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AMENDMENTS TO
THE ROMANIAN PUBLIC PROCUREMENT LAW IN THE CONTEXT OF CHANGING EUROPEAN
LEGAL PROVISIONS |
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Introduction
Despite Romania’s significant need for public infrastructure
development, arcane government procurement laws have hampered many
projects over the last several decades. To better streamline the
process, the Romanian authorities have recently amended Government
Emergency Ordinance No. 34/2006 (“GEO 34/2006”). Law No. 279/2011, which
took effect on December 12, 2011, will expedite the contracting process
for public procurement, public works, and other government services.
To increase flexibility and encourage European Union investment, the new
law streamlines public procurement documentation. It also centralizes
control over the entire public procurement process to decrease
procedural errors, such as a faulty drafting or breach of the selection
criteria set for tenderers. Most importantly, the new law aims to
prevent corruption, a frequent complaint in Romania, which can trigger
sanctions from the European Commission.
This issue of The Romanian Digest will address the changes implemented
through Law No. 279/2011 and other recent legislation. For a more
detailed history of the Romanian public procurement system, please visit
The Romanian Digest™ Archive at
www.hr.ro. Our July 2006 article, “Romania’s New Public Procurement
Law”, and our April 2009 article, “Romanian Public Procurement Law
Amended,” address many related issues. |
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Main Amendments Brought by Law No. 279/2011 |
The Public-Public Partnership
In anticipation of changes afoot within the European Union, Law No.
279/2011 includes new provisions that cover public-public partnerships.
These joint development projects by two or more public entities, either
national or international, now fall within the scope of Romania’s public
procurement regulations. This will help contracting authorities
coordinate and distinguish between when the EU public procurement
directives are applicable to their joint projects and when they are not.
Before the new legislation, this proved quite difficult and the issue
was often referred to the EU judicial bodies for preliminary rulings.
The Contracting Authority
The definition of “contracting authority” has been extended to include
new forms of association between contracting authorities.
ANRMAP’s Role in Analyzing the Compliance of
the Contract Documents with the Applicable Legislation
The recent revisions to the domestic public procurement regulations have
also substantially increased the role of the National Authority for
Regulating and Monitoring of Public Procurement (“ANRMAP”).
ANRMAP has been tasked with preventing any non-compliance with the
applicable regulations for contract notices and contract documentation.
Following the lead of other EU countries, the Romanian government
previously (through Government Decision No. 801/2011) commissioned
ANRMAP to exercise ex-ante control over compliance of all contract
documents (excluding technical specifications) issued by contract
authorities in public procurement proceedings. This process occurs
before the publication of the relevant contract notices/invitations to
tender in the Electronic System for Public Procurement. These measures
have both increased compliance with the applicable laws and decreased
the number of complaints and court filings.
However, pursuant to the new provisions in Law 279/2011, ANRMAP’s
ex-ante verifications shall not limit in any way the rights of those who
consider themselves harmed by a specific provision of the contract
notices/documents under review by ANRMAP. Prospective bidders may still
lodge complaints against these notices with the National Council for
Solving Complaints (“CNSC”) and request that the CNSC enjoin the
contracting authority until remedial measures are taken.
Direct Procurement / Open Tender /
Restricted Tender / Call for Tenders
Under Law No. 279/2011, when the contract value totals less than 15,000
euros (exclusive of value-added tax), domestic authorities may acquire
goods, services, and works through direct procurement. The documents
reflecting these acquisitions (such as fiscal invoices, written orders,
calls for offers, etc.) will no longer be regarded as procurement
contracts. Though the contracting authorities will still be required to
duly register and file all such supporting documents.
 According
to the new provisions, contracts appraised at more than 15,000 euros,
but less than 125,000 euros (for goods and services contracts) or
4,845,000 euros (for works contracts) must be awarded following a call
for tenders. Contracts valued at equal to or greater than the thresholds
will be awarded by an open or a restricted procedure, depending on the
specific circumstances. And in cases expressly provided for in Articles
94, 110 (1) and 122 of GEO 34/2006, contracting authorities may award
their public contracts through competitive dialogue or a negotiated
procedure, with or without publication of the contract notice.
The Obligation to Request a Participation
Guarantee
Under the previous legislation, the participation guarantee was
mandatory on a general scale. According to the newly amended legal
provisions, the contracting authorities are now permitted to require
that participants in procurement proceedings submit a participation
guarantee only in cases where prior publishing of contract notice is
mandatory.
