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PPT, L Kojnok, EC, Third ENP East public procurement conference, Tbilisi, 6 November 2019

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PPT, L Kojnok, EC, Third ENP East public procurement conference, Tbilisi, 6 November 2019

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PPT, L Kojnok, EC, Third ENP East public procurement conference, Tbilisi, 6 November 2019

  1. 1. Key requirements for independent and impartial review system Tbilisi, Georgia 7 November 2019 László Kojnok Legal Officer DG for Internal Market, Industry, Entrepreneurship and SMEs (DG GROW) Unit G2 – Access to Procurement Markets
  2. 2. The Remedies Directives in the EU • Basic principles and requirements
  3. 3. Remedies in public procurement • Procurement Directives set common principles and procedures across the Single Market. • Their objectives could not be entirely achieved if economic operators were unable to ensure that their rights were observed across the EU through access to clear, rapid and effective review procedures. • The Remedies Directives are at the core of public procurement legislation.
  4. 4. Remedies Directives Directives 89/665/EEC and 92/13/EEC, as amended by Directive 2007/66/EC and Directive 2014/23/EU • Enable economic operators to enforce the rights conferred by Public Procurement Directives everywhere in the EU • Require that decisions on contracts falling within the scope of the Public Procurement Directives taken by contracting authorities/entities may be reviewed effectively and as quickly as possible
  5. 5. Remedies Directives • Establish minimum EU review standards • Most of the provisions in the Remedies Directives are mandatory - ‘minimum conditions to be satisfied by the review procedures established in the national legal systems’ • Member States may introduce conditions that go beyond those laid down in the Remedies Directives
  6. 6. Main features of Remedies Directives Effective and rapid remedies must be available in the case of infringement of EU law in the field of public procurement or national rules implementing that law. (Art. 1) • Availability of review procedures: Material scope (what) Personal scope (who) Time scope (when) • Pre-contractual remedies: Interim measures Setting aside of decisions taken unlawfully by CA/CE Standstill period Automatic suspension • Post-contractual remedies: Ineffectiveness Alternative penalties Compensation/damages
  7. 7. Forum for review Member States are free to decide which body is responsible for the review procedure: 1. 1. Independent from contracting authority/entity 1) 2. Non judicial in character or judicial 2) 3. When not judicial • Written reasons • Review by either a judicial body or by another body that is independent and has the power to request preliminary rulings from CJEU 3) 4. Possibility of a compulsory review before the contracting authority itself
  8. 8. Independent review body • The members of such an independent body shall be appointed and leave office under the same conditions as members of the judiciary as regards the authority responsible for their appointment, their period of office, and their removal. At least the President of this independent body shall have the same legal and professional qualifications as members of the judiciary. The independent body shall take its decisions following a procedure in which both sides are heard, and these decisions shall, by means determined by each Member State, be legally binding.
  9. 9. Right to appeal to second instance When the first review body is not judicial in character: • Review by either a judicial body or by another body that is independent and has the power to request preliminary rulings from CJEU
  10. 10. Material scope of the review Remedies Directive apply to violations of the EU law in the field of public procurement or national transposing that law: • Contracts falling within the scope of PP Directives • All decisions taken by contracting authorities
  11. 11. Legal standing Member States are free to have their own definition of persons who can bring a request to review. • According to Art. 1(3) Remedies Directive, remedies should be available at least to “any person having or having had an interest in obtaining a particular public supply or public works contract and who has been or risks being harmed by an alleged infringement.”
  12. 12. Remedies – before the contract conclusion 1. Interim measures • review body must be able to take, at the earliest opportunity and by way of interlocutory procedures, interim measures to correct the alleged infringement or prevent further damage to the interests concerned, including measures to suspend the procedure for the award of a public contract or the implementation of any procedural decision taken by contracting authorities (Art. 2(1) a)
  13. 13. Remedies – before the contract conclusion 2. Setting aside of decisions taken unlawfully by CA/CE Review bodies must be given the power to “set aside or ensure the setting aside of decisions taken unlawfully”. The power shall include the removal of discriminatory technical, economic or financial specifications in the invitation to tender, the contract documents or in any other document relating to the contract award procedure
