Part 7
Let’s be positive at least once in seven years
Since 2018, we have been publishing an annual summary of changes in public procurement rules and the system of review procedures according to the Slovak Public Procurement Act. The year 2023 was extraordinary, as for the first time since the adoption of the law in 2015, no amendment to it was adopted. However, this was only an exception to the rule. After a one-year hiatus, the legislators decided to play with the law again and adopted several amendments. As usual, this was done under the slogan of simplification. So there is still much to write about, and we bring you our seventh overview of changes in public procurement.
Professionalization of public procurement
The previous leadership of the Public Procurement Office (ÚVO) was a big fan of the professionalization of public procurement and convinced the government and parliament of its necessity. In 2022, a robust regulation was adopted, which came into effect on April 1, 2024. Unsurprisingly, a significant number of experts opposed this regulation as too bulky and bureaucratic. The ÚVO tried twice to get rid of the regulation by way of an amendment to the law, but neither time was successful. However, the new government decided to listen to experts and finally amended the law so that professionalization was voluntary, or in other words completely unnecessary. As the classic says, the intention was good, but it turned out as always.
No more requests for correction
The Slovak system of revision procedures has always been built on two pillars. Bidders were expected to submit a rectification request to the public contracting authority in case of dissatisfaction with the tender conditions. In the case of an unsuccessful remedy, an objection was filed with the ÚVO. Such a procedure notoriously prolonged tenders. After decades of perpetuating this anomaly, lawmakers decided to change and removed the request for redress from the system. In our opinion, this change is one of the few that can really contribute to simplifying and speeding up public procurement. So far, bidders have tried to improve their business position in the tender simply by requesting a correction, which cost them nothing. Unlike the request for correction, objections to the ÚVO are not free of charge, and applicants will think twice about submitting them. How it all turns out remains to be seen, but we believe that this amendment will significantly speed up tendering.
“Deadline” for objections
In the past, it was possible to submit objections to tender documents practically on the last day of the deadline for submitting bids, or even later. This year’s amendment to the Public Procurement Act finally introduced a “deadline”, which was set for the 10th day after the notification of the announcement of the public procurement or the provision of the relevant tender documents. In combination with the elimination of requests for correction, this measure clearly aims to shorten tender procedures and increase their fluidity. Irrespective of the size of the tenders, in the past the bidders started to really examine them only at a very late stage and only then found out that they were not satisfied with something. Last-minute objections were therefore frequent. This, of course, did not help the smoothness of the selection process. Another “praise” goes to the legislators for this.
Removal of the action to determine the invalidity of the contract and a milder approach to sanctions
In view of the unusual amount of praise we give to Parliament, we will mention two more changes which we think very reasonable and beneficial to the system.
First, the legislators removed the mandatory action for invalidity, submitted to the ÚVO in the case of a contract that was concluded in violation of public procurement rules. This institute was unique within the system of remedies in the EU and often exposed key contracts for the state to the risk of invalidity without a proper plan B, or alternative solution to the situation. Aggrieved bidders will still be able to file a lawsuit to have the contract declared invalid, but the state has decided not to deliberately undermine its own functioning by sending state authorities to fight each other in court.
Another anomaly in the Slovak system was the draconian sanctions for violating public procurement rules. Multiple violations were automatically fined 5% of the contract value, regardless of the severity of the violation. This has finally changed and the ÚVO has gained a certain, welcome measure of discretion. It can now impose a fine ranging from 0.1% to 5% of the order value. In our opinion, the very existence of fines is nonsense, because the state punishes itself and transfers money “from one pocket to another”. By making the penalties generally tied to the severity of the violation, this nonsense has at least become more digestible.
Conclusion
Contrary to tradition, we think that legislators deserve a lot of credit for some of the amendments passed in 2024. Of course, there are others that are far from perfect. However, we decided to be positive at least once every seven years. Experience teaches us that there will be more to complain about in the future.
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