Amendments to the Criteria for Qualitative
Selection and to the Contract Award Criteria
The newly adopted provisions offer a clearer picture of the criteria
used to award contracts. This obviously benefits all potential
candidates and tenderers who are now aware, from the beginning of the
procurement process, of all applicable criteria.
Law 279/2011 also explicitly states that any change to the minimal
criteria in the initial announcement for a tender will trigger the
cancellation of the entire procedure, unless the change is expressly
ordered by the CNSC or a court of law.
Rules to Avoid Conflict of Interests
A candidate/tenderer can no longer also be a third-party supporter for
another candidate/tenderer in the same procedure. Violation of this rule
will result in the exclusion of either the individual offer or the offer
in which the initial candidate/tenderer is a third party supporter. The
new law fails to clarify which of the two offers must be excluded in
such a case.
Assignment in Public Procurement Procedures
The new version of GEO No. 34/2006 expressly allows for the assignment
of the receivables from a public procurement contract. Assignment is not
allowed for the corresponding obligations, which shall continue to be
borne by the initial debtors.
Cancellation of the Public Procurement
Procedures
Under the old version of GEO 34/2006, a contracting authority only had
the right to cancel a public procurement contract in certain situations.
Law No. 279/2011 now redefines and restructures the situations allowing
for rescission. The amendment states that contracting authorities are
specifically compelled to cancel a tender in some cases, but in other
cases are given the discretion to cancel the procurement process if they
choose.
Procedure before CNSC
Under Law 279/2011, the CNSC may no longer retain any money from the
participation guarantee submitted by a tenderer unless the complaint
filed by the tenderer has been dismissed as unfounded.
Moreover, according to the newly amended provisions, CNSC is obligated
to resolve all cases on its docket regardless of whether a claim
concerning the same tender has been submitted to a court of law.
Other Amendments
Other important amendments contained in Law 279 address the negotiated
procedure without publication of a contract notice (where the overall
value of the additional products and services may no longer be greater
than 20% of the main contract value). The overall value of the
additional products and services may no longer be greater than 20% of
the main contract value. Some other changes concern the water, energy,
transport, postal services and telecommunications sectors, where
contracting authorities are now permitted to reject offers referring to
products which are, in a percentage higher than 50%, originating from
countries outside the European Union. This rule will apply only in cases
where the EU has not created a multilateral or bilateral agreement with
another country.
Further, the thresholds set by GEO 34/2006 for the publication of the
relevant contract notices in the Official Journal have been implicitly
amended by EU Regulation No. 1251/2011 of November, 30 2011. This EU
Regulation amended Directives 2004/17/EC, 2004/18/EC and 2009/81/EC of
the European Parliament with respect to the application thresholds for
awarding public procurement contracts. Also, for consistency, the
Commission contemplated the necessity to re-establish the thresholds set
in Regulation (EC, Euratom) No 2342/2002, laying down detailed rules for
the implementation of the Financial Regulation. In response, on January
31, 2012, the EC enacted Decision No. 2012/56/CE, which adjusts the
thresholds referred to in Articles 157(b) and 158(1) of Regulation (EC,
Euratom) No 2342/2002. |
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Secondary Legislation |
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In an attempt to standardize the documentation for public procurement
contracts, ANRMAP has issued several significant orders clarifying
certain provisions and also standardizing the forms of documents used in
the bidding process. While this article does not exhaustively present
the orders issued by ANRMAP during 2011, it is important for entities
intending to bid on public procurement contracts to be aware of these
secondary regulations and closely analyze all applicable provisions. |
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Public Procurement in the Field of Security
and Defense |
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Close attention should also be given to projects where the procurement
agreements concern security and defense. Following the EU’s adoption of
Directive 2009/81/EC, the Romanian Government instituted Emergency
Ordinance No. 114/2011, detailing specific public procurement procedures
applicable in these special situations. |
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The EU Legislation: Amendments, Proposals,
Interpretations, Recommendations |
EU Modernization of the EU Public
Procurement Market
In its attempt to facilitate access to public funds, the European
Commission launched in January 2011 a project on the modernization of
the European Public Procurement Market. As a result of its efforts, the
EC released the “Green Paper on the modernization of EU public
procurement policy – Towards a more efficient European Procurement
Market.” The Commission considered that, in times of economic upheaval,
public procurement policy must ensure the most efficient use of public
funds to target job creation. Flexible and transparent rules applicable
to both government authorities and their contracting parties would help
to achieve this.