  14. 14. Automatic suspension Automatic suspension in case of review: A contracting authority cannot conclude the contract before the review body has made a decision on the application either for interim measures or for review. The suspension shall end no earlier than the expiry of the standstill period.
  15. 15. Standstill period Standstill period: It allows an effective pre-contractual review. A contract may not be concluded before the expiry of a period of at least 10 calendar days from the day on which the award decision is send to tenderers.
  16. 16. Post-award sanctions Ineffectiveness of contract • No publication, no exemptions for direct award, no standstill • Possibility not to consider a contract ineffective for overriding reasons relating to a general interest (in that case alternative penalties shall apply) Alternative penalties • Fines on the contracting authorities • Shortening of the duration of the contract
  17. 17. Damages • The Remedies Directives include the possibility to award damages to persons harmed by an infringement. • The conditions depend on national provisions.
  18. 18. Bilateral and plurilateral commitments concerning review bodies • Level of commitments • - WTO Agreement on Government Procurement • - Free Trade Agreements (FTAs) • - Deep and Comprehensive Free Trade Agreements (DCFTAs)
  19. 19. WTO GPA Article XVIII.4 Each Party shall establish or designate at least one impartial administrative or judicial authority that is independent of its procuring entities to receive and review a challenge by a supplier arising in the context of a covered procurement. => Inhouse review functions are not compliant
  20. 20. WTO GPA • Each Party shall adopt or maintain procedures that provide for: • • (a) rapid interim measures to preserve the supplier's opportunity to participate in the procurement. Such interim measures may result in suspension of the procurement process. The procedures may provide that overriding adverse consequences for the interests concerned, including the public interest, may be taken into account when deciding whether such measures should be applied. Just cause for not acting shall be provided in writing; and • •
  21. 21. WTO GPA • (b) where a review body has determined that there has been a breach or a failure as referred to in paragraph 1, corrective action or compensation for the loss or damages suffered, which may be limited to either the costs for the preparation of the tender or the costs relating to the challenge, or both.
  22. 22. Free Trade Agreement – EU- Armenia • Article 271 (5) Members of independent review bodies shall not be representatives of any contracting authorities. • (c) the members of such an independent body are appointed and leave office under the same conditions as members of the judiciary as regards the authority responsible for their appointment, their period of office, and their removal;
  23. 23. Free Trade Agreement – EU- Armenia • (d) at least the President of such an independent body has the same legal and professional qualifications as members of the judiciary; • => Precise requirements both on members, President
  24. 24. DCFTAs • Phase 1 - In the framework of the institutional reform, Ukraine/Georgia/Moldova shall designate in particular: • • an impartial and independent body tasked with the review of decisions taken by contracting authorities or entities during the award of contracts. In this context, "independent" means that that body shall be a public authority which is separate from all contracting entities and economic operators. There shall be a possibility to subject the decisions taken by this body to judicial review.
  25. 25. Further alignment with the Remedies Directives - DCFTA • Phase 2 (for classical) / Phase 3 (for utilities): • Article 1 Scope and availability of review procedures - coverage, complainants, suspension •
  26. 26. Further alignment with the Remedies Directives - DCFTA • Article 2 Requirements for review procedures • Interim measures • Setting aside • Damages • Conditions on the members of the independent and impartial review bodies
  27. 27. Further alignment with the Remedies Directives - DCFTA • Article 2a Standstill period • Article 2b Derogations from the standstill period • Point (b) of the first paragraph of Article 2b – only one tenderer concerned to who the contract is awarded and there are no candidates concerned
  28. 28. Further alignment with the Remedies Directives - DCFTA • Article 2c and 2f Time limits • Article 2d Ineffectiveness • Article 2e Infringements of this Directive and alternative penalties – fine on contracting authorities or shortening the duration of the contract
  29. 29. Further alignment with the Remedies Directives - DCFTA • Article 2c and 2f Time limits • Article 2d Ineffectiveness • Article 2e Infringements of this Directive and alternative penalties – fine on contracting authorities or shortening the duration of the contract
  30. 30. Thank you for your attention!

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