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Appeal procedures in the new public procurement law

The provisions of the new Act on Public Procurement Law, in force since 1 January 2021, introduced changes in the area of legal remedies aimed at improving them, as well as making them more accessible. Although the new act has not introduced any revolution in the above scope, the changes made are very significant, in particular from the point of view of the contractor’s interest. Legal remedies continue to be an appeal to the President of the National Appeal Chamber and a complaint to the District Court in Warsaw – the Public Procurement Court. Additionally, the possibility of filing a cassation complaint with the Supreme Court has been introduced.   

According to the new act, a contractor, a competition participant or any other entity that has or had an interest in obtaining an order or an award in a competition and has suffered or may suffer damage as a result of an infringement of the act by the awarding authority is entitled to legal remedies. Another novelty is the extension of the circle of entities authorised to file legal remedies against the announcement initiating the contract award procedure or the announcement of the competition and the contract documents to include organisations on the list kept by the President of the Public Procurement Office (available here: https://www.uzp.gov.pl/kio/lista-organizacji-uprawnionych-do-wnoszenia-odwolan) and the Ombudsman for Small and Medium-Sized Enterprises.

The basic legal remedy is an appeal to the President of the National Appeal Chamber.  One of the most important changes is the extension of the catalogue of prerequisites enabling a contractor to lodge an appeal.  Pursuant to art. 513 of the new Public Procurement Law, an appeal can be lodged against:

1) the ordering party’s action incompatible with the provisions of the Act, undertaken in the procedure for the award of a contract, the conclusion of a framework agreement, a dynamic purchasing system, a system for qualifying contractors or a competition, including the draft provision of the agreement;

2) failure to act in the procedure for the award of a contract, conclusion of a framework agreement, dynamic purchasing system, contractor qualification system or design contest, to which the awarding entity was obliged pursuant to the Act;

3) failure to conduct a contract award procedure or organise a design contest on the basis of the Act, despite the fact that the contracting authority was obliged to do so.

Thus an appeal may be filed against any act or omission of the awarding authority. The value of the contract does not matter. This constitutes a significant novelty in relation to the previous act, where an appeal below the so-called EU thresholds was possible only against a specific catalogue of actions performed by the ordering party. Currently this catalogue has been extended to include all actions. The scope of the appeal also includes the ordering party’s omissions.  

Moreover, an appeal is available not only in procedures for the award of a public contract, but it has also been explicitly indicated that an appeal is available in procedures aimed at awarding a contract, i.e. for the conclusion of a framework agreement, in a dynamic purchasing system, in a system for qualifying contractors or in a competition. The possibility to lodge an appeal against a failure to act on the part of an awarding entity, as well as against a failure to conduct a procurement procedure or organise a competition has been clearly indicated. A contractor may also lodge an appeal against draft provisions of a contract, regardless of whether their non-compliance with regulations has a significant impact on the outcome of the procedure. Appeals can be filed against non-compliance with the provisions of the PPL Act, as well as with the provisions of the Civil Code applied pursuant to art. 8(1) of the PPL to actions taken by the awarding entity, contractor and participants in the procedure for the award of a contract or competition, as well as contracts in public procurement matters. In such cases the National Appeals Chamber may order the amendment of the draft contractual provisions or their removal. It cannot order the introduction of provisions of a specified content, but it can order the introduction of provisions of a specified type.  

Submissions in appeal proceedings shall be made in writing, in an electronic form or in an electronic form, with the proviso that an appeal and an accession to appeal proceedings made in an electronic form shall require a trusted signature.

Unlike the previous act, the lodging of an appeal does not affect the course of the tender validity period. The new provisions do not provide for suspension of the tender validity period.

The new act has introduced regulations concerning proxies in appeal proceedings. The previous regulations did not regulate this issue. The general rules of the Civil Code applied. According to the new wording of the act, an attorney or a legal counsel may be a representative in appeal proceedings, as well as a person who manages the property or interests of a party or participant of the proceedings and a person employed by a commission from a party or participant of the proceedings, if the subject matter of the case falls within the scope of the commission. Moreover, an employee of a legal person, an entrepreneur, including one without legal personality, or an entity without legal personality may also be an attorney. The above provisions are based on the provisions of the Code of Civil Procedure. The well-established position of doctrine and courts in this respect will be helpful in their interpretation.  It is worth emphasising that the rule is that an attorney at law or a legal adviser may be an attorney at law, which is a change in relation to the previous provisions.