The Green Paper spotted a number of key areas ripe for reform and asked
for the stakeholders’ opinion on the proposed legislative changes. The
results of the Green Paper were subsequently discussed at a high level
conference on public procurement reform in June 2011 and also reiterated
through the 2011 reformed version of the Single Market Act.
Consequently, on December 20, 2011, the EC released several proposals to
underpin the streamlining of the EU procurement market and to support
growth and employment. In these proposals, the EC identified several
objectives: to simplify rules and procedures and make them more
flexible; to encourage access of SMEs to public procurement; to ensure
greater consideration for social and environmental factors; to improve
the existing rules aimed at combating conflicts of interest, favouritism
and corruption; to encourage the appointment by each Member State of a
single national authority responsible for monitoring public contracts.
The EC's proposals have been forwarded to the Council and the European
Parliament for negotiation and adoption. Should they be adopted by the
end of 2012 in the Single Market Act, member states, including Romania,
will need to implement the new directives by June 30, 2014 at the
latest.
EU Guide: Buying Social
The European Commission made additional efforts to modernize the
procurement market in response to the concerns in the Green Paper. In
January 2011, the EC published a new guide on public procurement, aiming
to increase the contracting authorities’ awareness to the social effects
of public procurement projects.
Guide to help public authorities provide
high quality and efficient services of general interest
This new Guide, released on January 28, 2011, is intended to modernize
the European rules regarding organization and financing of contracts for
services of general interest. This will support public authorities in
their attempt to provide high quality and efficient services in line
with the EU rules.
Consultation on access to external public
procurement markets; WTO’s government procurement negotiation
Following a consultation process at the EU level, it was agreed that
flexible legislation should be immediately adopted to expand market
access for foreign companies and open EU procurement markets to foreign
bidders. With that goal in mind and after fruitful negotiations, on
December 15, 2011, the parties to the Government Procurement Agreement
(GPA) reached a deal to overhaul the existing tender rules and open
market access.
Measures to Support E-Procurement
The European Commission has proposed, based on recent Deutsche Bank
research, a set of revisions to public procurement rules to better
integrate e-procurement and support member states in their transition to
e-procurement. This would also enable suppliers to participate in the
online procurement process across a single market.
Revised Version of Buying Green
In October 2011, the revised version of the Buying Green Guide was
published. Based on the previous versions of this Guide, Romania
initiated in 2008 a market study on products and services contracts’
compliance with ecological standards in Romania. The end goal was to
create the first public database of ecological products and services.
Based on the conclusion of the study, Romania started the enactment of a
set of norms regulating the procurement of products and services with
ecological impact. Potential bidders should carefully analyze the entire
applicable legislation in this field.
Proposal for a Directive on the Award of
Concession Contracts
In December 2011, the EU Parliament and the European Commission launched
a proposal for a new directive on the award of concession contracts, as
part of the broader strategy created through the 2011 Single Market Act
and in the EC proposals concerning the modernization of the EU
procurement market.
 Currently
in Romania, the concession of public works and services is regulated by
GEO 34/2006. However, at the EU level, the importance of having an
autonomous norm to govern public concessions relates to the fact that,
unlike public contracts, the award of service concessions is currently
not subject to any distinct piece of EU legislation. Rather, it is
guided by the general principles of transparency and equal treatment
laid down in the Treaty on the Functioning of the EU. Concessions
require a distinct set of rules since they have features different from
public contracts, which justify more flexibility.
As for the connection between concessions and public-private
partnerships, the recitals accompanying the proposal for a new directive
on concession contracts clarify that concessions involving private
partners are just a particular form of public-private partnership. Up to
now, this term remained undefined in EU public procurement legislation.
Regardless of terminology, these agreements span a significant share in
the market.
The Commission's proposal regarding the new directive on concession
contracts is now before European Parliament and the Council of Ministers
for adoption under the co-decision procedure. |
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Conclusion |
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Romania continues to need a huge infusion of capital for infrastructure
development. A robust public procurement system is key to facilitating
these projects. The new law should allow for greater flexibility in the
procurement process, but the actual implementation of these policies is
yet to be evaluated. The high interest in public procurement reform
across the European Union indicates that significant changes are yet to
be broadly incorporated. Romania will need to consistently adjust and
swiftly absorb all future changes into its own national system. |
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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 2012 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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