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Introduction |
Romania aligned its public acquisition legislation with European Union
regulations last month through the adoption of Government Emergency
Ordinance 34/2006 concerning the award of procurement agreements and of
concession agreements for public works and services (“GEO no. 34/06”),
effective as of June 30th. The change will result in modifications to
contracts where one of the parties is the Romanian State.
By revoking all the acts containing provisions regarding public
acquisitions, such as Government Ordinance 60/2001, Law 219/1998,
Government Ordinance 20/2002 -- the most important ones -- the new law
merges EU 2004 Directives 17 and 18 into a sole act. The unitary law
facilitates easy usage by all of the participants in the public
acquisition process. |
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Amendments |
 The
most significant amendments in the revised law relate to the methods
imposed for calculating the estimated value of a procurement contract,
the specific procedures for awarding the contract (as detailed below)
and the settlement procedures to be followed by a bidder who contests
any measures taken during the auction process. Based upon the relevant
EU Directives, the new law emphasizes the importance of the
pre-evaluation stage of a public contract, the types of products to be
procured and the possibility to anticipate any possible increase or
decrease in their value. Once the price is determined, no further
changes may be imposed as related to it and both parties (the
contracting authority and the winning bidder) are bound by it.
Pursuant to GEO no. 34/06, the contracting authority has the obligation
to disclose within the documentation annexed to the procurement
agreement all the criteria, regulations and other necessary information
required to ensure that each bidder has received complete information as
related to the acquisition procedure to be followed. This documentation
is supposed to focus particularly on those technical facts that must be
explicitly defined within the tender book regarding the qualitative,
technical and performance factors of the tender. The old law required
only minimum conditions, in contrast to the new law which focuses more
on the technical details.
One such new technicality is the so called “ecologic label” or “eco-label”–
which implies some sort of environmental management standard to be
fulfilled by the economic operator in order to be permitted to
participate in a bid. However, the new law does not provide any
definition for such environmental requirements. In any event, should
contracting authorities require the production of certificates drawn up
by independent bodies attesting to the compliance by the economic
operator with certain environmental management standards, they must
refer to the European Community Eco-Management and Audit Scheme (EMAS)
or to environmental management standards based upon the European or
international standards certified as conforming to European Community
law or to relevant European or international standards concerning
certification. The Romanian contracting authorities must recognize
equivalent certificates from bodies established in other Member States.
They must also accept other evidence of equivalent environmental
management measures obtained from other economic operators. In the event
that the Romanian contracting authorities set forth any distinctive
environmental requirements in terms of performance or function, they may
use the detailed specifications or, if necessary, parts thereof, as
defined by European or (multi-) national eco-labels, or by and any other
eco-label, provided that:
- the specifications are appropriate to define the characteristics
of the goods or services that are the object of the contract,
- the requirements for the label are drawn up on the basis of
scientific information,
- the eco-labels are adopted using a procedure in which all
stakeholders, such as government bodies, consumers, manufacturers,
distributors and environmental organizations can participate, and
- they are accessible to all interested parties.
Contracting authorities may indicate that the products and services
bearing the eco-label are presumed to comply with the technical
specifications laid down in the contract documents. They must accept any
other appropriate means of proof, such as a technical dossier of the
manufacturer or a test report from a recognized body.
The contracting authority must publish through the mass-media, a
contract notification setting out its needs and requirements, which it
must define in the notice and/or in a related descriptive document. The
Official Gazette may continue to be used for this purpose along with two
new specific methods of informing potential contractors: a public
acquisition electronic system to be used inside Romania starting with
January 1, 2007, and the Official Journal of the European Union for
European wide use (also commencing with January 1, 2007). Until December
31, 2006, the contracting authority must continue to publish the
contract notice within the Official Gazette and must use the two new
methods only in cases where it considers it to be appropriate.
To ensure transparency, the new law introduces changes to the provisions
regarding conflicts of interest. The new provisions enlarge the depth of
relationships between a bidder and the contracting authority. Persons
who are prohibited from participation in the evaluation/certification
process are any members of the board of directors or other ruling board
of a bidder, their husbands/wives or relatives up the 4th degree, as
well as any other person having an interest that could in any way affect
their impartiality. However, the new law does allow persons who
contributed to the preparation of the request for a proposal to bid,
provided that doing so would not distort fair competition. |
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Procedures |
As regarding the specific procedures to be followed for awarding the
procurement contract, the new law keeps in force the main procedures - (i)
open auction (takes place in one single stage; any interested
supplier, contractor or provider is free to submit an offer); (ii)
limited auction (takes place in two distinct stages, only the
candidates selected in the first stage being permited to participate in
the second one); (iii) negotiation with a single source (the
contracting authority discusses and negotiates the contracting clauses,
prices included, with a specific supplier, contractor or provider; only
candidates selected by the contracting authority in the first stage will
be invited to make an offer in the second stage); (iv) offer request (a
simplified procedure according to which the contracting authority
requests offers from several suppliers, contractors and providers); (v)
solutions contest (permits the contracting authority to obtain,
especially in the territorial planning, urban and zoning field, a plan
or a project selected by a jury on a competitive basis) but also brings
some amendments and novelties such as: negotiated procedure with
prior publication of a contract notice, negotiated procedure without
prior publication of a contract notice, request for tender, design
contests and, respectively, the competitive dialogue instead of former
competitive negotiation. The latter is applicable only in case of
complex contracts when the contracting authority is not objectively able
to define the technical means capable of satisfying their needs or
objectives and/or is not objectively capable of specifying the legal
and/or financial make-up of a project.
