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The current situation around the COVID-19 crisis requires a significant level of flexibility in contractual relationships, which, under standard circumstances, is hard to find in public procurement procedures. Even though the Czech authorities did not adopt any special extraordinary measures in the area of public procurement, the state of emergency and the subsequent extraordinary measures adopted in reaction to the COVID-19 pandemic have triggered the possibility for the contracting authorities to invoke provisions of Act No. 134/2016 Coll., on Public Procurement (Public Procurement Act or PPA) which aim at the facilitation and acceleration of public procurement under unusual circumstances, as described below in detail.
Contents
Shorter deadlines in standard procedures
Negotiated procedure without prior publication
Direct awards permissible during COVID-19 pandemic
Other options available to contracting authorities
Shorter deadlines in standard procedures
The deadlines in standard procedures may be shortened where urgent circumstances make it impossible to follow the statutory deadlines:
Open procedure for supplies and services (Sec. 57 (2) (b) of the PPA)
Submission of offers: minimum of 15 days (if the contracting authority could not have foreseen and have not caused these circumstances).
Restricted procedure (Sec. 59 (5) of the PPA)
Submission of requests for participation in a tender procedure: minimum of 15 days from commencement of the tender procedure.
Submission of offers: minimum of 10 days from sending the call for offers.
Negotiated procedure with prior publication (Sec. 62 (3) of the PPA)
Submission of requests for participation in a tender procedure: minimum of 15 days from commencement of the tender procedure.
Submission of preliminary offers: minimum of 10 days from sending the call for preliminary offers.
Negotiated procedure without prior publication
Where the level or urgency is even higher, i.e. in cases of extremely urgent circumstances which a contracting authority could not have foreseen and have not caused and which make it impossible to respect the prescribed deadlines for standard procedures (incl. shorter deadlines), the contracting authority may award the contract under the negotiated procedure without prior publication. Most importantly, under this regime the PPA does not prescribe any mandatory deadlines, and the contracting authority does not need to issue official tender documentation. Furthermore, the law does not require prior public announcement of the call for participation in the tender procedure and it is up to the contracting authority to decide on the overall framework of the supplier selection process.
Direct awards permissible during COVID-19 pandemic
Under certain circumstances, yes. Even though the COVID-19 crisis does not itself allow for a deviation from the rules applicable to public procurement, the PPA recognizes exceptional situations under which a contracting authority may award a tender directly.
With respect to the COVID-19 pandemic, a contracting authority may directly award a tender if the following conditions are met (alternatively):
The carrying out of a tender procedure would threaten essential security interests of the Czech Republic (incl. public health) and, at the same time, it is not possible to adopt a measure which would allow for carrying out the tender procedure (Sec. 29 (1) (a) of the PPA); or
The tender is awarded or fulfilled within the scope of a special security measure prescribed by special laws (e.g. Constitutional Act No. 110/1998 Coll., on the Security of the Czech Republic) and, at the same time, it is not possible to adopt a measure which would allow for carrying out the tender procedure (Sec. 29 (1) (c) of the PPA).
The exception would typically apply to the contracting authorities whose tasks under special legislation include the adoption of measures necessary to eliminate or reduce a threat represented by the COVID-19 pandemic or to eliminate, or at least mitigate, the factors for declaring the state of emergency with respect to the supplies which serve the purpose of containing the pandemic (e.g. procurement of respiratory masks, disinfectants, servers or building conversion works to create new hospital beds, etc.).
In addition, other contracting authorities may also, in our view, invoke the exception with respect to supplies which are subject to extremely urgent demand due to the COVID-19 pandemic (e.g. face masks, respirators, disinfectants, etc.) and for which the contracting authority can prove that even the negotiated procedure without prior publication would take too long.
Other options available to contracting authorities
Due to the specific circumstances caused by the COVID-19 pandemic, the contracting authorities may also need to make subsequent additional changes to the tender contract. Generally, if the contracting authority wants to make changes to the tender contract, it is necessary to initiate a new tender procedure. Nevertheless, the Public Procurement Act allows for making changes to tender contracts without initiating a new tender procedure in the case that these changes are necessary due to unpredictable circumstances, such as the COVID-19 pandemic, under the following conditions:
The contracting authority acting with due care could not have predicted the situation causing the need for the change of the contract;
The required change does not alter the overall nature of the contract; and
The value of the change does not exceed 50% of the value of the initial contract.
Therefore, in light of the COVID-19 pandemic, it might be for example possible to exceed the originally intended quantity of the service/supplies covered by the framework agreement/contract by half without the need to proceed with a new tender procedure.
Baker McKenzie’s Public Procurement World: More information about the world’s most important public procurement laws and guidance in light of the global COVID-19 pandemic. |
