
 proved to be very useful – quick and inexpensive solution of
disputes
 getting more and more frequent way of dispute settlement in
public procurement cases in Hungary (and most complaints do
not go any further)

32. First-instance Review Body
PUBLIC PROCUREMENT ARBITRATION BOARD
• operates in the framework of Public Procurement Authority (PPA)
independent part of PPA
independent from the Government
independent from Contracting Authorities
independent from the economic operators
• permanent body, founded by law in 1995
• takes decisions on the basis of legal rules
• its decisions are legally binding
• its decisions are subject to an appeal in administrative courts

33. Public Procurement Authority (PPA)
 the main policy making body in public procurement
 established in 1995 (by law)
 autonomous administrative body
 independent from the Government, subordinated only to
Parliament
 it has a collective governance structure – Public Procurement
Council

34. Public Procurement Council
• operates within the framework of the PPA
• 14 members – includes all relevant stakeholders in the public
procurement market (contracting authorities, economic
operators, public interest)
• the law defines the organizations that have the right to
designate the members of the Council
• members serve for at least a two-year-term
• members are not employed full-time, are not remunerated
for their activity from the budget of the PPA
• the working body: the Secretariat (supervised by the
Secretariat general + divided into various units)

35. Public Procurement Arbitration
Board
• Specialised for public procurement cases - experience and
expertise!
• Members: Public Procurement Commissioners
 civil servants (appointed by the PP Council)
 must fulfil almost the same requirements such as judges (e.g.
not having been convicted for a criminal offence)
 minimum criteria: higher education degree, 3 years
professional practise + a special examination in public
administration (for lawyers: bar exam)
35

36. Public Procurement Arbitration
Board
• Public procurement commissioners
 legal commissioners (with bar exam)
 professional commissioners (public procurement experts with economic,
transport, IT, construction or engineering background)
• panel of three commissioners as a general rule
• each time the members of the panel are appointed by the chairperson
of the PPAB
• at least two of them shall be a lawyer and one member shall have a
university or college degree in the field mostly connected to the
subject-matter of the procurement
• The President of the Arbitration Board is assisted by three public procurement
secretaries having a degree in law
36

37. Public Procurement Arbitration
Board
Public procurement commissioners
• strict conflict of interests rules:
 members cannot assume other paid occupation except
scientific, teaching, artistic or other legally protected
intellectual activity
 no membership with financial obligation in business companies
 no political membership
 no financial interest above a certain threshold in a business
company
• shall act in an independent and impartial manner
• are not subject to any kind of instruction but solely to law
37

38. Legal effects of launching a review
proceeding
Initiating a review process does not suspend automatically
the procurement procedure
BUT:
 the contracting authority may suspend the ongoing procedure
 the contract cannot be concluded until the final decision of the
PPAB

39. Communication of Decisions
PPAB decisions (alongside with their rationale) are
 delivered to the parties and other interested parties by regular mail
 also published in the Public Procurement Bulletin (official press of PPA, only
on-line version)
 published on its own website as well – on the day of their drawing up
Judgements of the court are also published on the website of the courts and in the
Public Procurement Bulletin
The most important decisions are also published and commented in Közbeszerzési
Szemle (Public Procurement Law Review), which is a monthly legal publication.

40. Time limits for decision making
PPAB has to take decisions rather quickly:
 within 15 days when there is no hearing,
 within 30 days if a hearing is necessary
 within 60 days, if the proceedings initiated against the
amendment or performance of procurement contracts
 an additional 10 days (in the third case 30 days) extension can
be granted if justifiable circumstances arise
Courts require considerably more time to issue a judgement – there
are no mandatory time limits for courts to make decisions

41. Unified application of law within the
PPAB
• for the sake of the uniformity of the remedies procedures, a
general council (a college) including the public procurement
commissioners operates within the framework of the PPAB
• if the proceeding panel of the PPAB has made a decision on a
matter of principle, it has to present its decision to the President
of PPAB
• the President presents the decision concerning the matter of
principle to the general council
• if the general council establishes that the decision or any element
of it is considered as a matter of principle, it publishes a guideline
on the decision or on a given element of it.

42. Thank you for your
attention !