Problems specific to the challenge of acts issued by public authorities in public procurement procedures prior to concluding the contracts

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Given the current economic background, public procurement procedures are attracting more and more undertakings eager to build contractual relationships which should be highly reliable in terms of finance.

As it is only natural, the manner of solving the lawsuits related to pre-contractual acts issued by the contracting authority within procurement procedures is a determining factor for undertakings in deciding to engage resources to participate in such a procedure. More exactly, if these lawsuits raise various barriers for the undertakings seeking to challenge a decision of the authority, this would automatically operate as an inhibiting factor for their involvement in a procurement procedure. As far as the general interest is concerned, this would lead to an unfortunate outcome: a lower competitiveness in procurement procedures brings less advantageous bids for the contracting authority.

This field is currently affected by the limited ways to challenge the authority’s pre-contractual acts. Thus, the two-tier system existing before January 2011, which allowed interested parties to bring their case before either the NCSC[1], i.e the administrative body competent to solve complaints in public procurement procedures, or the courts of law, was replaced by a one-tier challenge method, that before the NCSC. Under the new system, the court action is only available at a later stage, when contesting the NCSC decision, by lodging an appeal before the competent court of appeal.

Aside from the legal controversy surrounding the unconstitutionally repealed provisions which allowed bidders claiming an injury by the authority’s acts[2] to bring a court action, the lawmaker’s new vision on the mechanisms of solving complaints in this area of practice raises certain obstacles as regards the process through which the legality of such acts is verified.

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The first such obstacle is related to costs in the circumstances where, if NCSC rejects the complaint, the authority is to retain a portion of the performance bond in an amount that differs from case to case, being established mainly on the basis of ratios that vary based on the value of the procurement contract. For instance, for a contract worth approximately EUR 10 million, the amount retained will be around EUR 2,800. This measure is the result of a change of the relevant provisions instituted in July 2010. However, its inhibiting effects were not felt at the time because the bidders in public procurement procedures were then able to elect to challenge the authority’s acts in court, which entailed reduced costs. Under the same hypothesis of a EUR 10 million contract, the court fee amounted to approximately EUR 350. It was not until NCSC was established as the only authority competent to settle such complaints in first instance that the effects of this regulation were felt, as regards the costs entailed by the complaints against the authorities’ acts.

The second major obstacle concerns the manner in which bidders are allowed to sustain their case, i.e. illegality of the authority’s act. It is worth noting that the complaints in this field usually involve technical issues (for instance, the qualification criteria imposed under the awarding documentation or the technical specifications established in the tender book), i.e. elements that would require a thorough expert investigation. Although the applicable legislation allows expert reviews to be conducted before NCSC, the time limit within which complaints are solved before this institution (20 days) is unrealistic for the completion of expert reviews – a highly time-consuming procedure which in courts takes months or even years. This time limitation (solving the complaint within 20 days), instituted for reasons that are otherwise salutary, i.e. an expedited settlement of these proceedings, probably determines a certain reluctance on the part of NCSC to allow this evidentiary means (technical expert review), which is crucial for the complaint lodged before it. The restrictions are maintained in the second stage of the process of challenging the authority’s act – the court appeal against the NCSC decision. This appeal has the characteristics of a final appeal, a stage when expert reviews are not allowed. This limitation has now been emphasized by the change instituted in January 2011, according to which interested parties are no longer allowed to contest directly in courts, acts that pertain to public procurement procedures. Thus, when it came to approving an expert review, the courts were much more comfortable with the idea of extending the trial duration which, in the lawmaker’s opinion, should have been a swift one, finalized after only 1-2 hearings.

Having in view both the costs entailed by the challenge procedure and also the remote chances that NCSC allow the conduct of expert reviews seeking to clarify the objections of illegality raised by the bidders in public procurement procedures, we would welcome a legislative intervention that remedies the shortcomings referred to above which inhibit the participation in procurement procedures, with visible consequences in terms of general interest.

[1]   Reference is made to the National Commission for Solving Complaints.

[2] The controversy arises from the fact that the Constitution establishes as optional the administrative jurisdictions as well as the free access to justice.

Ioana Gelepu, Partner at Ţuca Zbârcea & Asociaţii