In proceedings with a value above the EU thresholds, the principle of three-person panel review by the NAC has been reintroduced. The President of the National Appeal Chamber may appoint a one-person panel in less complex cases.

The new Public Procurement Law has a separate section devoted to evidence proceedings, which has been systematized and made more precise. Among other things, a decision has been introduced as a form of admitting evidence, issued both at a hearing and in closed session, and issues related to the appointment of experts and testimony of witnesses have been clarified.

As in the previous act, the rule is that in the case of an appeal the ordering party cannot conclude an agreement until a judgment or decision closing the appeal proceedings is announced by the Chamber. The new act added another situation in which the Chamber may waive the ban on concluding an agreement if the ordering party has made it probable that the appeal is brought with the sole purpose of preventing the conclusion of an agreement.

The rules of incurring the costs of proceedings have also been changed, introduced pursuant to the Regulation of the President of the Council of Ministers of 30 December 2020 on detailed types of costs of appeal proceedings, their settlement and the amount and manner of collecting the appeal fee. What is important, the issues of proportional bearing of the costs of appeal proceedings have been regulated. The NAC will divide the entry relatively, awarding respectively from the ordering party or participant in the appeal proceedings raising an objection in favour of the appellant an amount the height of which it will determine by calculating the proportion of the number of charges presented in the appeal, which the Chamber accepted, to the number of charges which the Chamber did not accept. It has also been specified that the NAC may, in justified cases, refrain from dividing the costs in a proportional manner, in particular if this is supported by the type of charges upheld by the NAC or their importance for resolving the appeal. This has an impact on the practice of constructing charges. On the grounds of the previous act, a significant multiplication of charges by contractors was observed, often without substantive justification.

To sum up, the changes introduced by the new Public Procurement Law are not only cosmetic in nature and systematize the existing provisions. In particular, the catalogue of prerequisites allowing a contractor to lodge an appeal will have a significant impact. This seems to meet the expectations of contractors, who in many situations were deprived of legal remedies. The positive impact of the changes is reflected in the increased number of proceedings before the National Chamber of Appeal observed after the Act came into force.

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Design contest in the new public procurement law

The provisions of the new public procurement law, in force since 1 January 2021, introduced a number of modifications to the institution of the design contest, aimed at improving it and making it more widely used by contracting authorities.  The essence of the design contest remained unchanged. It is worth recalling that in accordance with the statutory definition, a design contest is a special form of a public promise, in which the contracting authority, by means of a public announcement, promises a reward for the execution and transfer of the right to the design contest work selected by the jury. It is important to note that a design contest is not a public procurement procedure, but a public promise of a prize, which may include, among other things, inviting the author of the work selected in a design contestto negotiate in single source procurement or to negotiate without an announcement.

The contracting authority can organise a design contest in order to select a creative work, concerning in particular spatial planning, urban design, architectural design, architectural and construction design, data processing, IT design, and an innovative project. The presented catalogue is not closed, but it makes it easier to specify the contracts to which the design contest may apply.  A novelty is the addition to the catalogue of “IT design” and “innovative project”.  The most important thing is that the design contest is held in order to select a work of creative character, thus having the character of a work in the understanding of the copyright law, to which the participant who submitted the selected work will transfer the author’s economic rights.

Unlike the previous act, which provided for the optional nature of the design contest, the current regulations introduced the obligatory principle, in a situation where the contracting authority intends to award a contract for architectural design or architectural and construction design services. There are three exceptions to this rule.  There is no obligation to hold a design contest if the contracting authority intends to award a contract for architectural design services or architectural and construction design services that has a negotiated element, i.e. in the form of negotiations with announcement, competitive dialogue, negotiations without announcement or single source procurement. There is also no need to hold a design contest for contracts of this type with values lower than the so-called EU thresholds – here it is worth noting that the value refers to design services, not the planned construction work (as the law stands, depending on the type of contracting authority, it is the equivalent of EUR 139,000 or EUR 214,000, i.e. PLN 593,433 or PLN 913,630). Moreover, a design contest does not have to be held if the subject of the procurement is a linear object within the meaning of the construction law – for example, a road construction project is such a procurement. It does not require creative solutions, and waiving the requirement for a design contest seems fully justified, particularly in the context of the length of potential proceedings. 

