Zlatina Dancheva, lawyer
I. The essence of the problem
In accordance with art. 20, par. 3 of the new Public Procurement Law (PPL) the public work contracts with a value net of value-added tax (VAT) from 50 000 to 270 000 levs, as well as the public supplies and services contracts[1] with a value net of VAT from 30 000 to 70 000 levs are awarded under chapter twenty-six of the law, called “Collection of tenders with notice. Call for completion to definite people”. Similar to this regulation, art. 14, par. 4 of the abolished PPL stipulates that the public work contracts with a value net of VAT from 60 000 to 264 000 levs, as well as the public supplies and services contracts with a value net of VAT from 20 000 to 66 000 levs, are awarded under chapter eight “ä” from the law, dedicated to the public call for competition.
The economic reality in Bulgaria conditions that the public procurement market is realized in priority by the conclusion of low value public procurement contracts, awarded to small and medium enterprises. The number of the awarded public procurement contracts by means of public call for competition only for the previous year 2015 is 11 384 with a total value net of VAT of at least 227 680 000 levs.
Nevertheless, the problem does not consist in the fact that too many low value public procurement contracts are being awarded. The problem is that under the abolished PPL the Commission for the Protection of Competition (CPC) and the Supreme Administrative Court (SAC) refuse to examine claims against the final act of the contracting authorities by which the award of the public procurement contract is ended after the public call for completion has been conducted.
That is why the purpose of the present article is to examine whether the low value public procurement contracts with threshold amounts under the terms of art. 20, par. 3 of the new PPL are subject to legal review. In particular the aim of the study is to establish whether in reality the protocols confirmed by the contracting authorities under art. 97, par. 4 of the Regulation of the Application of the PPL which are analogue to the protocols under art. 101g, par. 4 of the abolished PPL, are not subject to legal review. The matter is going to be examined in conformity to the terms of the relevant Bulgarian legislation and the European Union (EU) law.
II. The position of the Commission for the Protection of Competition and the Supreme Administrative Court
By reason of the analogue legal regulation under the new and the abolished PPL of the final acts of the contracting authorities, by which the low value public procurement contracts are awarded, one can logically suggest that the CPC and the SAC will abide by their uniform existing case-law. According to this case-law the award of the low value public procurement contracts cannot be subject to legal review because the protocols under art. 101g, par. 4 of the abolished PPL are not subject to legal review for they are not individual administrative acts and because the low value procurement contracts are not awarded by the conduct of a public procurement award procedure.
III. The opposite thesis
Regardless of the existing case law of the CPC and the SAC, the protocols under art. 97, par. 4 of the Regulation of the Application of the PPL, which are confirmed by the contracting authorities, are subject to legal review individual administrative acts that should be reviewed in respect to their conformity with the law before the CPC or at least before the administrative courts under the Administrative Procedure Code (APC). Within a profound and detailed analysis of the final acts of the contracting authorities by which the low value procurement contracts are awarded, one can easily establish that the confirmed protocols possess all the characteristics of the individual administrative acts defined in art. 21 of the APC. That is why these acts of the contracting authorities should be subject to legal review in accordance to the basic principles of the legal state, which are consecrated in art. 120, par. 2 of the Constitution and of course in the case law of the Court of Justice of the European Union (CJEU).
There are three basic arguments in maintenance of this thesis:
- The protocol under art. 97, par. 4 of the Regulation of the Application of the PPL when confirmed by the contracting authority is an individual administrative act
The confirmed by the contracting authorities protocol under the terms of art. 97, par. 4 of the Regulation of the Application of the PPL possess all the signs of the individual administrative acts in compliance to the art. 21, par. 1 of the APC. Therefore, as an individual administrative act the confirmed protocol should be subject to legal review in accordance with art. 21, par. 2 of the Constitution.
- Applicability of art. 120, par. 2 of the Constitution
The confirmed by the contracting authorities protocols under the terms of art. 97, par. 4 of the Regulation of the Application of the PPL as individual administrative acts fall within the scope of art. 120, par. 2 of the Constitution. At the same time, the PPL does not contain an explicit regulation, which enacts an exception in the scope of application of art. 120, par. 2 of the Constitution for the acts under art. 97, par. 4 of the Regulation of the Application of the PPL.
- The case law of the Court of Justice of the European Union
This point of examination is based on several cases of the case law of the CJEU and a document of the European Commission No. 2006/C179/02 called “Commission Interpretative Communication on the Community law applicable to contract awards not or not fully subject to the Public Procurement Directives”[2].
In the mandatory for the CPC and the SAC case law of the CJEU, the Court confirms that within the award of public procurement contracts, which do not fall in the scope of the Public Procurement Directives, the contracting authorities are obliged to comply with the basic principles of the Treaty on the Functioning of the European Union. These are the principles of free and loyal competition, non-discrimination, publicity and transparency. In its Judgements of 15.10.1987 in the case C-222/86 and of 25.07.2002 in the case C-50/00 the CJEU states that in cases of the award of procurement contracts bellow the thresholds of application of the Public Procurement Directives individuals are entitled to effective judicial protection of the rights they derive from the EU law. The right to such protection is part of the general principles of the law stemming from the constitutional traditions common to the Member States. In the absence of relevant European law regulations, it is up to the Member States to provide the necessary rules and procedures that guarantee effective judicial protection. According to the CJEU even when the award of the procurement contracts does not fall in the scope of the Public Procurement Directives, in order to comply with the requirement of effective judicial protection it is at least compulsory that the decisions of the contracting authorities adversely affecting a person having or having had an interest in obtaining the contract, should be subject to legal review for possible violations of the basic principles derived from the EU law. Such decision is for instance the decision to eliminate a candidate or a tenderer.
Therefore the EU law and in particular the case law of the CJEU should apply to the award of low value procurement contracts below the threshold of the Public Procurement Directives stipulated in chapter twenty six of the PPL.
IV. In conclusion and in perspective
As it has been clarified in the present article, the confirmed by the contracting authorities protocols under the terms of art. 97, par. 4 of the Regulation of the Application of the PPL are subject to legal review individual administrative acts. Hence, the award of low value public procurement contracts under art. 20, par. 3 of the PPL should be subject to review for conformity with the law before the CPC or at least before the administrative courts. One is to determine whether under the scope of application of the new Public Procurement Law the CPC and the SAC are going to reject their existing case law.
For now nevertheless, not only the CPC and the SAC, but obviously also the legislator do not proceed in providing concrete and effective measures in order to protect the competition within the award of the low value procurement contracts and to assure the transparency within the use of the public and the European funds and programs money for the “small” public procurement contracts. In confirmation of this statement and despite of the declared will of the legislator to reinforce the transparency, the new PPL does not contain a regulation that imposes the legal review of the award of the low value procurement contracts under the terms of art. 20, par. 3 of the PPL.
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Линк към цялата статия на български език: (НЕ)ОБЖАЛВАЕМОСТ НА ОБЩЕСТВЕНИТЕ ПОРЪЧКИ НА НИСКА СТОЙНОСТ
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[1] except of the service contracts enumerated in Appendix 2 of the Public Procurement Law
[2] http://eur-lex.europa.eu/legal-content/FR/TXT/?uri=CELEX:52006XC0801(01)