 With
regard to the offer request a new threshold (without VAT) is
provided to make this procedure applicable. For public works contracts,
the ceiling was raised to €250,000 from €100,000 that existed under the
former law.
Pursuant to the requirements of the EU Directives, the new law provides
other specific procedures such as: a framework agreement, a dynamic
purchasing systems procedure and an electronic auction. A
framework agreement may be concluded between the contracting
authorities and more than three economic operators for the purpose of
establishing the terms to govern the procurement contracts to be awarded
during a given period – usually not exceeding four years.
The dynamic purchasing systems procedure is an electronic process
which may be applied for making commonly used purchases, the
characteristics of which, as generally available on the market, meet the
requirements of the contracting authority. Such procedure is limited in
duration and open throughout the entire period of its validity to any
economic operator that satisfies its conditions.
Described as a special procedure, the electronic auction can be
applied only after a previous full evaluation of bidders participating
in open, restricted or negotiated procedures where the contract
specifications can be precisely established. In the same circumstances,
an electronic auction may be held on the reopening of competition
between the parties to a framework agreement as well as on the opening
for competition of contracts to be awarded under the dynamic purchasing
system.
The electronic auction may be based either solely on the price criteria,
when the contract is awarded to the lowest price, or on the price and/or
on the new cost of the features of the tenders indicated in the
specification criteria, when the contract is awarded to the most
economically advantageous offer. The contracting authority can purchase
products services and works without resorting to the procedures
described above directly from the economic operators only in case the
value of each procured product, service or work does not exceed €5,000
(as compared to the prior regulation where the threshold was €2,000 per
product, service or work during a year). |
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Qualitative Selection and Contract Award |
The contracting authority must make clear within the contract
notification and also in the descriptive documentation the award
criterion upon which the winner is selected. Once set, the criterion
cannot be subsequently changed.
 The
contracting authority can award a public contract based either on the
most economically advantageous tender, or on the lowest priced offer
only. When speaking about the most economically advantageous tender,
criteria linked to the subject matter of the public contract in question
may be considered -- for example, the quality, the price, the technical
advantage, aesthetic and functional characteristics, environmental
characteristics, running costs, cost-effectiveness, after-sales service
and technical assistance, the delivery date and delivery period or the
period of completion. The establishment of such new criteria for
qualitative selection is an improvement over prior Romanian legislation.
It should provide a better assessment of each candidate by referring to
its suitability to pursue the professional activity, to its economic and
financial standing, technical and/or professional ability, quality
assurance standards and environmental management standards.
In contrast with the prior regulations, under the new law the
contracting authority must conclude the public contract with that
candidate whose offer was selected only after a certain period of time
from the date the winner is announced. This period of time is either 7
or 15 days depending on whether the value of the procurement agreement
is equal or less than €40,000 (for supply and service contracts)/
€250,000 (for public works contracts) and, respectively, for those above
€40,000/€250.000.
Objections raised by bidders will be settled by a new public institution
– the National Council for Settlement (in Romanian “Consiliul National
pentru Solutionarea Contestatiilor”) – whose main responsibility will be
to answer to objections raised by bidders within a maximum of 10 days
from the date it is lodged. In special circumstances, the period of time
can be extended for up to 20 days.
The new law also contains certain new specific provisions regarding
concessions, utilities procurement and other specific contracts – like
procurements in the defense field.
In regard to utilities procurement agreements, the main change worth
noting is that in the case of multiple bids having the same winning
score, the law grants the contracting authority the right to award the
contract to the economic operator whose offer contains more than 50% EU-made
products, over any other party with a lesser percentage. |
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Conclusion |
The new GEO no. 34/2006 copies ad-literam the main provisions of
the relevant EU Directives and thus makes it far easier to determine the
requisite procedures and obligations incidental to the public
procurement process in Romania.
 The
new law is, by its nature, rather complex and parts of it are not easily
discernable to less experienced bidders. Consequently, the rapid
introduction of the requisite, but still unseen, methodological norms
and supplementary instructions is imperative. This is all the more true
since right on the heels of the effective date of GEO no. 34/06, two
additional laws were adopted (the Government Emergency Ordinance no.
54/2006 on the concession agreements for goods publicly owned, and the
Regulation for Organizing and Functioning of the National Council for
Settlement, both of which impact upon GEO no. 34/06 in ways that may not
be all together clear until the regulations for GEO no. 34/06 are
issued.
One has to wonder why there is a predisposition in Romania to
persistently institute new laws that require regulations well in advance
of their advent. Can a law not be made effective upon a date set for the
issuance of the relevant regulations? |
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Editors Note: It is our policy not to mention our clients by name in
The Romanian Digest™ or discuss their business unless it is a matter of
public record and our clients approve. The information herein is correct
to the best of our knowledge and belief at press time. Specific advice
should be sought from us, however, before investment or other decisions
are made.
Copyright 2006 Rubin Meyer Doru & Trandafir, societate civila de avocati.
All rights reserved. No part of The Romanian Digest™ may be reproduced,
reused or redistributed in any form without prior written permission
from the publisher.
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