The award in a design contest is obligatory. It is a pecuniary or material prize awarded to the author(s) of the selected entries, or an invitation to the author(s) of the selected entries to negotiations with a view to providing a service based on the selected entry, or such an invitation along with a pecuniary or material prize. Under the previous act, the reward in the form of an invitation to negotiations could only lead to the detailed elaboration of a design contest entry, so the introduced change should protect against a situation in which the execution of a design services contract would be performed by an entity other than the winner of the design contest.

Another novelty introduced are two types of design contest procedures: an open design contest and a restricted design contest, in which, after verification of the subject of the design contest, only the participants invited to submit entries may submit entries. 

The staged nature of design contests has been retained. In a two-stage design contest, in the first stage, studies complying with the requirements laid down in the design contest regulations are selected. In the second stage, the jury evaluates the entries based on the studies submitted in the first stage, using the criteria specified in the design contest regulations. In a two-stage design contest, the Contracting Authority may also limit the number of participants who will be invited to the second stage of the design contest by applying all or some of the criteria for the evaluation of the entries as specified in the design contest Rules to the study designs.

A very important practical innovation is the possibility of inviting to negotiations, and thus concluding an agreement, with the participant whose entry received the second highest score. Such possibility can be provided for in the Rules and Regulations of the design contest in the event that negotiations conducted in the mode of single source procurement with the author of the selected entry do not lead to the conclusion of a public procurement agreement.

The provisions of the new act also introduced the limitation of the publicity of those design contest entries or stage studies, which were not awarded.

The above principles are the basic rules according to which a design contest should be conducted. Moreover, just as under the previous regulations, the contracting authority organizes the design contest on the basis of the rules and regulations, which contain detailed principles of the design contest, including the rights and obligations of the design contest participants. The provisions of the regulations are binding not only for the design contest participants, but also for the contracting authority, which has limited possibilities of making changes.  The act indicates the minimum scope of the regulations, which includes a description of the subject of the design contest, the detailed procedure of the design contest, requirements for participants, the composition of the jury, and legal protection measures.  A thorough familiarisation with the regulations is crucial for any possible participation in the design contest procedure. Also from the contracting authority’s point of view, it is extremely important to properly prepare the regulations, so that they meet the requirements of the Act and do not leave any doubts in the interpretation of their provisions. It is worth mentioning that, among other things, the recommendations of the president of the Public Procurement Office are prepared for this purpose with the participation of entities bringing together entrepreneurs active in the field of construction and architecture. This document, once established, may constitute useful guidelines for the ordering parties and interpretative guidelines for the participants. Draft available here:   https://www.uzp.gov.pl/strona-glowna/slider-aktualnosci/konkurs-po-nowemu-konsultacje-projektu-rekomendacji/konkurs-po-nowemu-konsultacje-projektu-rekomendacji.

It is worth reminding that the jury, which makes the evaluations, consists of at least three persons appointed by the contracting authority, whodo not have to be its employees, should have the knowledge and experience to evaluate the submitted entries, and if specific provisions require that they have the qualifications to develop a design contest entry, at least 1/3 of the jury members, including the chairman, should have the required qualifications.  

It should also be remembered that there are legal remedies in contests, which should be specified in the rules of procedure. The legal remedies are available to design contest participants, if they have or had an interest in obtaining a prize in a design contest and suffered or may suffer a loss as a result of an infringement of the Act by the ordering party.

To sum up, the changes introduced by the new public procurement law are not only cosmetic and systematic. It seems that conclusions have been drawn from the design contests held and the problems that have arisen there. Moreover, by making design contests obligatory to a certain extent, the legislator aims to increase their role, which is already visible in the practice of awarding contracts, particularly for architectural services.